Archive for the 'World Affairs' Category

Elite Capture and Value Capture

Wednesday, August 30th, 2023

Elite Capture: How the Powerful Took Over Identity Politics (And Everything Else), Olufemi O Taiwo, 2022

In democracies, ostensibly, the elites (policymakers) are put in office by the non-elites (citizens), who can remove and replace them if they fail to defend public interests. Much like the mythical market, mythical liberal democracy is supposed to be self-correcting and self-justifying by definition. This way of casting the conversation about power and governance has been integral to the framing that links “freedom” and “capitalism” in the ideals and practices of liberal democracy: a country’s freedom need only be found at its ballot boxes rather than in, say its workplaces. Thus, if one believes in liberal democracy, they may believe that imbalances of power everywhere could be fixed by instituting arrangements like the “rules-based international order,”democratic elections,” and “formal political representation.” In a nutshell, if the right ideals are embodied in the right formal systems, then the outcomes of those systems are justified.

Ronald Reagan’s 1986 Anti-Drug Abuse Act, which helped supercharge mass incarceration by establishing mandatory minimum sentencing guidelines and adding $1.7 billion toward the drug war, while welfare programs were cut…The consequences led Democratic senator Daniel Patrick Moyniham to make a striking appraisal: “If we blame crime on crack, our politicians are off the hook. Forgotten are failed schools, the malign welfare programs, the desolate neighborhoods, the wasted years. Only crack is to blame. One is tempted to think that if crack did not exist, someone, somewhere would have received a federal grant to develop it.”

And then there’s capital. The 1950’s and 60’s saw important innovations in corporate management (particularly in the United States, which stood comfortably atop the post-World War II global economy):leveraged buyouts, divestitures, mergers, major sell-offs of “non-core businesses,” and other forms of reorganization of business by profit-hungry shareholders. These trends intensified in the 1980’s, producing what researchers called the “shareholder revolution”: a proliferation of management techniques that put previously complacent industry managers under strict discipline of activist shareholders. This second phase of shareholder revolution coincided with and helped produce a larger “global business revolution,” a “fast-developing process of concentration at a global level in numerous industries supplying goods and services,” to “system integrators”–the few large firms who can reorganize global production around their “core” business models and assets.

These institutions emerged as the world order was being reconstructed in the waning years of Second World War, with the United States newly emergent as a global hegemon. The architects met in Bretton Woods, New Hampshire, where they set up the International Monetary Fund (IMF) and what later became the World Bank. Whatever the “narrow” technical pretensions of their mandates, these organizations in fact have immense governing powers. They offer aid packages that are conditional on certain governance decisions by the receiving country – decisions that help determine the availability of jobs, public services, and the price of food. These basic features of non-elite life are thus placed in the hands of foreign bureaucrats over whom the country’s population have no means of democratic control, nor even the pretense of any sort of democratic relationship.

Rather than a cataclysmic putsch or violent event, for (Wolfgang) Streek, the end of democracy simply is the gradual capture of the political by the elites. “[A]s one crisis followed the next, and the fiscal crisis of the state unfolded alongside them, the arena of distributional conflict shifted, moving upward and away from the world of collective action of citizens toward ever more remote decision sites where interests appear as ‘problems’ in the abstract jargon of technocratic specialists.

Value capture is a process by which we start with rich and subtle values, encounter simplified versions of them the social wild, and revise our values in the direction of simplicity—thus rendering them inadequate…Capitalism is itself such a system: it rewards the relentless and single-minded pursuit of profit and growth—extremely narrow value systems that exclude much of what makes life worth living. But societies organized around fundamentalisms (whether religious or secular) and war have resulted in similarly warped value systems long before capitalism arrived on the scene.

Pentagon Militarizes Climate Change

Thursday, June 15th, 2023

The Pentagon, Climate Change, and War; Charting the Rise and Fall of U.S. Military Emissions, Neta C. Crawford, 2023

For most of the last 250 years humans have carried on with making “progress”–industrialization in the service of the good life—assuming that fossil fuels were an essential ingredient in shaping the world we were certain would be better than the one we were leaving behind. Our grand strategy for security took for granted that we would need fossil fuel for industry and fossil fuel for war. Only in the last fify years or so has it become clear that burning all that fuel and at the same time destroying the forests and the wetlands that take up the carbon released by the fire, is not just leaving the past behind, but destroying the possibility of preserving what is increasingly– in essential life giving respects—understood as a better world.

In sum, the economy, foreign policy beliefs, and military doctrine institutionalized greater demand for fossil fuels. The deep cycle of oil demand, consumption, militarization, and conflict begins with demand for oil and increasing consumption. Then, when U.S. policy makers feel anxious about guaranteeing oil supplies in the face of dependency, or are concerned about the price of oil, they back allies in the Persian Gulf and greater Middle East, as occurred in 1946 and 1949, in 1957. in 1973, in 1980 and 1990. The United States played favorites within the states that had large oil reserves, even if some of those government leaders were autocratic, such as the Shah of Iran, Saddam Hussein, and the leaders of Saudi Arabia.
Yet, the risk of supporting authoritarian regimes is that those regimes are increasingly unstable as the citizens who demand more say in their government push back against authoritarian kings, emirs, and shahs. When challenges to the undemocratic, autocratic or kleptocratic rulers within states with large oil supplies occurred, or there were external challenges, the United States sometimes backed the leaders or system that is thought could bring stability. Thus with the Eisenhower Doctrine, the United States backed Saudi Arabia’s King Saud and Crown prince Faisal as a way to balance against Egyptian leader Gamal Abdel Nasser. At times, as in the case of backing the Shah of Iran in the 1970s and Saddam Hussein in Iraq in the 1980s, these alliances backfired…This in turn increases the sense among U.S. Elites that the Middle East is a volatile region that needs U.S. Intervention to remain stable.

The military has understood the science and the consequences of global warming quite well for decades. They paid for much of that research. National security strategists have sounded muted alarms, the Pentagon has adapted some of their equipment and operations, and experts have imagined scenarios of increasingly dire complex emergencies and catastrophes and climate-caused wars.
Pentagon leaders have been farsighted and tactically flexible. Some of the smartest, best-trained and most determined people on the planet, given the resources of the richest nation on earth, the people at the Pentagon are trying to make things better…They have developed better batteries, put up solar arrays at bases, and even thought about moving some bases.

Camp Lejeune Hurricane Destruction 2018

Camp Lejeune (North Carolina) was hit by Hurricane Florence in September 2018 and suffered $3.6 billion worth of damages. In October 2018 , Michael, a category 5 hurricane devastated much of Tyndall Air Force Base in Florida, including F-22 aircraft, damaged beyond repair or destroying hundreds of buildings…Estimated to cost $4.9 billion to repair and reconstruct the base, the rebuilding was expected to last as long as five to seven years.

TYNDALL AIR FORCE BASE, Florida — Hangers once used to keep aircraft out of the elements now lie scattered across the flight line following Hurricane Michael on October 10, 2018. Hurricane Michael is the third largest hurricane to make landfall in the United States, reaching peak winds of 155 miles per hour.

