Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Fri Jul 22nd, 2016 at 06:32:29 PM EST
Why Corbyn so terrifies the Guardian Jonathan Cook
The parliamentary Labour party is in open revolt against a leader recently elected with the biggest mandate in the party's history. Most Labour MPs call Jeremy Corbyn "unelectable", even though they have worked tirelessly to undermine him from the moment he became leader, never giving him a chance to prove whether he could win over the wider British public.
Meanwhile, the Guardian, the house paper of the British left - long the preferred choice of teachers, social workers and Labour activists - has been savaging Corbyn too, all while it haemorrhages readers and sales revenue. Online, the Guardian's reports and commentaries about the Labour leader - usually little more than character assassination or the reheating of gossip and innuendo - are ridiculed below the line by its own readers. And yet it ploughs on regardless.
The Labour party ignores its members' views, just as the Guardian ignores its readers' views. What is going on?
Tue Jul 12th, 2016 at 10:07:28 PM EST
Is "Helicopter Money" About to Rain Upon the World? Guest Post by David Llewellyn-Smith in Naked Capitalism
Ever since the BOJ announced a new negative interest rate policy earlier this year (NIRP) the yen has stopped falling and reversed upwards. That is, despite weak Japanese growth, despite an inverted yield curve and deeply negative long bond, and despite still weak inflation, markets have bet on spectacularly easy monetary policy generating even more of all four. This is what is know as "quantitative failure", the notion that negative interest rates will not expand the monetary base owing to such phenomenon as crushed bank margins and the hoarding of cash under mattresses, so the currency is therefore going to rise.
Frontpaged - Frank Schnittger
Meanwhile, in an effort to calm potential concerns about the integrity of the fiscal budget central bankers implementing such a future monetisation of infrastructure spending will doubtless be at pains to describe the process as a "one off" though, as the ever theoretical Bernanke stated in his blog: "To have its full effect, the increase in the money supply must be perceived as permanent by the public."
...a policy of "helicopter money" is only likely to work if it is done on an ongoing basis and in continuing and growing amounts. But at that point the risk of a policy mistake grows exponentially, in terms of a potentially destabilising pickup in inflation expectations and a related pickup in velocity.
Tue Jul 12th, 2016 at 12:29:48 PM EST
Questions and Answers:
1. It seems clear that it is in the interests of the current government to hold onto power as long as possible. But how long is that likely to be?
2. It seems clear that the City is opposed to leaving the EU. A. But will they settle for a massive 'shock doctrine' roll back of social and labor protections? B. Will they be divided in their response, and, if so, what will be the majority response? C. And how effective will their response be?
3. It seems likely that Corbyn can hold on to the leadership of Labour. But will Labour be able to bring forth a program that is able to attract or bring back enough supporters to win by-elections and a new General Election.
4. How will legal challenges and issues impact the course of events?
Frontpaged - Frank Schnittger
Mon Jun 6th, 2016 at 02:21:18 PM EST
I recently has a discussion with a FB friend about 'kicking out' members of the Labor Party such as Blair. I wondered if that were possible. The same question arises in other counties. In the USA I am certain that the leaders of the Republican Party and the RNC would have kicked Donald Trump out of the party had they been able.
It seems to me that parties are not able and should not be able to prevent people from registering to vote as members of their party. That would infringe on their right to vote. Exclude from leadership - unequivocally yes. But no matter how odious or notorious an individual might be and regardless of the possibility of their only wanting to join a party to discredit it by their very presence can they still join?
Thu Jun 2nd, 2016 at 02:43:40 PM EST
Why Some of the Smartest Progressives I Know Will Vote for Trump over Hillary Yves Smith in Politico Magazine
Why do progressives reject Hillary Clinton? The highly educated, high-income, finance-literate readers of my website, Naked Capitalism, don't just overwhelmingly favor Bernie Sanders. They also say "Hell no!" to Hillary Clinton to the degree that many say they would even vote for Donald Trump over her.
