Steve's Politics Blog

Naked Capitalism has published the article Capital Accumulation, Private Property, and Inequality in China, 1978-2015.

To summarise, the level of inequality in China in the late 1970s used to be less than the European average – closer to those observed in the most egalitarian Nordic countries – but it is now approaching a level that is almost comparable with the US.

Just as I suspected, China has adopted some of the worst aspects of capitalism as well as some good aspects. The lower income earners are still making some progress, unlike what we see in the USA. The government of China will probably be able to sustain itself in power as long as the lower income earners continue to see progress. As that progress diminishes, and wealth gets more concentrated at the top, that is when we might see more open rebellion in China.

One key difference to note is from the following excerpt:

China has ceased to be communist, but is not entirely capitalist; it should rather be viewed as a mixed economy with a strong public ownership component. In effect, the share of public property in China today (30%) is higher than in the West during the mixed economy regime of the post-WW2 decades (around 15%-25%), but not hugely so. And while the share of public property in national wealth has declined to 0%, or even less than 0%, in Western countries (with public debt exceeding public assets in the US, UK, Japan, and Italy today), the public’s share of national wealth in China seems to have strengthened since the 2008 financial crisis.

As long as there is significant public ownership of wealth, China may still be able enforce some semblance of economic justice. The USA has passed up on an obvious way to increase public ownership of wealth in the USA. If the Social Security Trust fund were able to invest in the stock of publicly owned companies in the USA, our corporations might not be so pressed to maximize profits no matter what the cost to society. (I am not talking about individuals investing their share of the Social Security Trust Fund at retail costs in the stock market. I am talking about investing at the Trust Fund level where the funds are still aggregated and invested by professional pension fund experts at wholesale costs.)

Rolling Stone has the article What Does Russiagate Look Like to Russians?

But Americans surely helped usher in the oligarch era by guiding Russia through its warped privatization process. In some expat circles back then, you found Americans who believed that by creating a cadre of super-wealthy Russians, we would create a social class that would be pre-motivated to beat back a communist revival.

This may have prevented a backslide into communism, but a by-product was accelerating a descent into gangsterism and oligarchy.

As I observed what was going on in Russia after the collapse of the Soviet Union, this is exactly what I felt was the sad story. Their turning toward capitalism was taking on some of the worst aspects of capitalism. To some degree, China has followed the same path. Privatization in the U.S. is another example. We practically give away valuable publicly owned assets to oligarchs who become billionaires from that gift. They don’t even want to pay their fair share of taxes on the gift. This is the infamous transfer of wealth from the middle class to the ultra-wealthy.

Alternet has the article The Deep History of the Radical Right’s Stealth Plan to Hijack American Democracy. This is an interesting analysis of what frequently goes under the label of Libertarian.

Kristin Miller: You referred to a movement as a fifth column. Is it still a stealth movement, do you feel, or is it more in the open these days?

Nancy MacLean: … So I don’t think “fifth column” is necessarily the best term, but it identifies that element of their thought, which is really so far on the radical right that they have such a hostile attitude toward our democracy; it’s almost as if they’re outsiders bent on what one of them called a hostile takeover.

Nancy MacLean also explains why I am against paying so much attention to Trump’s Tweets.

Nancy MacLean: Well, the first thing I’d say is stop paying such attention to Trump’s tweets. They’re a total distraction. I think we should instead be carefully watching the actions of groups like Freedom Partners, Chamber of Commerce, the Koch’s big donor operation. The Club for Growth is another part of this, and Americans for Prosperity on the ground.

InsurgeIntelligence has the article Pentagon study declares American empire is ‘collapsing’.

Indeed, most telling of all is the document’s utter inability to recognize the role of the Pentagon itself in systematically pursuing a wide range of policies over the last several decades which have contributed directly to the very instability it now wants to defend against.

The implications for democracy in the USA are pretty dim based on what our government will do to maintain supremacy. The overwhelming political power of the very rich is what has brought us to this point. They will do anything to maintain the power they have accumulated. The world will be going through a very dark period of history as the American empire comes crashing down. I see very little likelihood that the situation can resolve itself peacefully and democratically. Still, I have hopes that this unlikely outcome can come to pass.

Foreign Affairs has the article Why the Ukraine Crisis Is the West’s Fault. The magazine won’t let me see the full article, but here is an excerpt from the part they let me read.

For Putin, the illegal overthrow of Ukraine’s democratically elected and pro-Russian president — which he rightly labeled a “coup” — was the final straw.

To see what part the USA played in the overthrow, look up Victoria Nuland on this blog.

Here is one link to an article you will find in the above search – U.S. officials caught in Ukraine plot.