Tyndall Hurricane 2018

And yet at the same time, the Pentagon has been strategically inflexible and blind…For the most part, the armed forces, and our political leaders, have not put away the tools and habits of mind that got us here in the first place. Our grand strategy for national security has not fundamentally changed. In some ways it can’t, because it is premised on the anticipation and fear of war—the idea that for us to be safe, we have to be prepared to meet every threat anywhere at any time with overwhelming force. The national security strategy is also premised on the idea that force works, that the threat of coercion and the actuality of destruction can get us what we want. So once we believe those things—that war is possible and may be imminent, that we must have a capacity to make war that far exceeds our enemy’s abilities, and that coercion and destruction are effective—it seems that the only way to deal with the threat of climate change-caused war is to prepare for more war. Of course, in preparing for more war, governments give the armed forces everything they need: money, weapons, people, bases, and fossil fuels. We defend and protect the oil we think we need to defend ourselves…At the same time that we are making our weapons more energy efficient and the installations more resilient, we scarcely question whether war is inevitable or in fact made more likely by our bases and our burning fuel to be the most powerful nation on earth…The military is inadvertently or perhaps deliberately militarizing climate change.

Ode to (Gordon) Moore’s Law

Monday, February 6th, 2023

Chip War, The Fight For the World’s Most Critical Technology, 2022, Christopher Miller

This reader is a retired software engineer whose 40 year career began with punch card mainframes and ended with microcontrollers with embedded graphic displays, WiFi, and flash memory on a single chip. My introduction to computing was as a graduate research assistant on an ARPA funded project to study the dimensionality of nations. Since that time I followed the development of the ARPANET. I have lived the profound impact of Moore’s Law, needing to constantly anticipate where technology would be when project development required several years before introduction. Moore’s Law has still not been broken after all these years.
To get some sense of what exponental increase in transistors looks like consider the 1980s Cray 2 supercomputer which was export restricted for national security reasons. The CRAY-2 stood nearly 4 feet tall with a 5.5-foot diameter and weighed 5,500 pounds. The iPhone 12 is 5,000 times faster than the Cray-2!
Exponential growth of a technology is unique in human history.

  • If the computing power on each chip continued to grow exponentially, Moore realized, the integrated circuit would revolutionize society far beyond rockets and radars…At Fairchild, Noyce and Moore were already dreaming of personal computers and mobile phones.

    Alongside the rise of these new industrial titans (Intel and Micron), a new set of scientists were preparing a leap forward in chipmaking and devising revolutionary new ways to use processing power. Many of these developments occurred in coordination with government efforts, usually not the heavy hand of Congress or the White House, but the work of small, nimble organizations like DARPA (originally ARPA, Larry Robert director 1966-1973) that were empowered to take big bets on futuristic technologies — and to build the educational and R&D infrastructure that such gambles required.

    Morris Chang Founder of TSMC

    (Dutch) ASML‘s history of being spun out of Philips helped in a surprising way, too facilitating a deep relationship with Taiwan’s TSMC (founder Morris Chang). Philips had been the cornerstone investor in TSMC, transferring its manufacturing process technology and intellectual property to the young foundry. This gave ASML a built-in market, because TSMC’s fabs were designed around Philip’s manufacturing processes. An accidental fire in TSMC’s fab in 1989 helped too, causing TSMC to buy additional nineteen new lithography machines, paid for by the fire insurance. Both ASML and TSMC started as small firms on the periphery of the chip industry, but they grew together, forming a partnership without which advances in computing today would have ground to a halt.

    The next generation EUV (Extreme ultraviolet) lithography would therefore be mostly assembled abroad, though some components continued to be built in facility in Connecticut. Anyone who raised the question of how the U.S. would guarantee access to EUV tools was accused of retaining a Cold War mindset in a globalizing world. Yet the business gurus who spoke about technology spreading globally misrepresented the dynamic at play. The scientific networks that produced EUV spanned the world, bringing together scientists from countries as diverse as America, Japan, Slovenia, ad Greece. However, the manufacturing of EUV wasn’t globalized, it was monopolized. A single supply chain managed by a single company would control the future of lithography.

    By the mid 2000’s, just as cloud computing was emerging, Intel had won a near monopoly over data center chips, competing only with AMD. Today nearly every major data center uses X86 chips from either Intel or AMD. The cloud can’t function without their processors… Some companies tried challenging z86’s position as the industry standard in PCs. In 1990 Apple and two partners established a joint venture called Arm, based in Cambridge England. The aim was to design processor chips using a new instruction set architecture based on the simpler RISC (reduced instruction set computer) principles that Intel had considered but rejected. As a startup Arm faced no costs of shifting away from x86, because it had no business and no customers. Instead, it wanted to replace X86 at the center of the computing ecosystem. Arm’s first CEO, Robin Saxby, had vast ambitions for the twelve-person startup…However Aim failed to win market share in PC’s in the 1990s and 2000’s, because Intel’s partnership with Microsoft’s Windows operating system was simply too strong to challenge. However Arm’s simplified, energy-efficient architecture quickly became popular in small, portable devices that had to economize on battery use. Nintendo chose Arm based chips for its handheld video games…

    The problem wasn’t that no one realized Intel ought to consider new products, but that the status quo was simply too profitable. If Intel did nothing at all it would still own two of the world’s most valuable castles–PC and server chips–surrounded by a deep x86 moat.

    Intel turned down the iPhone contract…Apple looked elsewhere for its phone chips. Jobs turn to Arm’s architecture, which, unlike the x86 was optimized for mobile devices that had to economize on power consumption. The early iPhone processors were produced by Samsung (founder Lee Byung-chul), which had followed TSMC into the foundry business… By the time Otellini (Intel) realized his mistake, however it was too late.

    By the 2000’s, it was common to split the semiconductor industry into three categories. “Logic” refers to the processors that run smartphones, computers, and servers. “Memory” refers to DRAM which provides the short-term memory computers need to operate, and flash, also called NAND, which remembers data over time. The third category of chips is more diffuse, including analog chips like sensors that convert visual or audio signals into digital data, radio frequency chips that communicate with cell phone networks, and semiconductors that manage how devices use electricity.

    It (America’s second class status) dates to the late 1980s when Japan first overtook the U.S. DRAM output. The big shift in recent years is the collapse in the share of logic chips produced in the United States. Today, building an advanced logic fab costs $20 billion, an enormous capital investment that few firms can afford…Given the benefits of scale, the number of firms fabrication advanced logic chips has shrunk relentlessly.

    Jensen Huang CEO Nvidia

    Nvidia (which became dominant in graphics) not only designed chips called graphic processors units (GPUs) capable of handling 3D graphics, it also devised a software ecosystem around them. Making realistic graphics requires use of programs called shaders, which tell all the pixels in a image how they should be portrayed in, say a given shade of light. The shader is applied to each of the pixels in a image, a relatively straightforward calculation conducted over many thousands of pixels. Nvidia’s GPUs can render images quickly because, unlike Intel’s microprocessors or other general-purpose CPUs, they’re structured to conduct lots of simple calculations–like shading pixels–simultaneously.
    In 2006, realizing that high-speed parallel computations could be used for purposes besides computer graphic, Nvidia released CUDA, software that lets GPUs be programmed in a standard programming language, without any reference to graphic at all. Even as Nvidia was churning out top-notch graphic chips, Huang (CEO) spent lavishly on this software effort, at least $10 billion,…to let any programmer–not just graphic experts–work with Nvidias chips…Nvidia discovered a vast new market for parallel processing, from computational chemistry to weather forecasting. At the time, Huang could only dimly perceive the potential growth in what would become the biggest use case for parallel processing, artificial intelligence.
    Today Nvidia’s chips, largely manufactured by TSMC, are found in most advanced data centers.

