Category Archives: Politics

Russia to Launch New Payments System to Circumvent SWIFT Network

Many observers have become unduly excited about what they depict as efforts to break the dollar hegeomony, such as the joint effort by the so-called BRICS nations to form a development bank. While having a suite of internationals funding entities, particularly ones focused on activities that in theory increase the collective benefits of relying on a reserve currency, are seen to be important, it does not follow that launching useful new funding institutions will break dollar dominance. As much as US abuse of its position as issuer of the reserve currency is correctly resented, there isn’t a competitor waiting in the wings. The Eurozone has blown it with its failure to clean up even sicker banks than the US has, and by compounding a bad situation with its adherence to destructive austerity policies. China clearly has the potential to displace the US longer-term, but it is unwilling to run the requisite trade deficits, since that means exporting demand and hence jobs. And no country had made the transition from being a major exporter to being consumer-driven smoothly; a crisis or protracted malaise would also delay China displacing the US as currency top dog.

But not being able to get rid of the dollar any time soon does not mean that countries that the US is trying to punish by using its influence over international payments system won’t find nearer-term escape routes.

Coalition Launches World War on Youth

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

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

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

The Funny Math in the GOP’s Energy Agenda

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

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

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

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

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

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

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

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

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

Gaius Publius: Bipartisan Corporate Establishment Turns Back Challengers, Strengthens Hold on Congress

Yves here. This post by Gaius on the bipartisan corporate triumph of the midterm is a follow-up to his recent piece Are Democratic Leaders Already “Tea Partying” The Progressives?

Don Quijones: It’s Official – Spain is Unraveling

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

Matt Taibbi and Alayne Fleischmann Discuss JP Morgan Mortgage Fraud, Eric Holder CoverUp on Democracy Now

Even though many readers have already read Matt Taibbi’s new article on how Attorney General Eric Holder acceded to Jamie Dimon’s efforts to squelch a criminal prosecution of JP Morgan’s securitization of toxic mortgages, I thought it would be useful to present the Democracy Now discussion of the story, particularly since the whistleblower, Alayne Fleischmann, discusses the case in her own words. Amy Goodman also asks Tabbi late in the broadcast about his departure from First Look.

Midterms 2014: Paying the Gold Price, and the Iron Price

The 2014 Midterms: The ballot box, ballot initiatives, “money in politics,” and a plea for Democrats to pay the iron price

Taibbi: Ex-JP Morgan Lawyer With Smoking Gun on Mortgage Fraud Stymied by Holder Cover-Up

Matt Taibbi has pulled the curtain back on an offensive and obvious bit of Obama administration bank cronyism that disappeared too quickly from public attention. Earlier this year, JP Morgan settlement negotiations over mortgage misconduct had broken down over price. When word got out that the Department of Justice had a criminal suit that it was ready to file, Jamie Dimon called the DoJ and went to Washington to negotiate a deal. Let us turn the mike over to Georgetown law professor Adam Levitin who wrote at the time:

Most Expensive Off-Year Election in History

Yves here. In this Real News Network interview, political scientist Tom Ferguson describes some of the salient characteristics of this week’s off year election, including its unprecedentedly high level of campaign spending and low voter turnout. Ferguson explains that low turnout is a feature, not a bug, of the US system. That is one reason that articles like this one in Mother Jones, Obamacare Could Have Turned Millions of Uninsured Americans Into Voters, miss the point. Both parties are happy with a system that favors the rich and connected. Even if the Democratic party is on a slow-motion path to self-destruction, the party apparatchiks are still doing well personally by their misrule.

Nomi Prins: Why the Financial and Political System Failed and Stability Matters

Yves here. We’re delighted to be featuring a post by Nomi Prins, a former Goldman managing director turned critic of the way the financial services industry has become a “heads I win, tails you lose” wager with the entire economy at stake. Many readers are likely familiar with her through her books, such as Other People’s Money: The Corporate Mugging of America and It Takes a Pillage: An Epic Tale of Power, Deceit, and Untold Trillions, as well as her regular TV appearances.

Private Equity Kingpin KKR Threatens Iowa Pension Fund Over FOIA Request

A new story on private equity secrecy by Mark Maremont at the Wall Street Journal started out with a bombshell, that of private equity industry kingpin KKR muscling a public pension fund to deny information requests about its practices: