Category Archives: Guest Post

The Greater Middle East as an American Garrison: 35 Years of Building Military Bases and Sowing Disaster

Yves here. In a bit of synchronicity, Lambert and I were discussing how bad America is at running an empire. Iraq by any standards was not doing all that well under Saddam Hussein. Growth was lousy due to Western sanctions, and he was thuggish in his methods of maintaining control. Yet he ran a secular government and hostilities between Shia and Sunni were a non-issue. After our invasion, hospitals were basically looted. Electricity barely worked in Baghdad, and wasn’t working all that well long after the US occupied Iraq. Any member of the professional classes that could leave the country did (this was well reported in Australia in 2003 and 2004). So we broke a country…as a demonstration project? For what end? The US also made a botch of the fall of the USSR, with our neoliberal reforms facilitating a plutocratic land-grab in Russia by well-placed insiders, with key Western aides participating in the plunder. OIFVet points out that, contrary to Western ideology, the lives of ordinary Bulgarians was better under the old USSR (Russia is now showing net gains; I’m told Moscow now looks to be on a par with Berlin).

The British took their imperial project far more seriously than we have ours. A big reason that they were more successful is that they built infrastructure, in the form of putting in place a British bureaucracy run by civil servants. And producing those civil servants was the top priority of the education system. C. Northcote Parkinson reports that the top Cambridge and Oxford graduates went to India. The next rank were civil servants in the UK. The ones at the bottom of the heap went into business.

Now there is a lot not to like about a British-style bureaucracy; they are stereotypically rigid and procedure-driven. The Australian Taxation Office is hugely taxpayer-unfriendly if you are a business, compared to the IRS (for instance, when I was there, you needed a receipt for every expense, and not just a credit card receipt. If you had a charge from a newsstand, they wanted to see that it really was a business periodical and not, say porn).

But the rigidity meant it was less easily corrupted, and that no one would question that the government was the paramount authority (a notion that most US regulators seem to have forgotten). Admittedly, with the rise of neoliberalism, no one seems to care about governing well any more, so there hasn’t been much thinking on how to run government in the 20th and 21st century that isn’t really about private sector profiteering.

This article looks at a symptom of the US’ misguided thinking about our imperial project: that of the role of our military bases. It isn’t much discussed in polite company, for instance, that the Saudis had repeatedly asked us to remove our base there because it was causing a lot of discord. We had ignored their request. It took 9/11 to get us to depart.

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Joe Firestone: Elizabeth Warren – Better, But Not There Yet

Yves here. As Elizabeth Warren inches to the left on overall economic policy, one wonders if she’s actually shifting her views or responding to Hillary Clinton trying to rebrand herself as a populist. In fairness to Warren, it’s difficult not to be deeply inculcated in flawed economic thinking and thus hostage to false ideas like “We depend on China and Japan to finance our federal spending.” I look at my pre-crisis coverage and am embarrassed to see that sort of idea treated as obviously true. But if nothing else, the shift in Warren’s stance may be a sign that the Overton window is moving a smidge away from the right. After all, a big reason the Republicans so badly trounced the Dems in the midterms wasn’t just Democratic party fecklessness, but also that the Republicans kept their Tea Party extremists well out of the limelight and toned down the anti-women, anti-gay (and outside the border states) the anti-immigrant rhetoric. That actually amounts to a shift to the center, even if more for show than for real.

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Ed Harrison: Zero Rates, Resource Misallocation, and Shale Oil

Yves here. Established Naked Capitalism readers may recall that Ed Harrison was a regular and much appreciated contributor to the site, particularly in 2009 when I was on partial book leave writing ECONNED. Ed now focuses more on writing premium content, as well as producing RT’s Boom and Bust. But he is now posting occasional pieces on his non-subscription site, and has graciously allowed us to post them from time to time.

This article is a more systematic work-up of something that we’ve discussed short form and Wolf Richter has also written up: that of the dependence of the shale oil boom on reasonably high oil prices as well as cheap financing. And as predicted, shale oil producers have shut marginal wells, and even majors are cutting back on oil production.

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Satyajit Das: Animal Crackers – Watching Bankers Watching etc.

Anthropologists study humans. Ethnographers, a related social science, study people and cultures, trying to understand specific human societies through observation and recording. Once, it entailed well-meaning, idealistic, ambitious, shy, lonely or misanthropic [cross out as required] men and women travelling to distant and exotic locations to study less well known tribes and peoples. Like a great deal of social science, the work reveals more about the structure of knowledge, methodology and the researchers than in does about the subject of study. Writing in the 21 July 1988 edition of The Guardian, Nancy Banks-Smith provided an astute assessment of anthropology: “the science which tells us that people are the same the whole world over—except when they are different”.

In recent times, with the increasing scarcity of newly discovered, loin clothed natives, researchers have turned their attention to professional ‘tribes’ within developed societies, including financiers.