    Dr. Irwin Jacobs co founder Qualcom

    For each generation of cell phone technology after 2G, Qualcomm contributed key ideas about how to transmit more data in the radio spectrum and sold specialized chips with the computing power capable of deciphering this cacophony of signals. The companies patents are so fundamental it’s impossible to make a cell phone without them. Qualcomm soon diversified into a new business line, designing not only the modem chips in a phone that communicate with a cell network, but also the application processors that run a smartphone’s core systems. These chip designs are monumental engineering accomplishments, each built on tens of millions of lines of code.

    For many years, each generation of manufacturing technology was named after the length of the transistor’s gate, the part of the silicon chip whose conductivity would be turned on and off, creating and interrupting the circuit. The 180nm node was pioneered in 1999, followed by 130nm, 90nm, 65nm, and 45nm, with each generation shrinking transistors enough to make it possible to cram roughly twice as many in the same area. This reduced power consumption per transistor, because smaller transistors needed fewer electrons to flow through them.
    Around the early 2010s, it became unfeasible to pack transistors more densely by shrinking them two dimensionally. One challenge was that, as transistors were shrunk according to Moore’s Law, the narrow length of the conductor channel occasionally caused power to “leak” through the circuit even when the switch was off. On top of this, the layer of silicon dioxide atop each transistor became so thin that quantum effects like “tunneling”–jumping through barriers that classical physics said should be insurmountable–began seriously impacting transistor performance. By the mid 2000s. the layer of silicon dioxide on top of each transistor was only a couple of atoms thick, too small to keep a lid on all the electrons sitting in the silicon.
    To better control the movement of electrons, new materials and transistor designs were needed. Unlike the 2D design used sine the 1960s, the 22nm node introduced a new 3D transistor, called a FinFET (pronounced finfet), that sets the two ends of the circuit and the channel of semiconductor material that connects them on top of a block, looking like a fin protruding from a whale’s back. The channel that connects the two ends of the circuit can therefore have an electric field applied not only from the top but also from the sides of the fin, enhancing control over the electrons and overcoming the electricity leakage that was threatening the performance of new generations of tiny transistors…These nanometer-scale 3D structures were crucial for the survival of Moore’s Law, but they were staggeringly difficult to make, requiring even more precision in deposition, etching, and lithography. This added uncertainty about whether the major chip-makers would all flawlessly execute the switch to FinFET architectures or whether one might fall behind…Moreover, the 2008-2009 financial crisis was threatening to reorder the chip industry. Consumers stopped buying electronics, so tech firms stopped ordering chips.

    Smartphones and PCs are both assembled largely in China with high-value components mostly designed in the U.S., Europe, Japan, or Korea. For PCs, most processors come from Intel and are produced at one of the company’s fabs in the U.S., Ireland, or Israel. Smartphones are different. They are stuffed full of chips, not only the main processor (which Apple designs itself), but modem and radio frequency chips for connecting with cellular networks, chips for WiFi and Bluetooth connections, an image sensor for the camera, at least two memory chips, chips that sense motion (so your phone knows when you turn it horizontal), as well as semiconductors that manage the battery, the audio, the wireless charging. These chips make up most of the bill of materials needed to build a smartphone.
    As semiconductor fabrication capacity migrated to Taiwan and South Korea, so too did the ability to produce many of these chips. Application processors, the electronic brain inside each smartphone, are mostly produced in Taiwan and South Korea before being sent to China for final assembly inside a phones plastic case and glass screen. Apple’s iPhone processors are fabricated exclusively in Taiwan.

    These tricks kept Moore’s Law alive, as the chip industry shrank transistors from the 180nm node in the late 1990s, through the early stages of 3D FinFET chips, which were ready for high-volume manufacturing by the mid-2010s.
    However, there were only so many optical tricks that could help 193nm light carve smaller features. Each new workaround added time and cost money. By the mid-2010s, it might have been possible to eke out a couple of additional improvement, but Moore’s Law needed better lithography tools to carve smaller shapes. The only hope was that the hugely delayed EUV lithography tools, which had been in development since the early 1990s, could finally be made to work at a commercial scale.

    Even the deep pockets of the Persian Gulf royals who owned GlobalFoundries weren’t deep enough. The number of companies capable of fabricating leading-edge (7nm) chips fell from four to three. (TSMC, Intel, and Samsung).

    As investors bet that data centers will require ever more GPUs, Nvidia has become America’s most valuable semiconductor company. Its assent isn’t assured however, because in addition to buying Nvidia chips the big cloud companies — Google, Amazon, Microsoft, Facebook, Tencent, Alibaba, and others — have also begun designing their own chips, specialized to their processing needs, with a focus on artificial intelligence and machine learning.

    Master Chip Designer Jim Keller

    Gordon Moore’s famous law is only a prediction, not a fact of physics…At some point, the laws of physics will make it impossible to shrink transistors further. Even before then, it could become too costly to manufacture them. The rate of cost declines has already significantly slowed. The tools needed to make ever-smaller chips are staggeringly expensive, none more so than the EUV lithography machines that cost more than $100 million each.
    The end of Moore’s Law would be devastating for the semiconductor industry — and for the world. We produce more transistors each year only because it’s economically viable to do so.
    The durability of Moore’s Law, in other words has surpassed even the person who it’s named after and the person who coined it. It may well surprise today’s pessimists too. Jim Keller, the star semiconductor designer who is widely credited for transformative work on chips at Apple, Tesla, AMD, and Intel has said he sees a clear path toward a fifty times increase in the density with which transistors can be packed on chips.”we’re not running out of atoms”, Keller has said. “We know how to print single layers of atoms.”

  • Trauma, Illness & Healing in a Toxic Culture

    Tuesday, December 6th, 2022

    The Myth of Nornal; Trauma, Illness & Healing in a Toxic Culture, Gabor Mate with Daniel Mate, 2022

    If we begin to see such illness itself not as a cruel twist of fate or some nefarious mystery but rather as an expected and therefore normal consequence of abnormal, unnatural circumstances, it would have revolutionary implications for how we approach everything health related.
    The current medical paradigm, owing to an ostensibly scientific bent that in some ways bears more resemblance to an ideology than to empirical knowledge, commits a double fault. It reduces complex events to their biology, and it separates mind from body, concerning itself almost exclusively with one or the other without appreciating their essential unity.

    My own observations of self and others have led me to endorse fully what a review of the stress literature concluded, namely that “psychological factors such as uncertainty, conflict, lack of control, and lack of information are considered to most stressful stimuli and strongly activate the HPA axis.” A society that breeds these conditions, as capitalism inevitably does, is a super powered generator of stressors that tax human health.

    Capitalism is “far more than just an economic doctrine,” Yoval Noah Harari observes in his influential bestseller Sapiens. “It now encompasses an ethic — a set of teachings about how people should behave, educate their children, and even think. Its principal tenet is that economic growth is the supreme good, because justice, freedom, and even happiness all depend on economic growth.” Capitalism’s influence today runs so deep and wide that its values, assumptions, and expectations potently infuse not only culture, politics, and law but also such subsystems as academia, education, science, news, sports, medicine, child-rearing, and popular entertainment. The hegemony of materialist culture is now total, its discontents universal.

    “The political system seems to be failing as much as the economic system,” (Joseph) Stiglitz writes in his 2012 book, The Price of Inequality. In the eyes of many, he continues, “capitalism is failing to produce what was promised — inequality, pollution, unemployment, and most important of all, the degradation of values to the point where everything is acceptable and no one is accountable.”