New Economic Perspectives has the post A Memo From MMT’s Legal Department. This post presents some interesting ways to interpret the insights of Modern Money Theory. Here is one example.

MMT’s determination that that a Job Guarantee is necessary because the state creates unemployment by imposing a non-reciprocal liability (i.e. a tax) that can only be satisfied by obtaining its tokens (i.e. tax credits), and thus owes individuals the ability to work for those tokens, is an argument about legal systems design. That is to say, the Job Guarantee is a legal remedy to the problem of legally-created unemployment. This framing echoes the legal arguments made by the British peasantry in response to the 18th century enclosure movement. When the state privatized farming and hunting lands previously considered part of the commons, peasants demanded compensation. Although the enclosure story focuses on the coercive creation of private property rights and the Job Guarantee story focuses on taxation , the underlying legal reasoning is the same: when the state prevents its subjects from subsisting independently from the state-controlled, monetarily driven, social provisioning process, it cannot exclude them from equitable participation in that process.

I had not seen the Job Guarantee in quite this light before. This is just one of the eye opening explanations in the post.

Naked Capitalism has the article It Takes a Theory to Beat a Theory: The Adaptive Markets Hypothesis. I wholeheartedly agree with the premise of the headline, but in my ill-considered opinion, this theory isn’t it.

We begin with this simple acknowledgment: market inefficiencies do exist. When examined together, these inefficiencies and the behavioral biases that create them are important clues into how that complicated neurological system, the human brain, makes financial decisions.

As Bill Black has pointed out numerous times, the people who brought on the financial collapse were acting completely rationally. They crashed their own corporations not out of irrationality. They did it because they were trying to make themselves rich, and they didn’t give a damn about the corporations they were looting in the process.

In this case, I am going to apply Occam’s Razor to conclude that Bill Black’s explanation is more likely to be the correct theory.

New Economic Perspectives has the article Monetary Sovereigns, Monetary Subjects: Modern Money & The Criminal Legal System.

So, there’s financial domination intertwisted with carceral domination. So what? Why should we care about looking at things this way? Because it affects our strategy. As the saying goes, “if you don’t know where you’re going, you’ll end up somewhere else.”

In an article in the Boston Review last fall, Donna Murch, a Professor of History at Rutgers, said that we need:

“…a larger reexamination of the economic and extractive dimensions of mass incarceration… apart from establishing more equitable means testing of people brought before the courts.”

I strongly agree. I would obviously propose the Modern Money view as the method of reexamination.

Here is an enlightened way to look at the monetary system and its relation to the criminal justice system. There is a grain of truth when the libertarians complain about the coercive nature of the monetary system. It is just that they don’t understand the system well enough to know what is wrong and what is right about the system. Their proposals are as likely to be harmful as they are to be helpful. I believe that the author of this article, touting Modern Money Theory, has the understanding to know how things work and how to make them work better for the society as a whole.

The Atlantic has this Rorschach Test article for you, What on Earth Is Wrong With Connecticut?.

You can either go away with The Atlantic‘s conclusion.

In the biggest picture, Connecticut is a victim of two huge trends—first, the revitalization of America’s great rich cities and second, the long-term rise of hot, cheap suburbs. But Connecticut’s cities are not rich or great; its weather is not hot year-round; and its cost-of-living is not low. The state once benefited from the migration of corporations and their employees from grim and dangerous nearby metros, but now that wave is receding. To get rich, Connecticut offered a leafy haven where America’s titans of finance could move. To stay rich, it will have to build cities where middle-class Americans actually want to stay.

Or you can go away with a “conservative” anti-liberal conclusion of your own, as The Atlantic suggests.

Consortium News has the article Ten Problems with Anti-Russian Obsession.

Further, the “blame-Russia” and “hate Trump” campaigns have reduced the credibility of liberals and progressives and make it harder to reach out to white working-class Americans who voted for Trump, in part, because they felt ignored and disrespected by the national Democratic Party.
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By obsessing on Russia-gate, Democrats and liberals are playing into the hands of neoconservatives and the Military Industrial Complex, which are pushing for another war in the Middle East and an expensive New Cold War with Russia. The immediate flashpoint is Syria where the Syrian government and allies are making slow but steady progress defeating tens of thousands of foreign-funded extremists.

These are two of the reasons that I think are most damaging to the Progressive and Liberal cause in this country. Since I keep insisting that the 4 “intelligence” agencies’ claims to Russian hacking of the DNC email are just suppositions and accusation without proof, I now have a cousin accusing me of being a right-wing conspiracy theorist. That’s particularly ironic coming from a person who is a Democrat, but who is somewhat to the right of me in political philosophy.