https://caitlinjohnstone.com/2020/01/27/the-establishment-doesnt-fear-trump-and-it-doesnt-fear-bernie-it-fears-you/
The Establishment Doesn’t Fear Trump, And It Doesn’t Fear Bernie. It Fears You.
During the George W Bush administration it was popular in conspiracy circles to speculate that events might be orchestrated which would allow the Bush family to complete a coup against the US Constitution and hold on to power indefinitely.
Such paranoia and suspicion of government power in the wake of the extraordinary post-9/11 advancements in Orwellian surveillance programs and unprecedented military expansionism were perfectly understandable, but predictions that the younger Bush would not cede power at the end of his second term proved incorrect. In today’s hysterical Trump-centric political environment we now see mainstream voices in mainstream outlets openly advancing the same conspiratorial speculations about the current administration, and those will prove incorrect as well.
What these paranoid presidential prognostications get wrong is not their extreme suspicion of government, but their assumption that America’s real power structures require a certain president to be in place in order to advance depraved totalitarian agendas. As anyone paying attention knows, intense suspicion of the US government is the only sane position that anyone can possibly have; the error is in assuming that there is no mechanism in place to ensure that the same agendas carry forward from one presidential administration to the next.
In a sense, the conspiracy theories about a Bush coup were actually correct: the Bush administration didn’t truly end. All of its imperialist, power-serving agendas remained in place and were expanded under the apparent oversight of the following administration. The same thing happened after the Obama administration, and the same thing–whether in 2021 or 2025–will happen after the Trump administration. The disturbing fact of the matter is that if you ignore election dates and just look at the numbers and raw data of US government behavior over the years, you can’t really tell who is president or which political party is in power at any given point in time.
The mechanism which ensures the perpetuation of the same policies from administration to administration used to be referred to by analysts as the “deep state”, back before Trump and his supporters hijacked that term and began using it to essentially mean something like “Democrats and anyone who doesn’t like Trump”. Originally the term deep state referred not to one political party, nor to some shadowy cabal of Illuminati or Satanists or reptilians, but to the simple and undeniable fact that unelected power structures exist and tend to influence America’s official elected government. It wasn’t a conspiracy theory, it was a concept used in political analysis to describe how US government agencies and plutocrats form loose alliances with each other and with official Washington to influence government policy and behavior.
It is inevitable that such a permanent second government would exist in the current iteration of the United States, if you think about it. It’s impossible to have a globe-spanning empire of the sort America now has without long-term plans spanning years or decades for securing control of world resources, undermining rivals, securing more compliant allies, and ensuring military and economic hegemony. If the US were a normal nation which simply minded its own affairs, a permanent government wouldn’t be necessary. But because it isn’t, one is.
I very seldom use the term deep state anymore, because its meaning in mainstream discourse has been completely corrupted. Now when I want to point to America’s permanent unelected power structures I usually use the word “oligarchy” or “empire”, or simply “establishment”.
This is why I haven’t been especially focused on the US presidential race, despite the Democratic primaries hitting fever pitch intensity. While I believe the race can be a useful tool for forcing establishment propagandists to expose themselves (virulent “never Trump” neocon Bret Stephens just came out in support of Trump if the Democratic nominee is anyone to the left of Pete Buttigeig, for example), the result of the 2020 election isn’t going to change a whole hell of a lot.
This might be a bit offensive to both Trump supporters and Sanders supporters, but it’s true.
Whenever I point out that the current administration has been advancing many longstanding agendas of the CIA and neoconservative war pigs–agendas like military expansionism, imprisoning Assange, regime change interventionism in Iran and Venezuela, and reigniting the Cold War–his supporters always come in saying “If he’s working for the establishment how come the establishment is working so hard to get rid of him, huh?”
Well, for starters, they’re not. Nobody who can count Senate seats believes Trump will be removed from office in the current impeachment sideshow, and everyone who understood Russiagate knew it was going to dead-end at nothing. If they really wanted Trump gone they wouldn’t be pussyfooting around with a bunch of kayfabe combat that they know will never hurt him. Obviously he wasn’t the preferred 2016 choice of certain factions within the establishment, but there are mechanisms in place to ensure that the empire can tick right along with a less-than-ideal president in the White House.
This will also hold true if Sanders miraculously makes his way through another rigged primary, and then through whatever sabotage gets thrown his way in the general election. Sure he might be able to sign a few somewhat beneficial executive orders and we probably wouldn’t see him flirting with an Iran war, but US imperialism will march on more or less unimpeded and his popular progressive domestic policies would require congress to successfully implement. At best he’d be a mild reformer who uses the bully pulpit to help spread awareness while being narrative managed on all sides by the billionaire media, and any changes he manages to squeak through which inconvenience the establishment at all will be reversed by a subsequent administration.
Obviously the establishment would rather have someone in the White House who doesn’t constantly put an ugly face on the empire by accidentally exposing its mechanics all the time as Trump does, and obviously it would rather have an incompetent oaf like Trump in office than someone who actively points out the evils of oligarchy and imperialism like Sanders. But the establishment which runs the US-centralized empire is not afraid of Trump, and it is not afraid of Sanders. It’s afraid of you.
The unelected power establishment has ways of ensuring its dominance amid the comings and goings of America’s official elected government; they are perfectly capable of dealing with one man being a less than ideal steward of the empire. What they absolutely cannot deal with, at all, is the prospect of ordinary people finally rising up and using the power of their numbers to force real change. That is what they are really fighting against when they try to sabotage populist candidates: not the candidates themselves, but populism itself.
You wouldn’t know it from reading the billionaire media, but the Yellow Vests protests in France are still going on and have remained widespread for more than a year now. This lack of coverage is partially due to the fact that establishment narrative managers are responsible for conveying the idea that the only governments whose citizens dislike them are those which haven’t been absorbed into the imperial blob like China and Iran. But it’s also because the propagandists don’t want us getting any ideas.
The reason the propagandists work so hard to manufacture the consent of the governed is because they absolutely do require that consent. If enough people decide that the status quo isn’t working for them and begin rising up to force it to change, there’s not really anything the establishment can do to stop them. Right now the only thing keeping people from rising up in this way is the fact that they’ve been successfully propagandized not to, and the propagandists intend to keep it that way.
But eyes are beginning to open. If real change is coming, it will come from there. Not from electing anyone president, but from a large-scale awakening to the reality of our situation. The only thing standing in the way is a thin layer of narrative fluff.
Thursday, January 30, 2020
Wednesday, January 29, 2020
SC205-7
https://www.truthdig.com/articles/the-disaster-of-utopian-engineering/
The Disaster of Utopian Engineering
Karl Popper in “The Open Society and Its Enemies” warned against utopian engineering, massive social transformations led by those who believe they found a revealed truth. These utopian engineers carry out the wholesale destruction of systems, institutions and social and cultural structures in a vain effort to achieve their vision. In the process, they dismantle the self-correcting mechanisms of incremental and piecemeal reform that are impediments to that vision. History is replete with disastrous utopians — the Jacobins, the Marxists, the fascists and now, in our own age, the globalists, or neoliberal imperialists.
The ideology of neoliberalism, which makes no economic sense and requires a willful ignorance of social and economic history, is the latest iteration of utopian projects. It posits that human society achieves its apex when individual entrepreneurial actions are free from government constraints. Society and culture should be dictated by the primacy of property rights, open trade — which sends manufacturing jobs to sweatshops in China and the global south and permits the flow of money across borders — and unfettered global markets. Labor and product markets should be deregulated and freed from government oversight. Global financiers should be given control of the economies of nation-states. The role of the state should be reduced to ensuring the quality and integrity of money, along with internal and external security, and to privatizing control of land, water, public utilities, education and government services such as intelligence and often the military, prisons, health care and the management of natural resources. Neoliberalism turns capitalism into a religious idol.
This utopian vision of the market, of course, bears no relationship to its reality. Capitalists hate free markets. They seek to control markets through mergers and acquisitions, buying out the competition. They saturate the culture with advertising to manipulate public tastes and consumption. They engage in price fixing. They build unassailable monopolies. They carry out schemes, without checks or oversight, of wild speculation, predation, fraud and theft. They enrich themselves through stock buybacks, Ponzi schemes, structured asset destruction through inflation, asset stripping and the imposition of crippling debt peonage on the public. In the United States, they saturate the electoral process with money, buying the allegiance of elected officials from the two ruling parties to legislate tax boycotts, demolish regulations and further consolidate their wealth and power.
These corporate capitalists spend hundreds of millions of dollars to fund organizations such as Business Roundtable and the Chamber of Commerce and think tanks such as The Heritage Foundation to sell the ideology to the public. They lavish universities with donations, as long as the universities pay fealty to the ruling ideology. They use their influence and wealth, as well as their ownership of media platforms, to transform the press into their mouthpiece. And they silence heretics or make it hard for them to find employment. Soaring stock values, rather than production, become the new measure of the economy. Everything is financialized and commodified.
These utopians mutilate the social fabric through deindustrialization, turning once-great manufacturing centers into decayed wastelands, and the middle and working class, the bulwark of any democracy, into a frustrated and enraged precariat. They “offshore” work, carry out massive layoffs and depress wages. They destroy unions. Neoliberalism — because it was always a class project and this was its goal — redistributes wealth upward. “Robbed of the protective covering of cultural institutions,” Karl Polanyi writes in his book “The Great Transformation,” human beings “perish from the effects of social exposure” and die as “victims of acute social dislocation.”
Neoliberalism, as a class project, is a brilliant success. Eight families now hold as much wealth as 50% of the world’s population. The world’s 500 richest people in 2019 added $12 trillion to their assets, while nearly half of all Americans had no savings and nearly 70% could not have come up with $1,000 in an emergency without going into debt. David Harvey calls this “accumulation by dispossession.” This neoliberal assault, antagonistic to all forms of social solidarity that put restraints on amassing capital, has obliterated the self-corrective democratic mechanisms that once made incremental and piecemeal reform possible. It has turned human beings and the natural world into commodities to be exploited until exhaustion or collapse. The ruling elites’ slavish devotion to corporate profit and the accumulation of wealth by the global oligarchy means they are unwilling or incapable of addressing perhaps the greatest existential crisis facing the human species — the climate emergency.
All competing centers of power, including government, have now been seized by corporate power, and corrupted or destroyed. We have undergone what John Ralston Saul calls a coup d’état in slow motion. It is over. They won.
At the same time, these utopians, attempting to project American power and global dominance, launched invasions and occupations throughout the Middle East that have descended into futile quagmires costing the United States between 5 trillion and 7 trillion dollars. This utopian project in Afghanistan, Iraq, Libya, Syria and, by proxy, in Yemen has killed hundreds of thousands, displaced or made refugees of millions, wrecked cities and nations, created failed states that incubate radical jihadist groups and fatally weakened American power. Indeed, these wars, some now in their 18th year, are the greatest strategic blunder in American history. The utopians — culturally, linguistically and historically ignorant of the countries they occupied — believed in their naiveté that they could implant democracy in places like Baghdad and see it emanate out across the Middle East. They assured us we would be greeted as liberators; the oil revenues would pay for reconstruction and Iran would be cowed and defanged. This was no more achievable or grounded in reality than the utopian scheme to unfetter the market and unleash worldwide prosperity and liberty.
Once a cabal — monarchial, communist, fascist or neoliberal — seizes power, its dismantling of the mechanisms that make reform possible leaves those who seek an open society no option but to bring the system down. The corporate state, like the communist regimes I covered in Eastern Europe, is not reformable from within. The failures that plague us are bipartisan failures. On all of the major structural issues, including war and the economy, there is little or no divergence between the two ruling political parties of the U.S. The concentration of wealth and power in the hands of an oligarchic elite, as Aristotle warned, leaves only two options — tyranny or revolution. And we are fast on the road to tyranny.
Neoliberal utopianism, because it suppresses the freedoms to organize, to regulate and to protect the common good and empowers the freedoms to exploit and consolidate wealth and power, is always fated, Polanyi writes, to end in authoritarianism or outright fascism. The good freedoms are lost. The bad ones take over.
Neoliberalism has given rise to the worst form of monopoly capitalism and greatest level of income inequality in American history. The banks and the agricultural, food, arms and communications industries have destroyed regulations that once impeded their monopolies, allowing them to fix prices, suppress wages, guarantee profits, abolish environmental controls and abuse their workers. They have obliterated free market competition.
Unfettered capitalism, as Karl Marx pointed out, destroys the so-called free market. It is hostile to the values and traditions of a capitalist democracy. Capitalism’s final stage, Marx wrote, is marked by the pillage of the systems and structures that make capitalism possible. It is not capitalism at all. The arms industry, for example, with its official $612 billion defense authorization bill — a figure that ignores numerous other military expenditures tucked away in other budgets, masking the fact that our real expenditure on national security expenses is over $1 trillion a year — has gotten the government to commit to spending $348 billion over the next decade to modernize our nuclear weapons and build 12 new Ohio-class nuclear submarines, estimated at $8 billion each. We spend some $100 billion a year on intelligence —read surveillance — and 70% of that money goes to private contractors such as Booz Allen Hamilton, which gets 99% of its revenues from the U.S. government. We are the largest exporters of arms in the world.
The fossil fuel industry swallows up $5.3 trillion a year worldwide in hidden costs to keep burning fossil fuels, according to the International Monetary Fund. This money, the IMF notes, is in addition to the $492 billion in direct subsidies offered by governments around the world through write-offs, write-downs and land-use loopholes.
Taxpayer subsidies to the big banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs — are estimated at $64 billion a year, an amount roughly equal to their typical annual profits.
In 1980 freight trains were deregulated. The number of Class I railroads shrank from 40 to 7. Four account for 90% of the industry’s revenue. Nearly one-third of all shippers have access to only one railroad.
President Bill Clinton’s Telecommunications Act of 1996 was touted as a way to open the cable industry to competition. Instead, it saw a massive consolidation of the industry into the hands of about half a dozen corporations that control what 90% of Americans watch or hear on the airwaves.
The airline industry, freed from regulation, was rapidly consolidated. Four airlines control 85% of the domestic market. They have divided the country into regional hubs where they extort fees, fix prices, cancel flights at will, leaving passengers stranded without compensation, and provide shoddy service.
The pharmaceutical and insurance corporations that manage our for-profit health care industry extracted $812 billion from Americans in 2017. This represents more than one-third (34.2%) of total expenditures for doctor visits, hospitals, long-term care and health insurance. If we had a public health system, such as in Canada, it would save us $600 billion in costs in a single year, according to a report by Physicians for a National Health Plan. Health administration costs in 2017 were more than fourfold higher per capita in the U.S. than in Canada ($2,479 versus $551 per person), the group notes. Canada implemented a single-payer “Medicare for All” system in 1962. In 2017, Americans spent $844 per person on insurers’ overhead. Canadians spent $146.
Neoliberalism cannot be defended as more innovative or more efficient. It has not spread democracy, and by orchestrating unprecedented levels of income inequality and political stagnation has vomited up demagogues and authoritarian regimes that falsely promise vengeance against ruling elites who betrayed the people. Our democracy under this assault has been replaced with meaningless political theater.
As the academics Benjamin Page and Martin Gilens detailed in their exhaustive 2017 study “Democracy in America?”:
the best evidence indicates that the wishes of ordinary Americans [have] little or no impact on the making of federal government policy. Wealthy individuals and organized interest groups—especially business corporations—have … much more political clout. … [T]he general public [is] … virtually powerless. … The will of majorities is … thwarted by the affluent and the well-organized, who block popular policy proposals and enact special favors for themselves. … Majorities of Americans favor specific policies designed to deal with such problems as climate change, gun violence, an untenable immigration system, inadequate public schools, and crumbling bridges and highways. … Large majorities of America favor various programs to help provide jobs, increase wages, help the unemployed, provide universal medical insurance, ensure decent retirement pensions, and pay for such programs with progressive taxes. Most Americans also want to cut “corporate welfare.” Yet the wealthy, business groups, and structural gridlock have mostly blocked such new policies. …
There should be no debate about how to effect change. Piecemeal and incremental reform is always preferable to the inevitable anarchy any power vacuum creates. The problem is that our utopian engineers in their giddy dismantling of an economic and democratic system, as well as their draining of state resources in the wars they prosecute overseas, have dynamited the tools that could save us. They have left us no option but to revolt and remove them from power.
We will carry out sustained acts of civil disobedience to bring down these corporate oligarchs or live in an Orwellian tyranny, at least until the climate emergency renders the human species extinct. Regulations, laws, planning and control are not the enemies of freedom. They keep capitalists from extinguishing freedom, denying justice and abolishing the common good. The freedom of the capitalist class to exploit human beings and the natural world without restraint transforms the freedom for the many into freedom for the few. That was always the point.
The Disaster of Utopian Engineering
Karl Popper in “The Open Society and Its Enemies” warned against utopian engineering, massive social transformations led by those who believe they found a revealed truth. These utopian engineers carry out the wholesale destruction of systems, institutions and social and cultural structures in a vain effort to achieve their vision. In the process, they dismantle the self-correcting mechanisms of incremental and piecemeal reform that are impediments to that vision. History is replete with disastrous utopians — the Jacobins, the Marxists, the fascists and now, in our own age, the globalists, or neoliberal imperialists.
The ideology of neoliberalism, which makes no economic sense and requires a willful ignorance of social and economic history, is the latest iteration of utopian projects. It posits that human society achieves its apex when individual entrepreneurial actions are free from government constraints. Society and culture should be dictated by the primacy of property rights, open trade — which sends manufacturing jobs to sweatshops in China and the global south and permits the flow of money across borders — and unfettered global markets. Labor and product markets should be deregulated and freed from government oversight. Global financiers should be given control of the economies of nation-states. The role of the state should be reduced to ensuring the quality and integrity of money, along with internal and external security, and to privatizing control of land, water, public utilities, education and government services such as intelligence and often the military, prisons, health care and the management of natural resources. Neoliberalism turns capitalism into a religious idol.