    The Swiss bank UBS reported in October 2020 that during the COVID-19 induced market turmoil the international billionaire stratum had grown their fortunes to over ten trillion dollars between April and July of that year. The worlds than richest individual Jeff Bezos had increased his wealth by over $74 billion Tesla owner Elon Musk by up to $103 billion. …the Toronto Star reported. “That’s in the midst of an economic crisis that has left millions of Canadians unemployed or working reduce hours and struggling with bills and our governments are borrowing to fund emergency financial aid for individuals and businesses to stave off even greater hardship.
    In the realm of political decision making, a widely circulated U.S. study showed that the views of ordinary people make no difference to public policy: a lack of control on a mass scale. “When a majority of citizens disagree with economic elites or with organized interests, they generally lose.” “Even when fairly large majorities favor policy change, they generally do not get it.”

    Scottish labor leader Jimmy Reid:

    “Alienation is the precise and correctly applied word for describing the major social problem in Britain today. People feel alienated by society…Let me right at the outset define what I mean by alienation. It is the cry of men who feel themselves the victims of blind economic forces beyond their control. It’s the frustration of ordinary people excluded from the processes of decision-making. The feeling of despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their own destinies.”

    Not only does our individual and societal sanity depend on connection so does our physical health. Because we are biopsychosocial creatures, the rising loneliness epidemic in Western culture is much more than just an psychological phenomenon it is a public health crisis.

    psychoanalyst Steven Reisner:

    “Narcissism and sociopathy describes corporate America. But it’s flat-out wrong to think in twenty-first century America that narcissism and sociopathy are illnesses. In today’s America, narcissism and sociopathy are strategies. And they’re very successful strategies, especially in business and politics and entertainment.”

    in what the Wall Street Journal called “an unprecedented plea” editors of two hundred health journals internationally, including the Lancet, the British Medical Journal, and the New England Journal of Medicine, called the failure of political leaders to confront the climate crisis “the greatest threat to global public health.” The harms of climate change include acute and chronic physical illness such as cardiovascular disease and susceptibility to infections, along with mental health challenges. Especially at risk are people with heart or kidney conditions, diabetes, and respiratory ailments. I need hardly mention food and water insecurity, major stressors already affecting millions.

    Underlying the active and callous disregard of our Earth’s health is the sociopathology of the most powerful entities, whose planetary poison-pushing removes any hint of metaphor thus this book’s subtitle phrase “toxic culture.” The oil companies pumped billions of dollars into thwarting government action. They funded think tanks and paid retired scientists and fake grassroots organizations to pour doubt and scorn on climate science. They sponsored politicians, particularly in the U.S. Congress, to block international attempts to curtail greenhouse gas emissions. They invested heavily in greenwashing their public image…in 2020 the top hundred or more American corporations channeled their political donations largely to lawmakers with a record of stalling climate legislation…Compared with financial gain the climate is, well, small change.

    Historically the idea of race arose from the impulse of European capitalism to enrich itself by subjecting, enslaving, and if necessary, destroying Indigenous people on other continents, from Africa to Australia to North America. Indeed, the word “race” did not exist in any meaningful way until it was created in the late eighteenth century. Psychologically, on the individual level, the “othering” of racism entails an antidote to self-doubt: if I don’t feel good about myself, at least I can feel superior to somebody and gain a sense of power and status by claiming privilege over them.

    The brilliant writer James Baldwin once said, “What white people have to do is try and find out in their own hearts why it was necessay to have a n_____ in the first place. If you, the white people, invented him, then you’ve got to find out why.”

    For another take on the current worldwide health crisis see Deep Medicine

    Why China Will Not Rule the World

    Saturday, November 5th, 2022

    The China Boom; Why China Will Not Rule the World, Ho-fung Hung 2016

    The China Boom <><> <> <> <> Ho-fung Hung

    Hong Kong born Hung is a sociologist who has studied capitalism and Chinese history extensively. This book sites the many studies and research about the rise of modern China, its politics, economics, its capitalist development, and its place in the global world order. Here is a short summary of his conclusions.

    Amid the late twentieth-century rise of global neoliberalism, under which the United States and Europe shifted to financial expansion, debt-driven consumption, and reliance on imported manufactured goods from low-wage countries, China eschewed central economic planning and absorbed substantial foreign-capital accumulated during the industrial takeoff of its Asian neighbors, particularly those of Chinese diasporic origins, turning itself into a dynamic center of export-driven capitalism…It is apparent that China has no intention of or capacity for transforming the global neoliberal order because the China boom has been relying heavily on transnational free trade and investment flow. China also makes significant contribution to the perpetuation of U.S. global dominance through its addiction to U.S. public debt.

    Mao and Deng

    ..SOEs (State Owned Enterprises) and state control of the marketing of agricultural products as a means to speed up rural surplus extraction and industrial capital accumulation began in certain KMT (Kuomintang) controlled areas before 1949. What the CCP (Chinese Communist Party) did after 1949 was to expand this state-owned sector to the whole economy and to collectivize agriculture, turning the state into the sole agent of capital accumulation. As a consequence, China managed to build an extensive network of heavy industries and infrastructure despite its international isolation in 1949-1979. It also successfully defended its sovereignty and geopolitical security vis-a-vis both the United States and the Soviet Union. The Mao period in China represented the culmination of a century of the state elite’s quest for state-led industrialization…the expansion of KMT-controlled state enterprises, the successful land reform, and the rise of state-directed rural cooperatives that facilitated agriculture-to-industry surplus transfers in Taiwan can be seen as a mild variation of SOEs and the People’s Commune in Mao China. This continuity attests to Immanuel Wallerstein’s provocative formulation that “actually existing socialist countries” emerging in mid-twentieth century were always part of the capitalist world system and that their socialist system has been little more than a strategy of rapid capital accumulation and industrial catch up under the strong hands of mercantilist states.

    In retrospect, many Deng and post-Deng reform measures would not have been that successful had it not been for the legacies of the Mao era. The SOEs and infrastructure constructed in Mao times, though moribund and unprofitable at the advent of reform, were important foundations for the capitalist takeoff during the reform period. For example, many foreign companies investing in China did not start from scratch but began as joint ventures with preexisting SOEs. At the same time, many SOEs developed into sizeable transnational capitalist corporations with financial and policy support from the state, though ownership changed from the state by itself to other combinations — for example public listing but with the government owning a majority share. Most of China’s biggest corporations today originated in the Mao era or were built on state assets developed in that era…It is not surprising that many other former socialist countries in Russia and Eastern Europe have also witnessed a similar predominance of state corporations.

    Other Mao-era legacies include the restriction of rural-urban migration by means of the household registration system and public investment in rural education and rural health care in the People;s Communes. These policies created a generation of literate and healthy rural laborers available in great numbers for private, export-oriented enterprises as well as TVEs (Township and Village Enterprises) from the 1980s on. The self reliance policy in the Mao period prevented the large-scale external borrowing in the 1970s that many other developing or socialist countries indulged in, thus sparing China from the international debt crisis in the 1980s that brought large setbacks to the developing world and the Soviet bloc.

    China has not challenged U.S. global dominance despite its leader’s postures and its nationalist press’s rhetoric. On the contrary, it has been a key force in helping perpetuate U.S. global dominance. China’s SOEs have been transformed into U.S. style capitalist corporations, many of them with the aid of Wall Street financial firms, and floated in overseas stock markets such a Hong Kong and New York. China’s export-oriented growth relies on the United States and Europe, the two biggest markets for its manufactured goods, and China’s exports to both places have been paid for mostly in U.S. dollars. The massive flow of U.S. dollars into China in the form of trade surplus impels China to invest addictively in U.S. Treasury bonds as the most liquid and largest US dollar-denominated store of value.Since 2008, China has replaced Japan as the biggest foreign creditor to the United States, and such financing enables the United States to continue living and fighting beyond its means. This investment in U.S. Treasury bonds in turn facilitates the perpetuation of the global dollar standard, which has been the single most important foundation of U.S. global power. The foreign exchanges brought in by China’s export sector have been the foundation of the state banks’ profligate creation of liquidity that fuels fixed-asset investment. In short, the China boom relies on the global free market instituted and warranted by the United States. It is thus far from China’s interest to undermine the global neoliberal status quo and U.S. leadership in it.

