Links 6/15/14

Britain hoping ‘spornosexual’ just goes away Daily Mash

Deforestation leaves fish hungry BBC

How Much Energy Will the 2014 World Cup Consume? OilPrice

In print or on dead trees, there’s money in long-form journalism Pando. Notice the eyestrain issue with long form on screens. I had a really terrific greyscale monitor on my NeXT, and I wish I could get something as good now. My eyes got markedly worse when I had to switch to color monitors.

Vermont, food industry begin court fight over GMO label law Christian Science Monitor (furzy mouse)

GM floodgate to open? EU ministers back deal to let nations decide fate of crops RT

Sham Peer Review Issue Goes Mainstream. WaPo: VA Physicians Fear Sham Peer Review Health Care Renewal

Cambodian Activist’s Fall Exposes Broad Deception New York Times (lambert)

Chinese Payments Association Wants Banks to Identify, Eliminate Bitcoin Activity CoinDesk

Beijing accuses Vietnam of ramming vessels over 1,500 times South China Morning Post

China Housing Still Clouds Economy WSJ Economics

Apple, Starbucks, Others Under EU Tax Investigation Angry Bear

Russia seeking greater cooperation in space industry with China Nikkei

13 planes vanish from radars over Europe Telegraph (Chuck L)

Israel: an Army That Has a State CounterPunch (Chuck L)


Ukraine: These Tanks … And The State Department Lies Again Moon of Alabama

Ukraine hits back after rebels down plane Aljazeera

Bulgaria’s decision to suspend work on the South Stream pipeline is likely to increase the EU’s leverage in negotiations with Russia over Ukraine EUROPP

Hollande and Merkel voice concern to Russia over Ukraine violence DW


Obama Positions Warships as Iraqis Await Decision on Air Strikes Bloomberg

Rebel Advance Stalls in Iraq as Capital Braces for a Siege New York Times

Militants’ gains in Iraq pose threat of broad regional ramifications Los Angeles Times. Duh.

Iraq’s civil war threatens structure of global energy supply for years Ambrose Evans-Pritchard, Telegraph

The Faulty Foundations of American Exceptionalism National Interest (Chuck L)

Two Occupations Ending in Hopeless Disasters Counterpunch

Iraq, Vietnam, and Why US Foreign Policy Elites Won’t STFU Barry Eisler, Firedoglake

What if US Government Had Not Demanded We “Drop It” on Maliki’s Corruption in 2010? Marcy Wheeler

Who’s to blame for Iraq crisis? CNN

Big Brother is Watching You Watch

Pentagon bracing for public dissent over climate and energy shocks Guardian (furzy mouse)

Senior NSA Executive: NSA Started Spying On Journalists in 2002 … In Order to Make Sure They Didn’t Report On Mass Surveillance George Washington (RR)

Transforming the web into a HTTPA ‘database’ ZDNet

Motorcyclist who filmed, uploaded police flight video to serve hard time arstechnica

Making Schools Poor New York Review of Books

Getting rid of teacher tenure does not solve the problem Cathy O’Neil

International Human Rights Violations in Detroit On the Commons (John L)

Obama signs order; SEPTA Regional Rails to roll Sunday (Paul Tioxon)

Former Managers Allege Pervasive Inventory Fraud at Walmart. How Deep Does the Rot Go? Nation

Citigroup, BofA Said to Face U.S. Lawsuits as Talks Stall Bloomberg

The South Rises Up to Take on Wall Street and High Frequency Trading Pam Martens (Chuck L)

Pension Funds, Dancing a Two-Step With Ratings Firms Gretchen Morgenson, New York Times. Looks at hypocrisy of public pension funds suing rating agencies for faulty ratings, yet requiring the use of ratings in their fixed income process. A pension fund readers know well features prominently.

Class Warfare

You Can’t Have A Wage-Price Spiral Without Wages Paul Krugman

Atrophied Social Network vs. Skill Mismatch Theories of the Unfortunate Shift in the Beveridge Curve Brad DeLong

No Solution to Record Number of Homeless Families in San Francisco TruthOut

Why boarding schools produce bad leaders Guardian

Antidote du jour:


And a bonus video (hat tip Gawker):

See yesterday’s Links and Antidote du Jour here.

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  1. abynormal

    Turning off the water in Detroit:
    ‘Body Drought’ – the Strongest Form of Stress
    Our brain, working round the clock, requires more water than any other part of the body. Under normal conditions, it contains about twenty percent of all the blood that circulates through the body. It is estimated that brain cells consist of 85 percent water. Their energy requirements are not only met by metabolizing glucose (simple sugar), but also by generating “hydroelectric” energy from the water drive through cell osmosis. The brain depends greatly on this self-generated source of energy to maintain its complex processes and efficiency.

    Water deficiency in the brain tissue cut downs its energy supply and thereby depresses many of its vital functions – hence the word depression. With a low level of brain energy, we are unable to meet our personal and social challenges and subsequently succumb to fear, anxiety, anger and other emotional problems. We may feel drained, lethargic, stressed and depressed. The chronic fatigue syndrome, which is commonly known as M.E., is mainly a symptom of progressive brain dehydration and subsequent retention of metabolic toxins in the brain.
    The Stress Response
    When dehydrated, the body has to put up the fight of a lifetime — similar to the one experienced in a “fight or flight” situation. The body meets a crisis situation by mobilizing several powerful hormones, including adrenalin, endorphins, cortisone, prolactin, vasopressin, and Renin-Angiotensin (RA).

    Endorphins, for example, help us to withstand pain and stress and allow the body to continue most of its functions. Cortisone orders the mobilization of stored energies and essential raw materials to supply the body with energy and basic nutrients during the crisis. In other words, this hormone allows the body to literally feed off itself. This in itself is a very stressful and damaging situation for the body and is expressed by such emotions as, “I can’t cope anymore” or, “I feel this is eating at me.” Many patients with Rheumatoid Arthritis, MS or other degenerative diseases take cortisone drugs, which often give them a boost of energy and morale for a relatively short period of time. Article Source:

    “Human nature is like water. It takes the shape of its container.” Wallace Stevens

    1. trish

      and so if conscious of what form our container takes we may push out against it, de-form, alter it… awareness may allow a degree of malleability of which otherwise would remain rock -hard? A degree. Our “container”, our culture, our language, certainly “too big,” too invisible, too much a part of us (blurry between our form and its form?), for much malleability. More likely just bruised from bumping against it…

      not very well-articulated, but…

  2. Marina

    My reply is a comment on the Gretchen Morgenstern NYT Pension article.

    It is abundantly obvious that the business model for rating agencies (all 3 US based ones and any thereafter) be returned to what it was in the 1980’s and prior – any and all fees MUST be paid by investor subscribers.

    It is a ludicrous conflict of interest that rating agencies are paid by issuers! How STUPID has the now cow-like institutional investor become?