And they don't come by these views casually. Their conclusions are the result of careful study of her record and her policy proposals. They believe the country can no longer endure the status quo that Clinton represents--one of crushing inequality, and an economy that is literally killing off the less fortunate--and any change will be better. One reader writes:
"If Clinton is the nominee 9 out of 10 friends I polled will [do one of three things]:
A. Not vote for president in November.
B. Vote for Trump.
C. Write in Bernie as a protest vote.
"We are all fifty-somethings with money and college educations. Oh, and we are all registered Democrats."
Frontpaged - Frank Schnittger
Wed May 25th, 2016 at 12:57:58 PM EST
I could never bring myself to read more than excerpts from Edmond Burke's "Notes On The Revolution in France" This was likely due to him being presented almost exclusively as a cudgel against the French Revolution while I could not but identify with the revolutionaries. Had I been more aware of his position on the American Revolution I might have been more sympathetic. But, as I can now see, my professors were, at best, social liberals or libertarians. But Burke was a defender of the value of tradition and of the wisdom of evolved and lived practical experience. Another take on Burke:
A Few Notes on Burkean Conservatism John Michael Greer aka The (former) Archdruid
The foundation of Burkean conservatism is the recognition that human beings aren't half as smart as they like to think they are. One implication of this recognition is that when human beings insist that the tangled realities of politics and history can be reduced to some set of abstract principles simple enough for the human mind to understand, they're wrong. Another is that when human beings try to set up a system of government based on abstract principles, rather than allowing it to take shape organically out of historical experience, the results will pretty reliably be disastrous.
Wed Mar 9th, 2016 at 01:10:46 PM EST
SO WHAT WENT WRONG?
538 has been had the best record and, often, the most insightful commentary on politics with regard to public opinion in the USA. Yet today it posted the following:
What The Stunning Bernie Sanders Win In Michigan Means By Harry Enten 538
Bernie Sanders made folks like me eat a stack of humble pie on Tuesday night. He won the Michigan primary over Hillary Clinton, 50 percent to 48 percent, when not a single poll taken over the last month had Clinton leading by less than 5 percentage points. In fact, many had her lead at 20 percentage points or higher. Sanders's win in Michigan was one of the greatest upsets in modern political history. (My bold)
I believed Sanders was going to do better than the polsters were predicting, but then I AM a Sanders partisan and make no bones about it. I could be the proverbial stopped clock and it was just that time of day for once. But what happened with them? And even I had been beaten down and was surprised at the outcome. I expected it to be close, but for Hillary to win, if only by a point.
Wed Feb 10th, 2016 at 11:23:28 PM EST
What could the USA do if there is another, more serious global financial collapse? This has been a subject of discussion on several economic, financial and political blogs. The question also applies to any country. But the answer below will be restricted to countires with their own currency.
Tue Feb 2nd, 2016 at 01:05:00 AM EST
Iowa Caucus: Cruz Victory Deals Setback to Donald Trump
Clinton and Sanders Locked in Tight Race
NYT 98% reporting Last updated 11:59 PM ET
Republicans . . . . . . . . . . . Democrats . . . . . . .
Ted Cruz 27.7% Hillary Clinton 49.9%
Donald J. Trump 24.3 Bernie Sanders 49.6
Marco Rubio 23.1 Martin O'Malley 0.6
Mon Dec 15th, 2014 at 01:51:18 AM EST
Will the Oil Collapse Kill Energy Junk Bonds? (Yves Smith on Illari's post from Automatic Earth)
(The PBS News Hour Friday, December 12, noted that US oil prices dropped below $60/bbl Friday, causing the lagest drop in US stock markets in three years.)
Some context, (via Ed Harrison):
front-paged by afew
Mon Dec 8th, 2014 at 01:34:25 AM EST
I want to note that I have been dealing with health issues lately. I was hospitalized in mid September and then again on the 2nd of December. All of this arises from an exquisitely ridiculous bit of prat-fall. I have been using a mobility cart at large stores for several years due to my knees. In early August I drove one out to my car, started to get off by placing my left foot off the cart, then decided to reposition the cart further left and proceeded to do so without putting my foot back on the cart - thus running the cart over the foot with my 270lbs and the cart's ~ 100 lbs resting on the side of my left ankle. Then I had to reverse the procedure.
