Leave My Bush Alone        

 

Obama Sitting Although it seems that President Obama is tired of getting “Bush”.

 

 

 

 

 

 

 

Family Fued Contestants I asked 100 Americans, Should The President leave their “Bush” alone?

The top two answers are on the board. Let’s play!

“The President Has It Wrong Again”

 

 

With an economy still in the midst of a recovery and last month's unemployment rate of 9.5% according to the Bureau of Labor Statistics(BLS). Survey says, the number one answer is.

95 Americans say “Leave My Bush Alone”. These were not only the wealthiest Americans but also some of the poorer ones who enjoy their “Busch” more than the White House is willing to admit.

 

Busch Beer Legs Cold as a mountain stream, smooth as its name. 

 

 

 

 

 

The number two answer on the board.

 

Golden Gate Shadow 5 Americans don't like “Bush” never have and never will. These are “Happy Americans” who are content to live their lives without “Bush”.

 

 

 

 

In announcing that he will let President Bush's 2003 tax rates expire, President Obama thinks that he and the Democrats can play their usual class war to justify raising taxes on the rich. If Bush's tax cuts expire Estate Tax will jump from 0 to 55% and the top income tax rate will go from 35 to 41%.

Why are the rich seen as a solution to The President's poor management of the economy?

Stock market data with downtrend vector It is stupid to raise anyone's taxes in the midst of a slow economic recovery.

Mr. Obama's higher spending (stimulus package) and higher taxes approach is idiotic.

 

 

 

Who has the potential to spur the economy more than the rich? Furthermore, increasing the top income tax rate could hurt small businesses that contribute a great deal to the economy. These businesses create JOBS, Mr. President and they are primarily owned by hard working, risk taking wealthy Americans.

Maybe the time has come to cut government spending especially in the “Government Hand Out” department. By playing the class war card, Democrats win favor with those who are not willing to work hard, take risk or personal responsibility.

However, I am convinced they will lose in November. Proving once again, The President and Democrats are wrong about how most Americans feel about the issues.

 

What a bunch of donkeys!

 

 

 

 

 

 

Rick James Mr. Obama, I am a hard working American who has taken risk and although I am not rich yet, you will reward me by raising my taxes. Capital gains rate will jump 5% in 2011.

How can I ever become like Rick James, I’m RICH BITCH, if you do this? 

 

  

President BushSo Mr. President, would you be so kind to go home to Mrs. Obama and Leave My “Bush” Alone.

 

 

 

 

 


          Dissent at Google        
This is the document being circulated among those Googlers dissenting from the converged regime there. Needless to say, it has resulted in utter outrage among the SJWs there and the inevitable witch hunt. It will be interesting to see what happens when the culprit is revealed and what excuse is given for his firing. One hopes he has read SJWAL, or at least the SJW Attack Survival Guide.

Reply to public response and misrepresentation

I value diversity and inclusion, am not denying that sexism exists, and don’t endorse using stereotypes. When addressing the gap in representation in the population, we need to look at population level differences in distributions. If we can’t have an honest discussion about this, then we can never truly solve the problem. Psychological safety is built on mutual respect and acceptance, but unfortunately our culture of shaming and misrepresentation is disrespectful and unaccepting of anyone outside its echo chamber. Despite what the public response seems to have been, I’ve gotten many personal messages from fellow Googlers expressing their gratitude for bringing up these very important issues which they agree with but would never have the courage to say or defend because of our shaming culture and the possibility of being fired. This needs to change.

TL:DR

Google’s political bias has equated the freedom from offense with psychological safety, but shaming into silence is the antithesis of psychological safety.
This silencing has created an ideological echo chamber where some ideas are too sacred to be honestly discussed.
The lack of discussion fosters the most extreme and authoritarian elements of this ideology.
Extreme: all disparities in representation are due to oppression
Authoritarian: we should discriminate to correct for this oppression
Differences in distributions of traits between men and women may in part explain why we don’t have 50% representation of women in tech and leadership. Discrimination to reach equal representation is unfair, divisive, and bad for business.

Background [1]

People generally have good intentions, but we all have biases which are invisible to us. Thankfully, open and honest discussion with those who disagree can highlight our blind spots and help us grow, which is why I wrote this document.[2] Google has several biases and honest discussion about these biases is being silenced by the dominant ideology. What follows is by no means the complete story, but it’s a perspective that desperately needs to be told at Google.

Google’s biases

At Google, we talk so much about unconscious bias as it applies to race and gender, but we rarely discuss our moral biases. Political orientation is actually a result of deep moral preferences and thus biases. Considering that the overwhelming majority of the social sciences, media, and Google lean left, we should critically examine these prejudices.

Left Biases
  • Compassion for the weak
  • Disparities are due to injustices
  • Humans are inherently cooperative
  • Change is good (unstable)
  • Open
  • Idealist

Right Biases
  • Respect for the strong/authority
  • Disparities are natural and just
  • Humans are inherently competitive
  • Change is dangerous (stable)
  • Closed
  • Pragmatic
Neither side is 100% correct and both viewpoints are necessary for a functioning society or, in this case, company. A company too far to the right may be slow to react, overly hierarchical, and untrusting of others. In contrast, a company too far to the left will constantly be changing (deprecating much loved services), over diversify its interests (ignoring or being ashamed of its core business), and overly trust its employees and competitors.

Only facts and reason can shed light on these biases, but when it comes to diversity and inclusion, Google’s left bias has created a politically correct monoculture that maintains its hold by shaming dissenters into silence. This silence removes any checks against encroaching extremist and authoritarian policies. For the rest of this document, I’ll concentrate on the extreme stance that all differences in outcome are due to differential treatment and the authoritarian element that’s required to actually discriminate to create equal representation.

Possible non-bias causes of the gender gap in tech [3]

At Google, we’re regularly told that implicit (unconscious) and explicit biases are holding women back in tech and leadership. Of course, men and women experience bias, tech, and the workplace differently and we should be cognizant of this, but it’s far from the whole story.

On average, men and women biologically differ in many ways. These differences aren’t just socially constructed because:
  • They’re universal across human cultures
  • They often have clear biological causes and links to prenatal testosterone
  • Biological males that were castrated at birth and raised as females often still identify and act like males
  • The underlying traits are highly heritable
  • They’re exactly what we would predict from an evolutionary psychology perspective
Note, I’m not saying that all men differ from women in the following ways or that these differences are “just.” I’m simply stating that the distribution of preferences and abilities of men and women differ in part due to biological causes and that these differences may explain why we don’t see equal representation of women in tech and leadership. Many of these differences are small and there’s significant overlap between men and women, so you can’t say anything about an individual given these population level distributions.



Personality differences

Women, on average, have more:

  • Openness directed towards feelings and aesthetics rather than ideas. Women generally also have a stronger interest in people rather than things, relative to men (also interpreted as empathizing vs. systemizing).
  • These two differences in part explain why women relatively prefer jobs in social or artistic areas. More men may like coding because it requires systemizing and even within SWEs, comparatively more women work on front end, which deals with both people and aesthetics.
  • Extraversion expressed as gregariousness rather than assertiveness. Also, higher agreeableness.
  • This leads to women generally having a harder time negotiating salary, asking for raises, speaking up, and leading. Note that these are just average differences and there’s overlap between men and women, but this is seen solely as a women’s issue. This leads to exclusory programs like Stretch and swaths of men without support.
  • Neuroticism (higher anxiety, lower stress tolerance).This may contribute to the higher levels of anxiety women report on Googlegeist and to the lower number of women in high stress jobs.

Note that contrary to what a social constructionist would argue, research suggests that “greater nation-level gender equality leads to psychological dissimilarity in men’s and women’s personality traits.” Because as “society becomes more prosperous and more egalitarian, innate dispositional differences between men and women have more space to develop and the gap that exists between men and women in their personality becomes wider.” We need to stop assuming that gender gaps imply sexism.

Men’s higher drive for status

We always ask why we don’t see women in top leadership positions, but we never ask why we see so many men in these jobs. These positions often require long, stressful hours that may not be worth it if you want a balanced and fulfilling life.

Status is the primary metric that men are judged on[4], pushing many men into these higher paying, less satisfying jobs for the status that they entail. Note, the same forces that lead men into high pay/high stress jobs in tech and leadership cause men to take undesirable and dangerous jobs like coal mining, garbage collection, and firefighting, and suffer 93% of work-related deaths.

Non-discriminatory ways to reduce the gender gap

Below I’ll go over some of the differences in distribution of traits between men and women that I outlined in the previous section and suggest ways to address them to increase women’s representation in tech and without resorting to discrimination. Google is already making strides in many of these areas, but I think it’s still instructive to list them:

  • Women on average show a higher interest in people and men in things
  • We can make software engineering more people-oriented with pair programming and more collaboration. Unfortunately, there may be limits to how people-oriented certain roles and Google can be and we shouldn’t deceive ourselves or students into thinking otherwise (some of our programs to get female students into coding might be doing this).
  • Women on average are more cooperative
  • Allow those exhibiting cooperative behavior to thrive. Recent updates to Perf may be doing this to an extent, but maybe there’s more we can do. This doesn’t mean that we should remove all competitiveness from Google. Competitiveness and self reliance can be valuable traits and we shouldn’t necessarily disadvantage those that have them, like what’s been done in education. Women on average are more prone to anxiety. Make tech and leadership less stressful. Google already partly does this with its many stress reduction courses and benefits.
  • Women on average look for more work-life balance while men have a higher drive for status on average
  • Unfortunately, as long as tech and leadership remain high status, lucrative careers, men may disproportionately want to be in them. Allowing and truly endorsing (as part of our culture) part time work though can keep more women in tech.
  • The male gender role is currently inflexible
  • Feminism has made great progress in freeing women from the female gender role, but men are still very much tied to the male gender role. If we, as a society, allow men to be more “feminine,” then the gender gap will shrink, although probably because men will leave tech and leadership for traditionally feminine roles.

Philosophically, I don’t think we should do arbitrary social engineering of tech just to make it appealing to equal portions of both men and women. For each of these changes, we need principles reasons for why it helps Google; that is, we should be optimizing for Google—with Google’s diversity being a component of that. For example currently those trying to work extra hours or take extra stress will inevitably get ahead and if we try to change that too much, it may have disastrous consequences. Also, when considering the costs and benefits, we should keep in mind that Google’s funding is finite so its allocation is more zero-sum than is generally acknowledged.

The Harm of Google’s biases

I strongly believe in gender and racial diversity, and I think we should strive for more. However, to achieve a more equal gender and race representation, Google has created several discriminatory practices:

  • Programs, mentoring, and classes only for people with a certain gender or race [5]
  • A high priority queue and special treatment for “diversity” candidates
  • Hiring practices which can effectively lower the bar for “diversity” candidates by decreasing the false negative rate
  • Reconsidering any set of people if it’s not “diverse” enough, but not showing that same scrutiny in the reverse direction (clear confirmation bias)
  • Setting org level OKRs for increased representation which can incentivize illegal discrimination [6]

These practices are based on false assumptions generated by our biases and can actually increase race and gender tensions. We’re told by senior leadership that what we’re doing is both the morally and economically correct thing to do, but without evidence this is just veiled left ideology[7] that can irreparably harm Google.

Why we’re blind

We all have biases and use motivated reasoning to dismiss ideas that run counter to our internal values. Just as some on the Right deny science that runs counter to the “God > humans > environment” hierarchy (e.g., evolution and climate change) the Left tends to deny science concerning biological differences between people (e.g., IQ[8] and sex differences). Thankfully, climate scientists and evolutionary biologists generally aren’t on the right. Unfortunately, the overwhelming majority of humanities and social scientists learn left (about 95%), which creates enormous confirmation bias, changes what’s being studied, and maintains myths like social constructionism and the gender wage gap[9]. Google’s left leaning makes us blind to this bias and uncritical of its results, which we’re using to justify highly politicized programs.

In addition to the Left’s affinity for those it sees as weak, humans are generally biased towards protecting females. As mentioned before, this likely evolved because males are biologically disposable and because women are generally more cooperative and areeable than men. We have extensive government and Google programs, fields of study, and legal and social norms to protect women, but when a man complains about a gender issue issue [sic] affecting men, he’s labelled as a misogynist and whiner[10]. Nearly every difference between men and women is interpreted as a form of women’s oppression. As with many things in life, gender differences are often a case of “grass being greener on the other side”; unfortunately, taxpayer and Google money is spent to water only one side of the lawn.

The same compassion for those seen as weak creates political correctness[11], which constrains discourse and is complacent to the extremely sensitive PC-authoritarians that use violence and shaming to advance their cause. While Google hasn’t harbored the violent leftists protests that we’re seeing at universities, the frequent shaming in TGIF and in our culture has created the same silence, psychologically unsafe environment.

Suggestions

I hope it’s clear that I’m not saying that diversity is bad, that Google or society is 100% fair, that we shouldn’t try to correct for existing biases, or that minorities have the same experience of those in the majority. My larger point is that we have an intolerance for ideas and evidence that don’t fit a certain ideology. I’m also not saying that we should restrict people to certain gender roles; I’m advocating for quite the opposite: treat people as individuals, not as just another member of their group (tribalism).

My concrete suggestions are to:

De-moralize diversity.

  • As soon as we start to moralize an issue, we stop thinking about it in terms of costs and benefits, dismiss anyone that disagrees as immoral, and harshly punish those we see as villains to protect the “victims.”

Stop alienating conservatives.

  • Viewpoint diversity is arguably the most important type of diversity and political orientation is one of the most fundamental and significant ways in which people view things differently.
  • In highly progressive environments, conservatives are a minority that feel like they need to stay in the closet to avoid open hostility. We should empower those with different ideologies to be able to express themselves.
  • Alienating conservatives is both non-inclusive and generally bad business because conservatives tend to be higher in conscientiousness, which is require for much of the drudgery and maintenance work characteristic of a mature company.

Confront Google’s biases.

  • I’ve mostly concentrated on how our biases cloud our thinking about diversity and inclusion, but our moral biases are farther reaching than that.
  • I would start by breaking down Googlegeist scores by political orientation and personality to give a fuller picture into how our biases are affecting our culture.
  • Stop restricting programs and classes to certain genders or races.

These discriminatory practices are both unfair and divisive. Instead focus on some of the non-discriminatory practices I outlined.
Have an open and honest discussion about the costs and benefits of our diversity programs.

  • Discriminating just to increase the representation of women in tech is as misguided and biased as mandating increases for women’s representation in the homeless, work-related and violent deaths, prisons, and school dropouts.
  • There’s currently very little transparency into the extend of our diversity programs which keeps it immune to criticism from those outside its ideological echo chamber.
  • These programs are highly politicized which further alienates non-progressives.
  • I realize that some of our programs may be precautions against government accusations of discrimination, but that can easily backfire since they incentivize illegal discrimination.

Focus on psychological safety, not just race/gender diversity.

  • We should focus on psychological safety, which has shown positive effects and should (hopefully) not lead to unfair discrimination.
  • We need psychological safety and shared values to gain the benefits of diversity
  • Having representative viewpoints is important for those designing and testing our products, but the benefits are less clear for those more removed from UX.

De-emphasize empathy.

  • I’ve heard several calls for increased empathy on diversity issues. While I strongly support trying to understand how and why people think the way they do, relying on affective empathy—feeling another’s pain—causes us to focus on anecdotes, favor individuals similar to us, and harbor other irrational and dangerous biases. Being emotionally unengaged helps us better reason about the facts.

Prioritize intention.

  • Our focus on microaggressions and other unintentional transgressions increases our sensitivity, which is not universally positive: sensitivity increases both our tendency to take offense and our self censorship, leading to authoritarian policies. Speaking up without the fear of being harshly judged is central to psychological safety, but these practices can remove that safety by judging unintentional transgressions.
  • Microaggression training incorrectly and dangerously equates speech with violence and isn’t backed by evidence.

Be open about the science of human nature.

  • Once we acknowledge that not all differences are socially constructed or due to discrimination, we open our eyes to a more accurate view of the human condition which is necessary if we actually want to solve problems.

Reconsider making Unconscious Bias training mandatory for promo committees.

  • We haven’t been able to measure any effect of our Unconscious Bias training and it has the potential for overcorrecting or backlash, especially if made mandatory.
  • Some of the suggested methods of the current training (v2.3) are likely useful, but the political bias of the presentation is clear from the factual inaccuracies and the examples shown.
  • Spend more time on the many other types of biases besides stereotypes. Stereotypes are much more accurate and responsive to new information than the training suggests (I’m not advocating for using stereotypes, I [sic] just pointing out the factual inaccuracy of what’s said in the training).

[1] This document is mostly written from the perspective of Google’s Mountain View campus, I can’t speak about other offices or countries.

[2] Of course, I may be biased and only see evidence that supports my viewpoint. In terms of political biases, I consider myself a classical liberal and strongly value individualism and reason. I’d be very happy to discuss any of the document further and provide more citations.

[3] Throughout the document, by “tech”, I mostly mean software engineering.

[4] For heterosexual romantic relationships, men are more strongly judged by status and women by beauty. Again, this has biological origins and is culturally universal.

[5] Stretch, BOLD, CSSI, Engineering Practicum (to an extent), and several other Google funded internal and external programs are for people with a certain gender or race.

[6] Instead set Googlegeist OKRs, potentially for certain demographics. We can increase representation at an org level by either making it a better environment for certain groups (which would be seen in survey scores) or discriminating based on a protected status (which is illegal and I’ve seen it done). Increased representation OKRs can incentivize the latter and create zero-sum struggles between orgs.

[7] Communism promised to be both morally and economically superior to capitalism, but every attempt became morally corrupt and an economic failure. As it became clear that the working class of the liberal democracies wasn’t going to overthrow their “capitalist oppressors,” the Marxist intellectuals transitioned from class warfare to gender and race politics. The core oppressor-oppressed dynamics remained, but now the oppressor is the “white, straight, cis-gendered patriarchy.”

[8] Ironically, IQ tests were initially championed by the Left when meritocracy meant helping the victims of the aristocracy.

[9] Yes, in a national aggregate, women have lower salaries than men for a variety of reasons. For the same work though, women get paid just as much as men. Considering women spend more money than men and that salary represents how much the employees sacrifices (e.g. more hours, stress, and danger), we really need to rethink our stereotypes around power.

[10] “The traditionalist system of gender does not deal well with the idea of men needing support. Men are expected to be strong, to not complain, and to deal with problems on their own. Men’s problems are more often seen as personal failings rather than victimhood,, due to our gendered idea of agency. This discourages men from bringing attention to their issues (whether individual or group-wide issues), for fear of being seen as whiners, complainers, or weak.”

[11] Political correctness is defined as “the avoidance of forms of expression or action that are perceived to exclude, marginalize, or insult groups of people who are socially disadvantaged or discriminated against,” which makes it clear why it’s a phenomenon of the Left and a tool of authoritarians.
          Class Wars Preliminary MAGES (Feb 2016) – Misty        
Greetings Heroes! In this post we share with you an example of Class Wars Preliminary round battles from Mage Class (thanks to Misty; Feb 2016 CW) and below you can find the video and some more information: Character overview: Not a lot of changes from last class wars. Increase in Intel stats are from mount […]
          What Exxon Knew About Climate Change        

By Bill McKibben [Photo: Mikael Miettien.] Wednesday morning, journalists at InsideClimate News, a Website that has won the Pulitzer Prize for its reporting on oil spills, published the first installment of a multi-part expose that will be appearing over the next month. The documents they have compiled and the interviews they have conducted with retired […]

The post What Exxon Knew About Climate Change appeared first on Cyrano's Journal Today.

       

Related Stories

 

          Jimmy Carter on US ‘Oligarchy’ and Corrupting Power of Money on Politics        

By Lauren McCauley [Photo: Jimmy Carter speaking at the Commonwealth Club in 2013, wikimedia.] Commenting on the political landscape, now six years after the U.S. Supreme Court’s Citizens United ruling, former U.S. President Jimmy Carter laments that Washington D.C. has become corrupted by the influence of money. “We’ve become, now, an oligarchy instead of a […]

The post Jimmy Carter on US ‘Oligarchy’ and Corrupting Power of Money on Politics appeared first on Cyrano's Journal Today.

       

Related Stories

 

          Citibank Calls for Helicopter Money Drops across Globe        

By Stefan Gleason [Cartoon: helicopter dropping money in Lewes Delaware Angler’s Marina. (RKVC.] A quietly panicking Janet Yellen and the Federal Open Market Committee (FOMC) decided the U.S. economy still isn’t ready for an interest rate hike last week and left the Fed funds rate at essentially zero – the same level to which the […]

The post Citibank Calls for Helicopter Money Drops across Globe appeared first on Cyrano's Journal Today.

       

Related Stories

 

          Austerity is Smokescreen for Class War Against Poor, Says Yanis Varoufakis        

By Sarah Lazare [Photo: Anti-austrity protest in Dublin. William Murohy / flickr.] Austerity and deficit reduction are smokescreens for class war against the poor, economics professor, former Greek finance minister, and fiery commentator Yanis Varoufakis declared Thursday on BBC’s Question Time. Varoufakis made the statements during a panel debate with United Kingdom politicians and pundits […]

The post Austerity is Smokescreen for Class War Against Poor, Says Yanis Varoufakis appeared first on Cyrano's Journal Today.

       

Related Stories

 

          Comment on A Response to Rosaria Butterfield by evan773        
As I read through Butterfield's and Burk's statements, it reminded me again of what particularly annoys me about that crowd. It also explains why I'm no longer an evangelical. Neither Burk nor Butterfield seem interested in coming to a theologically nuanced understanding of this notion of homosexuality. Rather, Burk and Butterfield seem to be much more interested in defending a particular position from attack. But that position, if one examines it closely, is something akin to what Strauss would call a "noble lie." It's something that's close to the truth, but represents a truth that's been stripped of nuance and gray. It operates on the principle that clarity is usually more important than accuracy. Ross Douthat penned a great piece a few years ago, entitled, "Social Liberalism as Class Warfare." Since the 1980s, the cognitive elite has become its own distinct subculture. One of the hallmarks of that subculture--among all of its members--is a rejection of explicit moralizing, and particularly of "noble lies" intended to encapsulate moral rules of thumb. After all, when elites think of same-sex marriage, they're not thinking of Castro. Rather, they're thinking of educated, wealthy gays who work as bankers, lawyers, accountants, etc. Evangelicalism is a middle-class phenomenon. It serves a populace that needs guardrails, and who lack the professional restraint and self-discipline that one finds among the cognitive elite. I travel extensively for work. Recently, I had to travel to a nearby rural county to attend a court hearing. The week before I had been in Shanghai and Tokyo. It struck me that I felt far more out of place in this rural county 30 miles form my home than I felt in Shanghai or Tokyo. The many billboards warning of the dangers of opioid abuse made it clear that I was entering a world that was completely foreign to my social world. I say that because I don't think we have a common language any more for discussing issues of sexuality. I'm asexual. Even so, I find relationships with women to be overly complicated. And I generally find myself being more emotionally and aesthetically attracted to other guys. I generally couldn't care less what women think about me; I care a lot what guys think about me. If I were ever to enter into a committed relationship, it would likely be a same-sex relationship. I would describe my attraction tendencies as complex, but they're probably no less complex than anyone else's. I expect my church to arm me with wisdom to navigate that complexity, not to tell me noble lies that push me to deny it. In that sense, I believe that these are decisions that are simply best addressed at a local level within local churches. Churches that minister to cognitive elites are likely to handle this differently from churches that minister to middle-class non-elites. And local churches need to have the freedom to do that.
          Barnhardt: Banned In Boston - Transcribed        

Kudos to Vanderleun for posting this:


Hello, my name is Ann Barnhardt and I am the person who says the things that everyone else is too terrified to say.

This is the speech that I was going to deliver in Boston today, May 15, 2011, had a facility been available to me. Unfortunately, no facilities were willing to host my speech, sponsored by Rabbi Jon Hausmann, because I was deemed to be “hateful”, “bigoted” and “potentially violent”. 


Well, we’ll see about that.

In this speech we are going to cover a lot of intellectual and theological ground. I tend to set my goals extremely high, and this speech is no exception. 


I hope to fully explain the relationship between Christians and Jews in today’s world, and show that we, and really all people of civilization and good will, are allied in a war of survival against satanic evil, manifested today by islam and Marxism.


I am also going to show how our fundamental human rights as codified in the Constitution of the United States flow directly out of the Judeo-Christian milieu and the bible.

I will then contrast this to the Marxist-islamist paradigm, and show that Marxism and islam are actually cut from exactly the same philosophical cloth.


Finally, I will discuss my personal three-point tactical plan that I will carry out should the proverbial “poop” hit the proverbial fan. My three-point plan serves not only as a system of engagement, but it simultaneously rebuts any and all accusations of “intolerance”, “bigotry” and “hatefulness”. 


AND I aim to do all of this in less than 30 minutes. Like I said, I’m a very high goal-setter.


The first concept we need to tackle is that of the relationship between Judaism and Christianity. There is a tremendous amount of confusion, ambiguity and bigotry flowing in both directions. There are plenty of anti-Semitic Christians who think that the Jews are the accursed killers of Christ. There are also plenty of Jews who think that Christianity despises them as a point of intrinsic doctrine. Both are completely wrong, and it is high time that someone stepped up and explained the relationship clearly and without mincing any words.


The fact of the matter is this: you show me an anti-semitic Christian, and I’ll show you a Christian who is completely and totally clueless about his faith. Sadly, in this day and age, most Christians are exactly that – CLUELESS. And that goes for everyone, Catholic, Protestant, non-denominational, all of them. If we look at the Church from an intellectual standpoint, it has already been reduced down to just a mere remnant. There are so many heresies active today that it would take a lifetime to define them all individually, so I have named them corporately. What the Church suffers from today is the Heresy of Stupidity.


Now everyone listen up, Jew, Christian, atheist – everyone.


The foundational premise of the Jewish people and of Israel is that Israel is the representative proxy for humanity. This is why the Jews are called “the chosen people”, because they are. God chose Israel to stand in representation of all people everywhere. This is an honor, but it is a taxing and dubious honor due to the Fall of Adam and Eve and the inherent tendency that all people have for sin, which is called concupiscence.


God chose Israel to stand at the fore of humanity and be the people with whom the historical narrative of Salvation History is played out. This began with a married couple, Adam and Eve, and then expanded to a family unit through Noah, then the expansion moved to the tribal level through Abraham, the national level through Moses, then to the level of a kingdom through David, and finally in the fullness of time the expansion moved beyond Israel to cover all people everywhere through Jesus Christ. BUT, the only way to fully understand God’s relationship with us as individuals is to understand God’s interaction with Israel through history.

We see in the Old Testament a continuous pattern of Israel falling away from God in sin, and God taking Israel back, many times after a required chastisement to make Israel fully appreciate the gravity of its sin. God says to Israel over and over again that He will NEVER, EVER forsake His covenant. God uses the imagery of marriage to make Israel understand that the relationship between God and Israel is not a mere legalistic contract – it is a covenant sealed in flesh. The covenant cannot be broken. It can be abused by one of the partners, but it can never be broken.


God does not walk out. God does not “get divorced”. He always has been and always will be ready and willing to take us back, forgive our indiscretions and betrayals, if we will only turn back to Him. He did it after the unfortunate incident with the golden calf at the foot of Mt. Sinai. He did it after the numerous phases in which Israel had bad kings and fell into idolatry and immorality. He did it with King David after David’s sins of the flesh.

The exuberant joy of the “honeymoon” period after Israel’s return to God was put into words by Solomon in the Song of Songs. The image of the rocky trials of the marriage relationship was put into writing by the prophet Hosea.


Every macro image of Israel presented in the Bible maps perfectly to the micro context of the individual. Every sin committed by Israel corporately is a sin I have personally committed as an individual. The worshiping of idols, the failure to trust in God’s provision, the hypocrisy, the sins of the flesh – all of them. Every single one. They all map precisely to me as an individual. And to each and every human being.

And now we move into the New Testament. There are many verses in which Jesus soundly and harshly rebukes the Jews and the Pharisees. Knowing now as we do that Israel is standing in our personal stead as the proxy representatives of humanity as a whole and as us as individuals, we need to read these words of Christ as chastisements and critiques of us individually and personally, not as a critique or condemnation of a third party.


When Christ says, “Woe to you, scribes and Pharisees, you hypocrites . . .” He is speaking directly to me. “Woe to you, Ann, you hypocrite.” When Christ says, “You are like whitewashed tombs which appear beautiful on the outside but inside are full of dead men’s bones and every kind of filth” He is speaking directly to me. I am the serpent. I am the brood of vipers. I am the liar. And if I may be so bold, so is every one of you.


The more a person thinks that Jesus is speaking not to them but only to the Jews, and then considers themselves able to sit in seething hatred of the Jews, the further from Christ they actually are. These people who read Jesus’ words as exclusive to Jews aren’t in the right ballpark, they aren’t even in the right galactic cluster. This is the Heresy of Stupidity in full bloom.


Now to ten of the most beautiful words in the New Testament. Every Jew watching this has heard these words, and probably has shuddered every time they heard them. These ten words have been twisted by stupid, ignorant people to justify horrific acts of evil against Jews for 1978 years. And many of these people have claimed to be pious Christians. Well, we’re going to fix this deal once and for all. The ten beautiful words are: “Let His Blood be upon us and upon our children.”

These are the ten words shouted by the Jewish crowd to Pontius Pilate as he was sentencing Jesus. I repeat these words internally at every Mass, because these are the words that give hope to humanity. These are the words that open the gates of heaven. These words are the means by which our salvation is accomplished.

At every Mass, the temporally transcendent sacrifice of Calvary which is the Body, Blood, Soul and Divinity of Christ Himself, re-presented to God the Father by the power of God the Holy Ghost. This is accomplished through the transubstantiation of Bread and Wine as prefigured by the priest and King Melchizedek in Genesis 14. This sacrifice is the Todah sacrifice of Israel, which is the only sacrifice to be offered in the post-messianic age and for all eternity, according to ancient Rabbinic teaching. The Todah sacrifice is the sacrifice of Thanksgiving. The word “Thanksgiving” in Greek is Eucharist. The Divine Surprise to Israel and the world is that GOD provided and provides HIMSELF IN THE FLESH as the final, worthy and fully efficacious Todah sacrifice.

There is a saint called St. Gaspar del Bufalo who was an Italian priest who had mystical visions during his life. In one of St. Gaspar’s visions during a Mass, he saw angels approach the altar after the consecration of the wine into the Precious Blood. The angels took branches of hyssop and dipped them in the chalice. The angels then turned and proceeded to sprinkle the people with the Blood of Jesus, exactly the way that Aaron and all of the Levitical priests sprinkled the people of Israel with the blood of the animal sacrifices of the Old Covenant. We are literally being showered and cleansed with the Precious Blood of Jesus.


Let His Blood be upon us and upon our children.

I believe this is happening at every Mass in a dimension that we are not, at this time, able to physically see. And so TO the Jews who stood in Pilate’s courtyard as my representative, and as the representatives of all humanity, and called the Precious Blood of Jesus down upon humanity, all I can say is THANK YOU. God heard the deep, groaning cry of Israel, and answered it, even though Israel didn’t understand it themselves. And again, isn’t this exactly what I do as an individual? I lash out at God in groans of anger and despair and misunderstanding, and He hears me, and answers by transforming my anger and despair and misunderstanding into grace, through His Mercy.

In the last month and a half since I burned my Koran on YouTube, I have received a significant amount of anti-semitic email and comments left on my YouTube Channel. They are all fairly similar, but I did reply to one in particular. The man started out by complimenting my burning of the Koran and then asked, “When are you going to go after the Christkillers?” And then proceeded to launch into a typical anti-semitic diatribe, concluding that if I didn’t share in his anti-semitism, that I wasn’t really a Christian. I responded thusly:

“Sir, you are deeply confused. I killed Jesus. The Jews are merely the historical proxy for me.”

That shut him up. And I would invite all of the Jews the world over to feel free to use my reply if ever accused of being “Christkillers”. Please reply by saying, “No, Ann Barnhardt killed Christ.” 



Because that is the truth. I betray Him, and like Judas, I do it with a kiss.


It is ME who is whipping Him with the flagellum at the pillar. It is ME who spits on Him and laughs at Him as He carries the Cross that should be mine. It is ME who nails Him to the Cross. And it is ME who callously walks away leaving Him to die in my stead. And I do it every damn day. And yet He stays. You would think that He would eventually get to the point where He would simply say, “This is too much. I can’t do this anymore. I’m sorry it didn’t work out between us, but I think it is better that we just go our separate ways.” But no. He’s not going anywhere because it is the same with me as it is with Israel. We are in a covenant, and He will not forsake that covenant. Ever. No matter how much I deserve it. He chose to enter into it, and I am free to choose whether or not I respond to that covenant or not – just like Israel was free to drift in and out of His Grace over the centuries.

Now that we understand that Israel is the proxy for all of humanity, both on a macro scale, and on a micro, individual scale, we can now turn to the question of proper systems of human governance as revealed to Israel and recorded in scripture.


We need to start in Exodus chapter 18. Israel has just escaped Egypt and is traversing the desert toward Mt. Sanai. Moses is visited by his father-in-law, Jethro. Yes, the Jethro on the Beverly Hillbillies is named after Moses’ wifes’ father. And for very good reason, because Jethro was blessed by God with wisdom that would affect all of humanity. When Jethro arrived, Moses was sitting at the head of a huge line of people. One by one, each party would approach Moses and tell him of some sort of problem or disagreement between them that needed judgment, and one by one, Moses would judge these issues and claims. And this would go on for days, because there were hundreds of thousands of people in Israel, even at this time. Moses was judging them and governing them all alone.

When Jethro saw this he told Moses that it was “not good”. Jethro then, by the inspiration of the Holy Spirit, explained to Moses the concept of governmental subsidiarity. Jethro laid out a system whereby the people were encouraged to govern themselves in a tiered representative structure. The first tier removed from the individuals themselves was in groups of ten families. This would be the analogue of a neighborhood. The next representative tier was in goups of fifty. This would be analogue to a city or county commission. The next tier was in groups of one hundred. This would be the analog of a state legislature. The next tier would be in groups of one thousand. This would be the analogue of a national legislature. Finally came Moses himself, with Aaron at his right hand and Joshua at his left hand. This would be the equivalent of a Chief Executive with a cabinet.

Yes, our current system of representative republic governance in the United States was modeled after the Jethrine system in scripture. The big difference between The Jethrine system and our system is that in the Jethrine system, Moses personally appointed all of the representatives based upon their Godliness and good character. In our system, representatives and the Chief Executive, or President, are elected. However, the over-arching concept here is the concept of SUBSIDIARITY.

Subsidiarity is defined as the idea that a central authority should only perform those tasks which can not be performed effectively at a more immediate or local level. In other words, the most power resides with the sovereign individual, and as layers of government move away from the individual, the power structure necessarily dilutes, being tasked with those objectives that only they are capable of performing.


In the case of our federal government, those tasks would include such things as coordinating national defense, negotiating and entering international treaties and trade agreements, and perhaps most importantly, ensuring that the Rule of Law as defined in the Constitution is preserved, protected and defended throughout the chain of subsidiarity all the way back to the individual.


This concept of subsidiarity was first formally defined and codified by – GUESS WHO – the Catholic Church, although the concept existed and was understood and practiced in various ways all the way back to Jethro and Moses at the foot of Mt. Sinai. The Catholic Church has always understood subsidiarity through the life and actions of Christ Himself. Jesus Christ, the King of Kings, manifested His Kingship by submitting Himself totally and completely to his subjects, to the point of willingly dying for them, and thus doing for them the one thing that they could never do for themselves, which is make perfect atonement for their sins.

Subsidiarity is not exclusive to democracy, representative republic or parliamentary republics. Subsidiarity can be executed in many systems of governance, including hereditary monarchies. This is why Christ did not call out a specific form of governance, because He knew that many forms of governance are feasible, so long as subsidiarity is observed. History has shown us that a Godly man can reign as a king, living as a humble servant to his people. In the Old Testament Good Kings included Asa, Hezekiah and Josiah. In modern times, King St. Louis the ninth of France, King St. Stephen the first of Hungary, and King St. Casmir of Poland are examples of Godly monarchs who ruled in a spirit of subsidiarity.

As a corollary, democratic or representative republic systems do not guarantee subsidiarity, and if infiltrated and usurped by Godless, power-hungry, money-grubbing moral degerates like Barack Obama, Nancy Pelosi, Harry Reid, Hillary Clinton, Charles Schumer, Lindsey Graham, John McCain and all the rest, those systems will lead to totalitarianism and ultimate collapse.


That is what we are seeing happen right now. This is also why the so-called “Arab Spring” is no such thing. The totalitarianism of the Islamic political system, elevated to power, though it may be, by democracy, is still totalitarianism. So long as islam is the driving force behind ANY form of government, that government is satanic by definition, and by definition will destroy the people within it. Don’t kid yourself. The Arab Spring is the Arab Winter, because that is all it can ever be.

The Catholic Church, and many Protestant sects as well, today have been infiltrated and infested by Marxists. There is still a remnant remaining, but please understand that the infiltration and rot is DEEP. Any Catholic, from a lay person all the way up to an Archbishop or Cardinal, who proclaims Marxism, and ratifies the concentration of power in the state to redistribute wealth by force, or to elevate the importance of the collective above the dignity of the individual is a DIRTY SATANIC LIAR. Period. End of story.


And that goes not just for Catholics but any Christian or Jew, because the concept of subsidiarity was revealed at the foot of Mt. Sinai, recorded in the Torah, and demonstrated par excellence by Christ crucified on Calvary.


The argument that Christ’s call to love and serve the poor is to be achieved by dehumanizing the individual and installing a totalitarian state is satanic, serpentine manipulation. You filthy Marxist scum have been twisting and perverting the Gospel into this satanic filth for decades, and you know what? I’m ending it. Right here and right now.


You CAN NOT BE both a Christian or an observant Jew and a Marxist.


Specifically to Christians now: you cannot advocate a satanic system of governance whilst claiming to be preaching the Gospel of Christ. Nope. You have to pick. It’s either Marxism or Christ.


And so to Jeremiah Wright, Jesse Jackson, Al Sharpton, the majority of the United States Conference of Catholic Bishops, the majority of the Jesuit order, the majority of the United Methodist church, the majority of the Presbyterian Church USA, the majority of the Evangelical Lutheran Church, the majority of the Episcopalian Church (what little is left), and of course, the ironically named Disciples of Christ and United Church of Christ, and all of the others, CHOOSE. 


CHOOSE NOW. 


It is either Christ or Marx. If you choose Christ – great. Praise the Lord. If you choose Marx – in even the smallest way – and we all know that you will, pack your bags and get out. And we’ll be praying for you and for your conversion and return to the fold as authentic Christians. But your days of squatting in the Church are OVER.

Finally, I would like to lay out my three-point tactical plan should the Marxist-islamic poop hit the proverbial fan, which I am afraid is all but inevitable at this point.


In this portion, I would like to focus once again especially on the Jews in the audience. So far, we have established how Israel has been the proxy for humanity throughout Salvation History. Understanding that as we do, we can now see that to hate Israel is to hate humanity itself.


All we need do to confirm this is look at where the locus of anti-Semitism exists in today’s world. There are two main loci today: Marxism and islam. Both of these political systems have at their core an intrinsic hatred of the individual man. Both mask this seething hatred by wrapping themselves in a false cloak of collectivism, manifested in the call for Marxist class warfare and jihad. Both systems use the Jews as their primary scapegoat and whipping boy, blaming all problems in the world on Jews, and then calling for the “final solution” to the stumbling block to utopia that is the Jewish race.


From the Koran to Mein Kampf, the rhetoric is exactly the same: exterminate the Jews so that utopia can be achieved. But what this is at its core is a call to exterminate humanity itself, which is the ultimate goal of both Marxism and islam. If the Jews are exterminated, the rest of humanity will follow quickly, because if the Jews are exterminated, that means that there are no longer any people of good will on earth who could see and understand the representative quality of humanity itself in Israel. No one would be left to take up the banner of Christ and the Church Militant to march against the forces of evil in defense of not just Israel, but of all human life on earth. It is essential to approach, understand and see this coming war with the forces of evil through that lens.

I recently saw a video of an Islamic execution taped in the Middle East. In it, the three condemned men were bound hand and foot, standing beside an incinerator, or furnace. The men were doused with an accelerant, presumably gasoline, and then thrown alive into the incinerator, where they could be seen writhing in flames as they died in the furnace. These men were not Jews, but that is beside the point. They were human beings who ran afoul of Sharia Law.


This is what is coming. This, and executions like this, are the inevitable destination of both islam and Marxism. Hitler had his ovens. Stalin had his gulags. Mao had his execution quotas. The Khmer Rouge had their killing fields.

And so here is what I say to all people of good will, but specifically today to the Jews. If a second holocaust begins and you find yourself standing bound on the precipice of an incinerator – I’m coming.

My first tactical objective will be to come in, guns-a-blazing, and rescue you and we’ll both get out of there, and hopefully take a bunch of evil men out in the process. That is objective number one.

If that doesn’t work and I am unable to free you by force of arms, I will negotiate with the evil executioners to switch places with you. I will offer to be executed in your place, so long as you are freed. That is tactical objective number two.

If that doesn’t work, then I am going to stay and die with you.


There is no possible way that I am going to turn my back on you as you stand on the precipice of the incinerator, walk away and let you die alone and afraid and then congratulate myself on my ability to “handle and survive the situation”. No. I am going to stand beside you, I am going to throw my arms around you, and I am going hold you and tell you that I love you. I am going to make certain that the last sounds you hear ringing in your ears on this earth are the sounds of a friend telling you that you are loved, and that you are precious, and that you are not, never have been, and never will be alone. And then we will go into the incinerator together. Because I can’t think of a better way to die – with the words “I love you” on my lips. THAT is tactical objective number three.

One final question. Do you honestly believe that Barack Obama or Nancy Pelosi or Harry Reid or John Kerry or any of the Hollywood people, or Michael Moore or Keith Olbermann or Joy Behar or any of the people who would call me a venomous hate-spewing bigot would stay and die with you if it came down to that? Of course they wouldn’t and we all know this. But I am the hate monger. I’m the bigot. I am the danger to society.

Ladies and gentlemen, Western Civilization has officially jumped the shark. The words, “I love you”, delivered in sincere Christian charity are now a hate crime that warrants the suppression of free speech.

Thank you for your time.

My name is Ann Barnhardt . . . . and I love you.

          Here’s what happened when they raised taxes 2,000+ years ago        
In 353 BC, as violent class warfare broke out across ancient Greece, one wealthy Athenian lamented in his journal, When I was a boy, wealth was regarded as a thing so…admirable that almost everyone affected to own more property than he actually possessed. Now a man has to be ready to defend himself against being rich as if it were the worst of crimes. Ancient Greece had become deeply divided at that point. The opportunities from new ‘technology’ and new trade routes created a lot of wealth for many people. Others were left behind. Plato called it “the two cities” of Athens — “one the city of the poor, the […]
          Compassionate Conservatism        

In my last post, I included a link to some talking points to use when discussing the differences between our two presidential candidates with people on the fence, reachable Republicans, or even hardcore right-wingers who need a wake-up call.

Tonight, I'd like to highlight the other side of the talking points with which we all need to acquiant ourselves, showing how there's nothing traditionally "conservative" about the contemporary Republican party. Yes, there are still plenty of good, decent, well-meaning people with an (R) after their name. But the party's mission and apparatus have been hijacked by some right-wing ideologues who wouldn't know the planks of the party's traditional platform -- things like fiscal discipline and personal responsibility -- if you whacked them over the head with them.

The Religious Right gets plenty of attention, as well it should, for dragging the country along on a Mr. Toad's Wild Ride of intolerance, moral hectoring, and eschatology. But despite all the lip service he pays that faction (much of it in verbiage that's under the radar of Americans who aren't "aware" the second coming is nigh...) George W. Bush's true base consists of the well-to-do who resent having to pay one dime towards social programs for the weakest and meekest in our society.