    If these guys don’t want to pay up and do their own homework to get the in-house research staff they need to execute their due diligence as mandated legally in their trusts, they WILL be sued and incur legal fees and mistrust at large. Probably more economical to PAY for S&P, Moody’s, Fitch… Worked just fine prior to the idiotic and piggish change in business model.

    Ms.Morgenstern does excellent work, however, in this instance I must call her out is placing the emphasis of her article on the wrong issue. It is fantasy to think that pension funds will now or ever have the savvy to analyze their own investments although the fiduciary responsibility lies with them.

    Look to your ‘minor’ point of conflict of interest within rating agency payment scheme.

    That IS the story.


    1. Yves Smith Post author

      1. The rating agencies moved to the “issuer pays” model as a result of the proliferation of copying machines. Their subscriptions plunged when investors could copy their ratings and other research. They have no business with an “investor pays” model.

      2. You seem not to have read her article carefully. Her point is that even investors that are suing the rating agencies are still using their ratings. If they were serious about the point of view they took in their court filings, they would not be relying on ratings.

      3. Certain investors actually are legally or contractually required to rely on ratings. For instance, some money market and bond funds say they will invest in bonds only of a certain rating. A lot of contracts and statutes would have to be rewritten to undo that. The point that Morgenson does not make clear is that state pension funds aren’t bound by those rules. They informally follow ERISA but are not subject to it. They actually could pave the way in moving beyond rating agencies but aren’t doing so.

  3. arby

    One regrets that Professor DeLong has now joined Professor Krugman in the category of extremely clever men. “There are so many different kinds of stupidity and cleverness is among the very worst.” The quote from Thomas Mann epitomizes the economics leaders who might use their platforms to focus on the paramount issue of rank criminality occurring in finance. Instead, one is treated to cleverness about obscure models. The ongoing Moyers work .. most recently, the Admati interview, provides the contrast.

  4. DakotabornKansan

    Just as Detroit is a victim of decades of market driven neoliberal policy that put business and profit ahead of the public good, Kansas, because of the zealotry of the powerful right, has been pursuing an austerity agenda – massive tax cuts; devastating cuts to education; privatization of social services; elimination of aid to the working poor.

    These zealots and busybodies, True Believers, who torment us for our own good, will torment us without end for they do so with the approval of their own clear consciences.

    Tony Judt described this as “The Cult of the Private,”

    “The reduction of ‘society’ to a thin membrane of interactions between private individuals is presented as the ambition of libertarians and free marketers…Governments that are too weak or discredited to act through their citizens are more likely to seek their ends by other means: by exhorting, cajoling, threatening, and ultimately coercing people to obey them. The loss of social purpose articulated through public services actually increases the unrestrained powers of the over-mighty state.

    “There is nothing mysterious about this process: it was described by Edmund Burke in his critique of the French Revolution. Any society, he wrote in Reflections on the Revolution in France, which destroys the fabric of its state, must soon be ‘disconnected into the dust and powder of individuality.’ By eviscerating public services and reducing them to network of farmed-out private providers, we have begun to dismantle the fabric of the state. As for the dust and powder of individuality: it resembles nothing so much as Hobbes’s war of all against all, in which life for many people has once again become solitary, poo, and more than a little nasty.” – Tony Judt, Ill Fares the Land

  5. Banger

    Things are not what they seem in Iraq. The mainstream media is adept at just reporting the externals (and usually not very well) and ignoring/distorting the underlying reality of the situation. Who funds ISIS? What are the objectives of powerful groups involved in Syria/Iraq?

    First the Syria “rebellion” is a proxy war between U.S./Saudi and the Shiite part of the ME. Without this as our starting point we get nowhere. The idea that “the people” just all of a sudden rise up against their overlords in this day and age of propaganda, covert operations, NGOs funded by the CIA and so on is fairly ludicrous. Yes, like in Ukraine, there was some kind of upset among the disaffected in Syria but, on the whole, life was not so bad in Syria. Several years before the revolt there was a long New Yorker piece about how well Syria was handling the situation and that Syria seemed to have the most convivial society despite the influx of refugees from Iraq. Now was Syria the land of the free and home of the brave–no it wasn’t but then neither is the U.S. Syria is run by an oligarchy, the U.S. is run by an oligarchy all God’s chillen’ are run by oligarchies so let’s dispense with that–some let people have more scope than other societies–in the U.S. since there is very little opposition there is no reason to take people screaming into the night–just keep the Mighty Wurlitzer humming along year after year.

    Now, the U.S. is proposing to bomb ISIS and, in exchange, tie Maliki to the U.S. or replace him with Alawi (the CIA guy) as McCain (the NED guy–same difference). The Iranians, understanding all this are gunning to get into the fight themselves because they know the U.S./Saudi objective, i.e., the defeat and destruction of Iran (for starters). Maliki, said that the refusal of the Iraqi Army to fight was treachery–perhaps. Perhaps the Saudi/U.S. alliance decided to bribe these people or perhaps the U.S. trained officer corps was ordered by the Saudis and U.S. to disperse and melt into the population. I don’t know. Certainly Webster Tarpley who, as much as I hate to admit it, is often pretty right on about geopolitics seems to think that this is the case. I’m on the fence here. But Tarpley also claims and has claimed for some time that there is what he calls a Bonapartist coup in the makings within Washington.

    Let’s look closely at that for a moment. Tarpley was one of the most adamant and vociferous critics of Obama early on, in fact, he wrote a book about the danger of an Obama Presidency which turned out to be, on balance, correct which is one reason, aside from his excellent book on 9/11, that I listen to him though I have a very different POV about many things from him. The idea he has, as far as this stunningly quick success of ISIS is that the coup centers around McCain, Petraeus and the Kagan/neocon clique currently centered in the State Department–their chief target is Gen. Dempsey who has urged moderation but, also, the whole WH contignet that tends to be a little more dovish. The coup is not about replacing Obama but bringing in a nest of people like McCrystal and other ambitious Generals to run, along with the hawkish State Dept. American foreign policy and, ultimately all aspects of the state apparatus.

    Do I buy this? I’m not sure. As I’ve said, I believe there is a multi-faceted power struggle going on in Washington in large part because Obama is a weak President (he was supported by the oligarchs precisely for that reason) who is dependent on outside sources of power–please don’t think that because theoretically the President has all this power that he can just wield it as he pleases–that is not even remotely true. To get what he wants a Prez has to constantly play one faction against the other–of come into office with that job already done as was the case with every RP President since Reagan (because a Bush was always prominent in all those administrations).

    What I do know for sure is that the mainstream media POV is always based on the propaganda needs of whatever factions hold the balance of power in Washington and New York so we have to try and triangulate and use our intuition–since facts are in short supply at least on issues of war and peace.

    1. Jim Haygood

      Speaking of the mighty Wurlitzer, its house organ the NYT is floating some spin today about how ISIS’s sweep ‘appeared to catch Iraqi and U.S. officials by surprise.’

