SteveG’s Posts


The Rest Of The Story on the Fight Between Turkey and the USA   Recently updated !

NBC’s Nightly News was pretty parsimonious with the explanation of what is going on between Turkey and the USA. I decided to look on the internet to see what my “friends” in the USA corporate news media aren’t telling me. Here is the first article I found.

‘We are not going to take it sitting down’: Trump on detention of US pastor in Turkey.

The US president’s remarks followed a ruling by a Turkish court, which rejected an appeal for the release of US Pastor Andrew Brunson.

The man has been detained by Turkish authorities for nearly two years. Brunson is accused of being linked to Fethullah Gulen, a US-based cleric who Ankara has said was the mastermind behind the botched coup attempt in July 2016. Brunson faces up to 35 years in Turkish jail over a number of charges, which include espionage and acting “on behalf of terror groups.”

I found this BBC story Turkey coup: What is Gulen movement and what does it want?

Turkish President Recep Tayyip Erdogan blames US-based cleric Fethullah Gulen for last week’s bloody attempted coup.

Then I found this story from France – Gulen admits meeting key figure in Turkey coup plot, dismisses Erdogan’s ‘senseless’ claims.

In an exclusive interview with FRANCE 24, Fethullah Gulen admitted meeting a key figure in Turkey’s July 2016 attempted coup. But the Turkish cleric said that a mere visit from one of his followers isn’t proof he orchestrated the failed coup.

Finally I came to this Global Research story The CIA, Fetullah Gülen and Turkey’s Failed July 2016 Coup.

On December 1, Turkish prosecutors issued an arrest warrant for Graham E. Fuller, former head of the CIA’s National Intelligence Council and former CIA head of Middle East and East Asia operations. The warrant claims Fuller was in the vicinity of Istanbul the night of the coup attempt at a meeting with another top “former” CIA person, Henri Barkey. It claims both CIA veterans were meeting at the five-star Splendid Hotel on the island of Büyükada some 20 minutes boat ride from Istanbul.
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Fuller goes on to admit he formally backed granting Gülen special US visa status in 2006:

“Full disclosure: It is on public record that I wrote a letter as a private citizen in connection with Gülen’s US green card application in 2006 stating that I did not believe that Gülen constituted a security threat to the US…”

Fuller’s “full disclosure” then however omits the fact that it was not merely a casual letter of recommendation to a man Fuller claimed he had met only once. Fuller’s endorsement of Gülen’s Green Card application was so influential that he managed to override the no votes of the FBI, of attorneys for the US State Department and Homeland Security. In the Gülen hearings, State Department attorneys stated,

“Because of the large amount of money that Gülen’s movement uses to finance his projects, there are claims that he has secret agreements with Saudi Arabia, Iran, and Turkic governments. There are suspicions that the CIA is a co-payer in financing these projects.”

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Whatever the outcome of the Turkish charges against Graham Fuller and his close former CIA associate, Henri Barkey, for their alleged involvement in the failed July 15, 2016 Turkish coup d’etat, it clearly throws a major spotlight of world attention on the relation between the CIA and the Fetullah Gülen organization. To open that can of worms could help fumigate more than thirty years of covert Central Asia and other CIA operations with Osama bin Laden, opium trade, Kosovo drug mafia, Turkish dirty CIA operations and far more. Little wonder Graham Fuller writes a blog with the pathetic title, “Why did Turkey Issue an Arrest Warrant Against Me?”

You would think this would be enough circumstantial evidence to get a special prosecutor if this were Russia instead of Turkey.


Ten Reforms to Restore Industrial Prosperity

Spoiler alert, here are the 10 ways the book, Killing The Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, suggests to stop the parasites from killing the host.

1. Write down debts with a Clean Slate, or at least in keeping with the ability to pay

2. Tax economic rent to save it from being capitalized into interest payments

3. Revoke the tax deductibility of interest, to stop subsidizing debt leveraging

4. Create a public banking option

5. Fund government deficits by central banks, not by taxes to pay bondholders

6. Pay Social Security and Medicare out of the general budget

7. Keep natural monopolies in the public domain to prevent rent extraction

8. Tax capital gains at the higher rates levied on earned income

9. Deter irresponsible lending with a Fraudulent Conveyance principle

10. Revive classical value and rent theory (and its statistical categories)

Read the book to understand the reasons for these proposals.


