Ian Welsh

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

Category: Economics Page 24 of 90

Cold War 2.0 Incoming

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On August 11, 2020

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Right, with the ban on Huawei using chips made with American manufacturing equipment (one of the US’s last few places of absolute advantage), the bans on TikTok, Tencent, and WeChat, the attempt to convince other countries to not use Huawei 5G, and the arrest of the Huawei founder’s daughter for doing business with Iran, along with the US seizing a freighter full of medical supplies for Iran, I think we can state that the world is moving towards a second cold war.

The US pivoted to China containment under Obama, not Trump — though Trump has been far more aggressive. The Trans-Pacific Partnership (TPP) was created as a way of marshaling Asia-Pacific countries into an anti-Chinese trade area. While Trump didn’t go ahead with it, he’s pushed hard against China in other ways.

When the US asked Canada to seize the daughter of Huawei’s founder, for example, it destroyed Canada-China relations: Canada was forced to take sides, and the Chinese were furious. The USMC (the NAFTA replacement) included a clause that says signees cannot make new trade deals with non-free states if the others object: This was aimed squarely at China.

Britain had originally intended to use Huawei 5G, but after leaving the EU, reversed course.

It’s important to understand that the anti-China pivot is bipartisan, as are the sanctions against Huawei and others.

The United States has a number of advantages and it’s using all of them aggressively. First, the fact that it is the center of the financial universe, to the point that movement of funds often goes through the US even when the transaction doesn’t involve them, is a major one. The US has made its financial laws extra-territorial, in effect. If a transaction goes through the US at all, even if no one involved in the transaction is American-related, the US claims jurisdiction. (Famously, this was used by the US to launch an investigation in the World Cup, in which the US is a trivial player, because a bribe went through the US on its way somewhere else.)

This often happens unintentionally, and firms that do business with the US at all are thus often unwilling to do business with anyone whom the US has sanctioned.

US naval power and military presence is also important, with their ability to interdict the Strait of Malacca. China imports about 70 percent of their oil, and 80 percent goes thru the Malacca strait and the US can shut it down any time they want. This is true of much else that China imports or exports.

The Belt and Road Initiative is, in part, meant to cut out the US ability to use its navy to hurt China; it creates alternate land routes, including one right across the continent to Europe, and it includes pipelines. The alliance with Russia, fraught as it is, is also about reducing dependence on Malacca.

Indeed, even the ability to protect and control trade to nearby neighbours is in doubt, which is why China built artificial islands in the South China Sea.

Fundamentally, the post-WWII trade, financial, and military order is an American creation, with a European assist.

When the US let China into the WTO, they let the power most likely to overtake them inside, as it were, the house. They did so for the simplest of all reasons: greed. Oh, sure, there was talk of capitalism meaning democracy and all that, but basically, offshoring and outsourcing to China made a lot of money for a lot of corporations and rich people, and that’s why they allowed China in.

The US deliberately sped up the transfer of industry to China as a way of making more money and undercutting wages at home. China knew the deal it was offering; they understood Americans, and they were patient.

So now, China is a larger manufacturing country than the US and, by some measures, has a larger economy.

China is a threat.

China is seen as a threat and this perception is, again, bipartisan.

There is no reason to expect this to change. China is not going to buckle under to the US, like some third-world nation or a vassal like Canada. They now have a de-facto alliance with Russia. China has nuclear weapons, and Russia is not going to allow China to be taken out with a nuclear first strike (without China, they’d have to give the US anything it wants, and they know it.)

The US will keep using its financial and technological power to weaken and isolate China.

So what will happen is an acceleration of the creation of a banking system that routes entirely around the United States and which does not use the US dollar, but instead the Yuan. Countries will be folded into this, as part of the Belt and Road Initiative. Even core US allies may have little choice: South Korea does twice as much business with China as with the US, for example, and Australia is extremely dependent on China.

For many countries, China clearly offers the better deal: they provide far more cheap loans than the US, they provide development, and their goods and services are suitable for both developed and developing nations. Nor do they natter on about “human rights” while they bomb Yemen.

For others, China will be unacceptable.

This leads to a world with two trade areas, not a free trade world. It leads to an end of the dollar as the world reserve currency. It leads to a continued arms race. It may well lead to a breaking of world IP into two sets: one American lead, one China lead. (There’s no particular reason for China to respect US IP if the US refuses to let them use it.)