      If this were really a surprise, there ought to some heads rolling in the intelligence agencies for another 9/11-scale abject failure. But of course, if they’re actually running this show, all they need is plausible deniability, since no one in Usgov is ever held accountable for anything anymore.

      Smash the MSM. The Media is The Man (TM).

    2. Andrew Watts

      “Things are not what they seem in Iraq. The mainstream media is adept at just reporting the externals (and usually not very well) and ignoring/distorting the underlying reality of the situation. Who funds ISIS? What are the objectives of powerful groups involved in Syria/Iraq?”

      ISIS is a mostly self-funded movement. In territory under their control they collect taxes, pump oil, and run their little extortion rackets. They do also provide social support to the civilian population. They’re organized like Hezbollah which pioneered this successful model of organization.

      Anybody who spins recent events in Iraq as anything other than a sectarian conflict has no idea what they’re talking about. The only reason why ISIS was able to advance so quickly was due to their co-operation with fellow Sunni. It must have taken years to organize this offensive.

      Of course, all we hear about is how Al Qaeda is taking over Iraq. An(other) American bombing campaign won’t contribute much if anything of value to a resolution. I hope Washington is factoring in how many civilians they’re likely to kill in the process of “resolving” this sectarian civil war.

      1. Banger

        So then the Saudis have nothing to do with this? And the U.S. intel just is twiddling its thumbs not aiding the Syria rebels? And to go deeper you then imply, perhaps, that the U.S. and (before WWII) Britain had no connection at all with putting the Saudi royals in power and, furthermore, had nothing to do with aiding Islamic fundamentalism (as a political force) in places like Egypt. You take in the media narrative that has been proved wrong time after time after time after time after time if you believe in logic that is.

        I actually don’t know who is doing what–but I do know a little about the history of the region.

        1. Andrew Watts

          Saudi Arabia and the ISIS-Sunni alliance both share an interest in making sure Iraq isn’t dominated by Iran. That isn’t proof that ISIS is under the control of any external power. In Syria they fought other rebel groups that received political/military support from both the US and Saudi governments. They were expelled from Al Qaeda for this and eventually they consolidated control over a large swath of territory in Syria/Iraq. Based upon these events I can believe that ISIS is an independent power in their own right.

          Everybody has an angle which makes this more than a binary situation. The Saudis don’t have a very good history with the Baathists that ISIS have aligned with. The Iranians are practically offering the United States an alliance to help crush the Sunni insurrection. The Turks are probably preparing plans to invade Kurdistan. The Israelis will be doing everything in their power to keep the Shia and Sunni fighting each other.

          The overall situation is a pressure cooker ready to blow. I don’t think Washington or anybody else knows what to do. The only thing they do know is that they don’t want to this situation to escalate. It’s probably too late for that.

          “And to go deeper you then imply, perhaps, that the U.S. and (before WWII) Britain had no connection at all with putting the Saudi royals in power and, furthermore, had nothing to do with aiding Islamic fundamentalism (as a political force) in places like Egypt.”

          You’re putting words in my mouth. The historical relationship between the United States and Kingdom of Saudi Arabia is irrelevant to the current situation in Iraq. I don’t believe they’re working together based upon recent history. Consider the fact the US didn’t intervene militarily in Syria.

    3. Eureka Springs

      I have yet to see any reason to suspect ISIS is anything but US/Saudi and probably Qatari-Exxon, the Turks etc organization. A combination of mercenaries and wayward angry souls looking for a job, a purpose or simply a rage outlet on behalf of their god. The very fact we aren’t certain says so much…. such as we remain mired in totalitarian deception. To not be able to follow the orders, actions and money on our own (US) part is an outrage only superseded by the constant war/death/torture/oppression happening to tens if not hundreds of millions of human beings in our name, by all the neoliberalcons in charge. It’s just business… Derivatives of MIC, energy and FIRE. All without opposition at home in the west, EU or America. Certainly no opposition within the halls of power.

      One small poo poo red mist platter here:

      Like this guy, whether real or not.

      Human Rights, (not on their) Watch (**spit**) Praised ISIS until a couple of days ago. That was no accident if one simply followed Syria on a casual level these past few years… and we know HR, not on their W, was far more than a casual observer. Since they cheered the pre ISIS guys war in Syria and did their level best to perpetuate the lie in re chemical weapons there in order to escalate that war.

      1. Banger

        So how did these guys get the entire military in Iraq to collapse and basically give U.S. heavy weapons to the anti-Assad/anti-Iran forces?

        1. Eureka Springs

          Well If I had taken a job out of desperation for an income as an Iraqi army/security agent in Mosul… then the shit hit the fan I would most certainly have said to myself – you know this is not your battle… get the hell out of here!

          As for arms ending up in the hands of yet more Pro US/Saudi ambitions – against Assad and Iran…. you really have to ask that question?

    4. Doug Terpstra

      This is compelling. The scale and speed of the al-Qaeda insurrection, its explicit connection to the US-Saudi-funded civil war in Syria, the reported liberation of $400 million cash from Mosul banks ($400 million cash on hand in small-town banks; are you effing kidding?), the breathtaking top-down collapse of the US -trained army (abandoning hi-value weapons), along with the completely implausible, dumbfounding stupidity of our vast “intelligence” agencies is overwhelming evidence of CIA engineering. One logical scenario is that Maliki has cut the puppeteers strings and must be replaced with a marionette more compliant with the oil majors. Whatever the case, official theories make no sense whatsoever. As in Ukraine, that must now be the default presumption with the Obama regime.

      It’s quite insulting to be played for such fools, again and again … Then again, as someone said, no one ever lost money underestimating the gullibility of the American public. Witness the reelection of Obama. It’s enough to evoke great despair. There seems to be no bottom to the depth of deceit and depravity of imperial leadership.

      1. Working Class Nero

        The key here is Iran. The US wants Iran to respect her authority but knows an invasion will be too costly. Instead, the invasion of Iraq (2003) was seen as a confidence building measure towards Iran because we put the Shia in power. Remember the US empire is traditionally much closer to the Sunnis. So make no mistake, we intentionally placed Iran in charge of Iraq.

        But the power to give is also the power to take away. Iran has not yet kissed the ring, they do not make the requested nuclear concessions, and they continue to support Hezbollah and the Assad regime in Syria. They have totally failed to get with the US program. What kind of gratitude is that?

        The question we need to ask is, “What would the Romans have done”? Well Iran had plenty of time to come around and now a little pressure is going to be applied to them. Yesterday it was reported (by the Guardian) that Iran sent 2000 men to Iraq. Over the past several months they have been pulling assets out of Syria and back towards Iraq (this ISIS advance in Iraq was reported on over the past few months but one really had to dig a bit).