How Nicaragua defeated a right-wing US-backed coup: A report from Managua (Ep. 22)

YouTube has the audio How Nicaragua defeated a right-wing US-backed coup: A report from Managua (Ep. 22).

Max Blumenthal reports from on the ground in Nicaragua’s capital Managua. He reveals how the violent right-wing opposition attempted to overthrow the elected Sandinista government, with help from US-funded organizations and think tanks.

Nils McCune recalls how Nicaragua’s “April 19 movement” operated: violent insurgents occupied universities, burnt down government buildings and pro-government activists’ homes, besieged police headquarters, and tortured and even killed Sandinistas. The Catholic Church helped.

Meanwhile Western corporate media outlets and human rights organizations outlandishly portrayed the democratically elected government of President Daniel Ortega as a murderous oppressor killing moderate peaceful protesters.

All you people who are standing up to declare that our corporate media is not our enemy, please listen to this report. It might just change your mind about taking sides between #45 and the corporate media. They are both evil. There is no lesser evil between the two of them.


Why Elizabeth Warren’s Accountable Capitalism Act Will Be Good for Shareholders   Recently updated !

Naked Capitalism has the article Why Elizabeth Warren’s Accountable Capitalism Act Will Be Good for Shareholders.

Efforts to pursue shareholder value fail. Companies will do better not just for other constituencies but also for shareholders by pursuing a broader set of interests.

Here is the part of the article that speaks to me. A good part of my career had to do with nonlinear optimization.

Or as reader Ruben said in 2017:

Congrats, you have highlighted a trade secret held by experts in nonlinear optimization. The saying is: you can’t go there from here. So whenever optimization (such as profit maximization) has to happen over an irregular landscape (often multidimensional, not just 3D as Earth landscapes) the process is multi-step (cannot go in straight-line, 2 steps) and so it happens that often times you take steps that move you in the opposite direction (less profit) of your final destination (maximum profit), but that was a necessary step to avoid a salient non-linearity (an obstacle)….

Here is a picture to help you understand the nonlinear optimization issue. This is from the ENCYCLOPÆDIA BRITANNICA article Nonlinear Programming.

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Imagine that you are looking for the global minimum of this function, and have found the local minimum at point Q. To find the global minimum at point P you would have to go up hill from the local minimum at point Q to get to the global minimum at point P.

It is easy to see this in a two dimensional plot, but not so easy to see in a 100 dimensions. There is no plot for a computer program or a system to see. Even in this simple case, there is no plot for a computer program to see. It has to try points away from the local minimum to see if there is a point that is lower.

Don’t be confused because I used a minimization example. Turn the plot upside-down in your mind, and you have a maximization problem.


Elizabeth Warren’s Accountable Capitalism Act

Vox has the article Elizabeth Warren has a plan to save capitalism.

Instead of advocating for expensive new social programs like free college or health care, she’s introducing a bill Wednesday, the Accountable Capitalism Act, that would redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime.

You can comment about her idea on my Facebook post. I don’t want to prejudice you with stating my opinion.


Macroeconomic Accounting Instead of CBO/Business Accounting   Recently updated !

There are so many wonderful, pithy paragraphs in the article in New Economic Perspective that I have to repeat it here with emphasis on different sections of the article.

This is way down in the article, toward the end.

Macroeconomic Accounting Instead of CBO/Business Accounting

Macroeconomic accounting is required as a government and political discipline because the importation of business, i.e. “microeconomic”, accounting methods, leads to distortion and discontinuities in the execution of the mission of governments. The use of business accounting is based on a fallacy of composition: that the aggregate of all economic entities in an economy must behave like each of the individual parts. Keynes showed via the Paradox of Thrift that adhering consistently to such a microeconomic path by governments would inevitably lead to economic collapse, especially during a private credit crunch.


Alexandria on the Daily Show: the Moral Economy and Modern Money   Recently updated !