Mon Nov 24th, 2014 at 12:20:30 PM EST
Vicious Circle(s) 2.0 While trying to sever the sovereign-banking link, we may be disregarding vulnerabilities from banks' mutual interconnectedness Silvia Merler Breugel H/T NC
Since the beginning of the crisis - and more so since 2010 - Europeans have been looking at the sovereign-banking "vicious circle", tying the dismal fates of States and banks together. This has emerged as a characteristic disease during the euro crisis, and one of the stated objective of the European Banking Union project was precisely to remedy it. The idea was basically to achieve this goal in a twofold way, ex ante and ex post. On one hand, by imposing stronger and harmonised supervisory requirements (e.g. on capital) and by empowering a third-party, independent and hopefully high-quality, supervisor to oversee their fulfillment, thus rebuilding trust in supervision and in the financial sector's health. On the other hand, if a crisis turned out to be unavoidable, the second principle consisted in limiting recourse to taxpayers' money as much as possible therefore preventing doubts about the damage that bank rescue would inflict to the state of public finances.
The first principle was translated into practice by the creation of a Single Supervisory Mechanism (SSM) under which, on the 4th of November, the ECB took over supervisory responsibility for banks in the euro area. The second principle concretized by the introduction of the Bank Recovery and Resolution Directive (BRRD) which gives a framework for resolution of troubled banks, and by the creation of a Single Resolution Mechanism (SRM), who should ensure consistent and homogeneous application of it. Among the other provision, the BRRD contains a set of rules for the application of bail-in in bank resolution, strengthening the involvement of private creditor that de facto is already introduced by the amended State Aid framework.
Hence, there has been a remarkable shift in the European mindset about banking crisis, from a first phase in which bail-in was a taboo, to a second one in which it is considered as a new normal and welcome practice. And there is in principle nothing bad about this idea, but the question is whether in rapidly overturning the approach, European policymakers have not overlooked important weaknesses that still exists in the system and could have important consequences in the perspective of applying these new rules.
Twenty percent of EU banks' capital has as counterparties other EU banks and in Italy and others much of the state debt is held by its private banks.
Thu Nov 20th, 2014 at 04:15:28 PM EST
New York Fed, Goldman in Criminal Investigation for Sharing Confidential Information Yves Smith Naked Capitalism
A New York Times story manages to bury the lead, even given the salacious material, in an important story that provides more evidence of the overly-cozy relationship between the New York Fed and its favored large banks, particularly Goldman. The issue is sensitive in the wake of former New York Fed staffer Carmen Segarra releasing hours of tape recordings that show undue deference by the Fed employees towards Goldman....What is striking about the New York Times expose is how tortuous the writing is, and how it takes (and I am not exaggerating) three times as many words as necessary to finally describe what happened. For instance, it isn't until the 9th paragraph that the article mentions that this sharing of confidential information can be a crime and the authorities are giving a serious look into that very question.
The overview: a former New York Fed employee who had been assigned to work with banks obtained confidential information about a bank client that amounted to impermissible sharing of privileged regulatory information. As the Times states at the very end of the story:
Goldman determined that the spreadsheet contained confidential bank supervisory information. Federal and state rules classify certain records, including those generated during bank exams, as confidential. Unless the Federal Reserve provides special approval, it can be a federal crime to share them outside the Fed.
But proving that someone "willfully" violated the rules, as is required for a criminal prosecution, could be difficult. The rules are vague and even contradictory about which documents must remain confidential -- and when regulators are allowed to share them.
Some of [Goldman employee] Mr. [Rohit] Bansal's information, the lawyers said, may have come from Jason Gross, who worked at the New York Fed at the time.
Mr. Gross's lawyer, Bruce Barket, said, "We are cooperating with the federal investigation to the best we can."
They put the worst nine paragraphs down, beneath the copy from three reporters, apparently hoping that few readers will get that far. At least they published the story. It gets better.
It would seem time to change the status of The New York Federal Reserve Bank by abolishing it board and making it directly responsible to the Federal Reserve Board of Governors and the Chairman. That would obviate the possibility for Jamie Dimon or another powerful Wall Street Banker to have an inside position as a member of the New York Fed's board. Most Open Market Operations by the Fed are implemented by the NY Fed. Determing what to do about the New York Times and other MSM publications is more difficult.