        So the US is sitting in a pretty nice position. They have the Islamic version of Right Sector on the march and plausible deniability in spades . But there is absolutely no hurry. The key is too spread the Iranians out as wide as possible and eventually to bleed them white à la Verdun. The ISIS will menace as many Shia shrines as possible and attempt to encircle Baghdad. They control the water coming in. A nice move would be for the ISIS to send minimal assets out in Iraq to accomplish the above goals while they turn back to the now less-guarded Syria to make some major gains there. In the meantime nuclear talks are ongoing between the US and Iran. I suppose the Iranians may feel a little heat to make some compromises. They may even, if it comes down to it, throw Syria and Hezbollah under the bus in return for the US helping the Iraqi Shia regaining control of Iraq.

        But the price of this would be Iran kissing the US ring.

        In any case, the key here is Iran.

        1. Andrew Watts

          The US government doesn’t have a whole lot of maneuvering room. We don’t have any troops deployed outside of a few military advisers. The Iraqi Army that it trained either defected or disbanded in the face of the Sunni rebellion. The Iraqi government is mostly under Iranian influence. The Assad/Iranian alliance have effectively won a victory in Syria. The Iranians haven’t been offering any new concessions in the nuclear negotiations since 2003.

          “So the US is sitting in a pretty nice position.”

          Bah. Am I really the only American here that isn’t infected by a virulent strain of exceptionalism?

          1. Working Class Nero

            But the US doesn’t really care who is running Iraq as long as in the end they submit to American power. And as Saudi clients, the ISIS or whoever else ends up running Iraq if the Shia lose power will submit to the US just as the Shia puppets have been for the past ten years. It is Iran who cares who runs Iraq since they are doing so at the moment. Just as we are willing to use Right Sector in Ukraine, we will let the ISIS slaughter Shia if Iran doesn’t submit. And the Iran/Syria alliance are far from having won a victory in Syria.

            It is a feature and not a bug that we have no troops in Iraq. In our absence the Iranians sent 2000 soldiers there just this weekend. But can they hold off the ISIS threat? Iran is already publicly asking for the US to intervene and so far we are saying no. That will only change if Iran starts submitting to US demands. The goal is to stretch Iran, who are already suffering under sanctions, so thin over two fronts that they snap, at least on the Syrian front.

            As the most basic stroll through the history of empires will tell you, given the principle of divide and rule, breaking entities down into even smaller factions, as is currently happening in Iraq, is always in the interests of the imperial power. So in fact far from American Exceptionalism, this is just basic Imperial Analysis 101.

            So now the Iranians are stretched thin and fighting on two fronts. There is suddenly a Sunni lake between the two fronts so land routes are closed. In the coming weeks things will start to go worse in Syria. The Sunni jihadi groups are trying to stop fighting each other and turn their guns and suicide bombs back against Assad. And this is exactly what the US/Israeli bloc wants.

            1. Doug Terpstra

              Fulfilling Israel’s agenda, the default motive driving most US policy, would best explain all of this.

            2. Mark P.

              Working Class Nero wrote: “So in fact far from American Exceptionalism, this is just basic Imperial Analysis 101.”


              I like your analysis. It may or may not turn out to be factually correct in all its details, but any long-term US hegemonic strategy in the region has to start by dealing with the reality that the natural regional superpower — setting aside the objections of Israel and the Saudis, who both have ideas above their station and will behave in increasingly ugly ways till they’re wacked into line — is Iran.

            3. Andrew Watts

              There might not even be an Iraq if this descends into all-out civil war. In either scenario the United States doesn’t wield much influence over Iraq. All they’re going to get is a seat at the table which they already had and cashed in for a minority interest in developing Iraq’s oil fields.

              “It is a feature and not a bug that we have no troops in Iraq.”

              You’re a poor victim of Obama’s 8th dimensional chess playing. Washington tried really hard to get the Iraqi government to agree to stationing an American military presence in the country.

              “As the most basic stroll through the history of empires will tell you, given the principle of divide and rule, ”

              Which is why the British and French imperialists drew all those lines around the Sunni dominated areas of the Middle East. Right? The current situation is probably their worst nightmare. It’s something they were trying to avoid when the British put a Sunni in charge of a state (Iraq) that had a Shia majority.

              Furthermore if Iraq fractures along sectarian lines than the Shia part with roughly 60% of that country’s oil reserves is free to unite with Iran proper. If you think that’s winning I don’t want to know what you think losing looks like.

              “So now the Iranians are stretched thin and fighting on two fronts. There is suddenly a Sunni lake between the two fronts so land routes are closed.“

              The Russians will not let Assad fall. Hezbollah has already proven themselves to be superior fighters against the ISIS.

              1. Working Class Nero

                No, it’s more like one-dimensional imperial checkers. Yes, most of the US discussion revolves around placing partisan blame; the right saying the crypto-Muslim Obama is destroying all the US built, while the left are saying the recent events prove they were right all along. All this partisan sniping just stops people from looking at what is really going on.

                Yes it is helpful that Obama, a supposed opponent of the Iraq War with little to no foreign policy interest, is in office now because it is believable and politically congruent that he would just let the Iraq project fall apart. If a Romney had been elected he would be under serious partisan pressure to intervene, which is exactly contrary to what US imperial interests are right now.

                Let’s look at your point about the stationing of US troops in Iraq. There are two possibilities; either the US never really wanted to permanently station troops (for example because they wanted to leave open the possibility of the current situation arising) and so it was all Kabuki and they let Maliki burnish is nationalist, anti-American cred with the Iraqi street. Or maybe the US really did want to permanently station troops but the ungrateful Shia said no. So how is that decision looking now? Even Iran is publicly calling for US intervention, something tells me the Iraqi Shia would sign any agreement the US put in front of them in order to save their skins from the ISIS. Advantage US empire.

                I totally agree that the colonial lines were drawn in Iraq and a Sunni minority empowered with a view to enhance colonial interests (at the time British). Which was why it was so bizarre for the US to invade Iraq in 2003 and put the Shia in charge, who were obviously puppets of our enemies in Tehran. But the goal was to bring Iran in from the cold. Look at the US gifting Iraq to the Iranians as a sort of reparations for the Shah-era US abuses. But so far the Iranians let they US take them out to an expensive dinner but have not even allowed a peck on the cheek in return. So now the Sunni minority are attempting to reconquer the country. Obvious if they are successful this is in US imperial interests; since we agree the model of a Sunni minority dominated Iraq is what an imperialist would want. And during the reconquista attempts, the US is empowered as they can extract concessions from say the Kurds if the US so desired. But the three Iraqi factions constantly fighting each other is not at all so problematic from the point of view of US imperial interests.

                The idea that Iran will annex Shia Iraq is mitigated by the fact that Iran is under sanctions and so all they would be doing, besides triggering a potential imperial reaction against this move, is to be placing even more areas under US sanctions. There is no question the sanctions are hurting so I doubt Iran would do this.