This utopian vision of the market, of course, bears no relationship to its reality. Capitalists hate free markets. They seek to control markets through mergers and acquisitions, buying out the competition. They saturate the culture with advertising to manipulate public tastes and consumption. They engage in price fixing. They build unassailable monopolies. They carry out schemes, without checks or oversight, of wild speculation, predation, fraud and theft. They enrich themselves through stock buybacks, Ponzi schemes, structured asset destruction through inflation, asset stripping and the imposition of crippling debt peonage on the public. In the United States, they saturate the electoral process with money, buying the allegiance of elected officials from the two ruling parties to legislate tax boycotts, demolish regulations and further consolidate their wealth and power.
These corporate capitalists spend hundreds of millions of dollars to fund organizations such as Business Roundtable and the Chamber of Commerce and think tanks such as The Heritage Foundation to sell the ideology to the public. They lavish universities with donations, as long as the universities pay fealty to the ruling ideology. They use their influence and wealth, as well as their ownership of media platforms, to transform the press into their mouthpiece. And they silence heretics or make it hard for them to find employment. Soaring stock values, rather than production, become the new measure of the economy. Everything is financialized and commodified.
These utopians mutilate the social fabric through deindustrialization, turning once-great manufacturing centers into decayed wastelands, and the middle and working class, the bulwark of any democracy, into a frustrated and enraged precariat. They “offshore” work, carry out massive layoffs and depress wages. They destroy unions. Neoliberalism — because it was always a class project and this was its goal — redistributes wealth upward. “Robbed of the protective covering of cultural institutions,” Karl Polanyi writes in his book “The Great Transformation,” human beings “perish from the effects of social exposure” and die as “victims of acute social dislocation.”
Neoliberalism, as a class project, is a brilliant success. Eight families now hold as much wealth as 50% of the world’s population. The world’s 500 richest people in 2019 added $12 trillion to their assets, while nearly half of all Americans had no savings and nearly 70% could not have come up with $1,000 in an emergency without going into debt. David Harvey calls this “accumulation by dispossession.” This neoliberal assault, antagonistic to all forms of social solidarity that put restraints on amassing capital, has obliterated the self-corrective democratic mechanisms that once made incremental and piecemeal reform possible. It has turned human beings and the natural world into commodities to be exploited until exhaustion or collapse. The ruling elites’ slavish devotion to corporate profit and the accumulation of wealth by the global oligarchy means they are unwilling or incapable of addressing perhaps the greatest existential crisis facing the human species — the climate emergency.
All competing centers of power, including government, have now been seized by corporate power, and corrupted or destroyed. We have undergone what John Ralston Saul calls a coup d’état in slow motion. It is over. They won.
At the same time, these utopians, attempting to project American power and global dominance, launched invasions and occupations throughout the Middle East that have descended into futile quagmires costing the United States between 5 trillion and 7 trillion dollars. This utopian project in Afghanistan, Iraq, Libya, Syria and, by proxy, in Yemen has killed hundreds of thousands, displaced or made refugees of millions, wrecked cities and nations, created failed states that incubate radical jihadist groups and fatally weakened American power. Indeed, these wars, some now in their 18th year, are the greatest strategic blunder in American history. The utopians — culturally, linguistically and historically ignorant of the countries they occupied — believed in their naiveté that they could implant democracy in places like Baghdad and see it emanate out across the Middle East. They assured us we would be greeted as liberators; the oil revenues would pay for reconstruction and Iran would be cowed and defanged. This was no more achievable or grounded in reality than the utopian scheme to unfetter the market and unleash worldwide prosperity and liberty.
Once a cabal — monarchial, communist, fascist or neoliberal — seizes power, its dismantling of the mechanisms that make reform possible leaves those who seek an open society no option but to bring the system down. The corporate state, like the communist regimes I covered in Eastern Europe, is not reformable from within. The failures that plague us are bipartisan failures. On all of the major structural issues, including war and the economy, there is little or no divergence between the two ruling political parties of the U.S. The concentration of wealth and power in the hands of an oligarchic elite, as Aristotle warned, leaves only two options — tyranny or revolution. And we are fast on the road to tyranny.
Neoliberal utopianism, because it suppresses the freedoms to organize, to regulate and to protect the common good and empowers the freedoms to exploit and consolidate wealth and power, is always fated, Polanyi writes, to end in authoritarianism or outright fascism. The good freedoms are lost. The bad ones take over.
Neoliberalism has given rise to the worst form of monopoly capitalism and greatest level of income inequality in American history. The banks and the agricultural, food, arms and communications industries have destroyed regulations that once impeded their monopolies, allowing them to fix prices, suppress wages, guarantee profits, abolish environmental controls and abuse their workers. They have obliterated free market competition.
Unfettered capitalism, as Karl Marx pointed out, destroys the so-called free market. It is hostile to the values and traditions of a capitalist democracy. Capitalism’s final stage, Marx wrote, is marked by the pillage of the systems and structures that make capitalism possible. It is not capitalism at all. The arms industry, for example, with its official $612 billion defense authorization bill — a figure that ignores numerous other military expenditures tucked away in other budgets, masking the fact that our real expenditure on national security expenses is over $1 trillion a year — has gotten the government to commit to spending $348 billion over the next decade to modernize our nuclear weapons and build 12 new Ohio-class nuclear submarines, estimated at $8 billion each. We spend some $100 billion a year on intelligence —read surveillance — and 70% of that money goes to private contractors such as Booz Allen Hamilton, which gets 99% of its revenues from the U.S. government. We are the largest exporters of arms in the world.
The fossil fuel industry swallows up $5.3 trillion a year worldwide in hidden costs to keep burning fossil fuels, according to the International Monetary Fund. This money, the IMF notes, is in addition to the $492 billion in direct subsidies offered by governments around the world through write-offs, write-downs and land-use loopholes.
Taxpayer subsidies to the big banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs — are estimated at $64 billion a year, an amount roughly equal to their typical annual profits.
In 1980 freight trains were deregulated. The number of Class I railroads shrank from 40 to 7. Four account for 90% of the industry’s revenue. Nearly one-third of all shippers have access to only one railroad.
President Bill Clinton’s Telecommunications Act of 1996 was touted as a way to open the cable industry to competition. Instead, it saw a massive consolidation of the industry into the hands of about half a dozen corporations that control what 90% of Americans watch or hear on the airwaves.
The airline industry, freed from regulation, was rapidly consolidated. Four airlines control 85% of the domestic market. They have divided the country into regional hubs where they extort fees, fix prices, cancel flights at will, leaving passengers stranded without compensation, and provide shoddy service.
The pharmaceutical and insurance corporations that manage our for-profit health care industry extracted $812 billion from Americans in 2017. This represents more than one-third (34.2%) of total expenditures for doctor visits, hospitals, long-term care and health insurance. If we had a public health system, such as in Canada, it would save us $600 billion in costs in a single year, according to a report by Physicians for a National Health Plan. Health administration costs in 2017 were more than fourfold higher per capita in the U.S. than in Canada ($2,479 versus $551 per person), the group notes. Canada implemented a single-payer “Medicare for All” system in 1962. In 2017, Americans spent $844 per person on insurers’ overhead. Canadians spent $146.
Neoliberalism cannot be defended as more innovative or more efficient. It has not spread democracy, and by orchestrating unprecedented levels of income inequality and political stagnation has vomited up demagogues and authoritarian regimes that falsely promise vengeance against ruling elites who betrayed the people. Our democracy under this assault has been replaced with meaningless political theater.
As the academics Benjamin Page and Martin Gilens detailed in their exhaustive 2017 study “Democracy in America?”:
the best evidence indicates that the wishes of ordinary Americans [have] little or no impact on the making of federal government policy. Wealthy individuals and organized interest groups—especially business corporations—have … much more political clout. … [T]he general public [is] … virtually powerless. … The will of majorities is … thwarted by the affluent and the well-organized, who block popular policy proposals and enact special favors for themselves. … Majorities of Americans favor specific policies designed to deal with such problems as climate change, gun violence, an untenable immigration system, inadequate public schools, and crumbling bridges and highways. … Large majorities of America favor various programs to help provide jobs, increase wages, help the unemployed, provide universal medical insurance, ensure decent retirement pensions, and pay for such programs with progressive taxes. Most Americans also want to cut “corporate welfare.” Yet the wealthy, business groups, and structural gridlock have mostly blocked such new policies. …
There should be no debate about how to effect change. Piecemeal and incremental reform is always preferable to the inevitable anarchy any power vacuum creates. The problem is that our utopian engineers in their giddy dismantling of an economic and democratic system, as well as their draining of state resources in the wars they prosecute overseas, have dynamited the tools that could save us. They have left us no option but to revolt and remove them from power.
We will carry out sustained acts of civil disobedience to bring down these corporate oligarchs or live in an Orwellian tyranny, at least until the climate emergency renders the human species extinct. Regulations, laws, planning and control are not the enemies of freedom. They keep capitalists from extinguishing freedom, denying justice and abolishing the common good. The freedom of the capitalist class to exploit human beings and the natural world without restraint transforms the freedom for the many into freedom for the few. That was always the point.
Tuesday, January 28, 2020
SC205-6
https://www.peakprosperity.com/blackswan/
How Will The Coronavirus Impact The Markets?
It's a true Black Swan event that stocks haven't yet priced in
The 2019-nCoV “coronavirus” outbreak remains serious and fluid.
Over the past several days, we’ve been publishing a steady stream of videos, reports and podcasts to keep you as up-to-date and informed as possible on the science behind this fast-developing situation. You can follow our full coverage of the coronavirus here.
But the TL;DR version is this:
The first order of business is stopping the spread of the disease, which means prevention. Your immediate and top concern should be readying yourself and your household and loved ones for the arrival of 2019-nCoV. We cover the most useful practices in this report.
Second, help your co-workers and students, passengers, or other such dependents become aware and prepared by practicing good hygiene and educating them about how the virus spreads.
IMPORTANT: Anyone who is sick, whether with nCoV or a standard flu/cold, needs to be isolated for the duration of the disease, which means 24 hours after their last fever. They should always, always, always wear a surgical mask to block virus particles before they are expelled into the air. Masks can be worn by everyone, but do the most good when worn by those who are ill.
But in addition to presenting a major public health risk, the coronavirus is already doing serious economic damage. China, the world’s second-largest economy, is essentially “closed for business” right now.
The disruption to global trade the coronavirus is likely to cause is going to be material, perhaps severe. And that will have serious negative consequences for the financial markets, which have been (and is still!) trading at the highest valuations in history.
The coronavirus has all the hallmarks of a true Black Swan event.
Markets & Global Economy Already Impacted
Note: This is an extremely fast-moving situation and the data is coming in so quickly that it has to be presented as a mosaic. I’ll do my best to make sense of it for you, but I really want you to allow yourself to trust your own assessment of what pattern the dots make. Much of this data has just been gathered this morning (1/28/20).
Remember: it’s not the fall that harms you, it’s how fast you stop.
For years now, the global economy has been debt-strangled and limping along, kept alive by constant central bank interventions and money printing. Like any weakened victim, the last thing it needs is any kind of serious shock.
The coronavirus has all the features of the proverbial Black Swan event we’ve long been worried about. Nobody saw it coming, it hit hard and fast, and is spreading far faster than government bureaucracies and the markets can adjust.
It’s the equivalent of slipping an iron bar into the front spokes of a moving bicycle.
We can’t possibly predict how all the implications of this will manifest. Our globalized economy is just too complex. We have a world-wide, just-in-time manufacturing and delivery system. Which just got a huge stick shoved between its spokes.
Stay Informed!
Get all of Peak Posperity's articles and updates on the coronavirus threat, the economy & more sent to your each week
Enter your email here...
What does it mean to completely shut down the normal business activities of cities with 5, 10 and even 25 million inhabitants? Particularly in a country with massive property bubbles, where the median price-to-income ratio can be as sky-high as 40(!!)?
Shanghai has a population of 24 million and Suzhou another 10.7 million. Both are now all but completely shut down.
Shanghai is China’s equivalent of New York City. It hosts the main stock exchange and is where the Shanghai Gold Exchange (SGE) is located. Suzhou is a vital manufacturing hub.
I can’t express just how crazy it is to see the videos and pictures from these towns showing empty 8-lane roads, which are normally crammed 24/7 with cars and trucks. Empty subway cars. Nearly abandoned railway stations. Empty sidewalks.
Like literal ghost towns. ‘Ghost cities’ in this case.
Shanghai
No cars, no trucks, no people, no commerce.
If that isn’t a stick in the spokes, I don’t know what is. There’s just no way to plan for such an event. You just have to brace for the impact.
Once people self-isolate (which is exactly what they should be doing, and what I will do myself should the virus makes it to my town), economic activity just… stops.
And this is being woefully underappreciated by the global equity markets right now.
Of course, I’ve long ranted that we now have bastardized ““markets””, deformed by the terribly misguided and ultimately destructive actions of the world’s central banks and their misguided money printing.
Well, good luck trying to print your way past a virus. Or of a nation’s bus drivers and factory workers staying home.
Below is a graphic showing the location of Apple’s Foxconn plants relative to the coronavirus outbreak:
And yet Apple stock is still trading within a whisker of its all-time high, up nearly 3% as I’m typing this.
See any disconnect?
Beijing
I can’t really wrap my head around this cavernous train station being all but completely deserted. Anyone who’s been to Beijing knows that this place is usually furiously humming with commuters like a beehive. The contrast is really stunning.
Wuhan
The above is a usually completely crammed intersection. All we see now is a single parked car.
A few people just strolling across the equivalent of 5th Ave NY in the middle of the day without even bothering to look either way. There’s no one about.
Global Travel
Whether for business or pleasure, global travel is being impacted. Tourism is taking a huge hit. Again, there are almost too many data points to process. But here are a few:
Too Much To Process
I have too many other such data points to present. I don’t want to overload you or make this article encyclopedic. But hopefully I’ve provided enough examples above to give you a sense of the near-instantaneous halt the coronavirus has placed on China’s domestic economy and travel.
The data on its impact on manufacturing and trade won’t be known for a little longer, but it’s safe to guess it will be ‘significant.’
This is the nature of fast-moving situations. You have to rapidly grasp a lot of fragmentary data and turn it into something actionable.
And I’ll give you my sense: This is already a massive shock to the Chinese economy. Which in this hyper-connected world, will quickly translate into a shock to the entire global economy.
That hasn’t fully registered yet for most people, and therefore, the markets. But that’s coming. Soon.
The US Is Especially Vulnerable
In the US, healthcare costs are the #1 economic threat to households. More families go bankrupt due to our predatory and inhumane medical care system that any other cause.
Because people can’t afford to call an ambulance or dare to go to the emergency room for fear of being financially destroyed, they will resist seeking treatment until the very last minute. This means detecting people infected with the coronavirus will be slower than in many other countries. Which means the illness will be able to spread farther and faster as the unhospitalized sick and untreated infect more people.
“If The Dow Is Up, Everything’s OK. Right?”
Financial price bubbles require two things to sustain themselves: ample credit and a compelling story.
Ample credit has been supplied by increasingly desperate central banks willing to do “whatever it takes” to keep stock and bond prices elevated.
A normal market confronted with all the above evidence and uncertainty would be experiencing a sell-off here. Markets are supposed to based on future earnings. Less economic activity = less future earnings. Some sort of downwards repricing would be prudent, healthy and mathematically sound at this point.
But what are they doing?
Being bought furiously in the overnight ““markets””. Here’s a chart from this morning (Tuesday 1/28/20):
This is how silly and stupid things have become. The Fed and the Plunge Protection team (PPT) are now on a daily mission to keep stocks from selling off.
This is wrong, perhaps even evil. As it keeps people from appreciating the gravity of the situation. Falling markets would signal that maybe, possibly, something is wrong. That investors should start adopting more caution.
Which they should at this time. Current stock prices simply can’t be justified given what the coronavirus is doing to the world economy. No way, no how.
What Happens If….?
As I said, bubbles need two things: ample credit and a good story. The main “story” of the markets over the past few years has become almost entirely this; “The Fed won’t let them fall.”
There’s been a lot of truth to that sentiment. It’s not wrong. Or at least it hasn’t been.
But can Fed printing and market-propping make China’s empty mega-highways and grounded flights start burning more oil? No, it can’t. So, oil prices will fall. And US oil companies will suffer.
Can Fed printing and market-propping compel the Chinese workers to return to their factories? No.
Can Fed printing and market-propping make tourists return when no one wants to be around crowds? Again, no.
These and a dozen other such questions all end in “no.”
Which is why the story that has been driving the stock market bubble suddenly is breaking.
So, what will happen when the Fed is revealed to be impotent?
Well, then that’s the end. No narrative = no bubble.
And at today’s record highs?
A painful market correction, perhaps even a full-blown crash (stocks down 30-50%), will be the inevitable result.
Conclusion
Today markets are still clinging to the idea that the Fed “has got this.” The sell-off on Monday (just -1.5% on the S%P 500) was entirely too minor to count as anything at all. The vigorous futures buying the next morning says the same thing.
The market doesn’t yet believe that the coronavirus risk is real.
Which means that this may be one of those very rare moments in market history where the immediate future is briefly visible to us, just a little bit before everyone else.
Once you’ve taken the necessary steps to protect your family’s health against the coronavirus threat, then do the same for your money.
Minimize risk. Reduce your exposure to a market crash. And, for those with the risk tolerance, possibly position yourself to profit from one. (Full disclosure I am net short the US equity markets at present)
There are many ways to reduce risk in your portfolio. In this report for our premium readers, Positioning For A Downturn we detail out the wide range of options that investors have for both protecting against a downturn and, for the more courageous, profiting from one.
Again, we are in a rare and likely very brief moment where we see the risks from the coronavirus that the market does not. Use this time wisely.
How Will The Coronavirus Impact The Markets?
It's a true Black Swan event that stocks haven't yet priced in
The 2019-nCoV “coronavirus” outbreak remains serious and fluid.
Over the past several days, we’ve been publishing a steady stream of videos, reports and podcasts to keep you as up-to-date and informed as possible on the science behind this fast-developing situation. You can follow our full coverage of the coronavirus here.
But the TL;DR version is this:
The first order of business is stopping the spread of the disease, which means prevention. Your immediate and top concern should be readying yourself and your household and loved ones for the arrival of 2019-nCoV. We cover the most useful practices in this report.