This is a recipe for Cold War 2.0.

This time, however, understand that the US is facing an “enemy” with more population and more industry than it, not a nation devastated by World War with less population. Likewise, China and Russia combined have more land and more resources, while Europe is not a sure American ally, though Britain, absent EU support, will fall completely into US vassal status.

This is especially true as the US is experiencing late-imperial rot. It is nearly completely unable to handle its internal affairs, and its social cohesion is breaking down to the point where it may soon become a failed state.

Many American supporters of Cold War 2.0 are trying to use China as the external enemy to rally Americans around and, by closing China off from the US, to drive manufacturing back to the US, or at least to its firm allies (like Taiwan).

Bringing manufacturing back is smart, it should never have been sent overseas, but American elites are confused: Their primary enemy isn’t China, their primary enemy is themselves. They are responsible for the US decline and China could not have risen so fast if they were not so corrupt, greedy, and short-sighted.

It’s a very stupid world we’re moving into, but some of what is going to happen has to happen. It’s not good that the US has the ability to sanction anyone it wants to. Those medical supplies seized off that freighter? Covid-19 medicines.

Power which is routinely abused, as the US has abused its financial and military power, is eventually removed. The US is accelerating this progress as fast as it can.

The ban on Huawei using chips manufactured with US tech will hurt, for example. But it’s time limited: China isn’t some backwards third-world country. They will advance their own chip manufacturing and erase the deficit.

By fighting the dragon, the US is making a rival an enemy.

Cold War 2.0 is coming and essentially inevitable, because it is something the leadership of both countries either wants or is willing to accept. The only monkey wrench in this are the effects of climate change and ecological collapse. More on them later.

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America Is About to Feel Like a Third World Nation

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On August 7, 2020

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I spent a good chunk of my childhood in third world countries. Most of that chunk was spent in Bangladesh, which was then arguably the poorest country in the world, but I visited or lived in Malaysia, Singapore, Indonesia, Nepal and India, among others.

There’s a feel to the third world one becomes familiar with: beggars, infrastructure that doesn’t really work, people doing terrible menial jobs. There’s the huge disparity between the wealthy and everyone else, or even those who have managed to attach themselves in a semi-dignified way to the wealthy.

Cruelty is routine and unremarked. Indian police officers routinely beat people as punishment (similar to their American counterparts). Servants are treated terribly, and in fact the locals routinely treated the servants far worse than foreigners. This has hardly changed, Vivekenanda, in the 19th century, noted that Americans treated their servants far better than Indians did.

The US is about to make a double digit percentage of its population homeless. Something like 20 to 30 percent — or more — of American small businesses have or are soob to shut down by the end of the pandemic. The jobs won’t all come back and those that do will pay worse and feature worse treatment than the ones before (which were mostly not well-paid and featured routine meanness).

We’re talking about 30 million to 60 million homeless.

These are staggering numbers.

The United States will feel third world. Oh, parts already did, when I landed in Miami airport the first time I immediately thought “third world.” Relatively prosperous third world, but third world.

Those places will be worse–and Florida (as I predicted near the beginning of the crisis) has handled the pandemic noticeably badly.

Of course, for many, little will change. They’ll keep their jobs, they’ll be fine. I recently witnessed a discussion of infosec jobs, talking about how for a person with a degree and a couple certifications, $120,000 was a lowball. There will still be good jobs, and you’ll still be able to lose everything in a few months if you become seriously ill.

But when those people who are hanging on go out in the streets, they’ll see, even more than now, the fate that awaits them if they slip.

So much of American meanness, and the culture is mean in the details of its daily life, comes from this fear. Because it is so easy to slip into the underclass, even if one “does everything right,” Americans are scared, even terrified, all the time. They suppress it with massive amounts of drugs (most of them legal), and most deny it, but the fear drives the cruelty.

In the Great Depression, people became less cruel, not more. They saw that the idea of meritocracy was absolute bullshit: The richest people in society had fucked up, good people wound up in poverty, and merit had nothing to do with who had how much.

I hope this is what will happen in the US this time. I fear, instead, it will lead to even more cruelty. Instead of saying, “We should make sure everyone is taken care of” and instituting universal health care, good wages, and a non-punitive welfare system (whether through a universal income or some other way), Americans will instead become even more cruel out of fear of losing their place.

The US is “undeveloping.” It is moving away from being a developed nation to being an undeveloped nation.