                I certainly agree that Hezbollah are superior fighters to ISIS (in fact Hezbollah are superior to any Arab fighters anywhere). But the key is that Iran over the past few months Iran has been calling back to Iraq from Syria their various militias including elements of Hezbollah. As things deteriorate in Iraq, and the US stays on the sidelines, Iran will be forced to pull even more assets from the Syrian front to help them save Shia Iraq. Remember, at the end of the day, Iran would be willing to sacrifice Syria if it meant saving their portion of Iraq. I am not sure how far Russia would go to save Assad. They are a bit busy in Ukraine of course but I suppose if the political will were there they could extend Assad’s rule for some time past his sell-by date.

                So from every angle this Shia / Sunni conflagration is very much is US (and even more so) Israeli interests.

                1. Andrew Watts

                  I was making fun of the fact you (and others) think that every setback or potential catastrophe is a set-up for a potential win for the American empire with the snark about Obama. It’s a waste of time to engage that argument or in all the partisan bickering that is prevailing.

                  Every bit of your imperial analysis blithely ignores what ISIS has accomplished so far and their ambitions. Instead you’re stuck focusing on a previous moment of history that for all intents and purposes is irrelevant both to the present and future. The Western world has benefited from Sykes-Picot for a great deal of time. However this recent conflict is solely between the Sunni and Shia and they’re both ignoring that particular agreement. The West will meddle of course but they are not the ultimate arbiters of history, nor will they likely find this conflict to be all that rewarding. Why?

                  The likelihood that this conflict will spread to neighboring states like Jordan and Saudi Arabia or even Egypt cannot be easily dismissed. As ISIS is attempting to unite every single Sunni underneath it’s banner. They are currently trying to provoke the Shia into mass slaughtering Sunni as this will further their overall goal of uniting Sunni Muslims behind their efforts towards re-founding the Caliphate.

      2. Banger

        It’s pretty easy to fool us. Why? Because all political factions agree on the doctrine of American Exceptionalism (AE) even the left. Let me clarify here–the left believes in AE Lite, i.e., that after 1789 history stopped and “conspiracies” are something that happens in other countries and at other times but not here–they believe intel services make “mistakes” and just didn’t catch 9/11 or were “wrong” about WMDs in Iraq, or didn’t know ISIS was going to charge into Iraq. This is beyond ludicrous, yet, most of the left pretty much accepts the mainstream media narrative.

        Having said that, I don’t know really what is going on there–I can only speculate based on what I know about other events but I do know that whatever is going on you won’t find out by watching or listening or reading the mainstream media. The project started a century ago with the Creel Committee and the misdirection/misinformation campaign is now fully mature and I would classify it as a virtual mind-control machine. Even those that have some idea that this regime exists still falls for it.

        1. FederalismForever

          Can you provide an example of an event where intelligence agencies were, in fact, mistaken? Because if you can’t, such that every event is the result of some deep state “conspiracy”, then we must wonder whether you have an adequate theory of error.

          For example, some people have a conspiracy theory for every single Presidential assassination or death in office. So, President William Henry Harrison didn’t get sick, he was poisoned, etc. etc. For these people, it seems no assassination can be explained simply by the fact that some crazy loser/loner with an invented or imagined grudge decided to kill the President, or that sometimes world leaders do just get sick and die while in office. Rather, for these conspiracy die-hards, every one of these events represents some “false flag” event, or broader conspiracy. But this just raises the question whether their underlying theory can adequately sort the wheat from the chaff.

          1. Banger

            Look, that is total BS, man. This is how skeptics “debunk” conspiracy theory: “oh, then everything is a conspiracy theory…” and fill in the ludicrous blank. I follow the facts. And my favorite direct proof of one conspiracy theory that cannot be denied is the official autopsy of RFK which directly contradicts the official story. RFK was shot in the back of the head from a gun pointed up from the back AT POINT BLANK RANGE!–those were the shots fired that automatically exonerates Sirhan who was railroaded as the “lone crazed assassin.” There are hundreds of other items of evidence that prove the official stories wrong about many incidents of historical significance (but not all stories of historical significance)–but you will ignore it by arguing that I’m mentally unbalanced and paranoid or whatever your implication is. I submit to you that most of the left is cowardly for ignoring obvious fact in order to remain “credible” to the mainstream.

      3. Veri

        Mosul is not a small town. It is a city of 2,000,000. Banking in Iraq is not like here in America where you just go to one of several local branches of one of several local or interstate banks in the area.

        Think of it as Las Vegas and add up all the cash in the count-rooms in the casinos.

        Al-Maliki is a variant of the US-backed former Shah of Iran, complete with corruption, cronyism, military officers buying their rank, etc. Add in to that the torture and murder of opposition, Sunnis, Kurds, etc. and he is not popular. Even among his own. Al-Maliki, curiously enough, has religious and other connections to Iran while also serving has a Western-backed puppet.

        Just another scum in a long line of scum backed by America and The West.

        In The Middle East, shifting alliances are the norm. For the intelligence community, The ME is the most complicated place on Earth, where both sides frequently find themselves in bed together, intentionally or unintentionally. Before shooting at each other. Alliances really comes down to who can pay the most to the person or group in order to get them to do your bidding. With double- and triple-crosses, the norm.

    5. Working Class Nero

      The idea of a coup attempt on Obama seems to contradict the Deep State theory that the ISIS are covertly US-controlled.

      First of all, the JFK assassination should always be seen in conjunction with the multiple attempts by the OAS (Organisation de l’armée secrète) to assassinate de Gaulle. Both de Gaulle and Kennedy were blamed for losing key colonial possessions, Algeria in de Gaulle’s case and Cuba for Kennedy. So there is a potential parallel if Obama were to be blamed for the loss of a US client state in Iraq.

      But this means that we have to accept the official story of Obama being a simple left wing community organizer and of total US innocence in the rise of the ISIS. However the evidence says otherwise. Obama’s family on his mother’s side has serious intelligence connections, there is little doubt Obama’s mother worked for the CIA in one fashion or another and there are signs his grandparents had connections as well. And the chances are pretty strong that the ISIS is working at least with the acquiescence of the US. So I would put the odds of any sort of coup as slim to none.

    6. VietnamVet

      The House of Saud saw a Shiite Crescent north of them and paid to have it split in half. They got what they wanted. Israel is supporting the Kurds and doing whatever to keep the churn going. Ditto! The USA admittedly provided supplies to moderate jihadists and supports the Kiev Putsch. The only question is do they have operational control over the Right Sector in Ukraine and ISIS in Iraq. I think not. Both have gone off the ranch.
      The only other possibility is that the deep state wants to humiliate the Obama Administration so badly that they are bringing their revolutionary churn to 2014 and 2016 American elections; that is if a nuclear war with Russia doesn’t ignite first.

      1. Veri

        It is like Morsi in Egypt, along with the Muslim Brotherhood. The Muslim Brotherhood is financed out of Qatar and Saudi Arabia. Once Morsi became head honcho over in Egypt, it is a sure bet that he had other ideas about being a puppet of Saudi Arabia which The House of Saud did not like. Enter the US-backed Egyptian military to remove The Muslim Brotherhood from power.