New Economic Perspectives has the article Alexandria on the Daily Show: the Moral Economy and Modern Money.

That the US Treasury is authorized to sell Treasury bonds in the amount of the “deficit”, the amount spent over the amount taxed, does not mean government spending is financed by the bond sales, though those bond sales might have a desirable inflation-dampening effect on the demand created by some government spending over tax receipts, as bond sales defer spending on goods and services. Inflation is also a concern of MMT economists but is not assumed to be the automatic result of net injections of more cash into the economy but rather on levels of actual demand for particular goods and services. The US federal government, as are governments like those of the UK, China, Norway, Sweden, India, Russia, or Japan, is in this “monetarily sovereign” in that it doesn’t get its currency from anywhere else other than its own fiscal operations.
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Searching for sources of money to tax puts her, Sanders, and other “find-the-tax-dollars-first” progressives on a collision course with various interest groups that want to hold onto their money and gives those groups ultimate “veto-power” over spending, if they can lobby hard enough against raising taxes as a precondition for social or ecological spending. Taxation in general and higher levels of taxation are required to realize ambitious social visions and contain inflation but the “pay for” spending-to-match-taxation paradigm will put immediate brakes on those visions at the critical initial stages of developing the social and physical infrastructure we need for the 21st Century.

Ocasio-Cortez may be following the lead of Bernie Sanders in accepting the deficit hawk, “pay for” paradigm. Though I have campaigned for and support most of what Bernie Sanders has done, he has continued to follow the “pay for” framework in his public utterances, despite an ongoing association with Stephanie Kelton, a leading MMT economist and the founding editor of New Economic Perspectives. I am fearful that Ocasio-Cortez will follow Sanders’ path in contributing to deficit worry and “tax as revenue source”. Sanders, despite inhabiting the leftmost portion of the American public sphere before Ocasio-Cortez, is, in my view, too cautious in presenting a transformative vision for American society and physical infrastructure.

Watching an interview with Alexandria Ocasio-Cortez is always fun, but that isn’t necessarily the most important part of the article. So I urge you to read the article after watching the interview.


Toward the end of the article the author gets into the real meaty stuff.

I proposed in 2013 that macroeconomists and in particular MMT economists should develop a macroeconomic accounting methodology for use by political parties and governments as a replacement for business accounting methods. Rather than just critique existing CBO or “government as household” methodology, economists, ethicists, political scientists, sociologists and natural scientists should collaborate in creating a way for governments to effectively convert commonly held ethical principles and known factual data about the real world into government fiscal policy that will effectively and beneficially transform our material reality, reform government and related social institutions. Macroeconomic accounting would provide a step-by-step methodology for political leaders and their support staff and consulting scientists and experts to follow through on realizing the public good via better government fiscal policy.


How big does the fire need to be?

New Economic Perspectives has the article How big does the fire need to be?

I have written about this before, but it bears repeating now—and perhaps it bears repeating every week until somebody with more leverage than me picks the message up and carries it a step further: America (and the rest of the world, for that matter) has the resources needed to limit and mitigate the enormous damage and dislocations that climate-change is now beginning to impose. The “resources” I’m referring to are not dollars. They are materiel, labor, and human ingenuity. The only question is how and when we’ll stop simply raising warning flags and marshal those resources to take real action against the growing challenges.

Maybe this article can finally wake people up to the facts of life. You can’t even imagine what you will learn by reading this article.


Understanding Russian Involvement in the Ukraine   Recently updated !

People listening to the USA government and its corporate news media tend to have a very distorted view of the Russian involvement in the Ukraine. I found an interesting story that clarifies what happened in what you may find to be an odd place. Michael Hudson wrote a book that was published in 2015, Killing The Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

I’ll try to quote enough of one chapter to give you the picture about the Ukraine without quoting too much to violate Hudson’s copyright.

The point is that the European Union with the collusion of the USA was trying to raid the Ukrainian economy, and Russia was trying to prevent the raid. The nefarious tricks that our side used finally caused Russia to take action to protect itself. In actual fact, our side’s successful raid on the Ukraine has made a shambles of the Ukraine’s economy.