Tue Oct 7th, 2014 at 02:12:55 AM EST
Since those with great wealth hold most of the debt issued by the US Government in the form of bonds, and since they have disproportionate influence on Congress via large campaign contributions they could insist that the government buy back their bonds and retire them. But they don't because that is not what they really want. The main reason they hold this debt is that there are no alternative investments they find attractive. The USA desperately needs to build a renewable energy and transportation infrastructure before the cost of fossil fuels makes such an investment much more expensive, and building that infrastructure now would cap the cost of electricity, as there is no fuel cost for renewables, so renewables come on line first, per the Merit Order Effect. But this would cut into the profits from their fossil fuel holdings. The real reason they are pushing this faux debt crisis is to provide a reason to cut program they despise - namely anything that benefits the average citizen: food stamps, long term unemployment, Social Security and Medicare.
Sat Apr 26th, 2014 at 01:13:40 PM EST
Putin, Petrodollars and Canada's Useful Idiot Counterpunch
by MURRAY DOBBIN (H/T melo for the original post in the weekend newsroom.)
Stephen Harper's embarrassing behaviour regarding the crisis in Ukraine -- demonizing Vladimir Putin and upping the rhetoric -- must be welcomed in the U.S. which created the crisis in the first place and apparently believes it still has something to gain by isolating Russia. But it is not clear that Harper even realizes -- or cares -- what the larger game is. And that game may include a Russia-driven shift in global currency allegiance that could devastate the economies of the U.S. and Canada.
It is arguable that push for the petroruble is a global issue many times more important to the U.S. than anything that happens in the Ukraine, but American efforts to isolate Russia is actually accelerating the process. The desire is also driving Russia to look to the east instead of Europe for its future prosperity -- aligning with China as both a market for its gas and a partner in undermining the petrodollar. China is already headed there. Its yuan is the second most used currency, ahead of the euro, in international trade settlements. China recently "opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt."
The emerging economies of Brazil, Russia, India, China and South Africa are grouped under the acronym BRICS. According to journalist Peter Koenig: "Other countries, especially the BRICS and BRICS-associates (BRICSA), may soon follow suit and join forces with Russia, abandoning the `petrodollar' as trading unit for oil and gas. This could amount to tens of trillions in loss for demand of petrodollars per year." In which case, "leaving an important dent in the U.S. economy would be an understatement," says Koenig. "Along with the new BRICS(A) currency will come a new international payment settlement system, replacing the SWIFT and IBAN exchanges, thereby breaking the hegemony of... the Bank for International Settlements (BIS) in Basle.
Fri Apr 18th, 2014 at 10:39:38 AM EST
Ukraine: Is Obama Channeling Cheney? Yves Smith
In this Real News Network report, Michael Hudson discusses the news blackout in the US as far as critical developments in the Ukraine are concerned, and how the distortions and gaps in reporting exceed those in the runup to the Iraq War. From the top of the interview:
Late last week, the German television program ARD Monitor, which is sort of their version of 60 Minutes here, had an investigative report of the shootings in Maidan, and what they found out is that contrary to what President Obama is saying, contrary to what the U.S. authorities are saying, that the shooting was done by the U.S.-backed Svoboda Party and the protesters themselves, the snipers and the bullets all came from the Hotel Ukrayina, which was the center of where the protests were going, and the snipers on the hotel were shooting not only at the demonstrators, but also were shooting at their own-at the police and the demonstrators to try to create chaos. They've spoken to the doctors, who said that all of the bullets and all of the wounded people came from the same set of guns. They've talked to reporters who were embedded with the demonstrators, the anti-Russian forces, and they all say yes. All the witnesses are in agreement: the shots came from the Hotel Ukrayina. The hotel was completely under the control of the protesters, and it was the government that did it.
So what happened was that after the coup d'état, what they call the new provisional government put a member of the Svoboda Party, the right-wing terrorist party, in charge of the investigation. And the relatives of the victims who were shot are saying that the government is refusing to show them the autopsies, they're refusing to share the information with their doctors, they're cold-shouldering them, and that what is happening is a coverup. It's very much like the film Z about the Greek colonels trying to blame the murder of the leader on the protesters, rather than on themselves.
