The IMF, Globalization, and All The Other Losers

By Raúl Ilargi Meijer, editor at Automatic Earth. Originally published at Automatic Earth

I read a lot, been doing it for years, about finance and affiliated topics (a wide horizon of them), which means I’ve inevitably seen a wholesale lot of nonsense fly by. But for some reason, and I think I know why, Q3 2016 has been gunning for a top -or bottom- seat in that regard, and Q4 is looking to do it one better/worse.

Apart from the fast increasingly brainless political ‘discussions’ that don’t deserve the name, in the US and UK and beyond, there are the transnational organizations, NATO, IMF, EU and all those things, all suffocating in their own hubris, things I’ve dealt with before in for instance Globalization Is Dead, But The Idea Is Not and Why There is Trump. But none of it still seems to have trickled through anywhere that I can see.

The end of growth exposes the stupidity and ignorance of all but (and even that’s a maybe) a precious few (of our) ‘leaders’. There is no other way this could have run, because an era of growth simply selects for different people to float to the top of the pond than a period of contraction does. Can we agree on that?

‘Growth leaders’ only have to seduce voters into believing that they can keep growth going, and create more of it (though in reality they have no control over it at all). Anyone can do that. So ‘anyone’ who’s sufficiently hooked on power games will apply.

‘Contraction leaders’ have a much harder time; they must convince voters that they can minimize the ‘suffering of the herd’. Which is invariably a herd that no-one wants to belong to. A tough sell.

Any end to growth will and must therefore inevitably change the structure of a democracy, any democracy, any society for that matter. It will lead to new leaders, and new parties, coming to the front. And it should not surprise anyone that some of these new leaders and parties will question the very structure of the democracy they are part of, if only because that structure is already undergoing change anyway.

The tight connection between an era of economic growth (and/or contraction) and the politicians that ‘rule’ during that era is reflected in Hazel Henderson’s“economics is nothing but politics in disguise”.

On the one hand you have the incumbent class seeking to hold on to their waning power, churning out false positive numbers and claiming that theirs is the only way to go (just more of it), and on the other hand you have a loose affiliation – to the extent there’s any affiliation at all- of left and right, individuals and parties, who smell change that they can use to their own benefit.

They just mostly don’t know how to use it yet. But they’ll find out, or some of them will. Blaming people and groups of people for what’s gone wrong will be an major way forward, because it’s just so easy. It’s another reason why the incumbents class, the traditional parties, will go the way of the dodo: they will be blamed, and rightly so in most cases, for the fall of the economic system.

That’ll be the number one criteria: if you’re -perceived as- part of the old guard, you’re out. Not at the flick of a switch, but nevertheless the rise of Trump and Farage and all those folks has been much faster than just about anyone would have thought possible until very recently.

They feed on discontent, but they can do so only because that discontent has been completely ignored by the ruling classes everywhere. Which has a lot to do with the rulers in all these instances we see pop up now still being well-off, while the lower rungs of societies definitely are not.

Moreover, if most people still had comfortable middle-class lives, the dislike of immigrants and refugees would have been so much less that Trump and Wilders and Le Pen and Alternative for Deutschland could never have ‘struck gold’. It’s the perception that the ‘new’ people are somehow to blame for one’s deteriorating living conditions that makes it fertile ground for whoever wants to use it.

And since the far left can’t go there, the right takes over by default. Bernie Sanders and Jeremy Corbyn have brave ideas on redistribution of wealth, but there is still too much resistance, at the moment, to that, from the incumbent class and their voters, to have much chance of getting anywhere.

Of course the traditional right wing smells the opportunity too, so Hillary (yeah, she’s right wing) and Theresa May and Sarkozy and Merkel are all orchestrating sharp turns to the right, away from their once comfortable seats in the center. They all sense that power will not be emanating from the center going forward, and it’s power, much more than principles, that they are after.

But enough about politicians and their parties, who can and will all be voted out of power. Much harder to get rid of will be the transnational organizations, like the EU and IMF (there are many more), though they represent the ‘doomed construction’ perhaps even more than mere local or national power-hungries. The leading principle is simple: What has all the centralization led to? To today’s contracting economies.