Second, help your co-workers and students, passengers, or other such dependents become aware and prepared by practicing good hygiene and educating them about how the virus spreads.
IMPORTANT: Anyone who is sick, whether with nCoV or a standard flu/cold, needs to be isolated for the duration of the disease, which means 24 hours after their last fever. They should always, always, always wear a surgical mask to block virus particles before they are expelled into the air. Masks can be worn by everyone, but do the most good when worn by those who are ill.
But in addition to presenting a major public health risk, the coronavirus is already doing serious economic damage. China, the world’s second-largest economy, is essentially “closed for business” right now.
The disruption to global trade the coronavirus is likely to cause is going to be material, perhaps severe. And that will have serious negative consequences for the financial markets, which have been (and is still!) trading at the highest valuations in history.
The coronavirus has all the hallmarks of a true Black Swan event.
Markets & Global Economy Already Impacted
Note: This is an extremely fast-moving situation and the data is coming in so quickly that it has to be presented as a mosaic. I’ll do my best to make sense of it for you, but I really want you to allow yourself to trust your own assessment of what pattern the dots make. Much of this data has just been gathered this morning (1/28/20).
Remember: it’s not the fall that harms you, it’s how fast you stop.
For years now, the global economy has been debt-strangled and limping along, kept alive by constant central bank interventions and money printing. Like any weakened victim, the last thing it needs is any kind of serious shock.
The coronavirus has all the features of the proverbial Black Swan event we’ve long been worried about. Nobody saw it coming, it hit hard and fast, and is spreading far faster than government bureaucracies and the markets can adjust.
It’s the equivalent of slipping an iron bar into the front spokes of a moving bicycle.
We can’t possibly predict how all the implications of this will manifest. Our globalized economy is just too complex. We have a world-wide, just-in-time manufacturing and delivery system. Which just got a huge stick shoved between its spokes.
Stay Informed!
Get all of Peak Posperity's articles and updates on the coronavirus threat, the economy & more sent to your each week
Enter your email here...
What does it mean to completely shut down the normal business activities of cities with 5, 10 and even 25 million inhabitants? Particularly in a country with massive property bubbles, where the median price-to-income ratio can be as sky-high as 40(!!)?
Shanghai has a population of 24 million and Suzhou another 10.7 million. Both are now all but completely shut down.
Shanghai is China’s equivalent of New York City. It hosts the main stock exchange and is where the Shanghai Gold Exchange (SGE) is located. Suzhou is a vital manufacturing hub.
I can’t express just how crazy it is to see the videos and pictures from these towns showing empty 8-lane roads, which are normally crammed 24/7 with cars and trucks. Empty subway cars. Nearly abandoned railway stations. Empty sidewalks.
Like literal ghost towns. ‘Ghost cities’ in this case.
Shanghai
No cars, no trucks, no people, no commerce.
If that isn’t a stick in the spokes, I don’t know what is. There’s just no way to plan for such an event. You just have to brace for the impact.
Once people self-isolate (which is exactly what they should be doing, and what I will do myself should the virus makes it to my town), economic activity just… stops.
And this is being woefully underappreciated by the global equity markets right now.
Of course, I’ve long ranted that we now have bastardized ““markets””, deformed by the terribly misguided and ultimately destructive actions of the world’s central banks and their misguided money printing.
Well, good luck trying to print your way past a virus. Or of a nation’s bus drivers and factory workers staying home.
Below is a graphic showing the location of Apple’s Foxconn plants relative to the coronavirus outbreak:
And yet Apple stock is still trading within a whisker of its all-time high, up nearly 3% as I’m typing this.
See any disconnect?
Beijing
I can’t really wrap my head around this cavernous train station being all but completely deserted. Anyone who’s been to Beijing knows that this place is usually furiously humming with commuters like a beehive. The contrast is really stunning.
Wuhan
The above is a usually completely crammed intersection. All we see now is a single parked car.
A few people just strolling across the equivalent of 5th Ave NY in the middle of the day without even bothering to look either way. There’s no one about.
Global Travel
Whether for business or pleasure, global travel is being impacted. Tourism is taking a huge hit. Again, there are almost too many data points to process. But here are a few:
Too Much To Process
I have too many other such data points to present. I don’t want to overload you or make this article encyclopedic. But hopefully I’ve provided enough examples above to give you a sense of the near-instantaneous halt the coronavirus has placed on China’s domestic economy and travel.
The data on its impact on manufacturing and trade won’t be known for a little longer, but it’s safe to guess it will be ‘significant.’
This is the nature of fast-moving situations. You have to rapidly grasp a lot of fragmentary data and turn it into something actionable.
And I’ll give you my sense: This is already a massive shock to the Chinese economy. Which in this hyper-connected world, will quickly translate into a shock to the entire global economy.
That hasn’t fully registered yet for most people, and therefore, the markets. But that’s coming. Soon.
The US Is Especially Vulnerable
In the US, healthcare costs are the #1 economic threat to households. More families go bankrupt due to our predatory and inhumane medical care system that any other cause.
Because people can’t afford to call an ambulance or dare to go to the emergency room for fear of being financially destroyed, they will resist seeking treatment until the very last minute. This means detecting people infected with the coronavirus will be slower than in many other countries. Which means the illness will be able to spread farther and faster as the unhospitalized sick and untreated infect more people.
“If The Dow Is Up, Everything’s OK. Right?”
Financial price bubbles require two things to sustain themselves: ample credit and a compelling story.
Ample credit has been supplied by increasingly desperate central banks willing to do “whatever it takes” to keep stock and bond prices elevated.
A normal market confronted with all the above evidence and uncertainty would be experiencing a sell-off here. Markets are supposed to based on future earnings. Less economic activity = less future earnings. Some sort of downwards repricing would be prudent, healthy and mathematically sound at this point.
But what are they doing?
Being bought furiously in the overnight ““markets””. Here’s a chart from this morning (Tuesday 1/28/20):
This is how silly and stupid things have become. The Fed and the Plunge Protection team (PPT) are now on a daily mission to keep stocks from selling off.
This is wrong, perhaps even evil. As it keeps people from appreciating the gravity of the situation. Falling markets would signal that maybe, possibly, something is wrong. That investors should start adopting more caution.
Which they should at this time. Current stock prices simply can’t be justified given what the coronavirus is doing to the world economy. No way, no how.
What Happens If….?
As I said, bubbles need two things: ample credit and a good story. The main “story” of the markets over the past few years has become almost entirely this; “The Fed won’t let them fall.”
There’s been a lot of truth to that sentiment. It’s not wrong. Or at least it hasn’t been.
But can Fed printing and market-propping make China’s empty mega-highways and grounded flights start burning more oil? No, it can’t. So, oil prices will fall. And US oil companies will suffer.
Can Fed printing and market-propping compel the Chinese workers to return to their factories? No.
Can Fed printing and market-propping make tourists return when no one wants to be around crowds? Again, no.
These and a dozen other such questions all end in “no.”
Which is why the story that has been driving the stock market bubble suddenly is breaking.
So, what will happen when the Fed is revealed to be impotent?
Well, then that’s the end. No narrative = no bubble.
And at today’s record highs?
A painful market correction, perhaps even a full-blown crash (stocks down 30-50%), will be the inevitable result.
Conclusion
Today markets are still clinging to the idea that the Fed “has got this.” The sell-off on Monday (just -1.5% on the S%P 500) was entirely too minor to count as anything at all. The vigorous futures buying the next morning says the same thing.
The market doesn’t yet believe that the coronavirus risk is real.
Which means that this may be one of those very rare moments in market history where the immediate future is briefly visible to us, just a little bit before everyone else.
Once you’ve taken the necessary steps to protect your family’s health against the coronavirus threat, then do the same for your money.
Minimize risk. Reduce your exposure to a market crash. And, for those with the risk tolerance, possibly position yourself to profit from one. (Full disclosure I am net short the US equity markets at present)
There are many ways to reduce risk in your portfolio. In this report for our premium readers, Positioning For A Downturn we detail out the wide range of options that investors have for both protecting against a downturn and, for the more courageous, profiting from one.
Again, we are in a rare and likely very brief moment where we see the risks from the coronavirus that the market does not. Use this time wisely.
Monday, January 27, 2020
SC205-5
https://www.globalresearch.ca/war-dissent-us-west-threatens-speech-media-academic-freedoms/5701729
“War on Dissent” Threatens Speech, Media and Academic Freedoms
Censorship is the new normal in America and the West, wanting the message controlled, targeting what conflicts with it for elimination, notably on major geopolitical issues.
Digital democracy is the last frontier of free and open expression.
It’s threatened by social media, Google, and other tech giants — complicit in a campaign against content conflicting with the official narrative.
Media scholar Robert McChesney earlier said without digital democracy, “the Internet would look like cable TV…a handful of massive companies (controlling) content” — deciding what’s permitted online and what’s suppressed.
Without free expression rights, all others are threatened — where things are headed in US and other Western societies.
Fundamental rights are eroding, at risk of disappearing altogether on the phony pretext of protecting national security at a time when alleged foreign threats to the West are invented, not real.
Pompeo earlier claimed “Julian Assange has no First Amendment freedoms (sic)…He’s not a US citizen.”
Despite no evidence suggesting it, Pompeo called Assange “a non-state hostile intelligence service often abetted by state actors like Russia (sic),” adding:
“We have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us (sic).”
“To give (him and others) space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for (sic). It ends now.”
Pompeo declared war on speech, media, and academic freedoms — supported by Trump, falsely calling Assange an “enemy of the people.”
Following his latest kangaroo court hearing in London on Thursday, pertaining to the Trump regime’s unjustifiable extradition request, the UK complicit in its war on free expression, WikiLeaks editor-in-chief Kristinn Hrafnsson said the following:
“We have now learned from submissions and affidavits presented by the United States to this court that they do not consider foreign nationals to have a First Amendment protection,” adding:
“Now let that sink in for a second. At the same time that the US government is chasing journalists all over the world, they claim they have extra-territorial reach.”
“They have decided that all foreign journalists which include many of you here, have no protection under the First Amendment of the United States.”
“So that goes to show the gravity of this case. This is not about Julian Assange. It’s about press freedom.”
Denying Assange the universal right of free expression endangers all journalists and everyone else. His case is precedent-setting.
If extradited to the US, convicted of the “crime” of truth-telling journalism and imprisoned, it’ll have far-reaching consequences, all truth-telling journalists potentially threatened the same way.
Fundamental rule of law principles are universal, in place to protect everyone from abuses of power.
Dark forces in the US and other Western societies want views conflicting with official ones silenced.
In the US, earlier Supreme Court rulings upholding First Amendment rights are ignored, notably Justice William Brennan’s majority opinion in Texas v. Johnson (1989), saying:
“(I)f there is a bedrock principle underlying the First Amendment, it is that government may not prohibit the expression of an idea simply because society finds the idea offensive or disagreeable.”
Justice Thurgood Marshall once said:
“(A)bove all else, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” Nor does anyone else.
Separately he said:
“If the First Amendment means anything, it means that a State has no business telling a man, sitting alone in his own house, what books he may read or what films he may watch.”
“Our whole constitutional heritage rebels at the thought of giving government the power to control men’s minds.”
No one on the US Supreme Court today approaches the stature of Brennan and Marshall.
Their support for equal justice under law no longer exists in the US, police state injustice replacing it, including efforts to censor views dark forces consider objectionable.
We’re all Julian Assange, Chelsea Manning, and others like them.
Their fate could be ours by challenging powerful interests — wanting free and open expression replaced by controlling the message.
What’s going on is the hallmark of totalitarian rule — enforced with police state harshness.
When truth-telling and dissent are considered existential threats, free and open societies no longer exist — the slippery slope where the US, UK, and other Western states are heading.
A Final Comment
Last year, WikiLeaks said the following:
Assange is “an Australian journalist who founded WikiLeaks in 2006.”
He “was the editor of WikiLeaks until September 2018: six months of his effective incommunicado detention in the Ecuadorian embassy in London then prompted Julian to appoint Kristin Hrafnsson as WikiLeaks editor-in-chief. Julian remains WikiLeaks’ publisher.”
“Wikileaks’ publications have had enormous impact. They have changed many peoples’ views of governments, enabling them to see their secrets.”
“They have changed journalism as a practice, as debates have raged over the ethics of secrecy, transparency and reporting on stolen documents.”
“WikiLeaks has gained the admiration of people and organizations all over the world, as evidenced in the numerous awards it has won.”
“For these contributions to public accountability and the historical record, Assange has been arrested in the United Kingdom and indicted in the United States.”
“The US requests Assange’s extradition and has charged him with 17 counts under the Espionage Act of 1917 for the publication of truthful material in the public interest.”
“Assange is the first journalist in history the US has charged with Espionage for publishing.”
“He also faces one count of conspiracy to commit computer crime based on his alleged reporter-source communications with whistleblower Chelsea Manning.”
“This charge would criminalize basic journalistic activity, as the indictment details alleged attempts to help Manning protect her anonymity as a journalistic source.”
“If extradited, Assange faces the prospect of life imprisonment in the United States” — for the “crime” of truth-telling journalism the way it’s supposed to be, what establishment media long ago was abandoned, operating as press agents for powerful interests.
“War on Dissent” Threatens Speech, Media and Academic Freedoms
Censorship is the new normal in America and the West, wanting the message controlled, targeting what conflicts with it for elimination, notably on major geopolitical issues.
Digital democracy is the last frontier of free and open expression.
It’s threatened by social media, Google, and other tech giants — complicit in a campaign against content conflicting with the official narrative.
Media scholar Robert McChesney earlier said without digital democracy, “the Internet would look like cable TV…a handful of massive companies (controlling) content” — deciding what’s permitted online and what’s suppressed.
Without free expression rights, all others are threatened — where things are headed in US and other Western societies.
Fundamental rights are eroding, at risk of disappearing altogether on the phony pretext of protecting national security at a time when alleged foreign threats to the West are invented, not real.
Pompeo earlier claimed “Julian Assange has no First Amendment freedoms (sic)…He’s not a US citizen.”
Despite no evidence suggesting it, Pompeo called Assange “a non-state hostile intelligence service often abetted by state actors like Russia (sic),” adding:
“We have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us (sic).”
“To give (him and others) space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for (sic). It ends now.”
Pompeo declared war on speech, media, and academic freedoms — supported by Trump, falsely calling Assange an “enemy of the people.”
Following his latest kangaroo court hearing in London on Thursday, pertaining to the Trump regime’s unjustifiable extradition request, the UK complicit in its war on free expression, WikiLeaks editor-in-chief Kristinn Hrafnsson said the following:
“We have now learned from submissions and affidavits presented by the United States to this court that they do not consider foreign nationals to have a First Amendment protection,” adding:
“Now let that sink in for a second. At the same time that the US government is chasing journalists all over the world, they claim they have extra-territorial reach.”
“They have decided that all foreign journalists which include many of you here, have no protection under the First Amendment of the United States.”
“So that goes to show the gravity of this case. This is not about Julian Assange. It’s about press freedom.”
Denying Assange the universal right of free expression endangers all journalists and everyone else. His case is precedent-setting.
If extradited to the US, convicted of the “crime” of truth-telling journalism and imprisoned, it’ll have far-reaching consequences, all truth-telling journalists potentially threatened the same way.
Fundamental rule of law principles are universal, in place to protect everyone from abuses of power.
Dark forces in the US and other Western societies want views conflicting with official ones silenced.
In the US, earlier Supreme Court rulings upholding First Amendment rights are ignored, notably Justice William Brennan’s majority opinion in Texas v. Johnson (1989), saying:
“(I)f there is a bedrock principle underlying the First Amendment, it is that government may not prohibit the expression of an idea simply because society finds the idea offensive or disagreeable.”
Justice Thurgood Marshall once said:
“(A)bove all else, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” Nor does anyone else.
Separately he said:
“If the First Amendment means anything, it means that a State has no business telling a man, sitting alone in his own house, what books he may read or what films he may watch.”
“Our whole constitutional heritage rebels at the thought of giving government the power to control men’s minds.”
No one on the US Supreme Court today approaches the stature of Brennan and Marshall.
Their support for equal justice under law no longer exists in the US, police state injustice replacing it, including efforts to censor views dark forces consider objectionable.
We’re all Julian Assange, Chelsea Manning, and others like them.
Their fate could be ours by challenging powerful interests — wanting free and open expression replaced by controlling the message.
What’s going on is the hallmark of totalitarian rule — enforced with police state harshness.
When truth-telling and dissent are considered existential threats, free and open societies no longer exist — the slippery slope where the US, UK, and other Western states are heading.
A Final Comment
Last year, WikiLeaks said the following:
Assange is “an Australian journalist who founded WikiLeaks in 2006.”
He “was the editor of WikiLeaks until September 2018: six months of his effective incommunicado detention in the Ecuadorian embassy in London then prompted Julian to appoint Kristin Hrafnsson as WikiLeaks editor-in-chief. Julian remains WikiLeaks’ publisher.”
“Wikileaks’ publications have had enormous impact. They have changed many peoples’ views of governments, enabling them to see their secrets.”
“They have changed journalism as a practice, as debates have raged over the ethics of secrecy, transparency and reporting on stolen documents.”
“WikiLeaks has gained the admiration of people and organizations all over the world, as evidenced in the numerous awards it has won.”
“For these contributions to public accountability and the historical record, Assange has been arrested in the United Kingdom and indicted in the United States.”
“The US requests Assange’s extradition and has charged him with 17 counts under the Espionage Act of 1917 for the publication of truthful material in the public interest.”
“Assange is the first journalist in history the US has charged with Espionage for publishing.”
“He also faces one count of conspiracy to commit computer crime based on his alleged reporter-source communications with whistleblower Chelsea Manning.”
“This charge would criminalize basic journalistic activity, as the indictment details alleged attempts to help Manning protect her anonymity as a journalistic source.”
“If extradited, Assange faces the prospect of life imprisonment in the United States” — for the “crime” of truth-telling journalism the way it’s supposed to be, what establishment media long ago was abandoned, operating as press agents for powerful interests.