        The House of Saud would like to covertly re-establish a sort of Caliphate of independent Muslim states that owe their alliegance to The House of Saud. Al-Maliki is a Shiite as is The Iranian State. Saudi Arabia wants Iraq partitioned and Assad gone. Hence, they fund the bulk of terrorist organizations on The Sunni Side (as well as getting rid of dangerous, militant, male Wahhabists in a country where men outnumber women by about 125 to 100). There are also credible allegations that Saudi Arabia funded the bulk of the 9/11 attack. One reason that 27 pages of the Congressional Report regarding 9/11, concerning Saudi Arabia’s involvement, remain classified to this day.

  6. Jim Haygood

    ‘To someone like [Leslie] Gelb [of the CFR], war is fundamentally a tool.’ — Barry Eisler, FDL

    Gelb (Harvard ’64) is another Ivy League toff handing down policy dispensations to the huddled masses who do his fighting.

    This year makes a quarter century of presidential governance by Harvard and Yale graduates, since George H. W. Bush (Yale ’48) took office in 1989.

    How’s that elite rule workin’ out for us? Lots of shiny, happy workers and resplendent foreign policy successes, yes?

    1. MyLessThanPrimeBeef

      Perhaps this is the right time to issue the first ever university-product (academic degree in this case) recall.

      ‘We are sorry to inform you that in manufacturing your academic degree, during the four, six or however many good-times years you spent there, we mistakenly installed a greedy intellectual subroutine for world domination instead of a wisdom subroutine for humility and love. We need you to bring your degree product and your brain back to our satanic academic mill for rectification.’

    2. FederalismForever

      True, but many of today’s “elite” did quite poorly while in school. One of the striking things about our political leadership from Reagan onward is the general decline in academic and military and/or professional accomplishment compared to prior eras. Many don’t realize that Alan Greenspan became Fed Chairman without an economics Phd and even though he had never published any scholarship in economics or finance. (Could this be why he did so poorly?) Although George W. Bush, Al Gore and John Kerry all went to Ivy League schools, none of them got good grades, and Kerry would end up at Boston College for law school. (Could this be why Kerry can’t seem to hold his own at the negotiating table?) Dick Cheney also did poorly and couldn’t even complete his dissertation at Wisconsin. Although Obama graduated magna cum laude at Harvard Law, he never clerked for a judge and never published a single piece of legal scholarship during his 14 years at University of Chicago, and only taught the same three classes on race/voting rights issues. (Could this be why so many of the legal positions taken by his Administration have been so questionable?)

      Compare our current crop of political leaders with, say, the early Progressive Era. The Theodore Roosevelt Administration, for instance, was stacked with top quality talent, and his Administration knew how to get things done. Just compare the lawyers in the group: William Howard Taft and Charles Evans Hughes graduated near the top of their Ivy League classes, and each of them was able to step in to the role of Chief Justice of the Supreme Court without any apparent difficulty and serve in that capacity with distinction. Could Obama do the same? Or Joe Biden (middling student at Delaware)? Or John Edwards? Or (god help us) Dan Quayle?

      One can go on and on with this. For example, compare the memoirs of George Kennan or Dean Acheson with those of, say, Madeiline Albright or Condoleezza Rice. Acheson’s is so well written it won a Pulitzer Prize. (Kissinger is also a surprisingly good writer.) Albright’s book, by contrast, seems pitched at the level of Oprah’s Book Club.

      The fundamental problem is that a popular democracy may not be very skilled at recognizing top quality talent when so much of the voting populace is so ignorant about world events and so distracted by other forms of entertainment. It’s sad.

      1. Working Class Nero

        Well I guess this just proves to adage that A students go on to teach, while B students go on to work for C students.

        1. FederalismForever

          But it doesn’t explain why the A students used to rise to the top, whereas now we are governed by the mediocre C students.

      2. gordon

        What, still hankering after The Best and the Brightest? I thought that idea had been exploded. It’s a DIY job, I’m afraid.

  7. ella

    “My eyes got markedly worse when I had to switch to color monitors.” Try f.lux …. “f.lux is a computer program developed by Michael and Lorna Herf. It adjusts a computer display’s color temperature according to its location and time of day…” (quoted from Wikipedia.) You can also adjusted the program to gray the screen, during the day or night, which is much easier on the eyes.

    1. steviefinn

      I used to have problems many years ago with eye strain due to the detailed work I do. Aldous Huxley’s ” Art of seeing ” helped me out with this resulting in very little eye strain since. It’s based on the controversial ” Bates Method ” which aspects of I have serious doubts about – What helped me was the advice that the eye should be kept mobile when focusing on an object by constantly shifting your focus rather than staring at any fixed point.

      I probably have not explained it very well but I am now 56 with only very slight age related eye problems & something I noticed long ago is that many people with glasses tend to stare rather than move their central focus around an area.

      1. bob

        I have noticed that when I am wearing glasses that my eyes don’t move as much. It’s one of the reasons I prefer contact lenses. There is only one point, or “line” in space (per eye) that is in focus with glasses on. This is why most people tend to let their eyes rest in that spot. That or they just disengage from the glasses entirely to “rest” their eyes.

        This is for prescription glasses only. It’s a property of optics that can’t really be fixed. The further from the eye that the lens is, the smaller the area of correct focus.

        When you are getting examined for glasses, they take a measurement of where your pupils are, and use that to tell the maker of your glasses where that “point” of perfect focus should be. It’s usually done with a hand held white “box” that they have you look into.There can only be one point of perfect focus per lens. Physics.

        Contacts move with your eyes, and can keep that point of perfect focus right on top of the pupil. Glasses are fixed, you have to move your head to move the point of focus.

    2. ella

      Thanking both of you for your comments, I am having visual difficulty and intend to research your suggestions.

  8. Ned Ludd

    Ukraine pledges to cleanse its land of invaders sponsored by “subhumans” (archive):

    The members of the military killed near Luhansk “lost their lives because they defended men and women, children and the elderly who found themselves in a situation facing a threat to be killed by invaders and sponsored by them subhumans. First, we will commemorate the heroes by wiping out those who killed them and then by cleaning our land from the evil” – Prime Minister Yatsenyuk

    Moon of Alabama observes that Yatsenyuk is using the same language as the Nazis, when they condemned the Untermensch.

    1. Working Class Nero

      While what Moon of Alabama say is true in the narrow sense, has there ever been a war in all of human history where the leaders of the various sides did not try to dehumanize the enemy?

      1. hunkerdown

        Darn that path dependence. If humans had learned to react to leadership by decapitation rather than obedience, we might not be in the messes we’re in today…

  9. gonzomarx

    some radio drama for a Sunday

    Do Androids Dream of Electric Sheep?
    Philip K. Dick’s cult sci-fi novel inspired the film Blade Runner. Set in a world devastated by nuclear war, a San Francisco bounty hunter is on a mission to retire a group of rogue androids.