The Prime Mover of that particular religion is one Grover Norquist. Though he's well-known inside the Beltway, he's been a behind-the-scenes figure for many years, only recently stepping out of the shadows to make a name for himself with remarks to the effect of wanting to shrink government down to a size where he could drown it in a bathtub. Or equating the imposition of the estate tax solely on the rich with the logic that led to the Holocaust.

It's no coincidence that Norquist has become more prominent and more vocal as the Bush administration has grown more brazen pursuing its hard-right agenda since 9/11. On the one hand, it's sickening to think we now live in a country where someone as selfish and nihilistic as this can spout off without having to worry about condemnation (outside of isolated, traditionally liberal circles).

On the other hand, let's be thankful for what we've got, which is someone on the right who doesn't say one thing and do another. Norquist is a lot of things I revile...but I'll give him this: he's honest. He recently ran down the ultra-conservative governor of Ohio, Bob Taft, for not being conservative enough. Kudos to the person who happened to catch it on tape...

The modern Republican party knows how to get its members to fall in line (there's a reason Tom Delay is called "The Hammer") so you'd think someone would have given Norquist the order to fall in line. But apparently he's untouchable -- which says an awful lot about the party -- because he felt perfectly comfortable making the following statement, regarding the future prospects of the Democratic party in America, just a few days after the Taft flap:

"Yes, because in addition their demographic base is shrinking.  Each year, 2 million people who fought in the Second World War and lived through the Great Depression die. This generation has been an exeception in American history, because it has defended anti-American policies.  They voted for the creation of the welfare state and obligatory military service. They are the base of the Democratic Party. And they are dying. And, at the same time, all the time more Americans have stocks. That makes them defend the interests of business, because it is their own interest. Because of that, it's impossible to bring to the fore policies of social hate, of class warfare."


Lemme get this straight: the "Greatest Generation" defended ANTI-AMERICAN policies?!! And Norquist is gloating over the deaths of WWII veterans because it means the Republicans can shore up their hegemony?!!

Let's think about the traditional definition of fascism. It's come to be known as goosestepping allegiance to a nationalist dictator (for good reason, I should add) but as Mussolini envisioned it, it was ruling by a confluence of government and business. Go back and re-read Norquist's statement, and ponder his remarks about WWII vets defending "anti-American policies" and his opinions regarding the "interests of business."

Now I'm not callin' nobody nothin', but...think about it.

Norquist is a MAJOR player in current policy-making. He convenes a weekly breakfast meeting to hash out policy that is a Who's Who of the Republican power machine. He sends out daily faxes that delineate the day's talking points for right-wing media. He is, in short, at the eye of the Republican storm.

And he's never been elected to anything. But he's playing a major role in running our government.

Nice work if you can get it.

Republicans need to be reminded CONTINUALLY, between now and November 2nd, that support for "their" party and "their" candidates is support for this kind of bullshit. Sensible liberals seem to get it thsi year, that a vote for Nader is a vote for Bush. Republicans who can be reasoned with need to get it too: a vote for Bush is a vote for Norquist. In other words, a vote against every single thing this country is supposed to stand for.

The left has its share of kooks, to be sure. But as any good party should, we do a decent job sending the biggest whack jobs off into the wilderness. Bush/Rove on the other hand, are counting on their whack jobs to turn out in November.

When they're not trying to get them elected. Just to put things in perspective: the keynote speaker at the Democratic Convention was by the young, thoughtful, and inspiring Barack Obama; the RNC turned to the Strom Thurmond-wannabe Zell Miller for theirs. And who did the Republicans finally field to challenge Obama in Illinois? Alan Keyes.

Alan Freakin' Keyes.

Pathetic. Yet I know plenty of sensible, decent people who feel this party does a good job of representing their interests...

Sleep tight,
Moonlighter.
          Re:Politics - USA        
 Co'tor Shas wrote:
Asterios wrote:


I would quote my sources but last time I did I got warned for spam from a moderator who did not agree with me since there is more then one source involved,


Just make the whole quote a link. Problem solved.
as it goes its not hard to find its all part of the public record, also of course the NAACP would defend a democrat, they are democrats

Yeah, no. The NAACP supports black people and isn't going ro protect someone who works against their wellbeing.

and yet fail to mention how Democrats founded the KKK.

The dempcratic party then and now are dramatically different, same for the republican party. But sure, democrats are the real racists.

and actually you may call Hitler a fascist but he was a liberal socialist trying to fight for the little guy and that was his party stance.which started off as the worker's party.


Oh, so you are just devoid from reality. Good to know. Because if you actually knew history, you would know that Hitler was extremely anti-communist. And was a fething fascist.


actually my sources are not one, albeit some sites may have combined them into one, but from various sources, the NAACP is one of the biggest racist organizations I know of on par with the KKK so I don't see any difference to be honest., no party is all racists and I didn't say Democrats are racists, just that the KKK was founded by Democrats, but hey your logic is your own but try not putting words into my mouth ok ? As to German fighting Russia, Socialism is not the same as Communism.

so·cial·ism
ˈsōSHəˌlizəm/Submit
noun
a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

com·mu·nism
ˈkämyəˌnizəm/Submit
noun
a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.

but if you want to believe they are the same thing, go for it.

http://www.diffen.com/difference/Communism_vs_Socialism
          Re:Politics - USA        
Asterios wrote:


actually my sources are not one, albeit some sites may have combined them into one, but from various sources,

Then just make the relivent quotes a link. It's not rocket science.

the NAACP is one of the biggest racist organizations I know of on par with the KKK so I don't see any difference to be honest.,

Care to back that up?
no party is all racists and I didn't say Democrats are racists, just that the KKK was founded by Democrats,

Which is a completely irrleivant peice of information in totday's society, and the political parties are not the same as they were back then.
but hey your logic is your own but try not putting words into my mouth ok ?
And if you aren't trying to insunuate that the D's are racist, what was the point of that?

As to German fighting Russia, Socialism is not the same as Communism.

so·cial·ism
ˈsōSHəˌlizəm/Submit
noun
a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

com·mu·nism
ˈkämyəˌnizəm/Submit
noun
a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.

but if you want to believe they are the same thing, go for it.

http://www.diffen.com/difference/Communism_vs_Socialism


I'm not saying they are, I'm saying they are directly linked. Communism is a radical off-shoot of Socialism. It takes the government control of the means of production one step further, to government constorl of everything. And Hitler being anti-communist is a good indication that he is not, in fact, a "liberal socialist". He wan't "a person who disagreed with communism", he was an "anti-communist".

Now can you stop avoiding the point and provide your proof that Hitler was a "liberal socialist", and not a fascist.

Edit: Also, actually use the period. Your run-ons are getting ridiculous.
          Class War 03/2016: IRAQ 1991 - Class war and bourgeois containment        
It was a quarter of a century ago, on March 7th, 1991, when the proletarian uprising in Iraq against war showed to the world proletariat the only way forward to eliminate wars forever. As always, on the other side of the social barricade, all the global forces of Capital acted as one body to liquidate the autonomy of our class.
          Kaiju Kavalcade: MATANGO (1963)        

 

Matango_1963_poster

LUCA:

For a movie called ATTACK OF THE MUSHROOM PEOPLE stateside, MATANGO doesn’t feature a whole lot of said fungal persons on the attack. And it’s all the better for it! But let’s take it back a bit and talk about what this movie IS about. After GOJIRA’s Lovecraftian, unstoppable, unknowable beast from the depths, MATANGO provides us with that other classic trope of weird fiction: the doomed narrator who will recount to the reader/viewer their story from the bowels of a hellish institution for the mentally unstable. A fun way to break the tokusatsu mold, and who better to usher us into this bleak tale of humanity lost than Akira Kubo, that Toho stalwart Godzilla fans know from INVASTION OF ASTRO-MONSTER, SON OF GODZILLA and DESTROY ALL MONSTERS. Kubo plays university professor Kenji Murai who, along with six others, undertook a doomed pleasure cruise deep into the Pacific. Murai’s ominous narration is actually quite intriguing, as it doesn’t promise viewers the tale of how EVERYONE DIED, but rather tells us that “they are all alive… and I am the one who is dead.” Okay, I’m down for this!

In a hilarious bit of classic Toho tonal shifting, this portentous statement is followed up by swingin’ 1963 big band music as we flash back to the ill-fated voyage. On board are other Toho mainstays Kumi Mizuno as Mami, famous actress, Hiroshi Koizumi as the skipper Naoyuki, Kenji Sahara as the first mate Senzo and Yoshio Tsuchiya as Kasai, the industrialist owner of the ship. Rounding out the maritime miscreants are novelist Yoshida and student Akiko. There’s a lot of faux-jolliness in the initial scenes, as it’s quite clear quite quickly that some of these people can’t really stand each other. A storm strands this ragtag crew of (mostly) 1%ers on an abandoned island, strangely bereft of all animal life and even edible plants. Tensions rise as the skipper warns everyone not to eat the ubiquitous fungi, as they may be poisonous. After some exploring, the group comes upon another stranded ship, overcome with rot and mold. Amazingly enough, this seemingly ancient vessel has only been here for a year, according to a recovered log book. With relations being strained ever thinner due to lack of food and no way to communicate with the mainland, along with the strange lure of the mushrooms, the group finds itself under great duress. But what will happen to them?

Well, Travis, I must say I rather enjoyed MATANGO as a hell of a detour from our usual Toho kid stuff! MATANGO is bleak. True, we weren’t very far from GOJIRA, which was no walk in a sun-drenched park, but we were also post-KING KONG VS GODZILLA, the definitive veering into comedy adventure. What I’m trying to say is, it’s refreshing to see director Ishiro Honda get to make a genre movie for adults again, and I have the feeling he must have enjoyed the experience as well. No Akira Ifukube this time, but music duties are most ably and atmospherically handled by Sadao Bekku, a fellow whose work I’ve not had the pleasure of hearing before this. What did you think of this tense island thriller, Travis?

matango

TRAVIS:

This is truly great filmmaking here, Luca. MATANGO is not only one of Toho's best tokusatsu movies, but it's also one of Honda's finest films. Though his career would be caught up and defined by the Godzilla machine, I suspect that MATANGO and GOJIRA were prime examples of the type of science fiction he was most invested in: human drama at the forefront while the supernatural threat looms ominously in the background. For G fans, MATANGO's also a great discovery to see Honda and some familiar Toho cast talent put on a tense, psychological thriller instead of the usual rompy kaiju fests. It reminds me of Joss Whedon's adaptation of MUCH ADO ABOUT NOTHING, which is certainly a break from his action flicks yet retains many Whedon players like Amy Acker, Nathan Fillion, and Clark Gregg.

To go back to the MATANGO/GOJIRA comparison, a sense of fatalism permeates both films and each one ends on a bittersweet note. In GOJIRA, Godzilla is finally obliterated by the Oxygen Destroyer, yet Takashi Shimura's character still bemoans that the monster could arise again if mankind continues to tamper with nuclear weaponry. It's only a small victory in the fast growing atomic age. Similarly in MATANGO (SPOILER ALERT!), despite Kubo keeping a level head and resisting the temptations of the mushrooms during the entire ordeal, he reaches the mainland as the sole survivor with the fungus infecting his face. Was the struggle worth it if the disease was inevitable? MATANGO's even darker as a streak of nihilism runs through the film with the survivors constantly at each others' throats. Issues of class warfare and sex between the members of the shipwrecked crew drive most of the drama in the movie even before the mushrooms become a legitimate threat. Though Kubo is rescued at the end, he wonders if coming back to so-called civilized society is any better. “They're becoming inhuman,” he muses as he gestures to the Tokyo cityscape.

The fighting amongst the group drives so much of the story that the appearance of the mushroom people almost feels like a secondary threat. And yet in spite of the goofiness of kaiju performers in fungal makeup or over-sized toadstool costumes terrorizing people, the tension and reality of the situation never feels broken when such an odd, cosmic entity infiltrates the plot. It's to Honda's credit that he first establishes the survivors' predicament in such a serious, dire fashion that any silly Showa tropes would feel improper. Secondly, as the groups slowly descends into their own isolated madness, the walking Matango are introduced and shot in a very hallucinogenic way with a warped out soundtrack filled with child-like laughter. Ivan Reitman once explained that why GHOSTBUSTERS ultimately worked was because he started the characters in a familiar setting (the schlubs thrown out by the academic snobs) then slowly used it introduce very fantastic elements until the film climaxed with a monolithic marshmallow man. In the case of MATANGO, Honda used the old potboiler of stranded survivors to tell a monster tale, ratcheting up the human drama until the monstrous horror is unveiled. It's refreshing to find a kaiju flick that builds towards the kaiju scenes in a disturbing manner rather than ticking down the clock till the wrestling match set piece. Did you find anything else striking in MATANGO, Luca?

matango-3

LUCA:

I'm of two minds towards the mushroom people themselves, because I honestly think they look kinda gross, and the children's laughter and psychedelic sound effects do a superb job of creating an atmosphere of madness. The muted, earthy colors Honda uses for the island (no surreal splotches of color to indicate the radioactive life form) stand in stark contrast to the swingin' sixties garb the human cast is attired in, making them look like little islands in an unending sea of decay, almost pathetically attempting to stand out and affirm their individuality. Such decadence is not good for anything, as the film's final thesis statements lets us know! "Perhaps they are alive and I am dead" indeed...

Here's the problem with the mushroom people, however! The fungus is supposed to be alluring because of the castaway's hunger (and maybe on a more supercerebral level as well). The horror is in the loss of self, and the discovery of what happened with the crew of the research vessel that was stranded here before our jolly 1%ers . When we finally see the mushroom people, the shit should basically be pretty much lost for everyone: this is your new reality, the movie should be saying at this point. It's a real short story ending. MATANGO is, in fact, based on William Hope Hodgson's "The Voice in the Night", making it one of the few movies we've covered (along with the original MOTHRA) to be based on outside material. Being a 1960s monster movie, however, we need some physical threat -- lumbering monsters in dark hallways, people in physical peril. Credit to Honda for keeping the mushroom people MOSTLY out of frame and in the distance for a majority of the movie, but there are some key moments where I was more confused than unsettled because of this necessity of the times. I think there's at least two moments where people are cornered by a (admittedly well built-up and shot) mushroom man but... don't seem to suffer any consequences? They just scream and we cut to other survivors, but later they're okay? Was there something I missed here, Travis? Maybe the mushroom men dissolved into spores to be breathed by their new victims/hosts to spread the infection, but the budget/technology wouldn't allow for such intricate visuals?

Despite my sluggish human brain's incapacity to process complex mushroom motivations, I was a big fan of this movie as well, Travis! It has even slightly nudged me to check out some Hodgson short stories. It also makes me kinda sad Honda wasn't allowed to branch out a bit more -- I'm sure Fukuda would have gladly picked up some slack! It's funny how a completely bleak movie becomes a breath of fresh air after many, many jolly ones. And with Toho returning to Zilla soon (2016), why not give other types of movies a shot? Can you imagine the internet hype machine for something like TOHO STUDIOS PRESENTS THE CALL OF CTHULHU?

MatangoAttackoftheMushroomPeople196

TRAVIS:

Oh man, a Toho take on some proper Lovecraft sounds tantalizing! Since we've tied Godzilla to the Old Ones earlier, we could also connect the mysterious Matango to the amphibious creatures known as the Deep Ones from H.P.'s famous short story “The Shadow over Innsmouth”. Both are species of upright walking monstrosities from the sea that promise eternal life through assimilation (though for the Deep Ones it's through mating and reproducing with humans instead of consumption for the Matango). Quite a scary prospect, Luca, but I also understand the confusion you had over the nature of the mushroom people. I think having them suddenly disappear into thin air during their attacks on the ship is supposed to make the audience question the sanity of the group. Is there an actual threat or are they just hallucinating? It kinda works until we finally see for sure that, yes, the Matango are truly strutting around the island. Then it just makes those past incidents even more confusing! It's a substantial criticism, but it's only a small smear on an otherwise fine film.

And MATANGO truly is a fine film and a testament to the talents of Ishiro Honda. Though he couldn't escape the giant monster capers that defined his filmography, he could still infuse them with the humanity and fine craftmanship that one might not expect in such low caliber fluff. By the year 1963 when MATANGO was released, he was already swept up in the kaiju factory, and in fact that same year also saw the release of Honda's sci-fi adventure ATRAGON (which introduced sea serpent Manda). The small personal films he directed early in his career alongside his tokusatsu movies would eventually fade away, and he would only make only more monster-free film (the romantic comedy COME MARRY ME in 1966) before retiring from feature directing with 1974's TERROR OF MECHAGODZILLA. In this historical context, MANTANGO is almost a bridge between the humanist stories he was personally invested in and the creature flicks that brought in the audiences. If you're a Godzilla fan that would like a break from the usual meat and potatoes kaiju diet, why not give in and try the mushrooms sometime?

 

Have a taste…

          Venezuela's economic reality        
The drama of Venezuela's political conflict is being carried out against the backdrop of its worst economic crisis in decades. With runaway inflation far outstripping the average wage, around 82 percent of Venezuelan households are living in poverty. Supermarket shelves are empty making the daily priority the search for just the basics. News of a delivery triggers massive queues. Yaritza Chirimos lives in Caracas: "Here, there are no medicines, there is nothing." Berta Mart'inez has someone to blame: "I want to tell the President Maduro to stop the lies because if he wants, we can take him to our homes and show him what is in our refrigerators." "Citizens form long queues every day to obtain products such as milk, pasta or rice ... The Constituent Assembly President Delcy Rodriguez has said its members will face the economic crisis that in her judgment is being promoted from abroad," reports Eduardo Salazar Uribe for euronews. Seems USA is purposely undermining Economy in #Venezuela & stirring up conflict there to bring down the Gov't. #WednesdayWisdom pic.twitter.com/zW0h9BGdvj- Christina (@55krissi55) August 9, 2017 Around half of Venezuelan workers are engaged in the so-called "informal economy" to survive, but that doesnt qualify them for social security. Economist Alejandro Grisanti has seen the economic reality for his countrymen and women get steadily worse. "About 40% of the population is eating less than 3 times a day, it could be 1 or 2 times a day...many Venezuelans have been forced to eat food scavenged from waste bins, often its the only food they have each day. This is not just happening out the back of restaurants and cafes, but on middle class housing estates." While the opposition is blaming President Maduro for the mismanagement of the economy, he still has a strong core of support who see the crisis in terms of a class war. Yetzaida Morillo is a government sympathizer: "Rich people do not like poor people and they will never fight for our needs and priorities." Our reporter Eduardo Salazar Uribe says if Maduro's government hopes to solve the economic crisis it will have an uphill struggle bearing in mind that the accumulated rate of inflation for this year is predicted to be around 1100%. How a poor economy and an increasingly authoritarian leader made Venezuela into Latin America's powder keg https://t.co/Jh7VBXVPnU pic.twitter.com/4Ncw5Tk5ba- Bloomberg (@business) August 6, 2017
          Class Warfare Not the American Solution to Budget Deficit        
Two weeks ago, President Obama ventured courageously into the debt crisis debate with soak-the-rich proposals aimed at the usual suspects—“oil companies,” “hedge fund managers,” “millionaires and billionaires,”—and a new enemy, “corporate jet owners.” That phrase may have tested well with focus groups, but economists and pundits weren’t duped. Continue Reading...
          Story Release: "Atlas" is out there in the world        
Cover art for Shimmer Magazine
Issue 31 May 2016, of two muscular
women engaged in combat
There are moments. A terrible event. The right inspiration. The right encouragement. The perfect story.

"An Atlas in Sgraffito Style" was born from earthquakes and Clarion. After many drafts (6? 8? I've lost count now), and no small amount of blood, sweat, and tears, it found a home at Shimmer Magazine. I wanted to use beautiful language to describe tragedy, the colour and life, and the forgotten people who rose up from the dust to take back what remained of their world, even when it was being eaten bit by bit by the darkness. Yeah, there are a lot of metaphors for the politics, street art, and class war that came out of the earthquakes.

I am such a sucker for great titles (a little bit of Tiptree in me I suppose), and when I came across the concept of sgraffito while researching street art, I knew I HAD to work that word and concept into the story. Sgraffito is a technique mostly used in plaster or ceramic work, building up layers then scratching through the top layer to reveal colour and/or texture beneath. This is the perfect metaphor for the story and Christchurch: a city scratching through the rubble to bring something beautiful up out of the destruction.

This is the best story I've written so far, and I'd really love to see it go a long way. It had the privilege of being beta'd by Catherynne M. Valente, one of my literary heroes, and it definitely flourished under her careful eye. My Clarion class also gave it the tough fisk it required. Thank you so much to Shimmer badgers Elise Tobler and Beth Wodinski for believing in my story and finding a place for it in their magazine.

Shimmer Magazine Issue 31 for May 2016 is now available, including stories from Arkady Martine, Bentley A. Reese, Rich Larson, and Rachel Acks. Each of the stories will be released online during May and June, with Martine's "All the Colours You Thought Were Kings" available now. "Atlas" will be available online from June 14. If you can't wait until then to read it and all the other fabulous stories, the magazine is available in e-formats for just $US2.99.


          "Elusive" world of the Poor in "Yahoolanthaya"        

"We will continue to progress in the noble endeavour to strengthen democracy, fundamental rights, reconciliation and development for lasting peace, freedom and national integration." said Finance Minister Ravi Karunanayake introducing his "Unity" government's budget for year 2017.

“The people didn’t ask for it (Referring to a one billion rupee 'vertical tower'). They want to get back on their feet. Give them something to boost their economy.” TNA Jaffna district MP Sumanthiran said in joining the budget debate.

This demand for something to the war affected people of the North and East "to get back on their feet" is demanded from a Sinhala Buddhist dominated government that has for almost 22 months been promising to "strengthen democracy, fundamental rights, reconciliation". It exhibits the ethno-religious divide in the country. A "divide" spelt in the South on a "historical right" of the Sinhalese, publicly claimed as "The land of Gauthama Buddha". Buddhism taken for granted as "property of the Sinhalese". That "divide" keeps the Tamil people "demanding" and the Sinhala Buddhist leadership always "promising". Dividing of society on the assumption of " historical ownership" of land, leads to majoritarian authority in society. Narendra Modi rode to power on it. Donald Trump created his "White supremacist" campaign against all "aliens" in America on similar terms.

Over 80 years ago in 1936, Bertolt Brecht captured this dividing factor on "racial supremacy" and read through its politics in a fictional land called "Yahoo". In collaboration with Margarete Steffin, Emil Burri and Elisabeth Hauptman and Hans Eisler as music composer, he wrote the play "Round Heads and Pointed Heads" to expose the perils of such vulgar opportunism. The original is based on an Italian parable used by Shakespeare for his play "Measure for Measure" which Brecht borrowed, calling it the most "progressive" drama by Shakespeare. The play was altered to present Brecht's own philosophy to the audience as "Round Heads and Pointed Heads".  

The name of the play and its main plot finds detail expression in the dialogue between Viceroy of "Yahooland" and Missena, his minister.
Searching for answers the country is getting dragged into, Missena tells his Viceroy, "The man's discovered that Yahoo has two quite separated races, living side by side. Who even outwardly are quite distinct…..The one race with rounded skulls, are called, says Iberin, the Zaks. And they have been a part of Yahoo's healthy blood and soil. Right from the dawn of immemorial time….The others, those with pointed heads….you follow? Are foreign interlopers in our land. They are called Ziks….."
Viceroy – "Pretty tale…But tell me. What's the point?"
Missena – "Instead of class war cleaving rich from poor,…. there's war between the Zaks and the Ziks."   

This play was translated to Sinhala by Hasini Haputhanthri and produced by the "Janakaraliya" mobile theatre group as "Watoluwo saha Uloluwo". It was directed by Rasaiah Loganathan and Sumudu Mallawarachchi, two young performing artistes with Janakaraliya. In Colombo it was last staged on 11 November for their festival held from 07 to 21 November.

Despite the time gap of 80 years, Brecht with his co-writers has seen through this complex power grid in societies influenced by big time profit makers and ruled for big profits. They discuss how crises and rebellions are trouble-shot by those in power to stay in power. The play thus brings out the conflict between the big profiteering landlords who fund the State of Yahooland and those tenant farmers who are exploited through heavy rents. It also brings on stage the inevitable. The armed rebellion of tenant farmers, organised as "Sickle" group challenging the State and refusing to pay rent. The rebellion pushes the Yahoo government into crisis and instability. Irrespective of their Zak – Zik descent, poverty drives young people to the city in search of a living. Girls end up as sex-workers. Small time grocery owners keep complaining about dwindling sales and increasing rents.

Poor villagers believe they have a right to rebel against the government that supports the most profiteering five wealthy, company landlords. The Viceroy has to stay in power to allow wealthy landlords to profit. Search for an answer takes him to Iberin, a man looking for power. Iberin believed his ideology on Zaks being the owners of Yahooland will provide him public support.

Brecht brings Iberin on stage with this ideology as the new ruler of Yahooland. His "Zak" ideology helps divide the "Sickle" rebellion. Callas a Zak tenant farmer believes Iberin in power will help them out of the "rent trap". Brecht creates this conflict to discuss how this racist ideology gradually pollutes the whole society. Giving up his principles, Callas turns into a racist opportunist who enjoys the popularity he gains among poor Zak farmers. Brecht uses a trial between Nanna, a young Zak girl turned a sex-worker in the city and a powerful and wealthy landlord, but a Zik to present how the judiciary is bullied to stand with Iberin. The accused Zik landlord owns land Nanna's father Callas is a tenant. She alleges the landlord promised to write off rent if she agreed to satisfy his lust. But never honoured his promise. The judiciary has to fall in line with dictator Iberin's "ideology of the superior". He says the issue is not about rights as defined through traditional justice, but about a Zik abusing a Zak girl. His ruling provides popular support for his ideology. "Sickle" rebels who stood for farmer rights and low rents get divided on Zak dominance to decide against the Ziks.

Brecht takes the audience through complex conflicts shifting the scales against poor Zaks and rich Ziks with declining morals and values. He brings in the institutionalised religion as "corrupt" and as compromising with dominant ideology. Once the "Sickle" rebellion is completely crushed and Iberin no more important, Brecht uses the judiciary to effectively tell the audience that power glides more with big profit than with racist supremacy. That the judiciary has to bring back its old traditions to leave the "poor" as the "poor". He presents the fast creeping frustrations and disappointments of the Zak poor through Callas and his daughter Nanna, who were once the popular "cheer leaders" for Iberin. The play decides changing fates of the wealthy Zik landlord and the poor Zak farmer, Callas. It concludes leaving Callas as a defeated poor tenant farmer and the wealthy landlords back with their traditional power.

Janakaraliya production captures all this within strong dialogue aptly written and forcefully delivered by all actors and actresses. The strength of this Sinhala adaptation, "Watoluwo saha Uloluwo" is in its delivery of dialogue. It argues well the case for Iberin in the two court cases. It laid bare the empty and corrupt life of the religious institutions with witty and pious dialogue. Dialogue often was witty at times leaning on the crude in catching the caustic life of the city. It was forceful in contrasting the moral degeneration of the two social trends; the popular Iberin racial dominance and the committed adherence of Sickles to principles and rights. The production was effective outside the elevated "proscenium" stage. It was extremely novel and colourful on the extended "arena" stage. Music in general was light and loud enough and fitted into the context of the play. Use of modern communication tools like the digital screen and radio announcements as background fillers, made the production rich.

Yet the production missed "something" that was felt it should have had. Something was felt as dramatically lacking. The most important political argument of using "racial supremacy" of the Zaks as a popular ideology to crush the poor rebelling farmers for rights was dialogued, but lacked drama in unfolding. As the main plot it did not thicken dramatically enough. The reason perhaps was the entry of Iberin. It was not pre developed and dramatized enough to hype Yahoo's crisis.

So was the moral conflict between material life and spiritual belief. The desire of young Isabella the sister of Zik landlord to lead a simple spiritual life in a nunnery giving up all the wealth she inherited needed more emphasis. The conflict and contradiction she is pushed to in deciding between her desired simple spiritual life and the life of her brother sentenced to be hung, needed more emotion and sarcasm than veiled wit. Thus it lapsed the seriousness of a conflict between spiritual desire and a "conscience" bitten by guilt over brother's life. Nor was dialogue caustic enough to contrast the contradiction and compromise both Nanna and Isabella are together dragged into. The concluding song that should aptly portray the fate of the poor in a racist society, needed powerful lyrics, a melody and music to bring the play to its desired climax. Thrilling it would have been, if the song had the audience standing in chorus and exited singing it.

But, and this is the most important aspect of this production of "Watoluwo saha Uloluwo" by the Janakaraliya team. It helps the Sinhala society immensely to unlearn if it wants to, what they had learnt in the past to live through a polarised, conflict ridden society. It helps the South to learn anew that this Sinhala society needs an alternate inclusive approach for stability and peace. For reconciliation to find its foothold now, for future stability. A social responsibility the Janakaraliya team responds to with this drama "Watoluwo saha Uloluwo". A political challenge for the government to patronise this discourse in the play, in Sinhala South.

Kusal Perera
12 November, 2016
Colombo    

  

          The Senate’s New Health Care Bill Is a Win for Ted Cruz—and Almost Nobody Else        

Ted Cruz: 1. Humanity: 0.

That is, sadly, the simplest way I can summarize the latest version of the Senate health care bill, which Republicans unveiled Thursday afternoon. Not much has fundamentally changed about the legislation, which still amounts to a large tax cut financed by shearing away large swaths of the social safety net. But it does represent a big win for the senator from Texas, as it includes a version of his proposal to let insurers sell cut-rate, unregulated coverage as long as they also offer plans that comply with all of Obamacare's mandates.

Cruz, who is attempting to morph from the most hated man in the Senate into a conservative dealmaker, is very pleased with this development. He now supports the bill. His conservative buddy Mike Lee of Utah, who also pressed for the amendment, may get to yes as well, though he's still officially undecided.

There is far less in the legislation to assuage the concerns of moderate Republicans, or for that matter lower-income Americans and middle class cancer patients who might fear for their health coverage. All of the draconian Medicaid cuts? Those are still there. The skimpy tax credits meant to help people buy private coverage? Still meager. The completely bonkers waivers that, as one widely respected health policy expert put it, could feasibly let state lawmakers spend their Obamacare funding on “cocaine and hookers” instead of health care? Still right there in the legislative text.

On the other hand, the new bill doesn't include quite as many tax cuts for the wealthy. So it's got that going for it.

The Cruz amendment is an odd piece of legislative maneuvering. Again: Under it, insurers can sell whatever kind of threadbare coverage they want if they also offer health plans that abide by all of the Affordable Care Act's rules, meaning those products would cover the ACA's expansive essential health benefits and couldn't discriminate against customers with pre-existing conditions. It partially achieves the conservative goal of slaying Obamacare's various consumer protections in order to let insurance carriers market cheapo coverage. But it also throws a bone to moderates, since it doesn't entirely abandon sick Americans to the fangs of the free market.

There are some obvious problems with this approach. Young and physically well Americans will likely buy inexpensive, unregulated insurance plans, which will cost them relatively less since they'll be priced based on health and won't have to cover extensive benefits like mental health and maternity care. Many sick individuals, meanwhile, will need to buy Obamacare-compliant plans—which could send the cost of that coverage skyward.

This might not be such a concern for poorer customers, since they'll receive subsidies that cap their premiums as a percentage of their incomes. (For them, it acts like a high-risk pool with unlimited funding, which isn't so terrible.) But Americans who earn too much to qualify for those tax credits—they cut off at 350 percent of the poverty line, or about $71,000 for a family of three today—will get stuck paying full price. So if you're sick and middle-to-upper-middle class and insured on the individual market, you're stuck paying full fare for some very expensive coverage. The Kaiser Family Foundation has estimated that about 1.5 million Americans could end up in that boat.

Notably, the insurance industry itself seems to believe splitting the market this way could be a horrible, infeasible idea. “Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets,” the trade group America's Health Insurance Plans said in a memo that made the rounds earlier this week. The Blue Cross Blue Shield Association was similarly critical.

There are some reasons to think that the version of the Cruz amendment that showed up in Thursday's draft wouldn't be quite such a boondoggle. For one, the draft bill includes an additional $70 billion to help insurers with the cost of especially ill or high-risk patients, which should keep premiums down a bit. (It also bulks up the market stabilization fund that was already in the legislation by an additional $70 billion, which should help keep a lid on premiums.) Beyond that, the market probably won't divide entirely into two tiers. The Senate doesn't provide subsidies to buy unregulated insurance plans, so even if they're healthy, lower-income Americans might be better off buying Obamacare-compliant coverage. That will balance out the health profile of the customer pool a bit.

Still, we're talking about a plan designed to make healthy people pay less for their insurance and sick people pay more. That will probably be the ultimate outcome. I don't know how many people not named Ted Cruz will be pleased with that.

And that brings us back to the rest of the bill, which gives moderates vanishingly little. Because cutting taxes on the wealthy while slashing Medicaid was a transparent act of class warfare on the poor, the legislation no longer nixes Obamacare's tax on investment earnings or the additional Medicare tax on high earners. It also kicks in an extra $45 billion toward opioid treatment.

Beyond that? There's not much. The bill's insurance tax credits are still designed to buy low-end, high-deductible coverage, meaning poorer adults likely won't be able to afford to use the health plans they purchase. The aforementioned waivers—which are theoretically meant to encourage health care "innovation"—still give states almost incredible latitude to divert federal money to god knows what. Meanwhile, Medicaid still gets brutalized—just as before, the bill ends Obamacare's expansion of the program and throttles its traditional funding stream over time. Republican leaders have softened their approach a tiny bit around the edges by carving out exceptions meant to deal with public health emergencies, for instance, but the basic thrust hasn't changed.

Of course, Medicaid has supposedly been the single biggest concern for senators like Maine's Susan Collins, Nevada's Dean Heller, West Virginia's Shelley Moore Capito, and Ohio's Rob Portman. Which is as it should be. We're talking about America's largest health insurance program, after all, a piece of the safety net that serves vulnerable populations like the elderly, disabled, and children. The individual market, which so much of the Obamacare debate has focused on, is a shrub by comparison.

If Republican moderates cave now and abandon their fight over the single most significant aspect of this legislation, they'll show what a weak and insignificant faction of their party they truly are. They'll show that the only GOPers who really matter are men like Ted Cruz.


          The Rise of the Automated Aristocrats (Burton & Swinburne, #6)        
The Rise of the Automated Aristocrats (Burton & Swinburne, #6)
author: Mark Hodder
name: Mark
average rating: 3.93
book published: 2015
rating: 4
read at: 2015/09/25
date added: 2015/09/25
shelves:
review:
The Rise of the Automated Aristocrats
Author: Mark Hodder
Publisher: Pyr Books
Published In: Amherst, NY
Date: 2015
Pgs: 382

REVIEW MAY CONTAIN SPOILERS

Summary:
Sir Richard has taken an expedition into the future. On his return with knowledge and technologies beyond anything imagined in the current era. These technologies must remain secret if history is to proceed as it should. But one of Sir Richard’s colleagues has gone rogue. And those secrets have fallen into the hands of those very people who are most likely to misuse them. Horror as London is transformed into a steampunk nightmare. Enemies of the state. Propaganda. Automata. Betrayal. Counter betrayal. Danger abounds. Sir Richard and his band of revolutionaries are faced with an indestructible and immortal autocrat.

Genre:
Adventure
Alternate History
Detective
Fiction
Historical fiction
Multiverse
Science fiction
Steampunk

Why this book:
Burton and Swinburne are great. Hodder is great.

______________________________________________________________________________

Favorite Character:
Edward Burton, Sir Richard’s brother and Minister of Chronological Affairs...even though we can’t be sure for most of the story which side he’s really on. Twist, counter twist, great stuff. Is he a villain? Is he a patriot? Is he a self serving, snivelling politician? Is he a hero?

Least Favorite Character:
Disraeli is a douche.

The Feel:
The steampunk isn’t overwhelmed by the time travel and robots. Great stuff.

Favorite Scene:
The sword duel.

Pacing:
Love the pace.

Plot Holes/Out of Character:
The crew of the Orpheus being cyphers when they reappear in the second act.

The Beetle disappearing from the narrative so completely after the first act. I understand it, but he’s too important to vanish so completely.

Hmm Moments:
The crossing of timelines and Gordian knot of lifetimes is well presented here.

Love the who is behind it mystery.

Great class warfare elements with the automated men both a means to an end and an end in themselves.

“If the ladder could be more easily climbed, the weight would surely accrue at the top, and inevitably, it would overbalance and fall. In order to be safe, the center of gravity must stay at the foot. Thus does the empire’s stability depend upon their being a clear division between the few at the heights and the laboring masses at the bottom”

...wow...that sounds like a lesson in the economics of the last 30 years in America where lipservice is paid to the idea of someone being able to climb the ladder while rungs are being removed from the ladder on an ongoing basis.

Why isn’t there a screenplay?
Probably won’t be...but it would be awesome if done right. Give it a Warehouse 13, Victoriana feel and let the steampunk awesomeness flow.

Casting call:
William B Davis of X-Files fame could be Disraeli or Babbage or Edward Burton. He could fit all those roles and bring the proper amount of menace, self servingness, madness, or officiousness to them. Yes...I am currently binging on X-Files on Netflix.
______________________________________________________________________________

Last Page Sound:
Awesome.

Author Assessment:
I read Book 6 of this series and it stood on its own. It gave enough detail on past adventures to make it all hang together. The book stands on its own even with 5 other novels ahead of it. Love it when an author can do that.

I thought I had previously read something by Hodder, but I can’t find it listed on my Goodreads or on my LibraryThing accounts. This is probably because the style and prose sucks you in and makes the world of Sir Richard feel familiar to the reader even as the Sir Richards are at odds with themselves across multiple alternate historical iterations of his psyche.

Editorial Assessment:
See the Author’s Assessment above. The same can be said about editorial. Having the story stand up on its own while the other 5 books all indirectly influence this one is awesome. Well done.

Knee Jerk Reaction:
real genre classic

Disposition:
Irving Public Library
South Campus
Irving, TX

Dewey Decimal System:
F
HOD

Would recommend to:
everyone
_____________________________________________________________________________

Errata:


          This Summer's Postapocalyptic movie: DIE GSTETTENSAGA: The Rise of Echsenfriedl (a TV movie by Johannes Grenzfurthner 2014)        


DIE GSTETTENSAGA: The Rise of Echsenfriedl
a postapocalyptic TV movie by Johannes Grenzfurthner 2014




I recently had the great satisfaction to watch a preview of a very fresh postapocalyptic feature film + a directorial debut, that premiered on Austria's ORF in March this year.
It is somehow impossible not to appreciate an entirely different kind of algorithmic force(from another alternate universe for sure!) that was once again set loose by Johannes Grenzfurthner (of monochrom fame) upon unsuspecting survivors of the last 35 years of road-warrior, post-nuke, road-kill, after-the-bomb films. What would be the life of near-future anchorman and anchorwoman be like? What would news-worthy, or for that matter - what would 'news' mean in the age of abject prosumption, neuromarketing and endlessly recursive destructo-capitalist loops that really takes of the edge of tomorrowland?
As a friend just tweeted, now every Hollywood blockbuster seems to be written by some underlying algorithm. The end credits are just the cinematic equivalent to a CAPTCHA response – trying to identify the film crew as human, even if this last human verification test is untenable and obsolete.

Well, I kinda have this incredible (and maybe you do too!) and perverse desire to get to the bottom of actual directorial algorithms, pushing hard to enter the loop and be able to forget how Hollywood movie after movie manages to push an exact quota of car explosions, 3D makeover, eye-popping HD footage, hero worship, body count, family values, rescue missions ad infinitum into box office paradise. 
Let's be clear, I'm overenthusiastic about Gstettensaga – because it is such a genre bender, a satiric H bomb, a horror movie and ex-auction house vaudeville  going for the unexpected dialectical turns of current history, and leading us into the untrodden and definitely outrageous wastelands. A very fertile wasteland that could be populated by postironic versions of Robocop Nazis Must Die, Escape from Vienna, Cheap-Chinese-Plastic Dawn or Europa 3000?

Finally, in our year 2014, Gstettensaga made clear to me that Europe/including Austria is maybe feudally ripe for the post EU disaster age, the after-austerity, structural changes, post-financial capital era where just one megalopolis sprawls in the no-man's-land(actually Gstetten is the Austrian word for wild urban area, vacant lot) a Detroit-like failed city, somewhere on what used to be the river Danube.
I think that Johannes Grenzfurthner, in the tradition of gleeful and unrepentant apres- disaster storytelling manages to simultaneously gonflate and reconfigure the present we live in, by shipwrecking and beaching its contents onto the shores of Do It (to) Thyself history and lore. The more it insists on toponymic specifics, on local tabloid news and blurbs, the more it can temporally mutate and amplify diverging Austrian regionalism and separatism within a new postal or linguistic contour.
On the macro-political forecasting scale, this future chronology takes the shape of national-technological firewall world after the China vs Google Wars. The future is crap-o-tastic without doubt. The best is that it doesn't need fancy gimmicks, upload minds, bland singularities, since it is busy scavenging like a future Robinson Crusoe in the lofty ruins of past technological glory, consumer goods and fossil media, trying (mostly unsuccessfully) to get things working and functioning again.   
Probably the Gstetten-saga universe should be placed along side Generation or Multi-generational Ship or Interstellar Ark stories(a personal favorite of mine!) as they are all exploring alternative or speculative anthropology trough the flesh of deep space and deep time fiction. The cosmic and historic drift of spaceship earth in the form of relentless entropy reshuffles not only tectonic plates but also hierarchies in unexpected ways. It also manages to enlarge agnatologic fissures where monopolistic feudal tycoons keep on capturing information technologies and claiming media supremacy by reinventing themselves as post-disaster Gutenbergs.
The same genetic and memetic drift affects both bodies and knowledge on the multi-generational Ark(Austrian/European) ships. Typically, on such a multi-generational spaceship, the crew gets segmented into a new caste system and the command and machine rooms have been transformed into a pretty nasty  sancta sanctorum. Once-in-a-lifetime mechanical alarm signals are misinterpreted or reinterpreted as divine providence and the captain's log acts now like a Bible for the survivors who struggle to understand its obscured terminology and hidden meaning.        
The vacant lot of the drifting future is not empty at all – it is populated by a constant class war shifted into zombie (worker) class war, or by the marauding tribes of subsidized EU farmers. These are some of my favourite First Contacts, although one might hash other best of sequence (such as the Occupy reference) – so watch out because of the spoiler alert further down!

The two hero figures of Gstettensaga are a he and a she, a journalist and a technician (actually a looser baby boomer  and a hacktivist nerd) on the quest to interview a strange hero of the nerd underground – a talking lizard hiding away in the ruins of the former Ecuadorian Embassy. And as we know from today's world, if it's no easy task to interview Edward Snowden or Julian Assange, and greater dangers will await those who try this after the China vs Google wars. 
This team resembles a lot the heroic media-wise crusading journalist as a character armed with both tekkie acumen and pluck, harking back to a distinctively dystopian VHS-flavored 80s futurism where television networks and large corporations dominate. This brand of TV broadcaster turned TV hacker, becomes an unlikely ancestor to the Internet cypherpunk whistleblower. Even if remotely related, the Gstettensaga couple somehow revived(for a brief flickering moment) the A.I. and virtual TV host Max Headroom/Edison Carter of Network 23 and his tech savvy colleague Theora Jones. In post-Google wars future, after Mountain View headquarters got nuked, the uplink TV transmissions seem to be back with a vengeance.   
As the two wandering Gstetten-heroes are being kidnapped by a marauding tribe of ex-EU members of the Farmers Association they end up in one of these moments of pure futurologic bliss. Of course the subsidized peasants will become tribalized and start adorning themselves with Christmas decorations and prize-winning vegetables! Of course they will be sacrificing newcomers in a ritual of signatures and paper document filling!
After the Berlin Wall we got today an incredible “Great Brussels Wall of Paper” that bore strange fruit in the Gstettensaga world. Lo and behold! Somehow the all-powerful white flip-chart, the omnipresent markers, the cheapo laser pointers have ended up becoming sacred paraphernalia of a new agrarian cult. A cult centred around ritual signature sessions of cryptic documents on which the two captive exurbanites make out a few awe-inspiring titles: EU Funding and Application! 
Let's not forget the rising trend of militarizing the police force - the federal borders patrolled by a new internal SWAT-grade militia, a bureaucratic armed muscle that can confiscate, body-check, and vaccinate at will. Gstettensaga present us with some prize examples in next phase or the future robocopism: border patrols vacuum tube-sandwich fed and speaking their own abstruse and in-comprehensive dialect.
As if the ('slow food'!) cannibalistic ritual of agrarian pagan paper-signing wasn't enough, the heroes are confronted with ever bigger odds on their way to the final Tele-O-Vision interview. They are being attacked by a group of undead miners, stuck in the depths of long-deserted shafts, probably brought back to a zombie existence while toiling for rare toxic metals to supply our endless hunger for mobile smart-phones and tablets.