This process has been going on for a loooooong time. At least 40 years (1980), and arguably since about ’68 or so. The frustration, as an analyst, was that the trend was obvious but it took so long. There is, as Keynes said, a lot of ruin in a nation.

Change is slow, very slow, until it is fast. People who live in the slow period, of long decline, don’t really believe in collapse, they assume that things will get worse in a steady line.

But, in fact, there are long periods where everything changes slowly, then periods like earthquakes. 2008 was an earthquake (and collapse nearly inevitable by bailing out the rich). This is also an earthquake. Amercians will FEEL different afterwards, even if Covid goes away 100 percent, which it may not, because Americans refuse to do what is necessary. American media keeps having articles about how Covid will never go away. Well, except for quarantining visitors, it will for many countries. But not for the US, or Brazil, or India. Third world countries all.

Nor should we get too down on third world countries. The US is third world and experiencing the complete corruption of its ruling and governing classes, with the collapse of its administrative ability. When your post office can’t even deliver mail, you’re a failing state; this is such a basic part of being a government that it’s part of the Constitution, written in the 18th century, but because the post office isn’t a kleptocratic institution, the American political class is destroying it.

Most third world nations, indeed, are handling Covid better than The US.

Nonetheless the process is underway. The US is already governed like a third world nation, it just has a lot of legacy infrastructure and institutions to destroy to get the full experience.

So, expect that this is one of the times that matters. Expect that the US will be different after this. Expect that it will feel different. Understand that your personal position has become much more perilous. You must reduce your vulnerability and/or attach yourself to a corrupt money stream in a way which makes you indispensable. Being valuable is not enough, it needs to hurt important people if you you go down. If it doesn’t, the second the numbers say you go, you’re off, and any individual who can be replaced will be if you get on the wrong side of someone more powerful.

There’s lots of good paying jobs, yes, but almost all of them can be done by someone else. It doesn’t have to be you.

Bear all this in mind as you plan your future in the new third world United States.

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Understanding Leadership Responsibility For Death, Harm & Welfare

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On August 5, 2020

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In the law there is a crime known as criminal negligence.

Criminal negligence is the failure on the part of a person on whom a duty is placed to take reasonable steps to prevent a certain bad outcome from happening. Duties may or may not be specifically known to you. For instance, as a driver, you have a duty not to hurt others with your vehicle. You may or may not have known that.

Other examples of people who have duties to others include: parents owing a protective duty to their children, or employers/supervisors at work owing a duty to their workers.

Let’s extend this. When you have authority, if you do something a reasonable person should know would cause harm, you are responsible for that harm.

All positions of power come with duties. American Presidents like to whinge on about how they have a duty to protect Americans, but the actual sworn duty is to uphold the Constitution. All leaders in any sane system are broadly responsible for the welfare of the people they rule and for the consequences of the actions they take, even on non-citizens.

If you go to war, like George W. Bush did, you know that a lot of bad things will happen: deaths, injuries, rapes, property destruction and so on. So you are responsible for all of those deaths. Therefore if you go to war without sufficient reason, you are a criminal. This is true for Obama (Libya, Yemen) and Trump as well (all the ongoing wars he could stop but hasn’t.) It is true of drone murders, both because they kill innocents and because they violate any reasonable reading of the Constitution (due process of law.)

It is also true of creating a medical system that kills tens of thousands of people a year. If you raise the price of drugs so that people can’t afford them without sufficient justification (aka. production and distribution costs have gone up that much), you know people will die. You are guilty of negligent mass murder.

Politicians and bureaucrats have positive duties: to see to the welfare of the people they oversee.

The same is true of corporate officers, or should be. Corporations are bundles of very valuable rights, given to corporations by the people, in the expectation that corporations will increase public welfare. A corporation which does not increase public welfare has broken that bargain and the officers have failed in their positive duty. Likewise the expectation is that the corporation will not actively do harm, certainly not harm that outweighs the good it does.

When you analyze various leaders in society thru this lens it becomes quickly clear who is doing their job and who isn’t. The Federal Reserve deliberately crushed wages for decades. That was deliberate harm, and they knew it. They deliberately made sure that full employment was not reached, which is in direct violation of the explicit aims of their institution.

Trump swore to uphold the constitution and repeatedly violated the prohibitions against profitting from public office. All Presidents of the past decades have supported laws that violate the first and fourth amendments, and do so very clearly.