Sunday, January 26, 2020
SC205-4
https://www.craigmurray.org.uk/archives/2020/01/the-troubling-decline-of-international-law/
The Troubling Decline of International Law
While it is true that rogue states – most notably the USA – have always posed a threat to the rule of international law, I see no serious room to dispute that the development of the corpus of international law, and of the institutions to implement it, was one of the great achievements of the twentieth century, and did a huge amount to reduce global conflict.
The International Court of Justice, the Law of the Sea Tribunal, the European Court of Justice, the World Trade Organisation, these are just some of the institutions which have played an extremely positive role, helping resolve hundreds of disputes during their existence and, still more importantly, helping establish rules that prevented thousands more disputes from arising. Regional Organisations, dozens of them including the EU, the African Union and the Shanghai Cooperation Organisation, have also flourished.
The judgement of the ICJ in the 160 cases it has heard has almost always been respected by the parties to the case. That has applied even when the dispute is radical, inflammatory and had already led to fighting and deaths, such as the settlement of the Nigeria/Cameroon border. The ICJ has been a massive success story.
The foundation of the International Criminal Court in 2002 was the high water mark in establishing the rule of law as the guiding principle of international affairs. As with all the major worldwide institutions of international law, the UK had played a leading role in the establishment of the ICC. I was in the FCO at the time, and I remember the quiet confidence that eventually the USA would join up, just as they had with the UN Convention on the Law of the Sea after decades of havering. In fact, the ICC has been a major disappointment, of which more later. I refer to 2002 as the high water mark for the rule of international law, because subsequently the tide has turned decisively against it.
When Blair and Bush invaded Iraq, not only without the sanction of the UN Security Council but in the certain knowledge the Security Council was against it, and in Blair’s case against the unanimous opinion of the FCO’s entire cadre of Legal Advisers who stated that the war was illegal, they not only precipitated a crisis that has resulted in millions of deaths, they dealt a killing blow to the entire fabric of international law.
The results are now becoming every day more visible. We have just survived for now, thanks to Iran’s remarkable sense and restraint, a dangerous crisis in the Middle East following the illegal assassination of General Soleimani, who was travelling on a diplomatic mission at the time. The use on a massive scale of execution by drone – including execution of UK and US nationals – by the British and American governments, often without the permission of the government in whose territory the execution takes place, is an appalling breach of international law for which there appears to be no effective remedy.
The FCO Legal Advisers refused to advise that the killing of Soleimani was legal in international law. However the UK government no longer cares if something is legal in international law or not. The government line was originally that there was an “arguable case” that the assassination was legal, then after objections from legal advisers the line changed to “it is not for the UK to determine whether the drone strike is legal”.
The United Kingdom used to be a pillar, arguably the most important pillar, of international law. Thanks to a series of neo-con politicians, including Blair, Straw, Cameron, May and Johnson, the UK scarcely makes a pretence any more abut giving a fig about international law. It simply ignores the instruction of the United Nations and the International Court of Justice to decolonise the Chagos Islands. It refuses to implement the binding international arbitration on debt owed to Iran. It mocks the UN Working Group on Arbitrary Detention. It refuses to allow the UN Special Rapporteur on Violence Against Women into asylum detention centres. I could go on. A direct consequence of this is sharply diminished UK influence in the world, and in particular for the first time in 71 years it does not have a seat on the International Court of Justice. As the UK has effectively spurned the authority of the ICJ, this is scarcely surprising.
It was the UK’s reputation as an upholder of international law that moderated outrage at the UN at the UK’s anachronistic permanent membership of the UN Security Council. That international respect no longer exists, and the British Government are deluded if they think that the UK’s privileged UN status will last forever, especially as it can no longer be represented as a proxy for EU foreign policy.
The UN itself is of course suffering a sustained threat to its authority. It is simply ignored on the dreadful Saudi led disaster in Yemen. By refusing the Iranian foreign minister a visa to attend a Security Council meeting on Soleimani, the USA struck at the very purpose of the UN. If the institution is to be held the hostage of its geographical host, what is its purpose? Ultimately, to regain relevance the UN would have both democratically to reform and to relocate, perhaps to South Africa. I do not see that happening in the near future.
As for the International Criminal Court, that has been a severe disappointment which in many ways symbolises the collapse of international law. Its failure to prosecute Bush and Blair for the war on Iraq set its direction from the beginning. Waging aggressive war is in itself a war crime and was indelibly established as such by the Nuremburg Tribunal. That it was not specifically mentioned in the Rome Statute was a flimsy pretext from judges not willing to take on power. The same judges have bottled out of investigation of US crimes in Afghanistan and appear to be in the same process over war crimes in Gaza, where astonishingly there has been no backing from states for the ICC against Netanyahu’s threat to institute sanctions against ICC staff if investigations continue. I used to defend the ICC robustly over accusations that it was simply a tool of neo-con policy. I now find it very hard to do so.
The UK is not the only country ignoring international law. Spain’s repudiation of the European Court of Justice decision that Junqueras must be released to take his seat in the European Parliament is a huge blow to the prestige and authority of that organisation. Spain’s vicious persecution of Catalonia is itself the most comprehensive challenge that “western values” have faced for decades in the European heartland, by a large measure worse than anything which Orban has done. Spain completely ignores its Council of Europe obligations.
The structure of international law is looking very shoogly indeed. It does matter, a very great deal. The world is becoming a significantly more dangerous place as a result.
The Troubling Decline of International Law
While it is true that rogue states – most notably the USA – have always posed a threat to the rule of international law, I see no serious room to dispute that the development of the corpus of international law, and of the institutions to implement it, was one of the great achievements of the twentieth century, and did a huge amount to reduce global conflict.
The International Court of Justice, the Law of the Sea Tribunal, the European Court of Justice, the World Trade Organisation, these are just some of the institutions which have played an extremely positive role, helping resolve hundreds of disputes during their existence and, still more importantly, helping establish rules that prevented thousands more disputes from arising. Regional Organisations, dozens of them including the EU, the African Union and the Shanghai Cooperation Organisation, have also flourished.
The judgement of the ICJ in the 160 cases it has heard has almost always been respected by the parties to the case. That has applied even when the dispute is radical, inflammatory and had already led to fighting and deaths, such as the settlement of the Nigeria/Cameroon border. The ICJ has been a massive success story.
The foundation of the International Criminal Court in 2002 was the high water mark in establishing the rule of law as the guiding principle of international affairs. As with all the major worldwide institutions of international law, the UK had played a leading role in the establishment of the ICC. I was in the FCO at the time, and I remember the quiet confidence that eventually the USA would join up, just as they had with the UN Convention on the Law of the Sea after decades of havering. In fact, the ICC has been a major disappointment, of which more later. I refer to 2002 as the high water mark for the rule of international law, because subsequently the tide has turned decisively against it.
When Blair and Bush invaded Iraq, not only without the sanction of the UN Security Council but in the certain knowledge the Security Council was against it, and in Blair’s case against the unanimous opinion of the FCO’s entire cadre of Legal Advisers who stated that the war was illegal, they not only precipitated a crisis that has resulted in millions of deaths, they dealt a killing blow to the entire fabric of international law.
The results are now becoming every day more visible. We have just survived for now, thanks to Iran’s remarkable sense and restraint, a dangerous crisis in the Middle East following the illegal assassination of General Soleimani, who was travelling on a diplomatic mission at the time. The use on a massive scale of execution by drone – including execution of UK and US nationals – by the British and American governments, often without the permission of the government in whose territory the execution takes place, is an appalling breach of international law for which there appears to be no effective remedy.
The FCO Legal Advisers refused to advise that the killing of Soleimani was legal in international law. However the UK government no longer cares if something is legal in international law or not. The government line was originally that there was an “arguable case” that the assassination was legal, then after objections from legal advisers the line changed to “it is not for the UK to determine whether the drone strike is legal”.
The United Kingdom used to be a pillar, arguably the most important pillar, of international law. Thanks to a series of neo-con politicians, including Blair, Straw, Cameron, May and Johnson, the UK scarcely makes a pretence any more abut giving a fig about international law. It simply ignores the instruction of the United Nations and the International Court of Justice to decolonise the Chagos Islands. It refuses to implement the binding international arbitration on debt owed to Iran. It mocks the UN Working Group on Arbitrary Detention. It refuses to allow the UN Special Rapporteur on Violence Against Women into asylum detention centres. I could go on. A direct consequence of this is sharply diminished UK influence in the world, and in particular for the first time in 71 years it does not have a seat on the International Court of Justice. As the UK has effectively spurned the authority of the ICJ, this is scarcely surprising.
It was the UK’s reputation as an upholder of international law that moderated outrage at the UN at the UK’s anachronistic permanent membership of the UN Security Council. That international respect no longer exists, and the British Government are deluded if they think that the UK’s privileged UN status will last forever, especially as it can no longer be represented as a proxy for EU foreign policy.
The UN itself is of course suffering a sustained threat to its authority. It is simply ignored on the dreadful Saudi led disaster in Yemen. By refusing the Iranian foreign minister a visa to attend a Security Council meeting on Soleimani, the USA struck at the very purpose of the UN. If the institution is to be held the hostage of its geographical host, what is its purpose? Ultimately, to regain relevance the UN would have both democratically to reform and to relocate, perhaps to South Africa. I do not see that happening in the near future.
As for the International Criminal Court, that has been a severe disappointment which in many ways symbolises the collapse of international law. Its failure to prosecute Bush and Blair for the war on Iraq set its direction from the beginning. Waging aggressive war is in itself a war crime and was indelibly established as such by the Nuremburg Tribunal. That it was not specifically mentioned in the Rome Statute was a flimsy pretext from judges not willing to take on power. The same judges have bottled out of investigation of US crimes in Afghanistan and appear to be in the same process over war crimes in Gaza, where astonishingly there has been no backing from states for the ICC against Netanyahu’s threat to institute sanctions against ICC staff if investigations continue. I used to defend the ICC robustly over accusations that it was simply a tool of neo-con policy. I now find it very hard to do so.
The UK is not the only country ignoring international law. Spain’s repudiation of the European Court of Justice decision that Junqueras must be released to take his seat in the European Parliament is a huge blow to the prestige and authority of that organisation. Spain’s vicious persecution of Catalonia is itself the most comprehensive challenge that “western values” have faced for decades in the European heartland, by a large measure worse than anything which Orban has done. Spain completely ignores its Council of Europe obligations.
The structure of international law is looking very shoogly indeed. It does matter, a very great deal. The world is becoming a significantly more dangerous place as a result.
Saturday, January 25, 2020
SC205-3
https://www.peakprosperity.com/coronavirus/
ALERT: Coronavirus Pandemic Event Now A Serious Risk
The prudent are preparing for it
The coronavirus is currently sweeping across China. So far, it has all the hallmarks of a potential true pandemic outbreak.
While it could still (and hopefully will) be contained and burn itself out, the chances of that are slipping by the hour.
If an actual pandemic breaks out, expect the following to happen quickly:
Travel within and especially between countries will be restricted if not completely banned
Critical shortages of materials will develop, especially medical supplies, doubly especially antivirals.
In cities with lockdowns or quarantines, food will disappear rapidly from shelves.
Pro tip: N95 face masks are already rapidly disappearing form Amazon and other retailers. If you can’t order online, then get yourself down to Home Depot pronto to get a stash of masks for you and your family (something we’ve recommended as a part of routine preparations for years). However, don’t be a hoarder. Buy only what you really need. The time to responsibly stock up was before now.
A Quick Primer On Viruses
When I was getting my PhD through the Duke Medical school, there was a debate as to whether viruses even qualified as being a lifeform. That debate still carries on.
A virus is a protein encapsulated set of genetic instructions. Just some DNA or RNA surrounded by a complex shell that can ‘dock’ with a specific living host cell. All viruses completely lack the ability to reproduce themselves. They require the hijacking of the active replicating machinery of a host cell to reproduce and multiply.
Viruses are everywhere. A single drop of clear seawater may contain 10 million virus particles on average. You encounter them everyday. Your body already has natural immunity against hundreds of different virus types.
The problem comes in when a new virus enters the game, one which your body has not seen before, and against which you have no immunity.
An even bigger problem emerges when ‘the herd’ has not seen it before either and there’s no herd immunity to block its spread.
The biggest problem emerges when such a new virus emerges (usually by ‘jumping’ from a non-human species to humans) has the ability to spread easily between humans. By contrast, a virus that requires some sort of a host vector such as a mosquito or a tick is much more easily contained.
The Coronavirus
The coronavirus currently in question derives its name from the spiky crown of proteins (Corona = Crown) that are seen under magnification.
It first erupted on Wuhan China, and is thought to possibly have jumped from a snake species to humans:
Wuhan coronavirus may have been transmitted to people from snakes
Jan 22, 2020
A new coronavirus that has claimed 17 lives in Wuhan, China, may have been transmitted to people from snakes, according to a genetic analysis. The snakes may have caught the virus from bats in the food market in which both animals were sold.
This was bound to happen sooner or later. Especially among a tightly-packed human population with a proclivity for eating many different forms of wild animals.
This virus has all the statistical and virologic markers to be a true pandemic – the sort that the world has been luckily spared for many decades. But which nature and history shows us is always an inevitability.
According to the WHO’s guidance document on pandemics, this new coronavirus is already well on its way to being a full-blown pandemic:
We are already at Phase 4. Things get really serious at Phases 5 & 6.
All we need to move to Phase 5 is for another country to report a sustained outbreak — something that seems all but certain at this point. Then it will be Game On.
“It’s Contained!”
Early reports on the media have been underselling the severity. This is expected.
For some reason governments across the world long ago decided that ‘not panicking’ people was more important than providing timely, accurate, risk-balanced information.
The straight-up lying about the Fukushima disaster was one example.
China lied like crazy about the SARS outbreak a number of years ago. And they’re certainly being less than fully revealing about this outbreak.
As of this morning (6:35 am, 1/23/20) there are two major Chinese cities under a full quarantine. Wuhan with 11 million people and Huanggang with another 6 million people:
Health officials fear the transmission rate will accelerate as hundreds of millions of Chinese travel at home and abroad during week-long holidays for the Lunar New Year, which begins on Saturday.
The previously unknown virus strain is believed to have emerged late last year from illegally traded wildlife at an animal market in the central Chinese city of Wuhan.
Most transport in Wuhan, a city of 11 million people, was suspended on Thursday morning and people were told not to leave. Hours later, state media in neighboring Huanggang, a city of some 6 million people, said it was imposing a similar lockdown.
Compounding the difficulty for Chinese authorities is that all of this coincides with the Lunar New Year, when hundreds of millions of Chinese typically travel about.
That’s just a recipe for disaster here.
By The Numbers
To truly appreciate and estimate the possible impact of an emerging pandemic there are a few things to know.
First, how lethal is the virus? That is, how many people die as a result of contracting the virus? This is called the “case fatality rate” or CFR in virologist lingo.
Second, how easily does it spread between victims? This measure goes by the name “R0” or “R-naught”, which we’ll get to in a minute.
The CFR of this coronavirus is not really known yet because we don’t trust the numbers coming out of China. But the numbers we’ve got are not encouraging. In Wuhan, there are a reported 444 cases and 17 deaths.
That yields a CFR of 3.8%. There’s also been reports of 555 infections, which would yield a CFR of 3.0%. Let’s use that, while reserving the right to seriously amend these numbers when better data comes along.
The Spanish flu of 1918 which was the last true global pandemic, had a CFR of 2.5%. It was horrible and killed an estimated 50 – 60 million people. True, we’ve got substantially better containment protocols today, but they clearly are not perfect.
If a virus is ‘too lethal’ and kills above a certain threshold, it will burn itself out quickly. The 3% CFR of this coronavirus is in the ‘sweet spot’ for doing a lot of damage.
Next, it’s the contagious aspect of this particular virus that’s most worrying to me. Let’s dive into the R-naught value for a minute:
What do R0 Values Mean?
R0 is pronounced “R naught.” It’s a mathematical term that indicates how contagious an infectious disease is. It’s also referred to as the reproduction number. As an infection spreads to new people, it reproduces itself.
R0 tells you the average number of people who will catch a disease from one contagious person. It specifically applies to a population of people who were previously free of infection and haven’t been vaccinated. If a disease has an R0 of 18, a person who has the disease will transmit it to an average of 18 other people, as long as no one has been vaccinated against it or is already immune to it in their community.
What do R0 values mean?
Three possibilities exist for the potential spread or decline of a disease, depending on its R0 value:
If R0 is less than 1, each existing infection causes less than one new infection. In this case, the disease will decline and eventually die out.
If R0 equals 1, each existing infection causes one new infection. The disease will stay alive and stable, but there won’t be an outbreak or an epidemic.
If R0 is more than 1, each existing infection causes more than one new infection. The disease will spread between people, and there may be an outbreak or epidemic.
Importantly, a disease’s R0 value only applies when everyone in a population is completely vulnerable to the disease. This means:
no one has been vaccinated
no one has had the disease before
there’s no way to control the spread of the disease
This combination of conditions is rare nowadays thanks to advances in medicine.
Here’s what we know – the R0 of this virus is way above zero. We don’t have a solid value yet, but our clue lies in the fact that a reported 15 healthcare workers in Wuhan contracted the disease from being around their patients.
These would be people using the very latest in protective measures, too – masks, gloves, proper handwashing, and even full hazmat suits.
The one case in Hong Kong turned into 5 as the entire family of an infected person came down with the disease.
So this R0 is pretty worrying.
Finally, it’s those last three bullet points above that set off my alarm bells here:
no one has been vaccinated
no one has had the disease before
there’s no way to control the spread of the disease
Check, check and check.
Combine those with a high R0 and now you know why China has just clamped down and quarantined two major cities with a combined 17 million people in them.
The Nightmare Begins
My personal nightmare is being played out in those quarantined Chinese cities. Locked in with possibly contaminated people whom I have to battle and engage with for rapidly dwindling resources.
Already, within hours, reports of scuffles for food have been reported.
People didn’t have much time to prepare or react. It was a matter of hours between “normal” and everything being placed into lockdown:
NZers trapped in China megacity Wuhan as virus spreads
Jan 23, 2020
At least 17 people are dead and more than 500 infected in China alone, as the virus spreads from Wuhan to other provinces and countries.