    Any readjustment of the structure of capitalist development in China will have to involve an increase in domestic consumption’s share in GDP and a corresponding reduction in export and investment’s share…such restructuring must be associated with a profound redistribution of wealth and income that will let average households share a larger slice of the pie of the expanding economy, reducing the advantages that the state has been offering to the export sector and state enterprises, both of which have been protected by the entrenched interests in the political process. Such readjustment, coupled with the cleaning up of existing bad debts in the system, will inevitably bring a slowdown in economic growth through either a disorderly hard landing or an orderly soft landing…Although such a slowdown is inevitable and normal in the adjustment and rebalancing process, it is unknown whether existing political institutions in China can withstand it.

    Billionaire libertarians, Empirical free Economics and Ideologically driven Law attempt to destroy Democracy

    Saturday, September 17th, 2022

    Democracy in Chains; The Deep History of the Radical Right’s Stealth Plan for America, Nancy,MacLean, 2017

    Started immediately after the end of WWII with the founding of the “think tank” the Mont Pelerin Society in Switzerland in 1947 and the influence of the Austrian school of economics via Ludwig von Mises and Friedrich Hayek on the economics department at the University of Chicago, a radical right movement that is best known as “neoliberalism” rose in America. Neoliberalism seeks to privatize all government run programs to reduce the state’s influence on capitalism by eliminating price controls, deregulating capital markets, and lowering trade barriers.

    The most influential economists of this movement are the well known Milton Friedman and the little known James Buchanan both Chicago school of Economics trained and both of whom won Nobel prizes for their work. To best appreciate the dangers to democracy of their fact free, empirical free ideologies one need only look at the experience of Chile after the CIA assisted overthrow of the democratically elected government in 1973, the death of President Allende and the long disastrous Pinochet dictatorship. Friedman advised the coup government on the privatization of public government programs including the national retirement program. Friedman’s reputation was badly tarnished by these efforts. Buchanan’s influence was most felt in the creation of a new democracy free constitution for Chile which has yet to be replaced. Buchanan’s reputation was largely unaffected by his work in Chile.

    “…for Buchanan, the end justified the means. Chile emerged with a set of rules closer to his ideal than any in existence, Built to repel future popular pressure for change. It was “a virtually unamendable charter,” in that co constitutional amendment could be added without endorsement by super majorities in two successive sessions of the National Congress, a body radically skewed by the over representation of the wealthy, the military, and the less popular political parties associated with them. Buchanan had long called for binding rules to protect economic liberty and constrain majority power, and Chile’s 1980 Constitution of Liberty guaranteed these as never before.

    From its founding, some in the the US have been obsessed with protecting the rights of minorities – slave owners til the Civil War and the 19th Century robber barons thereafter. Central to all these efforts is the advocacy of states rights. The confederation of states failed because the central government was too weak. In negotiating the new Constitution, Madison fought hard with slave owning southerners. The result is the current division of powers between the executive, the legislative, and the judiciary. The senate was created with 2 senators per state serving 6 year terms. This equality of all states regardless of population was an attempt to protect the smaller southern states from the political influence of the larger. Slave owners also negotiated that the millions of slaves should have 3/5 vote each (to be exercised by the owners). Then whenever civil rights issues came before the senate, the filibuster was invented and built into the system to assure that a minority of senators could stop any legislation. Not satisfied, the minority continues effort to disenfranchise voters to protect their power.

    <> <> Harry Flood Byrd Sr. <>John C Calhoun

    Maclean spends some time recounting the history and influence of slavery defender John C. Calhoun, 1782-1850, who can justifiable be considered the father of the radical right in America. Calhoun forged the filibuster as a senate tool in 1841. The supreme court ruled in Brown v. Board of Education in 1954 that all schools must be racially integrated. Senator Harry Flood Byrd of Virginia who politically ran Virginia was determined that Virginia’s schools would never be integrated. To get around the Federal ruling. Byrd offered a plan that all public schools in Virginia would be sold to private owners who would continue to operate then as segregated schools and that the state would offer vouchers to parents to pay for the new private schools. When parents, business owners, and other Virginia residents realized the potential impact of this plan on Virginia’s future they rose up to defeat the plan. Byrd reign as power broker for Virginia ended with this debacle. Buchanan arrived to head the economics department of the U of V in 1956, while this battle was ongoing. Buchanan favored the failed private school plan.

    Enter billionaire Charles Koch:

    The sense of intellectual and even ethical superiority to others may help explain why Charles Koch bypassed Milton Friedman to make common cause with the more uncompromising James Buchanan. Koch referred to Friedman and the rest of the post-Hayek Chicago school of economics he led, as well as to Alan Greenspan, as “sellouts to the system”. Why? Because they sought to “make government work more efficiently when the true libertarian should be tearing it out at the root.” They actually tried to help government deliver better results, which could only prolong the disease. Koch believed that only in its “radical, pure form,” without compromise, would the ideas “appeal to the brightest, most enthusiastic, most capable people.”

    The Koch focus introduced heavily deceptive practices such as the crab walk to confuse, dividing constituencies to target groups that might be more open to deceptive tactics like pretending changes are needed to preserve a program when the goal is actually to eliminate the program altogether – social security, medicare, etc. Lying is now acceptable behavior if it advances your goals.

    We just need to look at Citizen’s United – corporate spending on elections is free speech, Voting Rights Act of 1965 – Section 4 is unconstitutional – Section 5 requires re authorization, repeal of Roe V Wade – States rules apply to see that the focus on appointing ideological judges to federal courts is paying big dividends to the radical right. One former judge says recent pro corporate decisions amounts to a “privatization of the Justice System“.

    Winston Churchill – In His Own Words

    Friday, September 2nd, 2022

    Winston Churchill: His Times, His Crimes, Tariq Ali 2022

    This well researched history is too dense and comprehensive to summarize. Tariq Ali read so many books and sources in preparation that he only presents a Select Bibliography at the end. Winston Churchill was born an aristocrat in 1874 and died in 1965 at age 90. The book is as much a history of British aristocratic rule and imperialism as it is a biography of the man. The ambitious Winston made certain he was present at most of the critical events affecting imperialism and labor relations during the course of his long life. He never took personal responsibility for his many failures during his long life. The life of Winston Churchill makes an interesting contrast to American marine general Smedley Butler who was born middle class in 1881 and died in 1940 at age 58. Like Winston, Smedley seems to have been present at almost every significant event in extending and securing American imperialism. Unlike Winston, his military exploits were largely successful, even if they primarily benefited American exploitative capitalists. The British military officer that most matches the exploits of American Smedley Butler, is Sir Charles Wickham, whose exploits include Ireland, the Boer War, Russia supporting the White army fighting the Bolsheviks in the civil war, Greece, and Palestine.

    Know thy enemy:
    he does not care what colour you are
    provided you work for him
    and yet you do!
    he does not care how much you earn
    provided you earn more for him
    and yet you do!
    he does not care who lives in the room at the top
    provided he owns the building
    and yet you strive!
    he will let you write against him
    and yet you write!
    he sings the praises of humanity
    but knows machines cost more than men.
    Bargain with him, he laughs and beats you at it;
    challenge him, and he kills.
    sooner than lose the things he owns
    he will destroy the world.

