SteveG’s Posts


Toshiba to sell chip unit to Bain Capital-led group for $18 billion

Reuters has the article Toshiba to sell chip unit to Bain Capital-led group for $18 billion.

Japan’s Toshiba Corp agreed on Wednesday to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital LP, a key step in keeping the struggling Japanese conglomerate listed on the Tokyo exchange.

A statement later on in the article is what really raised my concern.

Also, the semiconductor business requires huge amounts of investment, and Toshiba’s chip unit risks losing its competitive ability as rivals such as Samsung Electronics roll out big capital spending plans.

It seems to me that Bain Capital has a habit of stripping the resources from companies that it buys, puts the companies into huge debt, then walsk away with the money, and leaves the remnants to the bankruptcy courts.

Since the semiconductor business requires huge amounts of investment, this approach is sure to kill off Toshiba Semiconductor. Of course, I have no crystal ball, and I am no expert. Of course, Toshiba’s weak financial position might have doomed the semiconductor division even if Toshiba had tried to hang on to it.


What Bibi Said At The UN Was True — And That’s Horrifying

The Forward has the article What Bibi Said At The UN Was True — And That’s Horrifying.

On Yom Kippur, we will hear Isaiah demand that we “unlock the fetters of wickedness, untie the cords of the yoke and let the oppressed go free.” And what happens if we don’t?

On Tuesday at the General Assembly, Netanyahu gave his answer: Nothing will happen. In fact, we will prosper because what matters in this world is power. It’s Pharaoh’s answer, horrifying to hear from the leader of a Jewish state. But nothing I can see proves it wrong.

For those who don’t know the history, The Forward is a Jewish newspaper. Don’t blame me for what my maternal grandfather’s favorite newspaper has to say.


Getting the Gulf of Tonkin Wrong: Are Ken Burns and Lynn Novick “Telling Stories” About the Central Events Used to Legitimize the US Attack Against Vietnam?   Recently updated !

Counter Punch has the article Getting the Gulf of Tonkin Wrong: Are Ken Burns and Lynn Novick “Telling Stories” About the Central Events Used to Legitimize the US Attack Against Vietnam?.

Framing the US attack on North Vietnam as “retaliation” in this PBS documentary, which purports to tell truths about this horrific war, is a fundamental, serious, and consequential defect, one which must raise the question of why, after all these years — and when the truth about the Gulf of Tonkin “incidents” has been known for years — Ken Burns and Lynn Novick would engage in this kind of (albeit strangely belated) pro-war propaganda. (Or is it better understood as indoctrination.)

There is a lot of good information in the Counter Punch article to backup the accusations made against the PBS documentary.

Well, we have known for years that PBS has turned to the dark side, but now it ought to be apparent to the doubters.

I stopped watching NOVA on PBS years ago when they advertised that it was sponsored by the Koch brothers.


This radical money policy would easily pay for Bernie Sanders’ Medicare for all

The Week has the article This radical money policy would easily pay for Bernie Sanders’ Medicare for all.

Now, it would still be prudent for Sanders to match some of the new spending with new taxes because as the economy improves, there will be less wiggle room to spend. But he hardly needs to match all of it. Reasonable assumptions suggest his plan would already result in a bit over $1 trillion in new revenue.

The article depends on the premises of Modern Money Theory (MMT), but it also emphasizes the reality of future inflation issues.

This article also fails to talk about the savings from eliminating the private health insurance overhead. The assumption that the country has to pay about the same amount of money for health care after single-payer as the country did before, is not realistic.

There also needs to be a discussion of one of the ways inflation was kept in check during WWII. That is the selling of war bonds. The purpose of war bonds was to encourage workers to put some of their earnings aside for a while instead of trying to spend it on goods that the economy could not provide at that moment. I don’t know how you do the equivalent of war bonds in a time of peace. That’s why we need to start thinking about this now.

I find this article to be a nice complement to my previous blog post Robert Reich: A Handful of Ultra-Rich Families Are Bleeding the Country Dry.


The Truth About the Vietnam War

Clearing The Fog Radio has an episode with two interviews titled The Truth About the Vietnam War.

PBS is currently airing a ten-part documentary about the Vietnam War by Ken Burns and Lynn Novick that is financed by the Koch Brothers and Bank of America and promoted by the Pentagon. We speak with Vietnam scholar, Professor Bob Buzzanco about the real history of the Vietnam War, what led to it and the opposition that developed. He emphasizes that it is important to understand this history so that we do not repeat it in North Korea or the Middle East. Then we speak with Vietnam Vet, David Ross, about his experiences in Vietnam and subsequently in organizing veterans to stop the war.

Pay attention to who is sponsoring the PBS series. Are you in the habit of praising what these sponsors usually promote? Does it raise any doubts in your mind?


Robert Reich: A Handful of Ultra-Rich Families Are Bleeding the Country Dry   Recently updated !

Alternet has published the article Robert Reich: A Handful of Ultra-Rich Families Are Bleeding the Country Dry.

Taxing dynastic wealth is an absolute necessity if we hope to restore our democracy.
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Then, President Teddy Roosevelt warned that “a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” could destroy American democracy.

Roosevelt’s answer was to tax wealth. The estate tax was enacted in 1916 and the capital gains tax in 1922.

There may soon be an even more immediate reason why we will need to tax this dynastic wealth. The Federal Government created $29 Trillion to bail us out of the crash of 2008/2009. This flood of money did not create inflation because most of that money went to the rich who did not spend it on economy stimulating consumer goods and investments to make consumer goods and investments to make jobs. Since there was a severe lack of consumer demand in our stagnating and collapsing economy, there was nothing worth investing in. All this money was used to increase the price (value) of the things that rich people wanted. One example is corporate stocks. The stock market is now significantly over-priced, but the companies are not hiring at living wages, and they are not making more goods in the USA.