Also (for those who tremble and fear for their lives: DO NOT READ FURTHER NOW!!!) the Rise of Echsenfriedl - is noting else but a covert the rise of that most terrifying AI apoptosis meme - Roko's Basilisk. It's the self-replicating meta-goatse, the scarecrow of posthumanist morale, the nightmare child of bored tech-libertarians and techno-utopian shivering, the Oedipal upload of downgraded futurists, a slick Reanimator that takes even your screaming capacities (the Hurayyyyyyyyyyyyy for the Singularity!) away.     
There is lots to be said, not at least the grandiose Gstettensaga adbusting finale – where the eye-logo of the CBS Network gets morphed from human gaze in a view with a nonhuman slant.  
          What is wrong with the world?        
Recently I have been considering this in some detail. My conclusions are depressingly predictable, but hear me out!!! The case is compelling.

What is wrong with the world? The short answer? The Republican Party of the United States. They represent the core of what is currently our most pressing collective problem. Sure there are subsidiary causes, but at the heart of it all, are an elite core of the republican party. Possibly the most evil group of morons ever foisted on an unsuspecting world.

Let me give you some examples.
There is almost zero “debate” on the validity of global warming and evolution in the rest of the developed world, and precious little about that human caviar the blastocyst.

Yet these are hot topics in the US, why? Why is this the only developed country in the world confused and divided? The answer is crystal clear, the Bush regime in particular, and Republicans in general are propped up by a 10% base of religious fanatics that lap all this nonsense up, and they pander shamelessly to this constituency.

I mean politicians actually articulating a belief in utter unabridged mythology like the Rapture!!!!! Sheeese ….. nowhere else in the developed world could you get away with that, you’d be rightly dismissed as a lunatic.

This is not to say the religious people are evil, stupid or poorly educated. Many quite intelligent people are "believers" of one stripe or another. I present myself as exhibit A:-). Although I hasten to add comprehensivley lapsed.

The effect of constantly trying to reconcile the belief against reality is corrosive to cognition generally. One slips easily into the practice of ignoring reality where it conflicts with a cherished belief, and when something else comes along that does the same thing, the circuits to ignore the contradicting reality are all in place.

For example the US government is largely made up of incompetent, amoral assholes, the supporting evidence for this contention is overwhelming. Yet 30-40% of the population persist in providing their support to these people. The cognitive disconnect that allows this, in otherwise normal people, is amplified and nourished by fervent religious belief.

I say this as a person who had a “personal faith” for decades, and finally snapped out of it. Courtesy ironically enough of GWB. His actions and their results, shoved the inconsistencies of faith into my face with such vigour and frequency, that I finally gave up trying to reconcile them.

It is intriuging to note that a 30-40% theme is emerging in the US. That number :
Support Bush.
Believe they are “winning” in Iraq.
Believe it makes sense to “tag” muslims in the US.
Don’t want a timetable for withdrawal.

The 10% of Christian Fundamentalists that shore up the Republican Party, are a critical subset of this group. It is clear they want a genocidal WWII class war that will kill millions in the middle east, that provides "moral clarity" or perhaps Armageddon. These people are not dismayed and horrified by terrorist attacks and efforts but excited by them, because it has the potential to herd a critical mass of bleating, frightened sheeple into their "KILL THEM, KILL THEM ALL" camp.

The bottom line? The Republicans would rather govern based on a pack of lies, than not govern. They would rather undermine and hinder the science that keeps us healthy, warm and well fed, to garner that critical 10% of the vote, than campaign on real issues like healthcare, not blowing stuff up and the environment.

Their selfish and foolish short term strategy gives these people a platform and "hey presto!!!!" suddenly half the country is questioning established science, making poor choices across the spectrum, and worst of all, electing people like GWB. When this applies to the most powerful country the world has ever seen, it affects us all.
          The Paradox of the Wage Slave        
Once upon a time, there was no such thing as the hourly wage. If you were an independent farmer, you'd sell your grains, cows, pigs and vegetables at the market, and in general would try to stagger these so that you could have money coming in most times of the year. If you were a tenant farmer, when the land lord sold the goods you produced, you'd get a percentage of the sales based upon the amount of land you farmed. A smith would negotiate by the piece or the lot, and usually took a down-payment to cover the costs of the materials. Farmhands and soldiers would be paid a set amount each week, usually at the end of the week after the work in question was done, but might also get a certain proportion of their wages from a share of the harvest or a chance at the spoils. Sailors would get a share of the shipping proceeds (or plunder if the ship in question was a pirate or privateer vessel), plus a stipend for completed voyages and occasionally a small signing bonus.

In general, the per week payments were intended to keep the laborer involved until the final payout - in effect the laborer was part of the venture and would share in the rewards, or was paid per piece with just enough to cover the artisan's or tradesman's costs and basic sustenance paid in advance.

Industrialization changed that, along with the arrival of the mechanical clock. People have always had the ability to tell approximate time via candles or hour glasses, but because such resources were both expensive and required maintenance (and were at best very approximate) most timekeeping was managed by church bells sounding the times of worship. With the advent of the clock, however, it became possible to measure tasks more precisely, and as a consequence to break up time into discrete units during the day.

The machine paradigm also broke the normal agricultural rhythms of working at dawn, getting a big breakfast, working until the sun reached it's peak, taking a short siesta, then working until near dark. Instead, you worked to the clock. In the factory paradigm, it made less sense to pay the workers an small initial payment then pay them a share of the proceeds after the project was done, because there was never a "done" point - the machines ran twelve hours a day, every day. Because industrialization was going on in tandem with the break up of the feudal tenant farm system, there were a lot of laborers available for factory jobs, and consequently, factory owners could limit the laborers to hourly stipends without any hope of final renumeration. This was also the stage where factory labor diverged from trade or artisanal labor, although the former also depressed wages for the latter.

In the 1940s in both the US and England, most able bodied young men went to war, where they learned regimentation, and where both officer and enlisted class became intimately familiar with command and control structures. The military had standardized on hourly wages, but also had standardized on the concept of a standard work week for those not in theater in order to simplify wage accounting. In practice, that meant that you got paid for 48 hours of work a week, period. Senior grades had a higher pay structure per hour, and officers made more than enlisted for the same number of hours of service.

When the war ended, the officers went into the newly booming corporations as managers as they switched over from war time to peacetime production of goods, while the enlisted went into the factories as foremen and line managers. The terms "white" and "blue" collar jobs reflected this - naval daily officer uniforms were white cotton, while the ratings and seamen wore blue chamoise-cloth shirts.

Wages began going up both because of increased demand for skilled workers and because the management class was also getting wages - they were still hirelings of the rentier or investor class, but because they were doing management type activities they typically had far more involvement in the longer term success or failure of the company. Moreover, much of that management was involved with sales, which in addition to wages, paid a commission on sales made that boosted the income of the management class significantly in the years after World War II.

Meanwhile, unions, which had struggled during the Depression and World War II, exploded in popularity in the 1950 and 60s, in part because there was a massive demand for people in the building trades - skilled carpenters, electricians, plumbers, and so forth who had until then perforce taken temporary jobs on an as available basis, and in part in manufacturing, where again high employment demand had meant that a system that both guaranteed competence and provided an environment for younger union members to gain experience made them attractive. As many of the companies involved were comparatively weak, the management of these companies were unable to stop this phenomenon, as they needed people too much not to concede to labor demands.

By the 1970s, labor unions had become very pervasive, and arguably had become too powerful, at least from the perspective of corporations that were now facing increasingly severe headwinds. In the 1950s, the United States was effectively rebuilding both Europe and Asia. By the 1970s, however, these economies had recovered, and were increasingly competing against the United States in critical areas. Additionally, the Breton Woods agreement in 1944 that had established a global reserve currency (the US dollar) and pegged that dollar to gold was seen more and more as a burden by the US, since it meant that US banks were very limited in the amount of money that they could loan out. When French President Charles de Gaulle demanded that the US make payments to France in gold, not dollars (as the French were concerned about the Americans' depreciation of their currency during the 1960s), President Richard Nixon severed the tie between gold and the dollar. This had the immediate effect of causing the oil producing states of the Middle East to band together in order to raise prices in response, which in turn began an inflationary spiral that didn't really end until Federal Reserve Chair Paul Volcker raising interest rates to nose bleed levels,

The massive spike in inflation caused demand for American produced goods to fall dramatically, exacerbating problems that the unions faced. With reduced demand, corporations were able to close plants with impunity. People paid into unions because they had been successful in raising wages and work standards (including reducing total work time to 40 hours per week), but as manufacturing jobs disappeared, so too did the clout of the unions, because there were far more people competing for jobs than there were jobs available. This has always been the Achilles heel of the union movement. Ironically, those places where unions have remained strongest are also those where educational requirements and continued training have also been the most stringent - teachers, nurses, engineers, fire and police professionals,

It's also worth noting the distinctions in types of inflation. Talking about a broad "inflation" rate is misleading, because in general, inflation is the rise of labor or resources relative to the nominal price of other resources. wage inflation occurred in the 1950s and early 60s relative to commodities, energy and finished goods because labor was comparatively scarce for many jobs. Wages largely stagnated since about 1971, but there was massive inflation in managerial salaries and dividends. Energy has inflated relative to wages since '71, while commodities inflated during the period from 1998-2008, and real estate inflated dramatically from about 2000 until the market collapsed in 2008.

Most corporate managers and rentier class investors prefer it when labor costs fall while finished goods inflate (which increases their profit), but fear when labor costs rise and raw material goods inflate (which can often squeeze margins at a time when the economy is tight). Not surprisingly, when the main stream media discusses the desire of the Federal Reserve to increase inflation, what they are usually referring to is the inflation of finished goods (from cars and houses to computers, packaged foods and so forth) rather than wage inflation, even though in this case wage inflation is precisely what needs to happen, relative to other asset classes).

In the late 1970s, a new class of business consultants such as Peter Drucker began making the argument that the primary purpose of a corporation was not to create goods and services but to maximize shareholder value. This credo was part of a shift in thinking pushed largely by the Chicago School of Economics and the monetarists, led by Milton Friedman. Along with this came the belief that the senior management of a corporation, such as the CEO or CFO, should be incentivized to increase stock value (which was widely seen as a good proxy for "shareholder value") by giving them options to purchase stocks at a greatly reduced price.

With skin in the game, these senior managers would then have more reason to keep stock prices up. In point of fact, all that this did was to transfer a significant amount of wealth from the employees (who were not similarly compensated) and the investors to the managerial class. Ironically, this has served in the long term to significantly reduce shareholder value, while at the same time making such manageables largely unaccountable as they ended up stocking boards of directors with their cronies. Weighed down with expensive senior management contracts many companies ended up reducing long term wages on employees that weren't critical to success to compensate - additionally, because stock price became the only real proxy for a corporation's value, corporate raiders emerged who would push the stock value of a company down through market manipulation, buy it out, reward the senior managers and fire the labor force, often gorging on pension funds and patents in the process.

The rise of unemployment that resulted was partially masked by the rise of the IT sector. The information technologies revolution started in the 1970s with big iron systems that began to reduce accounting staffs, but it really was only the marriage of the personal computer in the 1980s with networking technology that things began to change dramatically. One of the first things to happen was that as software reached a critical threshold in the mid 1980s, it began to erode the last real bastion of wage employment - the non-managerial white (and pink) collar jobs that had been indispensible to the command and control corporate structure.

The creation of presentations provides an interesting illustration of the impact this had. Until the mid-1980s, many corporations had graphic design departments. If a manager needed to make a presentation, he would need to work with a designer to design the slides, who would then work with a typesetter, a graphic illustrator and photographer to create the slides, a copy-writer, and possibly a printer, and would often take a month of lead time. With the introduction of presentation software such as Harvard Graphics and later Powerpoint, the manager could do all of these jobs himself, eliminating these positions and drastically reducing the time to do this work. Adaptable artists and designers did eventually go to work for themselves to provide such services, but for every person that became successful in this milleau, three or four did not, and in the process it caused a shift away from the monolithic culture into more of a  freelance and studio arrangement.

Ironically, such a process served to hinder the women's movement for at least a few decades. Falling real wages coincided with a rise of women's empowerment to bring a whole generation of women into the corporate workforce as secretaries, which often provided a stepping stone into mid-level management (typically office management or administration). The introduction of personal computers into the corporate workforce actually initially proved beneficial to secretaries, because they were often the first to get access to these typewriter-like devices and consequently ended up getting a leg up on their male managerial counterparts. However, as more people began using PCs in the work environment, it also radically thinned the number of secretaries required in an organization (although in a fitting twist of irony it also had the same effect on mid-level managers a few years later). This is part of the reason that there's something of a gap between older and younger women in most organizations, especially as IT itself became increasingly seen as a specialized domain for nerdy young men.

For manufacturing, however, the IT revolution was devastating for workers. Once you networked computers, it became possible to distribute your workforce, and from there it was a short step to moving work outside the US in particular to countries with low labor costs, low taxes and lax regulatory regimes. Standardization of shipping containers made shipping raw goods to these external factories for processing and sending the finished goods back easier, and new telecommunication systems meant that it was easier to coordinate production eight to ten hours ahead or behind you globally. This served to inject huge amounts of money into the Asian economies, which had the unintended effect of raising the wage levels of Chinese, Indian, Japanese and Korean workers dramatically. This outsourcing drained manufacturing from the US, leaving much of the Midwest and MidAtlantic as derelict ghost towns.

This also had the effect of reducing the overall import costs of foreign goods, which companies such as Walmart took strong advantage of. The outsourcing on manufacturing not only eliminated manufacturing jobs, but also had an adverse on the many service jobs that supported these manufacturing jobs, driving down wages in these areas and giving rise to the McJob - part time, no benefits, paying minimum wage, offering little opportunity for advancement and making an insufficient amount of money to catch up on with steadily rising food and housing prices. Automation generally affected services economies less directly - services almost by definition require either human intervention or human knowledge - but it did mean that mid-level management jobs (which typically provided a career path for people in these sectors) disappeared, leaving fewer ways for a person to break out of the "wage-slave" trap.

Dramatic rises in energy and commodities due both to scarcity and a growing realization on the part of countries that they were being pillaged by Western corporations caused the machine to falter even more. As the opportunities for the giant petrochemical companies to get access to foreign oil at highly profitable rates disappeared, cries for energy independence began to arise in the US. Energy independence in this context should be read, however, not as an increase in the use alternative energy sources (which currently receive a very small subsidy by the US compared to the oil companies) but as increased drilling for shale oil, offshore oil and natural gas deposits via rock fracturing (aka fracking). These deposits were considered less economical (in part because of the remediation and political costs) than foreign oil and natural gas, but at this stage there are considerably fewer alternatives left to the oil companies (in 1960, oil companies owned roughly 85% of all oil deposits globally, in 2010, that number is closer to 10%, as most of these has been nationalized by their respective governments).

This has led to an increase in the number of hydrocarbon engineering and maintenance jobs in the US, but this is a labor market that runs hot and cold. The jobs will be around until the fields play out, then will be gone - this will likely happen within the next decade.

We are now in what has been described as a bubble economy - government stimulus is frequently needed to create a temporary market, but these markets, unregulated, quickly grow to a point where they are oversupplying the available demand, attracting parasitic speculators that then cause the system to collapse, causing inflation in that sector followed by rapid deflation and despoiled ecospaces. This happened in IT in 2000, in housing in 2008, and in education and energy production likely in the next couple of years. The housing collapse in particular is still playing out, primarily in Europe, though it has left a legal tangle of housing ownership that will take decades to untangle, if ever (I expect that ultimately much of this will end up being written off as uncollectable).

It is against this backdrop that it becomes possible to understand what will happen to jobs over the next couple of decades. There are two additional factors that play into the picture as well. The first is demographic. People born in 1943, which I consider the start of the Baby Boom, turn seventy this year. In the depths of the recession that started in 2008, when this group reached 65, many of them went back to work - and for a while it was not at all uncommon to see a lot of low wage jobs being held by people in their seventh decade. However, even given advancements in geriontology, the ability of people to work into their seventies deterioriates dramatically. The Boomer generation peaked around 1953. If you assume that only a comparatively small fraction of those age 70 or above are still in the workforce, this means that this gray workforce will fade fairly quickly from the overall workforce just in the next five years. This will have the effect of clearing out a large proportion of upper-level management as well, which has been heavily dominated by Boomers just given the sheer number of them.

GenXers are a trough generation - as a group there is perhaps 65% as many of them as there are Boomers. These people are now entering into policy making positions in both government and business, but because of numbers, the Boomer peak for leaving the workforce hits at approximately the bottom of the GenXer trough for entering into senior management and senior professional positions. This actually translates into a relative scarcity of executive and professorial level talent by 2020, now only seven years distant. GenXers, for the most part, are engineers. Many of them, in their 20s through 40s, were responsible for the low level implementation of the web in the 1990s and the 2000s. A large number were contractors, people who generally benefited far less overall monetarily from the emergence of the computing revolution and the web, and as such they see far less benefit in large scale corporate structures.

Indeed, the GenXer view of a company is increasingly becoming the norm. It's typically small - under 150 people, in many cases under twenty people. It's distributed and virtual, with the idea of an "office" as often as not being a periodically rented room in a Starbucks, and with people working on it from literally across the world. Participants are often shareholders without necessarily being employees. Their physical facilities are on the cloud, and staffs are usually two or three people devoted to administration while the rest are "creatives" - engineers, developers, artists, videographers, writers and subject matter experts. The products involved are often either virtual or custom as well, and usually tend to have a comparatively small life cycle - often less than six months. This could be anything from software to customized cars to media productions to baked goods.

In effect these microcompanies are production pods. They may be part of a larger company, but they are typically autonomous even then. They can be seen as "production houses" or similar entities, and they may often perform specialized services for a larger entity - a digital effects house for a movie, a research group for a pharmaceutical company, a local food provider, specialized news journalists. When they do have physical production  facilities, those facilities may be shared with other microcompanies (the facilities themselves are essentially another company).

One of the longer term impacts of ObamaCare is that it also becomes possible for such pods to enter into group arrangements with health insurers, and makes it easier for people to participate in such insurance systems without necessarily being tied to a 40-hour paycheck. Health insurance was once one of the big perks of the more monolithic companies, but until comparatively recently changing companies typically involved changing insurance companies as well, a process that could become onerous and leave people with gaps in insurance that could be devastating if a worker or her child was injured. As command and control companies end up putting more of the costs of insurance on the employee, the benefit to staying with that employer diminishes.

The same thing applies to pension plans - it has become increasingly common for companies to let go of employees that are close to cashing out their pensions for retirement, often leaving them with little to nothing to show for years of saving. The younger generations are increasingly skeptical of large companies to manage their retirement, usually with good reason, especially since the average 40 year old today may have ten or more companies under their belt since they started work, and can expect to work for at least that many more before they reach "retirement age". This means that GenXers and younger (especially younger) are choosing to manage their own retirement funds when possible, independent of their employer.

Once those two "benefits" are taken out of the equation, the only real incentives that companies can offer are ownership stakes and salaries. As mentioned earlier, salaries are attractive primarily because of their regularity - you have a guarantee that you will receive X amount of money on this particular date, which becomes critical for the credit/debit system we currently inhabit. Ownership stakes are riskier, but they constitute a long term royalty, which can be important because it becomes itself a long term semi-reliable revenue stream. If you receive royalties from three or four different companies, this can go a long way to not having to be employed continuously.

The GenXers will consequently be transformers, pragmatists who are more interested in solving problems than dealing with morality, overshadowed by a media that is still primarily fixated on the Boomers, quietly cleaning up the messes, establishing standards, and promoting interconnectivity and transparency. Many of them now are involved in the technical engineering involved in alternative energy and green initiatives, next generation cars, trucks and trains, aerospace technologies, programming, bioengineering, information management and design, and so forth. While they are familiar with corporate culture, they find the political jockeying and socializing of the previous generation tedious, and though they are competent enough managers, GenXers generally tend to be more introverted and less entrepreneurial. Overall, as they get older, GenXers are also far more likely to go solo - consulting or freelancing. They may end up setting up consulting groups in order to take advantage of the benefits of same, but there is usually comparatively little interaction between consultants - they are more likely to be onsite with a client troubleshooting.

From a political strategist standpoint, one of the great mysteries of the modern era has been the disappearance of the unions. Beyond the strong automation factors discussed earlier as well as a politically hostile climate to unions, one factor has always been generational. GenXers are probably the most disposed personality-wise to being union members, but because unions generally gained a blue collar reputation, many GenXers (who in general see themselves more as engineers and researchers) have tended to see unions as being outside their socioeconomic class. Moreover, the consultant or freelancer mentality is often at odds with the "strength in numbers" philosophy of most unions.

I expect this generation to also end up much more in academia, especially on the technical and scientific side, or to migrate towards research, especially by 2020 or so as they finally reach a point where passing their knowledge on to the next generation outweighs any gains to be made by consulting. As is typical, the relatively inward looking GenXers will lay the groundwork for the very extroverted generation following after them - the Millennials.

Millennials were born after 1982, with the peak occurring in 1990, and are the children of the latter wave part of the Boomers (many of whom started families comparatively late - in their very late 20s, and had children until their late 40s). However, there's also an overlap with the children of the GenXers that creates a double crested population hump, with the trough in 1997 and then growth until 2007 (which actually exceeded the number of births per year of the Baby Boomers). After that, however there's been a sharp drop off to the extent that in 2012 the number of births is expected to approach the trough levels of 1971. For all that, the Virtuals (those born after 2000) will likely be a fairly small generation, given the drop off (most likely due to the economy's collapse).

The oldest Millennials are now thirty years old. Displaced by the gray workforce and facing the hardships in the economy by 2007, many started work four or five years later than in previous generations, had more difficulty finding work, and were often forced when they could find work to take MacJobs. They are distrustful of corporations, and are in general far more bound to their "tribes" -- connected over the Internet via mobile phones and computers -- than they are to work. Their forte is media - writing, art, film production, music, entertainment programming, social media, all of which lends itself well to the production house model, and which will likely mean that as this generation matures, it will end up producing the first great artists of the 21st century.

What it won't do is make them good workers in the corporate world, or in traditional blue collar positions. Overall, math and science scores for high school plummeted for the Millennials during the 1990s and 2000s, and enrollment in STEM programs in college declined dramatically after 2000 (when the Millennials started into college). Most Millennials are very good at communicating within their generation - this is the most "connected" generation ever - but overall tend not to communicate well with authority figures outside that demographic. (I've discussed this in previous essays.)

While I've seen some commentators who are critical of the Millennials because they see them as spoiled and entitled, instead, I'd argue that these characteristics are actually more typical of a generation that overall is just not heavily motivated by financial factors. Most have learned frugality after years of having minimal jobs. They will likely marry later and have fewer children than any generation before them, and their social relationships may actually prove stronger than their marital ones. On the other hand, they will also likely focus more strongly on their craft because of these factors, which means that as they age, they will prosper because of their innate skills and talents.

Temperamentally, the Millennials will tend to act in concert to a far greater extent than the generations before them. They will not join unions, but they will end up creating constructs very much like them. Moreover, they will be inclined to follow authority, but only if that authority is roughly in their generation. Consensus politics will be very important to them, and this will be the first generation that really employs a reputation economy as currency.

Given all this, it is very likely that the nine-to-five, five day a week job is going the way of the dodo. It won't disappear completely for quite some time, but the concept of a salaried employee will become increasingly irrelevant as the production house model obviates the command and control structure corporation. If you're still learning, you would get paid at a fixed rate plus time, but once you reach a point where you add significant value to a project, you would get points in the project towards a return royalty. Service jobs, similarly, will likely revert to a work for hire basis, coupled with some profit sharing. Manufacturing is shifting to a combination of insourcing with pod companies and artisanal production. Legal and accounting services, where they haven't already shifted to web-based delivery, are pretty much already done on a work for hire basis, with partners getting profit-shares.

The biggest changes that are taking place are in the sales sector. The rise of eRetailing is beginning to hit brick and mortar businesses hard. Christmas hiring at physical retail stores has been dropping consistently in the last five years, even as the economy itself has begun to recover. This is primarily because more and more retail is shifting online, to the extent that it accounts for nearly half of all retail activity in the United States during the last three months of the year. Mobile continues driving that as well, as it becomes far easier to "impulse buy" when your computing platform is constantly by your side.

The only real exception to this trend is in groceries and restaurants, though even there online purchases are accounting for a larger percentage of sales than a few years ago. Many grocery chains now offer online ordering and delivery services for nominal fees, up from only a couple specialized services a few years ago. Supermarket shopping is perhaps more ingrained in people than other retail shopping, so it is likely that this trend will take longer to play out there, but it is happening, especially in cities where grocery shopping is more complicated than it is in the suburbs.

Ambiance stores and restaurants are perhaps the only ones truly bucking the trend, and this has to do with the fact that most restaurants ultimately are as much about entertainment as they are about food. It's why there's been a slow death of the fast food industry, but places such as Starbucks do quite well. They are the modern day equivalent of pubs.

Note that I do not believe that such service jobs will go away completely, but they will diminish, and at some point it is often more profitable for a common to only be virtual and not maintain the costs of storefronts. No storefronts means fewer stores in malls, and already many malls are closing or being converted to other purpose buildings, while there are very few new mall or strip mall projects starting. Similarly, the number of "big box" stores has been declining as well. On any given day, go into an Office Depot or Best Buy, and what's most remarkable is how little traffic there generally is. Yet people are buying from their online sites, and the stores stay open increasingly to keep the brand alive in people's minds. At some point I expect these expensive "advertisements" to finally close down or turn into general distribution points, with only token merchandise on the floor.

This brings up the final paradox of the wage slave. The number of jobs being created is smaller than the number of jobs that are going away by a considerable degree, even in a "healthy" economy. These jobs are not being outsourced, they are being eliminated due to automation. The jobs that are being created in general require specialized skills, skills which used to be acquired via "on the job training", but increasingly these low and mid-tier jobs that provided such training are the easiest to automate, and hence are going away as well.

It is possible to train people some of these skills in the classroom, but the 10,000 hour rule of mastery generally applies - in order to understand a particular topic or acquire a given skill, it usually takes 10,000 hours worth of study, experimentation and practice to truly acquire competency in that area. In practice, this usually correlates to about ten years of fairly rigorous working with the topic. This means that while education is a part of the solution, the time required to impart that education can often make these skills obsolete.

The upshot of this is pretty simple - eventually, you end up with a large and growing percentage of the population that simply become unemployable. They are not lazy - most of them had positions until comparatively recently, but those positions are now gone. Meanwhile, profits that are made from the automation do not go to the people who lost the jobs, but the people who purchased the automation, and from there to the people who commissioned the creation of that automation in the first place. Put another way, productivity gains over the last fifty years were privatized, while the corresponding unemployment was dumped on the public domain. That unemployment in turn created emotional and financial hardship, foreclosures, a rise in crime and in the end a drop in the overall amount of money in circulation.

This last point is worth discussing, because it lies at the crux of the problem. In a capitalistic society, the velocity of money is ultimately more important than the volume of money in circulation. When money moves quickly through the system, more transactions take place, and in general more value is created in that economy. When money ceases moving, no one buys or sells, no investment takes place, no jobs are created (though many may be lost), and money becomes dearer, because you have a fixed amount - you can't count on additional moneys coming in, you can't get loans, even the simplest economic activity stops. This was close to what happened in 2009. As automation replaces work, billions of man hours of work payments disappear - money that would have gone to labor instead goes to the investors, who generally contribute a far smaller acceleration to the global economy than middle and working class individuals do in the aggregate. The wage-hour ceases being an effective mechanism for transferring wealth in society.

Eventually, a tiny proportion of the population ends up with most of the money in that society, and there is no way for the rest of the population to get access to that money to get the goods they need. We're not quite there yet, but the imbalance is already sizable and only getting worse.

One solution to this problem is to tax wealth that's not in use. This transfers money from wealthy individuals to the government, but given that government has become increasingly captured by those same individuals, the result of those taxes end up as corporate kickbacks to the same rentier class in terms of subsidies. Taxes can be reduced on low income individuals, but for the most part, low income individuals generally pay little in the way of payroll taxes, though they do pay in hidden taxes and fees arising from having to buy the smallest units of finished goods and services, which is generally the most expensive per item cost. Money can be distributed to everyone to spend, but the benefits of such stimulus usually tend to be short-lived, because the amounts are too small to make an appreciable difference in the same extractive mechanisms still exist in society.

Government mandated minimum wage floors can be set, but while this will help some, it is precisely these jobs that are most heavily impacted by automation. Moreover, the same corporate capture of the government provides a chokehold on the ability to impose such requirements on corporations. In effect the oligarchical control of the government continues to pursue policies that locally increase their profits, but at the systemic cost of destroying the consumer base upon which those profits depend. It is, in many respects, yet another example of the tragedy of the commons.

In many respects this is what the end state of a capitalistic society looks like - stalemate. Fewer and fewer jobs exist. Money becomes concentrated not in the hands of those who have jobs, but in the hands of investors, yet investment money is seldom sufficient to create a market, only to bring a product or service to that market. Wages become two tiered - bare subsistence level or below, and lavish for those with specialized skills, but only at the cost of continuous learning and training, and the concommittant loss of expertise as skilled workers choose not to share their skills at the risk of losing their marketability.

Because needs are not being met in the formal market, an informal or gray market emerges that is outside of the control of both the government and the corporatocracy, one with lax quality controls and legal redress in the case of fraudulent transactions, and consequently one where organized crime can play a much larger role. While this may seem like a Libertarian wet dream, the reality of such markets is typically like Russian markets in the aftermath of the fall of the Soviet empire, in which crime lords created monopoly markets where basic goods were only available for high prices or coercive acts, and where legislators and activists who tried to bring such crime lords under control were regularly assassinated.

So how does a society get out of this trap? My own belief is that in the end, it decentralizes. Power production shifts from long pipelines of petroleum based fuels to locally generated power sources - solar, wind, geothermal, hydrothermal, small nuclear (such as small thorium reactors), some local oil and natural gas production, intended primarily to achieve power sufficiency for a region with enough to handle shortfalls elsewhere in a power network. This provides jobs - both constructing such systems and maintaining them - and insures that energy profits remain within the region.

Establish a minimal working wage but also provide mechanisms for employees to become participants through profit-sharing and royalties, rather than options and dividends.

Make healthcare and retirement saving affordable and universal, rather than as a profit center for insurance companies and pharmaceuticals.

Tax financial transactions in exchanges, and use this to provide a minimal payment to individuals as a way of redistributing the costs of automation (and financial malfeasance) on employment.

Eliminate the distinction between salaried and hourly workers in the tax code, which has created an artificial two tiered system designed primarily to make it possible for unscrupulous employers to have a person work up to 39 hours a week and still not qualify for benefits.

Eliminate the 40 hour workweek - it's an anachronism. Instead, establish a government base payment that provides a floor for subsistence living for everyone, coupled with wage payments from jobs to fill in towards a production royalty payoff that provides wealth for people willing to put in expertise and effort.

Eliminate the income tax, and replace it with a value-added tax. The Federal income tax has in general been a disaster, increasing class warfare, often being used punitively by various administrations to favor one or another group, is extraordinarily complex, requires too much effort to maintain records for independent workers and small businesses, and usually being easily subvertible by the very wealthy, putting the bulk of the burden on the middle class. A value-added tax, while somewhat regressive, is generally easier to administrate, does not require that employees maintain detailed records, can be automated easily, and can in general be fined tune to encourage or discourage consumption of certain things within the economy.

Tax employers for educational support. Too many corporations want their workers to have specialized knowledge or skills, but in general do not want to pay for the training. Some of that tax can be in kind knowledge transfer from people that do have those skills in those corporations , at which point the corporation pays for that employer/contributor to teach.

Similarly, tax employers for infrastructure support that directly or indirectly benefits them. Much of the last half century has seen the maxim of privatizing profits and socializing costs become almost holy writ, but this has generally resulted in ghettos and gated communities that benefit a few at the expense of millions.

Encourage telecommuting and virtual companies, while taxing those corporations that require large numbers of employees onsite at all times. If telecommunication tools were good enough to outsource to China, they are good enough to provide telecommuting. This generally has multiple benefits - less need for infrastructure, far fewer carbon emissions, less energy consumption, less time wasted in traffic, fewer monster skyscrapers serving as corporate shrines.

These changes (and others like them) are feasible, but in general will only work if they are attempted locally - at the state or even city level. These are transformative changes - as different regions attempt these, facets that work and don't will emerge, and local variations will no doubt come about based upon cultural temperament, but overall success will beget success. Demographic changes, as discussed in this essay, will accelerate this process - those regions that are already investing in twenty-first century technologies are already doing a number of these things, and are seeing benefits, but those that are heavily petroeconomically bound will resist them. The irony here is that this means that in these latter areas, the wage slave paradox will only get worse, and the economy more dysfunctional over time.

It is likely that thirty years from now the economy of the United States will look very different - mass customization through additive printing techniques, millions of virtual pod corporations that number in the dozens of people only distributed all around the country (and probably the world), cities that will be in a state of controlled disintegration, powered locally and with much more local autonomy, with the rise of a strong creative class supported by an elderly engineering class and a youthful research cadre. None of this will happen overnight, nor will it happen uniformly, but I feel it will happen.
          Reader: Were you trying to stir up some class warfare?        
Letters Interesting article on the employee parking situation at Penrose Hospital ("Not in this neighborhood," News, July 12), but what was the point?…
          Trinamool Cong to have 36 ministers and 7 from Congress likely        
Kolkata, 19 May : There will be 36 Trinamool Congress ministers, while seven are likely to be from the Congress in the new West Bengal government to be headed by Mamata Banerjee.
A list of 36 names of MLAs from the Trinamool Congress, barring Banerjee, has been received by the chief secretary's office from the Raj Bhavan, secretariat sources said. "The Congress list of ministers has not yet been received," the sources said.
The Congress was likely to have seven ministers, they said.
The Trinamool Congress list of ministers include Dr Amit Mitra, Partha Chatterjee, Manish Gupta, Subrata Mukherjee, Abdul Karim Chowdhury, Sadhan Pandey, Dr Upen Biswas, Sabitri Mitra, Bratya Basu, Madan Mitra and Noore Alam Chowdhury.

-----------------------------------------------------------------------------------------------------------------------------
Buddha, Biman, LF leaders to attend Mamata's swearing-in
PTI, Kolkata, 19 May : Former West Bengal chief minister Buddhadeb Bhattacharjee and CPI(M) state secretary Biman Bose, who have been invited to the swearing-in of Trinamool Congress chief Mamata Banerjee, will attend the ceremony at Raj Bhavan tomorrow.
Trinamool Congress Legislature Party deputy leader Partha Chatterjee personally went to Buddhadeb Bhattacharjee's Palm Avenue residence to invite him and his wife Meera earlier in the day.

-----------------------------------------------------------------------------------------------------------------------------
2 Cong ministers to be sworn-in Friday in Mamata-led Govt
Kolkata, 19 May : The Congress late Thursday decided that two of its legislators would take oath as part of the Mamata Banerjee-led ministry in West Bengal Friday.
'It has been decided that two of the ministers will take oath. They are (Pradesh Congress president) Manas Bhuniya and newly-elected Congress legislature party leader Abu Hena,' state party spokesman Om Prakash Mishra told Bengal Newz over phone.

-----------------------------------------------------------------------------------------------------------------------------
Chittagong' ship breakers set for boom time in Bangladesh
Reuters, Chittagong, 19 May : Abul Hossen is preparing for the arrival of dozens of ships that promise to carry his family and hundreds, if not thousands, of other Bangladeshis out of a life of poverty.
Instead of sailing to another country, however, the 45-year-old father of four will help to torch, hammer and rip the fleet into pieces of money-making scrap metal, after a court ordered Bangladesh to free up its ship breaking industry.
Maritime recycling yards in the Indian subcontinent and China could see a boom that could run until 2013 as shipowners rush to get rid of ageing vessels, driven by an oversupplied freight market, low shipping rates and high steel prices.
“The restart of ship breaking has given me a new life,” Hossen told Reuters on an oil-besmirched beach in Chittagong, home to one of the world’s biggest ship recycling yards. “Had it not restarted I would have been compelled to stop sending my children to school.”
Hossen and other ship breakers earned a monthly average of 10,000 taka ($137), an income stream that vanished for the last year, forcing them to turn to other jobs such as unloading trucks and fixing cars.... READ FULL STORY

-----------------------------------------------------------------------------------------------------------------------------
Anna Hazare to address an anti-corruption rally tomorrow
Guwahati, 19 May : Gandhian leader and social crusader Anna Hazare will be visiting Guwahati tomorrow to address an anti-corruption rally here.
Several other prominent personalities, including Arvind Kejriwal, Swami Agnivesh and Kiran Bedi, are expected to participate in the rally. The Krishak Mukti Sangram Samiti (KMSS), which has organised the rally, said Hazare and other national-level leaders arrived here this evening. The rally has been organised at an educational institute’s field in Chandmari area of the city.

-----------------------------------------------------------------------------------------------------------------------------
CPI(M) dubs violence against Left workers as 'class war'
PTI, New Delhi, 19 May : The CPI(M) today termed the post-poll violence against workers of the Left parties in West Bengal as "class war" and said the "fascist" attacks were aimed at reversing land reform measures and the hard-earned rights enjoyed so far by the poor.
"Clearly, this is a class war that is aimed at weakening the CPI(M) and the Left Front, thus weaken the strength of the exploited classes who had immensely gained from the policies of land reforms and panchayati raj in Bengal over the last three decades and more," Politburo member Sitaram Yechury said.
He alleged that the electoral defeat of the Left was being used by "the ruling classes to mount a class offensive to undo the gains made by the people during the Left Front rule. This is precisely what is being attempted through these assaults".
-----------------------------------------------------------------------------------------------------------------------------
TMC supremo Mamata Banerjee resigns as Railway Minister
Kolkata, 19 May : Trinamool Congress supremo Mamata Banerjee, set to take over as West Bengal Chief Minister tomorrow, resigned as Railway Minister today.
Railway sources said Mamata Banerjee sent her resignation to Prime Minister Manmohan Singh. Mamata took over as Railway Minister of UPA-II government in May, 2009. She had also held the ministry for less than two years in the NDA government.... READ FULL STORY @
www.westbengalelections2011.com
-----------------------------------------------------------------------------------------------------------------------------
Fourteen Bru families return to Mizoram from Tripura camps
PTI, Aizawl, 19 May : Fourteen Bru families returned to Mizoram from Tripura's relief camps today in the ongoing repatriation of the refugees being conducted by the state government, a senior police official said today.
While 27 families were scheduled to be repatriated today as per the road map prepared by the Union Home Ministry and the state government, only 14 families returned and would be resettled in different villages of Mamit district, in Mizoram, SP of Mamit, H Sangawia said.

-----------------------------------------------------------------------------------------------------------------------------
Kolkata zoo to get Kangaroos
Kolkata, 19 May : Two pairs of kangaroos, the Australian national animal, will be housed soon in Alipore Zoological Garden here, Zoo director said. The four Kangaroos will be brought from a Czech Republic zoo under an inter-zoo exchange programme, he said.
"We were informed that some zoos in Europe have successfully carried out kangaroo breeding programme and have spares for exchange so we approached them. Later we got the clearance from the national zoo authority and also from the state government and we now are in the process of arranging the transportation of the Kangaroos," said Raju Das, director of Alipore Zoological Garden.
The Kangaroos will be arriving here possibly by May-end, he said. A separate enclosure has already been made for them in the zoo.
Some thirty years back Kangaroos were housed in Alipore zoo, but they could not survive for long.
This time we are hopeful that the special breed of kangaroos would be able to adapt to the environment. The Kangaroos would be kept under special observation for 10 days before they are relocated in the zoo, said Das.
-----------------------------------------------------------------------------------------------------------------------------
Total 31 Myanmarese prisoners set free from Kolkata's jail
Kolkata, 19 May : Indian government today released 31 of 34 Myanmarese pro-democracy activists who spent more than 13 years in Presidency jail.
'The United Nations High Commissioner for Refugees (UNHCR) granted them refugee status which they wanted and they were released,' Superintendent of Presidency Correctional Home Biplab Das said. The Indian Navy had on 13 February, 1998, intercepted a steamer in the Indian maritime zone and following a heavy exchange of fire arrested 34 people who turned out to be members of the National United Party of Arakan and Karen National Union which had been fighting the Burmese junta for decades. Six persons died in the encounter.
-----------------------------------------------------------------------------------------------------------------------------
Fake currencies of Rs 7 L Recovered at Indo-Bangla border
Malda, 19 May : The Border Security Force (BSF) personnel recovered fake currencies of Rs 7 lakh in Rs 500 and Rs 1,000 denominations from Chori Anantapur village under Kaliachak PS in Malda district yesterday. However, no one has been arrested yet. The BSF handed over the counterfeited currencies to the district police administration.
The district superintendent of police Bhuban Mandal told Bengal Newz, “a man threw a heavy bag from the other side of Indo-Bangladesh border . When another person stooped to pick up the bag the BSF personnel of 151 battalion noticed and chased the person who immediately ran away leaving the bag behind.”
-----------------------------------------------------------------------------------------------------------------------------
Gautam Ghosh plans documentary on Mamata Banerjee
Kolkata, 19 May : Mamata Banerjee's journey from being a firebrand politician leading up to the chief minister's chair will be captured on celluloid by filmmaker Goutam Ghose.
Apart from chronicling the extraordinary tale of a simple middle class girl with a burning political ambition who unseated the 34-year-old Left Front government almost singlehandedly, the documentary would stress on the humane side of her personality, Gautam Ghose said.
"I will try to delve into the humane self of Mamata, the way she interacts with the masses, the way she conducts herself in the elite business circles and the way she pursues her interets at home like painting or Rabindrasangeet," Gautam told PTI here today.
"Remember how she was derided once by the urban class who made fun of her English accent, her sartorial tastes and earthy image at cocktail circuits. I was very shocked at this and tried to protest.
Gautam had also made a documentary on late CPI(M) patriarch and former chief minister Jyoti Basu.
Mamata Banerjee will be sworn in Friday as West Bengal's first woman chief minister. The Left Front's 34-year reign in the state ended in the April-May assembly elections after Trinamool Congress and Congress alliance won a thumping victory by winning 227 of the 294 seats.