    Christopher Logue, poster poem, Black Dwarf (June 1968)

    Iris Chang

    Iris Chang published The Rape of Nanking in 1997, focusing worldwide attention on Japan’s “orgy of cruelty” where as many as 350,000 civilians are estimated to have died. 1000 women were raped every day. The assault on Nanjing was led by Hirohito’s fifty-year old uncle, Prince Asaka, the senior most officer present. To this day influential Japanese leaders, journalists, and academics deny that the Nanjing events happened. Historian Herbert Bix quotes from standing Japanese orders to military units that specified the killing of all prisoners, civilian and military, and the burning of houses. After Nanjing fell the soldiers went on an unplanned rampage of arson, pillage, murder, and rape. Herbert Bix published Hirohito and the Making of Modern Japan in 2000 establishing the direct responsibility of Hirohito for all major military actions including Manchuria, Nanjing, Pearl Harbor, Singapore, and so on. Hirohito was left in place after Japan’s defeat and was never tried for war crimes, unlike Tojo who was tried for war crimes and executed.

    From 1942 to 1944 the British rulers, under Churchill, diverted all available rice and other grains from Bengal to feed American and British soldiers. Fearing a Japanese invasion of Bengal they also confiscated and destroyed privately owned boats needed to transport food and other products throughout Bengal. The result was that an estimated 5 million Bengalis died of starvation. This genocidal war crime was only discovered after the war ended. Satyajit Ray made the film Distant Thunder in 1973 based on a novel describing this genocide. The film was panned by American reviewers. This war crime, near the level of the Jewish holocaust, is not even mentioned in the Oxford History of the Twentieth Century 1998. More proof that history is written by the victors.

    A 1948 U.S. State Department Assessment:

    We have about 50% of the world’s wealth, but only 6.5% of its population…Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security…We should cease to talk about vague and unreal objectives such as human rights, the raising of living standards, and democratization…We should concentrate our policy on seeing to it that key areas remain in hands which we can control or rely on.

    Sun Yat-sen, Lenin and China’s long term plans for sole global hegemony

    Sunday, July 31st, 2022

    The Long Game; China’s Grand Strategy to Displace American Order, Rush Doshi, 2021

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    László Ladányi was a Hungarian Jesuit who lived in China from 1936 until his expulsion by the Communists in 1949. He moved to Hong Kong where he published China News Analysis from 1953 til 1982 when he retired to write books. China News Analysis was the only English language coverage of events from a closed China and based on published speeches and other high level official sources. He covered Mao’s paranoid machinations from the Great Leap Forward where Ladányi predicted 50 million Chinese deaths from starvation to the Cultural Revolution.

    Rush Doshi adopted much of the research methodology of Ladányi in preparing this book which is a study of Chinese foreign policy (political, economic and military) from Deng Xiaoping to the present. Doshi notes that China inherited its nationalism from Sun Yat-sen and the Chinese century of humiliation at the hands of the west and the desire to return China to its historic role as the Central Kingdom surrounded by tribute bearing smaller states, and its political structure, the Chinese Communist CCP from Lenin.

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    <> <> <> <> <> Zhou Enlai
    In 1973 Chinese Premier Zhou Enlai visited Washington in preparation for Nixon’s visit to China. Zhou asked a young American member of the delegation “Do you think China will ever become an aggressive or expansionist power?” The American answered “No.” and Zhou said “Don’t count on that. It is possible. But if China were to embark on such a path, you must oppose it…And you must tell those Chinese that Zhou Enlai told you to do it.”

    The book highlights significant events that caused Chinese leaders to reevaluate their policy focus. The first was a trifecta of events from 1989 to 1991, The Tiananmen Square Massacre, overseen by Deng and widely criticized by the United States and the West; The Gulf War to expel Iraq from Kuwait, which shocked China with the technical superiority of the Americans and the speed with which the war concluded; and the collapse of the Soviet Union. Following the collapse and the end of the cold war, China focused much more on the United States and after Tiananmen started to be more sensitive to human rights concerns of the liberal West even though these concerns dated at least as early as the Chinese annexation of Tibet. China also acquired a new respect for the military technical superiority of the US as demonstrated in the Gulf War.

    When Deng Xiaoping became Premier, he followed the example of Singapore as a model of a democracy free capitalist economic system open to western investment and engagement under an authoritarian rule pioneered by Singapore prime minister Lee Kuan Yew.
    The era from China opening to the United States and the West for investment and trade was given a central policy directive from Deng “Tao Guang Yang Hui” or “hide capabilities and bide time”, applying to political, economic, and military policy as directed by the CCP. During the US Kosovo war a Chinese military leader reiterated:

    “what the PLA should do” in response to “the rise of military intervention” by the United States was to remember that “our approach is Tao Guang Yang Hui” He elaborated, “As a military, this means…vigorously developing ‘shashoujian’ equipment, [and following the principle of],’whatever the enemy is most afraid of, we develop that’.”

    Second, at the political level, the trifecta and China’s strategic adjustment led Beijing to reverse its position on joining regional institutions. Memoirs of Chinese ambassadors are explicit on China’s need to join institutions to blunt American power in three ways: (1)stalling the institutions so they couldn’t become functional; (2) using them to constrain US freedom of maneuver; and (3) using them to reassure neighbors so they wouldn’t join a US-led balancing coalition…Even s, these efforts were taken consistent with Tau Guang Yang Hui’s principle of avoiding claims of leadership, which meant China refrained from launching new institutions; moreover, Deng himself had said that China’s diplomatic voice would grow loader once Tao Guang Yang Hui was retired.

    Finally, the trifecta also shaped Chinese international economic policy…China raised new concerns in Beijing about its vulnerability to US leverage, and blunting these became the focus of Chinese efforts. China not only focused breaking economic sanctions, it also sought to secure MFN (most-favored-nation) status on a permanent basis, or permanent normal trading relations (PNTR). The goal was not to limit China’s dependence on the United States but to reduce the discretionary exercise of US economic power…It also pushed for WTO membership, hoping it would further tie Washington’s hands.

    China limited its military expansion during this time to the development of mines, missiles, and conventional silent submarines. Their largest fleet in the world of silent submarines could surface right next to a US aircraft carrier without detection. In 1973, 75 year old Zhou Enlie was suffering from bladder cancer which Mao had ordered Zhou’s doctors to not reveal or treat, when he lamented that China had not yet acquired an aircraft carrier.

    In 1992, after the Soviet Union collapse, a PLA delegation visited a new Soviet carrier, the Varyag, then under final construction in Ukraine on the Black Sea. China chose not to acquire it. Then five years later China’s top leaders changed their minds and launched a plan to acquire the Varyag that is worthy of a movie.

    Xu Zengping joined the PLA in 1971 and left in 1980 to found a trading company that he claimed made him wealthy. Xu’s wife was a basketball player on China’s national team that played alongside Yao Ming’s mother. PLAN Vice Admiral He Pengfei recruited Xu to serve as the military’s intermediary in the Varyag purchase.

    Consistent with Tao Guang Yang Hui, Xu knew he needed to deceive the world about his wealth, intentions, and government connections. Xu created the persona of an outlandish tycoon who wanted to use the carrier as a floating casino in Macao. Xu set up a shell company and spent $1 million to acquire licenses to operate the casino in Macao. Xu then bought one of the most expensive villas in Hong Kong for $30 million.