To that end, let’s just tear into a recent random Bloomberg piece on this week’s IMF meeting, and the ‘expert opinions’ on it:

Existential Threat To World Order Confronts Elite At IMF Meeting

Policy-making elites converge on Washington this week for meetings that epitomize a faith in globalization that’s at odds with the growing backlash against the inequities it creates. From Britain’s vote to leave the EU to Donald Trump’s championing of “America First,” pressures are mounting to roll back the economic integration that has been a hallmark of gatherings of the IMF and World Bank for more than 70 years. Fed by stagnant wages and diminishing job security, the populist uprising threatens to depress a world economy that IMF Managing Director Christine Lagarde says is already “weak and fragile.”


The calls for less integration and more trade barriers also pose risks for elevated financial markets that remain susceptible to sudden swings in investor sentiment , as underscored by recent jitters over Deutsche Bank’s financial health. “The backlash against globalization is manifesting itself in increased nationalistic sentiment, against the outside world and in favor of increasing isolation,” said Louis Kuijs at Oxford Economics in Hong Kong, a former IMF official. “If we lose consensus on what kind of a world we want to have, the world will probably be worse off.”

Oh, but we do have consensus, Louis: Ever more people don’t want what they have now. That too is consensus. And since you said that what it takes is consensus, we should be fine then, right?!

Also, I find the term ‘elevated markets’ interesting, even if I don’t know what it’s supposed to mean. I can only guess.

In its latest World Economic Outlook released Tuesday, the fund highlighted the threats from the anti-trade movement to an already subdued global expansion. After growth of 3.2% in 2015, the world economy’s expansion will slow to 3.1% this year before rebounding to 3.4% in 2017, according to the report, keeping those estimates unchanged from July projections. The forecasts for U.S. growth were cut to 1.6% this year and 2.2% in 2017.


“We’d like to see an end to the creeping protectionism in the worldand more progress on moving ahead with free-trade agreements and other trade-creating measures,” Maurice Obstfeld, director of the IMF’s research department, said in a Bloomberg Television interview with Tom Keene. Lagarde said last week that policy makers attending the Oct. 7-9 annual meeting of the IMF and World Bank have two tasks. First, do no harm, which above all means resisting the temptation to throw up protectionist barriers to trade. And second, take action to boost lackluster global growth and make it more inclusive.

I can see how a vote against the likes of Hollande, Hillary or Cameron constitutes a “the backlash against globalization”. What I don’t see is how that has now become the same asthe anti-trade movement. When did Trump express any feelings against trade? Against international trade deals as they exist and are further prepared, yes.

But those deals don’t define ‘trade’ to the exclusion of all other definitions. As for ‘protectionism’, that’s just a term designed to make something perfectly fine and normal look bad. Every single society on the planet should protect its basic necessities from being controlled by foreigners, either for money or for power.

Nothing good can come of relinquishing that control for any society, ever. There‘s not a thing wrong with protecting your control of your own water and food and shelter, and these are indeed things that should never be traded or negotiated in global markets.

So claiming that ‘do no harm’ equals NOT protecting your basics is nothing but a self-serving and dangerous kind of baloney coming your way courtesy of those people whose sociopathic plush seats and plusher bank accounts depend on your ongoing personal loss of control over what you need to survive.

It’s what any ‘body’ does that has reached the limits of its growth: it starts feeding on its host. Be it a cancerous tumor, the Roman Empire or our present perennial-growth driven economic models, they’re all the same same thing because they are fueled by the same -thoughtless- principle.


Ilargi: See that upward line at the end? Well, it’s an IMF growth ‘forecast’. Which are always so wrong, and always revised downward, that you must wonder if the term ‘forecast’ is even appropriate

Achieving even those modest objectives may prove elusive. Free trade has become polling poison in the U.S. presidential campaign, with Democratic nominee Hillary Clinton now criticizing a trade deal with Pacific nations, which isn’t yet ratified in the U.S., that she had praised when it was being negotiated. Republican challenger Trump has lashed out at Mexico and China, threatening to slap big tariffs on imports from both nations. Rattled by the U.K.’s June vote to leave the EU, European leaders know it may just be the start of a political earthquake that’s threatening the continent’s old certainties.

In case you didn’t catch it, “..the continent’s old certainties” is a goal-seeked term. Old in this case means not older than, say, 1950, if that. Look back 100 years and “the continent’s old certainties” dress in a whole other meaning.

Next year sees elections in Germany and France, the euro area’s two largest economies, and in the Netherlands. In all three countries anti-establishment forces are gaining ground. With growing resentment of the EU from Budapest to Madrid, policy makers have described the current surge inpopulism as the greatest threat to the bloc since its creation out of the ashes of World War II. There are also growing signs that the union and Britain are heading for a so-called “hard exit” that would sharply reduce the bloc’s trade and financial ties with the island nation. U.K. Prime Minister Theresa May said on Oct. 2 that she’ll begin her country’s withdrawal from the EU in the first quarter of next year.