-----------------------------------------------------------------------------------------------------------------------------
RBI to launch schemes for raising credit flow to North East
IANS, Agartala, 19 May : The Reserve Bank of India (RBI) has asked banks to introduce bankable schemes and open financial literacy and credit counselling centres in the northeast to improve the credit flows to the region, its governor D. Subbarao said Thursday.
"The RBI has intensified its efforts to enhance credit flow to the industry starved northeastern states," Subbarao told reporters after the first ever central board meeting of the apex bank here.
"For faster development of the region, it was equally important to raise its credit absorptive capacity. For this purpose, the RBI has been encouraging banks to introduce bankable and viable schemes, open financial literacy and credit counseling centres in northeast."
Subbarao, accompanied by four RBI deputy governors and top officials came to Agartala Wednesday and inaugurated a RBIs first sub-office in Tripura capital and addressed at a seminar on financial inclusion.
"To educate the people about the banking services and banking importance, 'financial literacy day' would be observed in one village in each blocks of northeast India," he said. "The RBI had announced a subvention scheme for opening new bank branches in the northeast. More and more credit to the agricultural and allied sectors must be increased in the region.
According to the RBI chief, the credit deposit ratio of the region is half of the national average which is 70. "The RBI has asked all the state governments to include finance in school curriculum to enhance fiscal literacy. It had developed material for this purpose which it would willingly share with the state governments," Subbarao said.
About the dubious activities of unauthorised and unincorporated bodies and financial companies, the RBI governor has asked the people not to make any deposit to these institutions. "People and media should be more vigilant about the unrecognised financial institutions." Subbarao said that RBI has decided to open its sub-offices in six more northeastern states - Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura and Meghalaya - in a phased manner to improve the banking services to the region and to ensure banking access is made available to all people.
Currently, RBI has a regional office in Assams main city of Guwahati. န Photo : Reuters
--------------------------------------------------------------------------------------------------www.bengalnewz.com-----

          The Real Tax Rate Scandal        
When Republican presidential candidate Mitt Romney casually estimated that his effective tax rate is around 15 percent, progressives immediately pounced on the issue. To this ideological minority with its Ahab-like obsession on class warfare, a rich American paying an effective tax rate of “only” 15 percent is a scandal of the first order. Yes, this story is a scandal, but not the one that progressives think it is.
          Racist Like Me        

In a nation riven to its very core by race, I appear to be the only remaining racist. Off and on, I'm homophobic and anti-Semitic, too, but mostly, I'm racist. Yet unlike the rest of you, I'm honest about it.

I'm the only person I know who routinely admits to being a racist. When I redeemed my Mother's Day spa package, I was assigned a lovely young black woman as my aesthetician. As we chatted, I found myself searching for words. Eventually, I realized I was trying to find a way to ask about her credentials. In 20 years of spa trips, I have never had a black aesthetician, and I have never thought, let alone asked, about one's competence, even when they disappoint me. It appears that I, too, think black people are stupid, uninformed, and graceless. Criminal, too—day before yesterday, after finalizing the details of working in a public housing complex, I dreamt that night of herds of rapacious, animalistic blacks robbing, assaulting, and generally terrorizing me there. (Birth of a Nation was more subtle.) So, counting yesterday's incident, which I will recount shortly, that makes twice just this week that I was a racist.

It was yesterday's incident that got me thinking about how racism is lived. The New York Times recently won a Pulitzer for a series on how race is lived, but that's not quite the same thing, is it? Most of us agree that racism is far from dead and that we're all responsible for helping to end it. And yet, so charged is the issue of race that it is virtually impossible for those who do not already agree about it to discuss it. Without a free exchange of ideas, progress is not very likely; conservatives will continue to preach to their choir and liberals will do the same.

Here's an example: A gay friend was being cavalier and dismissive, I thought, about the least divergence from the gay agenda, even by a pro-gay person like me. He wouldn't even entertain the notion that, say, lesbians in a women's locker room could legitimately give one pause. It shouldn't be a long pause (given that they've always been there), but give me a break. From the look on his face, you'd have thought that I had said he was going to sodomite hell. "Oh Debra. From you?" I argued that a man would never be allowed into a women's locker room—even if he were physically incapable of either sex or violence (I also made him blind for good measure). My friend sighed deeply, looked to the heavens as if praying for patience, and then grandly "forgave" me by abruptly changing the subject. Clearly, he considered any such discussion homophobic, a designation I escaped solely on the strength of our friendship. But why couldn't we discuss it? The notion that "victim" status exempts him from the need to examine, explain, or defend his beliefs is a dangerous one indeed. That was the perfect moment both to prove to himself that he'd thought things through, and to educate someone who could go forth and spread knowledge. Instead, we just showed each other that you can love and respect someone and yet know that they can sometimes be self-righteous, intolerant, and anti-intellectual.

One reason for bigotry's maddening intractability is that a determination—however knee-jerk, superficial, or unthinkingly made—that something or someone is racist ends the discussion, as happened with my friend. The verdict is "guilty" and the only punishment is forfeiture of the right to consider yourself a decent human being. Better to be a necrophiliac than an admitted bigot. Yet if we are to evolve on the issue of race, the notion that you, or someone else, is racist ought to function as the beginning of the attainment of full humanity, not the proof that you've relinquished it. Realizing with each incident that I was operating from a no-longer-quite-subconscious script about race allowed me to recognize, and then confront, the hateful notions I have internalized about blacks. Worse, it allowed me to see that having experienced racism had helped turn me into one: It turns out that I have a problem with whites, too.

Yesterday, I watched a white man park his truck in my driveway and walk off down the road without even a glance to see if the owners were about so he could ask permission. The sense of entitlement and ownership he exuded pushed every race-, gender- and class-based button a black girl from the inner city has to push. Guys like that have been pushing the world (read: me) around forever. Still, I tried to shrug it off. Then, when I went out for the mail two hours later, I was furious to see his truck still on my property. In full Gloria Steinem meets Fannie Lou Hamer mode, I marched down the road to the construction site where I figured he'd gone.

At the site, a gaggle of "Joe College"-type shirtless white boys were goofing off, and a grandfatherly black man halfheartedly directed nonexistent traffic. As I approached, the black man perked up, glad to see me in this extremely white part of an extremely white city in an extremely white region. Or perhaps he was glad because now he wasn't the only adult. The white guys, suddenly busy with their rakes, feigned blindness.

"Whose truck—"

The black man strode over and pointed gleefully at the man who was clearly in charge. "The green hat! That's his truck." How had he known what I was going to say?

With happy spite, the black man watched as I exchanged a few words with my squatter and saluted me as the man who must be his boss followed me shamefacedly to move his truck. As I passed the brother, I said evilly, "If I'd parked on his property, the police would be here."

"You got that right," he agreed grimly, as if I'd narrowly escaped the noose. It's a wonder we didn't flash each other black power salutes. But the moment the words were out of my mouth, I was ashamed. Worse: I felt stupid.

Who am I kidding? I'm an attorney. The lots are so big in my deer-filled suburb that I had to drive from neighbor to neighbor to collect petition signatures for a local election. In fact, we rarely even use that usurped driveway because we have two. My architect husband is white as are our two children. (So far. Biracial kids often darken over time.) The local police are just as respectful of me as they are of my neighbors, whatever they might be thinking. Whether or not I should fear them, I don't.

It is a testament to the enduring legacy of racism that a black grandfather still doing manual labor bothered to side with either me or my squatter. He should have said to hell with the both of you and played dumb, leaving the two of us to fight over our possessions. I'm guessing he'd also witnessed his feudal lord take arrogant possession of a stranger's property and that this had pushed all his buttons, too. The fact that I turned out to be black was the icing on the cake.

In a way, I'm arguing for class warfare to replace racial warfare. Class conflict makes sense; it keeps the powerful from riding roughshod over senior citizens who can't retire from manual labor in the hot sun. The truth is, I have far more in common with the rich white man than I do with that poor black grandfather (who would never dare to park on private property in this neighborhood). A world of perfect harmony would be lovely, but until the rapture comes I'd rather blue-collar types of all races faced off against us "suits" than one race against the other. There is nothing logical, natural, or beneficial about a world organized by race—the very concept is irrational. Any system divided along racial lines, implicitly or overtly, will be immoral, inefficient, and unstable. (Take, for example, poor whites' hatred of slaves, rather than of slavery, for depressing wages.)

Class conflict, on the other hand, is natural and rational. It brought us the minimum wage, OSHA, Social Security, the weekend, overtime, pensions, and the like. While none of those are unmitigated successes, a system organized along class lines acknowledges that capitalism doesn't police itself and that labor must have a voice—it wasn't the capitalists who pushed for child labor laws and the eight-hour work day. Everybody loses when societal goods are distributed on the basis of race, even those in the front of the bus. Bigotry is just plain stupid, but as long as the price of examining one's prejudices is expulsion from the human race, we're never going to be able to quash it.

When I realized that I had internalized the world's loathing of blacks, my first response was, counterintuitively, relief. Finally, I have proof that blacks' obsession with racism isn't crazy. If I secretly think that many poor blacks are animalistic and stupid, you'll never make me believe that lots of other people don't, too. My lasting response has been chagrined amusement to realize that I hold such ridiculous, illogical notions. Most of all, acknowledging my own racism has given me a measure of compassion for how difficult it is to retain one's humanity in such a politicized and inhumane world. I'm black and I make my living thinking about race, but I still wasn't immune to the insidious bigotry in our world. How much harder it must be for those with far less time to contemplate and come to terms with these vexing social issues.

It's not bigotry per se that hamstrings us in the struggle to achieve a just society. It's our inability to talk about and think our way through our preconceptions. We have to learn how to forgive each other, and more importantly ourselves, when we're stupid.


          Could I please speak to Kate please        
My favourite film in the 1990s was probably Terry Gilliam’s The Fisher King, which stars Jeff Bridges as radio cult personality Jack Lucas, whose offhand incitement to class warfare prompts a lonely caller to open fire on a yuppie watering-hole, killing seven people and then himself. Jack is dancing around his penthouse, rehearsing a catchphrase […]
          Anwar Ibrahim: The Tycoons Fear A New Government        
Very True, The Stake Holders Fear The Most!

KUALA LUMPUR, March 28 — Pakatan Rakyat (PR) will go into upcoming polls fighting a class war on behalf of the lower classes whom Datuk Seri Anwar Ibrahim said were being held at the mercy of Barisan Nasional (BN) cronies.

The opposition leader told a crowd of more than 2,000 at a ceramah in Ampang, a former Umno stronghold, that PR was facing attacks in BN-controlled media because cronies of the ruling coalition feared cuts into their “obscene profits” if there was a change in government.

“This battle, this election is about the masses, the workers, the low-income earners against the rich cronies of Umno,” he said.

“Every day I am attacked. Who is fighting me? Not Najib or Muhyiddin. It is the tycoons who fear their profits will be cut,” the former deputy prime minister said, referring to Prime Minister Datuk Seri Najib Razak and his deputy Tan Sri Muhyiddin Yassin.

Although he accused several Malaysian billionaires such as those who controlled the Genting and YTL groups, he zeroed in on tycoon Tan Sri Syed Mokhtar al-Bukhary’s monopoly of the sugar and rice market.

“Am I glad Malays control certain facets of the economy? Yes, but not to burden others,” the PKR de facto leader said.

“Under Syed Mokhtar, sugar prices are four times higher. You who support Umno, your family members in the paddy fields are being squeezed by your leaders.”

Anwar’s plea to voters comes after a survey conducted last month by independent pollsters Merdeka Center found that Najib’s popularity had surged by 10 percentage points to 69 per cent largely on the back of 78 per cent support from households earning under RM1,500 a month.
The centre credited this largely to Putrajaya’s RM500 cash handout to households with a monthly income of under RM3,000 under the Bantuan Rakyat 1 Malaysia programme.

Najib’s predecessor Tun Abdullah Ahmad Badawi’s approval rating was 71 per cent before the 2008 polls but BN lost its two-thirds parliamentary majority and four state governments.
Anwar (picture) also pointed out to the crowd last night that it was PR that fought for minimum wage and the abolition of the Higher Education Fund (PTPTN), which he said “burdened poor Malays and made them beggars”.

“These young Malays earning less than RM800 a month who are supporting Umno... it is not Umno that is fighting for minimum wage, it is us. We want to cancel PTPTN, not Umno.

“We want to reduce fuel, electricity prices. But Umno says giving free water like Selangor will make the government bankrupt,” Anwar added, referring to the PKR-led administration’s subsidy of the 20 cubic metres of water to each household in the Klang Valley.

Najib has indicated that elections are near although his government’s mandate expires only next year.

http://www.themalaysianinsider.com/malaysia/article/anwar-ge13-a-class-war/
          The GOP - Stealing, Murdering, and Raping Like the Barbarians of Old        
Republicans are always complaining about class warfare but since 2001 they have been on what can only be described as an extended plundering expedition on behalf of the rich. Their most recent activities since the Gilded Age may have begun in Iraq and A
                  

Yale historian warns Trump’s rise perfectly mirrors frightening ascent of Fascism and Nazis in the 1930s

Typical Leftist cherry picking below.  He quotes a few bits he likes and leaves out the rest. He can't find much that Trump has said so he quotes Steve Bannon -- quite ignoring that Bannon is now out of influence with Trump.

He says that Trump’s showman style of populism is heavily influenced by Bannon. But Trump has been a showman for decades, long before Bannon was heard of. You would have to go back a long way before you found a time when Trump was not in the news. Here's an example of Trump as a young man:



It is true that Trump's rise to power was rapid and Snyder  implies that Fascists rose to power overnight too.  But they didn't.  Hitler fought many elections before he was able to cobble together a minority administration in the "Reichstag". There is no comparison to Trump's sweep.

He does quote Trump as liking the prewar "America First" movement and implies that it was Nazi.  It was in fact the exact opposite. It was the chief anti-immigration and anti-intervention movement in 1930s America.  They were isolationists. The last thing they wanted was to march on any other county.

Snyder in fact just disproves his own argument.  He admits that America First was isolationist but then says that the 1930s Fascists were internationalists.  Che?  But they certainly WERE internationalists. Hitler tried to take over Russia.  Trump gets condemned for being too friendly towards Russia!

It is true that German conservatives gave Hitler some support but that was only because they saw him as a lesser evil than the KPD: the powerful German Communist party.  There was no such threat in America.  The Democrats trust in bureaucracy, not class war. It is in fact the Democrats who are the true modern Fascists.  Right into the war years, Hitler trusted in bureaucracy too.

And the guy below is a historian!  More accurately a fraud

Note that there have been many equally shallow attempts to brand Trump and his followers as being Nazi/ Fascist/ racist/ authoritarian. As authoritarianism is my main area of academic expertise I have debunked all of them that I know of. See here, here, here, here, here, here, here, here, here and here.



Writing for The Guardian, Timothy Snyder warns that conservatives seem to be unaware that Trump is taking their governing philosophy into darker — and more violent — territory.

According to Snyder, Trump’s showman style of populism is heavily influenced by White House Chief Strategist Steve Bannon.

“Stephen Bannon, who promises us new policies ‘as exciting as the 1930s,’ seems to want to return to that decade in order to undo those legacies,” Snyder writes. “He seems to have in mind a kleptocratic authoritarianism (hastened by deregulation and the dismantlement of the welfare state) that generates inequality, which can be channeled into a culture war (prepared for by Muslim bans and immigrant denunciation hotlines).”

“Like fascists, Bannon imagines that history is a cycle in which national virtue must be defended from permanent enemies. He refers to fascist authors in defense of this understanding of the past.”

Noting that President Trump is not an “articulate theorist,” Snyder points out that the president gives Bannon’s dark vision a populist veneer that has historical parallels.

“During the 2016 campaign, Trump spoke of ‘America first,’ which he knew was the name of political movement in the United States that opposed American participation in the second world war,” Snyder explains. “Among its leaders were nativists and Nazi apologists such as Charles Lindbergh. When Trump promised in his inaugural address that ‘from now on, it’s going to be America first’ he was answering a call across the decades from Lindbergh, who complained that ‘we lack leadership that places America first.’ American foreign and energy policies have been branded ‘America first.'”

“Conservatives always began from intuitive understanding of one’s own country and an instinctive defense of sovereignty. The far right of the 1930s was internationalist, in the sense that fascists learned one from the other and admired one another, as Hitler admired Mussolini,” Snyder continued.

“One of the reasons why the radical right was able to overcome conservatives back in the 1930s was that the conservatives did not understand the threat. Nazis in Germany, like fascists in Italy and Romania, did have popular support, but they would not have been able to change regimes without the connivance or the passivity of conservatives.”

“If Republicans do not wish to be remembered (and forgotten) like the German conservatives of the 1930s, they had better find their courage – and their conservatism – fast,” the historian concludes.

SOURCE


          Two Visions of Frustration        
In light of the last post about the Occupy Wall Street protests and how they might be an emerging contrast to the Tea Party I thought I would post two links to the Democratic version of the "us vs elites" meme and the Republican version of the "us vs elites" meme.

Here is Elizabeth Warren's now famous statement about fair taxation and "class warfare."

Here is Governor Rick Perry's address to a Republican/Tea Party rally in Austin Texas.

One thing that strikes me is that Warren's rhetoric is must more focussed economic distribution. Who wins and who loses from the current economic regime. Perry's rhetoric does mention taxes but mainly focusses on abstracts like "states' rights" and "the constitution" and "the founding fathers" etc.

Another difference is that Perry's rhetoric - to the extent it talks about economic distribution - focusses on the idea that government should stop taking things from individuals. Warren's rhetoric focusses on the idea that corporate elites have been taking things from the community without paying anything back.

It's not obvious to me which message will have more traction in the midst of ongoing sluggish economy or renewed recession. But certainly the mere fact that there is now a clearly enunciated and easily understood alternative to the "taxes bad" mantra of the Tea Party makes the 2012 election campaign more competitive. It's also refreshing that this may turn out to be the first election in a long time in which the two parties are clearly debating rival visions of the future in a substantively meaningful way. It will be nasty and hard fought. And many people will be upset that their side didn't win but this is exactly the kind of policy debate so many people who are frustrated with politics as usual want to see.

          Make America Great Again        
Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global marketplace. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital.
By: 
Peter Schiff
Wednesday, May 4, 2016
Donald Trump’s critics have heaped scorn on his calls for protective tariffs to deal with America’s widening trade imbalance and the resulting loss of higher–paying blue collar jobs. Some have accused him of trying to turn back the clock in pursuit of a cheap populist ploy and have said that he simply refuses to acknowledge that America is now an information and service economy for which large trade deficits are the new normal. But voters are sensing that The Donald is right to sound alarm bells, and that something radical needs to be done to revive manufacturing to make America great again. But his tariff solution is hardly the best medicine. To be honest, given the even worse solutions that are being offered by the left, Trump’s instincts may be preferable.
 
Ironically, in the late 19th and early 20th Centuries, the elimination of tariffs was a populist issue. A little more than a century later, the polls have reversed completely. Prior to the introduction of the income tax in 1913, tariffs were the Federal Government’s principal source of revenue. During the long and contentious campaign to enact the 16th Amendment (which allowed the government to tax incomes for the first time since the emergency Civil War-era 3% to 10% income tax), proponents argued that the passage of a “soak the rich” income tax would allow the government to repeal the tariffs and thereby transfer the tax burden from the working class, who paid the tariffs through higher prices on imports, to the ultra-wealthy, who were the sole target of the income tax as it was originally conceived, packaged and sold.
 
(The tax originally imposed rates from 1% to 7%, and only applied to fewer than 1% of Americans. The 99% supported its enactment solely because they believed they were getting something for nothing, in this case, government services paid for by the rich. In fact, in 1895, when the Supreme Court bravely declared the government’s first attempt to replace tariffs with an income tax unconstitutional, the justices were personally vilified as defenders of the rich.)
 
But once the Federal Government got its foot in the door, it rapidly raised the tax rates and expanded the base of taxpayers, ultimately subjecting the middle class to rates far higher than anything originally contemplated for the Rockefellers, Carnegies, or Vanderbilts. If this does not provide a sterling example to the legions of Democrats “Feeling the Bern” of how class warfare can backfire on the class waging the war, I don’t know what does. Ironically, no single tax has done more harm to the middle class than the income tax.
 
So while the populist movement of the early 20th Century demanded the removal of tariffs, the populist movement of today wants to bring them back. But Trump is not talking about replacing income taxes with tariffs. He simply wants to add tariffs to the existing tax structure (though he does want to lower the rates). This will only compound our problems and make our economy far less competitive. It will not bring back our jobs; it will only increase the tax burden on the American economy, destroying even more jobs. If we want to undo the deal we made with the devil over 100 years ago, we need to repeal the income tax as well.
 
If that substitution were on the table, I would argue that tariffs offer the lessor burden. Tariffs are a much simpler form of taxation that do not require armies of accountants, lawyers, and tax preparers, who are needed to comply. And while we are repealing the income tax, we should repeal most of the other federal taxes (particularly the payroll and estate taxes) and laws enacted since then as well. But that is not what is being discussed.
 
Our trade deficits do not result from bad deals but bad laws. Put simply, the amount of taxation and regulation that have been layered on our business owners and their employees have made it impossible for American firms to compete with foreign rivals. Contrary to the currently popular talking points, low wages are not the only means to establish successful trade balances. America became the dominant exporter in the world in the 19th and 20th centuries while our currency was strengthening, we were paying the highest wages, and our workers enjoyed the world’s highest living standards.
 
Germany is doing so today. Strong economies compete with quality, innovation, efficiency, and flexibility. Those capacities have been stifled by government policies that have nothing to do with trade agreements and have everything to do with domestic policies. We need to repeal those laws. Trade deficits are not the problem. They are the consequence of the problem. The problem is big government, financed largely by the income tax, which has made America uncompetitive.
 
But it is unlikely that tariffs alone, or even a broad-based national sales or value-added tax, could bring in all the revenue generated by the direct taxes we should eliminate. To survive on excise taxes, as the founding fathers envisioned, requires making the Federal Government a lot smaller.
 
But Trump is not promising to make government smaller. If anything, he is promising to make it even bigger. He has made no promises to cut government spending across the board, including popular “entitlements” like social security, which Trump has promised not to touch.
 
To make America great again, we need to recreate the free-market environment that made her great in the first place. It’s not just oppressive direct taxes that must go. It’s all the regulations that have driven up the cost of doing business, and labor laws that make employing workers so expensive and risky that business does all it can to create as few jobs as possible.
 
But contrary to Trump’s stump speeches, our trading partners are not taking advantage of us; we are taking advantage of them. They give us their products and we give them nothing but our debt. They expend scarce resources (land, labor and capital) to create consumer products for us to enjoy, while we just conjure intrinsically worthless dollars out of thin air. But years of excessive regulation and taxation have resulted in an accumulation of trade deficits that has transformed America from the world’s largest creditor to its largest debtor. Our once mighty savings financed a high-wage industrial economy that has been hollowed out, replaced by a weak, debt-financed, low-wage service sector economy.
 
Trump is right. This is a big problem and it needs big solutions. If tariffs were offered as a replacement to our ridiculous and destructive personal and corporate tax, and payroll and estate taxes, then America may become more competitive and our greater efficiency may even allow us to overcome the tariffs that other countries would likely impose on us in response. But slapping tariffs on imports, while doing nothing to improve the conditions for business efficiency, simply means that prices for American consumers will rise significantly, without sparking a revitalization of American manufacturing prowess. Don’t forget the global market contains over 7 billion consumers, the U.S. market just under 320 million. Insulating our manufacturers from this larger marketplace guarantees that we will never become globally competitive.
 
Tariffs or sales taxes will drive up the cost of goods for consumers, a fact that Trump seems to ignore. If he would acknowledge this issue, he could offer the counter argument that if we could couple tariffs with income tax relief that Americans would also have higher incomes to pay those higher prices. But even if incomes rise, higher prices will inevitably lead to less consumption and more savings, especially if we allow interest rates to be set by the free market rather than the Federal Reserve. More savings and less spending is exactly what we need if we want the capital to rebuild our industry. Protective tariffs alone will not work, especially when there is little industry left to protect.
 
So instead of criticizing Trump for his misguided advocacy of tariffs as a panacea, we should at least give him credit for recognizing a serious problem that so many others ignore. The real criticism should be directed at those who would allow America to continue down this self-destructive path.
 
Subscribe to Euro Pacific's Weekly Digest: Receive all commentaries by Peter Schiff, John Browne, and other Euro Pacific commentators delivered to your inbox every Monday!
 


To order your copy of Peter Schiff's latest book, The Real Crash (Fully Revised and Updated): America's Coming Bankruptcy - How to Save Yourself and Your Country, click here.

For in-depth analysis of this and other investment topics, subscribe to Peter Schiff's Global Investor newsletter. CLICK HERE for your free subscription.


          Kelly: A tale of two budgets        

It’s no surprise that Paul Ryan’s budget passed the House of Representatives recently, although it is refreshing that 10 Republicans voted against it. Nor is it any surprise that Mitt Romney is also for this budget and has embraced it, and Paul Ryan, who has in turn endorsed him.

So we have a look at what the Republicans want to do with the budget. Number one, they want to cut taxes for the rich even more than now. This budget also doesn’t lower the debt very much – which shows that lowering the debt is not their priority, but only lip service to those who don’t look closely at the details.

This budget would hurt so many people who are not rich. Medicare, one of the most popular programs we have, would change to a voucher program, with seniors hoping to find a benevolent insurance company who would accept their “voucher” and provide them with the health care they need. Good luck with that.

Prescription drug costs would rise again. The budget also slashes $3.3 trillion from other programs for low-income citizens, hurting not only the elderly, but the disabled and the poor. There is absolutely no concern for anyone in the middle or lower class income levels.

This budget cuts jobs and slashes investments in programs such as highway spending, education, basic research, sustainable energy, and more.

In contrast, we have another budget. It won’t pass, maybe won’t even come to a vote, but it shows what could happen if the Democrats win back the House of Representatives in November. It is the budget for all, from the Progressive Caucus of the Democratic Party in the House.

This budget helps put Americans back to work, charts a path to responsible deficit reduction, enhances our economic competitiveness, rebuilds the middle class, and invests in our future, according to the Progressive Caucus website.

There are no cuts to Medicare, Medicaid, or Social Security, and it asks those who benefit most in this country to pay a fair share. This was common policy until recently, when greed took over.

The budget provides $2.9 trillion in job-creating opportunities. This would help those seeking employment.

Without devastating programs that almost all Americans want, this budget would achieve $6.8 trillion in deficit reduction.

This budget returns us to a more fair tax policy.

It brings the troops home.

It helps to protect families.

The contrast is clear — the choice is clear as well.

What kind of society do we wish for the future? One where the majority of people matter, and have a fair shake. Or one which caters to the wealthy far beyond their share?

This is not about class warfare — that is just a Fox News talking point, which is now echoed by all the Republican candidates for the nomination. We should have room for people of all income levels — and all of them should benefit from our American society as American citizens. This is the way it was in the past, and there is no reason that it cannot be that way again.

A good reminder for our budget process would be — do no harm.

Columnist Barbara Kelly can be reached at bkellyshaw.kelly@gmail.com.

Content Watch Publication ID: 
11072031

          WHAT CONGRESS SHOULD BE DISCUSSING        
Instead of abortion, birth control, the war on religion,  socialist take overs of the US, class warfare, investigations into the President's birth, mandatory prison sentences, pulling out of support for Public Radio, and the war on drugs, this is what Congress should be discussing:

·     1)   The conflict of interest between representing the needs of people of the district and representing the interests of those who give generously to finance campaigns for election or reelection.

·      2)  Ways to prevent big dollar tax avoiders pay their share of taxes instead of hiding them in foreign banks, secret accounts, and loopholes placed by Congressional representatives at the suggestion of lobbyists.

·     3)   Ways to prevent self-serving gerrymandered districts that victimize whichever party is not in power in that State. There are ways to make them balanced and not based on race or economic status.

·       4) Ways to prevent states from making it difficult, if not impossible for US citizens to vote in elections.

·     5)   Shifting some of the money given to defense to rebuilding and repairing the nation’s infrastructure of ports, railways, airports, canals, dams, electric grid, roads, and bridges.

·    6)    Giving the same tax breaks, subsidies,  and start up benefits to the non-fossil fuel, non-polluting energy efforts using wind, sun, tides, and geothermal energy.

·    7)    Making sure that every person in the US has access to health care equivalent to that given to our Congressional representatives and military members.

·   8)    Federal regulation of those industries that pollute our rivers and lakes, deplete our resources, endanger our environments, or diminish our national parks.

·       9) Federal regulation of those industries whose products may endanger the health of those users of products that may contain carcinogens, mutagens, toxins, and teratogens.

·      10)  Finding ways to employ those laid off from work so they can support a family.

·       11) What should be an adult minimum wage?  Why is this exempt from cost of living annual changes?

·     12)   Why does our military budget greatly exceed all other nations?  Is it inflated beyond reasonable costs of manufacture and testing?

·      13)  Why are health costs in the US far greater than any other country? Are hospital costs and medical and pharmaceutical costs inflated beyond reasonable costs of production and care?


·       14) What should be done to address the long term prospects that people are living longer after retirement. Should benefits be graduated based on age of retirement? Should Social Security taxes be extended past income caps that are highly beneficial to those who least need social security?

115) What measures should Congress initiate to protect coastal cities at or near sea level from being inundated in the coming decades by rising sea levels (it does not matter whether the cause was human energy use or natural cycles). 



          The Utter Disaster Of The Barack Obama Presidency        

America elected Barack Obama to achieve a "first" that is important to Leftists: a first African-descended President. This furthers their agenda to dispirit and dispossess the genetic core of Western Civilization, or those who are biologically Western European, and replace them with a mixed-race grey people who by virtue of having no culture or identity, will gravitate toward Leftism to create a permanent Leftist majority and power structure.

Eight years later, the country is a smoking ruin thanks to the racial- and class-revenge policies of Leftists and their darling candidate, Barack Obama:

And he has black skin, so he must he cool and progressive! Man I voted for him 2008 back when I was in college and decided to give him another shot in 2012, what a huge disappointment he is.

He is actually one of the major reasons that Trump became president, Hillary was running on a platform of more-Obama.

  1. The architect of TPP and leading the worst economic recovery in U.S. history. Economy is STILL so weak after 8 years that the Federal Reserve is still forced to keep interest rates near zero just to keep our economy from collapsing.

  2. Used Espionage Act to go after more whistle blowers and journalists than all other administrations in US history, COMBINED.

  3. The only president in US history to not to have at least one year of 3% GDP growth

  4. Grew the national debt more than all other presidents COMBINED.

  5. 50% of college graduates cannot find a full-time job in their field of study.

  6. Obama is the only president in history that for the first 7.5 years of his presidency the median income fell.

  7. Record numbers of people on Food Stamps and Welfare.

  8. Lowest labor-participation rate in 40 years.

  9. Highest percent of unemployed 6 months or more since the Great Depression.

  10. Obamacare is failing and collapsing at an alarming rate, personally my premiums have skyrocketed since it was introduced.

  11. That promise of racial unity that Obama was supposed to represent has turned into our country having the worst racial relations in decades. We have cities from Baltimore to Charlotte literally burning down in race riots.

  12. Regressive leftism everywhere. When the Charlie Hebdo cartoonists were murdered by Muslims for drawing a cartoon of Muhammed, instead of standing up for Western values he sided against the cartoonists, saying "the future must not belong to those who slander the prophet of Islam."

  13. Killed literally over a hundred innocent people in drone strikes.

  14. Expanded the surveillance state, massive failure on going after Snowden for calling out NSA's bullshit

  15. Signed CISA, ICANN and a slew of other terrible bills.

I would need a list of 10 or 15 lines just to touch on his foreign policy failures. Hillary said her vision of America is continuing the Obama policies. The American voters said no thanks.

This user would get more points if he noticed that all Leftism is "regressive Leftism" because Leftism is an agenda of destruction of social order, not its creation. It is based on fantasies about human equality that inevitably have bad results in reality.

Perhaps the real story here is the sea change in culture that can be seen on social media. As another user quipped:

[J]ust yesterday, I would have had to have sorted by controversial to read the truth.

This is what Leftism does: it makes people into ideological zombies who then deny reality with obsessive, vengeful zeal. Just yesterday, these things could not be said. Now we can finally admit the truth... which also admits that we were suppressing the truth yesterday and the days before it, purely so we could believe the fiction that is Leftism and its associated policies of equality, diversity and class warfare.


          Election 2013: Day 33 (or, Wow it seems like only 33 days ago this all started)        

This last day of the campaign saw Kevin Rudd start off early by attacking the Liberal Party over its release of its child care policy last night.

Yep, child care. No one cares about, so of course you would release it without any fan fair…

So what was in it? Mostly it was about getting rid of the requirement to have child care centres move to 1:4 staff child ratio; remove the requirement for centres to have half of all staff with a diploma level qualification or working towards it, and the other half having, or be working toward, a Certificate III level qualification by 1 January 2014.

Similarly removing the need for Centres with 25 or more children will be required to have at least one qualified early childhood teacher.

Specifically:

“We will seek the cooperation of the States and Territories to pause the
requirement that all staff should be qualified until the Australian Children’s Education Quality and Care Authority has undertaken a full review of early childhood qualifications.”

As a result they are also axing the Early Years Quality Fund, which was $300m to provided directly to eligible child care providers to improve quality outcomes for children by supplementing wage increases of $3.00 per hour for Certificate III qualified educators.

It hides this in a bullshit statement:

“The Coalition will undertake a ministerial review of the EYQF establishment process and its operation. The review will examine the EYQF implementation process; in particular, allegations about the fund being established as a vehicle to boost union membership.”

A ministerial review? Yeah that’ll be thorough.

One small blessing: “If elected, the Coalition will honour funds contracted from the EYQF but no further expenditure will be approved.”

So in effect the move of the child care industry towards a more professional sector is pretty much undone. Coalition's legal aid cuts a 'slap in the face' for Indigenous communities - World news - theguardian.com

Now sure, they can do that. It’s a typical right-wing move done under the guise of “reducing red tape” but given how big an issue child care is, that they put it out at such a late stage is a pretty dodgy way of operating.

Similarly they announced they would be cutting $42m in legal aid. This was done in the costings under the innocent line of “Reprioritise Indigenous Policy Reform Program” Let’s just say indigenous groups are rather shirty about finding this out. Especially as it had not been foreshadowed.

It also highlights what I was saying yesterday about not being provided any assumptions or details in their costings document.

For a party that has been well ahead in the polls, they don’t show much courage.

***

Today Kevin Rudd was in the seats of Dobell and Robertson. I’m surprised he was there, I thought those seats might be already gone to the Libs. so I guess it either means the ALP thinks they’re a a chance, or that all the other seats are so far gone that these are the only one’s left with any hope!

Three years ago Tony Abbott was going on a mad 26 hours straight finals campaign. This time round he’s off to bed early. Rudd has had the better last week, but I think both sides know it hasn’t been good enough.

The big failure for the ALP has been to get people engaged. I seriously doubt many actual uncommitted voters have given much thought or care to the goings on of the past 5 weeks. And when you are the party coming from behind, you need to make them care.

***

At his doorstop this morning Tony Abbott was asked a very good question:

QUESTION: Mr Abbott, on radio this morning, Andrew Robb said that the low-income super contribution which you're going to cut is the political pain that you have to take in order to live within your means. Why is it that low-income earners are taking the political pain and can you give me an example of one of your policies where high-income earners are taking that pain?

So there we go – all he needs to come up with is ONE policy that hurts high-income earners.

I won’t even bother relating you his first attempt. He spent a lot of blather on how the Liberal Party are really great with superannuation. Fortunately the journalist didn’t let up:

QUESTION: But on high-income earners, where are they taking the political pain?

OK. All he needs is to come up with one example. Let’s see how he goes

TONY ABBOTT: Well, it's very important that we try to strengthen our economy. It’s very important to strengthen our economy, and if you look at our paid parental leave policy, for instance, it’s capped at $150,000 a year, 80 per cent of the people who will benefit from our paid parental leave policy are earning less than $65,000. So it is a policy to enable Australians to move forward together, not to play the class war card, not to play the politics of envy which I absolutely reject.

Yep. The one policy he came up with as an example of high-income earners being hurt is his paid parental leave because it is capped at $150,000!

Oh to be hurt like that.

***

Yesterday the Libs announced that their budget bottom line would be $6 billion better off. So it was rather surprising to listen to Channel 7 Sydney news tonight and hear Tony Abbott say it would be $9 billion. Cripes money is easy to come by nowadays. (He didn’t get pulled up on it though.)

I also noticed that both Channel 9 and 7 used the exact same stock footage of kids looking at things on the internet while reporting on the Libs aborted net filter plan.

(This is possibly not the most incisive thing I’ve noticed this campaign).

***

And so tomorrow we get to have a sausage and vote. But mostly we get to have a sausage. I would have voted early, but I didn’t want to miss out on the sausage sizzle. I have been known on occasion to go to a Bunnings on the weekend not to buy any hardware but just because I know there’ll be a sausage sizzle on.

For me in the ACT seat of Fraser, the lower house is a non-event. Andrew Leigh will get home. The only choice is how many will give him their first preference and how many will give him their second preference.

But the Senate contest is more interesting. I doubt the Green’s Simon Sheik will get up and beat the Lib’s Zed Seselja, but it would be nice to see. Mostly it would be nice to see because it might at least give the Liberal Party some pause before it goes through its standard policy of thinking all they need to do is cut the public service and everything will be great.

The main seats I’ll be watching are

  • Melbourne – to see if Adam Bandt gets back in. It would be a fair effort, but I think it unlikely
  • Griffith – mostly because I think the individual seat polling of the seat were crap and I think Rudd will get back with a bit of a swing against him, but no real danger
  • Longman – I heard early on the polling wasn’t good for Wyatt Roy, so it’ll be interesting to see if that holds.
  • All of QLD and NSW. Under Gillard the ALP was likely to only have one seat north of Sydney Harbour. So let’s see how they do with Rudd.
  • Indi. I’d wager if you told lefty political tragics that the result would be Abbott wins the election but Mirabella loses her seat, that a fair few would say they could live with that. Her losing would be an absolute net-win for the parliament.
  • WA Senate. Partly because I know him (he launched my book), but mostly because he is one of the smartest people in Parliament I hope Scott Ludlum gets up in the WA Senate race. In a better world he would be Australia’s Communication Minister. The Senate needs people like him – especially when you look at the LNP and ALP Senate benches and you such light weight space fillers who have the job purely because of factional deals.
    Do the right thing WA – and especially don’t be so dumb as to vote Wikileaks and end up giving your preference to the Nationals.
  • NSW Senate. The LNP ticket has Arthur Sinodinos third, which could mean he gets the last Senate vacancy. If something stupid happens someone like Pauline Hanson could get that spot. Again, the Senate would be poorer if that were the case.

***

This election campaign has been a rather different one for me than the last one. In some ways I have felt less connected with it. One of the things about working in the APS is you know the result will determine who is your boss. Whatever happens tomorrow, I’ll still be writing away my posts next week hopefully finding interesting things in economic data that provides people with some knowledge they didn’t have before.

This blog has also felt a bit less vital to me – probably because I spend more time trying to think up interesting things to write for Guardian Aus and The Drum.

I wasn’t sure how I would cover the election, but I quite like that my two most read Guardian blog posts were both yesterday on the Libs and Greens costings. I also like that my post slapping down the Libs boat buyback scheme got some good coverage. On The Drum my post that got the most discussion was the one suggesting that Rudd had a lot of thought bubbles, but not much of a sense of being in government with developed policies.

Last time round I was a pretty small voice mostly trying to find things not being mentioned, but perhaps too often complaining about things not being mentioned. This time I tried not so much to write about the coverage but to try and be a bit of the solution.

The experience of having to write on the election as a job is rather different. But to be honest it gives me no sympathy for those others who do it, because it is an incredibly privileged thing to be able to write for large audiences, and being paid to write is about as good as it gets.

It does make me perhaps more admiring of those who do it well. In the economics field this means people like Tim Colebatch, Laura Tingle, Ross Gittins, Stephen Long and David Crowe (when he is not forced to have his name attached to shite with Adam Creighton or David Uren).

I should have written more on the Greens policies, though. They were far and away the most honest with voters with their spends and cuts. Anyone looking for the party at this election that tried to bluff their way through with vague announcements and polices pushed out at the last minute will have to look elsewhere.

And I also think this election would have been better if Christine Milne was allowed to participate in the leaders debates. At the very least she would have knocked Abbott and Rudd off their talking points a bit.

But overall for me, it has been good to get back into some real blogging – as opposed to just using this site to post graphs.

I’ll probably however, drop the posts again (they are actually a bit of an effort – especially when like yesterday I also wrote about 2000 other words for the Guardian), but I do plan to write some more stuff on movies and sport and assorted things.

Writing about politics and economics is great, but it has (largely by accident) become my job and this blog was always my hobby, so I’m going to see if I can make it a bit more of that.

Of course it’ll also still be home to all my graphs – couldn’t stop that!


          Ep 543: Class Warfare        

Ep 543: Class Warfare

“Yesterday was the fifth of November, did you all remember?” Read on fine denizen of the internet. Read on. – Let’s welcome Shaun Cubbs back to the Jamhole. It’s been a while since we’ve all been together. Let’s get some good solid …

Read more »

The Jamhole - Stay hungry, stay foolish.


          Comment #44        
LOL Guess you haven't been here long enough to know me, most know I am conservative.

I understand everyday people very well, I know many millionaires , most are self made and have hearts of gold and are very generous. Yes, some people are very snobby, poor people are snotty mean and rude as well. Depends on how you were raised.

You have a biased media pounding the Class wars into your head. You are here because you want to win the lottery and become rich, will it change who you are?

Goo... [ More ]
          Links for 2011-09-22 [Digg]        

          The Sparks of Rebellion        
We need to be a nationally networked movement of many local, regional and issue-focused groups so we can unite into one mass movement. Research shows that nonviolent mass movements win. Fringe movements fail. By ‘mass’ we mean with an objective that is supported by a large majority and 1 percent to 5 percent of the population actively working for transformation.”

I am reading and rereading the debates among some of the great radical thinkers of the 19th and 20th centuries about the mechanisms of social change. These debates were not academic. They were frantic searches for the triggers of revolt.

Vladimir Lenin placed his faith in a violent uprising, a professional, disciplined revolutionary vanguard freed from moral constraints and, like Karl Marx, in the inevitable emergence of the worker's state. Pierre-Joseph Proudhon insisted that gradual change would be accomplished as enlightened workers took over production and educated and converted the rest of the proletariat. Mikhail Bakunin predicted the catastrophic breakdown of the capitalist order, something we are likely to witness in our lifetimes, and new autonomous worker federations rising up out of the chaos. Pyotr Kropotkin, like Proudhon, believed in an evolutionary process that would hammer out the new society. Emma Goldman, along with Kropotkin, came to be very wary of both the efficacy of violence and the revolutionary potential of the masses. "The mass," Goldman wrote bitterly toward the end of her life in echoing Marx, "clings to its masters, loves the whip, and is the first to cry Crucify!"

The revolutionists of history counted on a mobilized base of enlightened industrial workers. The building blocks of revolt, they believed, relied on the tool of the general strike, the ability of workers to cripple the mechanisms of production. Strikes could be sustained with the support of political parties, strike funds and union halls. Workers without these support mechanisms had to replicate the infrastructure of parties and unions if they wanted to put prolonged pressure on the bosses and the state. But now, with the decimation of the U.S. manufacturing base, along with the dismantling of our unions and opposition parties, we will have to search for different instruments of rebellion.

We must develop a revolutionary theory that is not reliant on the industrial or agrarian muscle of workers. Most manufacturing jobs have disappeared, and, of those that remain, few are unionized. Our family farms have been destroyed by agro-businesses. Monsanto and its Faustian counterparts on Wall Street rule. They are steadily poisoning our lives and rendering us powerless. The corporate leviathan, which is global, is freed from the constraints of a single nation-state or government. Corporations are beyond regulation or control. Politicians are too anemic, or more often too corrupt, to stand in the way of the accelerating corporate destruction. This makes our struggle different from revolutionary struggles in industrial societies in the past. Our revolt will look more like what erupted in the less industrialized Slavic republics, Russia, Spain and China and uprisings led by a disenfranchised rural and urban working class and peasantry in the liberation movements that swept through Africa and Latin America. The dispossessed working poor, along with unemployed college graduates and students, unemployed journalists, artists, lawyers and teachers, will form our movement. This is why the fight for a higher minimum wage is crucial to uniting service workers with the alienated college-educated sons and daughters of the old middle class. Bakunin, unlike Marx, considered declasse intellectuals essential for successful revolt.