And so on and so forth.

If a reasonable person, with the knowledge expected of someone in the role (aka. a drug executive should know the result of price increases of drugs, that’s a basic competency of the job) are responsible for the affects of their decisions. Since all of them exist to increase, at the least, the welfare of society, if they do things they know will decrease that welfare, then they have, at best, been negligent, and probably criminally negligent.

This the floor for how leaders in society, whether private or public, should be judged. This doesn’t mean they can never do anything to hurt anyone, many public decisions involve trade-offs, and sometimes harming a few is required to aid the many. A simple example would be a wealth tax. Bezos and Gates would squeal and feel badly done by, but many people would be better off as a result.

If a result of an action or policy is what a reasonable person in that role would expect to happen, leaders can be judged by it. Going to war has obvious consequences. Drone murders with big explosions have obvious consequences. Helping Saudi Arabia keep food out of Yemen has obvious consequences. Keeping life-saving drugs from Iran and Iraq has obvious consequences. Dropping progressive taxes thru the floor and taxing capital gains lower than earned income has obvious consequences. Massively raising insulin prices has obvious consequences. Treating warehouse workers like automata has obvious consequences (acknowledged in at least one case by keeping an ambulance outside an Amazon warehouse.)

When we fail to hold our leadership to “you are responsible for the obvious consequences of your decisions” our leadership no longer serves the people or their welfare, but only the welfare of the very few they decide to care about. At that point they become not leaders, but rulers, and we their subject and in all but name: serfs. Disposable assets to be used up as they see fit, for their benefit, not ours.

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Understanding American Elites Means Understanding Predators

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On July 30, 2020

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American elites are not incompetent at what matters to them.

People constantly make ridiculous statements like, “The American government has been incompetent in its handling of Covid-19.”

Anyone who makes such a statement reveals that they do not understand how the US operates.

Fact: According the Princeton oligarchy study, almost the only thing that matters in what policies government pursues in the US is what elite factions want.

Fact: Covid-19 has made the rich in the US much, much richer.

US billionaires saw their wealth increase by 20 percent, or $584 billion, roughly since the beginning of the pandemic.

Covid-19 is enabling the consolidation of US industry. Small businesses have to shut down, large businesses keep running. The oncoming tsunami of renters being evicted (depending on state, 25 percent to over 50 percent of renters are in danger of eviction) will wipe out landlords, allowing the richest Americans to buy up rental properties on the cheap, consolidating them. They will then charge, not market clearing rental rates, but profit maximization rents, leaving many people permanently homeless.

If you’ve ever researched how to make money, you know the standard advice virtually always includes one thing: You must have other people work for you or passive income, or both. You must be making money when you, personally, aren’t doing a thing. Your money must make money for you, and so must other people. Any person worth employing makes more money for you than you pay them. You take the difference.

In kinder capitalist epochs, this is kept under control by wealth taxes, inheritance taxes, high progressive taxation, and aggressive anti-trust policy, along with a monetary policy intended to raise wages and prices, not crush them.

But our era is built on three ideological assertions.

  1. There is no such thing as society.
  2. Greed is good.
  3. There is no alternative (TINA).

Whatever makes a profit, according to this assertion, is good. There is no society, and no social goals. There are only competing people and whatever they get is fair. And this is the only way to run society, there is no alternative. Thatcher noted that her victory was not sealed by Conservative party elections, rather it was Tony Blair’s Labour party adopting neoliberalism that meant that TINA went from assertion to fact; no matter who was elected, the same basic policies would be followed, Labour would just try to thinly mitigate the effects of so many rich people and so many poor people.

In the US, the victory of Reagan was when Bill Clinton helped create the “Third Way,” which was an adoption of neoliberal principle. Again, it would not matter if Republicans or Democrats were in power, the rich would get richer and the social state would be defunded.

Our elites are predators. They are taught that they have no obligation to other people. Greed is good, and whatever makes money is good. If someone else has less money, that’s because they deserve less money, and because they create less good.

In their daily lives, the rich become rich through passive income and exploiting other people; paying the lowest wage or price possible (Walmart and Amazon both famously fuck suppliers over, though in different ways), getting as much government money as possible, and making sure that they don’t have to work to make money, and that the stock market always goes up in the long run, along with other asset prices–no matter what’s actually happening in the economy.