Public transport in the Chinese mega-city, with a population of more than 11 million, has been suspended. Residents have been advised to stay put as the response to the outbreak ramps up.
Auckland man Mr Li, who didn’t want his full name used, said on Tuesday people were still shopping and travelling, and the streets were bustling with people.
Roughly 48 hours later, the city had gone into lockdown. For him, it started with friends and relatives cancelling planned parties and gatherings.
“The face masks were all sold out. There were queues in front of every pharmacy. The usually crowded shopping malls are entirely different. The shops are all open but there’s barely any customers. The subway stations, which should be noisy and crowded in the New Year’s season, are almost empty,” he said.
He said anyone seen in public was wearing a mask.
“Starting from yesterday, the whole city started to feel more nervous. All the things and all the conversations in our social media group are around the virus infection.”
Li said he didn’t believe it when he first heard about the likelihood of locking down the city, comparable in size to London.
He had been planning to come back to Auckland in two days, but had to start changing his plans unsure when the travel restrictions would be lifted.
“At five o’clock China time this morning, the Chinese Central Television Station Channel One said from ten o’clock this morning, all of the buses, subways, airport – and I’ve just heard that all the motorways – will be closed down temporarily.”
It was just a matter of hours from the first inklings to complete shutdown.
The Chinese authorities are reacting promptly and vigorously because they’ve got the data. They know how dangerous this all could be if it becomes a full-blown pandemic. We’ll see if their authoritarian government can manage to suppress this. But if not, I expect western governments stand even less of a chance.
More:
Coronavirus: panic and anger in Wuhan as China orders city into lockdown
Supermarket shelves empty and face masks sell out as residents retreat indoors
Jan 23, 2020
A sense of panic has spread in Wuhan as the Chinese city of 11 million people was put on lockdown in an attempt to quarantine a deadly virus believed to have originated there.
On Thursday, authorities banned all transport links from the city, suspending buses, the subway system, ferries and shutting the airport and train stations to outgoing passengers.
Nearby Huanggang and Ezhou suspended buses, subways and ferries and shut the airport and train stations to outgoing passengers.
In Wuhan, supermarket shelves were empty and local markets sold out of produce as residents hoarded supplies and isolated themselves at home. Petrol stations were overwhelmed as drivers stocked up on fuel amid rumours that reserves had run out. Local residents said pharmacies had sold out of face masks.
Few pedestrians were on the street and families cancelled plans to get together for the Chinese New Year holiday. Special police forces were seen patrolling railway stations. Residents and all government workers are now required to wear face masks while in public spaces.
“When I saw the news when I woke up, I felt like I was going to go crazy. This is a little too late now. The government’s measures are not enough,” said Xiao, 26, a primary school teacher in Wuhan, who asked not to give her full name.
Conclusion
We’re going to be tracking this on an hourly basis. Wherever you live you should be taking standard precautions right now. Stock up on food, get yourself proper face masks, and be prepared should you need to be locked down for days/weeks.
The chance of that happening in your country may yet be small (for now), but it’s well above zero. So, don’t screw around with this one.
This is the most serious pandemic-worthy risk we’ve come across since SARS.
Of course, as we’ve long advised, you should always be prepared for such an event anyway as part of being a prudent adult.
My own personal remedy kit includes a hefty supply of elderberry syrup which I make from dried berries. You can buy it as well. For those who are scientifically-minded there are numerous peer-reviewed, double blind studies showing that elderberry syrup has pronounced anti-viral activities.
See here and here as well as here.
No, elderberry syrup does not prevent one from getting the flu or a cold. But it does knock the symptoms in half, and it reduces the recovery time by half which means it gives you much better odds: 50% x 50% = 25%
With only a quarter of the ‘experience’ a patient has a much better chance for survival, I figure. I have no idea if it works on this coronavirus, but elderberry syrup has prevented me from getting a full-blown flu or any serious cold for more than a decade. I swear by it.
Beyond that, your best chance of avoiding catching something involves staying away from people, washing your hands fastidiously, wearing a mask when you have to be around others, properly shaming those idiots who proudly show up to events/work sick and coughing, not touching public surfaces (railings, knobs, etc), and never, ever wiping your eyes or touching your nose or mouth before washing your hands.
We’ll be tracking the breaking developments on this coronavirus outbreak hourly. Check back in with us regularly for updates.
Update 1.24.20, 12:45pm ET: Given the worsening conditions within China and the continued spread of the coronavirus strain to other countries, including the US, we have just released the report Our Recommendations For Pandemic Preparation to our premium subscribers.
In it, we detail the havoc a widespread pandemic can wreak and provide the steps and solutions prudent households should take now in advance of such a crisis.
....
As of yesterday aprox 40 million people in 8 huge cities in china are under quarantine conditions, with mass transportation shut downs, roads out of affected areas being blocked, with a huge hospital facility trying to be constructed in 6 days outside of the epicenter of this spreading contagion in Wuhan to isolate infected citizens. Caronavirus has a 22 day incubation period and a very high infection rate. Thousands of people have already traveled to numerous destinations around the world, entering various countries and if not showing signs at the times of entry, before the actual infections starts, would not be detected. Thus far there are reports of Caronavirus infections in 10 countries outside of china. Here is a brief description of what happened for the 1913 Spanish Flu Pandemic: " It infected 500 million people around the world, including people on remote Pacific islands and in the Arctic. Probably 50 million, and possibly as high as 100 million (three to five percent of Earth's population at the time) died, making it one of the deadliest epidemics in human history ". Today there is mass travel and huge concentrated populations around the world that did not exist in 1913, increasing greatly the chance for a pandemic to spread.
ALERT: Coronavirus Pandemic Event Now A Serious Risk
The prudent are preparing for it
The coronavirus is currently sweeping across China. So far, it has all the hallmarks of a potential true pandemic outbreak.
While it could still (and hopefully will) be contained and burn itself out, the chances of that are slipping by the hour.
If an actual pandemic breaks out, expect the following to happen quickly:
Travel within and especially between countries will be restricted if not completely banned
Critical shortages of materials will develop, especially medical supplies, doubly especially antivirals.
In cities with lockdowns or quarantines, food will disappear rapidly from shelves.
Pro tip: N95 face masks are already rapidly disappearing form Amazon and other retailers. If you can’t order online, then get yourself down to Home Depot pronto to get a stash of masks for you and your family (something we’ve recommended as a part of routine preparations for years). However, don’t be a hoarder. Buy only what you really need. The time to responsibly stock up was before now.
A Quick Primer On Viruses
When I was getting my PhD through the Duke Medical school, there was a debate as to whether viruses even qualified as being a lifeform. That debate still carries on.
A virus is a protein encapsulated set of genetic instructions. Just some DNA or RNA surrounded by a complex shell that can ‘dock’ with a specific living host cell. All viruses completely lack the ability to reproduce themselves. They require the hijacking of the active replicating machinery of a host cell to reproduce and multiply.
Viruses are everywhere. A single drop of clear seawater may contain 10 million virus particles on average. You encounter them everyday. Your body already has natural immunity against hundreds of different virus types.
The problem comes in when a new virus enters the game, one which your body has not seen before, and against which you have no immunity.
An even bigger problem emerges when ‘the herd’ has not seen it before either and there’s no herd immunity to block its spread.
The biggest problem emerges when such a new virus emerges (usually by ‘jumping’ from a non-human species to humans) has the ability to spread easily between humans. By contrast, a virus that requires some sort of a host vector such as a mosquito or a tick is much more easily contained.
The Coronavirus
The coronavirus currently in question derives its name from the spiky crown of proteins (Corona = Crown) that are seen under magnification.
It first erupted on Wuhan China, and is thought to possibly have jumped from a snake species to humans:
Wuhan coronavirus may have been transmitted to people from snakes
Jan 22, 2020
A new coronavirus that has claimed 17 lives in Wuhan, China, may have been transmitted to people from snakes, according to a genetic analysis. The snakes may have caught the virus from bats in the food market in which both animals were sold.
This was bound to happen sooner or later. Especially among a tightly-packed human population with a proclivity for eating many different forms of wild animals.
This virus has all the statistical and virologic markers to be a true pandemic – the sort that the world has been luckily spared for many decades. But which nature and history shows us is always an inevitability.
According to the WHO’s guidance document on pandemics, this new coronavirus is already well on its way to being a full-blown pandemic:
We are already at Phase 4. Things get really serious at Phases 5 & 6.
All we need to move to Phase 5 is for another country to report a sustained outbreak — something that seems all but certain at this point. Then it will be Game On.
“It’s Contained!”
Early reports on the media have been underselling the severity. This is expected.
For some reason governments across the world long ago decided that ‘not panicking’ people was more important than providing timely, accurate, risk-balanced information.
The straight-up lying about the Fukushima disaster was one example.
China lied like crazy about the SARS outbreak a number of years ago. And they’re certainly being less than fully revealing about this outbreak.
As of this morning (6:35 am, 1/23/20) there are two major Chinese cities under a full quarantine. Wuhan with 11 million people and Huanggang with another 6 million people:
Health officials fear the transmission rate will accelerate as hundreds of millions of Chinese travel at home and abroad during week-long holidays for the Lunar New Year, which begins on Saturday.
The previously unknown virus strain is believed to have emerged late last year from illegally traded wildlife at an animal market in the central Chinese city of Wuhan.
Most transport in Wuhan, a city of 11 million people, was suspended on Thursday morning and people were told not to leave. Hours later, state media in neighboring Huanggang, a city of some 6 million people, said it was imposing a similar lockdown.
Compounding the difficulty for Chinese authorities is that all of this coincides with the Lunar New Year, when hundreds of millions of Chinese typically travel about.
That’s just a recipe for disaster here.
By The Numbers
To truly appreciate and estimate the possible impact of an emerging pandemic there are a few things to know.
First, how lethal is the virus? That is, how many people die as a result of contracting the virus? This is called the “case fatality rate” or CFR in virologist lingo.
Second, how easily does it spread between victims? This measure goes by the name “R0” or “R-naught”, which we’ll get to in a minute.
The CFR of this coronavirus is not really known yet because we don’t trust the numbers coming out of China. But the numbers we’ve got are not encouraging. In Wuhan, there are a reported 444 cases and 17 deaths.
That yields a CFR of 3.8%. There’s also been reports of 555 infections, which would yield a CFR of 3.0%. Let’s use that, while reserving the right to seriously amend these numbers when better data comes along.
The Spanish flu of 1918 which was the last true global pandemic, had a CFR of 2.5%. It was horrible and killed an estimated 50 – 60 million people. True, we’ve got substantially better containment protocols today, but they clearly are not perfect.
If a virus is ‘too lethal’ and kills above a certain threshold, it will burn itself out quickly. The 3% CFR of this coronavirus is in the ‘sweet spot’ for doing a lot of damage.
Next, it’s the contagious aspect of this particular virus that’s most worrying to me. Let’s dive into the R-naught value for a minute:
What do R0 Values Mean?
R0 is pronounced “R naught.” It’s a mathematical term that indicates how contagious an infectious disease is. It’s also referred to as the reproduction number. As an infection spreads to new people, it reproduces itself.
R0 tells you the average number of people who will catch a disease from one contagious person. It specifically applies to a population of people who were previously free of infection and haven’t been vaccinated. If a disease has an R0 of 18, a person who has the disease will transmit it to an average of 18 other people, as long as no one has been vaccinated against it or is already immune to it in their community.
What do R0 values mean?
Three possibilities exist for the potential spread or decline of a disease, depending on its R0 value:
If R0 is less than 1, each existing infection causes less than one new infection. In this case, the disease will decline and eventually die out.
If R0 equals 1, each existing infection causes one new infection. The disease will stay alive and stable, but there won’t be an outbreak or an epidemic.
If R0 is more than 1, each existing infection causes more than one new infection. The disease will spread between people, and there may be an outbreak or epidemic.
Importantly, a disease’s R0 value only applies when everyone in a population is completely vulnerable to the disease. This means:
no one has been vaccinated
no one has had the disease before
there’s no way to control the spread of the disease
This combination of conditions is rare nowadays thanks to advances in medicine.
Here’s what we know – the R0 of this virus is way above zero. We don’t have a solid value yet, but our clue lies in the fact that a reported 15 healthcare workers in Wuhan contracted the disease from being around their patients.
These would be people using the very latest in protective measures, too – masks, gloves, proper handwashing, and even full hazmat suits.
The one case in Hong Kong turned into 5 as the entire family of an infected person came down with the disease.
So this R0 is pretty worrying.
Finally, it’s those last three bullet points above that set off my alarm bells here:
no one has been vaccinated
no one has had the disease before
there’s no way to control the spread of the disease
Check, check and check.
Combine those with a high R0 and now you know why China has just clamped down and quarantined two major cities with a combined 17 million people in them.
The Nightmare Begins
My personal nightmare is being played out in those quarantined Chinese cities. Locked in with possibly contaminated people whom I have to battle and engage with for rapidly dwindling resources.
Already, within hours, reports of scuffles for food have been reported.
People didn’t have much time to prepare or react. It was a matter of hours between “normal” and everything being placed into lockdown:
NZers trapped in China megacity Wuhan as virus spreads
Jan 23, 2020
At least 17 people are dead and more than 500 infected in China alone, as the virus spreads from Wuhan to other provinces and countries.
Public transport in the Chinese mega-city, with a population of more than 11 million, has been suspended. Residents have been advised to stay put as the response to the outbreak ramps up.
Auckland man Mr Li, who didn’t want his full name used, said on Tuesday people were still shopping and travelling, and the streets were bustling with people.
Roughly 48 hours later, the city had gone into lockdown. For him, it started with friends and relatives cancelling planned parties and gatherings.
“The face masks were all sold out. There were queues in front of every pharmacy. The usually crowded shopping malls are entirely different. The shops are all open but there’s barely any customers. The subway stations, which should be noisy and crowded in the New Year’s season, are almost empty,” he said.
He said anyone seen in public was wearing a mask.
“Starting from yesterday, the whole city started to feel more nervous. All the things and all the conversations in our social media group are around the virus infection.”
Li said he didn’t believe it when he first heard about the likelihood of locking down the city, comparable in size to London.
He had been planning to come back to Auckland in two days, but had to start changing his plans unsure when the travel restrictions would be lifted.
“At five o’clock China time this morning, the Chinese Central Television Station Channel One said from ten o’clock this morning, all of the buses, subways, airport – and I’ve just heard that all the motorways – will be closed down temporarily.”
It was just a matter of hours from the first inklings to complete shutdown.
The Chinese authorities are reacting promptly and vigorously because they’ve got the data. They know how dangerous this all could be if it becomes a full-blown pandemic. We’ll see if their authoritarian government can manage to suppress this. But if not, I expect western governments stand even less of a chance.
More:
Coronavirus: panic and anger in Wuhan as China orders city into lockdown
Supermarket shelves empty and face masks sell out as residents retreat indoors
Jan 23, 2020
A sense of panic has spread in Wuhan as the Chinese city of 11 million people was put on lockdown in an attempt to quarantine a deadly virus believed to have originated there.
On Thursday, authorities banned all transport links from the city, suspending buses, the subway system, ferries and shutting the airport and train stations to outgoing passengers.
Nearby Huanggang and Ezhou suspended buses, subways and ferries and shut the airport and train stations to outgoing passengers.
In Wuhan, supermarket shelves were empty and local markets sold out of produce as residents hoarded supplies and isolated themselves at home. Petrol stations were overwhelmed as drivers stocked up on fuel amid rumours that reserves had run out. Local residents said pharmacies had sold out of face masks.
Few pedestrians were on the street and families cancelled plans to get together for the Chinese New Year holiday. Special police forces were seen patrolling railway stations. Residents and all government workers are now required to wear face masks while in public spaces.
“When I saw the news when I woke up, I felt like I was going to go crazy. This is a little too late now. The government’s measures are not enough,” said Xiao, 26, a primary school teacher in Wuhan, who asked not to give her full name.
Conclusion
We’re going to be tracking this on an hourly basis. Wherever you live you should be taking standard precautions right now. Stock up on food, get yourself proper face masks, and be prepared should you need to be locked down for days/weeks.
The chance of that happening in your country may yet be small (for now), but it’s well above zero. So, don’t screw around with this one.
This is the most serious pandemic-worthy risk we’ve come across since SARS.
Of course, as we’ve long advised, you should always be prepared for such an event anyway as part of being a prudent adult.
My own personal remedy kit includes a hefty supply of elderberry syrup which I make from dried berries. You can buy it as well. For those who are scientifically-minded there are numerous peer-reviewed, double blind studies showing that elderberry syrup has pronounced anti-viral activities.
See here and here as well as here.
No, elderberry syrup does not prevent one from getting the flu or a cold. But it does knock the symptoms in half, and it reduces the recovery time by half which means it gives you much better odds: 50% x 50% = 25%
With only a quarter of the ‘experience’ a patient has a much better chance for survival, I figure. I have no idea if it works on this coronavirus, but elderberry syrup has prevented me from getting a full-blown flu or any serious cold for more than a decade. I swear by it.
Beyond that, your best chance of avoiding catching something involves staying away from people, washing your hands fastidiously, wearing a mask when you have to be around others, properly shaming those idiots who proudly show up to events/work sick and coughing, not touching public surfaces (railings, knobs, etc), and never, ever wiping your eyes or touching your nose or mouth before washing your hands.
We’ll be tracking the breaking developments on this coronavirus outbreak hourly. Check back in with us regularly for updates.
Update 1.24.20, 12:45pm ET: Given the worsening conditions within China and the continued spread of the coronavirus strain to other countries, including the US, we have just released the report Our Recommendations For Pandemic Preparation to our premium subscribers.
In it, we detail the havoc a widespread pandemic can wreak and provide the steps and solutions prudent households should take now in advance of such a crisis.
....