The most imaginative recent rationales for annulling sovereign debts have been thought up not by Argentina, Greece or Ireland, but by U.S. strategists seeking to enable Ukraine to avoid paying the bonds it has issued or debts run up for gas imported from Russia. In the wake of the New Cold War confrontation in mid-2014 after Crimea voted heavily in a popular referendum to be re-absorbed by Russia, the Peterson Institute for International Economics floated a proposal by former Treasury official Anna Gelpern to deprive Russia of a means for enforcing its loan to Ukraine. “A single measure can free up $3 billion for Ukraine,” she proposed. Britain’s Parliament could pass a law declaring the $3 billion bond negotiated by Russia’s sovereign wealth fund to be “foreign aid,” not a real commercial loan contract worthy of legal enforcement.

This would be a thunderclap shaking international debt markets. Its principle would be logically applicable to U.S. claims “foreign aid,” which includes loans to pay back American bankers and other creditors, as well as World Bank “aid” loans. The bonds held by Russia’s sovereign wealth fund were denominated in euros under strict “London” rules. Furthermore, the fund required at least an AA rating for bond investments. Ukraine’s B+ rating was below this level, so Russia acted in a prudent way to add financial protection by making the bonds payable on demand if Ukraine’s overall debt rose above a fairly modest 60 percent of its GDP. Unlike general-purpose foreign aid, the terms of this loan gives Russia “power to trigger a cascade of defaults under Ukraine’s other bonds and a large block of votes in any future bond restructuring,” Gelpern noted.

As recently as 2013, Ukraine’s public debt amounted to just over 40 percent of the nation’s GDP – some $73 billion, seemingly manageable until the February Maidan coup led to civil war against the Eastern Russian-speaking region. Waging war is expensive, and Ukraine’s hryvnia currency ruptured. A quarter of its exports come from eastern Ukraine, sold mainly to Russia (including military hardware). Kiev sought to end this trade, and spent a year bombing Donbas and Luhansk cities and industry, turning off the electricity to its coal mines, and driving an estimated one million of the region’s civilians to flee into Russia. Ukraine’s exchange rate plunged steadily, raising its debt/GDP ratio far above the 60 percent threshold. That gave Russia the option to make the debt payable immediately, triggering the cross-default clauses it had inserted into the euro-bonds contracted with Ukraine.

Gelpern’s paper accused Russia of seeking to keep Ukraine “on a short leash,” as if this is not precisely what the IMF and most financial investors do. However, “governments do not normally sue one another to collect their debts in national courts.” If this should occur, the pari passu rule prevents some debts from being annulled selectively. That is the problem Gelpern has been describing in the Credit Slips blog with regard to Argentina’s debt negotiations.

Gelpern therefore raises another possibility – that Ukraine may claim that its debt to Russia is “odious,” addressing the situation where “an evil ruler signs contracts that burden future generations long after the ruler is deposed.” “Repudiating all debts incurred under Yanukovich would discourage lending to corrupt leaders,” she concludes.

The double standard here is that instead of labeling Ukraine’s long series of kleptocrats and their corrupt governments “odious,” she singles out only Yanukovich’s tenure, as if his predecessors and successors were not equally venal. An even greater danger in declaring Ukraine’s debt odious is that it may backfire on the United States, given its own long support for military dictatorships, corrupt client states and kleptocracies. U.S. backing for Chile’s military dictatorship following General Pinochet’s 1973 coup led to Operation Condor that installed Argentina’s military dictatorship that ran up that country’s foreign debt. Would a successful Ukrainian claim that its debt was odious open the legal floodgates for broad Latin American and Third World debt annulments?

Ukraine’s sale of bonds to Russia’s sovereign debt fund, as well as its contracts for gas purchases were negotiated by a democratically elected government, at low concessionary rates that subsidized industrial and household consumption. If this debt is deemed odious, what of the EU’s insistence that Greece remove its Parliamentary leader Papandreou in 2011 to prevent a public referendum from taking place regarding the ECB loan? Loans made in the face of evident public opposition may be deemed to have been imposed without proper democratic consent.