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Coalition Launches World War on Youth

Yves here. I must confess to not being anywhere near as on top of Australian politics as I’d like to be, and I have a great deal of difficulty understanding the ascendancy of Liberal leader and now Prime Minister Tony Abbott, save that in a parliamentary system, who winds up on top often has more to do with infighting skills than real leadership. This post shows that the latest Abbot scheme for addressing youth un and under employment is a serious contender for Worst Neoliberal Post-Crisis Policy Evah. And recall it has QE as a competitor. So this post serves to launch a watch for Really Horrid Neoliberal Policies so we can start creating a taxonomy, which helps in making fun of them.

For starters, how smart is it to throw young people under the bus in an economy that has become almost entirely a real estate one trick pony? Where is household formation going to come from, exactly? Chinese investors and Chinese-driven extraction boom have both provided a big lift to Oz over most of the last decade. Deflation across non-agricultural commodities is a strong tell that that game is past its sell-by date.

One of the things I noticed briefly about Australian policies when I lived there is that they were weirdly bimodal, as in either really well thought out or terrible. This was confirmed by some Canadian policy wonks I met who said when they were looking for policy ideas from other countries, they’d look at Australia first because they were most likely to have gotten it right. The new Abbott policy suggests that capability is being destroyed.

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The Funny Math in the GOP’s Energy Agenda

Yves here. One of the new forms of political handicapping is forecasting which policies newly-ascendant Republicans will put in the forefront and how likely they are to make meaningful progress with them. Corporate taxes are clearly high on their wish list, and one where corporate Democrats will be keen to pretend to be forced to capitulate go along. Another is their energy agenda, which is basically, “let no environmental protection stand in the way of more extraction.”

Now having said that, the Obama position really wasn’t as different as Democratic party loyalists would have you believe. Obama was clearly all in for fracking, and as Gaius Publius set forth in a series of posts, clearly cooked the greenhouse gas emission figures by excluding methane, the most potent greenhouse gas. But even the awfully energy friendly Administration wasn’t as aggressive as the Republicans will prove to be.

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Peter Van Buren: What Could Possibly Go Right? Four Months Into Iraq War 3.0, the Cracks Are Showing

Yves here. This post, which discusses the barmy US idea that we can create an effective Iraq army having failed in two previous efforts, fails to use a key word: mercenaries. Normally, if you aren’t willing or able to have your own citizens act as soldiers, the next best solution was to hire mercenaries. History shows that does not generally work very well, even though it probably does beat doing nothing. Here, the idea of training locals to do our dirty work, out of allegiance to “Iraq,” a made-up country consisting largely of tribal and ethnic groups that don’t play well together in times of upheaval, is questionable on its face, independent of our poor history with this experiment. But the US seems to be in “if the only tool you have is a hammer, every problem will be defined to be a nail” mode.

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Matt Stoller: Why the Democratic Party Acts The Way It Does

There is no end to the whining from Democratic activists after a rotten election, and no end to finger pointing after legislative defeats on contentious questions. This story in the Washington Post is the tell-all of the 2014 wipe-out, featuring the standard recriminations between the President and Congress. In it, the chief of staff of the Senator Majority Leader Harry Reid, David Krone, attacks the White House. “We were never going to get on the same page… We were beating our heads against the wall.” The litany of excuses is long. Democratic candidates were arrogant. The White House failed to transfer money, or stump effectively. The GOP caught up in the technology race, or the GOP recruited excellent disciplined candidates.

Everything is put on the table, except the main course — policy. Did the Democrats run the government well? Are the lives of voters better? Are you as a political party credible when you say you’ll do something?

This question is never asked, because Democratic elites — ensconced in the law firms, foundations, banks, and media executive suites where the real decisions are made — basically agree with each other about organizing governance around the needs of high technology and high finance. The only time the question even comes up now is in an inverted corroded form, when a liberal activist gnashes his or her teeth and wonders — why can’t Democrats run elections around populist themes and policies?

This is still the wrong question, because it assumes the wrong causality.

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Ilargi: The Broken Model of the Eurozone

Yves here. There is a solution of sorts to the problem of the “competitiveness” of Eurozone periphery countries, which is for them to lower wage rates to improve their terms of trade. Unfortunately, that still does not resolve the issue of needed to import other inputs, like energy and sometimes raw materials, at Eurozone-wide price levels. And the response to crushing wages (or the super high unemployment that results from not being able to “adjust”) is that the people most able to leave, which is usually the young and best educated, depart.

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Don Quijones: It’s Official – Spain is Unraveling

straining the economic foundations of the Eurozone, are increasingly spilling over into the political realm. While it isn’t at all clear how this plays out, it is important to remember that the citizens of most European countries are far more willing to engage in collective action, particularly protests, than Americans are. And this propensity has the potential to be more effective than here since political and economic activity is concentrated in comparatively few major cities, while both the population as a whole and power centers are more dispersed in America. Don Quijones gives an update on how centrifugal forces are playing out in Spain.

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