Neoliberal elites are predators. This is true in every neoliberal country. It is simply most advanced in the United States. They view ordinary people as prey or useful tools. After the 2007/8 financial crisis, banks set up assembly lines to sign false paperwork so they could seize people’s homes. The Federal government knew, aided them, and later immunized them by making them pay fines far less than the value of what they stole.

You are food or a money-producing asset to elites.

You are not human, you do not have a right to anything. Not due process of the law. Not food. Not housing. Not affordable medicine or health care. Those things are for people with enough money, and if that’s not you, you don’t deserve them.

This is THE most important thing you can understand about society today. You can’t count on US elites to care about you at all. If it is in their best financial interest to impoverish you, kill you or any other thing, they will do so.

This may seem hyperbolic, but it meets the most important test of truth: It predicts their actions with far more accuracy than any other hypothesis.

If it was just incompetence, like for example, the favorite excuse of liberals, “Never assume malice when incompetence will explain something,” then they wouldn’t keep getting more and more money.

Somehow their “incompetence” just makes them richer. Even the financial crisis made the elites richer overall–the drop was a blip which allowed them to control more of the economy than before.

Neoliberal elites are predators. Their food is ordinary citizens and anything else (animals, plants, the ecosystem which allows human life to exist).

And yes, it’s true, all neoliberal nations are not as far gone. But this is where neoliberalism leads, this is what its internal logic demands.

It’s not an accident that the best Covid-19 performance on the planet was probably in Vietnam, right next to China, with huge trade ties.

Zero deaths.

Anyone who tells you it was hard to avoid Covid-19 deaths is lying. All it required was seeing that a pandemic was underway and doing what the epidemiology textbooks tell you to. The introductory textbooks.

Nor is this all on one person. No one rules alone. Without a huge supporting apparatus, including Congress, Trump could not have done what he did (and didn’t). If his incompetence had been costing elites, you can be sure it would have been brought to an end.

It wasn’t. It was making them richer and furthering their plans. At the end of this, US elites will control a larger percentage of the US economy than before. They will be richer and more powerful. And if that means tens of millions of Americans are homeless and hungry, then that is a price US elites are willing for you to pay.

If you deserved better, you’d be rich. You aren’t, so you don’t.

Your lords and masters kill you for money. That’s their function.

Act on this knowledge, or don’t.

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The “System” Did Not Appear Ex Nihilo

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On July 13, 2020

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Last week I wrote an article lampooning the idea that people are only following incentives and therefore are not bad people.

Let’s spell this out clearly.

The system, whatever the system is, whether it is New Deal capitalism, Stalinist communism, English high feudalism, neoliberal capitalism, or French late medieval feudalism, is a creation of humans.

Our system is always a choice.

It doesn’t feel like a choice to you as an individual, because it is a collective choice which weights a very few individuals’ preferences much higher than yours. Not being Barack Obama (who had a choice to end neoliberalism) or FDR (who did choose to create a new type of capitalism) or Khrushchev (who created a different type of communism, recognizably different from Stalinism–and much more pleasant to live in), you have never had much of a choice.

So, being weak and only one person, to you the system feels like a force of nature or God, given, not a man-made construction.

But the system is always made and is always the result of choices. Sometimes, individuals at key junctures get to make a choice or a difference, and most people only make choices as part of large groups. But it is a choice.

Even within a system, different results are produced. English feudalism was far kinder than French feudalism, with far more free men and far fewer villeins or serfs. England produced common law and even non-free men and women had rights. Russian serfdom by the end of the Czars was known for its cruelty, but it wasn’t always thus, and so on and so forth.

More recently, and if not within your memory (though it is within my memory), then certainly within the memory of people you know, the previous form of capitalism running the US and most of the “free” world produced the following results:

  • steadily increasing incomes after real inflation was measured;
  • steadily decreasing share of income being made by the richest in society;
  • steadily increasing prices (but slower than wages).

It did all those things because it was designed to do those things. A choice was made in 1933, and made again pro-actively every four years after that to keep doing it. After a while, people became wishy washy about its continuation. You can trace it in stages: the post-war Congress weakening unions, Truman deciding to keep the war time state running, Kennedy deciding to lower top taxes, qualified immunity in the 60s, Nixon deciding to start the war on drugs, and so on.

But it didn’t really end until Reagan. Reagan was a choice, that’s why there were elections. He had been worked for, hard, by various rich people who could see that the current system was slowly siphoning away their power, and they found, with racism and the fear engendered by the oil shock crises, enough of a wedge to get a voting majority of Americans onside.