As of yesterday aprox 40 million people in 8 huge cities in china are under quarantine conditions, with mass transportation shut downs, roads out of affected areas being blocked, with a huge hospital facility trying to be constructed in 6 days outside of the epicenter of this spreading contagion in Wuhan to isolate infected citizens. Caronavirus has a 22 day incubation period and a very high infection rate. Thousands of people have already traveled to numerous destinations around the world, entering various countries and if not showing signs at the times of entry, before the actual infections starts, would not be detected. Thus far there are reports of Caronavirus infections in 10 countries outside of china. Here is a brief description of what happened for the 1913 Spanish Flu Pandemic: " It infected 500 million people around the world, including people on remote Pacific islands and in the Arctic. Probably 50 million, and possibly as high as 100 million (three to five percent of Earth's population at the time) died, making it one of the deadliest epidemics in human history ". Today there is mass travel and huge concentrated populations around the world that did not exist in 1913, increasing greatly the chance for a pandemic to spread.
Friday, January 24, 2020
SC205-2
https://wallstreetonparade.com/2020/01/bernie-sanders-hasnt-quite-captured-what-wall-street-does-its-actually-a-fraud-monetization-system-with-a-money-printing-unit-called-the-new-york-fed/
Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed
Senator Bernie Sanders has come closer than anyone on the Presidential campaign trail in defining what Wall Street actually does. Sanders has repeatedly stated at his rallies that “the business model of Wall Street is fraud.”
That analysis is correct but abbreviated. Sanders needs to go further. It’s not just Wall Street’s business model that has left the United States with the greatest wealth inequality since the Roaring Twenties (a time when Wall Street investment banks were also allowed to own deposit-taking banks). It’s how Wall Street is monetizing that fraud that poses an existential threat to the solvency of the United States and the impoverishment of millions of Americans.
The attempted WeWork Initial Public Offering (IPO) of last year was a classic example of how Wall Street can put lipstick on a pig, pass it off as a hot new startup company, and sell its shares, which were overpriced by about $40 billion, to unwary public pension funds and mutual funds that dominate millions of Americans’ 401(k) plans. The IPO failed to materialize simply because alternative media sent the dirty details of the offering viral, forcing business media to cover the story.
Rather than being a hot new tech startup with oodles of potential, WeWork was a money-losing real estate leasing company with a grifter as its CEO. That, however, didn’t stop two of the largest law firms, Skadden Arps, Slate, Meagher & Flom and Simpson, Thacher & Bartlett, from representing the company and the underwriters, respectively, and it didn’t stop two of the biggest firms on Wall Street, JPMorgan Chase and Goldman Sachs, from trying to unload the dog of a deal on investors for a hefty underwriting fee.
That’s what we mean by monetization of fraud. (See The Dickensian Tale of the WeWork IPO.)
Now you may be thinking that WeWork might have been just an aberration where due diligence slipped through the cracks by a bunch of overworked bean counters. Unfortunately, this is the way that Wall Street has been issuing IPOs for a very, very long time.
In 2003 the Securities and Exchange Commission settled charges against ten of the largest Wall Street firms over how their research analysts had been issuing fraudulent reports to the public on IPOs. The analysts were sending internal emails to colleagues calling the offerings “dogs” and “crap” while telling the investing public that these were great companies with bright futures and putting a “buy” recommendation on the stock.
Those fraudulent research reports and “buy” recommendations led to a $4 trillion bust in the stock market, known as the dot.com crash. While public pensions and individuals investors suffered enormous losses, the Wall Street analysts and their bosses got to keep their fat bonuses.
This is another example of long-running monetization of fraud schemes on Wall Street.
The epic financial collapse on Wall Street in 2008 was, reduced to its basic terms, simply the end game of Wall Street banks’ efforts to monetize their frauds. Insiders at the major Wall Street banks had told their bosses that the mortgage underwriting department was issuing mortgage loans to people who could not possibly afford to repay the loan. They warned their bosses to reject the loans. But they were overruled because the Wall Street banks had a grander scheme: they would make money securitizing the loans; they would make more money creating synthetic derivatives to bet on the loans; they would make even more money shorting the loans based on their insider knowledge that the loans were doomed to default; and they would make even more money allowing hedge funds to pay them to assemble these dogs into new securitizations so that they hedge funds could make billions shorting the pile of dung. (See here, here and here.)
The 2008 crash and the ensuing Great Recession were the worst economic disasters in the United States since the Great Depression. Millions of Americans lost their homes to foreclosure, millions more lost their jobs as a result of the economic contraction, and trillions of dollars of household wealth was wiped out.
The Financial Crisis Inquiry Commission (FCIC) issued a report attempting to capture for the American people what had gone so wrong on Wall Street and how Federal regulators and Congress had failed to catch the corruption in time to prevent the epic crash. If you were asked to give a one-sentence explanation for what happened on Wall Street from the findings of the FCIC report, you could do no better than this: Wall Street was monetizing fraud.
The dot.com bust in 2000 and the epic financial crash in 2008 were both the well-documented result of Wall Street monetizing its fraud and its execs and traders getting to keep the multi-million dollar salaries and bonuses that ensued from that fraud monetization.
The reason that Wall Street continues to be allowed by Congress to pursue its fraud monetization schemes is that Wall Street has captured both Congress and its federal regulators. A significant number of members of Congress are beholding to Wall Street to fund their political campaigns. Without that funding, the incumbent doesn’t stand a chance against their opponent, who will tell Wall Street what they want to hear and grab Wall Street’s funding. Federal regulators are either looking to return to their seven figure jobs on Wall Street or are auditioning to get one.
The revolving door has now even corrupted the accounting profession that audits our publicly-traded companies, as recently reported in-depth by The Project On Government Oversight. (See “How Accountants Took Washington’s Revolving Door to a Criminal Extreme.”)
But what would happen if a criminal network actually obtained a government power to financially resuscitate itself after each of its crime waves? Wouldn’t that make it the most dangerous threat to national security?
On April 9, 2019, the nonprofit Wall Street watchdog, Better Markets, released a study titled: “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” It should have made headlines on the front pages of every major newspaper in the U.S. Instead, it was effectively ignored by mainstream media.
The report notes this:
“Of the more than $29 trillion in bailouts, just the six biggest banks in the country (the ‘Six Megabanks’) received more than $8.2 trillion in lifesaving support from American taxpayers during the 2008 financial crash, or nearly one-third of the total bailouts provided to the entire financial system. This was a massive transfer of wealth from Main Street to Wall Street to prevent the bankruptcy of just six banks, supposedly because they were vital to the economic security and prosperity of Main Street Americans.”
Who provided the bulk of that $29 trillion in bailout money to resuscitate banks engaged in serial frauds? It was the New York Fed, another captured regulator with one critically important and critically dangerous difference from other regulators: it has the ability to electronically create money out of thin air.
As a sign of just how brazen and disastrously broken the U.S. financial system has become, with no hearings in Congress, with no blaring headlines on the front pages of newspapers, the New York Fed turned on its money spigot to Wall Street again on September 17, 2019. It was the first time this has happened since the financial crisis. For the past four months the New York Fed has been spewing hundreds of billions of dollars each week to Wall Street’s trading houses, pushing the Dow Jones Industrial Average up by 3,000 points, with no accountability to anyone or explanation as to why Wall Street needs or deserves this money.
Americans must engage in demanding accountability from their elected, and as yet uncaptured, members of Congress.
Bernie Sanders Hasn’t Quite Captured What Wall Street Does: It’s Actually a Fraud-Monetization System with a Money-Printing Unit Called the New York Fed
Senator Bernie Sanders has come closer than anyone on the Presidential campaign trail in defining what Wall Street actually does. Sanders has repeatedly stated at his rallies that “the business model of Wall Street is fraud.”
That analysis is correct but abbreviated. Sanders needs to go further. It’s not just Wall Street’s business model that has left the United States with the greatest wealth inequality since the Roaring Twenties (a time when Wall Street investment banks were also allowed to own deposit-taking banks). It’s how Wall Street is monetizing that fraud that poses an existential threat to the solvency of the United States and the impoverishment of millions of Americans.
The attempted WeWork Initial Public Offering (IPO) of last year was a classic example of how Wall Street can put lipstick on a pig, pass it off as a hot new startup company, and sell its shares, which were overpriced by about $40 billion, to unwary public pension funds and mutual funds that dominate millions of Americans’ 401(k) plans. The IPO failed to materialize simply because alternative media sent the dirty details of the offering viral, forcing business media to cover the story.
Rather than being a hot new tech startup with oodles of potential, WeWork was a money-losing real estate leasing company with a grifter as its CEO. That, however, didn’t stop two of the largest law firms, Skadden Arps, Slate, Meagher & Flom and Simpson, Thacher & Bartlett, from representing the company and the underwriters, respectively, and it didn’t stop two of the biggest firms on Wall Street, JPMorgan Chase and Goldman Sachs, from trying to unload the dog of a deal on investors for a hefty underwriting fee.
That’s what we mean by monetization of fraud. (See The Dickensian Tale of the WeWork IPO.)
Now you may be thinking that WeWork might have been just an aberration where due diligence slipped through the cracks by a bunch of overworked bean counters. Unfortunately, this is the way that Wall Street has been issuing IPOs for a very, very long time.
In 2003 the Securities and Exchange Commission settled charges against ten of the largest Wall Street firms over how their research analysts had been issuing fraudulent reports to the public on IPOs. The analysts were sending internal emails to colleagues calling the offerings “dogs” and “crap” while telling the investing public that these were great companies with bright futures and putting a “buy” recommendation on the stock.
Those fraudulent research reports and “buy” recommendations led to a $4 trillion bust in the stock market, known as the dot.com crash. While public pensions and individuals investors suffered enormous losses, the Wall Street analysts and their bosses got to keep their fat bonuses.
This is another example of long-running monetization of fraud schemes on Wall Street.
The epic financial collapse on Wall Street in 2008 was, reduced to its basic terms, simply the end game of Wall Street banks’ efforts to monetize their frauds. Insiders at the major Wall Street banks had told their bosses that the mortgage underwriting department was issuing mortgage loans to people who could not possibly afford to repay the loan. They warned their bosses to reject the loans. But they were overruled because the Wall Street banks had a grander scheme: they would make money securitizing the loans; they would make more money creating synthetic derivatives to bet on the loans; they would make even more money shorting the loans based on their insider knowledge that the loans were doomed to default; and they would make even more money allowing hedge funds to pay them to assemble these dogs into new securitizations so that they hedge funds could make billions shorting the pile of dung. (See here, here and here.)
The 2008 crash and the ensuing Great Recession were the worst economic disasters in the United States since the Great Depression. Millions of Americans lost their homes to foreclosure, millions more lost their jobs as a result of the economic contraction, and trillions of dollars of household wealth was wiped out.
The Financial Crisis Inquiry Commission (FCIC) issued a report attempting to capture for the American people what had gone so wrong on Wall Street and how Federal regulators and Congress had failed to catch the corruption in time to prevent the epic crash. If you were asked to give a one-sentence explanation for what happened on Wall Street from the findings of the FCIC report, you could do no better than this: Wall Street was monetizing fraud.
The dot.com bust in 2000 and the epic financial crash in 2008 were both the well-documented result of Wall Street monetizing its fraud and its execs and traders getting to keep the multi-million dollar salaries and bonuses that ensued from that fraud monetization.
The reason that Wall Street continues to be allowed by Congress to pursue its fraud monetization schemes is that Wall Street has captured both Congress and its federal regulators. A significant number of members of Congress are beholding to Wall Street to fund their political campaigns. Without that funding, the incumbent doesn’t stand a chance against their opponent, who will tell Wall Street what they want to hear and grab Wall Street’s funding. Federal regulators are either looking to return to their seven figure jobs on Wall Street or are auditioning to get one.
The revolving door has now even corrupted the accounting profession that audits our publicly-traded companies, as recently reported in-depth by The Project On Government Oversight. (See “How Accountants Took Washington’s Revolving Door to a Criminal Extreme.”)
But what would happen if a criminal network actually obtained a government power to financially resuscitate itself after each of its crime waves? Wouldn’t that make it the most dangerous threat to national security?
On April 9, 2019, the nonprofit Wall Street watchdog, Better Markets, released a study titled: “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” It should have made headlines on the front pages of every major newspaper in the U.S. Instead, it was effectively ignored by mainstream media.
The report notes this:
“Of the more than $29 trillion in bailouts, just the six biggest banks in the country (the ‘Six Megabanks’) received more than $8.2 trillion in lifesaving support from American taxpayers during the 2008 financial crash, or nearly one-third of the total bailouts provided to the entire financial system. This was a massive transfer of wealth from Main Street to Wall Street to prevent the bankruptcy of just six banks, supposedly because they were vital to the economic security and prosperity of Main Street Americans.”
Who provided the bulk of that $29 trillion in bailout money to resuscitate banks engaged in serial frauds? It was the New York Fed, another captured regulator with one critically important and critically dangerous difference from other regulators: it has the ability to electronically create money out of thin air.
As a sign of just how brazen and disastrously broken the U.S. financial system has become, with no hearings in Congress, with no blaring headlines on the front pages of newspapers, the New York Fed turned on its money spigot to Wall Street again on September 17, 2019. It was the first time this has happened since the financial crisis. For the past four months the New York Fed has been spewing hundreds of billions of dollars each week to Wall Street’s trading houses, pushing the Dow Jones Industrial Average up by 3,000 points, with no accountability to anyone or explanation as to why Wall Street needs or deserves this money.
Americans must engage in demanding accountability from their elected, and as yet uncaptured, members of Congress.
Thursday, January 23, 2020
SC205-1
http://www.informationclearinghouse.info/52885.htm
Never the Pentagon
How The Military-Industrial Complex Gets Away With Murder in Contract After Contract
Call it a colossal victory for a Pentagon that hasn't won a war in this century, but not for the rest of us. Congress only recently passed and the president approved one of the largest Pentagon budgets ever. It will surpass spending at the peaks of both the Korean and Vietnam wars. As last year ended, as if to highlight the strangeness of all this, the Washington Post broke a story about a “confidential trove of government documents” -- interviews with key figures involved in the Afghan War by the Office of the Special Inspector General for Afghanistan Reconstruction -- revealing the degree to which senior Pentagon leaders and military commanders understood that the war was failing. Yet, year after year, they provided “rosy pronouncements they knew to be false,” while “hiding unmistakable evidence that the war had become unwinnable.”
However, as the latest Pentagon budget shows, no matter the revelations, there will be no reckoning when it comes to this country’s endless wars or its military establishment -- not at a moment when President Donald Trump is sending yet more U.S. military personnel into the Middle East and has picked a new fight with Iran. No less troubling: how few in either party in Congress are willing to hold the president and the Pentagon accountable for runaway defense spending or the poor performance that has gone with it.
Given the way the Pentagon has sunk taxpayer dollars into those endless wars, in a more reasonable world that institution would be overdue for a comprehensive audit of all its programs and a reevaluation of its expenditures. (It has, by the way, never actually passed an audit.) According to Brown University’s Costs of War Project, Washington has already spent at least $2 trillion on its war in Afghanistan alone and, as the Post made clear, the corruption, waste, and failure associated with those expenditures was (or at least should have been) mindboggling.
Of course, little of this was news to people who had read the damning reports released by the Special Inspector General for Afghanistan Reconstruction in previous years. They included evidence, for instance, that somewhere between $10 million and $43 million had been spent constructing a single gas station in the middle of nowhere, that $150 million had gone into luxury private villas for Americans who were supposed to be helping strengthen Afghanistan’s economy, and that tens of millions more were wasted on failed programs to improve Afghan industries focused on extracting more of the country’s minerals, oil, and natural gas reserves.
In the face of all this, rather than curtailing Pentagon spending, Congress continued to increase its budget, while also supporting a Department of Defense slush fund for war spending to keep the efforts going. Still, the special inspector general’s reports did manage to rankle American military commanders (unable to find successful combat strategies in Afghanistan) enough to launch what, in effect, would be a public-relations war to try to undermine that watchdog’s findings.
All of this, in turn, reflected the “unwarranted influence” of the military-industrial complex that President (and former five-star General) Dwight Eisenhower warned Americans about in his memorable 1961 farewell address. That complex only continues to thrive and grow almost six decades later, as contractor profits are endlessly prioritized over what might be considered the national security interests of the citizenry.
The infamous “revolving door” that regularly ushers senior Pentagon officials into defense-industry posts and senior defense-industry figures into key positions at the Pentagon (and in the rest of the national security state) just adds to the endless public-relations offensives that accompany this country’s forever wars. After all, the retired generals and other officials the media regularly looks to for expertise are often essentially paid shills for the defense industry. The lack of public disclosure and media discussion about such obvious conflicts of interest only further corrupts public debate on both the wars and the funding of the military, while giving the arms industry the biggest seat at the table when decisions are made on how much to spend on war and preparations for the same.
Media Analysis Brought to You by the Arms Industry
That lack of disclosure regarding potential conflicts of interest recently came into fresh relief as industry boosters beat the media drums for war with Iran. Unfortunately, it’s a story we’ve seen many times before. Back in 2008, for instance, in a Pulitzer Prize-winning series, the New York Times revealed that the Pentagon had launched a program to cultivate a coterie of retired-military-officers-turned-pundits in support of its already disastrous war in Iraq. Seeing such figures on TV or reading their comments in the press, the public may have assumed that they were just speaking their minds. However, the Times investigation showed that, while widely cited in the media and regularly featured on the TV news, they never disclosed that they received special Pentagon access and that, collectively, they had financial ties to more than 150 Pentagon contractors.
Given such financial interests, it was nearly impossible for them to be “objective” when it came to this country’s failing war in Iraq. After all, they needed to secure more contracts for their defense-industry employers. A subsequent analysis by the Government Accountability Office found that the Pentagon’s program raised “legitimate questions” about how its public propaganda efforts were tied to the weaponry it bought, highlighting “the possibility of compromised procurements resulting from potential competitive advantages” for those who helped them.
While the program was discontinued that same year, a similar effort was revealed in 2013 during a debate over whether the U.S. should attack Bashar al-Assad’s Syrian regime. You probably won’t be surprised to discover that most of the former military figures and officials used as analysts at the time supported action against Syria. A review of their commentary by the Public Accountability Initiative found a number of them also had undisclosed ties to the arms industry. In fact, of 111 appearances in major media outlets by 22 commentators, only 13 of them disclosed any aspect of their potential conflicts of interest that might lead them to promote war.