It is not the poor who make revolutions. It is those who conclude that they will not be able, as they once expected, to rise economically and socially. This consciousness is part of the self-knowledge of service workers and fast food workers. It is grasped by the swelling population of college graduates caught in a vise of low-paying jobs and obscene amounts of debt. These two groups, once united, will be our primary engines of revolt. Much of the urban poor has been crippled and in many cases broken by a rewriting of laws, especially drug laws, that has permitted courts, probation officers, parole boards and police to randomly seize poor people of color, especially African-American men, without just cause and lock them in cages for years. In many of our most impoverished urban centers--our internal colonies, as Malcolm X called them--mobilization, at least at first, will be difficult. The urban poor are already in chains. These chains are being readied for the rest of us. "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, beg in the streets or steal bread," Anatole France commented acidly.

Erica Chenoweth and Maria J. Stephan examined 100 years of violent and nonviolent resistance movements in their book "Why Civil Resistance Works." They concluded that nonviolent movements succeed twice as often as violent uprisings. Violent movements work primarily in civil wars or in ending foreign occupations, they found. Nonviolent movements that succeed appeal to those within the power structure, especially the police and civil servants, who are cognizant of the corruption and decadence of the power elite and are willing to abandon them.

"History teaches that we have the power to transform the nation," Kevin Zeese said when I interviewed him. Zeese, who with Dr. Margaret Flowers founded PopularResistance.org and helped plan the occupation of Freedom Plaza in Washington, D.C., continued: "We put forward a strategic framework that would allow people to work together in a common direction to end the rule of money. We need to be a nationally networked movement of many local, regional and issue-focused groups so we can unite into one mass movement. Research shows that nonviolent mass movements win. Fringe movements fail. By 'mass' we mean with an objective that is supported by a large majority and 1 percent to 5 percent of the population actively working for transformation."

Zeese said this mass resistance must work on two tracks. It must attempt to stop the machine while at the same time building alternative structures of economic democracy and participatory democratic institutions. It is vital, he said, to sever ourselves from the corporate economy. Money, he said, has to be raised for grass-roots movements since most foundations that give grants are linked to the Democratic Party. Radical student and environmental groups especially need funds to build national networks, as does the public banking initiative. This initiative is essential to the movement. It will never find support among legislative bodies, for public banks would free people from the tyranny of commercial banks and Wall Street.

The most important dilemma facing us is not ideological. It is logistical. The security and surveillance state has made its highest priority the breaking of any infrastructure that might spark widespread revolt. The state knows the tinder is there. It knows that the continued unraveling of the economy and the effects of climate change make popular unrest inevitable. It knows that as underemployment and unemployment doom at least a quarter of the U.S. population, perhaps more, to perpetual poverty, and as unemployment benefits are scaled back, as schools close, as the middle class withers away, as pension funds are looted by hedge fund thieves, and as the government continues to let the fossil fuel industry ravage the planet, the future will increasingly be one of open conflict. This battle against the corporate state, right now, is primarily about infrastructure. We need an infrastructure to build revolt. The corporate state is determined to deny us one.

The corporate state, unnerved by the Occupy movement, has moved to close any public space to movements that might reignite encampments. For example, New York City police arrested members of Veterans for Peace on Oct. 7, 2012, when they stayed beyond the 10 p.m. official closing time at the Vietnam Veterans Memorial. The police, who in some cases apologized to the veterans as they handcuffed them, were open about the motive of authorities: Officers told those being taken to jail they should blame the Occupy movement for the arrests.

The state has, at the same time, heavily infiltrated movements in order to discredit, isolate and push out their most competent leaders. It has used its vast surveillance capacities to monitor all forms of electronic communications, as well as personal relationships between activists, giving the state the ability to paralyze planned actions before they can begin. It has mounted a public relations campaign to demonize anyone who resists, branding environmental activists as "ecoterrorists," charging activists under draconian terrorism laws, hunting down whistle-blowers such as Chelsea Manning, Julian Assange and Edward Snowden who shine a light on the inner secrets of power and condemning them as traitors and threats to national security. The state has attempted--and in this effort some in the Black Bloc proved unwittingly useful--to paint the movement as violent and directionless.

Occupy articulated the concerns of the majority of citizens. Most of the citizenry detests Wall Street and big banks. It does not want more wars. It needs jobs. It is disgusted with the subservience of elected officials to corporate power. It wants universal health care. It worries that if the fossil fuel industry is not stopped, there will be no future for our children. And the state is using all its power to stymie any movement that expresses these concerns. Documents released under the Freedom of Information Act show Homeland Security, the FBI, the Federal Protective Service, the Park Service and most likely the NSA and the CIA (the latter two have refused to respond to FOIA requests) worked with police across the country to infiltrate and destroy the encampments. There were 7,765 arrests of people in the movement. Occupy, at its peak, had about 350,000 people--or about 0.1 percent of the U.S. population.

"Look how afraid the power structure was of a mere 1/10th of 1 percent of the population," Zeese said. "What happens when the movement grows to 1 percent--not a far reach--or the 5 percent that some research shows is the tipping point where no government, dictatorship or democracy can withstand the pressure from below?"

The state cannot allow workers at Wal-Mart, or any other nonunionized service center, to have access to an infrastructure or resources that might permit prolonged strikes and boycotts. And the movement now is about nuts and bolts. It is about food trucks, medical tents, communications vans and musicians and artists willing to articulate and sustain the struggle. We will have to build what unions and radical parties supplied in the past.

The state, in its internal projections, has a vision of the future that is as dystopian as mine. But the state, to protect itself, lies. Politicians, corporations, the public relations industry, the entertainment industry and our ridiculous television pundits speak as if we can continue to build a society based on limitless growth, profligate consumption and fossil fuel. They feed the collective mania for hope at the expense of truth. Their public vision is self-delusional, a form of collective psychosis. The corporate state, meanwhile, is preparing privately for the world it knows is actually coming. It is cementing into place a police state, one that includes the complete evisceration of our most basic civil liberties and the militarization of the internal security apparatus, as well as wholesale surveillance of the citizenry.

The most pressing issue facing us right now is the most prosaic. Protesters attempting to block the Keystone XL pipeline can endure only for so long if they have nothing to eat but stale bagels. They need adequate food. They need a system of communication to get their message out to alternative media that will amplify it. They need rudimentary medical care. All of these elements were vital to the Occupy movement. And these elements, when they came together, allowed the building of a movement that threatened the elite. The encampments also carried within them internal sources of disintegration. Many did not adequately control some groups. Many were hijacked or burdened by those who drained the political work of the movement. Many found that consensus, which worked well in small groups, created paralysis in groups of several hundred or a few thousand. And many failed to anticipate the numbing exhaustion that crushed activists. But these encampments did provide what was most crucial to the movement, something unions or the old Communist Party once provided to militants in the past. They provided the logistics to sustain resistance. And the destruction of the encampments, more than anything else, was a move by the state to deny to us the infrastructure needed to resist.

Infrastructure alone, however, will not be enough.  The resistance needs a vibrant cultural component. It was the spirituals that nourished the souls of African-Americans during the nightmare of slavery. It was the blues that spoke to the reality of black people during the era of Jim Crow. It was the poems of Federico Garcia Lorca that sustained the republicans fighting the fascists in Spain. Music, dance, drama, art, song, painting were the fire and drive of resistance movements. The rebel units in El Salvador when I covered the war there always traveled with musicians and theater troupes. Art, as Emma Goldman pointed out, has the power to make ideas felt. Goldman noted that when Andrew Undershaft, a character in George Bernard Shaw's play "Major Barbara," said poverty is "[t]he worst of crimes" and "All the other crimes are virtues beside it," his impassioned declaration elucidated the cruelty of class warfare more effectively than Shaw's socialist tracts. The degradation of education into vocational training for the corporate state, the ending of state subsidies for the arts and journalism, the hijacking of these disciplines by corporate sponsors, severs the population from understanding, self-actualization and transcendence. In aesthetic terms the corporate state seeks to crush beauty, truth and imagination. This is a war waged by all totalitarian systems.

Culture, real culture, is radical and transformative. It is capable of expressing what lies deep within us. It gives words to our reality. It makes us feel as well as see. It allows us to empathize with those who are different or oppressed. It reveals what is happening around us. It honors mystery. "The role of the artist, then, precisely, is to illuminate that darkness, blaze roads through the vast forest," James Baldwin wrote, "so that we will not, in all our doing, lose sight of its purpose, which is, after all, to make the world a more human dwelling place."

Artists, like rebels, are dangerous. They speak a truth that totalitarian systems do not want spoken. "Red Rosa now has vanished too. ..." Bertolt Brecht wrote after Luxemburg was murdered. "She told the poor what life is about, And so the rich have rubbed her out." Without artists such as musician Ry Cooder and playwrights Howard Brenton and Tarell Alvin McCraney we will not succeed. If we are to face what lies ahead, we will not only have to organize and feed ourselves, we will have to begin to feel deeply, to face unpleasant truths, to recover empathy and to live passionately. Then we can fight.


          Comment on How not to fund a war by Brain Shavings        
<strong>The rich, the poor, and the middle class are treated unequally</strong> As you watch President Obama's class warfare ridden State of The Union address tonight, keep two things in mind. He's a liar. Taxation is only half of the story at best. You have to watch...
          No Tax Hikes AND No "Entitlement" Cuts Damn It!        
I'm about to piss off my conservative friends but I call it like I see it. And there is just no need to raise any taxes or to cut the so-called entitlement programs.

For fucks sake people; conservatives know damn well that the policies of Oblamer have made things very hard for most people now which is why so many damn people are on food stamps and other welfare programs. Almost half the American people are on these social services. Beating the shit out of people who are already at the poverty level isn't going to win friends AND only makes you look like big stupid assholes that the left already labels you as. 

Have some damn compassion and use your brains. I mean really, I've known "you people" for a long time and you are the smart ones so start acting like it already!

Cutting social services is only going to make people who are down on their luck, trapped in a system that doesn't give a flying fuck about them so much worse. AND FOR WHAT!? It won't helped our horrible deficit. 

That's right! I said it! BITE ME!

You know damn well that agencies like FEMA should be gone. Romney looked like the big meanie saying this but after Sandy I think many NYers see the reality of this tax vacuum. FEMA is that little mother fucking Roomba on a gazillion steroids. It just sucks good after bad dollars in and never spits it back out. Just how many billions of our tax dollars goes to FEMA anyway? No seriously I'd like someone to tell me the amount.  How many millions or billions a year goes to the fucking blowhards for their salaries for them to do NOTHING!?

Let's also be real. The Department of Education needs to be gone too. Who the fuck are they educating? Our schools SUCK! Our drop out rates are terrible. It's just another version of the steroidal Roomba. The states can do it better. Let them keep the money and put it directly into their own states. Who the fuck was the genius that decided to make the states send money to the federal government so they can allocate it back to the states???

GONE AND GONE. If just those two agencies were gone, just how much would we save in spending?
In April of 2010 "Administrator W. Craig Fugate recently sent a letter to Congress indicating serious budget shortfalls that could jeopardize FEMA’s ability to respond to disasters. It is expected that this letter will be followed by a request for $5.1 billion in emergency supplemental funding from Congress."


So if that was just a request for MORE money what is the actual operating budget?

So let me get back to the original point here. To my conservative friends:
SHUT THE FUCK UP ABOUT ENTITLEMENT PROGRAMS.
You make yourselves look like a bunch of moronic hypocrites going after the left for class warfare, which they do and do so horribly and get away with I might add, but you are doing it to.

Nobody is as big a leach as the fucking government assholes that we send to work for us year in and year out! There is no social service program that sucks that much money out of the system anywhere near to these two agencies.

And you can add a huge diarrhea to the list called the Energy Dept. Seriously? WHAT THE FUCK  has this billions of dollars a year agency ever done. No seriously? You list just one mother fucking thing!??!?!?

So don't you dare ask me to stand with you on your stupid fight with Oblamer when what you want to cut isn't what you should be going after.

Now to the dimwits on the other side who want to hate the rich. BLAME HATE LOSERS that you are. You also need to SHUT THE FUCK UP TOO!!

No rich person or corporation ever kept you down. You wouldn't know a damn day of wanting for anything you got a trophy for showing up for the game but lost all the time never achieved anything in your life spoiled shit tards! There are real people in other countries on this earth fighting for the right for young females to go to school without getting their fucking heads blown off but boo fucking who, let's play the victim and take more of someone else's money.

Get a life!

The amount of money you say should be taxed more will run the scummy government's budget for 8 DAYS!  Can you read or are you too busy chanting how Bush is a warmonger while you kiss your savior Oblamer's asshole while he sends MORE military troops to Africa to fight Al Queda, yes that's right. Al Queda, you know the terrorist group he said was pretty much obliterated so you would vote for him again. 

The only people who are really hurting are the regular average Americans who are being used as pawns for both parties stupid pet issues. You all suck!

          Plutocracy III: Class War        
Plutocracy III: Class War   The early struggles of the working class are placed under a microscope in Plutocracy III: Class War, the latest chapter in an exceptionally well produced series which explores the origins of America's growing economic divide. Without a doubt, the...


          "Defeating the Totalitarian Lie: A Former Hitler Youth Warns America"        
itunes pic
Hilmar von Campe December 4, 2008 http://www.voncampe.com/home.html Great program I encourage you to buy the book and if possible invite him to your church or other meetings. If you cannot get through to him by his web site contact me... The Real Objectives of Barack Obama by Hilmar von Campe Lust for power is in the heart of every human being, it is part of human nature. It is an issue for each one of us in our personal and professional life and it is a political issue on the level of government. The question is how to deal with the lust for power and serve justice at the same time if you want a stable government. The handling of human nature in organizing power is different from country to country. Because our Founding Fathers understood human nature and the temptation of power they created a Constitution which took both issues into account – a master piece of transferring Christian teachings into the political organization of American society. It is built on the respect for life and for the rights every person has been given by our creator and not by any government. Its political foundation consists of the separation of power between the three branches of government and depends on truthful and responsible citizen who make it function. The armed forces have to defend life and freedom of all Americans to outside enemies. Additionally there are the National Guards reporting to the governor of the respective state of the union and the militias. One reason for the creation of the militia was to enable the citizens to defend themselves against our own government if it should get oppressive. Therefore to bear arms is our constitutional right which cannot be taken away by any government. Enemies of freedom do not like the idea of armed citizens and try all sorts of means to control or eliminate guns in private hands. Hitler described on April 11, 1942 in a dinner keynote address his thinking regarding the matter: “The most foolish mistake we could possibly make would be to allow the subject races to possess arms. History shows that all conquerors who have allowed their subject races to carry arms have prepared their own downfall by so doing. I would go so far as to say, that supply of arms to the under dog is a sine qua non to overthrow of any sovereignty. So let’s not have any native militia or native police.” He was referring to occupied Soviet Union provinces whose people he called “races” but made clear that his principle is valid to wherever somebody wants to overthrow any sovereignty. In our case you just need to say “citizen” instead of “race” and you understand what that “somebody” means when he tells you his lies why he wants to do it. It that simple! The Nazis also controlled the media which fed us with lies about what they were doing and why. The Democratic Party and Obama would like to get a similar status of power as the Nazis had. The so-called fairness doctrine is a stepping stone in that direction. If you hear former NBC anchor Tom Brokaw say “we have to have free speech in some kind of context” then you know what he is up to. By the time of his speech Hitler had put himself into a comfortable position. He was commander in chief of the armed forces. In 1934 the armed storm troopers under the leadership of Ernst Roehm, a close friend of Hitler, had become a competitor of Hitler’s power. Hitler had him and 300 others killed in 1934, among them a great part of the storm troopers leadership. Thereafter the troopers were without weight in the inside power struggle. Hitler had created the SS. including the Gestapo, the secret political police (Geheime Staatspolizei}, the feared executioner of the Nazi system. The only dangerous enemies of the system remaining were inside the armed forces. He bribed for instance some of the military leaders with ranches and had every officer and civil servant swear his oath of allegiance to him personally. The only ones who were legally forbidden to bear arms were the Jews. My father had a gun. All of the above, however, was meant to enable the government to put down any armed insurrection. Different from any “normal” dictatorship a totalitarian system goes after the minds and hearts of the population with the purpose to make them do voluntarily what the government wants them to do. This is called mind control, which also is far advanced in the United States. The Nazis controlled 100% of the media and also an important part of education. In the schools through godless Nazi teachers where they had some and through Darwinism which is also be taught to American children. The Minimum result they had with the Hitler Youth was that there was no other youth organization and that we young people didn’t question the legality of it. It belonged to the system into which we were born. There was another Nazi organization that had the same task as all other institutions, namely to keep people under control and influence their thinking. It was the Service to Work (Arbeitsdienst). Young men had to serve half a year before entering into military service. It seems that Obama likes this Nazi feature because he comes up in addition to the idea of a civilian national security force with a plan to create a national community service program. Obama’s motives for this cannot be different from the Nazi motives – to bring as many youth as possible under their Socialist umbrella and influence. Obama has 3.1 million e-mail addresses from young people who are waiting to do something. There are many good organizations in America for everybody, like for instance the boys and girls scouts and the National Rifle Association. They teach young and adult people basic American values, like self-sufficiency, independence, personal ethics and individual responsibility. They are being taught to love God and America. We don’t need a class war youth organization. President-elect Obama says that America is no more a Christian nation. He is not a Christian himself because you can’t be a Christian and promote the killing of unborn human beings which he does. He also wants to neutralize our Constitution by adding class warfare concepts. His plans which begin to become public point to where he wants to lead the American nation; onto the same road Germany took in 1933. Americans, do you want to go in that direction? It is still time to take the opposite direction – a nation under God. Lewis Cass, Governor of the MichiganTerritory in 1848, Secretary of State for President James Buchanan, Senator and 1848 Democrat Presidential Candidate stated the following: “Independent of its connection with human destiny hereafter, the fate of republican government is indissolubly bound up with the fate of the Christian religion, and a people who reject its holy faith will find themselves the slaves of their own evil passions and of arbitrary power…God, in his providence, has given us a Book of His revealed will…to teach us what we ought to do here, and what we shall be hereafter.” John Witherspoon, who lost two sons in the Revolution, was the only clergyman to sign the Declaration of Independence and served on 120 Congressional Commitees stated: “He is the best friend of American liberty, who is most…active in promoting true and undefiled religion…to bear down profanity and immorality of every kind. Whoever is an awoed enemy of God, I scruple not to call him an enemy of his country.” Barack Hussein Obama would bring his immorality into the White House. He is an enemy of God. As everybody else he can and must change morally to be in line with our Constitution and able to represent and lead the American people.
          The Big Picture on UK strategy        
So I've been rambling a lot lately about a lack of strategic thinking for the UK. The question that follows that is simple; "Ok smarty pants, what's your plan? Hmm?"

Good question.
 
One of the pitfalls of suggesting alternatives is that defence is a big and unwieldy beast. For example I've just finished re-reading Heinz Guderian's book "Achtung - Panzer!" (almost literally, "Attention - Tank!") which is all about the use of the tank in the first world war and the future vision of German armoured forces as they stood in 1937. That's an entire book devoted solely to the subject of armoured forces which even then were in a somewhat fledgling state. Trying to lay out a thought process for an entire states armed forces is therefore not an easy undertaking.

For that reason much of my thinking on strategy will probably come out over time, through my various posts. If you go back through the archive you can see bits of it scattered about. But here I'll try and squeeze some of it into a small space, primarily looking at the big picture and not so much at the details.

And that big picture begins with the thinking that the UK's armed forces should be rebalanced away from grand, global thinking into a more regional context. This doesn't mean that British forces should never go on exercise outside of Europe or that British forces should never deploy away from Europe, rather that the routine thinking of the military should shift back to a more local context and the problems in our own back yard. The Empire is gone. Just let it go people.

Business can thrive globally and Britain can be a globally connected and globally engaged nation without having to send ships, planes or troops to prove it. It seems that in this day and age people are unable to prise themselves away from the idea that military power, diplomacy and economics are all significantly different things. They often cross paths and events in one sphere often collide with those of another, but fundamentally the UK does not need to be a global military power to be a global trading nation for example.

The strain that such global commitments have placed on the armed forces has been evident of late, with retention rates coming under pressure and shortages emerging in a number of trades. I have an old friend for example who is leaving the Navy soon because he has simply become burnt out with life away from home for months at a time on what he feels are unfulfilling and not especially useful deployments. That is one mans perspective, but it's something that has been echoed by others.

It's not just the manpower though, it's the equipment as well. The army is struggling by on vintage APCs and the Navy's Type 45 destroyers are struggling in the middle eastern heat. More critically, in order to meet the various far flung requirements it seems that material is often spread dangerously thin, with very little slack in the system for emergencies.

This is set against the backdrop of the rising threat posed by Russia. While everyone is getting excited about the prospect of nuclear wars and the like, the main threat posed by Russia is more conventional in nature and would likely stem from a repeat of the crisis in Ukraine, except this time probably played out in the Baltic countries and using the lessons learned from Ukraine. Either way, it's increasingly clear for the next few years Britain's attention needs to turn back towards its own backyard.

That should basically give you enough of a clue about where my thinking is, with a reshaping of the forces to dealing with more local requirements. 

I do not believe the UK needs to worry itself overly with far flung places. The British capacity for interventions in these places has proved limited and the US normally has any serious threat covered. If it doesn't... well then there's normally not a lot the UK can actually do about it anyway. If the US doesn't deal with Iran for example, what exactly is it that people think the UK would do instead? For this reason I think the UK needs to focus on working with NATO to protect the European theatre, which has always been the prime concern for UK governments, and which has always been the source of the most serious dangers that have faced our nation.

To give some context it might be useful at this stage to just skim over the three services and the general position I think each should adopt.

As far as the army goes, it's quite the timing that I've just finished reading Guderian's work, as I believe the army should be shifting to as much mechanisation as possible, and away from the abundance of light infantry forces. There are lots of countries that can do mass manpower. For the UK to be a useful ally to our NATO partners we should bring a capability on land that is of value. I believe much of that value can be offered through armour and the development of modern armoured divisions.

At sea I believe the Royal Navy should be turning its attention back to the North Sea, North Atlantic, Baltics and the Mediterranean. Again, this is not to say that ships can't be sent east of Suez, they would just do so on a less regular basis. Patrols in the South Atlantic and to the Caribbean would also become more of an occasional thing, instead of a permanent tasking. The focus would be on dealing with issues that are more relevant immediately to the UK, such as securing the southern flank of Europe and the need to face up to Russia in the Baltics and NATO's northern flank.

In the air I would like to see the RAF focused on aiding allies in their defence against aggressive Russian activity, thinking about how to defend NATO airspace beyond just air patrols, and how airpower can be used in combination with other arms to help avert another Ukraine style situation. Like the other services, the RAF would focus strongly on European defence, which in fairness is not such a big stretch.

Some may baulk at this. I would question why? During the cold war the UK was primarily focused on European defence and cast its net further only on account of territorial concerns, most of which are now defunct. What I'm advocating here is basically just a return to a general strategic position that has served the UK very well for a very long time, albeit it some things have changed.

In the past for example West Germany represented the boundary with Russia. That's where NATO focused much of its land combat power, because that's where the threat needed to be met. Today the border is further east and as such it stands to reason that NATO should position its defences there. Germany is no longer in the frontline. Poland is, sort of. The Baltic nations most definitely are. It would seem logical then that the army would preposition an armoured division for example in this region. If based in Poland for example it would have access to wide training areas, be in a position to support allies in the east of Europe, and could move north if required to support our Baltic allies.

I'm really not a big fan of this whole "Strike Brigade" concept either. I'm not sure why, but ever since the whole Pristina airport incident back in 1999 everyone has become obsessed with the idea of rapid reaction. Except it's one of those odd things where people aren't really obsessed with the concept, they're obsessed with the tools and structures that they think the concept needs. An 8x8 vehicle is really no more rapid in transportation terms from the UK than a tank or tracked IFV. When we allow for the use of transporters for tracked vehicles, any advantage virtually disappears at a meaningful level.

As such I'm a supporter of going heavy. Tanks, tracked IFVs, proper artillery support, new means for Electronic Warfare, drones etc. Basically taking the lessons of history, and of recent conflicts such as Ukraine, and rebuilding UK armoured strength using these as a guide. No more of this rapid reaction, strike brigade business, but focusing on hard combat power that can actually make a meaningful contribution when it arrives.

Ideally the drive would be towards two divisions. One as I said based forward, either in somewhere like Poland or even in one of the Baltic states as a proper rapid reaction force. The other other would be based in the UK, ready to be sent either to the continent for reinforcement purposes or elsewhere as the needs of defence require. Most importantly it would represent a genuine force that required a second thought in Moscow beyond just a battalions worth of largely immobile light troops. A degree of light infantry capability could be kept aside for various garrison roles such as Cyprus and to provide companies for overseas engagement work.

Probably the biggest shift would occur in the Naval sphere. My main concern currently is that the Royal Navy is being stretched beyond what it can genuinely cope with, as demands from government seem to continuously expand while resources diminish. I do not see the ongoing value in maintaining permanent rotations of warships to the middle east and to the south Atlantic as is currently the norm. While I can see the value in the occasional deployment of say a Type 45 or Type 23 to the Gulf region, I do not feel the Navy should be asked to expend valuable resources on this theatre.

The states of the Arabian peninsula will at some point have to take responsibility for their own security. They get plenty of assistance as things stand from the US and likely will into the future. I think it is difficult to argue that they need the presence of Royal Navy warships on a routine basis, especially when some of our NATO allies at home could use the assistance even more. What might Italy think for example to have two Royal Navy escorts available to help it police the migrant crisis in the med?

And I'm sure someone will be up in arms about the idea of discontinuing routine patrols of the south Atlantic in favour of more irregular visits, no doubt worried about the signal it would send to Argentina in regards to the Falklands Islands. This would be the same Argentina that struggles to keep its ships afloat even when they're docked in port. On top of this, as I've said before, if we consider the Falklands to be at serious risk of capture, then perhaps we ought to defend them properly up front, perhaps by a strengthening of the garrison? Now there's a novel idea.

With the introduction into service soon of the new Queen Elizabeth class carriers, combined with existing capabilities and a first class reputation, the Royal Navy is ideally poised to take a much stronger leading role in the maritime defence of Europe. Royal Navy expertise in issues like minesweeping, survey and anti-submarine warfare could be at the forefront of cooperation with nations from Scandinavia to the Med, backed by a hard core of first class warships such as the new carriers, giving real punch to NATO maritime forces in European waters. 

This isn't to say that the Royal Navy doesn't already have strong relationships with other European nations, that it doesn't contribute, or that through exercises like Joint Warrior it doesn't take a leading role. I'd just like to see the Royal Navy really double down on NATO cooperation in the regional sphere, and perhaps with the coming of the new Maritime Patrol Aircraft, take a lead role in anti-submarine work in the Atlantic, North Sea and in the Baltic sea.

In terms of the RAF things get a bit more complex to a degree. I have a post in the pipeline which will outline some of my detailed thinking a little more clearly, but the general gist of it is a desire to see the RAF think more about its operations in terms of the high end difficult tasks, shifting away from the recent bombing of pick up trucks type operations. 

It would also mean the RAF taking a more forward leaning role, as it did during the cold war. While some assets would be needed for the air defence of the UK, I think it would send a strong message if the RAF were to keep a presence forward like that proposed for the army, and not just with air assets. I'd like to the see the RAF, and the MoD in general, take the idea of things like surface to air missiles more seriously. 

While deploying four aircraft at a time for Baltic policing is fine, but it is asking a lot for these plus another four from another nation to cover the airspace over the whole Baltic region. It does smack a little of tokenism in some respects, possessing the ability to put on a show of force and escort any stray intruders away, but probably not capable of serious defence if Russia were to run another Ukraine style insurgency with air support.

There needs to be a shift of thinking as to how the air arm of NATO could actually intervene quickly in support of ground action to protect an alliance member. The advantages of air power have always been speed, range, surprise and concentration. The RAF, and indeed NATO as a whole, needs to think about how to tap into these attributes in a coordinated manner if needed to face down Russian aggression.

Broadly speaking then I see the strategy of the UK being one of taking a deeper focus on European matters and the threat posed by Russia, as opposed to adventures abroad. Perhaps if I have time I could break down my thinking of each of the three service areas in a little more detail, as this post is somewhat vague, but then strategy tends to focus on the big picture anyway. Bits like conventionally powered subs for the RN can wait for another day.

          Where to start on a VA clain: Do you have a presumptive condtion?        
 Most people start veteran claims by filing online or through a service organization like the DAV, VFW or AMVETs.

Thai means providing medical evidence form doctors, preferably the board certified variety. 

However, many Veteran Service Officers (VSO) aren't familiar with VA directives, although they are well-versed with the Veteran Affairs Disability system.

This is the case because many states do not require VSOs to have legal training. VSOs are often not familiar with VA legal directives found in 38 CFR 3.3nn.

In the past, Rightardia has advised vets to file medical evidence using Disability Benefits Questionnaires. See 
http://www.benefits.va.gov/COMPENSATION/dbq_ListByDBQFormName.asp

You should also read 38 CFR 3.309: Disease subject to presumptive service connection.

These are the original presumptive conditions  in the 1947 law. Theese are diseases and NOT injuries.


Anemia, primary.
Arteriosclerosis.
Arthritis.
Atrophy, progressive muscular.
Brain hemorrhage.
Brain thrombosis.
Bronchiectasis.
Calculi of the kidney, bladder, or gallbladder.
Cardiovascular-renal disease, including hypertension.
Cirrhosis of the liver.
Coccidioidomycosis.
Diabetes mellitus.
Encephalitis lethargica residuals.
Endocarditis. (This term covers all forms of valvular heart disease.)
Endocrinopathies.
Epilepsies.
Hansen's disease.
Hodgkin's disease.
Leukemia.
Lupus erythematosus, systemic.
Myasthenia gravis.
Myelitis.
Myocarditis.
Nephritis.
Other organic diseases of the nervous system.
Osteitis deformans (Paget's disease).
Osteomalacia.
Palsy, bulbar.
Paralysis agitans.
Psychoses.
Purpura idiopathic, hemorrhagic.
Raynaud's disease.
Sarcoidosis.
Scleroderma.
Sclerosis, amyotrophic lateral.
Sclerosis, multiple.
Syringomyelia.
Thromboangiitis obliterans (Buerger's disease).
Tuberculosis, active.
Tumors, malignant, or of the brain or spinal cord or peripheral nerves.
Ulcers, peptic (gastric or duodenal)
There are separate presumptive condition lists for tropical diseases, prisoners of war, and Agent Orange exposure: etc.  The law has been revised after wars and there is even a section on the water poisoning at Camp LeJeune.


If you have a presumptive condition, your claim will get expedited treatment by the VA regional office. You do not want to find out, after the fact, your claim was a presumptive condition after several years.

So, before you file a claim,  check 38 CFR. 3.309 to see if you have a presumptive disease. Injuries do not pertain to this directive.

sources;

https://www.law.cornell.edu/cfr/text/38/3.309
http://www.benefits.va.gov/BENEFITS/factsheets/serviceconnected/presumption.pdf 


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA   Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          How Ivanka recovered her retail enterprise        
As you know, some major retail chains discontinued Ivanka's line of clothing, garments and shoes. But Ivanka recovered by moving her merchandise online.

However, her big item  which is  selling like hotcakes is her famous No 45 butt plugs. If you are a Russophile, you can also purchase Vladimir Putin butt plugs, too. 

These realistic butt plugs are "Hecho in Mexico. Mexico , of course, is one of Donald Trumps' favorite trading partners. 


These sets are sire to become valuable collector's items


Each set costs $30 US. If you wish to celebrate the forthcoming Cinco de Mayo with your ICE friend agents, you can also dress up the butt plugs with tiny sombreros for a additional $5.99 US.


For every set you order, Ivanka will donate $1 US to the No. 45 Mexican Wall project.

Why Not more?

Well Ivanka, is a Trump, isn't she?

Don't delay before Number 45 puts an excise tax on these plugs!


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

 Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          West Word for the Alt-Right        
Saw West World with Yul Brynner many years ago. it was one one of the first SCIFI movies with robots. Haven't seen the TV version yet, but one of my FaceBook pals, Ruben Betancourt, says it is terrific.

This is a concept for an alt-right version of West World. 

 

Donald Trump is the sheriff is a perfect American town. His deputies are all West World robots who patrol the town to make sure all the towns people fly American flags. The deputies also have mock gunfights with the townspeople for entrancement.

No one got hurt until some Russian and Wikileaks hackers mistakenly break into the West World mainframes, turning the deputy robots into killers. The  deputies start shooting up the villagers who had flag violations. Anyone driving while black in the village was also gunned down.  Women wearing a Hijab or men Wearing turbans  were also attacked.

The Donald called up Jeff Sessions and asked him to send some of his white knights to West Word for help. The militia men drove into town if full Klan regalia in jeeps and humvees.

Gunfights between the robots and the Klan went on for several days until the robo-deputies were driven form the town.

The leader of the robos is named Jules Berner. He is wanted deactivated or alive. 

Sheriff Donald Trump was elated and opened the  town saloon to the victors who we allowed to play grabass with the robo-dance hall girls. Many of the robo-ladies were refurbed Stepford wives.
According to Sheriff trump. all of the robo-ladies are 10's


Ensuing episodes will show  the White Knight and militia men hunting down the escaped robo-deputies, Silicon Valley has built a Underground Railloop to help the robots who are still on the lam.

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Canon Imageclass MF4770 printer maintenance mode        
My Canon MF4770 multifunction printer could send an receive faxes, but could not print faxes that were received.  So I thought,  time for a new printer.

It's an amazing laser printer that can copy, print  and fax, They are usually about $100 when on sale.

Canon technical may not be much help unless you fax them a receipt showing you own the canon printer. Some of the Canon multifunction printers are CARP raster scanning printers. It is hard to find Linux drivers for these printers. The MF 4770 works great in Linux Mint 17 and 18. The updated version, the MF216n doe not have a Linux driver. If you can't find a Canon printer driver on Canon USA, try Canon UK.

If you bought your printer through Staples or Office Depot in the past couple of years, you my be able to go to their respective web sites, create an online account and download proof of your past purchases.

There are a lot of solutions on the Internet for getting into Canon Maintenance mode. Suspect there are different sequences for different Canon printers. Once you get into maintenance mode, the options may be different based up the firmware version.

This particular sequence works on a MF4770 with a boot ROM of 1.07.

Press Menu, then 2, 8 and Menu again. 

Most problems can be cleared by by going into COPIER, FUNCTION, CLEAR, ALL. This printer should then reboot.

Use the back key  to back out of the maintenance menus. 

Then turn the printer off and back on again. 

Tried the maintenance fix on my old MF4770. after clearing the copier functions it was able to receive faxes again. 


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          What is the fuss about in the Republican National Convention?        
Donald Trump wants his Evangelical police (EP) to monitor the convention. The EP's are armed with metal rulers and will slap the wrists of anyone involved in hanky panky on the floor of the convention.

Trump has already had a major sex scandal when it was revealed that former campaign manager Corey Lewandowski and press secretary Hope Hicks were secret lovers. Trump staffer Sam Nunberg got fired over the story and also because he revealed Trump had a secret and illegal campaign finance account..Trump is suing Nunberg for $10 million for violating a non-disclosure agreement.

The EPs are also passing out Hanzoff anti-mastubatory gum. This is a real product you can buy at Amazon.com. Ina addition, the Trump has ordered that saltpeter be added to any sandwiches orfinger food served at the the event. The Donald wants to keep the convention pure in accordance with conservative Evangelical standards,

Fappy the anti-masturbation porpoise will also be at the event. He was recently bonded out of of jail for public indecency when he was caught polishing his own porpoise. Fappy is very popular with conservative and Evangelical children.

Property Christians will also be prominently featured in the event. Will Joel Osteen, the Chistian Prosperity king be there?Hard to say, but but hidden in the schedule is Rev.Mark Burns, an enigmatic and sometimes gaffe-prone  African American pastor from South Carolina. Burns who has been a big Trump supporter. He may even plug the capitalistic Trump Institution.


Whether you vote Republican not, this convention should be an eye opener. 


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          How to extend the life of an electric water heater.        
You can double the life of an electric water heater by replacing the sacrificial anode. If you had your electric water heater replaced, change out the anode after 6 months and every year thereafter. Changing out the anode can double the life of the water heater,

The anode is a threaded bar usually made of magnesium. Water, iron, magnesium and calcium in the water will attack the anode before it attacks the tank and its heating elements. If elements start to fail, consider replacing the anode at the same time.

You will need to purchase two items to remove the anode. One is a 1/2 inch impact wrench and the other is a 1-1/16 socket. Th electric wrench from Harbor Freight is a simpler alternative than a pneumatic wrench that requires a compressor. This wrench can also easily remove lug nuts to change out a tire.
You will also need the 1-1/16 socket to remove the anode.
And a replacement anode. You can see the difference between the new and old anodes. Besides scale, the old anode will have pock marks all over it where the magnesium has been eaten away, Make sure both anodes are the same length. Cut the new anode to the correct size with a hack saw if you have to.
At the this point, you can start the installation.

  1. Turn off power to the water heater.
  2. Torn off the water supply to the power heater. 
  3. Drain out about two gallons from the tank by opening the valve at the bottom of the heater, Connect a hose to the valve if necessary to drain a few gallons form the tank. If you open the pressure release valve at the top of the tank, no water should be released,
  4. The tank will have  2 inch cut out in it with a plastic insert on top of the anode, Remove the plastic insert and cut around the insulation with a paring knife. Remove the insulation to expose the cap on the anode.
  5. Place the socket over the anode to make sure your have a snug fit. Attach the impact wrench and hold it tightly before giving a 4 second reverse burst. A second burst may be needed. At this point you should be able to unscrew and remove the old anode. 
  6. Make sure the new anode is the same length as the old and put two turns of Teflon tape or plumbers putty around the screw threads. Hand tighten the anode into the tank and give a forward burst with the impact wrench, 
  7. Turn the water back on. At this, open the valve and let the tank drain for 5 minutes and then close the valve. 
  8. Replace the insulation in the hole for the anode and snap the plastic cap back on.  
  9. Turn the power back on to the hot water heater. 
You are finished. 



Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          A profound message from Betty Bowers        


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Pituitray disease is progressive and often fatal if not detected        



It is not uncommon for a woman to damage or destroy their pituitary during pregnancy. One of the reasons is that the pituitary increases its size by one-third during pregnancy. The pituitary sits behind the nose in a a bony carapace called the sella.

If an empty sella condition is identified during an MRI of your brain, your are missing your pituitary, which can be a serous and often fatal disease.

Sometimes the pituitary stalk will take over for the pituitary and you may be only deficient in just one pituitary hormone. Pituitary disease iS progressive. It may take may years for the endocrine system to fail.

When you are in the process of losing the entire endocrine system, the term panhypopituitarism is used

First to go is the growth hormone (GH), next the gonadotropins (LH and FSH) which control sexual/reproductive functions, followed by thyroid stimulating hormone (TSH) which controls thyroid hormone release, and finally the Adrenocorticotropic hormone (ACTH) which controls adrenal function.

If you have low LH and FSH you may also lose your sense of smell and taste.

Most endocrinologists (endo) will look for hypothyroidism first because there is really no replacement therapy for LH and FSH. Often the blood tests for thyroid simulating hormone (TSH) are inconclusive even after months of testing. An endo may give you a small dose levothyroxine to see if your feel better. People who are hypothyroid may be sensitive to cold and have a low pulse (bradycardia). Most people with thyroid conditions do not feel well at all.


Adrenal insufficiency is dangerous because you need cortisol in your system to survive. If cortisol get too low you may vomit, feel like your are spinning in a room and have and adrenal episode or crises. The latter results in death about 20 per cent of the time,

Adrenal insufficiency is not easy to test for. An endo has to inject an ACTH stimulator and monitor the response of the adrenal glands.

A damaged or missing pituitary may also result in diabetes insipidus a disease that is not related to diabetes mellitus I or II. In this case you wil constantly drink water and urinate every hour because you are missing the anitdiuretic hormone (ADH) that is actually produced in the hypothalamus.

The hypothalamus has a connection to the pituitary, providing a junction between the nervous system and the endocrine system,

If you are diagnosed with hypopituitarism or panhypopituitarism, it is important to have your GH tested, An endo can test your insulin-like growth factor-1 (IGF-1) level. If it is too low you need to be put on a somatropin or a growth hormone regimen.

This is important because people with pituitary disease have shortened life spans. Daily Somatropin injections have many benefits, but extending your life is the most important.

sources:
https://labtestsonline.org/understanding/analytes/growth-hormone/tab/test/
http://www.pathguy.com/lectures/pituitar.htm
https://en.wikipedia.org/wiki/Growth_hormone
http://www.medkorat.in.th/admin/ckfinder/userfiles/files/panhypopituitarism.pdf




Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA
Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Jeb can't fix shit!        
Mitt Romney said he would not run for president if Jeb bush did. He later told Jeb he thought his candidacy was a long shot.

Jeb was not a distinguished Florida governor. Like his brother, George, he entered politics at the gubernatorial level. Jeb claimed his greatest accomplishment was education, Florida public education has been in shambles since the Jeb Bush  was governor.

Jeb's big problem with his bother, George. George was a Big "F' failure as president. George an his neo-conservative pals may have brought down the World Trade Center in a false flag operation hoping to benefit Israel. Bush's invasion of Iraq was a monumental error and his ownership society nearly tanked both the US and international economies.

No, even the Republicans remembered George W. Bush, the comedy about him, and had no interest in putting another Bush in the White House. Jeb lacked the charisma of his brother and never did well in the GOP primaries, finishing poorly even in Florida.

Jeb even had problems in Florida raising campaign finances because many pundits believed Marco Rubio was a better candidate. Yet, Jeb amassed the biggest war chest of all the Republicans,  estimated between $115 and $150 million.

His brother used the same approach to win the GOP nomination in 2000 by outspending his opponents in the primaries and the caucuses.

Jeb went thought the campaign cash, winning 0 delegates. At the end of his candidacy he took out a loan to keep the campaign going.

Big mistake. The pundits were right. Rubio was a better candidate.

Jeb now has a $260,000 debt with $31,000 left of campaign funds.

Should you fell sorry for him?

Not at all.
The Scarlet letter

source: http://www.motherjones.com/politics/2016/04/jeb-bush-campaign-debt


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Cruzader Ted and the Virgin Heidi        
Cruzader Ted met Heidi Nelson during the 2000 GW Bush presidential campaign. This was before she she worked as a banskster for Goldman Sachs. On the third date, Ted touched Heidi's shoulder and there was a flash of light. Heidi instantly knew that she was pregnant.

In April 2008, Heidi Cruz gave birth to her first child, Caroline Camille Cruz. Her second daughter, Catherine Christiane Cruz was born three years alter after another flash of light form Ted Cruz' hand.

Ted said that Heidi's body is a temple. Her immaculate conception of two children was a miracle and Ted quickly realized he would no longer be a husband with benefits.

So did had to go to a nunnery to seek passion. Unfortunately for him, Anonymous found out about these rendezvous.


Ted is Magic man would said he could easily make Donald Trump “huge” again by touching him is a certain place, but why would he want to do that?


Ted said that after he is elected president,he will establish an American National Church that would end the myth of the separation of church and state once and for all. The Virgin Heidi would oversee the two Oracles, Caroline and Christiane, who would produce prophesies and intelligence estimates for the United States.  

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Jeb and Marco's suspended campaigns no surprise.        


Jeb had been out of politics for many years and his two terms as the Florida governor were lackluster. Mitt Romney warned him about running for president. Americans haven't forgotten his brother, George W., and the damage he did to the US and world economies

Donald Trump said “Frankly, he’s (Jeb) a stiff. He’s not a guy who can be president. He doesn’t have what it takes to be president.”