Then they systematically changed how the system operated so that it would produce:

  • stangnant income for the majority of the population (really decreasing if inflation were properly measured);
  • steadily increasing share of income and wealth controlled by the wealthiest in society;
  • steadily decreasing prices of production of goods. At first some of this was passed on, but most of it was kept as profit.

Neoliberal capitalism produced different results from New Deal capitalism because it was designed to do so. It had different incentives, to use econo-speak.

To say “people just follow the incentives” is driveling idiocy when dealing with large social matters, because in large social matters, the incentives are dependent variables; they are chosen by the leadership and the mass of the people (who, yes, do have power in large enough groups–Reagan was not possible if enough Democrats hadn’t defected, they were called the “Reagan Democrats”).

Nor are people ex-nihilo. We are shaped by the society we live in. Reagan’s revolution could not have happened while the Lost Generation still had large numbers because the Lost Generation remembered not just the Great Depression, but the roaring 20s. Knowing that the wealthy had caused the Great Depression, most Lost believed in keeping the rich poor. Those who came afterwards, not properly remembering the 20s, did not feel this in their gut, and they were willing to sell out.

Neoliberals said, “You can have a suburban home, away from the blacks, and we’ll spike the value of housing and stocks, so you’ll be rich, and you won’t even have to work for it.” Sub Voce: “Because you’ll get it for doing nothing, you won’t care about wages, which we’ll crush.”

More than this, a system selects for people who will do what it requires. You cannot join many gangs without murdering someone first. You cannot be in power in DC, or almost any state capital, if you are not onside with crushing wages and making the rich richer. You will not be allowed in power. You will not want power, because you will quickly find out that you can’t do what you want, you can only do evil.

The system doesn’t so much turn people evil as it selects for evil. The “incentives” don’t work on everyone, what matters is that, if they don’t work on you, you don’t get into power. Or, if you somehow fluke in (like Corbyn) you don’t stay in power. You won’t compromise enough.

People worked hard to create neoliberalism. Once they were in power, they worked hard to create a system which excludes those who don’t want to crush wages and make the rich richer. The rules of the system, the incentives, were created by men and women and are maintained by men and women.

They are not unchallenged, but so far every challenge has lost. Corbyn was a challenge. Sanders was a challenge. There have been other challenges. They all lost. This was true of every challenge to the New Deal Order from 1936 to 1976. All challenges lost. It looked unbeatable.

One day, the New Deal Order lost. One day Neo-Liberalism will lose. The questions are only, “When?” and “To what?”

Hitler, Mussolini, and Lenin defeated older orders too.

So, the people who run the US and the developed world are almost all very bad people. They were selected to be very bad, and they also worked very hard to ensure that only evil people could get power, because only evil people will do what their system requires and it is the system that makes them powerful and rich. (Reminder: Nancy Pelosi is worth $120 million.)

The systems selects for evil, the system was created, and is maintained, by people who worked and are working hard to make sure it selects only evil people to run it.

Just like Soylent Green, the system is people.

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The Well-meaning American Oligarchy Are SO Misunderstood

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On July 8, 2020

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Just saw an instance of the argument that, “The people who have been enriching themselves by fucking everyone else for four decades are misunderstood, they’re just following the incentives, and suggesting that the people killing and impoverishing you are bad is polarizing.”

Lovely.

Everyone is well-meaning, and it’s all just a misunderstanding. They don’t mean for people to die or suffer when they cut food stamps, or welfare, or start wars, or don’t handle a pandemic. Oh no, it’s all just a misunderstanding driven by market laws that the beneficiaries themselves didn’t create (they are far different than the market laws which existed from 1933 to 1979 and which produced very different results).

Those laws just fell out of the sky, and weren’t created by men and women who wanted certain outcomes.

Why, if only our rulers understood that the market laws that appeared during their reign, without them doing anything to create them, were bad for almost everyone, surely they would change those laws to laws which raised wages, removed the wealth of billionaires, and ended American oligarchy while relieving poverty and providing universal health care!

It is, indeed, all just a misunderstanding. I feel terrible that I have suggested that people who fought for well over 40 years (they took power in 1980, but fought for that victory long before) actually understood what they were fighting for. Surely, they believed that reducing taxes on the rich and corporations, slashing welfare, creating a carceral state, running asset bubbles, and deliberately crushing wage inflation with the Federal Reserve would resound to the benefit of every American, not just those they favored.