I have addressed the misleading use of the term ‘populism’ before. In its core, it simple means something like: for, and by, the people. How that can be presented as somehow being a threat to democracy is a mystery to me. They should have picked another term, but settled on this one.

And in the western media consensus, it comprises anything from Trump to Beppe Grillo, via Hungary’s Orban and Nigel Farage, Spain’s Podemos, Greece’s Syriza and Germany’s AfD. All these completely different movements have one thing only in common: they protest the failed and fast deteriorating status quo, and receive a lot of support from their people for doing that.

Because it’s the people that bear the brunt of the failure, not the leadership; even Greece’s politicians still pay themselves a comparatively lush salary.

As for Britain, it’s the textbook example of utter blindness. Those who were/are well provided for, be they politically left or right, missed out on what was happening around them so much they had no idea Brexit was a real option. And in the 15 weeks since the Brexit vote, all anyone has done in the UK is seeking to blame someone, anyone but themselves for what they all failed to see coming.

Perhaps the biggest beneficiary of free trade over the past generation, China, still restricts access to many of its key industries, with economists worried about increasingly mercantilist policies. It’s also seeking a larger role in the existing global framework, with entry of the yuan into the IMF’s basket of reserve currencies on Oct. 1 the most recent example. An all-out trade war would be a disaster for China’s economy, with Trump’s threatened tariff potentially wiping off almost 5% of its GDP, according to a calculation by Daiwa Capital Markets.

John Williamson, whose Washington Consensus of open trade and deregulation was effectively the governing ethos for the IMF and World Bank for decades, said the 2008-09 financial meltdown had undercut support for economic integration. “There was agreement on globalization before the crisis and that’s one thing that’s been lost since the financial crisis,”said Williamson, a former senior fellow at Peterson Institute for International Economics who is now retired.

The growing opposition to economic integration has been fueled by a sub-par global recovery. “Perhaps the most striking macroeconomic fact about advanced economies today is how anemic demand remains in the face of zero interest rates,” former IMF chief economist Olivier Blanchard wrote last week in a policy brief for the Peterson Institute.

These ‘experts’ seem to have an idea there’s something amiss, but they don’t have the answers. Which is impossible to come and say out loud if you’re an expert. Experts must pretend to know it all, or at least know why they don’t know. “There was agreement on globalization before the crisis”, and now it’s no longer there. That they see.

That they ain’t coming back, neither the agreement on it nor globalization itself, is a step too far for them. To publicly acknowledge, at least. That Blanchard expresses surprise about ‘anemic demand’ at the same time that interest rates are equally anemic is something else.

That both are two sides of the same coin, or at least may be, is something he should at least mention. That is to say, low rates induce deflation, though they are allegedly supposed to induce the opposite. Economists are mostly very misguided people.



The world economy is getting some lift after rising at an annual rate just shy of 3% in the first half of this year, according to David Hensley, director of global economics for JPMorgan. But much of the boost will come from a lessening of drags rather than from a big burst of fresh growth, said Peter Hooper at Deutsche Bank Securities, a former Federal Reserve official. Recessions in Brazil and Russia are set to come to an end, while in the U.S. cutbacks in inventories and in oil and gas drilling will wane.

Please allow me to chip in here. ‘Lessening of drags’ in a nonsense term. And so is the idea that “..recessions in Brazil and Russia are set to come to an end”. That’s all goal-seeked day-dreaming. Smoke or drink something nice with it and you’ll feel good for a few hours, but that doesn’t make it real.

“I’m characterizing the global economy as something akin to a driverless car that’s stuck in the slow lane,” said David Stockton, a former Fed official and now chief economist at consultants LH Meyer. “Everybody feels like they’re being taken for a ride but they’re pretty nervous because they can’t see anybody in control.”

I really like this one, because off the bat I thought Stockton had it all wrong. What I think is the appropriate metaphor, is not “a driverless car that’s stuck in the slow lane”, but one of those cars in a carousel at a carnival, a merry-go-round, where you can sit in it forever and you always end up in the same spot. And the only one who’s in control in the boss who hollers that you need to pay another quarter if you want to keep on riding.