    In October 1997, Xu went to Kiev to negotiate with the Ukrainian owners of the Varyag. The private owners acquired the Varyag during the massive neoliberal privatization of Soviet public assets after the collapse in 1991. After months of parties and millions in bribes, the owners finally agreed to sell the Varyag to Xu for $20 million. But Xu also needed the blueprints and the engines which were beyond Chinese capabilities to build at the time. The engines had already been installed but Xu got fake documents showing that the engines had been removed. Xu received 45 tons of blueprints and documents and the engines and then set out on the arduous process of moving the ship to Dalian China.

    In all the government of China spend $120 million and in March 2002, the Varyag arrived in Dalian where it was rust protected and left in December 2005. Even the original Soviet name and markings were left on the carrier.

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    <> <> <> <> <> China’s First Carrier Liaoning

    Then, in response to the Global Financial Crisis of 2008, which Chinese leaders took as a clear indication of the weakening of the US and the West, Chinese foreign policy entered a new more aggressive direction. The top level decision to build a carrier fleet was made in 2009. The Varyag was completed, renamed Liaoning , and commissioned on 25 September 2012.

    After the 2008 Global Financial Crisis, China began to emphasize building regional order. It no longer felt the need to constrain itself fowir fear of rattling Washington or the wider region. The capabilities that carriers were know for were now fully in line with China’s own strategic objectives, which leaned increasingly toward enforcing maritime sovereignty and cultivating the ability to intervene regionally. And so, China entered the ranks of carrier-fielding great powers.

    …the 2008 Global Financial Crisis caused a much bigger shift. China’s assessment of the relative power gap with the United States fell significantly and President Hu then officially revised Tao Guang Yang Hu by stressing “Actively Accomplishing Something” in his 2009 address.

    In 2012 Wang Jisi, dean of Peking University’s School of International Relations wrote:

    “Unlike East Asia, there is no U.S. led regional military alliance among the countries to the west, and there is no possibility that one will arise”…Instead, China had abondant resources and a continental vacuum in that direction, as well as the surplus capacity and dollar reserves to fill it with pipelines, railways, highways, and even overland Internet infrastructure that would reduce China’s dependence on the sea and bind the region tighter to China.

    In 2013 Xi would launch the Belt and Road Initiative (BRI)

    Mao’s Cultural Revolution began in 1966 and ended with Mao’s death in 1976. It impacted virtually all Chinese leaders from Deng to the present. Two stories of auto-didactic education are featured in this book:

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    <> <> <> <> <> The Silver Fox Wang Yi

    On March 16, 2013, Chinese diplomat Wang Yi was formally promoted to minister of foreign affairs. The urbane but fierce defender of Chinese interests was sometimes known as a “silver fox” for both his “looks and his diplomatic wiles.” but he was also brilliant and diligent. After graduating high school during the Cultureal Revolution, Wang Li was sent to labor on a farm in northeast China for eight long years. A former classmate of his recalls that Want Li “did not waste his time” but engrossed himself in literature and history entirely on his own direction. When the Cultural Revolution ended , Wang Li’s diligence paid off, and he earned a spot at Bejing International Studies University, where he dedicated himself to Japanese language studies.

    Wang Li married the daughter of Quian Jaidong an underling of Zhou Enlai and member of China’s first overseas delegations to the Geneva conference in the 1950s. Quian Jaidong became China’s UN ambassador in 1980.

    <> <> <> <> <>
    <> <> <> <> <> Lin Liqun

    On January 16,2016, The Asian Infrastructure Investment Bank (AIIB) was declared “open for business” and a grey haired enthusiast for English literature, Jin Liqun was elected its first president…Jin grew up in an educated but poor family with what was then an unusual passion for English literature. When he was sent to labor in the countryside for a decade during the Cultural Revolution, he spend three quarters of his meager annual salary and what little time he had after a day’s work in the fields continuing that pursuit. “I was outfitted with a worn out Remington typewriter and a copy of Webster”, he said later, as well as a radio he kept tuned to the BBC that gave his English a trace of the “standard BBC accent of the 1970s.” When the Cultural Revolution abated, the twenty nine year old autodidact won a seat at the Beijing Institute of Foreign Languages, excelled in graduate work, and was offered a faculty position…It was not to be. That same year, China joined the World Bank, and English speakers were needed to staff its new office in Washington…He spent a dozen years at the World Bank and then the Asian Development Bank, rising to become its first Chinese vice president, and developed a resume and Rolodex in multilateral finance no other Chinese official could match. When China decided to build its own development bank, Jin was the logical choice.

    Another remarkable story about a misfit coming out the Cultural Revolution was previously blogged.

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    <> <> <> <> <> Xi Jinping

    On October 18. 2017, General Secetary Xi Jinping, in a 3 1/2 hour 30,000 word speech announced the next great change in Chinese foreign policy.

    The speech announced a “new era”, put forward timetables for China’s rejuvenation in 2049, promised greater Chinese activism in global governance, called for a “world-class” military, committed China to becoming a “global leader in innovation,” and declared that China would “become a leading country in comprehensive national strength and international influence.”
    Like other changes in China’s grand strategy, this shift toward greater global ambition was driven by what Beijing saw as the West’s irreversible decay and decline. In 2016…the United Kingdom voted to leave the European Union, and Donald Trump was elected president of the United States. From China’s perspective–which is highly sensitive to changes in perception of American power–these to events were shocking. The world’s most powerful democracies were withdrawing from the international order they had helped erect, creating what China’s leadership and foreign policy elite has called a “period of historic opportunity” to expand the country’s strategic focus from Asia to the wider globe and its governance systems.

    The New Deal, FDR, Truman, LBJ, can Biden reclaim the legacy?

    Tuesday, July 19th, 2022

    Going Big, FDR’s Legacy, Biden’s New Deal, and the Struggle to Save Democracy, Robert Kuttner, 2022


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    Economics Nobel Laureate Joseph E Stiglitz wrote the forward

    The (Great) Depression should have taught us that markets are not stable and efficient–high levels of unemployment could persist for a very long time. We should not have to have had the Great Recession (2008) to relearn the lesson…We should not have had to watch the anemic recovery from the Great Recession, the result of too little fiscal policy and too much reliance on monetary policy, to have relearned that lesson.

    The simplistic neoliberal ideology, which triumphed in both parties…held that downsizing government, including deregulation, privatization, and outsourcing government activities to the private sector, would lead to greater prosperity, (and)…all would benefit. Some half century later, we should declare this neoliberal experiment has been a failure, with lower growth and the benefits of that limited growth going overwhelmingly to those at the top.

    Jimmy Carter, Bill Clinton, and Barack Obama each embraced neoliberal ideology to devastating effect. Biden is the first president since 1984, including Republicans that has not appointed Robert Rubin (of Goldman Sachs and Citigroup) or a protege of Rubin, like Larry Summers, to the inner circle of power.

    Bill Clinton and Barack Obama took the Democratic Party deeper into the neoliberal wilderness, obsessing about budget balance, making alliances with Wall Street, and driving working-class voters into the arms of the Tea Parties and then Trump.

    Stunningly, Biden jettisoned the entire set of neoliberal orthodoxies that had hobbled Democratic presidents since Jimmy Carter. Gone was the idea that deficits necessarily caused high interest rates and inflation. Gone was any illusion that we needed tax breaks for the rich in order to promote private investment. Public investment was needed at a large scale precisely because private investment had failed to serve the real economy and had enriched mainly manipulators, traders, and monopolists…It fell to Biden and his economic team to revise the globalist ideology in favor of coherent policies to rebuild American leadership in industry, technology, and supply chains, sacrificing free trade norms where necessary.