Why, they had no idea that making the rich richer and ensuring everyone else got raises below inflation would not be to the benefit of all!

Phew.

It’s all just a misunderstanding. They didn’t know that they were doing evil. Every time they took food out of a mother or child’s mouth by cutting welfare and food stamps they said, “This is for their own good,” and believed it.

And a person who believes starving someone else is good isn’t a bad person. They’re a good person, but confused.

Every time they crushed wages by raising interest rates to crash the economy when wages increased faster than inflation, they were doing it for the sake of ordinary Americans, not to keep wages down to benefit their own class. And every time they gave money or tax cuts to the richest, well, that’s been so that the rich could pay high… er, do something for ordinary Americans, something I’m too stupid to understand, since I think things like: “People create market laws, they don’t drop out of the sky.”

Shows what I know!

Certainly, people who crush wages, obstruct universal health care, fuck up a pandemic, take food out of the mouths of children and poor people are just misunderstood. They’ve been acting for Americans own good, and we just need to explain to those in power that they’re mistaken and politely ask them to change the rules (oh wait, they don’t create the rules, but perhaps new rules can fall out of the sky). Forty years hasn’t been long enough for them to figure out on their own that doing more of the same thing will keep hurting everyone but the rich and the wealthy.

It’s good to live in such a world, a world where we all want the best for humanity, a decent living, kindness, food and shelter for all, and where we are just arguing over means. And, surely, we are all reasonable and can understand that our policies must change, even if after 40 years they have made a few filthy rich and impoverished everyone else? Who would think that deliberately crushing wages would crush wages? Who would think that running asset bubbles would favor those with more money rather than those with less money?

No one could have anticipated these things, and Nancy Pelosi, who is worth 120 million dollars, is aghast that all this has happened. Why, if only she had understood that crushing wages and favoring the rich would hurt most Americans and help the rich! It’s all just a big misunderstanding, and Nancy just didn’t get it. Neither did Obama, or Trump, or McConnell, or Reagan, or Clinton, or… why there are so many well-meaning people who didn’t understand! The Koch brothers would never have supported all these policies if they knew they would hurt almost everyone else except themselves. Nor would all the other billionaires, and centi-millionaires, and deci-millionaires, and the people who work for them!

This has removed a great burden from me. I know now that it’s all just a big misunderstanding, that the rulers are good people who want the best for everyone and are just a little thick–not understanding that policies meant to hurt ordinary people and make rich people richer would, in fact, hurt ordinary people and make rich people richer.

Good people can disagree, and now that we know that the majority of our leaders are good people, who are just a little mentally challenged, why, I’m sure we can clear this up in no time, and have a good, kind, fair economy that helps everyone again. Pelosi and Trump will be thrilled to work together on this, I know.

What a RELIEF.

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America’s Elites Live by the Rule of Power (Covid Version)

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On July 7, 2020

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There’s no question that the US response to Covid-19 has been awful.

So, is it just that American elites are incompetent?

Well, as of the end of April:

The total amount of wealth controlled by US billionaires’ swelled by more than $565 billion since the beginning of the coronavirus crisis.

So, why would America’s richest want to handle Covid well? Small businesses being closed is an advantage to billionaires, who control the large businesses that keep going and take over market share.

And while we don’t have figures for the top three percent or so, I’m willing to bet they are doing better as well. Plus they get to work from home and have everything delivered to their doorstep while stocking their industrial fridges with ice-cream. It’s hard for them. Honest.

Now, there’s a core point here that is important: If you are American, you cannot count on your leadership, of any variety, to look after you. You cannot even count on them to be neutral. If there is a way for them to benefit, including benefit to the people who own them (most politicians are owned in the US, and if you do not believe this you are pathetically naive), they will hurt or impoverish or kill you.

Little matters to your elites except the well-being of themselves and their close associates. To the extent they have an ideology, their ideology tells them it is right for the strong to take from the weak, and that everything they have they deserve, while those who lose deserve to lose. This is true of Republicans, but it is as true of most Democrats. Oh, they’ll give a little bit of pity money, but they won’t stop the processes in place that destroy lives and kill people. Indeed, they speed those processes on–as Pelosi and Biden have throughout their career.