Or, alternatively, and to stay at the carnival, it’s a bumper car, which allows you to hit other cars and get hit, but never to leave the rink. That’s the global economy. Not getting anywhere, and running out of quarters fast.

Still, for the first time in the past few years, Stockton said he sees a real upside risk to his forecast of continued global growth of around 3% next year. And that’s coming from the possibility of looser fiscal policy in the U.S. and Europe. In the U.S., both Clinton and Trump have pledged to boost infrastructure spending on roads, bridges and the like. In Europe, rising populism provides a powerful incentive for governments to abandon austerity ahead of the elections next year – and perhaps beyond. Whether such a shift will be enough to mollify those who have been on the losing side of globalization for decades is debatable, however.

“The consensus in policy-making circles was that more trade meant better economic growth,” said Standard Chartered head of Greater China economic research Ding Shuang, who worked at the IMF from 1997 to 2010. “But the benefits weren’t shared equitably, so now we see a round of anti-globalization, anti-free trade. “Globalization will stall for the moment, until we can find a way to share those benefits,” he added.

Globalization is done. And while we can discuss whether that’s of necessity or not, and I continue to contend that the end of growth equals the end of all centralization including globalization, fact is that globalization was never designed to share anything at all, other than perhaps wealth among elites, and low wages among everyone else.

The EU and IMF have not delivered on what they promised, in the same way that traditional parties have not, from the US to UK to basically all of Europe. They promised growth, and growth is gone. They may have delivered for their pay masters, but they lost the rest of the world.

Anything else is just hot air. But that doesn’t mean they will hesitate to use their control of the military and police to hold on to what they got. In fact, that’s guaranteed. But it would only be viable in a dictatorial society, and even then.

We are transcending into an entirely different stage of our lives, our economies, our societies. Growth is gone, it went out the window long ago only to be replaced with debt. And that’s going to take a lot of getting used to. But there’s nothing that says we couldn’t see it coming.

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  1. Adrian

    Yves, people have, or are loosing faith in all things financial/political as the policies have mostly enhanced the professional politicians, corporations, and the few. It’s no longer generally possible to work hard and do well in life, coupled with all forms of QE had boosted asset prices and put even accommodation, either buying, or renting ever more expensive. The cost of living via many measures is increasing and the CPI is no longer a realistic measure. Ok you might be able to buy a cheap flat screen relatively, but many now can’t even find a “full time job”. The bogus employment metrics help the sense of stability, but try living on a part time wage.

    There is very little social conscience when all the wealth goes to the extreme rich elite. Not content with this, they want all the wealth. There is a middle ground, but can politicians get an agreement, when performance is always measured, but an ever increasing quarterly profits expectations?

    I don’t know what the answer is, but you need people to earn if you want GDP growth, and AI/robots don’t consume, so don’t the elite get it?? Finally, we have our youth with low job prospects, looking at an uncertain future, and probably a very big student loan and how are they supposed to contribute to the economy.

    Thanks for the post.

  2. Sound of the Suburbs

    When Nelson Mandela walked out of prison the South African Rand fell 10% and the South African stock market collapsed.

    The prospect of the masses getting a better standard of living was going to be bad for profit.

    Economic liberalism is an idea that was first tried in Chile in the 1970s, it bought wide spread poverty and vast wealth for a few.

    Everywhere it has been tried the effects have been pretty much the same, the more economically liberal the economy, the more profound the inequality and poverty.

    The West and its strong democratic institutions posed a problem.

    How do you enforce it without IMF “conditionalities” for loans?

    Margaret Thatcher got the ball rolling in the UK, but she didn’t think she could go as far as Milton Freidman wanted.

    A softly, softly approach was taken to gradually roll back the welfare state, privatise previously public companies, remove regulations and cut taxes on the wealthy, but that bothersome democracy was always going to be a problem.

    There is now mass migration from the more economically liberal nations to the Western nations that still have a welfare state and where life looks altogether more pleasant.

    The hope for Eastern Europe when the Berlin Wall fell has gone and they can’t wait to get away from their economically liberal nations and get into Western Europe with the style of capitalism they had always wanted.

    Economic liberalism has progressed far enough in the West to now provoke a backlash.

    With the UK ignoring business and thinking of looking after the people, it must be punished by the markets.

    What Harold Wilson experienced in the 1960s has been perfected into a global system through the free flow of capital and freely floating currencies.