    Bretton Woods
    John Maynard Keynes and Harry Dexter White, played in this new play by Simon Callow as Keynes and Henry Goodman as White.

    don’t know why, but I feel this is a serendipitous piece of scheduling!

    1. MyLessThanPrimeBeef

      I am hoping for a sci-fi movie, set in the not too distant the future, Post-Global Warming (more accurately called Global Boiling by later historians) with a plot that robots are concerned about cheap human laborers taking away robot jobs, leading to armies of mothballed robots in the Arizona desert.

      1. abynormal

        Harry Lime: Don’t be so gloomy. After all it’s not that awful. Like the fella says, in Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love – they had 500 years of democracy and peace, and what did that produce? -The Third Man

        (sorree, couldn’t help meself…top o tha day to ya Buddy’)

        1. fresno dan

          great, great movie.
          I still don’t understand why the zither didn’t come to dominate the music industry…

  10. grayslady

    Fantastic article at the link to Moon of Alabama. Who knew that the blog’s author used to be a tank officer in the Bundeswehr? You think he might know something about tanks and how to identify them? Better yet, it turns out that even the Russian-owned tanks (all of which were destroyed by 2012) were made in Ukraine! Tanks made in Ukraine–and this particular model operated only by the Ukrainian army–make their way into the hands of Federalists in Ukraine from Russia? Totally improbable. Will wait to see if prostitute media ever picks up on this, but won’t hold my breath.

    1. Andrew Watts

      Kiev must be losing badly in Eastern Ukraine. This is illustrated by multiple Youtube videos showing white phosphorus being dropped on rebel positions. If they could win in a fair fight they wouldn’t be using WP. It’s kinda like Fallujah circa 2004.

      Though Putin is probably arming the secessionists with heavy anti-tank/anti-air weaponry.

    2. Katniss Everdeen

      So, what we have here is WMD 2.0. Definitely an “upgrade” to the mythical WMD 1.0 which got us into Iraq.

      It appears, as preposterous as it sounds, that Washington, DC will have another war. Perhaps as a distraction or an economic “stimulus.” From a ZH post today:

      ” What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the ‘continuing slowness of economic growth in high-income economies.’ In his own words: ‘An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace.’ ‘

      And so, apparently, the only REAL “existential” threat to the indispensable nation is, alas, PEACE.

      1. Doug Terpstra

        Wow, how utterly perverse. If a major war is what our economy needs, as some Ziocons and McCain propose, how fitting it is to provoke the bear and the dragon simultaneously. Only Armaggedon can save us from collapse! Paging Dr Strangelove!

          1. fresno dan


            Because the last one (9/11 attack) didn’t….
            My suggestion would be to go to war against Germany, because they had as much to do with 9/11 as Iraq did, and at least we can win there.

            And because every argument I hear about Iraq is identical to the arguments about Vietnam, this recapitulates them best:
            “Now, like then, there are those who contend that things would have turned quite differently if only the United States had not withdrawn its troops so hastily from Southeast Asia/the Middle East; if only Washington had provided more military assistance to the regime in Saigon/Baghdad; if only the leader of South Vietnam/Iraq would not have been so corrupt and so incompetent; if only the government in Saigon/Baghdad was more democratic and inclusive; if only the American president had been able to mobilize more public support for “staying the course.” Or as the saying goes, “If my grandma had wheels, she was a motorcycle.”

            Even more infuriating is (as it probably was to the war critics in 1975) to have to listen to the politicians and pundits who led this country into a mortifying military fiasco insisting that they were right, that their script made for a hit movie; it’s the producers in Washington who messed everything up
            McCain also believes that America could have won the Vietnam War. And who knows? If that would have happened, the United States and Vietnam could now be close trade partners and its government would have been establishing close military ties with Washington. But wait a minute. Isn’t that what is happening these days as the United States and Vietnam and other countries in Southeast Asia are looking towards Washington as a counter-balance to Chinese military and economic power in the region?

            In fact, contrary to the nightmare scenarios that followed the American evacuation of Saigon, the world-as-we-knew-it didn’t come to an end, the barbarians didn’t storm the gates, and the Reds didn’t take over Asia and the rest of the world. Through cautious and thoughtful diplomacy, the United States took steps to cut its losses and rebuild its military and economic power, including in Asia. At the center of these efforts, was the opening to China that helped to create the basis for diplomatic and economic cooperation in the region and to restructure its balance of power in terms that were favorable to the United States.”

            The world existed before the US – and will exist after. Considering that our Army seems only able in training our allies in how to tear off their uniforms and flee, maybe we should allow things to progress without the “indispensable nation”

  11. Oh the humanity, sob sob

    Yeah, Gelb, this is how foreign-policy shills are taught to think about US aggression. Funny how this logic only applies to the highest crime, aggression, and not to ordinary Joe-Blow crimes like child molestation. If you put Gelb on a local crime beat, he would cover John Wayne Gacy like, “Let us hope that future generations of clowns will stop and take note, and learn from the slippery slope of good intentions and misguided kindnesses and short-sighted expedients that led from delighting youngsters with whimsical balloon animals to handcuffing boys and fucking them and strangling them and burying them in the crawlspace. That’s the essential moral Americans can’t seem to learn.”

  12. MyLessThanPrimeBeef

    How much energy consumed in the 2014 World Cup?

    And how much baby milk could have been warmed with the energy expended by non-stop-running World Cup players, had they put themselves to some more productive use by, for example, stationing themselves to energy-generating treadmills, for the same amount of CO2 emission (in either case)?

  13. MyLessThanPrimeBeef

    I am pretty sure it’s mainly due to those faulty foundations that we have the faulty towers of American Exceptionalism.

  14. scraping_by

    Interesting Guardian article about crippling the young with boarding schools. It’s got echos this side of the pond since the Old Line Yankees who used to run the country, and still do through folkways and expectations, were also boarders.

    The three main realities are bullying, homesickness, and sexual abuse. Adolescents forcing prepubescents into acting as ‘tarts’ is little noted and less spoken of, since that would bring down the wrath of the gay activists and slander the ruling class. But it’s a commonplace in the lives of the boarders.

    Homesickness is inevitable, and dealt with without mercy. A friend of mine was a nurse for a boarding school, and much of her work was handing out tranks to small children (ages 6 through 10) who were inconsolable missing their parents. And bullying, when it’s not official policy such as military academies, is actually seen as a good thing. In the early 90’s they even tried to spread it to public schools, psychologists assuring parents that bullies were just ‘practicing leadership.’ Meh.

    As an aside, the Harry Potter books sanitize the boarding school experience. Sexual abuse doesn’t exist, there’s only one reference to homesickness, and bullying is the main plot line. Everybody bounces back, and anybody who develops into a sociopath was a bud ‘un to begin with.