When you are making your planning you must take this into account. Power companies won’t clear brush or replace infrastructure they know will lead to massive wildfires (PGE in California) because they have executive bonuses to pay. Executives of pharma companies will raise prices on life saving drugs they didn’t even research like insulin. Developers and landlords will hold properties off the market to keep prices up, and will force long term tenants out so they can raise rents.

There is little of consequence that people with power in America will not do to those without power.

The rule of power, as composed by Thucydides twenty-five hundred years ago, is as follows:

The Powerful Do As They Will: The Weak Suffer As They Must

Most social progress can be defined as creating norms and institutions which reduce that truth. American elites have spent the last 40 years returning it to dominance, with a plurality to bare majority of American voters complicit. Fools in the middle class thought that helped both them and the rich would keep helping them. But what helped them 5% a year helped the rich 20% a year, and soon the rich took off, decided they didn’t need the middle class (they can do the same work for less) and started liquidating them. During OK times, a percentage point every couple years: during crises, far more.

(Trump’s numbers actually show the middle class more than the poor drove his rise, because they were scared and went with someone who sounded different. Though some poor did the same. But Trump is VERY late stage in this process.)

If you are to survive this era, let along prosper, you must understand this in your bones: emotionally. America’s elites, business and political and ideological (media), are your enemies, committed to eating the poor and middle class (who get eaten all the time, metaphorically. “Eat the rich” is an aspirational goal, not a reality.) When you make your personal life plans, understand this. You must be useful to the rich to prosper and the second they do not need you, they will discard you. This goes even for many elite lackeys (see what has happened to media jobs, and they were on their knees fellating their masters even as the axe fell.)

If you wish to oppose the rich you must also understand this. There is no making peace with this elite, they may occasionally throw you a bone to disperse you, but their overall ethos will not change. Nothing short of replacing them with an entirely new ruling class and structure will work. If you have not done so, if you have not destroyed the rules that run this particular America and world; if you have not replaced the actual people, then you have not won the war, you have just been given some scraps to placate you and make you stand down whatever alliance you have built.

It’s you, or it’s the rich and their lackeys. It is that simple.

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The Coming Homelessness and Hunger Apocalypse in America

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On July 6, 2020

Comments

So, in June 30 percent of Americans couldn’t make their rent. July 25th, federal eviction protection ends. There may be another check, but another $1,200 (or even $2k) isn’t going to cut it, just as people couldn’t pay rent event with the $600 unemployment benefit top-up.

Covid now has more active cases than the previous peak. Less people are dying, because the new victims are mostly young (and due to the lag) but even non-fatal cases of Covid are nasty and can leave the victim with symptoms for months (or longer, we don’t know yet). Indeed, evidence is coming back that cases with no symptoms still do damage.

Even if there is an extension of eviction protection and some new checks, that will only push the problem back. People can’t make rent, and aren’t going to be able to. Because there are so many people competing for jobs (which are bouncing back somewhat), they have no wage leverage.

So, expect a huge wave of evictions, homelessness, and hunger. Food banks will be overwhelmed, people will go hungry.

Your lords and masters have decided that if you aren’t useful to them (aren’t employed, can’t make rent) that you don’t deserve anything, including life. This has been the case for a long time, it’s just that, in the middle of a pandemic, they see a lot of you as useless eaters towards whom they have no responsibility.

Besides, why should they care? Billionaires have actually gained wealth during the pandemic. Covid isn’t much of a problem for the rich, it’s mostly an opportunity.

Be aware, in your personal life, that this is coming down the stream. It is not going to be stopped. If there is an extension of the moratorium and a bit more benefits AND the economy continues to reopen (already being reversed in some states) then that might mitigate the homelessness somewhat, but will result in more deaths and long-term health problems from Covid.

This is going to lead to more, not less, riots. You should be ready for that, and for the possibility of civil disorder causing infrastructure and logistics problems. Stock up, have plans to shelter in place, and also to leave. Keep your head down. Make sure you are on good terms with your neighbours, friends, and so on. When shit really goes bad, the people who do okay are those other people care about.

I really hope I’m wrong about this, but the numbers on this are staggering. Assume that even five percent of Americans lost their housing over two months, that would be almost 17 million people. Each doubling is another 17 million. A ten percent loss is 34 million.

If anything like that happens, I cannot see how it does not turn into mass hunger and civil disorder.

Be prepared.

And if you are one of those who will be homeless, my genuine and true sympathy.

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