    From Harold Wilson’s memoirs:

    “The Governor of the Bank of England became a frequent visitor. . . we had to listen night after night to demands that there should be immediate cuts in Government expenditure.. . Not for the first time, I said we had now reached the situation where a newly elected government with a mandate from the people was being told, nor so much by the Governor of the Bank of England but by international speculators, that the policies on which we had fought the election could not be implemented.”

    Nelson Mandela is free from jail and will want to look after the people – we must slam their currency.

    The UK is thinking about looking after the people – we must slam their currency.

    Do they have some little buttons to push at the BIS when nations step out of line?

    1. Sound of the Suburbs

      In the early days of small state, raw capitalism slavery was found to be the ideal for maximising profit.

      Then those medalling politicians abolished it against the wishes of the business community.

      Those medalling politicians also abolished child labour against the wishes of the business community.

      Adam Smith observed:

      “The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

      NAFTA is going to be great for the US and jobs.
      They should have listened to Adam Smith.

      Adam Smith observed:

      “The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.”

      When the ideal for maximum profit is slavery, the public are always going to be in trouble.

      “Western workers are so much trouble, where can we set up a nice sweatshop where there are almost no regulations?”

      1. Sound of the Suburbs

        Adam Smith observed:

        “The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public.

        In the 21st Century we might observe:

        “The value of markets is always in some respects different from, and even opposite to, that of the public.”

        Markets just being an aggregate of business interests and in no way influenced by the general well-being of the public.

        1. RBHoughton

          To Sound of the Suburbs,

          Yves has given you a platform for your comments and you have said something worthwhile.

          How about tidy it up in a brief article and see if she will publish it?

          I totally agree with you that democracy seems to have had its day but its still being avoided in subtle and concealed ways. Are we ready to debate a new system?

  3. ex-PFC Chuck

    Nothing good can come of relinquishing that control for any society, ever. There‘s not a thing wrong with protecting your control of your own water and food and shelter, and these are indeed things that should never be traded or negotiated in global markets.

    So claiming that ‘do no harm’ equals NOT protecting your basics is nothing but a self-serving and dangerous kind of baloney coming your way courtesy of those people whose sociopathic plush seats and plusher bank accounts depend on your ongoing personal loss of control over what you need to survive.

    These two paragraphs nail the utter insidiousness of the TPP, TTIP, TISA, etc. ‘tradesovereignty surrender treaties.

    1. Steve H.

      Agreed, those paragraphs caught me, too. It’s not really new, but clarity of message is a critical part of persuasive arguments. And highlighting weasel-words is an excellent method of revealing assumptions.

      1. susan the other

        Those 2 paragraphs were great. It comes down to taking care of our own society. Good political housekeeping. We haven’t been very good at it. As far as “growth” goes – if we define a new growth dedicated to taking care of the planet it will solve a lot of philosophical confusion about things like GDP.

  4. Norb

    The transition period we are facing opens the door for a complete reevaluation of priorities in our society. The elite are finally beginning to feel some pressure and it is almost amusing seeing their wonderment at the long pent up discontent finally being expressed- and directed at them. It cannot be stressed enough how the wrongheaded worldview disseminated by the economic elite harms the majority of life. Even Stockton’s metaphor expertly reinforces the current economic relationships between owners and the rest of us. The carnival metaphor corrects that misdirection and perfectly fits everyday experience.

    The crisis we face is indeed grave and more people are waking up to that fact. When citizens refuse to play the debt game, the range of possibilities opens up to change society. People want answers and direction for their life. They understand that Globalization has failed to deliver on its promises, they have lived it. From the perspective of the impoverished, protectionism is a necessity and strong arguments can be made to support implementation of policies directed toward improving the lives of local citizens. Its just a question of support.

    The idea of Growth Leaders and Contraction Leaders is also an important point. At root, what we are facing is a leadership crisis. Shock Doctrine forms of leadership will not work in a climate stressed and resource constricted environment. It will only lead to more chaos. Crisis Leaders are those who deserve our support, and in one way, they will inevitably rise to the top. They are born of circumstance.

    Leaders like Trump scare everyone to death because he is the embodiment for the fears lying just below the surface of our current social reality. It is the choice between a violent transition in social organization or a peaceful one brought about by necessity. Will we have a peaceful or violent transition.

    Either way, it is becoming more difficult to lie about our true condition and where we are going.

  5. flora

    “Old in this case means not older than, say, 1950, if that. Look back 100 years and “the continent’s old certainties” dress in a whole other meaning.”