Now, the real question that the German data has is: why, if all of this is front-page news in Germany, front-page news in Russia-the Russian TV have been showing their footage, showing the sniping-why would President Obama directly lie to the American people? This is the equivalent of Bush's weapons of mass destruction. Why would Obama say the Russians are doing the shooting in the Ukraine that's justified all of this anti-Russian furor? And why wouldn't he say the people that we have been backing with $5 billion for the last five or ten years, our own people, are doing the shooting, we are telling them to doing the shooting, we are behind them, and we're the ones who are the separatists?
I strongly suggest you watch the interview in full, or read the transcript here.
Mon Mar 31st, 2014 at 10:49:45 PM EST
George Soros` INET: An institute to improve the world or a Trojan horse of the financial oligarchy? from Norbert Haering (H/T Edward Fullbrook)
Let's assume that there is a financial oligarchy which exerts strong political influence due to the vast amounts of money it controls. Let's further assume that this financial oligarchy has succeeded in having financial markets deregulated and that this has enabled the financial industry to expand their business massively. Then, in some near or far future, their artfully constructed financial edifice breaks down, because it cannot be hidden any more that the accumulated claims cannot be serviced by the real economy That might be due, for example, to millions of people having bought overly expensive houses on credit without having the income necessary to service this debt. This is the kind of situation we are interested in.
If such a situation occurs, the leading figures of that financial oligarchy might recall that there has been a financial crisis in the 1930s of similar origin, and that during and after this crisis, laws were passed which broke the power of the financial oligarchy and taxed their profits steeply. They might remember that it took their forbearers decades to reestablish the favorable state of the late 1920s, with deregulated finance and very low taxes on incomes and estates, even huge ones. The financial oligarchy might also recollect that economics is their most important ally in shaping public opinion and policies in their favor. To prevent a loss of power as it happened hence, they might want to make sure first that economics will not challenge the notion of leaving financial markets mostly to themselves and will continue to downplay the role of money and the power of the financial oligarchy, and of power in general.
However, the economic mainstream itself will have lost credibility due to its obvious failure to promote the public good and its rather obvious alliance with the interests of the financial oligarchy. Students will not so gullibly trust their professors and their textbooks any more. Young and bright researchers, who have not yet invested too much into the old discredited theories and methods, might turn to the question of the financial industry can be made to serve the public interest. This would contribute to turning public opinion against the interest of the financial oligarchy. Thus, it will be important for the financial oligarchy to identify the brightest and most influential critics and leading figures of reform initiatives and to neutralize them.
Mon Mar 17th, 2014 at 11:58:19 PM EST
Russia, Crimea and the Consequences of NATO Policy by Jeffrey Sommers & Michael Hudson (H/T Yves Smith) Originally published at Counterpunch
Discussing the peaceful breakup of the Soviet Union the authors note:
Part of the reason that this went off with such little violence was due to the mutual desire of President George H.W. Bush and Mikhail Gorbachev to end the Cold War's threat of Mutually Assured Destruction (MAD). Gorbachev for his part recognized that the Warsaw Pact nations needed to be let go, in order to free resources to build up a more middle class consumer economy. Demilitarization was to be achieved by disarmament, all the more remarkable in view of the largest human losses suffered in world history from military invasion had occurred just two generations earlier. Germany became the focus, pending its reunification in 1990. It had invaded its neighbors every generation or so since the Franco-Prussian War of 1870. In World War II it laid waste to the USSR and left 25 million of its people dead. Other East European nations, including Romania (and, along with victims of Stalinist oppression, e.g., the Baltics and Ukrainians, welcomed the Nazis and fought against Russia). The NATO alliance thus remained the main threat that had held the Soviet Union together
So Russia had vital security concerns that could only be met by assurances that NATO would not move into the Warsaw Pact states, where so much Soviet blood had been shed in World War II. President George H. W. Bush (#41) made assurances that if the Soviets were to dissolve the Warsaw Pact, Russia must be assured that the NATO would not fill the vacuum. But his successor, Bill Clinton, broke this promise by quickly taking the
former Warsaw Pact states into NATO, and then moved into territory formerly occupied and incorporated into the USSR with the Baltics.