    There is immense latent public support for the use of activist government to better the situation of ordinary people. Foreign policy adventures, such as Vietnam, Iraq, and Afghanistan, can serve as distractions from domestics issues that play to Democratic strength, and can wreck the unity of the coalition needed to pursue domestic progressivism. So, obviously, can racism and continuing legacy of slavery and segregation. But the big challenge is political economy.

    Biden needs to go beyond what even FDR achieved in containing a corrupted capitalist system, because that system today is the wellspring of so much policy failure, and so much political and economic inequality, as well as the corruption of too many Democratic leaders, all of which kindles support for Trumpism.

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    In the standard Roosevelt narrative, FDR restores hope. And he then goes about restoring the economy, using powers of government to put people back to work, and devising new public entities to accomplish what the private sector had bungled. He increases the prestige of the public sector and public solutions. He uses public deficits to restore purchasing power. He virtually invents a national system of social insurance with the Social Security Act. He puts government on the side of worker’s right to organize with the Wagner Act, and then regulates wages and hours directly with the 1938 Fair Labor Standards Act.

    Ordinarily, the Treasury Department is the home of the most conservative officials of an administration. Democratic presidents, seeking to reassure financial markets typically place Wall Street veterans at the Treasury. This was the practice of Johnson, Carter, Clinton, and Obama. But the Roosevelt Treasury was the home of radicals. The most radical was Harry Dexter White, the top U.S. government architect of the postwar global financial system. White was a close collaborator of the the chairman of Bretton Woods conference, John Maynard Keynes.

    The Democratic defensive unease on national security policy combined with the unfinished business of racial justice to destroy Johnson’s presidency. The Vietnam debacle also shattered the New Deal coalition and the hopes of progressive Democrats for half a century.

    As the Obama administration and the Fed did the bidding of the biggest banks, (Elizabeth) Warren and the oversight panel would become one of two sources of loyal opposition, calling for a far more radical, Rooseveltian approach. The other was the FDIC, which was the last regulatory hawk in laissez-faire Washington, because its trust fund had to be tapped to pay depositors when an insured bank failed. The chair of the FDIC was a tough and savvy regulator named Sheila Bair…The financial collapse should have set up Obama to orchestrate a resurrection the the New Deal–the containment of the toxic tendencies of private finance, the expansion of government to do what markets could not, and the use of the crisis as an object lesson…Most of what he did propped up the banking system rather than cleaning it out or seriously re-regulating finance. Obama’s obsession with deficit reduction made the recovery far too slow.

    The serial forms of deregulation that finally crashed the economy in September 2008 had been building and accumulating for several decades. Three earlier crashes, harbinger of the general collapse of 2008, had been contained because the degree of leverage, opacity, conflicts of interest, deregulation, non-supervision, and above all interpenetration had not quit reached the level of the early 2000s. But each was a clear warning that went unheeded.

    The 1990s S&L collapse saw the conviction of more than a thousand executives. The Crash of hedge fund Long Term Capital Management in 1998 led to no reforms. The dot-com and energy crash of 2000 also led to no reform.

    Kuttner spends some time on the explosion of private equity and the toxic effect on nursing homes, newspapers creating “news desserts” throughout the country, and retail.

    Kuttner also talks about the the collateralized loan obligation CLO that have replaced the discredited CDO behind the 2008 crash The US market for CLOs excedes $850 billion in 2022.

    If the New Deal proposition is that government can be effective in solving problems and helping ordinary people, climate change makes that harder to pull off, because worsened climate events are baked in for years to come. Even if Biden does everything right, the everyday experience of extreme climate events will intensify.

    Kuttner concludes with a discussion of the importance of the upcoming 2022 midterm elections. Only three Presidents over the last 100 years have seen their party increase its control of both houses of congress in the midterm elections; Roosevelt in 1934 because of the popularity of his programs; Clinton in 1998 because the Republicans overreached in trying to impeach him; and George W. Bush in 2002 because of the shock of the 9/11 attacks. Can Bidden become the fourth in 2022?

    Defund the Pentagon – From War to Defense to National Security to Irrelevance

    Thursday, April 7th, 2022

    After the Apocalypse; America’s Role in a World Transformed, Andrew Bacevich, 2021

    Created near the end of the Vietnam War, the All-Volunteer Force has since entrenched itself as a permanent feature of American life…it belongs to the category of arrangements that citizens and elected officials alike tacitly treat as sacrosanct. Yet as the wars in Afghanistan and Iraq demonstrated, the All-Volunteer Force is out of sync with U.S. global ambitions. Even so, as if enshrined in the Constitution, the post-Vietnam military system remains fixed in place. As a consequence, the problem of too much war and too few soldiers eludes serious scrutiny. Expectations of technology bridging that gap provide an excuse to avoid asking the fundamental question: Does the United States possess the military wherewithal to oblige adversaries to endorse its claim of being history’s indispensable nation? And if the answer is no. as the post 9/11 wars in Afghanistan and Iraq suggest, wouldn’t it make sense for Washington to temper its ambitions accordingly?

    As national security supplanted national defense, protecting the American people was demoted to the status of a lessor concern. When it came to designing and deploying U.S. forces, other priorities took precedence. The perceived imperatives of national security during the Cold War provided a rational for raising up immense nuclear forces, permanently garrisoning Western Europe with large troop contingents, and fighting costly wars in Korea and Vietnam. Mere national defense would never have sufficed to justify the many billions expended on each of these undertakings. Each was sold as contribution to a broader purpose.

    “Forward Presence” and “Crisis Response” comprised the cornerstones of this new (post Cold War) strategy. Keeping U.S. forces “deployed throughout the world” would demonstrate “commitment, lend credibility to our alliances, enhance regional stability, and provide a crisis response capability.” Forward presence and crisis response went hand in glove. Taken together, they would enable the United States to deal with any problems that might crop up anywhere on the planet, keeping Americans safe and enabling them to enjoy freedom. While the disappearance of the Soviet Empire made it difficult to identify those threats with any specificity, the NMS (National Military Strategy) pointed to “the intensification of intractable conflicts between historic enemies” as a concern, along with nuclear proliferation, drug trafficking, and the “continuing struggle to improve the human conditions throughout the world”. “The real threat we now face is the threat of the unknown, the uncertain.” In sum, as it ventured into that uncertain future, the U.S. military would surely have plenty of work to do.
    The 1992 NMS did not mention the possibility of nature itself posing a problem. In the Pentagon, Dr. Hansen’s warning went unheeded, as it did again in the 1995 NMS, that document made passing mention of disease, but without proposing a plan of action. Climate per se went unmentioned, as it would in the subsequent editions of the National Military Strategy published in 1997, 2004, and 2015.

    On occasion,the United States has found itself face-to-face with threats that did not conform to the profile of Pentagon-preferred adversaries. On each such occasion, with the American people gripped with fear, the existing national security paradigm was found wanting.
    The first occasion was the Cuban Missile Crisis, the second 9/11, and the third the coronavirus pandemic of 2020. Seemingly unrelated, these three episodes lay bare the inadequacies of the prevailing national security paradigm.

    Coronavirus Puts the USS Theodore Roosevelt out of action

    It remained for COVID-19 once and for all to truly drive home the shortcomings of the existing national security paradigm. In 2020, pursuant to that paradigm, the United States was spending approximately a trillion dollars per year. As the coronavirus pandemic ravaged the nation, that lavish expenditure of resources was all but irrelevant to the problem at hand.