    Yes, 100 years ago Europe was in the process of blowing itself apart. Yves has remarked elsewhere the current period seems like the pre-WWI period in Europe. The 25 years preceding WWI was known as the ‘Beautiful Era’ when then- globalization in trade led to enormous wealth for the few and increasing misery for many; growing populist movements; growing international workers movements; and a growing anarchist movement – which led to many assassinations and assassination attempts. Archduke Ferdinand’s assassination was a final straw. A short little war – (countries didn’t understand how the new ability for mass-production of material fundamentally changed the nature of war between industrialized countries) – was seen as just the thing to bleed the fight out of the “malcontents”, break up the internationalist workers organizations, and re-establish the old order’s continued dominance.

    1. OpenThePodBayDoorsHAL

      Yes I also noticed “the continent’s old certainties” line, but for a different reason, some of America’s fastest growth and rising standards of living came when we had protectionist trade policies, which were a “certainty” in past ages. I mean, duh, the entire premise of “free global trade” makes absolutely no sense for countries that already have a very high standard of living: why would you want to “level the playing field” with countries with no indoor plumbing, no wages, and no environmental protections? The only answer is that these ideas benefit ONLY the owners of the means of production and ONLY if they can squirrel away their gains where governments with falling relative standards of living cannot tax them.

      I’ll mention one other “old certainty”: that the institution governing a nation’s money should ensure first and foremost that its purchasing power was not destroyed through inflation. This was the firmest of “old certainties” in prior eras of fast-rising real wealth, Fed chairmen like William McChesney-Martin, Arthur Burns, and Paul Volcker knew this in their bones and acted accordingly. It’s when the Fed geniuses starting with Greenspan through Bernanke and Yellen did a 180 degree turn from that ancient wisdom that the evisceration of the great middle went into overdrive.

  6. The Derivative Project

    Well done and concise, Yves.

    “Globalization will stall for the moment, until we can find a way to share those benefits,” he added.

    Globalization is done. And while we can discuss whether that’s of necessity or not, and I continue to contend that the end of growth equals the end of all centralization including globalization, fact is that globalization was never designed to share anything at all, other than perhaps wealth among elites, and low wages among everyone else.

  7. Katharine

    “There was agreement on globalization before the crisis and that’s one thing that’s been lost since the financial crisis,”said Williamson, a former senior fellow at Peterson Institute for International Economics who is now retired.

    Agreement among whom, for heavens sake? His own small circle, perhaps, but humanity, broadly speaking, had already expressed quite a range of opinions, many negative. People who exclude data that do not fit their world view cannot produce good analysis, much less good advice. It’s terribly frustrating that people capable of better analysis have to waste so much time debunking nonsense. In the circumstances, it’s necessary work, but they could surely be more effectively employed.

  8. Sam Lewis

    Without naming names, I can only ask who was the major US proponent of the One World Order or Globalization. If you can answer that question then you know who was meant to benefit from it and who was meant to lose from it. It is sad that those who stood to lose have taken so long to realize it and even longer to start to fight against it. I believe the fight has only begun and it will become more intense as time goes by. College graduates earning $10.00 per hour with $30,000+ in college debt and no hope for improvement speaks mountains for our country’s current situation. Time for a change – you bet.

  9. Ignacio

    I wonder how many of those morons have or participate in accounts in the Bahamas, Panama etc. My guess is 100% of them.

  10. John

    Oh no! Not doomy automatic earth again! These guys just don’t stop dooming. It’s been well above 5 years. That’s classified as a mental health problem in some places. Nc I humbly request you to please get over this doomeṛ nonsense. What people need is posta that provide them with positive Visions to work towards.

      1. OpenThePodBayDoorsHAL

        Superb. But I think there might be a cognitive state that balances the two impulses (optimism and realism).
        The metaphor is someone with a cancerous growth, they have a full and exciting life and future ahead (optimism), but they must be ruthlessly realistic about that growing lump and the urgent need to cut it out.

      2. John

        Wasn’t asking for optimism. Was asking Nc to avoid automatic earth. They are professional Doomers who for the past 5 years and more have bee rambling about some collapse or the other that never ever happens. Hell they don’t even have a basic understanding of the monetary system but keep talking about economic collapse. as for asking for visions, well everyone knows what’s wrong. What’s the point of telling them again and again. What people will ultimately demand for us a vision or movement to follow.