It should have been foreseen - and probably was inevitable - that these new entrants wanted NATO, given their own experience with Soviet occupation. But the eagerness of a triumphalist United States to surround Russia militarily rather than disarm led Russian leaders to feel betrayed by the US breaking its word.
Jeffrey Sommers seems to be the likely source for the observations about the tacit agreement between G.H.W. Bush and Gorbichev and I would like some sourcing, which may be in some of his publications, but it seems right. And Clinton's Wall Street support came from many of the same people who later were 'advising' the Russians on 'reforms'.
Mon Mar 10th, 2014 at 01:13:47 PM EST
The ideological structure of a legitimated scam
by LAWPROF at Inside the Law School Scam (H/T epochepoque)
"Ideology" can mean a number of things. I'm using it here in the sense of the received consciousness of a particular social order, which legitimates that order and helps reproduce it. The lawyer and sociologist David Riesman aptly described how ideological modes of thought produce a kind of "sincere" mental state that allows someone to habitually believe his own propaganda. A dominant ideology generates a set of views that distort social reality in a particular way: in a way which advances the economic interests of the dominant group, without the members of the group becoming conscious of the fact that they believe what they believe because it is in their self-interest to believe it.
A simple example might be how the ideology of free enterprise capitalism in early 21st century America creates a sincere belief in the mind of a hedge fund manager that paying himself a salary of one billion dollars, which is then taxed at a lower rate than the salary of the average American full-time worker, is wealth maximizing for society as a whole, and therefore by definition a good thing.
Indeed! How is our present world anything but competing legitimated scams? (More below the fold.)
Sat Jan 25th, 2014 at 12:08:36 AM EST
Education has become a political football in the USA. An appalling number of students emerge with high school diplomas that don't really prepare them for anything practical. Conservatives want to hold the teachers accountable. We have had a changing series of standards and criteria that have succeeded in focusing efforts on preparing students for college. But the support available for college education for those whose families cannot afford to support them has been cut in favor of loans, debt from college loans has exceeded $1 trillion and college graduates are having increasing difficulty finding jobs that will enable them to pay their loans. This situation was the subject of a recent report on the PBS Newshour.
Meanwhile manufacturers, who offer living wage jobs with benefits, are frustrated that a high school diploma is no guarantee that an applicant can adequately perform most tasks in entry level positions. What are these skills? Per Bill Hoffer of Hoffer Plastics Corporation: "They need to be able to read blueprints. They need to follow procedures, document what they're doing. And that's all very important." A high school diploma, even with good grades in math, is no guarantee that the candidate has the needed skills for the job. College prep is not job prep it seems.
Per the PBS segment employers in the Illinois-Indiana area are turning to Work Keys, a program developed by ACT, Inc. It was developed specifically to test for skills employers found necessary and consists of three components - job skills assessment, job analysis and skill training - and the assessment covers twelve areas described in the link above. Why can't high school math teachers teach these skills?
According to teacher Laurie Nehf of Elgin High School in Indianopolis:
"I'm not told to have them job-ready. I'm told to have them college-ready. I'm focusing on linear functions, quadratic functions, polynomial functions, higher-level types of questions from WorkKeys. Is it important that they know that a negative under a square root creates an imaginary number? No, that's not really that important."
But figures from Elgin High and schools throughout the USA indicate that fewer than 25% of our students are graduating proficient in math according to current standards, focused as they are on college preparation. Says Laurie Nehf:
"They just shut down. They get very frustrated. We won't accept meeting kids where they're at and helping them where they're at.
I would love to spend all my time working on percentages, fractions, all that stuff with number sense. That number sense skills is what matters in the real world.(Emphasis added.)
Some have argued that the US should have a Plan B for students not going to college. But with only 25% graduating with math proficiency the USA does not even have a Plan A, just a brutal hazing of teachers and students administered by a failed series of plans for "excellence" and programs for "accountability". It is the politicians who need to be held accountable. It is time to end the pretense that every student should be, or even can be, prepared for college, whether then want it or not.
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