The same pattern is now being repeated in the debate over the Trump administration’s decision to assassinate by drone Iranian Major General Qassem Suleimani and other Iran-related issues. While Suleimani clearly opposed the United States and many of its national security interests, his killing risked pushing Washington into another endless war in the Middle East. And in a distinctly recognizable pattern, the Intercept has already found that the air waves were subsequently flooded by defense-industry pundits praising the strike. Unsurprisingly, news of a potential war also promptly boosted defense industry stocks. Northrop Grumman’s, Raytheon’s, and Lockheed Martin’s all started 2020 with an uptick.
Senator Elizabeth Warren (D-MA) and Representative Jackie Speier (D-CA) have offered legislation that could shut down that revolving door between the major weapons makers and Washington for good, but it has met concerted resistance from Pentagon officials and others still in Congress who stand to benefit from preserving the system as is. Even if that revolving door wasn’t shut down, transparency about just who was going through it would help the public better understand what former officials and military commanders are really advocating for when they speak positively of the necessity for yet another war in the Middle East.
Costly Weapons (and Well-Paid Lobbyists)
Here’s what we already know about how it all now works: weapon systems produced by the big defense firms with all those retired generals, former administration officials, and one-time congressional representatives on their boards (or lobbying for or consulting for them behind the scenes) regularly come in overpriced, are often delivered behind schedule, and repeatedly fail to have the capabilities advertised. Take, for instance, the new Ford class aircraft carriers, produced by Huntington Ingalls Industries, the sort of ships that have traditionally been used to show strength globally. In this case, however, the program’s development has been stifled by problems with its weapons elevators and the systems used to launch and recover its aircraft. Those problems have been costly enough to send the price for the first of those carriers soaring to $13.1 billion. Meanwhile, Lockheed Martin’s F-35 jet fighter, the most expensive weapons system in Pentagon history, has an abysmal rate of combat readiness and currently comes in at more than $100 million per aircraft.
And yet, somehow, no one ever seems to be responsible for such programmatic failures and prices -- certainly not the companies that make them (or all those retired military commanders sitting on their boards or working for them). One crucial reason for this lack of accountability is that key members of Congress serving on committees that should be overseeing such spending are often the top recipients of campaign contributions from the big weapons makers and their allies. And just as at the Pentagon, members of those committees or their staff often later become lobbyists for those very federal contractors.
With this in mind, the big defense firms carefully spread their contracts for weapons production across as many congressional districts as possible. This practice of “political engineering,” a term promoted by former Department of Defense analyst and military reformer Chuck Spinney, helps those contractors and the Pentagon buy off members of Congress from both parties. Take, for example, the Littoral Combat Ship, a vessel meant to operate close to shore. Costs for the program tripled over initial estimates and, according to Defense News, the Navy is already considering decommissioning four of the new ships next year as a cost-saving measure. It’s not the first time that program has been threatened with the budget axe. In the past, however, pork-barrel politics spearheaded by Senators Tammy Baldwin (D-WI) and Richard Shelby (R-AL), in whose states those boats were being built, kept the program afloat.
The Air Force’s new bomber, the B-21, being built by Northrup Grumman, has been on a similar trajectory. Despite significant pressure from then-Senator John McCain (R-AZ), the Air Force refused in 2017 to make public or agree upon a contract price for the program. (It was a “cost-plus,” not a “fixed price” contract, after all.) It did, however, release the names of the companies providing components to the program, ensuring that relevant congressional representatives would support it, no matter the predictably spiraling costs to come.
Recent polling indicates that such pork-barrel politics isn’t backed by the public, even when they might benefit from it. Asked whether congressional representatives should use the Pentagon’s budget to generate jobs in their districts, 77% of respondents rejected the notion. Two-thirds favored shifting such funds to sectors like healthcare, infrastructure, and clean energy that would, in fact, create significantly more jobs.
And keep in mind that, in this big-time system of profiteering, hardware costs, however staggering, are just a modest part of the equation. The Pentagon spends about as much on what it calls “services” as it does on the weaponry itself and those service contracts are another major source of profits. For example, it’s estimated that the F-35 program will cost $1.5 trillion over the lifetime of the plane, but a trillion dollars of those costs will be for support and maintenance of the aircraft.
Increasingly, this means contractors are able to hold the Pentagon hostage over a weapon’s lifetime, which means overcharges of just about every imaginable sort, including for labor. The Project On Government Oversight (where I work) has, for instance, been uncovering overcharges in spare parts since our founding, including an infamous $435 hammer back in 1983. I’m sad to report that what, in the 1980s, was a seemingly outrageous $640 plastic toilet-seat cover for military airplanes now costs an eye-popping $10,000. A number of factors help explain such otherwise unimaginable prices, including the way contractors often retain intellectual property rights to many of the systems taxpayers funded to develop, legal loopholes that make it difficult for the government to challenge wild charges, and a system largely beholden to the interests of defense companies.
The most recent and notorious case may be TransDigm, a company that has purchased other companies with a monopoly on providing spare parts for a number of weapon systems. That, in turn, gave it power to increase the prices of parts with little fear of losing business -- once, receiving 9,400% in excess profits for a single half-inch metal pin. An investigation by the House Oversight and Reform Committee found that TransDigm’s employees had been coached to resist providing cost or pricing information to the government, lest such overcharges be challenged.
In one case, for instance, a subsidiary of TransDigm resisted providing such information until the government, desperate for parts for weapons to be used in Iraq and Afghanistan, was forced to capitulate or risk putting troops’ lives on the line. TransDigm did later repay the government $16 million for certain overcharges, but only after the House Oversight and Reform Committee held a hearing on the subject that shamed the company. As it happens, TransDigm’s behavior isn’t an outlier. It’s typical of many defense-related companies doing business with the government -- about 20 major industry players, according to a former Pentagon pricing czar.
A Recipe for Disaster
For too long Congress has largely abdicated its responsibilities when it comes to holding the Pentagon accountable. You won't be surprised to learn that most of the “acquisition reforms” it’s passed in recent years, which affect how the Department of Defense buys goods and services, have placed just about all real negotiating power in the hands of the big defense contractors. To add insult to injury, both parties of Congress continue to vote in near unanimity for increases in the Pentagon budget, despite 18-plus years of losing wars, the never-ending gross mismanagement of weapons programs, and a continued failure to pass a basic audit. If any other federal agency (or the contractors it dealt with) had a similar track record, you can only begin to imagine the hubbub that would ensue. But not the Pentagon. Never the Pentagon.
A significantly reduced budget would undoubtedly increase that institution’s effectiveness by curbing its urge to throw ever more money at problems. Instead, an often bought-and-paid-for Congress continues to enable bad decision-making about what to buy and how to buy it. And let’s face it, a Congress that allows endless wars, terrible spending practices, and multiplying conflicts of interest is, as the history of the twenty-first century has shown us, a recipe for disaster.
Never the Pentagon
How The Military-Industrial Complex Gets Away With Murder in Contract After Contract
Call it a colossal victory for a Pentagon that hasn't won a war in this century, but not for the rest of us. Congress only recently passed and the president approved one of the largest Pentagon budgets ever. It will surpass spending at the peaks of both the Korean and Vietnam wars. As last year ended, as if to highlight the strangeness of all this, the Washington Post broke a story about a “confidential trove of government documents” -- interviews with key figures involved in the Afghan War by the Office of the Special Inspector General for Afghanistan Reconstruction -- revealing the degree to which senior Pentagon leaders and military commanders understood that the war was failing. Yet, year after year, they provided “rosy pronouncements they knew to be false,” while “hiding unmistakable evidence that the war had become unwinnable.”
However, as the latest Pentagon budget shows, no matter the revelations, there will be no reckoning when it comes to this country’s endless wars or its military establishment -- not at a moment when President Donald Trump is sending yet more U.S. military personnel into the Middle East and has picked a new fight with Iran. No less troubling: how few in either party in Congress are willing to hold the president and the Pentagon accountable for runaway defense spending or the poor performance that has gone with it.
Given the way the Pentagon has sunk taxpayer dollars into those endless wars, in a more reasonable world that institution would be overdue for a comprehensive audit of all its programs and a reevaluation of its expenditures. (It has, by the way, never actually passed an audit.) According to Brown University’s Costs of War Project, Washington has already spent at least $2 trillion on its war in Afghanistan alone and, as the Post made clear, the corruption, waste, and failure associated with those expenditures was (or at least should have been) mindboggling.
Of course, little of this was news to people who had read the damning reports released by the Special Inspector General for Afghanistan Reconstruction in previous years. They included evidence, for instance, that somewhere between $10 million and $43 million had been spent constructing a single gas station in the middle of nowhere, that $150 million had gone into luxury private villas for Americans who were supposed to be helping strengthen Afghanistan’s economy, and that tens of millions more were wasted on failed programs to improve Afghan industries focused on extracting more of the country’s minerals, oil, and natural gas reserves.
In the face of all this, rather than curtailing Pentagon spending, Congress continued to increase its budget, while also supporting a Department of Defense slush fund for war spending to keep the efforts going. Still, the special inspector general’s reports did manage to rankle American military commanders (unable to find successful combat strategies in Afghanistan) enough to launch what, in effect, would be a public-relations war to try to undermine that watchdog’s findings.
All of this, in turn, reflected the “unwarranted influence” of the military-industrial complex that President (and former five-star General) Dwight Eisenhower warned Americans about in his memorable 1961 farewell address. That complex only continues to thrive and grow almost six decades later, as contractor profits are endlessly prioritized over what might be considered the national security interests of the citizenry.
The infamous “revolving door” that regularly ushers senior Pentagon officials into defense-industry posts and senior defense-industry figures into key positions at the Pentagon (and in the rest of the national security state) just adds to the endless public-relations offensives that accompany this country’s forever wars. After all, the retired generals and other officials the media regularly looks to for expertise are often essentially paid shills for the defense industry. The lack of public disclosure and media discussion about such obvious conflicts of interest only further corrupts public debate on both the wars and the funding of the military, while giving the arms industry the biggest seat at the table when decisions are made on how much to spend on war and preparations for the same.
Media Analysis Brought to You by the Arms Industry
That lack of disclosure regarding potential conflicts of interest recently came into fresh relief as industry boosters beat the media drums for war with Iran. Unfortunately, it’s a story we’ve seen many times before. Back in 2008, for instance, in a Pulitzer Prize-winning series, the New York Times revealed that the Pentagon had launched a program to cultivate a coterie of retired-military-officers-turned-pundits in support of its already disastrous war in Iraq. Seeing such figures on TV or reading their comments in the press, the public may have assumed that they were just speaking their minds. However, the Times investigation showed that, while widely cited in the media and regularly featured on the TV news, they never disclosed that they received special Pentagon access and that, collectively, they had financial ties to more than 150 Pentagon contractors.
Given such financial interests, it was nearly impossible for them to be “objective” when it came to this country’s failing war in Iraq. After all, they needed to secure more contracts for their defense-industry employers. A subsequent analysis by the Government Accountability Office found that the Pentagon’s program raised “legitimate questions” about how its public propaganda efforts were tied to the weaponry it bought, highlighting “the possibility of compromised procurements resulting from potential competitive advantages” for those who helped them.
While the program was discontinued that same year, a similar effort was revealed in 2013 during a debate over whether the U.S. should attack Bashar al-Assad’s Syrian regime. You probably won’t be surprised to discover that most of the former military figures and officials used as analysts at the time supported action against Syria. A review of their commentary by the Public Accountability Initiative found a number of them also had undisclosed ties to the arms industry. In fact, of 111 appearances in major media outlets by 22 commentators, only 13 of them disclosed any aspect of their potential conflicts of interest that might lead them to promote war.
The same pattern is now being repeated in the debate over the Trump administration’s decision to assassinate by drone Iranian Major General Qassem Suleimani and other Iran-related issues. While Suleimani clearly opposed the United States and many of its national security interests, his killing risked pushing Washington into another endless war in the Middle East. And in a distinctly recognizable pattern, the Intercept has already found that the air waves were subsequently flooded by defense-industry pundits praising the strike. Unsurprisingly, news of a potential war also promptly boosted defense industry stocks. Northrop Grumman’s, Raytheon’s, and Lockheed Martin’s all started 2020 with an uptick.
Senator Elizabeth Warren (D-MA) and Representative Jackie Speier (D-CA) have offered legislation that could shut down that revolving door between the major weapons makers and Washington for good, but it has met concerted resistance from Pentagon officials and others still in Congress who stand to benefit from preserving the system as is. Even if that revolving door wasn’t shut down, transparency about just who was going through it would help the public better understand what former officials and military commanders are really advocating for when they speak positively of the necessity for yet another war in the Middle East.
Costly Weapons (and Well-Paid Lobbyists)
Here’s what we already know about how it all now works: weapon systems produced by the big defense firms with all those retired generals, former administration officials, and one-time congressional representatives on their boards (or lobbying for or consulting for them behind the scenes) regularly come in overpriced, are often delivered behind schedule, and repeatedly fail to have the capabilities advertised. Take, for instance, the new Ford class aircraft carriers, produced by Huntington Ingalls Industries, the sort of ships that have traditionally been used to show strength globally. In this case, however, the program’s development has been stifled by problems with its weapons elevators and the systems used to launch and recover its aircraft. Those problems have been costly enough to send the price for the first of those carriers soaring to $13.1 billion. Meanwhile, Lockheed Martin’s F-35 jet fighter, the most expensive weapons system in Pentagon history, has an abysmal rate of combat readiness and currently comes in at more than $100 million per aircraft.
And yet, somehow, no one ever seems to be responsible for such programmatic failures and prices -- certainly not the companies that make them (or all those retired military commanders sitting on their boards or working for them). One crucial reason for this lack of accountability is that key members of Congress serving on committees that should be overseeing such spending are often the top recipients of campaign contributions from the big weapons makers and their allies. And just as at the Pentagon, members of those committees or their staff often later become lobbyists for those very federal contractors.
With this in mind, the big defense firms carefully spread their contracts for weapons production across as many congressional districts as possible. This practice of “political engineering,” a term promoted by former Department of Defense analyst and military reformer Chuck Spinney, helps those contractors and the Pentagon buy off members of Congress from both parties. Take, for example, the Littoral Combat Ship, a vessel meant to operate close to shore. Costs for the program tripled over initial estimates and, according to Defense News, the Navy is already considering decommissioning four of the new ships next year as a cost-saving measure. It’s not the first time that program has been threatened with the budget axe. In the past, however, pork-barrel politics spearheaded by Senators Tammy Baldwin (D-WI) and Richard Shelby (R-AL), in whose states those boats were being built, kept the program afloat.
The Air Force’s new bomber, the B-21, being built by Northrup Grumman, has been on a similar trajectory. Despite significant pressure from then-Senator John McCain (R-AZ), the Air Force refused in 2017 to make public or agree upon a contract price for the program. (It was a “cost-plus,” not a “fixed price” contract, after all.) It did, however, release the names of the companies providing components to the program, ensuring that relevant congressional representatives would support it, no matter the predictably spiraling costs to come.
Recent polling indicates that such pork-barrel politics isn’t backed by the public, even when they might benefit from it. Asked whether congressional representatives should use the Pentagon’s budget to generate jobs in their districts, 77% of respondents rejected the notion. Two-thirds favored shifting such funds to sectors like healthcare, infrastructure, and clean energy that would, in fact, create significantly more jobs.
And keep in mind that, in this big-time system of profiteering, hardware costs, however staggering, are just a modest part of the equation. The Pentagon spends about as much on what it calls “services” as it does on the weaponry itself and those service contracts are another major source of profits. For example, it’s estimated that the F-35 program will cost $1.5 trillion over the lifetime of the plane, but a trillion dollars of those costs will be for support and maintenance of the aircraft.
Increasingly, this means contractors are able to hold the Pentagon hostage over a weapon’s lifetime, which means overcharges of just about every imaginable sort, including for labor. The Project On Government Oversight (where I work) has, for instance, been uncovering overcharges in spare parts since our founding, including an infamous $435 hammer back in 1983. I’m sad to report that what, in the 1980s, was a seemingly outrageous $640 plastic toilet-seat cover for military airplanes now costs an eye-popping $10,000. A number of factors help explain such otherwise unimaginable prices, including the way contractors often retain intellectual property rights to many of the systems taxpayers funded to develop, legal loopholes that make it difficult for the government to challenge wild charges, and a system largely beholden to the interests of defense companies.
The most recent and notorious case may be TransDigm, a company that has purchased other companies with a monopoly on providing spare parts for a number of weapon systems. That, in turn, gave it power to increase the prices of parts with little fear of losing business -- once, receiving 9,400% in excess profits for a single half-inch metal pin. An investigation by the House Oversight and Reform Committee found that TransDigm’s employees had been coached to resist providing cost or pricing information to the government, lest such overcharges be challenged.
In one case, for instance, a subsidiary of TransDigm resisted providing such information until the government, desperate for parts for weapons to be used in Iraq and Afghanistan, was forced to capitulate or risk putting troops’ lives on the line. TransDigm did later repay the government $16 million for certain overcharges, but only after the House Oversight and Reform Committee held a hearing on the subject that shamed the company. As it happens, TransDigm’s behavior isn’t an outlier. It’s typical of many defense-related companies doing business with the government -- about 20 major industry players, according to a former Pentagon pricing czar.
A Recipe for Disaster
For too long Congress has largely abdicated its responsibilities when it comes to holding the Pentagon accountable. You won't be surprised to learn that most of the “acquisition reforms” it’s passed in recent years, which affect how the Department of Defense buys goods and services, have placed just about all real negotiating power in the hands of the big defense contractors. To add insult to injury, both parties of Congress continue to vote in near unanimity for increases in the Pentagon budget, despite 18-plus years of losing wars, the never-ending gross mismanagement of weapons programs, and a continued failure to pass a basic audit. If any other federal agency (or the contractors it dealt with) had a similar track record, you can only begin to imagine the hubbub that would ensue. But not the Pentagon. Never the Pentagon.