    Any time you force children to act like adults, whether in a boarding school, a refugee camp, or on the rural frontier of the US, you’re creating people who act like adults and nothing more.

    1. Tim Mason

      Anyone who reads the Potter books should read Kipling’s ‘Stalky and Co.,’ a terrifying celebration of the psychopathological. Kipling knew what the boarding school was about.

  15. Tim Mason

    Some people swear that this little programme is what you need to make reading on the screen less eye-wearing. I gave up on it myself after three or four days, but you may find it helps. Others do.

    1. abynormal

      Wicked…Thank You Tim

      “Sometimes I can’t tell if I just blinked or the lights flickered.”

  16. gordon

    From Cathy O’Neil’s “teacher tenure” piece:

    “The thinking is that tenure removes the possibility of getting rid of bad teachers, and that bad teachers are what is causing the achievement gap between poor kids and well-off kids. So if we get rid of bad teachers, which is easier after removing tenure, then no child will be “left behind.”

    Well, maybe that is the thinking. But I suspect that the real thinking is just to find a way to bust teacher unions.

  17. Veri

    Wal-Mart and Shrinkage? Nothing new, actually. Wal-Mart has a policy of awarding bonuses to stores that cut costs, etc. For a Wal-Mart manager to earn that bonus, worker abuse and concealment of shrinkage is essential.

    Any who do not cooperate, are fired.

    End of story.

  18. Susan Pizzo

    Could use some help unwinding this development – new report says Central Banks are dabbling in the equities market to the tune of around $29 trillion. A group called the Official Monetary and Financial Institutions Forum (OMFIF) is about to release said report. A Peterson Institute functionary is quoted – which raises a red flag for me. Implications for the global economy, asset bubbles, conspiracy theories, non-story – what say we?

  19. concerned citizen

    “How America Became Uncompetitive and Unequal”
    “We can restore a more fair and competitive economy. To do so, we must realize, first, that intense concentration across our markets contributes to inequality. Second, we must recognize that we have the right to use laws to neutralize the power of these corporate giants. Americans in the Gilded Age freed themselves from the clutches of Standard Oil and the railroads because they knew that markets and economic outcomes were theirs to shape. Today, by contrast, we frequently surrender this power by assuming that inequality is a result of impersonal forces — technology, globalization — to be tracked and studied by technocrats, rather than a condition we can change through popular will and political action.”

  20. Roland

    Unfortunately, you no longer need a wage-price spiral to get grinding inflation in consumer prices.


    Answer: A debt-price spiral will also give you inflation.

    Normally, a debt-price spiral should be impossible. Nobody should ever want to lend to people who can’t service debt. That should put a natural hard ceiling on the ability of debt to spur price inflation.

    But we, in our time, using our system, have found a way to do what nobody should ever be able to do. What we have built is a regime under which people having stagnant or declining wages, but who can nevertheless rack up steadily mounting debts, therefore supporting a grinding inflation without the need for any wage-price spiral.

    How this was possible?

    1. Massive, uncapped public guarantees for private debts.
    2. Direct subsidy for private indebtedness (e.g. tax deductible mortgage interest, forgiveness of student loans)
    3. Massive direct purchase of assets by central banks and public treasury, which support borrowing against the value of similar assets held throughout the economy.
    4. Massive, repeated, system-wide, bailout of insolvent financial institutions. Can we call it Moral Hazard, when it happens to be our Prime Directive?

    That’s how you get student loan totals soaring when youth earn less income than ever. Student loans support spending on housing, food, utilities and transport.

    That’s why housing values never corrected as sharply as median wages. Wages sink, but prices of essentials stay high. Meanwhile, inflated asset values can be borrowed against, and the proceeds drive prices. Who needs wages, when central authorities make it possible to borrow in their absence?

    That’s how you can get “cash back” on auto loans, i.e. borrowing more than the value of the collateral, on a depreciating asset. That extra cash gets spent into the economy, driving prices.

    Today I walked by a billboard from the Royal Bank of Canada, which advertised available credit cards, auto loans and home mortgages, “without any credit history.” Under our system, a developed country’s largest and most reputable private bank can run advertisements which read like something off the back pages of an old comic book.

    Why should financial institutions ever stop behaving like this? They’re too big to fail, and they know it.

    If assets fall in value, the government and central banks will simply start buying to prop up prices. The more they do, the more they must do it.

    It is hard for a worker to earn in our capitalist system, but it is not too hard for a worker to borrow. You get money in exchange for ownership, even if said ownership is purely nominal. On the other hand the work that actually produces goods and services, is systematically punished. What else do you expect under capitalism? Capitalism is a system of political economy that extols ownership above all else.

    Sorry, Dr. Krugman, but in our time, using our glorious capitalist system, it is perfectly possible to have stagnant employment earnings along with steadily rising consumer prices.

  21. Roland

    @ Banger,

    ISIS gets Saudi and Gulf funding, but not from the governments.

    The funding for the Al-Qaeda comes from the large number of fairly wealthy but politically disempowered aristocrats in Saudi Arabia and the Gulf. Not all Gulf aristocrats are willing to accept a nice pay packet and party in Monaco.

    The governments are in a jam. If they try to crack down on disgruntled aristocrats, they’ll destabilize their own regimes and possibly even cause civil wars.

    It’s not like these princes can appeal to the masses. That would spell doom for their regimes, too.


    Meanwhile, keep pumping the oil, keep paying bribes to whomever can be bribed, and keep trying to make sure the fighting takes place anywhere but at home.

    What the Saudi gov’t doesn’t seem to understand is that before too long, the Americans are going to pull the rug out from under them. The American regime is warlike and treacherous, and they love the Saudis not.

  22. Roland

    @ Doug,

    The cash amounts taken in Mosul are not surprising.

    1. Mostly a cash economy in that region. Even large transactions would be mostly done in cash. So there’s a lot of cash physically present.

    2. Mosul is not a small town. It’s a large city, and a regional hub for the energy sector.

    For a city of a million people to have a half a billion in cash in the banks is not terribly out of whack. Heck of a heist, though, if the guerrillas actually got their hands on the whole stash.

    Still, this isn’t about conquering Baghdad. This campaign isn’t even abut conquering Mosul. It’s a large raid, meant to humiliate the Maliki gov’t and its allies.

    The reason it seemed to come out of nowhere is that the outside force involved was only in battalion strength, and bore few heavy weapons. Meanwhile, other elements were already in situ, including within the ranks of the enemy garrison. Speed, surprise, ferocity, morale, leadership, planning.

    Why is it so hard for Western analysts to understand that people you don’t like might know a thing or two about how to wage war? After all, during the past decade, many thousands of Arabs have received close instruction from the finest fighting forces on the planet. Thanks to the unceasing efforts of Israel and the West, the Arabs are being gradually transformed into a martial people, who in future will command the world’s respect.

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