If the economy turns around, all this money that is not being spent into the economy will start to return. This is what will cause inflation. If we could convince Congress to raise taxes, that would suck this excess money out of the economy in a way that would stop inflation. However, raising income taxes will not be enough. The money is already in the hands of the wealthy, so there won’t be enough income to tax. We will need to tax accumulated wealth.

One of the things that might have a hand in stimulating the economy is the transition to single-payer health care. The reduction in health care cost to the typical resident might be enough to get them spending again. If spending were to increase faster than corporations could expand to meet the demand, we would have inflation. We would need a tax that could lower the demand, but not lower the ability of corporations to expand to meet the demand.

Taxing the wealth and income of the very wealthy would discourage their spending on personal wealth accumulation, and redirect it to investment in economic growth to satisfy consumer demand. This is the history of our economy after WWII and up to the years before the Reagan presidency.


Census Data Show We’re Finally Back to Pre-Recession Poverty Levels.   Recently updated !

Spotlight on Poverty and Opportunity has the article Census Data Show We’re Finally Back to Pre-Recession Poverty Levels. Trump’s Budget Risks Erasing Those Gains.

If Trump and Ryan were serious about cutting poverty and fighting for communities left behind, they’d embrace the policies that brought about declines in poverty and rising incomes in 2015 and 2016—like raising the minimum wage. State and local minimum wage increases were likely a major driver of the declines in poverty and rising incomes we saw over the past two years—and, tellingly, in states that had enacted minimum wage increases, low-wage workers saw faster wage growth in 2015 than workers in states whose minimum wages remained flat. They’d close the book on repealing the ACA and slashing Medicaid, programs that together have brought the nation’s uninsurance rate to historic lows. And they’d abandon their proposals to slash nutrition assistance and other programs that help families afford the basics, which cut poverty nearly in half in recent years while also boosting mobility in the long-term.

But instead, they seem hell-bent on snatching any gains working families have seen in recent years and funneling them upward so millionaires and billionaires can buy a second yacht.

Recent reporting of the census data by the corporate media only mentioned the gains. They completely neglected any information about an objective assessment of where we are compared to where we ought to be.


What Is Missing In Modern Money Theory (MMT)?   Recently updated !

I think I have finally come to understand the key omission in Modern Monetary Theory (MMT). Close to the beginning of MMT Primer there is the chapter THE BASICS OF MACRO ACCOUNTING.

It is a fundamental principle of accounting that for every financial asset there is an equal and offsetting financial liability.

They using this accounting fact to justify later claims that banks making loans does not create net money. In this country, only the federal government is allowed to create money.

Accounting is essentially a static balance of assets and liabilities. An economy is not static, however.

When you get a loan from the bank, you make a promise to pay the money back later. However, you get the money to spend now. Your spending now stimulates the economy now, whereas the promise to pay back later will only have economic consequences later. The idea of spending now and paying later is promoted by business exactly because they know that you will be enticed to spend more money now if you don’t have to pay for it now.

During WWII, war bonds were not sold to finance the war. There was no need for the government to take back the money it had already created to finance the war, when it could just have created more money to finance the war. What the war bonds were for was to control inflation. With all of the country’s productive capacity going to the war effort, people immediately spending what they earned would have caused competition between too much money chasing too few goods. The government had to find a way to let you earn your income now, but get you to wait to spend it. So you gave the government back your money with the promise that they would return it to you later and add some interest to make it worth your while.

The point of this discussion is that the difference in time between when you get money and when you spend it or pay it back has a huge economic consequence.

The recognition of this difference may be implicit in some of the discussion of Modern Money Theory, but it ought to be more explicit. I’d hate to have our political leaders making economic decisions for our country solely based on the accounting balance idea only to figure out later that there is a time component that they needed to considered.


We Pay The Price When We Impose Economic Sanctions   Recently updated !

My previous blog post Venezuela Has Officially Stopped Accepting Dollars For Oil Payments has been a wake-up call to me.

When we use our money as an economic weapon to punish countries that don’t do what we want, there is a very serious delayed cost. When we impose sanctions on enough countries, they will eventually band together to free themselves from the power of our money.

One of the articles linked to in my previous post (Libya: another neocon war) identified Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran as our explicit targets. Add Venezuela, Russia, and China to the list. With this set of countries, there is enough economic power to start to put up some serious resistance to the place of the USA dollar as an international reserve currency.

Apparently we view the kind of threat posed to our dollar as significant.

Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar.
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The initiative was viewed negatively by the US and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind;

If you remember, Gaddafi was assassinated at our behest. This kind of retribution only makes it more important for countries to rid themselves of our power over them.

As a nation that is sovereign in its own money and has debts denominated almost exclusively in our own money, the ability to buy whatever we want internationally with our money is a major keystone to our power. If we lose that, we will rapidly decline as the major power in the world.


Venezuela Has Officially Stopped Accepting Dollars For Oil Payments

Real News has the story Venezuela Has Officially Stopped Accepting Dollars For Oil Payments.

And today, as The Wall Street Journal reports, in an effort to circumvent U.S. sanctions, Venezuela is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy said.

This is the kind of behavior that has led to assassinations by the USA. As the article says:

Cue the calls for a Venezuelan invasion in 3…2..1…!

Do a Google search of gaddafi petrodollar. Two article pop right up – Gaddafi’s Threat To The US Petro Dollar And Why He Had To Die and Libya: another neocon war.

Here is an excerpt from the second article which comes from The Guardian.

Kenneth Schortgen Jr, writing on Examiner.com, noted that ‘[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.’