        1. Yves Smith Post author

          This is an ad hominem attack. You need to say what is wrong with post, not say you don’t like Automatic Earth. You would have called Nouriel Roubini a doomster in 2008 because he’d been saying things were going to end badly starting around 2005 and happened to be early

          You are perfectly capable of not reading cross posts from sources you don’t like.

            1. Yves Smith Post author

              You are not arguing in good faith. The onus is on you to make a case as to what if anything is wrong with this particular post. All you’ve done is whinge and keep whinging without giving a single substantive objection.

              I’m not indulging further bitching from you on this topic. You are acting like a lazy crank with a personal vendetta. I said earlier that we expect readers to act like adults. If you don’t like a particular site, and we very clearly flag where each and every cross post comes from, no one is holding a gun to your head to make you read it.

            2. Norb

              John, your arguments are ones I hear all the time when trying to discuss issues with my coworkers and family members. Why are you so negative? All politicians lie and steal. We all know what the problem is- it has been going on forever. Why keep stating the obvious. What are YOU going to do about IT!! etc. ect..

              I’ve come to realize that people stressing these arguments really buy into the notion that people are motivated by self interest alone, and can’t seem to grasp that making a better society will take sacrifices. They operate from a worldview so narrow, and immediate, that any questioning of the status quo brings out defensive posturing ranging from the very subtile to outright violence.

              I don’t think its too over the top to say, we as a society, are entering a time of approaching civil war. Tensions have been brewing over inequality, and the effort needed to reverse that trend will divide the citizenry along class lines. The real question is if Jay Gould’s maxim will hold this time around- “I can hire one half of the working class to kill the other half” In one way or another, these agency killing arguments revolve around Gould’s sentiments. Any effort at movement building for change will have to successfully deal with countering that fact.

              Civil wars are hard on the emotional bonds that tie people together, unresolvable contradictions is what makes a civil war. The justifications for greed and selfish excess are reaching limits and good faith will be needed to move forward. Good faith will be the litmus test. Those dedicated to gaming the system, and those who are not.

              As for values of the post, for me, the correction of Stockton’s metaphor for our current situation alone was well worth the read. Going round and round on a circus carousel, paying our quarters to have the privilege of staying on the ride. Rings of solid truth to my experience.

              1. John

                Well I can understand why your friends and colleagues say that. Because by only stating the problem you keep reminding them of their own powerlessness. What are they at least individually going tO do about it anyway? Everybody knows generally what the problems are. What everyone needs is a vision ir a narrative they can be a part of and can trust it. Trump has provided one along with others like him. So has Corbun.
                My gripe with automatic earth is that they dont do that. They keep on posting ”doomer’ content everyday of the week. It’s unhealthy for it’s readers and writers. I’m not even sure if such websites have any scientific backing to them. Think through and you’ll feel that they are simply taking advantage of their readers trust and vulnerability to expert sounding opinion. I would be though interested in knowing why Nc truSTs it enough to cross post their work. I maybe me missing out on something here.

  11. oh

    The G-20 and similar meetings are really meant to steer policy in favor of the rich (but rapidly dying) countries. It should be renamed Grifter-20 meeting.

  12. Jeremy Grimm

    Illargi may assert that globalization is dead but the idea is not and unfortunately TTP, TTIP, TISA, and now CETA also seem all too much alive. What does it mean to say globalization is dead? Is Illargi saying the lie that globalization fosters slow but steady eternal growth for all has been found out? How does that matter? The ruling classes may have badly misjudged the sentiments of their minions but do they care about those sentiments of their minions other than as necessary to adjust their means of control? That might “inevitably change the structure of a democracy” and such “structural change” will “lead to new leaders, and new parties” but is the change a change of substance or a change of style? Regardless of its structure our democracy seems deaf to the wills of the many, responsive to the contending wills of the privileged few and interested in the needs of the many no further than required to maintain control. I want to believe in something better than this but I fail wanting to find substance for such belief.

    1. Norb

      The battle over idea’s and the narrative guiding people’s actions is what is changing. The existing neoliberal narrative is dying. That is why secrecy, mass surveillance, and endless war are so vehemently pushed. A crack is opening up that will allow new narratives to take hold.

      First you question, then you don’t participate, then you secure a different way-A different system of providing for your needs.

      Fear and pessimism must be vanquished. Will the force that brings about change be centered on democracy or dictatorship? Probably a dictatorship. Does the political form matter all that much if the goals are justified? When the rules of society are so twisted out of balance, would a dictator demanding justice for the people be all that hard to follow? Currently, we have no great leaders, only opportunists riding the wave of abundance and prosperity that is coming to an end. Their vision is only making matters worse.