Trump has a point. Jeb has no fire in his belly. Jeb never stood out in the numerous GOP debates. We don't need a Casper Milktoast as our next president.

It never amazes me how Republicans enter the political arena at the senatorial and gubernatorial level with no prior political experience. The was true of the two Bush brothers and Mitt Romney. Trump is running for president with no political experience and so were Ben Carson and Carly Fiorina.

Marco's problems are numerous starting with financial irregularities when he was a Florida legislator, Marco was also linked to two women during the campaign which certainly hurt him with Evangelicals. He also indicated he disliked being a Senator.

“I don’t know that ‘hate’ is the right word. I’m frustrated.” Marco told the Washington Post.

Marco was famous for his robotic recital of well rehearsed sound bites. For example. he said "the children of the Reagan Revolution are ready to assume the mantle of leadership" in a speech after the South Carolina primary.

The millennials are the children of the “Reagan Revolution” and most are progressives and Bernie Sanders supporters according to a Frank Luntz focus group.

Marco missed many Senate votes. He accomplished little as a US Senator. This is also true for Ted Cruz, who engaged in one pointless political stunt after another that alienated his Senate colleagues.

Two men who are US senators with two years of national experience are running for president. Don't think either Marco Rubio or Ted Cruz have paid their political dues.

Our next president should not peddle into the White House on training wheels.

Marco got few Florida newspaper endorsements because he developed a reputation as being a lazy politician.


Agree with the Tampa Bay Times: Marco was not ready to be president. He wasn't ready to be a US Senator either.  

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          How to deal with Donald Trump        
Trump has said plenty of really stupid things, many of which his GOP opponents have glossed over.

He may be easier to beat in a debate than a lot of people think.  His irreverence  may work in front of many Republicans, but Democrats may find Trump rude and boorish.


When the general election occurs assuming Trump is still standing, the Democrats should assure groups of blacks, Hispanics/Latinos, Native Americans and Asians are prominently sitting together in the audience. This will freak Trump out who will be unable to remove them.

Protesters should also picket his arrival. Hope the Occupy Democrats show up in Cleveland and at the general election debates.

Fast forwarding to the general election, let's assume Hillary or Bernie is is debating Trump.

Let's assume Trump throws a grenade out Bill Clinton's past infidelities. The Democrats should respond about the nude and semi-nude photos of Melania Trump are on the Internet.

When veterans issues comes up, it should be noted that Trump mocked a disabled person at a rally, “Now, the poor guy — you've got to see this guy,,” mocking New York Times investigative reporter Serge Kovaleski. Likewise, how can his escapades with women as a young man be compared to service in Vietnam. Trump has also disparaged John McCain's military service and his internment as a POW while Trump get 5 deferments to stay out of the war.

When racism comes up, it should be noted it took him several days before he repudiated David Dukes endorsement. Can he prove that Mexicans are bringing drugs, bringing crime and rapists to the US?

When immigrants and “the wall” are mentioned, he needs to explain why H2-B Romanian workers are given preference over US workers in his county club in Palm Beach. 

How can Muslim immigrants be prevented form entering the US. What is the legal basis for such an action?

When Trump mentions his business acumen, he should be asked to explain his four bankruptcies and why he was unable to get a gaming license in Nevada,

Also. why does Trump think is appropriate to punch a protester in the face or encourage people at his rallies to attack protesters? The US isn't WW2 fascist Germany

Why did he say, "I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn't lose any voters, okay?

Why did he suggest Hillary Clinton got schlonged in a close primary race with Obama? 

Constant Sexual innuendos 

 

Trump has attacked Carly Fiorina's appearance and implied Megyn Kelly was menstruating as a debate moderator. He has attacked celebrity females such as Bette Midler and Rosie O'Donnell as well. 

Why the constant sexual innuendos?

Trump: You know, it really doesn't matter what [the media] write as long as you've got a young and beautiful piece of ass." He also says Hillary Clinton can't satisfy her husband or America."

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Letter to Jonathan Haidt in his TED presentation of liberals and conservatives.        
Thought you might appreciate a non-academic view of your presentation on TED. Many years ago I wrote a thesis based on the work of Lawrence Kohlberg. I found his ideas very useful in understanding the differences between conventional and post-conventional thinkers which equate to liberal and conservative according to Charles Hampden-Turner.

Thought your TED presentation was a big improvements of your earlier work which tired to explain liberalism and conservatism in terms of a long list of attributes.. You now relate the differences between liberal and conservatives in in terms of harm, fairness, ingroup, authority and purity.

Was happy to see someone after Lawrence Kohlberg working on the issues of morlaity and ethics. Kohlberg's work was built upon the foundations of Piaget and Erik Erikson. Not clear what the intellectual basis your ideas on liberal and conservative is. The terms 'liberal and “conservative” are more often used in political science rather than social science or psychology.

Found Kohlberg's work to be valuable because it was based on developmental psychology and each his stages of moral development. Kohlberg's would probably see lower Tea Party and citizen militia members as lower small group (stage 3) conservatives. Would guess that libertarianism would fit better into a pre-conventional stage where there is an emphasis on individualism rather than cooperation within a group.

It is possible thee is some genetic components of liberalism. About 20% of humans possess the Explorer Gene. Those with it are more curious, restless, and take more risks. In addition , a study of the UK show people on the extreme right who have larger amygdalas than liberals. Democrats show greater activity in their left insula, an area associated with self and social awareness. People who identified themselves as liberals generally had a larger anterior cingulate cortex.

Kohlberg made some profound observation about stage 5 post-conventional thought. First few people who did not get a college education develop stage 5 thinking. College students are exposed to post-conventional thinking in college, but most of the graduates do not develop the post-conventional thought process until they are in their mid-thirties.

More important, Kohlberg noticed that post-conventional thinkers understand conventional thought, but the reverse is not true. Conservatives have a difficult and few grasp post-conventional ideas. This may be why our political process in this nation is in disarray.

In my view the big difference between liberals (post-conventionals) and conservatives (conventionals) is their view of the law. Conservatives want a static unchanging world with religion and law in concrete. Conservatives are the defenders of the status quo. Post-conventionals see the law as a social contract that is negotiated and frequently changed.

My own view is that liberals have a more pragmatic outlook while conservatives are far more ideological, a term you refer to as purity. Purity can be a dangerous in politics and religion. We can look back to the fascist movements in Italy and Germany prior to WW2 to see where purity can take you.

Glad to see a psychologist working on the important issues of ethics an morality In my view liberalism and conservatism are not opposite sides on different sides the same coin. Don't think that a dialectal conversation between liberals and conservatives will produce much positive outcome because as Kohlberg observed, few conservatives can grasp post-conventional thinking.

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Nov. 8 is Obama's Gun Confiscation day.        
Stay in your home, turn the lights off and do not open the door.

Turn all TVs and radios off. Your guns will be safe again on Nov. 9. 


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Buying a HUD home        
Have a relative is one who wants to buy a home that usually costs at at least $150-$200K  for about $120K. This is not an easy task and a HUD home is  probably the only option.

Many people who bought homes during the era of the Bush Ownership Society suddenly found they were financing a home for a lot less hat the home was worth. Essentially the loan was "underwater."

Typically, the home owner would try to get from under the loan with a short sale. The bank would sell the home for less than the original mortgage and the homeowner would only get a 4-year credit ding. This is better than walking away from a home and getting into foreclosure with  a 7-year credit ding.

Once a home goes through foreclosure, the bank can auction it off "as is." Often the bank will clean it up by removing furniture. cleaning floors and carpet, and removing other refuse in the house. The bank will first try to by sell it as a "contingency," which is the same as "as is."

If the house is in bad shape and the price is right, flippers will bid on it, fix it up for a couple of months and try to rent it or resell it. if the house is in reasonably good condition, flippers won't see any profit potential. If it doesn't sell as a contingency, the bank might list it in a HUD auction.

The HUD auction is a good deal for consumers because corporations like Blackstone,who are buying homes as rental property,  are not eligible to bid. Bidding is open to:

Owner Occupants, Nonprofits, and Government Agencies only

Buyers should look for these disclaimers.


FHA Financing: IE (Insured Escrow) *
203K Eligible: Yes *
    *Subject to an FHA appraisal
    Buyer selects Closing Agent/Firm.   

FHA financing usually protects the buyer and means a lower down payment. If the house needs some repair, you can use the 203k option to make them before closing.

Before the house is listed in a HUD auction, a HUD inspectors examines the house and completes a pre-inspection. if repairs are more than $5K, the house will not meet FHA loan ccriteria. A biggie is the roof. The roof must have 2 years left on it to to pass FHA criteria. 

Look for the Property Condition Report in the HUD listing.  It is in the Property Detail tab which provides a pre-inspection report.

Property Condition Report

2-Appraisal Complete
01/27/2016
Atlanta
Contract Area:
Address:
City, St Zip:

Functionality/Test Notes
_____________________________________________________________________________________________________________________
Cooling/Air-Conditioner: Damaged
--Heating/Furnace:
OK
--HVAC System Duct: OK
HVAC tested and
functional?:
No
The free standing air conditioning unit
was powered with active electric and the
unit did not activate when prompted. The
unit visually showed no apparent
deficiencies and is in need of an hvac
inspection as to cause.
The heating / air handling unit was
powered with active electric and the unit
functioned when activated at the time of
this inspection.
The heating / air handling unit was
powered with active electric and the unit
functioned when activated at the time of
this inspection.
_____________________________________________________________________________________________________________________
Electrical Wiring:
--Other:
--Other:
OK
OK
OK
Electric supply
tested and
functional?:
Yes
The electrical system was powered with
active electric and no apparent
deficiencies were revealed with all
lighting and outlets tested at this
inspection.
_____________________________________________________________________________________________________________________
Stove/Range/Oven:
--Kitchen Cabinets:
--Other:
Missing
OK
OK
Built-in appliances
tested and
functional?:
No
The dishwasher and disposal were the
only appliances and they were powered
with active electric. The disposal
functioned when activated and the
dishwasher did not. It was also not
installed properly. The stove was missing
from the home.
_____________________________________________________________________________________________________________________
Plumbing:
--Sink:
--Other: OK
OK
OK Water supply
tested and
functional?:
Water Heater: OK Water heater
functional?:
Yes
Active pressure was applied with a
compressor to the plumbing system and
it held pressure at 30 psi at the time of
this inspection.
_____________________________________________________________________________________________________________________
Yes
The water was not active and our
assessment of the water heater revealed
no apparent deficiencies at the time of
this inspection.
_____________________________________________________________________________________________________________________
Sewer/Septic System:
--Toilet:
--Other:
OK
Damaged
OK
Sanitary &
plumbing system
functional?:
Yes
The water was not active to the building
and outside water was used to activate
both install toilets. Both traps functioned
when activated at this inspection, One
toilet was not installed on the 2nd floor.
_____________________________________________________________________________________________________________________
Roof:
--Other:
OK

It is also a good idea to go online to the county property appraiser's office and look at the history of the house.You can usually get a line drawing of the house, see comparable prices and also view any building permits for improvements to the house.

You are now ready to rock and roll and make a bid online. Talk to an agent on recommendations for the bid. There are no counter offers in HUD. The highest bid wins.


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          The importance of VA secondary condtions.        
When a Veteran files the initial claims with the Veteran Administration, he usually files for a primary medical condition. Besides filing the online VONAPP (www.ebenefits.va.gov)or the VA Form 21-52.

The evidentiary requirement are rigid and Rightardia has recommended using the Disability Benefits Questionnaires (DBQ) to make sure all the "T" are crossed and the "I's are dotted.

It is important that the doctors check the box indicating the Service Medical Records (SMR) have been  reviewed. A nexus statement connecting the military service to the medical condition must  also be written in the remarks.

In the example below,  a serviceman loses his pituitary by being exposed to radiation or chemicals in an industrial environment. Hypopituitraims is the primary condition, but the vet could also lose adrenal, thyroid and sexual function. Hypopituitarism cal also cause anosmia (loss of sense of smell ) and diabetes insipidus.  All of the latter are secondary conditions.
Many Army solders were exposed to agent orange in Vietnam which led to many cancers and heart conditions. For example a veteran could revive an award for non-Hodgins lymphoma. With chemo-therapy, the vet might survive. But there are a lot of residuals or secondary conditions associated with non-Hodgkins lymphoma.
If the vet develops any of these conditions, they should file for a secondary condition. Filing for a secondary condtion  has some big advantages.
38 CFR § 3.310 says:

"When service connection is thus established for a secondary condition, the secondary condition shall be considered a part of the original condition."


This means the effective date of the secondary condition is given the date of the primary condition.  In addition, the doctors does not need to review the SMRs or write a  nexus statement. The doctor must indicate the secondary condition is  a consequence of, and linked to the primary condition. 

The vet may use a DBQ to document a secondary condition. Some DBQs are written to identify secondary conditions, other are not. A doctor's letter my suffice for a secondary condition. The letter should show:


A diagnosis for a compensable condition
A link between the secondary condition and an already service connected condition

You may think the primary condition would have a higher disability rating that secondary, but it is usually the other was y around. In fact the 38 CFR makes it clear that secondary condition may have a higher disabiliy rating than the primary.


sources:

http://www.vba.va.gov/pubs/forms/VBA-21-526-ARE.pdf
http://www.benefits.va.gov/COMPENSATION/dbq_ListByDBQFormName.asp
http://www.rightdiagnosis.com/n/non_hodgkins_lymphoma/complic.htm#complication_list
http://vets.yuku.com/topic/12131


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.





          Old time religion and politics have been a disaster for the GOP        
The struggle between organized region and non-affiliated has been around since the nations was founded. Benjamin Franklin, Ethan Allen, George Washington, Thomas Jefferson James Madison, and Thomas Paine were all deists.


Deism the belief in a deity based on natural religion only, or belief in religious truths discovered by people through a process of reasoning, independent of any revelationthrough scriptureor prophets.


Deism can be contrasted with theism, Most theists ascribe to organized religion. “Organized religion is typically characterized by an official doctrine(or dogma), a hierarchicalor bureaucraticleadership structure, and a codificationof rules and practices.”


The term theism was first used by Ralph Cudworth (1617–88). In Cudworth's definition, 'Theists, are those who affirm, that a perfectly conscious understanding being, or mind, existing of itself from eternity, was the cause of all other things".


Most modern western religious such as Judaism, Christianity and Islam are monotheistic. Almost all have official doctrine, bureaucratic leadership, and a codification of rules and practices often described as rituals.


Most of the early religions were integrated with and extensions of the state. This may explain why many religions have developed an authoritarian streak,


Barry Goldwater said this in 1981:


There is no position on which people are so immovable as their religious beliefs. There is no more powerful ally one can claim in a debate than Jesus Christ, or God, or Allah, or whatever one calls this supreme being. But like any powerful weapon, the use of God's name on one's behalf should be used sparingly. The religious factions that are growing throughout our land are not using their religious clout with wisdom. They are trying to force government leaders into following their position 100 percent. If you disagree with these religious groups on a particular moral issue, they complain, they threaten you with a loss of money or votes or both. I'm frankly sick and tired of the political preachers across this country telling me as a citizen that if I want to be a moral person, I must believe in 'A,' 'B,' 'C,' and 'D.' Just who do they think they are? And from where do they presume to claim the right to dictate their moral beliefs to me?

Goldwater further warned about Christan fundamentalists and Evangelicals taking over the GOP:

If they succeed in establishing religion as a basic Republican Party tenet," he told US. News & World Report in 1994, "they could do us in."  In an interview with The Post that same year, Goldwater observed, "When you say 'radical right' today, I think of these moneymaking ventures by fellows like Pat Robertson and others who are trying to take the Republican Party and make a religious organization out of it.  If that ever happens, kiss politics goodbye.


So here we are in 2016. In 2012, we had Republican Mitt Romney running for president. Romney believed he was the chosen one in the White Horse prophesy. The prophecy predicts that the United States Constitution will one day "hang like a thread" and will be saved "by the efforts of the (man on a) White Horse. " Mormons have anticipated. the United States to eventually become a theocracydominated by The Church of Jesus Christ of Latter-day Saints.


When Romney was running we also had Mike Huckabee and Rick Santorum trying to build their presidential aspirations on church altars. too. Newt Gingrich was another religious Catholic zealot


The worst by far is Ted Cruz who hold Dominionist beliefs. Ted would like to be the emperor of the first American theocracy.


The authoritarianism in the GOP can be explained to a certian extent by the a party riddled with religion. 

The Republican reaction of the GOP to Obama may also have a religious basis in that many fundamentalists think Africans a have the mark of Cain on them. However, most anthropologists know that the human species developed in Africa. The first humans were dark skinned. 

So how does the Democratic party work with Republicans who are religious zealots and ideologues with “my way of the highway” attitudes?

Would guess Obama is doing the best he can under the circumstances. You have to work under and around such people and work to marginalize them in the next election. On occasion, give them enough rope to hang themselves which is what happened to the the GOP when it closed down the Federal government.

You simply cannot negotiate with a “disloyal opposition” in good faith.

It's time for Democrats to put the hammer down and to storm the election booths in 2016. If we make an extended efforts, we can take the Presidency, the Senate and perhaps even the House!

Sources:
https://en.wikipedia.org/wiki/List_of_deists
https://en.wikipedia.org/wiki/Organized_religion
https://en.wikipedia.org/wiki/Theism
https://en.wikipedia.org/wiki/White_Horse_Prophecy
http://www.wnd.com/2014/08/the-top-12-newt-gingrich-quotes/

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Is Melania Trump the Whore of Babylon?        
Glenn Beck indicated in The Blaze that Melania had been a Rainbow Starlet in Slovenia.
Does America need a First HOTUS?


It's your call, America!



Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Jeb Bush's fingerprints are all over the outing of Rubio's mistress        

 Rubio and Bush have been feuding


Bush campaign officials are trying to compare with Rubio as a “GOP Obama.” The Bush campaigners have been suggesting Rubio lacks political experience, but Marco actually has broader experience than Jeb Bush who has only held one political office, Florida governor. Bush has also been out state and national politics for nearly a decade.

Rubio, who is rising in the polls, is the biggest obstacle to Jeb Bush who is trying to take to the GOP nomination. Rubio has also poached some big GOP donors from Jeb Bush like Paul Singer,

Jeb Bush thinks he can win the Latin vote, but Rubio,who is Cuban descent and speaks Spanish at home, could do so, as well.  

Rubio is not-so-subtly suggesting the Bush name is a negative. 

Wow, what a revelation.

Bush is trying to portray himself as an experienced manager who has operated the nation’s third most populous state. Rubio, on the other hand, is presenting himself as an alternative to a dynastic political family.

Rubio has rising in the polls according to Fox News and The Quinnipiac University National Poll and is now is second place with Carson's numbers declining.  Jeb Bush is in fourth place.

Enter the Rubio mistress

 

There have been rumors few years that a Rubio has had at least one mistress and possibly two. Rumors have also circulated that Marco Rubio has at least one illegitimate child. While Rubio was in the Florida statehouse there was a scandal about his finances and the inappropriate use of a Republican credit card. There was an investigation or sorts, but some of Rubio's expenses were kept secret. It is possible these may have been child support payments. 

Jeb Bush is well-aware of the old scandal and would know what closets the skeletons are hiding in.  The Florida Republican party probably gave him access to Marco Rubio's Florida statehouse expense reports, too. 

Jeb Bush has the most to gain by eliminating Marco Rubio from the primary race. Assuming he Establishment Republicans can take Trump out of the race, it will leave only Ted Cruz and Jeb Bush standing. 

Rightrdia sees Cruz as unelectable because of his numerous christo-fascist rants.  A bigger problem for the establishment Republicans is Trump. Jeb Bush won't be able to buy the GOP nomination by outspending Donald Trump. 

George W. Bush took the GOP nomination in 2000 because he had the biggest primary war chest,


sources: 

https://www.washingtonpost.com/politics/at-a-gathering-of-bushes-the-focus-turns-to-rubio-as-a-key-opponent/2015/10/26/38786714-7be9-11e5-beba-927fd8634498_story.html

http://www.occidentaldissent.com/2015/10/31/paul-singer-backs-rubio/


https://www.bostonglobe.com/news/politics/2015/07/09/jeb-bush-and-marco-rubio-heading-for-florida-showdown-gop-primary-subplot/JhtrkpDuWJ62XDEXWXsAKL/story.html

http://www.foxnews.com/politics/2015/11/22/fox-news-poll-trump-gains-carson-slips-cruz-and-rubio-climb-in-gop-race.html



Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Secrets that Joe the Plumber won't tell you.        
Was watching the news and it said plumbers gets lots of calls during the holiday season. The garbage disposal and toilet are usually the reasons.

Basic Plumbing


A garbage disposal has reset button on it, usually at the bottom of the unit. Press the button to see if the unit will restart. If that doesn't work you will need an Allen wrench to turn the grinding unit. Once the grinders budge, the unit will probably work again.

Potato peels and coffee grounds should not be put into a garage disposal. Often the potato peels will collect in the outlet pipe under the garbage disposal unit. You will have to disconnect and clear the pipe to get the peels out.

Note he reset button and the Allen wrench used to turn grinders that are stuck  

I prefer to use an Allen wrench set like the one below. You never lose the wrenches

Toilets are another holiday problem that can be a real mess if you have only one bathroom. If the plunger doesn't work, try some pots or pails of hot water.

Still clogged? Try a toilet auger. Got a three foot one at Ace hardware for $12. Have seen the longer ones for $39 or more. Most women should be able to handle the three foot version without much trouble,


Simply retract the snake up into the unit and put the cane into the toilet as noted in the picture. The auger should be at about a 30 degree angle with the toilet.
Now push the snake into the toilet. if you run into resistance., turn the handle in clockwise manner. This will grind up any debris. Repeat as required.


Advanced plumbing

Will post another article on fixing an electric water heater. If you or your partner are handy, you should be able to get the hot water heater working without calling a plumber.

Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Donald Trump's Four T's will make America Great Again        
In a letter to the NY Post, Donald Trump Explained how his Four T's would make America great again. The T's are:

  1. Trivialize women, minorities and the handicapped.
  2. Trust no one. 
  3. Trample your opponents
  4. Turn in you neighbors to the police. 

Donald Trump 2016







Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Supply side economics and the one per cent.        


The Gross National income of the US in 2014 is $17,601,119,000,000.

The gross national income (GNI) is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP) plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents. (Wikipedia).

One does not have to a brain surgeon like Ben Carson to understand why supply side economics will never work in the United States. The top quintile or 20 per cent of Americans now earn half the income. The the top one per cent rake in 23 per cent of the GNI.

Admittedly the affluent live in better home and drive better cars, travel more and take international vacations, but most of their income is surplus. Indeed, the affluent can take some of this surplus income and convert it to capital by buying stock, bonds and mutual funds. However, the top 10 per cent of Americans own more than 80 per cent of this market already. The top one per cent own more than 38 per cent of he stock and bond market.

As the Motley Foolpoints out:

Wealthy people don't own stocks because they're wealthy; they're wealthy because they own stocks.

The size of the U.S. bond market is just under $37 trillion, finance professor Torben Anderson at the Kellogg School of Management says in “Volatile Assets” in July 2012. In comparison, the market capitalization of the U.S. stock market is about $21 trillion.

The top decile (10 per cent) of income has a direct participation rate of 47.5% and an indirect participation rate in the form of retirement accounts of 89.6% in the stock and bond market. In the top decile, mean value of all holdings fell from $982,000 to $969,300 in 2007

U.S. corporate bond sales swelled to an annual record as a late-year rush by borrowers to lock in low interest rates pushed offerings for 2014 past $1.5 trillion.

Data compiled by Bloomberg. Internet commerce company Alibaba Group Holding Ltd. which sold $8 billion in bonds in one month, helping push this year’s bond volume past the previous high of $1.494 trillion setin 2013.

In 2014 a lot of mutual funds were converted to bonds and bond sale outpaced stock sales. The point here is that many stock, bond and mutual fund sales are conversions rather than new purchases.

The top 1 per cent of Americans earned $76,526,604,347,826in 2014. Even if the one per cent purchased $ 5 trillion in stocks, bonds and mutual funds, which represents most of the US securities market in 2014, such a capital investment would represent a trivial amount of the income the 1 per cent received that year.

This is why tax breaks for the 1 per cent or even the top 10 per cent are pointless. Such tax breaks will do little for the economy. These tax break would at best provide packet change to the one per cent. The per cent of annual income the affluent invest in the stock market is not large enough to be stimulative.

The Democratic party uses a more direct approach to stimulate the economy. Programs like unemployment compensation food stamps (Supplemental Nutrition Assistance Program) and school lunches for women, Infants and children (WIC) provide direct aid to the middle class and the working poor.

Any funds these program provide are usually quickly spent. The funds do not sit in US or foreign bank accounts as is the case for many upper income Americans.

The middle calls is the basis of the US economic engine, not the one per cent. As the AFL-CiO noted:

The middle class is the great engine of the American economy, but that engine is sputtering.

As one business man explained it, tax breaks at the end of the years are great, but it's customers that make or break a company. The middle class provides the customers to small and larger businesses that drives the US economy.

Supply side economics is blind to the middle class economic engine with its top down approach. Unfortunately America is hearing that same old supply side song from most the Republican candidates for president.


Sources:

https://en.wikipedia.org/wiki/Gross_national_income
http://www.fool.com/investing/general/2010/11/17/who-owns-the-stock-market.aspx
http://finance.zacks.com/bond-market-size-vs-stock-market-size-5863.html
https://en.wikipedia.org/wiki/Stock_market
http://www.aflcio.org/Blog/Economy/10-Ways-to-Rebuild-the-Middle-Class


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 
  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          Does the GOP engage in class warfare?        
  The GOP engages in class warfare. misogyny and racism. 

 
Both the tax plans of Jeb Bush and Donald Trump make this clear. Both tax plans give huge tax breaks to the affluent by cutting the income tax rates for top earning Americans to below 30 per cent. Trump's tax rate is 15 per cent, but he says he will eliminate all deductions. Trump goes further by eliminating the estate tax which only effects the top 0.1 per cent of Americans. 

Republicans like to call the estate tax the death tax and suggest it is double taxation. A progressive estate tax was instituted by Theodore Roosevelt to level the playing field. Unfortunately, the estate tax today is barely functional. The US now has a stratified social system. There is very little social mobility between classes. If you are born working class, you will likely die working class.

Trump suggests families making $50k or less pay no income tax while Bush suggests $40k or less. In both cases, more than half of the taxpayers in the US would be exempt from federal income tax. This proposal would greatly favor the Red states which have lower median incomes than the Blue.

When the dust clears from either of these plans a greater tax burden would end up on the backs of the middle class. Working class Americans would pay little or no tax and the top earning Americans would get huge tax cuts.

Both Ronald Reagan and George W. Bush tried similar supply side tax plans and both presidents greatly increased the annual deficits which added trillions to the national debt. Not only did the Republicans lower taxes irresponsibly, they also overspent on the armed services. Bush never vetoed a single bill while in office his first term and increased defense spending by 47 per cent.

The tax cuts plus the runaway spending had bad outcomes. The Bush “ownership society” was predicated on deregulation. This led to a worldwide economic meltdown.

Many observers have suggested the GOP favors defense spending over infrastructure because most defense facilities are in the Red states while the US infrastructure is in the Blue

President Obama was elected overwhelmingly by women voters, black Americans, and Hispanic Americans. It is not a coincidence that all three have attacked by Republicans ever since the elections.

In the case of women, an important institution, Planned Parenthood is being attacked. Certainly Republicans are “Pro-Life,” but it goes far beyond that. Republicans are trying to deny birth control pills and other forms of contraception to women. The real GOP goal appears to be to stop women from having “sex for mere pleasure. “

The attacks on gay or LGBT people is similar but also has an Old testament religious basis. Many evangelical and fundamentalist churches subscribe to the belief the Christian religion is underpinned by repressing gays. Many have predicted Christianity will collapse now that gay marriage is legal.

Much of the GOP racism was stimulated by the election of Barack Obama. America's first black president. Republicans were even more agitated when record number of blacks showed up at the polls and 95 per cent voted for the president. Since the election , many other Red states have instituted laws to “reduce voter fraud”vby requiring multiple forms of identification to vote. Many older and poorer people don't have birth certificates, so they will be unable to vote.

The worst example is in Alabama in which voters must register to vote at the Division of Motor Vehicle (DMV) offices. The state then closed all but 5 DMV offices and the open ones mainly service white drivers and voters.

Lat but not least, is the GOP attack on Latino/Hispanic immigrants. The GOP did poorly in the 2012 election with Romney picking up only 27 per cent of the Hispanic and Latino vote. Marco Rubio thinks the GOP candidate must pick up at lease 40 per cent of this vote to win. Another pollster indicated 42-47 per cent is needed.

Because Obama took 71 per cent of the Latino and Hispanic vote in 2012, Republicans have become anti-immigrant. The GOP will say that immigrants take jobs but most compete for jobs with high school dropouts. They take jobs in construction such as roofing, food service, agriculture, lawn service and gardening. Posit the real GOP concern is that immigrants from south of the border overwhelmingly vote Democratic.

The GOP prefers the Hi-B program that lets in educated workers such as information technology (IT ) people. Recently Walt Disney World told 250 workers, most of which were technical, that they were being laid off and replaced by foreign workers from India. The US workers even had to train their replacements.

Fortunately, Disney got plenty of bad press and dropped plans to replace the workers.

The GOP engages in class warfare in many ways. It uses tax policy to play the middle calls against the affluent and the working class. Its tax policy and appropriations also favors the Red states over the Blue.

The GOP attacks women, black, Latinos/Hispanics and other minorities based on voting patterns. If any group votes for Democrats, the GOP then tries to marginalize that group in the US congress and in statehouses controlled by he GOP.

Thee is one exception, veterans. Although veterans overwhelmingly vote Republican, Republicans the US House and senate have voted down several vet bills since 2008. Apparently the GOP thinks it can take vets for granted.


sources: http://www.independent.org/newsroom/news_detail.asp?newsid=31
http://www.huffingtonpost.com/rick-ross/black-voters-obama-2012_b_2086538.html
http://www.slate.com/blogs/the_slatest/2015/10/01/alabama_closes_dmvs_in_majority_of_black_belt_counties_passed_voter_id_law.html
http://www.pewhispanic.org/files/2012/11/2012_Latino_vote_exit_poll_analysis_final_11-07-12.pdf
http://townhall.com/tipsheet/mattvespa/2015/04/02/rubio-pollster-gop-needs-40-percent-of-the-hispanic-vote-to-win-in-2016-n1979044
http://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html
http://www.huffingtonpost.com/rep-bernie-sanders/a-progressive-estate-tax_b_5784892.html
http://www.businessinsider.com/social-mobility-is-a-myth-in-the-us-2013-3?op=1








Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 
  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          GOP tax con game starts again        
 

The proposed tax tables are approximate correlations with the existing federal income tax tables. Trump and Bush are proposing tax brackets that don't exist in the tax code.

Jeb Bush is probably the worst of the bunch with his three tax brackets courtesy of the Committee to Unleash Prosperity that includes Larry Kudlow, Stephan Moore, Steve Forbes and Republican economist Arthur Laffer, an economic fossil from the Reagan era.

Rand Paul also has a similar flat tax plan His 14.5%, plan is similar to Ben Carson's which is based upon tithing. However, Paul doesn't mention tithing

The flat income tax is a bad idea because the majority of American taxes, such as sales tax and municipal property tax, are already flat.

Let's look at a worse case scenario: Huckabee's fair tax. Florida has a sales tax of six or cent and Pinellas county has a one per cent sales tax. So if you purchase the average car which costs $32,000, your sales would boost you cost by another 30 per cent or $9600. You car would now cost $41600 under Huckabee's fair tax.

Now consider what the fair tax would be on a home sale.

Think that is fair?

President George W. Bushreported that that a national sales tax of at least 34 percent would be required to replace federal income tax. TheInstitute on Taxation and Economic Policy estimated the sales tax would need to be at least 45 percent to be revenue neutral.
Donald Trump on a national flat sales tax”

I would try to avoid paying it whenever possible.

Trump makes a great point. You can avoid sales tax with bartering, something that is common in the underground economy.

Theodore Roosevelt, a progressive Republican, created the graduated income tax and Republicans have been whining about ever since,

Theodore Roosevelt said this:

At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will. At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth……
“No man should receive a dollar unless that dollar has been fairly earned.
Every dollar received should represent a dollar's worth of service rendered. . .”

Some other features of the GOP candidates' tax plans:

Trump wants to eliminate the inheritance tax with a would impose a one-time, 14.25% tax on individuals and trusts with a net worth over $10 million. Trump's proposal indicates that that would a one time tax. What people who establish new trusts. In the future, would they be subject to this tax? Trump uses of the term “one time'” suggests that people who establish trusts in the future would get free rides.

The Estate Tax only affect 0.1 to 0.2per cent of the US population and it was reformed when Bill Clinton was president. Not clear why any changes are needed to the Estate Tax.

Jeb Bush's tax plan is even more reactionary that Trump's with three tax brackets. It is similar to his brother's plan that contributed to the record deficit spending Bush does end carried interest for hedge fund mangers that allows their income to be treated as capital gains.

Ted Cruz is the only one who has said much about corporate taxes:

Right now, U.S. corporations face the highest tax rate in the developed world, and they face double taxation if they invest their profits in America.
Ted is correct but there are so many corporate tax exemption, the effective tax rate is one of the lowest in the industrial world. None of the candidates said anything about ending corporate tax exemptions and having a minimum tax on corporations.

Sources:

http://www.washingtonpost.com/news/post-politics/wp/2015/09/09/jeb-bush-finally-unveils-tax-overhaul-plan-calling-for-fair-environment/
http://ontheissues.org/Celeb/Donald_Trump_Tax_Reform.htm
http://www.npr.org/templates/story/story.php?storyId=17209388
http://freedomoutpost.com/2013/05/ted-cruzs-solution-to-the-irs-abolish-it/
http://www.moneychimp.com/features/tax_brackets.htm
http://www.foxbusiness.com/economy-policy/2015/08/12/dr-ben-carsons-10-flat-tax-plan/
http://www.beliefnet.com/columnists/stevenwaldman/2008/10/teddy-roosevelt-socialist-advo.html
https://en.wikipedia.org/wiki/Estate_tax_in_the_United_States
http://www.politifact.com/georgia/statements/2015/may/18/david-perdue/fair-tax-claim-ignores-contradictory-economic-mode/


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.
'
Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          A non-believers view of religion        

Most of these are Meriam Webster definitions. A couple of definitions are also provided by Wikipedia.

Atheist--one who believes that there is no deity

Agnostic--a person who does not have a definite belief about whether God exists or not

Gnosticism("having knowledge"), is a modern term categorizing a collection of ancient religions whose adherents shunned the Demiurge– which they viewed as created by – and embraced the spiritual world. (Wikipedia)

Fundamentalism--a movement in 20th century Protestantism emphasizing the literally interpreted Bible as to Christian life and teaching

Evangelical--of or relating to a Christian sect or group that stresses the authority of the Bible, the importance of believing that Jesus Christ saved you personally from sin or hell, and the preaching of these beliefs to other people.


Deism--a movement or system of thought advocating natural religion, emphasizing morality, and in the 18th century denying the interference of the Creator with the laws of the universe .

Theism--belief in the existence of a god or gods; specifically a belief in the existence of one God viewed as the creative source of the human race and the world who transcends yet is immanent in the world.

Spirituality--most any kind of meaningful activity. It is often separated from organized religious institutions, as in the phrase "spiritual but not religious". Traditionally, spirituality refers to a process of re-formation of the personality live a life according to divine will, but there is no single, agreed-upon definition of spirituality.

Many people think atheists and agnostics are different. Actually, most atheists are agnostic. Richard Dawkins has even said it would be fine with him if god did exist. Most atheists like Richard Dawkins do not have any special knowledge about the existence of non-existence of god. Therefore, most atheists are, in fact, agnostic They just do not know.

An agnostic, therefore, is someone who lacks special knowledge about something like God or religion. It is the opposite of gnostic.

On the other hand, a gnostic atheist would be positive that god doesn't exist. Few atheists take this position. Most view god as irrelevant or that people who are adamant about gods' existence need to prove it. 


Fundamentalists and Evangelicals are gnostic. There is no doubt in their minds about the existence of god. Many also think the US is a Christian nation and accordingly Americans should be following god's law, whatever that might be. For example, Kim Davis, the Rowan county Kentucky clerk, thinks she is denying marriage licenses to gay couples under the authority of God.

When the nation was founded, many of the founders were deist. They believed in god , but not organized region. Thomas Jefferson, Benjamin Franklin, James Madison and John Adams were deists.

Franklin may have even been an atheist: One of his famous quotes: 

Light houses are more useful than churches. 


Theists, on the other hand, participate in organized religion. It would be safe to say that most evangelicals and fundamentalists are gnostic theists. They believe god needs to be worshipped in the context of an institution or ritual. 

There is an example of theism in Judaism. Orthodox Jews say the Temple of Solomon needs be rebuilt on the Temple Mount because it is the only place that God can reside on earth. This is considered the holiest place in Judaism,

Of course the Al Aqsa Mosque would have to be destroyed to rebuild the temple. 


There are also people into spirituality who do not show any interest in organized religion, but believe something is out there. People who are into spirituality appear to be the modern version of deists. 

In summary, most atheists are agnostic. And most fundamentalists and evangelicals are gnostic theists. People into spirituality are, for all intents and purposes, deists.


Subscribe to the Rightardia feed: http://feeds.feedburner.com/blogspot/UFPYA 

  Creative Commons License

Rightardia by Rightard Whitey of Rightardia is licensed under a Creative Commons Attribution 3.0 Unported License.

Permissions beyond the scope of this license may be available at rightardia@gmail.com.

          The Class War Has Begun        

By Frank Rich, NY Times Magazine

During the death throes of Herbert Hoover’s presidency in June 1932, desperate bands of men traveled to Washington and set up camp within view of the Capitol. The first contingent journeyed all the way from Portland, Oregon, but others soon converged from all over alone, in groups, with families until their main Hooverville on the Anacostia River’s fetid mudflats swelled to a population as high as 20,000. The men, World War I veterans who could not find jobs, became known as the Bonus Army for the modest government bonus they were owed for their service. Under a law passed in 1924, they had been awarded roughly $1,000 each, to be collected in 1945 or at death, whichever came first. But they didn’t want to wait any longer for their pre New Deal entitlement especially given that Congress had bailed out big business with the creation of a Reconstruction Finance Corporation earlier in its session. Father Charles Coughlin, the populist Radio Priest who became a phenomenon for railing against greedy bankers and financiers, framed Washington’s double standard this way: If the government can pay $2 billion to the bankers and the railroads, why cannot it pay the $2 billion to the soldiers?

The echoes of our own Great Recession do not end there. Both parties were alarmed by this motley assemblage and its political rallies; the Secret Service infiltrated its ranks to root out radicals. But a good Communist was hard to find. The men were mostly middle-class, patriotic Americans. They kept their improvised hovels clean and maintained small gardens. Even so, good behavior by the Bonus Army did not prevent the U.S. Army’s hotheaded chief of staff, General Douglas MacArthur, from summoning an overwhelming force to evict it from Pennsylvania Avenue late that July. After assaulting the veterans and thousands of onlookers with tear gas, MacArthur’s troops crossed the bridge and burned down the encampment. The general had acted against Hoover’s wishes, but the president expressed satisfaction afterward that the government had dispatched a mob albeit at the cost of killing two of the demonstrators. The public had another take. When graphic newsreels of the riotous mêlée fanned out to the nation’s movie theaters, audiences booed MacArthur and his troops, not the men down on their luck. Even the mining heiress Evalyn Walsh McLean, the owner of the Hope diamond and wife of the proprietor of the Washington Post, professed solidarity with the mob that had occupied the nation’s capital.

The Great Depression was then nearly three years old, with FDR still in the wings and some of the worst deprivation and unrest yet to come. Three years after our own crash, we do not have the benefit of historical omniscience to know where 2011 is on the time line of America’s deepest bout of economic distress since that era. (The White House, you may recall, rolled out recovery summer sixteen months ago.) We don’t know if our current president will end up being viewed more like Hoover or FDR. We don’t know whether Occupy Wall Street and its proliferating satellites will spiral into larger and more violent confrontations, disperse in cold weather, prove a footnote to our narrative, or be the seeds of something big.

What’s as intriguing as Occupy Wall Street itself is that once again our Establishment, left, right, and center, did not see the wave coming or understand what it meant as it broke. Maybe it’s just human nature and the power of denial, or maybe it’s a stubborn strain of all-American optimism, but at each aftershock since the fall of Lehman Brothers, those at the top have preferred not to see what they didn’t want to see. And so for the first three weeks, the protests were alternately ignored, patronized, dismissed, and insulted by politicians and the mainstream news media as a neo-Woodstock for wannabe collegiate rebels without a causeand not just in Fox-land. CNN’s new prime-time hopeful, Erin Burnett, ridiculed the protesters as bongo-playing know-nothings; a dispatch in The New Republic called them an unfocused rabble of ragtag discontents. Those who did express sympathy for Occupy Wall Street tended to pat it on the head before going on to fault it for being leaderless, disorganized, and inchoate in its agenda.

Despite such dismissals, the movement, abetted by made-for-YouTube confrontations with police, started to connect with the mass public much as the Bonus Army did with a newsreel audience. The week after a Wall Street Journal editorial claimed that no one seems to care very much about the collection of ne’er-do-wells congregating in Zuccotti Park, the paper released its own poll, in collaboration with NBC News, finding that 37 percent of Americans supported the protesters, 25 percent had no opinion, and just 18 percent opposed them. The approval numbers for Occupy Wall Street published in Time and Reuters were even higher—hitting 54 percent in Time. Apparently some of those dopey kids, staggering under student loans and bereft of job prospects, have lots of parents and friends of all ages who understand exactly what they’re talking about.

Coverage increased and politicians ran for cover. Mayor Bloomberg, who had initially (and preposterously) portrayed the occupiers as a threat to the financial industry’s lower-income service workers, gingerly observed that some unspecified people are very frustrated. Though the Treasury secretary, Timothy Geithner, waffled when asked if he had any sympathy for Occupy Wall Street, Barack Obama publicly acknowledged the demonstrators’ broad-based frustration about how our financial system works.* (If Bloomberg and Obama are both using frustration, you can be certain it is a focus-group-tested trope chosen not to frighten the presumed sensibilities of independents.) Mitt Romney, who had first called the protests dangerous,” executed another of his patented flip-flops to assert that he, too, identifies with America’s 99 percent, not the top one percent where he’s always dwelled. Boy, I understand how these people feel, he said. (Boy, do these people not believe him.) Even Eric Cantor, who’d described the protesters as mobs, started talking about what else? frustration.

These efforts to domesticate and contain the protests are unlikely to succeed. It is not frustration that’s roiling America but anger, the anger of a full-fledged class war. Try as polite company keeps trying to ignore it, that war has been building in this country and abroad for much of this decade and has been waged in earnest in America since the fall of 2008. But the crisp agenda demanded of Occupy Wall Street will not be forthcoming. The inchoateness of our particular class war is central to its meaning. America is not Tahrir Square or the riot-scarred precincts of North London, where everyone knows at birth who is in which class and why. We pride ourselves on being a classless” democracy. We abhor ideology. When Americans left and right, young and old, express anger at an overclass, they don’t necessarily agree about who’s on which side of that class divide. The often confusing fluidity of class definitions, especially in an America as polarized as ours is now, may make our home grown class war more volatile, not less.

The tea-party right finds the hippie-scented movement in lower Manhattan repellent, but it and Occupy Wall Street are two sides of the same coin. Take Back America, the initial tea-party battle cry, would work for those in Zuccotti Park as well. The disagreement is about which America needs to be taken back, and from whom.