A significantly reduced budget would undoubtedly increase that institution’s effectiveness by curbing its urge to throw ever more money at problems. Instead, an often bought-and-paid-for Congress continues to enable bad decision-making about what to buy and how to buy it. And let’s face it, a Congress that allows endless wars, terrible spending practices, and multiplying conflicts of interest is, as the history of the twenty-first century has shown us, a recipe for disaster.
Wednesday, January 22, 2020
SC204-15
https://www.globalresearch.ca/pompeo-iraq-if-you-kick-us-out-we-will-bury-you/5701293
Pompeo to Iraq: If You Kick Us Out, We Will Bury You
The Trump administration is threatening to destroy Iraq’s economy by withholding a critical source of money that is controlled by the Federal Reserve. The threat is a response to the Iraqi parliament’s unanimous decision to end Washington’s 17 year-long military occupation. The Iraqi people and their representatives in parliament are incensed by the recent assassination of Iran’s most revered general, Qassem Soleimani, who was savagely incinerated by a Hellfire missile on the direct orders of Donald Trump. Iraqi prime minister, Adel Abdul-Mahdi, and his supporting MPs believe that the US committed a gross violation of Iraq’s sovereignty by killing a visiting dignitary without first obtaining the government’s permission. This is why the parliament and the prime minister have asked the administration to respect the wishes of the Iraqi people and withdraw all US troops from the country.
In response to parliament’s request, President Trump has threatened to impose harsh economic sanctions on Iraq while the State Department has issued a defiant statement that flatly rejects Iraq’s demands and refuses to even discuss the matter. Here is an excerpt from the statement:
“America is a force for good in the Middle East. Our military presence in Iraq is to continue the fight against ISIS and as the Secretary has said, we are committed to protecting Americans, Iraqis, and our coalition partners….At this time, any delegation sent to Iraq would be dedicated to discussing how to best recommit to our strategic partnership—not to discuss troop withdrawal, but our right, appropriate force posture in the Middle East. …. There does, however, need to be a conversation between the U.S. and Iraqi governments not just regarding security, but about our financial, economic, and diplomatic partnership. We want to be a friend and partner to a sovereign, prosperous, and stable Iraq.”
It would interesting to know whether ‘shadow president’, Mike Pompeo, composed the communique himself or if he was assisted by his fellow neocon advisors at State. In any event, the terse directive leaves no doubt that Iraq remains the exclusive property of the US government who will not permit any challenge to its iron-fisted rule. By any definition, Iraq remains an American colony, that is, “a country that is under the full or partial political control of another country and occupied by (soldiers) from that country.” Pompeo’s imperious response shows that, despite the nonsensical hype in the western media, Iraq is neither independent nor sovereign.
A closer look at the State Department’s communique hints at the manner in which Pompeo intends to keep Iraq under Washington’s thumb. When he says, “There .. needs to be a conversation … about our financial, economic, and diplomatic partnership.” What he appears to mean is: ‘We have no intention of launching another costly counterinsurgency operation in Iraq. Instead, we will withhold the proceeds from Iraq’s oil revenues, which will drive the government into bankruptcy thrusting the country into another agonizing period of sectarian conflict.’
This new strategy, which is tantamount to blackmail, was fleshed-out in a number of recent articles which garnered only modest attention in the media. According to the Wall Street Journal:
“The State Department warned that the U.S. could shut down Iraq’s access to the country’s central bank account held at the Federal Reserve Bank of New York, a move that could jolt Iraq’s already shaky economy, the officials said….
The warning regarding the Iraqi central bank account was conveyed to Iraq’s prime minister in a call on Wednesday,….The Federal Reserve Bank in New York, which can freeze accounts under U.S. sanctions law… said it doesn’t comment on specific account holders.
“The U.S. Fed basically has a stranglehold on the entire [Iraqi] economy,” said Shwan Taha, chairman of Iraqi investment bank Rabee Securities….” (“U.S. Warns Iraq It Risks Losing Access to Key Bank Account if Troops Told to Leave”, Wall Street Journal)
This is how the Trump administration does business. After invading Iraq on false pretenses, killing a million of its people, and reducing large swaths of the country to an uninhabitable wastelands, the US is now conducting a financial ‘scorched earth’ campaign aimed at forcing Iraq to comply with Washington’s diktats. It is hard to see how the State Department can characterize this behavior as “a force for good” but perhaps they are being facetious. In any event, the danger to Iraq’s fragile economy is quite real as can be seen in this article by the French News Agency AFP. Here’s an excerpt:
“Iraqi officials fear economic “collapse” if Washington imposes threatened sanctions, including blocking access to a U.S.-based account where Baghdad keeps oil revenues that feed 90% of the national budget….
The PMO (Prime Ministers Office) got a call threatening that if U.S. troops are kicked out, ‘we’ – the U.S. –will block your account at the Federal Reserve Bank in New York,”….The Central Bank of Iraq’s account at the Fed was established in 2003 following the U.S.-led invasion that toppled ex-dictator Saddam Hussein…Under United Nations Security Council Resolution 1483, which lifted the crippling global sanctions and oil embargo imposed on Iraq after Saddam’s invasion of Kuwait, all revenues from Iraqi oil sales would go to the account.
Iraq is OPEC’s second-biggest crude producer and more than 90% of the state budget, which reached $112 billion in 2019, derives from oil revenues… To this day, revenues are paid in dollars into the Fed account daily, with the balance now sitting at about $35 billion, Iraqi officials told AFP…..Every month or so, Iraq flies in $1-$2 billion in cash from that account for official and commercial transactions.
“We’re an oil-producing country. Those accounts are in dollars. Cutting off access means totally turning off the tap,” the first Iraqi official said… The second official said it would mean the government could not carry out daily functions or pay salaries and the Iraqi currency would plummet in value. “It would mean collapse for Iraq,” the official said.” (“Iraq warns of ‘collapse’ if Trump blocks oil money”, Daily Sabah)
This article is key to understanding US policy in Iraq, so let’s take a minute to summarize:
1– Iraq’s wealth is in the hands of the Fed
From the earliest days of the invasion (2003) the Federal Reserve has held the revenues from Iraq’s oil proceeds. That money has never been directly under the control of the Iraqi people or their elected representatives.
2–The proceeds from Iraqi oil do not benefit the Iraqi people
Iraq is presently OPEC’s second-biggest crude producer and more than 90% of the state budget, which reached $112 billion in 2019, derives from oil revenues. While this may sound like a significant amount of money, it’s worth noting, that Iraq’s petroleum contracts were drawn up under US supervision which means that Iraq is neither being adequately compensated for its oil nor are the revenues being fairly distributed among the Iraqi people.
3– The Fed is a political actor that is deeply involved in the implementation of U.S. foreign policy
The Federal Reserve is a political actor that plays a essential roll in spreading neoliberalism. The Fed works with government agents to prevent countries like Iraq from controlling their own wealth or from establishing their own sovereign independence.
4– The Iraqi government remains in Washington’s death grip
Iraq currently has $35 billion in an account at the Fed that it does not control, does not have access to, and cannot be used to improve the lives of the Iraqi people. Instead, the Iraqi government must wait for its American overlords to release the money in dribs and drabs as it sees fit. Now that parliament has angered Uncle Sam with their demand that US troops leave the country, Washington is threatening to “turn off the tap” paving the way for an economic collapse followed by widespread social unrest.
5–Iraq must sell its oil in USD
Iraqi oil is solely denominated in US Dollars which strengthens the petrodollar system that recycles revenues into US debt. This, in turn, helps to maintain the dollar’s dominance as the world’s reserve currency which is a political tool Washington uses to impose its own development model on foreign countries.
This brief recap helps to illustrate that US policy in Iraq is a shameless extortion racket that only serves the interests of Washington and its ally, Israel. What these bullet-points do not cover, however, is the way that US policy has failed to address Iraq’s battered and neglected infrastructure, its perennially-high unemployment, its largely-polluted drinking water or the grinding, demoralizing poverty faced by a large percentage of the population. (“23% of the Iraqi people live below the poverty line while more “than half of the urban population lives in slum-like conditions.” Electricity is only available for roughly 8 hours a day while summer temperatures frequently top 100 degrees Fahrenheit. 20% of households in Iraq use an unsafe drinking water source, while 65% must use public networks as a main source of drinking water.
Unemployment stands at 13% while youth unemployment is soaring at 25%.)
So while the oil giants continue to rake in burgeoning profits on record oil extraction, millions of Iraqis are living hand-to-mouth in an increasingly hardscrabble and dystopian environment.
The media typically scapegoats the government for Iraq’s problems, (“mismanagement, bureaucratic inefficiency, and corruption”) but the real source of the troubles is the US invasion. Before the invasion, Iraq was a relatively-secure, moderately-prosperous country. Now it is a broken, dysfunctional failed state that remains helplessly pinned beneath Washington’s boot-heel. That is unlikely to change under the present administration which has already expressed its intention to extend the occupation into perpetuity.
The Iraq war is the greatest catastrophe of our time. Aside from a handful of fanatical Likudniks and behemoth oil companies, no one has benefited at all. A 5,000 year-old civilization was sadistically bombed into oblivion so Washington and its ally, Israel, could redraw the map of the Middle East and establish their hegemony over a strategically-critical region of the world.
Author Nir Rosen summed it up like this in an interview on Democracy Now 10 years ago. He said,
“We’ve destroyed Iraq and we’ve destroyed the region, and Americans need to know this.”
Pompeo to Iraq: If You Kick Us Out, We Will Bury You
The Trump administration is threatening to destroy Iraq’s economy by withholding a critical source of money that is controlled by the Federal Reserve. The threat is a response to the Iraqi parliament’s unanimous decision to end Washington’s 17 year-long military occupation. The Iraqi people and their representatives in parliament are incensed by the recent assassination of Iran’s most revered general, Qassem Soleimani, who was savagely incinerated by a Hellfire missile on the direct orders of Donald Trump. Iraqi prime minister, Adel Abdul-Mahdi, and his supporting MPs believe that the US committed a gross violation of Iraq’s sovereignty by killing a visiting dignitary without first obtaining the government’s permission. This is why the parliament and the prime minister have asked the administration to respect the wishes of the Iraqi people and withdraw all US troops from the country.
In response to parliament’s request, President Trump has threatened to impose harsh economic sanctions on Iraq while the State Department has issued a defiant statement that flatly rejects Iraq’s demands and refuses to even discuss the matter. Here is an excerpt from the statement:
“America is a force for good in the Middle East. Our military presence in Iraq is to continue the fight against ISIS and as the Secretary has said, we are committed to protecting Americans, Iraqis, and our coalition partners….At this time, any delegation sent to Iraq would be dedicated to discussing how to best recommit to our strategic partnership—not to discuss troop withdrawal, but our right, appropriate force posture in the Middle East. …. There does, however, need to be a conversation between the U.S. and Iraqi governments not just regarding security, but about our financial, economic, and diplomatic partnership. We want to be a friend and partner to a sovereign, prosperous, and stable Iraq.”
It would interesting to know whether ‘shadow president’, Mike Pompeo, composed the communique himself or if he was assisted by his fellow neocon advisors at State. In any event, the terse directive leaves no doubt that Iraq remains the exclusive property of the US government who will not permit any challenge to its iron-fisted rule. By any definition, Iraq remains an American colony, that is, “a country that is under the full or partial political control of another country and occupied by (soldiers) from that country.” Pompeo’s imperious response shows that, despite the nonsensical hype in the western media, Iraq is neither independent nor sovereign.
A closer look at the State Department’s communique hints at the manner in which Pompeo intends to keep Iraq under Washington’s thumb. When he says, “There .. needs to be a conversation … about our financial, economic, and diplomatic partnership.” What he appears to mean is: ‘We have no intention of launching another costly counterinsurgency operation in Iraq. Instead, we will withhold the proceeds from Iraq’s oil revenues, which will drive the government into bankruptcy thrusting the country into another agonizing period of sectarian conflict.’
This new strategy, which is tantamount to blackmail, was fleshed-out in a number of recent articles which garnered only modest attention in the media. According to the Wall Street Journal:
“The State Department warned that the U.S. could shut down Iraq’s access to the country’s central bank account held at the Federal Reserve Bank of New York, a move that could jolt Iraq’s already shaky economy, the officials said….
The warning regarding the Iraqi central bank account was conveyed to Iraq’s prime minister in a call on Wednesday,….The Federal Reserve Bank in New York, which can freeze accounts under U.S. sanctions law… said it doesn’t comment on specific account holders.
“The U.S. Fed basically has a stranglehold on the entire [Iraqi] economy,” said Shwan Taha, chairman of Iraqi investment bank Rabee Securities….” (“U.S. Warns Iraq It Risks Losing Access to Key Bank Account if Troops Told to Leave”, Wall Street Journal)
This is how the Trump administration does business. After invading Iraq on false pretenses, killing a million of its people, and reducing large swaths of the country to an uninhabitable wastelands, the US is now conducting a financial ‘scorched earth’ campaign aimed at forcing Iraq to comply with Washington’s diktats. It is hard to see how the State Department can characterize this behavior as “a force for good” but perhaps they are being facetious. In any event, the danger to Iraq’s fragile economy is quite real as can be seen in this article by the French News Agency AFP. Here’s an excerpt:
“Iraqi officials fear economic “collapse” if Washington imposes threatened sanctions, including blocking access to a U.S.-based account where Baghdad keeps oil revenues that feed 90% of the national budget….
The PMO (Prime Ministers Office) got a call threatening that if U.S. troops are kicked out, ‘we’ – the U.S. –will block your account at the Federal Reserve Bank in New York,”….The Central Bank of Iraq’s account at the Fed was established in 2003 following the U.S.-led invasion that toppled ex-dictator Saddam Hussein…Under United Nations Security Council Resolution 1483, which lifted the crippling global sanctions and oil embargo imposed on Iraq after Saddam’s invasion of Kuwait, all revenues from Iraqi oil sales would go to the account.
Iraq is OPEC’s second-biggest crude producer and more than 90% of the state budget, which reached $112 billion in 2019, derives from oil revenues… To this day, revenues are paid in dollars into the Fed account daily, with the balance now sitting at about $35 billion, Iraqi officials told AFP…..Every month or so, Iraq flies in $1-$2 billion in cash from that account for official and commercial transactions.
“We’re an oil-producing country. Those accounts are in dollars. Cutting off access means totally turning off the tap,” the first Iraqi official said… The second official said it would mean the government could not carry out daily functions or pay salaries and the Iraqi currency would plummet in value. “It would mean collapse for Iraq,” the official said.” (“Iraq warns of ‘collapse’ if Trump blocks oil money”, Daily Sabah)
This article is key to understanding US policy in Iraq, so let’s take a minute to summarize:
1– Iraq’s wealth is in the hands of the Fed
From the earliest days of the invasion (2003) the Federal Reserve has held the revenues from Iraq’s oil proceeds. That money has never been directly under the control of the Iraqi people or their elected representatives.
2–The proceeds from Iraqi oil do not benefit the Iraqi people
Iraq is presently OPEC’s second-biggest crude producer and more than 90% of the state budget, which reached $112 billion in 2019, derives from oil revenues. While this may sound like a significant amount of money, it’s worth noting, that Iraq’s petroleum contracts were drawn up under US supervision which means that Iraq is neither being adequately compensated for its oil nor are the revenues being fairly distributed among the Iraqi people.
3– The Fed is a political actor that is deeply involved in the implementation of U.S. foreign policy
The Federal Reserve is a political actor that plays a essential roll in spreading neoliberalism. The Fed works with government agents to prevent countries like Iraq from controlling their own wealth or from establishing their own sovereign independence.
4– The Iraqi government remains in Washington’s death grip
Iraq currently has $35 billion in an account at the Fed that it does not control, does not have access to, and cannot be used to improve the lives of the Iraqi people. Instead, the Iraqi government must wait for its American overlords to release the money in dribs and drabs as it sees fit. Now that parliament has angered Uncle Sam with their demand that US troops leave the country, Washington is threatening to “turn off the tap” paving the way for an economic collapse followed by widespread social unrest.
5–Iraq must sell its oil in USD
Iraqi oil is solely denominated in US Dollars which strengthens the petrodollar system that recycles revenues into US debt. This, in turn, helps to maintain the dollar’s dominance as the world’s reserve currency which is a political tool Washington uses to impose its own development model on foreign countries.
This brief recap helps to illustrate that US policy in Iraq is a shameless extortion racket that only serves the interests of Washington and its ally, Israel. What these bullet-points do not cover, however, is the way that US policy has failed to address Iraq’s battered and neglected infrastructure, its perennially-high unemployment, its largely-polluted drinking water or the grinding, demoralizing poverty faced by a large percentage of the population. (“23% of the Iraqi people live below the poverty line while more “than half of the urban population lives in slum-like conditions.” Electricity is only available for roughly 8 hours a day while summer temperatures frequently top 100 degrees Fahrenheit. 20% of households in Iraq use an unsafe drinking water source, while 65% must use public networks as a main source of drinking water.
Unemployment stands at 13% while youth unemployment is soaring at 25%.)
So while the oil giants continue to rake in burgeoning profits on record oil extraction, millions of Iraqis are living hand-to-mouth in an increasingly hardscrabble and dystopian environment.
The media typically scapegoats the government for Iraq’s problems, (“mismanagement, bureaucratic inefficiency, and corruption”) but the real source of the troubles is the US invasion. Before the invasion, Iraq was a relatively-secure, moderately-prosperous country. Now it is a broken, dysfunctional failed state that remains helplessly pinned beneath Washington’s boot-heel. That is unlikely to change under the present administration which has already expressed its intention to extend the occupation into perpetuity.
The Iraq war is the greatest catastrophe of our time. Aside from a handful of fanatical Likudniks and behemoth oil companies, no one has benefited at all. A 5,000 year-old civilization was sadistically bombed into oblivion so Washington and its ally, Israel, could redraw the map of the Middle East and establish their hegemony over a strategically-critical region of the world.
Author Nir Rosen summed it up like this in an interview on Democracy Now 10 years ago. He said,
“We’ve destroyed Iraq and we’ve destroyed the region, and Americans need to know this.”
Subscribe to:
Posts (Atom)