      America truly is a shallow place. Notions of community and solidarity have successively been reduced to concepts of consumerism. Consumerism must be reversed. It will be reversed when social cohesion can be built on the satisfaction of needs, instead of wants. That is a powerful force and hard to suppress when actually believed in and practiced.

  13. Ignacio

    I have enjoyed this post from Raúl Ilargy, whose name and surnames are quite intringuing to me. I cannot guess the origin. The accent mark in the ‘u’ says he has french origin.

    Nevertheless, reading this, as well as many other posts here, I always think of decent people I know that have an amazing faith on what distills from mainstream media. For instance, people who really believe that if austerity is what is needed, so be it. Hard criticism arises distrust in many brains. Why? Don’t know but it seems that a large majority tend naturally to believe the admonitions of the big fishes. Positive thinking?

  14. Gaylord

    Think “planetary,” not “global,” because we live in an ecosystem that is collapsing and human activities are directly destroying the earth’s systems of climate moderation and life support. The ultimate hubris is thinking we have dominion over the earth, and that attitude has precipitated our downfall.

  15. rkka

    ““Perhaps the most striking macroeconomic fact about advanced economies today is how anemic demand remains in the face of zero interest rates,” former IMF chief economist Olivier Blanchard wrote last week in a policy brief for the Peterson Institute.”

    This is the consequence of giving the benefits of zero interest rates only to those at the very top of the income distribution, who have a high propensity to save. Those lower on the income distribution with a high propensity to consume have no purchasing power.

    Thus the anemic demand.

    Why would Blanchard expect otherwise from the policies his sort supports?

  16. KPL

    Trump is just a figurehead. This was coming. As the adage goes you cannot fool all the people all the time. It has reached a stage where people are sick and tired of the elites, their preaching and in general condescending manner, the status quo, crony capitalism, the government’s cozy relationship with banksters, a central bank which in the guise of helping the economy has been shafting savers, retirees and prudent people for close to a decade now. In short it is a broken down system which is in imminent need of repair so that democracy works for all instead of a favored few and more and more people are realizing it. This is the heart of the issue and Trump is the one who is now in the forefront of this change. He may not be the best to lead the charge but at least he is willing to lead it. He may or may not succeed now but without change that we can really believe in (not the Obama kind) this is going to only grow in size.

    IMO, this is in its infancy, something like Winston Churcill’s The Gathering Storm and it is going to play out over the years with more and more people realizing that they have been had. It will not die till the elites acknowledge it for what it is instead of trying to put it under the carpet or worse laugh at it (Clinton’s — living in the basement). It has nothing to do with Trump. It is just that he is at the right place at the right time, and is able to take the battle to the elites and have them running so scared that all of them are on one side with the aim being to demolish Trump. This further plays into Trump’s hands and shows up the elite for what they are. He represents the seething anger at the elites who have cornered everything in cohorts with the government. Unless the elites recognize it for what it is they are going to be skewered by the wave that is wending its way towards them. Trump is just incidental to it.

  17. KPL

    After I had posted I saw this…


    “More and more, people don’t trust their elites. They don’t trust their economic leaders, and they don’t trust their political leaders,” German Finance Minister Wolfgang Schaeuble said during an IMF panel discussion in Washington.

    Why should they when it is perceived as all propaganda, lop-sided, unfair and unjust, all about self-aggrandizement and you scratch my back I scratch yours? These guys never feel they are at fault, the fault is always on the side of the common man, who is obviously a nincompoop.

    It is so nauseating that I feel like puking all over all of them, especially the central bankers.

  18. Jesper

    Losers? And winners?

    The IMF, Globalization, and All The Other Losers

    If the game is rigged is it a merit to be a winner? If the game is rigged, isn’t the proper thing to do to change and enforce the rules? The ones on top, the ‘winners’, will always claim (and probably believe) that they got there on merit. Difficult to argue with result/outcome…. No need to change or even enforce the rules or?

  19. John Coltrane

    Mister Raúl Ilargi Meijer does not know history. This is not the first globalisation, before we had the british empire. Concepts like growth are a recent one; a measure like GDP had to be introduced first. No. Mr. Meijer capitalism and globalisation are not there for growth, but for profits and we can demonstrably have profits (lot of them) even without growth.

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