Provoked by Obama’s ascent, the right was ahead of the class-war curve, with Sarah Palin sounding the charge when she stuck up for the real America against the elites during the 2008 campaign. The real America, as she defined it, was in small towns those who are running our factories and teaching our kids and growing our food. In other words: It is the middle class (or at least its white precincts) that fell behind while the rich got richer. The Über-class she and her angry followers would take to the guillotine, however, is not defined by its super-wealth. It is first and foremost exemplified by potentates in the federal government, especially the Ivy League cohort of Obama closely followed by the usual right-wing populist bogeymen, the pointy-headed experts in fancy universities and the mainstream-media royalty with their gotcha questions.

Palin may now have abdicated her position on the barricades, not least because she succumbed to the financial blandishments of the unreal America, but the zeal of her constituency has not faded a bit. The right’s angry class warriors constitute the vast majority of the GOP that roughly three- quarters of the party that seems determined to resist Romney no matter what. A Harvard-educated former Massachusetts governor, especially one who embraced the social engineering of health-care reform, inspires class anger from his own party to the same degree that his private-sector record as a leveraged-buyout tycoon provokes class anger from Democrats.

But while Romney is a class enemy liberals and conservatives can unite against, perhaps nothing has revealed how much the class warriors of the right and left of our time have in common than the national outpouring after Steve Jobs’s death. Indeed, the near-universal over-the-top emotional response more commensurate with a saintly religious or civic leader, not a sometimes bullying captain of industry brought Americans of all stripes together as few events have in recent memory.

Some on the right were baffled that the ostensible Marxists demonstrating in lower Manhattan would observe a moment of silence and assemble makeshift shrines for a top one-percenter like Jobs, whose expensive products were engineered for near-instant obsolescence and produced by Chinese laborers in factories with substandard health-and-safety records. For heaven’s sake, the guy didn’t even join Warren Buffett and Bill Gates in their Giving Pledge. There is perhaps no greater image of irony, wrote the conservative blogger Michelle Malkin, than that of anti-capitalist, anti-corporate, anti-materialist extremists of the Occupy Wall Street movement paying tribute to Steve Jobs.

Yet those demonstrators who celebrated Jobs were not necessarily hypocrites at all and no more anti-capitalist than the Bonus Army of 1932. If you love your Mac and iPod, you can still despise CDOs and credit-default swaps. Jobs’s genius in the words of Regis McKenna, a Silicon Valley marketing executive who worked with him early on was his ability to strip away the excess layers of business, design, and innovation until only the simple, elegant reality remained. The supposed genius of modern Wall Street is the exact reverse, piling on excess layers of business and innovation on ever thinner and more exotic creations until simple reality is distorted and obscured. Those in Palin’s real America may not be agitated about the economic 99-vs.-one percent inequality brought about by the rise of the financial sector in the past three decades, but, like class warriors of the left, they know that financial instruments wreaked havoc on their 401(k)s, homes, and jobs. The bottom line remains that Wall Street’s opaque inventions led directly to TARP, the taxpayers’ bank bailout that achieved the seemingly impossible feat of unifying the left and right in rage against government much as Jobs’s death achieved the equally surprising coup of unifying left and right in mourning a corporate god.

That bipartisan grief was arguably as much for the passing of a capitalist culture as for the man himself. Finance long ago supplanted visionary entrepreneurial careers like Jobs’s as the most desired calling among America’s top-tier university students, just as hedge-fund tycoons like John Paulson and Steve Cohen passed Jobs on the Forbes 400 list. Americans sense that something incalculable has been lost in this transformation that cannot be measured in dollars and cents.

There’s no handier way to track just how much American capitalism has changed since Apple’s divine, mid-�seventies birth in a garage than by following the corporate afterlife of the American icon most frequently invoked as Jobs’s antecedent in his obituaries, Thomas Alva Edison. Like Jobs, Edison wasn’t just a brilliant fount of technological breakthroughs but a businessman as well (albeit a less savvy one). He was the official founder of General Electric�known as Edison General Electric at its inception in 1890, before Edison was strong-armed into an early merger. G.E. was created to maximize the profits of his many inventions and businesses, Apple style. And like Apple, the company flourished as an exemplar of American capitalism at its most creative and productive, even in a downtime. During the Great Depression, it produced an astonishing array of Jobs-worthy �innovations�the first commercial fluorescent lamp, the first waste �Disposall,� the first night baseball game, and the first television network. This was the job-�creating, profit-making, America-�empowering corporate behemoth, spewing out refrigerators and jet engines, that would ultimately recruit Ronald Reagan as its television pitchman in the fifties.

But the G.E. born out of Edison’s genius and synergistic with Reagan’s brand of postwar jingoism is far from the G.E. of our time. Its once minor financial-services subsidiary, G.E. Capital, metastasized over the past 30 years in sync with the growth of the new Wall Street. In 1990, G.E. Capital accounted for just a quarter of G.E.’s overall profits, but by 2007, on the eve of the crash, it had gobbled up 55 percent of the bottom line. Its sophisticated gambling strategies, like those of the big banks it emulated, amounted to an ingenious get-rich-quick scheme for high-rollers until the bottom fell out, taking shareholders and employees, not to mention the country, down with it. G.E. Capital’s dependence on short-term credit was so grave that it forced G.E. to cut back its dividend for the first time since the thirties and to turn to Buffett for a $3 billion emergency cash infusion in the dark days of October 2008.

The cheerleader for ratcheting up that risk at G.E. was the CEO, Jeffrey Immelt. These days he heads the president’s ineffectual Council on Jobs and Competitiveness, despite his own corporation’s record of job-shedding in America and the revelation that G.E. paid no American taxes in 2010 (on more than $14 billion in profits, including $5.1 billion in the U.S.). Immelt is a Republican, but that didn’t prevent Palin this fall from calling G.E. �the poster child of corporate welfare and crony capitalism.� (Bill O’Reilly and Newt Gingrich joined this class-warfare chorus.) On this point, once again, there is no air between the right and Occupy Wall Street. And as both camps condemn Immelt, so they are also united in the conviction that the godfather of Obama’s economic team, Robert Rubin, is likewise a poster child for corporate welfare and crony capitalism. Rubin, whose useful cronies included his former protégés Geithner and Lawrence Summers, encouraged reckless greed and risk at Citigroup during the bubble much as Immelt did at G.E. Capital, ultimately requiring the taxpayers’ rescue of TARP.

Politicians in either party, of course, never use the term �class warfare� to describe what’s going on in America, unless it’s Republican leaders accusing Obama of waging it every time he even mildly asserts timeless liberal bromides about taxing the rich. Nor do most politicians want to talk about the depth of the crisis in present-day capitalism, since to acknowledge its scale would only dramatize how little they intend to do about it.

The whole system is screwed up, and it’s not all Wall Street’s fault�or remotely in the financial sector’s power alone to solve. As middle-class Americans have lost their jobs or watched their wages stagnate or decline while corporations pile up record profits, they’ve also seen CEOs far removed from Wall Street (at Hewlett-Packard and Yahoo most recently) walk away with rich settlements even after they’ve laid off workers en masse, mismanaged their companies, or wrecked them. But at least politicians pay lip service to the woes of the middle class. That America’s poverty rate has risen to its highest level since 1993 goes all but unmentioned by leaders in both parties. The poor, after all, don’t make campaign contributions and are unlikely to vote. And they have even less clout than usual now that Republican legislators and governors, fanning bogus fears of �voter fraud,� have mandated new, Jim Crow�style restrictions to scare away poor, elderly, and minority voters in fourteen states. In the Beltway bubble, even the local poor are out of sight and out of mind; with a 6.1 percent unemployment rate and a median income of $84,523 (versus $50,046 nationally), Washington is now the wealthiest metro area in the country and, according to Gallup, departs from all 50 states in believing by a majority that the economy is getting better.

Back in 1931, even Hoover worried that �timid people, black with despair� had �lost faith in the American system� and might be susceptible to the kind of revolutions that had become a spreading peril abroad. When Roosevelt took office, he had the confidence that his leadership could overcome that level of despair and head off radicals on the left or right. In 2011, the despair is again black, and faith in the system is shaky, but it would be hard to describe the atmosphere at Zuccotti Park or a tea-party rally as prerevolutionary. The anger of the class war across the spectrum seems fatalistic more than incendiary. No wonder. Everyone just assumes the fix is in for the highest bidder, no matter what. Take�please!�the latest bipartisan Beltway panacea: the congressional supercommittee charged by the president and GOP leaders to hammer out the deficit-reduction compromise they couldn’t do on their own. The Washington Post recently discovered that nearly 100 of the registered lobbyists no doubt charged with besieging the committee to protect the interests of the financial, defense, and health-care industries are former employees of its dozen members. Indeed, six of those members (three from each party) currently have former lobbyists on their staffs.

Elections are supposed to resolve conflicts in a great democracy, but our next one will not.

Just in time for election season, Obama has recovered his populist rhetoric (if not populism itself) and will say the right things about Wall Street, about that �frustration� out there, about the modest reforms of Dodd-Frank, and about millionaires who don’t pay their fair share of taxes. It’s not clear if anyone believes it, including him. Having been a bystander to history when the tea party harvested populist rage during the summer of 2009, he may have a tough time co-opting Occupy Wall Street now to plug the so-called enthusiasm gap in his base. There’s a serious danger that the anger could co-opt him instead. To pander to the swing state of North Carolina, the Democrats in their wisdom chose to hold their convention in a city best known as the headquarters of Bank of America, whose recent financial innovations include illegal robo-foreclosures and the $5 monthly fee on debit cards. Occupy Charlotte could be a far more telegenic show than the one happening inside the hall.

Despite all the chatter to the contrary, Obama is so far outdrawing all the GOP candidates combined in Wall Street contributions. His best hope is that that fact is blurred by either Romney, the plutocrat from central casting, or Rick Perry, a creature of lobbyists and pay-for-play government in Texas. Herman Cain’s as yet little-known corporate history would also prove problematic to Republicans: He’s not only an unabashed Alan Greenspan fan who was chairman of the Kansas City Fed but also served on the board of Aquila, an energy company that ended up paying a $10.5 million settlement for Enron-esque shenanigans. (Cain’s campaign manager hails from Americans for Prosperity, the Koch brothers’ political front.) Whatever else is to be said about Michele Bachmann, Rick Santorum, Tim Pawlenty, and Ron Paul, they actually spent most of their pre-political careers in the aggrieved middle class. But they are all history in the presidential race, and perhaps were destined to be, given how big money plays its hand. You don’t have to like their views to find their earnest but misplaced faith in the free-market efficiency of the political system a bit poignant.

Elections are supposed to resolve conflicts in a great democracy, but our next one will not. The elites will face off against the elites to a standoff, and the issues animating the class war in both parties won’t even be on the table. The structural crises in our economy, our government, and our culture defy any of the glib solutions proposed by current Democrats or Republicans; the quixotic third-party movements being hatched by well-heeled do-gooders are vanity productions. The two powerful forces that extricated America from the Great Depression�the courageous leadership and reformist zeal of Roosevelt, the mobilization for World War II�are not on offer this time. Our class war will rage on without winners indefinitely, with all sides stewing in their own juices, until�when? No one knows. The reckoning with capitalism’s failures over the past three decades, both in America and the globe beyond, may well be on hold until the top one percent becomes persuaded that its own economic fate is tied to the other 99 percent’s. Which is to say things may have to get worse before they get better.

Over the short term, meanwhile, the Democratic Establishment is no doubt wishing that Occupy Wall Street will melt away with the winter snows, much as its Republican counterpart hopes that the leaderless tea party will wither if Romney nails down the nomination. But even in the unlikely event that these wishes come true, it is not likely to be the end of the story. Though the Bonus Army was driven out of Washington in the similarly fraught election year of 1932, the newsreels they left behind turned out to be previews of coming attractions for the long decade still to come.
          If you're not reading E.D. Kain at Forbes...        
Then you are missing some of the best writing anywhere on workers, unions, Wisconsin and economics. E.D. is not some militant leftist (like yours truly?) either, his knee-jerk reaction is not pro-union (like yours truly?). And he self-identifies as a conservative - though that may have changed recently.He writes in a wonderfully lucid fashion and he has the intellectual ability (and patience) to expose the fabulists and their propaganda.

Here is E.D. today highlighting a speech from Michael Moore in Wisconsin,
“America is not broke,” he says. It’s just terribly unequal. Four hundred of the very wealthiest Americans have more wealth than 155 million Americans on the other end of the scale combined. And yet it’s the teachers who need to sacrifice. This is the new class war.
My only quibble is that I don't believe that this is the new class-war. Rather it's been the status quo for close to 40 years.


And here is E.D. calling Matt Yglesias out for being... well... Matt Yglesias and branding those opposed to his particular brand of school "reform" as edu-nighlists,
Nihilism is essentially a philosophy of meaninglessness. If you’re a nihilist, you don’t believe that life has meaning. Graft that into Matt’s ‘edu-nihilism’. He’s basically saying that anyone not on the reform side of the table thinks that nothing at all can be done to fix our education system. Reform is meaningless.

Granted, I think we’ve taken reform way too far, and I think rumors of the appalling state of our nations’ schools are very exaggerated, but nobody in the edu-nihilist crowd that I know of is suggesting that we do nothing at all to make schools better. We just don’t think school-choice, the corporatizing of public schools, and a system of deeply flawed testing and accountability measures are the best way to go about it – and we certainly don’t think blaming teachers is the right approach.

But we edu-nihilists actually do have a lot of ideas. I suggested universal pre-K education in my last post. If that’s too pie-in-the-sky then there are plenty of others. Some critics of the choice and accountability movement have suggested national voluntary curriculum and standards so that kids in Arizona and kids in Connecticut are learning at the same level, or at least have the same basic set of guidelines. The point is, there are really tons of ideas being floated. And none of them fuel the sort of reforms we’re seeing with Scott Walker in Wisconsin.

I don’t think Matt Yglesias wants to see massive teacher layoffs or the sort of heavy-handed tactics Scott Walker is taking against teachers. But he and other reformers like him have praised other similarly top-down approaches in New York and elsewhere. Barack Obama and Arne Duncan have as well. When you start blaming teachers and looking for ways to constantly identify and punish bad teachers, this is the logical conclusion. Scott Walker is just an outgrowth of this movement, emboldened by a national dialogue that has placed teachers on the altar of school reform and that has labeled anyone who might choose to defend them as edu-nihilists.
Thank you E.D. And I would like to add that Matt Yglesias is a proudly ignorant and arrogant son of privilege. And he's kind of an asshole about it too.
          Dead Zones        
One of the quiet nightmares of the last 50 years has been the growth of ocean dead zones as a result (mostly) of nutrient runoff. A cycle starts that ends up with rot on the bottom and no oxygen in the water.



You know where this is going : Michigan. Not the lakes - although the Great Lakes have more than their share of problems.


The cultural dead zone : The Suburbs .
How did Michigan, of all places, get to a point where the elected government could stage a coup against their people and institute right-to-work evil? Because so many of them know absolutely nothing of labor history. From the Pullman riots to the relative peace of 1945-1970 was a long, sometimes bloody struggle.

And the history of it was just vanished. The plutocrats stood aside for a generation, while pumping out reams of propaganda. The means of transmission of folk history vanished with the public spaces and places where teens could interact with elders. Places that were systematically excluded from the antiseptic residential monocultures planted in the Auto Age. By 1980, peoples heads had been emptied enough that the White Folks litany could be pumped into a vacuum. The Class War was on, in secret. Victory has been complete. Even 30 years ago, could someone as clueless & odious as Willard Mitt Romney, with his constant denigrating of most of the population, his history of corporate evil, and his sheer cluelessness been allowed anywhere near a nomination? Maybe, but the stories that he ran on - the moochers, dependent, winks, nods, dog whistles & fables - would have at least drawn derision. Now? we are cursed with Very Serious People, who appear to have been raised in jars & don't even have scruples to lose to become pundits.


Corporate profits as a share of national income in red, wages in blue. See any improvement since 2009? This chart is almost enough to turn an O-Bot into a Firebagger. In any event, it's a call to action:

Wake up, and start knitting, all you zombies out there!




Also, too : The rest of the country, walking quietly down the chute.
          Pack up Lady Liberty and Return Her To France        
It was mid-term election night here in Georgia. What's a progressive girl to do when she lives in the belly of the Republicrats Beast? Try to get a little distance from this thing in order to gain perspective. So tonight it has been a week exactly since some folks decided not to vote because they weren't excited, weren't motivated, didn't really see what was at stake, and others were chomping at the bit to undo the "mistake" they think 72 million Americans made in 2008.

Unlike my time spent in places like New York, NJ, Chicago, and Oakland, CA, where progressives weren't laboring in isolation, at the least there were more of us. Here, we are definitely in the minority. And this after living near one of the largest cities in the South, the place that is seen as a mecca for those looking for a place less hidebound, restrictive, uptight than almost every place in the region. There were so many different people in those other cities, from different cultures and traditions, more of a live and let live attitude. No one was much interested in trying to shove their way of life down your throat. (Of course there are exceptions but for the most part there are just way too many people to contend with to try to strong arm your belief system on others.)

As quiet as it's kept, the South is also home to thousands of immigrants from around the globe. They appear to keep a low profile though. Like they don't want to rock too many boats, remain under the radar. After last Tuesday I bet they'll hunker down even more.

In the South progressives are not only in the minority, but it is place rife with people who feel that they have the answer to everything. They want to live their lives and yours too. I now fully understand taxation without representation because our Republicrat US Senators and our congressman really don't give a crap about anyone but their corporate cronies. And bunches of my fellow citizens are just itching to roll back the clock on the social issues near and dear to their hearts. (More about the Republicrats in a later post.)

It is too bad that these too often poor and working class Caucasians don't realize that our elected officials only care about getting back to DC and riding this corporate cruise line of endless money until the very last wave in the very last ocean. (They should fall on their knees every night and thank the Supremes. No, not Diana and the girls, but the men in robes who voted for Citizens United.)

And that's what I've come to grips with this election night. There are millions and millions of Americans who do not care enough to even give lip service to the euphemisms that many of us, myself included have taken as faith, drummed into us in school over the decades such as "We're all in this together." "We're all swimming in the same ocean." "I felt sorry for the man with no shoes...""A rising tide lifts all boats." I could go on and on, and on. So could you I bet.

Factually, if there is a social contract in America, it is only a contract between those of us who believe that there but for the grace of God, go I. The other side apparently never signed the contract. I'm unsure if they are even aware there ever was one.

21st century Republicrats, have no such contract, no such ideal, and care less about the grace of God. (But you'll find them in church heads bowed, fist ready to pound the word into your hostile brain.) Who needs grace. They're Republicrats. So what if the factories have shut down and jobs shipped over seas. So what if the family farms have been consumed by big Agribusiness and now they have to buy what they once produced.

One of the most repugnant, unrepentant, repulsive Republican strategists was a man named Lee Atwater. Old Lee was one of, if not the, architects of the Southern Strategy that propelled Reagan into office, and Bush Senior. The Southern Strategy used emotional wedge issues such as race and religion, coupled with coded words like "special interests," and "busing" and "welfare queens," linking all this to "tax cuts" and before you could say Jack Rabbit three times real fast, ushered in four decades of whites who could least afford to, solidly align with the corporate class and continually vote against their best interest.

(As I read in a post today, a caller to the Rush Limbaugh show said he was for tax breaks for his boss/CEO so that he could one day keep more of his money if achieved success.) Yup! Good luck with that podna.

It's a real neat trick when eight million Americans are out of work, people are losing their homes, can't pay their bills, dare not get sick, their kids have no real future that their schools have prepared them for, their schools don't educate and these folks blame their problems on Mexicans, gays, black people, Democrats, and the president! It's kind of mind boggling actually. And pitiful. Really. But I don't feel that sorry for them, they've drunk the Kool-Aid. Shame on them. When the roof caves in it will fall on them as well, but they won't believe it until it happens.

Once upon a time in America there may have been a social contract. But today, I can't even put some lipstick on that pig. The contract has gone through the shredder people. And I sincerely feel for those frightened by the media and opinionated charlatans with a microphone pushing the race button and weeping widows, waiting hands wrapped around their bibles believing that "Muslims" or "Gays" are taking over America. They are in for a very rude awakening. They still have not grasped that their leaders run on the social issues, race, religion, gays, but govern from their vested financial interests, Goldman Sachs, Citibank, Koch Enterprises. And those folks will not ever do anything to mess up their gravy train. Ever.

If Republicrats have any compassion, and I'm not talking about the politicians here but the people who vote for them, I can tell you that they only seem to locate their compassion button when life catches up with them. Until then, it's every man/woman/family/ for themselves and the heck with everyone else. Especially those who don't look like them.

Folks, I think it is time that we send Lady Liberty back to France. Her "Give me your tired your poor, your huddled masses yearning to breathe free..." is so 19th, 20th century. Is so out of date. Those sentiments are nice, make great PR and photo opportunities during holidays, gives tourists a thrill to read those words and remember their ancestors for whom the words offered comfort and hope. The Lady has become as much an American icon as the Washington Monument, old Thomas Jefferson and Lincoln Memorials, the Capitol and the White House. But what was once a beacon of hope to those who would risk life and limb to come to the land of opportunity, her light has been blown out and only the torch remains. Cold. Empty. Alone. Foreign.

The man who ushered in this seemingly endless era of division, of economic rape and pillage, and destruction of the middle class, Lee Atwater, this son of the south, the man known for being utterly ruthless, caring nothing about anyone, for whom no tactic was too vile, too repulsive, too low in the quest for power, had his, " There but for the grace of God," come to Jesus moment. He died from a malignant brain tumor at forty years old. And this is what he said he learned at the end:

"My illness helped me to see that what was missing in society is what was missing in me: a little heart, a lot of brotherhood. The '80s were about acquiring — acquiring wealth, power, prestige. I know. I acquired more wealth, power, and prestige than most. But you can acquire all you want and still feel empty. What power wouldn't I trade for a little more time with my family? What price wouldn't I pay for an evening with friends? It took a deadly illness to put me eye to eye with that truth, but it is a truth that the country, caught up in its ruthless ambitions and moral decay, can learn on my dime. I don't know who will lead us through the '90s, but they must be made to speak to this spiritual vacuum at the heart of American society, this tumor of the soul."

Some said that Lee was spinning till the end, that he didn't really mean it. Regardless, at the end he got it right. Unfortunately we didn't learn on his dime, and our spiritual vacuum? You may have your own list of shame, but clearly Cheney, Rove, Bush II, Condoleeza, and Rumsfeld modeled the continuance of the spiritual vacuum as they used fear as a whip to appeal to their base, and gluttony and greed ruled straight through the first decade of the new century.

And what's still missing in our country is what is missing inside of us.

The French are in the middle of a class war. They are fighting for their lives. But at least they understand that those who work, who labor, who produce things, are as deserving of a humane life as those who are the captains of industry. I think they'll appreciate getting their Lady back.
          AFL-CIO president: GOP ‘started the war on working Americans’        
Rallying attendees on the second afternoon of the Take Back The American Dream summit, AFL-CIO President Richard Trumka said of Republicans, “If they want to have a debate on class warfare, we’ll have that debate,” because “It wasn’t our class that started the war on wo...
          Roberts' Russian Roulette        
I sat in stunned yet stoic silence Thursday morning as my coworker told me the news that the Supreme Court had upheld Obamacare.  I was determined not to get worked up about it.  That determination was severely tested when details started to come in.  The culprit was not Justice Anthony Kennedy, as would be expected of the notorious swing vote of the SCOTUS.  Kennedy not only sided with the conservative minority about the unconstitutionality of the law’s infamous individual mandate, he joined them in wanting to throw out the whole law.  The culprit, of course, was Chief Justice John Roberts, who is supposed to be a conservative jurist, a strict constructionist wanting to uphold the original intent of the Constitution and the rule of law.

And indeed, Roberts argued strongly in his opinion that Obamacare and the individual mandate would be a gross violation and abuse of the commerce clause, but guess what?  Despite what the President and Obamacare's  proponents and the law itself clearly say to the contrary, Roberts inexplicably declared that the law’s penalty for not buying insurance is not a penalty at all, but rather a tax.  Because taxation is one of Congress’ enumerated powers--voilà—the law is constitutional!


As dumbfounded as I was by Roberts’ betrayal and the verbal gymnastics he used to turn plain language on its head, I was even more perplexed by the positive spin that came from conservative pundits and bloggers.  Oh, this is a good thing they say.  In one fell swoop, Roberts has reined in Congress’ abuse of the commerce clause, kept the court above the political fray and, more importantly, forced the country to deal with Obamacare politically—at the ballot box, and that will surely help Republicans.  One headline went so far as to say, “Did Chief Justice Roberts just hand Romney the White House?”

Sorry, but I don’t buy it.  Throwing Obamacare out the window would not only have upheld respect for the Constitution and the rule of law, but perhaps—just perhaps—would have given the private sector enough confidence to jump back into the water and start investing resources and hiring people. By allowing to stand a law that is not only unconstitutional but onerously burdensome and damaging to the country both individually and corporately, the SCOTUS has sent the clear message that it is not safe to get back into the water, and it will not be unless and until we decide the matter politically.

While I do indeed hope and pray that a major political reversal in November will keep this country from going off the cliff, I sometimes wonder if the country will even survive that long, particularly as we continue to borrow forty cents on every dollar we spend.  Even if we do survive, I wish I had a level of certainty whether we will indeed change course, or whether a majority of the country will fall prey to the demagoguery and class warfare of the Democratic left and their water carriers in the media.  After three and a half years of chronic unemployment, a moribund economy, skyrocketing deficits a weakened nation on its knees both domestically and abroad, and the overwhelming evidence that the President is indeed the radical ideologue that conservatives warned he would be:  it is both dumfounding and downright scary to think that the President even has a shot at re-election.  His numbers should be in the basement, yet polls show him as being competitive if not slightly ahead of Mitt Romney.

By allowing Obamacare’s trampling of the Constitution to stand and leaving the fate of the republic to the whims of a fickle and pliable electorate, Chief Justice Roberts is  playing Russian roulette with the republic.  God help us. 

          The Iron Lady        
I wasn't really sure I wanted to see Meryl Streep’s rendition of Margaret Thatcher in The Iron Lady.  The little I had read about the movie in pre-release reviews made me suspicious that it was going to be another left-wing hatchet job.  It was understandably causing a furor in the UK because of the film’s setting and approach, portraying the prime minister’s otherwise remarkable and admirable career as a series of flashbacks in the mind of an ailing, demented Margaret Thatcher.  Throughout the movie she is shown having hallucinatory conversations with her long deceased husband Dennis, hardly a respectful and dignified portrait of one of the great world leaders of the twentieth century.



Despite the screenplay’s uncomplimentary setting, it portrayed Margaret Thatcher’s life and career in very positive terms: Her humble beginnings as a grocer’s daughter, being taught at a young age to not follow the crowd, to stand up for your convictions in the face of criticism, to stick to your ideas not because they are popular but because they are right, and to persevere in the face of adversity, fierce and unfair criticism and even violent opposition.

That is the type of spine that was needed in the second half of twentieth century Britain, a nation in moral and economic decline, in the stranglehold of debilitating social welfare policies and corrupt trade unions, self serving politicians resorting to class warfare and demagoguery, claiming to stand up for the poor and the little guy, but really accomplishing nothing other than increasing the intrusive scope of government and dependency.  Sound familiar?

The unfolding scenes of the movie caused me to remember and relive the transformative decade of the 1980’s, when great leaders like Margaret Thatcher and Ronald Reagan faced fierce opposition and blistering criticism for the stands they took for conservative principles of individual freedom and responsibility.  She did what was required to turn around a nation in decay, stating “Yes, the medicine is harsh, but the patient requires it.” Throughout the movie I found myself muttering, “Oh, how we desperately need leaders like that today!”

I am not sure about the screen-writer's intentions in portraying Margaret Roberts Thatcher as frail and ailing, slipping into dementia.  It certainly seems disrespectful, particularly given that she is still alive.  Whatever the writer’s intentions, I personally choose to view this portrayal as appealing, perhaps not in political terms, but definitely in theological terms. God created us to love and serve Him, giving each of us a calling and mission. In the movie, a young Margaret Roberts says, “One’s life must matter”.  Toward the end, an elderly Margaret Thatcher states, “All I wanted was to make a difference.”  Indeed, she did, and the world should be grateful.  But in the end, no matter what we accomplish, this life is fleeting.  We are frail and finite; we decline and, at the time of God’s choosing, we die.  Whether we achieve great things like Margaret Thatcher, or lead humble and obscure lives whose impact is limited to family, friends and acquaintances, our calling is to be faithful to Him.

          Class War??? Elect “Progressive” Democrats???        
THE FIRS WEB SITE I GO TO EVERY DAY IS COMMON DREAMS.  I DON’T READ EVERYTHING BECAUSE I HAVE OTHER WEB SITES TO CHECK OUT, BUT I TRY TO FIND WHAT SPEAKS TO THE CRISES IN OUR WORLD TODAY AND WILL HAVE A UNIVERSAL AND HUMANISTIC APPEAL TO THE READERS OF MY BLOG.  AS HAPPENED […]
          Foucault, Power, Truth and Ecology        
Dan Bednarz brings together Foucault's theory of power with an ecological theory of power. I tried to do the same in my DOE (demonstration of expertise), with equally limited success. Aside from his crazy run-on sentences, Bednarz stab at this synthesis is worth read through.


Understanding the interplay of power[i],[ii] identity, and social change is critical to those who recognize that modern societies are at the limits to growth, in ecological overshoot[iii] and undergoing a first phase reaction of economic contraction;[iv] disintegration of modern finance, as evidenced by massive corruption and wealth destruction;[v] and political upheaval[vi]. While responses to these dilemmas can take the form of involvement in community localization, disengagement from modernism, studying yoga and Zen Buddhism, shrugged shoulders, political activism, or focusing on one institution –like health care, education, transportation, public banking, or the food supply, they all contain layers of nuance involving the relationships among power, identity (personal and collective) and social change.   
I want to speak to those who feel, as the cultural, thermodynamic and biophysical clocks enter the eleventh[vii] hour,[viii] either confounded or bludgeoned and “powerless” facing the deep-seated cruelty, incapability and intransigence of modern civilization to recognize overshoot and the limits to growth. I speak also to those who have a seemingly contrary reaction: flickers of intrepidness and hope despite recognition of enormous obstacles and dilemmas. This essay in addition is addressed to health professionals, most of whom do not comprehend overshoot and the limits to growth but find themselves in hierarchical bureaucratic systems that will increasingly malfunction and are susceptible to punctuated collapse[ix] or “failure cascade”[x] â€“which will present the best opening for fundamental change- as the world lunges into degrowth.
Almost all contemporary governments are ignoring or misinterpreting economic contraction, resource scarcities and biophysical crises and dilemmas by intensifying their servility to the neoliberal[xi] model of society, which operates in terms of debt-based economic growth; class exploitation; and fundamentalist faith in “The Market,” where individuals are told “there’s no such thing as society” and, therefore, they are free to be “entrepreneurs of [themselves]”[xii][xiii] â€“and are personally to blame if they fail to climb an economic ladder of  opportunity[xiv]. Those cognizant of ecological dilemmas realize this system cannot be resuscitated and is in fact beginning to break apart. They realize that modern culture remains captive to the neoliberal[xv]political/economic/cultural paradigm as it produces further ecological destruction, increasing socioeconomic inequality – allegedly to revive the economy, a side “benefit” is the spoils of class warfare- and proceeds with the temporarily successful privatization of public goods and services, social control measures of secrecy in government policy[xvi] making[xvii] and embracing embryonic[xviii] totalitarianism[xix] in the guise[xx] of protecting[xxi] the homeland.[xxii]
Simultaneously, neoliberal governments delude themselves[xxiii] and propagandize their citizens that this corporatocracy[xxiv] is not just the best option, but also the only feasible model of governance in the modern world. Since they believe the status quo offers the only way forward, corporatocracy members regard themselves[xxv] as the select evolutionary elite[xxvi] to manage[xxvii] 21st century society.[xxviii] The opposite is the case;[xxix] and this will become manifest even to them as, for example, the power of climate change, water scarcity, ocean acidification, nuclear disaster[xxx], bee population die-off, peak oil (immediately and directly through its impact on the economy and finance), etc. mounts and proceeds to undermine neoliberal shibboleths –as well as the neoliberal “Masters of the Universe” collective identity- about how the world works.
Neoliberal ideological hubris is built upon the modernist mythology that human’s ability to fashion the social world is infinite, the earth’s resources are essentially limitless and its biophysical systems are passive and resilient vassals absorbing industrial society’s wastes and toxins. This is a colossal conceit as the further we go into overshoot and hit against resource limitations the more inept, desperate and downright socially and ecologically destructive neoliberal policies become[xxxi] and the fewer options modern culture has to reconcile its practices with ecological realities.
As things look, neoliberal governments will continue to do their utmost[xxxii] â€“that is, use their waning but still potent power- to preserve the current political/economic hierarchy and ecologically destructive social order.[xxxiii]However, their power is not stable, nor is it insurmountable and -this must be stressed- it does not derive exclusively or primarily from cultural and historical phenomena, such as media propaganda and other forms of rhetoric and symbol manipulation, institutional inertia, incentives and rewards, tradition, appeals to fear and xenophobia, vested interests, and the implicit threats of surveillance and state sanctioned violence.
To make my argument requires a brief tour of how social science has reflected cultural ideas about power and how Michel Foucault, in his mid to late career writings, challenged the conventional view, arguing “power is everywhere,”[xxxiv] regarding the location and function of power in society. Foucault’s concept of power is then synthesized with ecological theory to recognize resource scarcity and biophysical forces as agents (of power) shaping personal and collective identity and proscribing the possibilities for social change.
From the conventional behavioral viewpoint, Max Weber[xxxv] writes, “Power is the probability that one actor within a social relationship will be in a position to carry out his own will despite resistance…” from another actor. Simply put, power is the ability of actor A to compel actor B to do something actor B would prefer not to do, all things being equal. “Authority” connotes legitimate power; “coercion” indicates the illegitimate use of power, ultimately through the threat or application of harm or violence.[xxxvi] In Weber’s view power is a force that actors and institutions possess and at times use to assert their will upon others with less or no power. The implication is that power is a tool or resource, not a constitutive feature of all interaction.
Foucault challenges the received understanding of power, where it exists and how it functions. He writes,
We must cease once and for all to describe the effects of power in negative terms: it ‘excludes’, it ‘represses’, it ‘censors’, it ‘abstracts’, it ‘masks’, it ‘conceals’.  In fact power produces; it produces reality; it produces domains of objects and rituals of truth.  The individual and the knowledge that may be gained of him belong to this production[xxxvii].
Cole summarizes in plain English Foucault’s  â€œpower is everywhere” thesis:
Foucault explains that all social relations -between persons and between people and institutions- are imbued with power relations. Wherever there are points of contact between persons, or between persons and institutions, power relations -which is to say, force relations -exist. Power exists in the spaces between us. It is present in all our interactions. Power, as it exists in power relations, is dynamic. Power is not permanently possessed by any one actor or institution. It cannot be protected or guarded. Rather, power is constantly in circulation -always in adjustment, as our interactions with one another take place in time. [xxxviii]
Critically, in this conception power is unstable and is –theoretically- up for grabs whenever people interact. Social reality is, after all, merely a contingent human arrangement; that is, socially shared definitions of situations where people are expected to behave in terms of the established “rules of the game” of social organization and human interaction.[xxxix] In short, an actor’s sense of power -or powerlessness- and, also, the individual’s identity –identity motivates people[xl]- rests upon the rules she believes to be governing social interaction. Change the rules[xli] and you change the power relations and identities among actors. Admittedly, changing the rules that define the situation is in many social interactions not at all easy, and in any given instance it may prove all but impossible to do. Nonetheless, Foucault’s point is that the essence of power is a socially constructed definition of the situation with –again, simplified- negotiable and unstable rules.[xlii]
The rules of a social situation define what identities are acceptable to display, that is, what an individual can (openly) think, feel, say and do. So when people challenge or resist rules, they take on an oppositional identity, which undermines social reality and established power relationships; and this is why seemingly trivial indiscretions or objections to authority or rules are often severely punished. Put differently, the instability of the definition of the situation -something voicing protest, offering criticism, satire or “inappropriate behavior” can expose (think of George Carlin’s humor)- explains why governments and all large organizations engage in propaganda and severe punishment: Is Edward Snowden -and Bradley Manning- a criminal and a traitor? Is he a whistleblower doing a public service by exposing unconstitutional activities by the US government? Is he something else?[xliii]Or is the question of his character itself not the right one to be asking?[xliv]
Pickard notes,
Insofar as those [definitions] can never be fixed, then, power relations are not and cannot ever be inevitable, unchanging, or unalterable … Power is not seen to radiate in a single direction [as with Weber’s conception] from a specific source, and is not solely a matter of force or coercion, but permeates every aspect of social life, exercised from an infinite multiplicity of positions. People, then, are not so much victims of power, as vehicles…[of its application].[xlv]
 From this insight that power is relational, not fixed in roles or institutions, Foucault argues that cultural “truth”-which in his view is always associated with dominant, legitimated knowledge- is socially constructed. That is, the relationship of “power/knowledge/discourse” (derived from an episteme or paradigm which organizes collective thought) like neoliberalism has power relationships encoded in its dogma. So “a rising tide lifts all boats” connotes the legitimacy of massive disparities in wealth distribution, and “There Is No Alternative” implies the Borgism “all resistance is futile.” And if people believe all resistance is pointless then power appears absolute, ones identity is subservient and tightly constrained and political opposition need not be considered.
Foucault writes:
Truth is a thing of this world: it is produced only by virtue of multiple forms of constraint.  And it induces regular effects of power.  Each society has its regime of truth, its “general politics” of truth: that is, the types of discourse which it accepts and makes function as true; the mechanisms and instances which enable one to distinguish true and false statements, the means by which each is sanctioned; the techniques and procedures accorded value in the acquisition of truth; the status of those who are charged with saying what counts as true[xlvi].
Rainbow adds: â€œThese ‘general politics’ and ‘regimes of truth’ are the result of scientific discourse and institutions, and are reinforced [and always threatened by the possibility of resistance] constantly through the education system, the media, and the flux of political and economic ideologies.”[xlvii]
Again for emphasis, this is why the use of propaganda, control of narratives, and the suppression or exclusion of counter-narratives and bodies of knowledge/discourses -like realistic discussion of peak oil or the limits to growth- from consideration in mass media, businesses, medicine and higher education is critical to perpetuation of established regimes of truth (which are rules for the definition of situations) and power relationships. Dominant institutions are not seekers of truth, they are in charge of allocating imprimatur to “legitimate discourses” and fields of knowledge, which also means isolating or suppressing bodies of knowledge that threaten established constructions of social reality and power relations. (This explains the cluelessness of government, business, medicine, the media and higher education as we enter degrowth –fear of the unknown, vested interests and the decadence evidenced by massive corruption pretty much round out the model.)
Foucault’s thoughts on power developed in the 1960s and 1970s, and, according to Pickard, are tinged with anthropomorphism and modernism, and therefore lack the contributions of ecological theory. For example, Cole’s summary of Foucault’s work, cited above, holds that power is present in all “contact between persons, or between persons and institutions…” Put differently, Foucault’s view, for all its departure from convention, begs the question, “Where do the rules come from?”
To supplement this social construction of reality perspective, Pickard argues that all ecological science –which he refers to as complexity theory- shares the premise that humans, nonhumans and environments are interconnected. That is, they are networked agents exercising power -force- in the construction of social reality. This suggests, argues Pickard, that power in human affairs should be thought of as social, a la Foucault, and ecological.
Pickard writes:
Modern notions of agency are not only insufficient to the task of acknowledging that humans exist within material, ecological environments, but because their binary construction [power seen as zero sum] serves to limit access to agency [power], they also reinforce Modern power relations that have legitimized the discrimination of those who are constituted as non-agential [e.g., women, ethnic minorities, animals, children, low wager earners, “the environment,” and so forth] (see footnote 45).
Because a relational power is necessarily dispersed throughout every relationship, and because it constitutes nonhumans and environments as well as humans, such a relationality implies a radicalness that even Foucault did not acknowledge. In this sense, a more radical relational agency recognizes that humans, nonhumans and environments are all participants within relations of power [they all contribute to the definition of the situation and identity formation]. Foucault’s thought both implies a radical relational agency, and yet, does not quite acknowledge it (see footnote 45).  
At this point we can ask, so what? Is this merely academic autoeroticism? It’s that and more.
For example, Pickard’s formulation helps us ask questions (readers will think of others, and may reject these) as degrowth tightens its grip on society:
  1. Can this formulation of power aid people to remain sane[xlviii] as they undergo, and observe in others, changes in personal and collective identity?
    1. The differences between a growth-based modernist identity and a sense of self that is rooted in an understanding of ecological theory are many and profound.
  2. How can this conception of power inform a cultural narrative that explains why degrowth is occurring?
    1. How can it guide us to develop strategies to both overcome neoliberalism –a negation of the present- and live within ecological boundaries –an affirmation of what is emerging?
    2. How can this narrative help to ameliorate identity crises and enable personal and collective identity transformations?[xlix] In other words, taking care of oneself is not narcissistic but healthy[l].
    3. What does entering into degrowth mean for the possibility of some form of genuine political/economic democracy[li]?
      1. How to prevent neoliberalism from transforming into a neo-feudal, totalitarian, authoritarian, or non-egalitarian dystopia?
Pickard goes on,
The importance of recognizing that humans exist in relationships with nonhumans and environments is that it extends a relational agency to include not only the limits imposed by [human] power relations, but also recognizes that there are material, ecological limits on human power relations [e.g., peak oil, climate change, and so forth]. While Modern systems of thought are characterized by the recognition that Man is a natural being, such systems of thought nonetheless constitute human beings as superior to Nature [faith in technological fixes, regarding Nature as passive, whether to be exploited or protected] and, hence, as distinct from Nature. In this sense, the emergence of Man [the Enlightenment] did not include a recognition that humans are bound by ecological limits. (See footnote 45)
For illustration, let’s ponder the current cultural hegemony of neoliberalism and the biophysical reality of degrowth. This reveals two diametrically opposed forces at work in the social world, the first of which pales in strength to the second:
  • Neoliberalism currently has massive power –“regimes of truth”- in the cultural/mythological and political/economic dimensions. A sociologist laments,  â€œWe face a system that is now much more integrated, and dominant groups that have accumulated an extraordinary amount of transnational power and control over global resources and institutions.”[lii]To be fair, there are also critics and observers who believe that neoliberalism is in decline,[liii] and many who know it’s moribund but marvel that its power persists[liv].
  • However, the “amassed power” of neoliberalism is merely a social construction of reality –or collection of definitions of situations. Indeed, peak oil and other ecological forces, following Pickard’s thesis, are undermining neoliberalism’s cultural and political power and producing degrowth –the situations in Greece and Egypt are illustrative. This juxtaposition is well known among those who understand the limits to growth and ecological overshoot, but baffling to those unaware of ecological theory.
Briefly, neoliberalism is capable of tremendous devastation as it succumbs to its many contradictions and arrant incompatibility with a social world entering degrowth.
Let’s consider an historical case to demonstrate Pickard’s thesis, which I hope will be eye opening for those readers unaware of the ecological dimension of power in shaping human society.
Thomas Mitchell, in Carbon Democracy: Political Power in the Age of Oil[lv]argues that the use of coal to build industrial society fashioned a social context for the diffusion of political power and the spread of democracy, while the exploitation of oil has had the opposite effect of fostering a social construction of reality that concentrates political power, neoliberalism is the current manifestation. Mitchell’s analysis shows how the fact that coal had to be dug from the earth and shipped via rail set up a relationship between capitalists, labor and coal which allowed workers to exercise significant control over the extraction and shipment of coal (the primary source of energy at the commencement of the industrial revolution). Resistance to capital exhibited labor’s ability to align with the physical force, which labor could provide, needed to extract and use coal. This in turn enabled labor to make successful economic demands of capitalists for a more politically and economically democratized life. In contrast, the fact that oil is pumped out of the earth and then sent through pipelines onto giant tankers allowed power to be concentrated in the clutches of political/economic elites, both governments and corporations, who typically worked in tandem.
Today, the supremacy of neoliberalism ultimately rests, if one accepts Pickard’s thesis and my interpretation of Mitchell’s book, upon the flow of oil,[lvi] not on the ephemera of “accumulated power,” which treats a fragile contingent social construction of reality as virtually immutable.
One astonished reviewer, whom I quote because he is not a peak oiler or otherwise steeped in ecological theory, summarizes Carbon Democracy this way. He describes this book as:
a history of the relationship between carbon-based fueling sources and modern political systems… and after reading it, it’s hard to imagine thinking about political power the same way again.
Everything in our politics flows through dense carbon-based energy sources, and has for three to four hundred years.[lvii]
Carbon Democracy, combined with Pickard’s synthesis on power confirms what those who grasp overshoot and limits to growth already know, either implicitly or explicitly about power and politics. And it opens the door for mainstreamers and fence sitters to understand what is occurring in the social world in a radically different manner that can give them new identities and strategies to simultaneously accept degrowth and overcome neoliberalism.
Let me close with a caution. First, at present everyone’s identity is subject to crisis. Numerous surveys indicate growing numbers of Americans suffering from high stress, depression, and other mental illnesses, which sociologically indicates identity crisis. We see that collective and personal identities are subject to significant modification as degrowth unfolds. Marshall McLuhan, always good for a reprise, wrote years:
When things come at you very fast, naturally you lose touch with yourself. Anybody moving into a new world loses identity…So loss of identity is something that happens in rapid change.[lviii]
Awareness that natural forces are changing society is a great advantage, yet it places those who know it on a psychological tightrope. They are living in two social worlds: one that is passing and the other inchoate and to varying degrees unknown and potentially threatening. The passing of the growth-based system cannot be halted –this is where the neoliberal identity is trapped in morbid resistance and denial. Those living in two worlds are tasked to fashion “truthful existence”[lix] identities, which ideally are characterized by lucidity, flexibility and strength in sync with degrowth, while simultaneously using strategic –perhaps pseudo- identities to triumph over neoliberalism[lx],[lxi] as it continues to demand privilege[lxii] for the 1% despite a shrinking economic pie.


Notes and References
[i] Power is a part of all interaction among humans. This is a controversial claim to conservatives and many liberals, who find the discussion of power disturbing to their consensus –as opposed to conflict- conception of how society works.
[ii] To be sure, this examination of sociological power and social change is a minute contribution, if that, to the topic. The hope here is to reorient and open thinking to possibilities and perceptions dimly visible. Many readers will be familiar with my argument.
[iii] Catton, William. Overshoot: The Ecological Basis of Revolutionary Change. Urbana: University of Illinois Press. 1982.
[iv] Short, Doug. “Vehicle Miles Driven And the Ongoing Economic Contraction.”Business Insider, July 25, 2011. http://www.businessinsider.com/vehicle-miles-driven-and-the-ongoing-economic-contraction-2011-7#ixzz2XhEhoD9o.
[v] Financial chaos is actually the expected outcome of the end of a debt-based system.
[vi] Egypt Oil and Gas. â€œEgypt and its looming energy crisis.” ND. http://egyptoil-gas.com/read_article_issues.php?AID=26.
Sharif Yamani. “Egypt endures fuel crisis.” Asharq Al-Awsat, June 27, 2013.http://www.aawsat.net/2013/06/article55307370.
[vii] Emmott, Stephen. “Humans: the real threat to life on Earth.” The Guardian,June 29, 2013.http://www.guardian.co.uk/environment/2013/jun/30/population-growth-wipe-out-life-earth. Emmons writes:
“The UN Framework Convention on Climate Change, whose job it has been for 20 years to ensure the stabilisation of greenhouse gases in the Earth’s atmosphere: Failed. The UN Convention to Combat Desertification, whose job it’s been for 20 years to stop land degrading and becoming desert: Failed. The Convention on Biological Diversity, whose job it’s been for 20 years to reduce the rate of biodiversity loss: Failed. Those are only three examples of failed global initiatives. The list is a depressingly long one.”
[viii] I add that those who see their response as that of localization and the avoidance of politics are misunderstanding the nature of power and the fact that the present indifference of the dominant system to localization efforts is likely to change as we go further into overshoot and the ramifications of hitting the limits to growth. See footnotes 60 and 61, below, on the Trans-Pacific Partnership Trade Agreement for the threat to the localization of economies it may pose.
[ix] Tainter, Joseph. The Collapse of Complex Societies. New York: Cambridge University Press. 1988.
[x] Fabius Maximus. “Is America experiencing a failure cascade?” Fabius Maximus, July 10, 2013. http://fabiusmaximus.com/2013/07/10/failure-cascade-52317/.
Wikipedia, “Cascading failure.” http://en.wikipedia.org/wiki/Cascading_failure.
[xi] This doubling-down is not an exclusive feature of neoliberalism. Barbara Tuchman, in A Distant Mirror: The Calamitous 14th Century.  (NYC: Ballantine Books, 1978) writes, “To admit error and cut losses is rare among individuals, unknown among states.”
[xii] Foucault, Michel. The Birth of Biopolitics: Lectures at the Collège de France, 1978-79. Translated by G. Burchell. New York: Palgrave Macmillan. 2008: Pg. 252-253. Foucault viewed this self-entrepreneurship as at the core of neoliberalism’s attachment to “rational-choice” theory and faith in “free markets.” Parenthetically, it explains Margaret Thatcher’s, “There is no such thing as society,” remark. In fact, from Foucault’s perspective it makes far more sense to argue, “There is no such thing as an individual.”
[xiii] For an example of this we turn to the always-reliable weathervane of the neoliberal worldview, Tom Freidman. His July 28, 2013, New York Times Op-Ed, “Welcome to the Sharing Economy,” illustrates this “you’re an entrepreneur of yourself” because  “there is no society” to bear responsibility for the fact that there are 15-20 million un and under-employed souls in contemporary America. In short, he encourages people to become “micro-entrepreneurs” earning money “In a world where, as I’ve argued, average is over â€” the skills required for any good job keep rising — a lot of people who might not be able to acquire those skills can still earn a good living now by building their own branded reputations, whether it is to rent their kids’ rooms, their cars or their power tools.”
[xiv] President Obama’s latest rhetorical turn of phrase to craftily blame individuals can be found here: “Building Ladders of Opportunity.” The White Househttp://www.whitehouse.gov/omb/budget/factsheet/building-ladders-of-opportunity.
[xv] I respect the views of those who feel neoliberalism is the latest bogyman in what they see as the never-ending conflict: humans inevitably dominate one another. This requires elaborate ideological cover to make the dominated willingly internalize the rules that oppress them. On the other hand, humanity’s problem may be that of hierarchy. See:
Thayer, Frederick C. An End to Hierarchy! An End to Competition! Organizing the Politics and Economics of SurvivalNew York: New Viewpoints, 1973.
[xvi] Ahmed, Nafeez. “Pentagon bracing for public dissent over climate and energy shocks.” The Guardian, June 14, 2013.  http://www.guardian.co.uk/environment/earth-insight/2013/jun/14/climate-change-energy-shocks-nsa-prism.
[xviii] Post by “b.” “NSA – Recording One Billion Phone Calls Per Day.” Moon of Alabama, June 29, 2013. http://www.moonofalabama.org/2013/06/nsa-recording-one-billion-calls-per-day.html.
[xix] Augstein, Jakob. “Obama’s Soft Totalitarianism: Europe Must Protect Itself From America.” Spiegel Online, June 17, 2013.http://www.spiegel.de/international/world/europe-must-stand-up-to-american-cyber-snooping-a-906250.html.
[xx] Miller, Tom. “Creating a Military-Industrial-Immigration Complex: How to Turn the U.S.-Mexican Border into a War Zone.” TomDispatch, July 11, 2013.http://www.tomdispatch.com/blog/175723/.
[xxi] Dougherty, Danny. “Obama’s crackdown views leaks as aiding enemies of U.S.”  McClatchy News, June 20, 2013.  This story is about Obama’s Insider Threat Program, which is reminiscent of how East Germany’s State Security, The Stasi, had citizens spying on each other.http://www.mcclatchydc.com/2013/06/20/194513/obamas-crackdown-views-leaks-as.html#.UdBKkRZ3vw4.
[xxii] The NSA’s collecting of phone and internet records of Americans is a violation of the 4th Amendment to the U.S. Constitution; this is why the traditional left-right political divide is not a guide to reactions to this conduct.
[xxiii] In the parts of the United States capitol city of Washington, D.C. frequented by federal government employees, lobbyists and tourists all appears to be booming and prosperous. The fact that the child poverty rate in the city surpasses that of Mexico is, I propose, an irrelevancy to Congress and the President.
See: “The Poverty Factor.” Capital Kids Report. http://capitalkidsreport.org/the-poverty-factor/#.
[xxiv] Wikipedia. “Corporatocracy.”http://en.wikipedia.org/wiki/Corporatocracy.
[xxv] For a good read on fault lines in the workings of “Trans-partisan Permanent Washington,” see:
Sirota, David. “GOP insurrection heats up over surveillance.” Salon.com, July 22, 2013.http://www.salon.com/2013/07/22/gop_civil_war_leaders_target_rising_star/.
[xxvi] Tett, Gillean. “Stop worrying and breathe the zeitgeist in America.”Financial Times, July 4, 2013. http://www.ft.com/intl/cms/s/0/c5ff7470-e4be-11e2-875b-00144feabdc0.html#axzz2YB1FfLUs.
Tett observes, of the economic optimism she found at the Aspen Ideas Festival: “Now this zeitgeist … is that of an ultra highly privileged elite – and one that is becoming increasingly detached from the poorer parts of America, as economic polarisation grows.”
[xxvii] McCoy, Alfred W. “Surveillance dystopia looms.” Asia Times, July 15, 2013. http://www.atimes.com/atimes/World/WOR-01-150713.html. McCoy writes about the Pentagon’s plans for total control: “In the stratosphere, close enough to Earth for audiovisual surveillance, the Pentagon is planning to launch an armada of 99 Global Hawk drones – each equipped with high-resolution cameras to surveil all terrain within a 100-mile radius, electronic sensors to intercept communications, and efficient engines for continuous 24-hour flight.
“Within a decade, the US will likely deploy this aerospace shield, advanced cyber-warfare capabilities, and even vaster, more omnipresent digital surveillance networks that will envelop the Earth in an electronic grid capable of blinding entire armies on the battlefield, atomizing a single suspected terrorist, or monitoring millions of private lives at home and abroad.”
Comment: I’m not concerned about this totalitarian mentality succeeding; but it can do untold damage and destruction before it fails. Instead, I think this passage illustrates that neoliberal elites will rely on the tools of repression and oppression, as they remain ignorant of the significance of the increasing power of biophysical, thermodynamic and resource scarcity forces in human societies.
[xxviii] Chicherio, Barbara.  â€œTrans-Pacific Partnership and Monsanto.” Z-Net,June 26, 2013, http://www.zcommunications.org/trans-pacific-partnership-and-monsanto-by-barbara-chicherio.
[xxix] Rich, Frank. “The Stench of the Potomac.” New York Magazine, August 6, 2013. Ri
          By: burt        
RRM 19th century class warfare made the union and political classes very wealthy.
          By: RRM        
Mighty Kites <blockquote>I guess as long as the serfs keep toiling away in the fields without complaining too much, you’ll be happy</blockquote> That's the way, make it all about 19th century class warfare, like everything else. The kind of injury that ruin your life is the kind that keeps you off work for a MONTH (or 3), and then your boss has to find light duties for you because you physically can't do what you were doing before
          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:

Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.

Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.

Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.

I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.

In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.

Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?

Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.

Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …

Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.

Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?

Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.

Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.

One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.

So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.

Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …

Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?

Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …

Dr. Schirrmacher: Wegen der oberen 1 %.

Wagenknecht: … The upper class has to take the losses.

Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.

But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.

So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?

Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?

Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.

The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.

It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.

But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.

Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?

…

Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.

Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.

But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.

Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.

Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.

What they call “class war” is simply society trying to protect itself from the 1 %.

Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?

Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.

If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.

None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.

…

Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …

Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.

When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.

In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.

Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.

The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.

The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.

Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.

That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.

The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.

Dr. Schirrmacher: That is what you say about Europe?

Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.

Dr. Schirrmacher: But what is with the unions? Normally …

Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
….

Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau

Wagenknecht: You are insane … What do you say as a scientist to this question?

Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.

Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.

So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.

The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.

Prof. Hudson: Impoverishment.

Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?

….

Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …

Wagenknecht: Nein, albern hat er …

Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?

Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.

Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?

Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.

So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.

So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.

Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”

It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …

Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.

That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?

Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.

The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.

It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.

Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
…

Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?

Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.

Dr. Schirrmacher: Exactly that is what they did.

Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.

Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.

Prof. Hudson: You can’t provoke them.

Wagenknecht: Provoke you can, but …

Prof. Hudson: You can only replace them with a new generation.

Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.

Prof. Hudson: That is what Dr. Caligari said.

Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.

Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.

Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?

Dr. Schirrmacher: And why does Robert Harris? Did you read the book?

Prof. Hudson: Yeah, wonderful.

Dr. Schirrmacher: "Fear," Robert Harris

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at 6 % or 4 % per year, which economists were doing at that time. He thought that all the technology and power somehow would make all countries rich. I refused to make that calculation, even though when I joined the Institute I insisted that the one perk that I wanted was an HP 75 calculator that could calculate exponential growth. I told Herman that the only growth that is exponential is financial – the magic of compound interest. And the more compound interest grows, the more it slows the economy, like driving a car with the brake on.
 

 
So that is where we differed. It turned out that most of his clients ended up hiring me instead of him, and I ended up getting a collection of Tibetan art as a result, and buying enough real estate, so, I’ve never had to work ever since and could spend all of my time writing.
 

 
Prof. Hudson: You talked about rescuing the banks, and that is really a phrase for trying to rescue a whole financial growth function to somehow save debts that can’t be paid. The question is: Who is going to take the loss? It really is trying to keep the debt overhead in place, by making the public sector absorb all the losses of the banks that have made the bad loan. And beyond this, it is really an ideology – an ideology that somehow the debts can all be paid. And beyond that, there is something else. Saving the banks is a slogan …
 

 
Dr. Schirrmacher: Sahra Wagenknecht, did I get you right that you say they can be paid?
 

 
Wagenknecht: They can’t. Also vorläufig können sie immer wieder, aber irgendwann …
 

 
Dr. Schirrmacher: Wegen der oberen 1 %.
 

 
Wagenknecht: … The upper class has to take the losses.
 

 
Prof. Hudson: The bailout is not saving the banks. The banks could function very well the next day after a debt cancellation. You are saving the bank stockholders and the bondholders and the rich counterparties to the banks. You are saving the gamblers who have accounts with the banks, not saving the banks.
 

 
But there is something even worse. The slogan “saving the banks” means a program for the governments to be financially responsible, which means financially self-destructive. The bailout is forcing Greece to sell its public domain, its water and sewer systems, its land, its real estate, its buildings, to sell to private buyers who are going to borrow money at interest from the bank to buy these public assets, and to treat them like a toll road.
 

 
So in the broadest sense of the term, saving the banks means to achieve by financial terms what it took an army militarily to counter a thousand years ago. Saving the banks thus is destroying society. Is that worth the payment?
 

 
Dr. Schirrmacher: Very good and very understandable, but a question again. We can’t be too economic but … You say, you don’t save the banks. But what is, let’s say, my life insurance. What they say to me is that my bank has Staatsanleihen from …, at a normal average term too, so I would lose as an average person … I mean, by saving the banks, don’t they save me as well?
 

 
Prof. Hudson: No, that’s the trick that they are playing. For instance, in the United States the largest bank is Citibank. That was insolvent as a result of being one of the most abusive fraudulent banks with junk mortgages and similar gambles. The head of the Federal Deposit Insurance Corporation, Sheila Bair, said that she argued with the Obama administration saying that she could close down Citibank and save all of the insured depositors. She could have saved all of the basic banking functions.
 

 
The only people who would not have been saved would have been the gamblers at the top, on whom Citibank had written derivative gambles. It is as if in a horse race somebody goes to the casino and gambles, and then can’t pay their debt. The casinos say: We can’t operate at all, if the losers can’t pay what they owe. So, you – the government – have to levy a tax, to enable the losers to pay the winners.
 

 
It’s true that not everybody’s savings would have been saved under this plan. But normal operations would have been. And it’s the same with AIG, the Insurance conglomerate that was bailed out with $184 billion dollars. All this loss went through the London office making financial gambles, losing bets as to which way interest rates and junk mortgages would move. The government could simply have closed down AIG, taking it over and said: We are saving all of your normal insurance policies, we are saving all of your normal business, but the gamblers we are just not paying.
 

 
But in that case, Goldman Sachs would not have been paid $18 billion dollars. And Goldman Sachs had its representative Hank Paulson as Secretary of the Treasury. The Treasury was paying its private colleagues on Wall Street, instead of saving the normal depositors. The intention of this bank bailout is to wipe out the normal depositors and only save the rich of the top. Pretending to save the poor, the working class,and the middle class, they want to save everything for the top 1%. That is what they did with Citibank, and that is what they did with AIG. Citibank makes money by lending to people like Sam Zell, who would buy a company, look at the pension funds or Employee Stock Ownership Plan (ESOP), and empty them out to pay his creditors. So, what the government is saving are the parasitic functions of the banks.
 

 
Dr. Schirrmacher: To make it clear, and ask Frau Wagenknecht too: It could be possible not to save the banks, und würde trotzdem nicht diese Lebensversicherungen und Alters … das kann man trennen?
 

 
…
 

 
Dr. Schirrmacher: Nein, that is very important for you to understand that people like me, I take me as a durchschnittliche …, believe in a kind of empirical or scientific rationality and all this stuff. And if I am told by Hans Werner Sinn or other people, der frühere Regierungssprecher, Ulrich Wilhelm, you have to save the banks because then you save your life assurance, for example, then I believe it, and everybody believes it, because you say: Well, they are mathematicians or whatsoever.
 

 
Prof. Hudson: What if I say: You have to make me rich in order to give me an incentive not to wreck society. What the banks are really saying is that: We will wreck the payment system, and we will stop paying, and we will cause a crisis if you don’t give us what we want. We are holding you hostage.
 

 
But all you really have to do is take them over and replace them with other people. You save the basic banking and insurance functions. There are plenty of good assets in there. Even junk mortgages are worth something. They are worth enough to save all of the normal activities for 90 % of the population. The losers in this case would only be the 10 % at the top … And all these gains for the last 20 years have been to the top 10 %. They would lose their gains – but there is enough to pay everybody else.
 

 
Dr. Schirrmacher: Normal understanding is, politicians need majorities, and not the 10 % of the top.
 

 
Prof. Hudson: You talk about empirical studies. If the statistics were publicized to show what I am talking about, everybody would see in chart form that there is enough money there. The Federal Reserve has them. There are many statistics available, but the newspapers don’t publish them. They find it politically incorrect to do so.
 

 
What they call “class war” is simply society trying to protect itself from the 1 %.
 

 
Dr. Minkmar: One key argument in your system of thinking is the role of central banks. And now today we think that central banks are there to supervise things and see that everything runs smoothly. But what would you advice central banks to do?
 

 
Prof. Hudson: Central banks began to be created in 1694 with the Bank of England, and down to the Federal Reserve in the United States in 1913 their function was to finance government budget deficits by printing money. All governments over time run deficits – at least, most of the time – because that is how they supply the economy with the purchasing power and the money it needs to grow. The role of a central bank is to create money to finance the deficit.
 

 
If it does not do this, then the commercial banks end up performing this function. However, the commercial banks creating credit on their own computer keyboards have a different role from that of the central bank. When the central bank finances government spending, this is supposed to promote growth, full employment and industrialization. But that is not the object of a commercial bank. Banks, in the first instance, make loans against property already in place – mainly real estate and also the buyout of entire corporations. So they provide credit that bids up the price of housing, making it more expensive for workers. They also loan to buyers of commercial buildings, making it more expensive to do business, Takeover loans enable corporate raiders to bid up the price of stocks and bonds, making them yield less, so it costs more to buy a retirement income. And now, commercial banks are moving from finance capitalism to casino capitalism to make big gambles. They are essentially financing gambling. That’s what derivatives and “hedge fund” trading are.
 

 
None of this funds industrial investment. From the United States to Germany, almost all industrial capital formation is now funded by the retained earnings of corporations, not by bank borrowing. Even the stock market does not fund new direct investments. It has become a vehicle for corporate raiders to go to the banks to borrow the money, to buy a corporation on credit with junk bonds, retire the stock, and use the corporate profits to repay the banks – and then try to steal for themselves the pension funds, or sell off the assets, or just work the labor force more intensively; longer hours, outsource labor and move to the un-unionized labor. So the banks are no longer part of the industrialization process; they are part of the de-industrialization process. This is applauded as the post-industrial economy.
 

 
…
 

 
Dr. Minkmar: You were talking about Europe as being the new third world as a model for politics …
 

 
Prof. Hudson: In the 1970s and 80s, the International Monetary Fund imposed austerity on indebted countries. The conditions were that if the countries did not pay their foreign debts, they would be treated like Cuba or Iran, and made into pariahs in the international community. So, they were forced to sell off and privatize.
 

 
When I worked for Chase Manhattan Bank in 1964, my first job was to analyze the economies of Argentina, Brazil and Chile. My job was to calculate/estimate how much potential they could export and raise, one way or another.
 

 
In Latin America it could only be imposed at gunpoint, as you saw in Chile. So the first privatization, the first free-market model, was imposed at gunpoint in Chile under general Pinochet, under the direction of Henry Kissinger and the Nixon administration, and the University of Chicago Economics Department under Harberger and other operatives down there.
 

 
Once they did that, the next big test was the former Soviet Union. Unlike the West, the Soviet Union had no background in Marxism. They had no group that was familiar with Marx and Engels or classical economics. So in 1991 they immediately adopted the neo-liberal approach that said: We can promote millionaires by privatizing the property. Many friends of mine tried to go over and promote a more reasonable tax system. The post-Soviet economies after 1991 would have financed themselves by taxing natural resource wealth and real estate. But as soon as these good advisors would go over there, right-wing institutes like the Lincoln Institute or the World Bank would come and tell the mayors of a town: We’ll give you a million dollars in computers if you follow our system and give the assets to your insiders to create a new nomenklatura of vested property interests – specifically, rentier interests, who would issue stocks in their companies and sell them to U.S. and other foreign investors. The idea was to let the West buy out the key rent-yielding assets in the former Soviet Union, above all mineral rights and public utilities, as well as centrally located real estate.
 

 
The government would put a deposit in one of the banks of the nomenklatura. In the Loans-for-shares program in 1994, the banks right say: 100 million dollars to buy Yukos oil company. The government would redeposit the check in the bank, so that they got the company for nothing, that is, no cash of their own. And then, when the government did not repay the debt, the bank would get many billion dollars worth of an oil or mining company.
 

 
The Americans did this because they realized that if a kleptocrat could buy Russian resources for one cent on the dollar, they would be happy to sell it for two cents on the dollar. That made the Russian stock market the best performing market in the world from 1994 to 1997. Russia let itself be financialized.
 

 
Other parts in the Soviet Union did not have raw materials. So a more accurate dress rehearsal would be what happened in Latvia, where they imposed a neo-liberal paradise. As in Russia, the neo-liberals had a free hand as to how to design what they said would be an ideal economy. Their way of creating such an economy and its financial and fiscal system was to say: “Don’t set up your own banks. Let foreign banks create the credit on their own keyboards.” Labor in Latvia has to confront a 59% set of flat taxes on employment – taxes that together are 59%. The real estate tax is only 1%, based on the most recent appraisal of Latvian property, which was in 1917 just before the revolution. So, the result was the largest real estate bubble of all.
 

 
That is basically the neo-liberal plan for how to get rich in a post-industrial economy. A property is worth whatever a bank will lend, because without taxes the value of this economic rent became available to be paid to the banks as interest rather than as taxes. The value of the site’s location should have been the basis of public financing, as in America. It’s the basis for most localities to pay for their school systems. If you are not going to tax property, if you are not going to tax monopolies, if you are not going to tax finance, then you have to tax labor. That’s why you have a 59% tax on employment in Latvia.
 

 
The result was an economic collapse in Latvia, Lithuania and Estonia. The result is that one third of the Latvian labor force of working age between 20 and 35 emigrated or announced its intention to emigrate. They would go to countries like Ireland which also was being financialized. So the Baltics still, even last year, were celebrated by the Institute for International Economics, the Peterson Institute, which is a bank lobbyist in the United States, and by the applauder of Russian privatization, Anders Aslund, the Swedish neoliberal lobbyist. Latvia is applauded as a model for which Europe should emulate. So you can expect your wages to be cut by 30%, you can expect people will have to go into a lifetime of debt in order to buy housing. They will have to have to inherit money if they want to get an education.
 

 
Dr. Schirrmacher: That is what you say about Europe?
 

 
Prof. Hudson: I said, if you follow the Latvian model. This is the ideal. The basic principle when I talk to bankers is: You don’t know how far wages can be pushed down until somebody pushes back. And so far, nobody has pushed back.
 

 
Dr. Schirrmacher: But what is with the unions? Normally …
 

 
Prof. Hudson: The communist countries did not have unions because they were supposed to be one big union. So the working conditions in the Baltic States have the worst accident rates, the worst workplace conditions, and their workers report the most abusive treatment by their employers. The workplace conditions in the post-communist economies are much worse than those in the capitalist economies, where there has been a symbiosis between labor and capital, a symbiosis between the private sector and the government.
 
….
 

 
Dr. Schirrmacher: Just, I mean, off the record, but one of the advisers of chancellor Merkel is sometimes amazing, and he keeps telling this. He says: No, don’t write that. He says: It’s illegal, it’s against the treaty. I mean, that’s his last argument. So, I would like to … from scientific point of view. Frau
 

 
Wagenknecht: You are insane … What do you say as a scientist to this question?
 

 
Prof. Hudson: Let’s simply look at the empirical facts. Since 2008 you have had the largest monetary creation in the 20th century’s history. The central banks have fueled this money creation. In America alone they have added $13 trillion dollars to the federal debt by bank bailouts. Yet prices have remained quite stable. Wages actually have fallen for the last 30 years, despite the wave of asset-price inflation fueled by commercial bank credit.
 

 
Central bank economists talk about consumer price or commodity price inflation. But commercial banks fuel asset price inflation, by lending money against real estate, stocks and bonds already in existence. As they make credit terms easier, people need more access to bank credit in order to buy a house. They have to bid against other. So bank credit inflates real estate prices. The upshot is that now you have to take more years of your income to buy a home. In the United States, the average American worker now pays 40% of family income for housing, 15% of income more for other debt service on credit cards and student loans. Another 15% is for wage withholding, and about another 15 % in other taxes, including sales taxes. This means that only about a quarter of American workers’ income is available to be spent on goods and services. Bank lending has absorbed so much of the income of workers that money that is spent to pay the banks is not available to be spent on goods and services.
 

 
So the flip side of asset price inflation is debt deflation. More and more money has to be spent to carry the debt overhead. The problem is not central banks financing domestic government budget deficits. Every hyperinflation in history has come as a result of the collapse of the balance of payments. The Germans are most familiar with 1921, but they tend to forget that the Weimar inflation was a result of Germany trying to pay reparations abroad. They were ordered by the Allied powers to print Deutsche Marks not for domestic spending, not to run a domestic deficit, not to rebuild Germany, not to employ labor, but to throw reichsmarks onto the foreign exchange market to obtain the foreign currency to pay the Allies, so that the Allies could turn around and pay the arms debts for what they bought from the United States before entry into World War One. It was the collapse of the foreign exchange that caused the hyperinflation, not domestic spending. And Germany’s hyperinflation was not cured by the central bank creating less money. It was cured by setting up a triangular flow of international payments. American bondholders would lend money to German municipalities that would issue bonds. The municipalities would receive dollars, and turn them over to the Reichsbank. It then would issue German currency against this for local spending – using the dollars to pay the Allies. The Allies would pay America, and that would keep the circular flow going. But to do this, interest rates had to be held down in the United States, to make German and other European borrowing more profitable for international lenders.
 

 
The same thing happened in Chile, which is another textbook hyperinflation. Rogers wrote a book on the process of hyperinflation in France that also occurred in the 1920s. The classic study of German inflation is by Salomon Flink, The Reichsbank and Economic Germany. The book actually was printed in Germany at that time. The same thing happened in Russia in the 1990s. The Russia hyperinflation occurred as a result of the depreciation of the ruble. This was already determined in advance at the meeting in Huston, Texas, between the World Bank and the IMF and the other Russian authorities. All this was published at the time, even before break-up of the Soviet Union. So to talk about hyperinflation as if it is a domestic phenomenon is to ignore the fact that never in history has it been domestic. It always is a balance-of-payments phenomenon, associated either with war or a class war, as in Chile’s case.
 
Dr. Schirrmacher: Now, to leave that economical …, to go to the interpretation of what will come. So, when I get it right, what you say, and Frau Wagenknecht says it too, there will be a … Wir werden ärmer. Also der durchschnittliche Deutsche wird verarmen oder ärmer.
 

 
Prof. Hudson: Impoverishment.
 

 
Dr. Schirrmacher: Right. And not a revolution, not a moment where the society says no? That’s my question. But at the same time, what we are observing is that it is not only a change of the social standards of human beings in Europe but of the whole idea of democracy as well. This is something that strikes me most, which I would never believed. I must say, ten years ago, I would have said: conspiracy. And many like me would have said that the banks are so powerful and so on. Now, we start thinking whether “conspiracy” is the right word for it. And the same with the democracy, democratic question. I learned at school that the “Soziale Marktwirtschaft”, as we termed it, definitely requires Pluralismus, Demokratie, Partizipation, all that. But, and that is my question, are we, as Colin Crouch writes, postulating a post-democratic system? Is one of the prizes we have to pay for it, that democracy becomes weaker and weaker, and isn’t that a very dangerous development?
 

 
….
 

 
Dr. Schirrmacher: Und da hätte ich eine Frage, die auch ganz aktuell ist, an Michael Hudson, vielleicht more in a theoretical way. Our new president said apparently, it is ridiculous to protest against, how did he say it, the capitalistic system, or something like that. Es ist lächerlich …
 

 
Wagenknecht: Nein, albern hat er …
 

 
Dr. Schirrmacher: Albern, ja, another word, it’s like ridiculous. And there we are, the point of question is, after the end of the communism, there was the idea, there is the triumph of capitalism. And now the people who are very social saying, I am repeating what they said in Germany: Now we can have a chance really, we don’t need the money for Rüstung anymore, and for armies, and against the Soviet Union, and so on. And now, we are in the third phase, and that’s why the (spot) that is so interesting, is the question: There is no alternative. Nobody really likes it, many people suffer. But the idea is, they managed to get the system like die beste aller möglichen Welten, there is no alternative to that all. What do you say to that, and what do you say to this quote?
 

 
Prof. Hudson: It is very interesting that the destruction of communism, or what passed for communism in 1990, made possible the destruction of industrial capitalism. What you have today is not capitalism as it was known when I grew up. It is not the capitalism that was talked about by Adam Smith, Ricardo, John Stuart Mill or even Marx. It is something that is evolved into finance capitalism, that is going through a number of stages. Pension-fund capitalism is exploiting labor, not by hiring it to produce goods and services, but to dock savings and channel them into the hands of financial managers – to bid up stock market prices.
 

 
Dr. Schirrmacher: Is it not the case, that this system did exist in the 20s?
 

 
Prof. Hudson: No, it only existed since 1950s. That is when General Motors started its pension fund. Pension funds soon became the single largest purchasers of stock, pushing up stock prices. The major sellers of stock have been management insiders, and increasingly those exercising their stock options, selling them in effect to the pension funds. So, the function of labor was to provide pension fund savings to spur stock market gains for the managers that have been financializing industrial companies – and in the process, de-industrializing them.
 

 
So, I’d like to plug this into the earlier discussion you just had. When you use the word “post-democratic society”, that is a byproduct of the post-industrial economy, which essentially means a financialized economy. It also was post-modern, if you think of “modern” as what existed in the early 20th century in the Progressive Era. That was the Modern Era. We are now in a post-modern era. The pro-financial strategy is essentially an anti-government strategy. That is because every economy is planned by someone or other. Most economies throughout history have been planned by the government, or whoever controls it, whether it’s been the landed aristocracy or bankers. If the government does not do the planning, this function is forfeited to the banks. And that is where we are today. Just like the case in which, if taxes are cut and the government does not get the revenue, it is available to be pledged to the banks and capitalized on the debt.
 

 
So the planning process passes to the banks, and they claim that they are the brains of society. They say, there is no alternative. But they are not the brain; they are something alien to industrial capitalism. This is what the Saint-Simon and his followers discussed in the 19th century. It was discussed in every country. The financial strategy now is to prevent people from studying what this body of classical economics was. It sought to free society from interest. Today’s banks are playing upon anxiety and fear, like a high-pressure salesman threatening to bring on a collapse if industrial economies try to protect themselves. They say: “You have to make up your decision in a hurry, if you don’t do this, you are going to lose your money, you are going to lose this opportunity.” They try to make it appear that this not only is the only alternative, but that it will make you rich.
 

 
Banks have been saying this for 30 years. This is the first time in history that people have believed they could get rich by borrowing money to buy assets that are increasing in price, or that they may get rich by the hyperinflation of property prices, and by the stock and bond prices that bank credit has inflated. Banks have managed to prevent the government from regulating and preventing this hyperinflation – and they even have called it “wealth creation.”
 

 
It is really debt creation. Debt is a claim on the means of production, and on labor. It is not a process of real growth. So what banks are saying is that there is no alternative but to let debts grow, at compound interest. This means reducing wages, as more and more must be spent on debt service. This eats into corporate cash flow and profits. So more and more are siphoned off to pay creditors. Debt also eats into the government revenue, so that the government does not have enough to pay for social programs and pensions. It only has enough to bail out the banks on exponentially growing debt that can never been paid, mathematically. That is the empirical fact. All you have to do is draw a statistical chart of the growth of debt, and compare it to the growth in wages. And you’ll see …
 

 
Dr. Schirrmacher: How do you explain from a business point of view … I take the example of Dresden. I was in Dresden two weeks ago, and there they explained to me, the people I met from the city and from Volksbank and all these … They explained to me that Dresden, which I didn’t know, sold parts of their Stadtwerke and so on, and bought it back now because they realized that it was a mistake. I hear this from many, many other cities. Now, in my understanding of society, someone apparently made mistake here, the people who sold this, or at least, put the pressure. And normally, you would have to pay a price for making a mistake, and society would say: How could this happen? But the contrary is true, first of all, nobody discusses this, I can’t see it in den Städten.
 

 
That’s the first. And the second is, the made a mistake but became rich, from what I see. They are not sanctioned at all. So, I always ask you for the gesellschaftlichen Folgen. Isn’t this something what really is the most frightening result of this new era that things we once learned when we were kids, are not true anymore? The question of, it’s not that you are sanctioned when you make mistakes but that you can benefit in this regard?
 

 
Prof. Hudson: This is a question that I have discussed in Russia and China with their leaders. Fortunately, there is an alternative that they are well aware of. There is a way to recover the property that has been turned over to the privatizers. The answer is very simple: a windfall gain tax or a rent tax. If the land is been privatized, as it has been in China and Russia, all you have to do is tax the land’s value – the natural value, not the building value, but just the economic rent. You will recapture for the state the free lunch of economic rent.
 

 
The same principle applies to mines and fuel resources. You will simply have a mineral depletion tax that will recapture the value of what nature has provided freely. So the alternative is for the government not to tax profits, not to tax wages, not to tax income, but to tax economic rent. Because what the national income account pretends to be empirical, pretends to be “earnings” of the banks and other rentiers, is actually a transfer function – and often, outright theft.
 

 
It’s remarkable that French novelists realize this, such as Balzac who said that behind every great family fortune is a great theft. Economists don’t rise to the level of 19th century French novelists when it comes to understanding the economy.
 

 
Dr. Schirrmacher: So to get back to your outlook again, talking about Europe, we have another debate that is quite interesting, which I think might be important to see. The one debate is, Greece is a lazy country and …, a new nationalism. The other one which I hear from bankers, by the way, sometimes, is, they say it ganz leise: It’s all America. So, it’s a huge American conspiracy. And they say: Wir wissen auch, dass das System nicht funktioniert, aber das ist ein amerikanischer Druck auf das, was jetzt mit Europa passiert usw. My question is, again, I think of Peter Hacks and Rahmentheorie. Ist das ein – das ist etwas, was ich für das Allerwichtigste halte – ein Prozess, der nicht mit einem big bang …
 
…
 

 
Dr. Schirrmacher: Das wäre Occupy. Will "Occupy" be a revolutionary agent?
 

 
Prof. Hudson: We’re not trying to be a revolutionary agent. We are in a pre-revolutionary situation, so the aim is to raise consciousness – at this point, simply to explain how the world works. And many people want to … They sense that the economy does not work the way that textbooks say. But they can’t reinvent the rules by themselves. So most of the reason “Occupy Wall Street” is on Wall Street is because that is where the problem is. And most of the financial advisers, like myself, are lifetime workers on Wall Street, specialists in financial maneuvering and behavior. So our job is to explain to people, to popularize what used to be classical economics. Right wing interests have inverted the classical idea of free markets and captured its vocabulary, hijacking the repertory of classical, socialist and social democratic rhetoric.
 

 
Dr. Schirrmacher: Exactly that is what they did.
 

 
Prof. Hudson: I want to comment on your earlier point. It is true that the parasitic financial dynamic stems from America. But that is official policy; it is not a secret. It is not a conspiracy, it is very open. I am told that when Mr. Geithner came here to meet with the German bankers about the Greek debt, the Germans and Mrs. Merkel were in favor of a default, saying: Look, they can’t pay. But Mr. Geithner said that the German and the French banks and other banks have taken out credit default insurance with the American banks. These American banks would go under if Greece defaulted. Mrs. Merkel agreed to sacrifice the German banks and to impose losses on the German banks in order to help America. She seems to have put American interests before her own national interest, and cost the German people hundreds of billions of dollars by doing this. It is as if the leaders of Europe are hypnotized by a kind of Dr. Caligari who ends up to be running the asylum.
 

 
Dr. Schirrmacher: (…) I think, it gives sehr große Einsichten, das ist faszinierend. The idea behind is, a little bit to … first of all to show that the position Frau Wagenknecht postulates, is not a position of two people in the world, but that there is a debate about it. And the other one is to provoke the others, the economists in Germany.
 

 
Prof. Hudson: You can’t provoke them.
 

 
Wagenknecht: Provoke you can, but …
 

 
Prof. Hudson: You can only replace them with a new generation.
 

 
Dr. Schirrmacher: What I found out, what they really need to understand them is psychology. Of course, they need media power, and the consensus. The idea that you are insane if you are questioning certain aspects.
 

 
Prof. Hudson: That is what Dr. Caligari said.
 

 
Dr. Schirrmacher: Yes, that’s right. Or Dürrenmatt, “Die Physiker”, that’s exactly the same. Economists are like “Die Physiker”.
 

 
Dr. Minkmar: Once you can put a label on them, like “umstritten,” and you’ve already won.
 

 
Prof. Hudson: Why do Hollywood movies understand this better than economists and politicians?
 

 
Dr. Schirrmacher: And why does Robert Harris? Did you read the book?
 

 
Prof. Hudson: Yeah, wonderful.
 

 
Dr. Schirrmacher: "Fear," Robert Harris
 

          Fireside on the Great Theft        
A recent interview in Frankfurt’s FAZ newspaper:
 

 
Dr. Schirrmacher: And then, just to find a starting point, maybe we can start with the personal, and then at least I would ask you both. Maybe that is a good starting point, very basic: What is the future of Europe? So, what do you conceive what will happen, and what is going to happen? Sie können sich auch gegenseitig … Now, Michael Hudson, you are in Germany and you are known to our readers, and Sahra Wagenknecht, of course, as well. Just very briefly your background. In your DNA, in your genetic code, you have traces of Indian roots.
 

 
Prof. Hudson: Well, I am one-eighth (Chippewa) Indian, so I’m half Irish, a quarter Swiss, one eighth English. I grew up in Minneapolis, which was the center of America’s labor movement in the 1930s. The general strike in 1936 shaped the American labor scene.
 

 
Minnesota had a governor, Floyd B. Olson, who said that he hoped capitalism run right to hell. The Trotskyists were the main opponents of the Stalinists at that time. The irony is that you had the right wing ganging up with the Stalinists, all against the Trotskyist leadership because the Stalinists feared that a non-communist socialist leadership would build up the labor unions, as Minnesota was building up the Teamsters. So in 1941 my father became one of the Minneapolis 17, the first people committed under the Smith Act. This was ostensibly against advocating the overthrow of the government by force and violence, defined so loosely that in the presentation before the jury, it meant simply having the works of Marx and Lenin on your bookshelf.
 

 
I later was asked, when I went to work for Herman Kahn at the Hudson Institute, whether there was any reason why I could not get a top secret security clearance. I mentioned that my father was a Trotskyist leader, and he said: Oh, they know about that, that Stalin and Roosevelt made a deal around 1941 that if Roosevelt would prosecute the Trotskyists, the Communist Party promised not to pull out any of its Labor unions on strike during the balance of the war. The U.S. Attorney General later wrote in his autobiography that it was the only thing that was ashamed of doing, because by no stretch of the imagination could the Trotskyists have been any threat to the country.
 

 
In fact, it was the Trotskyists that called in the National Guard to protect the workers and the strikers against the police force that was working on behalf of the large companies. The lawyer for the Trotskyists in the trial was Al Goldman, who had been a colleague of Rosa Luxemburg and Karl Liebknecht. As I was growing up, most of the radicals who were still living throughout the world and from the United States would come to my house, and tell me their stories and their experiences.
 

 
Dr. Schirrmacher: What could they say about Luxemburg and Liebknecht?
 

 
Prof. Hudson: Al Goldman was still trying to find out who was responsible for killing them. But we decided that it really does not matter who the individuals are. They are usually killed by their bodyguards. The key is people behind them that order the killing.
 

 
Dr. Schirrmacher: But you don’t have a memory of an anecdote or whatsoever, an anecdote about Luxemburg or Liebknecht, what they …
 

 
Prof. Hudson: No. Mainly, they talked about revolutionary theory. I wanted to grow up and go to jail like all of the people that my family admired, and their colleagues admired. So now I’m ashamed that I’ve never been able to go to the University of the Revolution.
 

 
Dr. Schirrmacher: But you worked with Kahn, and I remember that Kahn was the person who proclaimed golden ages ahead of us. And he was the futurist who always said we will be so happy and so lucky. Am I right?
 

 
Prof. Hudson: Yes, he was basically a military theorist who wrote a very good book on atomic warfare, saying that some people would survive. He was the model for “Dr. Strangelove”. And he felt so bad from being attacked for his military theory – and he was indeed a brilliant military theorist – that he decided to form the Corporate Environment study. But he was wrong in almost everything economic he said, so he brought me on to disagree with him on everything, as a foil. We liked each other. He was a very nice guy. In fact, we liked each other so much that we could not believe that the other person actually believed what they were saying publicly.
 

 
Herman Kahn weighed 400 pounds. I remember once in Paris, we were leaving the hotel to go to the airport, and I tried to hand him his pants. As far as my hands would stretch, they still weren’t long enough for the waist. He also had narcolepsy. When he was not speaking at a public lecture, he would fall asleep – usually in his food. He would rise from the table with the food flowing down his necktie, talking about the world economy an expanding pie, and in another generation, the whole world could live just like him. And everybody would go on diet, over a long time.
 

 
One of the big problems we had was when he wanted me to project the gross national product and hence living standards at