Weekend Economists' Demeter Film Award Reveal January 23-25, 2015

[Demeter]

Last edited Sat Jan 24, 2015, 12:48 PM - Edit history (1)

The Envelope please....



TCM’s Rob Nixon on the film:

The large ensemble cast and zany plotting are clearly inspired by the success of Stanley Kramer’s frenzied satire of greed and corruption, It’s a Mad, Mad, Mad, Mad World (1963). But critics at the time noted that this movie had much more fully developed and sympathetic characters and so was able to achieve its comic aims with more narrative integrity without losing any of the hilarity. As a result, it has much of the feel of the classic 1940s satires created by Preston Sturges.

Jewison recounts the eventful preview screening for a Russian audience in This Terrible Business Has Been Good to Me: An Autobiography:

I had thought our screening in Berlin was a triumph. Willy Brandt, foreign minister at the time, had praised me and the film, a tractor had towed a large sign, “Die Russen kommen!” up and down the berlin Wall, and everybody loved the idea of a comedy satire about American and Russian relations. But the screening in Moscow was everything a film director could hope for. The theater was bigger than Radio City Music Hall in New York. To sit in that enormous theater, jammed with over two thousand Russians, and watch their reaction to my movie was an amazing experience.

As the film ran, a Russian interpreter gave a simultaneous translation over the sound system. I had been told that if a Russian audience didn’t like something, they would make a “chuh-chuh-chuh” sound, so throughout the screening, I prayed I wouldn’t hear it. They laughed at the jokes in Russian that the Americans didn’t get, and everything was fine until Theo Bikel, the Russian sub captain, threatens to blow up the town. You could feel the tension in the theater, then the “chuh-chuhing” began. I thought, “Oh God, they think they’re going to be made to look like the villains again.” But when the stand-off is broken by the little boy falling from the church belfry and the Russians help save him, the audience began a rhythmic clapping and many burst into tears. Directors Sergei Bondarchuk and Grigory Chukhrai were on their feet clapping and crying.

I was sitting next to Vladimir Posner, the Brooklyn-born editor of Soviet Life. “Why are they crying?” I asked.

“Because they didn’t make it first,” he replied.

I realized then that the film, although made primarily for an American audience, expressed the hopes and fears felt by people in both countries at that period in the Cold War. What the Russians of course couldn’t believe, and were blown away by, was the fact that I had been allowed to make the film at all.

http://altscreen.com/05/25/2011/thursday-editors-pick-the-russians-are-coming-the-russians-are-coming-1966/

Tony Shaw for the journal Film History:

The Russians Are Coming deserves a special place in the history of Cold War cinema. On the one hand, it helped break down cultural barriers, giving support to those promulgating detente between the superpowers. It was the subject of considerable political debate in the United States and reduced some cinema-goers to tears of joy when it was shown in the USSR. On the other hand, Jewison's comedy unconsciously helped reinforce long-standing ideological divisions between East and West. It humanised the Russians in the only way that Hollywood knew how, by de-communising them. If only the enemy could be just like these Soviet sailors, more like us, the film was saying, the Cold War could simply fade away. Little wonder The Russians Are Coming was so popular in the United States when it was released and, perhaps, why it is celebrated today as a brave and timely classic about East meeting West.

Alan Arkin recalls his work on the film:

It was a dream come true. It was what I desperately wanted all my life. My interest in acting was film acting from the time that I was five. I was panic stricken. My dream was, ‘Please God, let me good enough so I get another job some day.’ And I was so animated at that point that Norman Jewison made me stand in an orange crate all the time so I wouldn’t move around so much. I was driving the camera operator crazy. For most of the film I stood in orange crates. I didn’t understand marks and staying still. I was used to the stage and walking around and being my own director. It was the opposite of any auteur theory I’ve ever had. It was not only a family with the cast, but he made the entire town part of the experience of making the film. The entire town was invited to dailies. And every couple weeks he would have to stand up and make a speech and say, ‘People, please leave your dogs and babies at home because we can’t hear the dialogue track.’ But it was an extraordinary experience. It was a continuation of the community feeling I felt at college and then Second City and then on Broadway.

Robert Alden was enraptured upon the film’s initial release, as he wrote in The New York Times:

After two decades of cold war during which Americans and Russians have stared down the gun barrels at each other at all points of the compass, the United States has come up with a rousingly funny and perceptive motion picture about a desperately unfunny world situation.

The Russians Are Coming the Russians Are Coming is a credit to those who made it. By personalizing a dangerous confrontation between Russians and Americans, it reveals, through broad farce, the good and bad in both, the strengths and weaknesses of people under stress and the fundamental fact that, after all, Russians and Americans are basically human beings and, therefore, share basic human qualities. And not one whit of this lesson is accomplished by preaching, but rather by a hilarious troupe of actors telling a hilarious tale in a hilarious way.
…Everyone will find favorite comic bits: Mr. Reiner’s efforts to prove to his son that he is not a Benedict Arnold; Mr. Arkin, barely able to speak English himself, teaching English to his crew of invaders; Mr. Reiner’s and the amply proportioned Tessie O’Shea’s attempts to free themselves after the Russians have bound them together, and Brian Keith, the police chief, meeting a wildly improbable situation with the only practical solution that would occur to a police chief: he takes out his book and proceeds to write a ticket for the offending Russian submarine. After all, it is illegally parked in United States territory.

There is also great satirical fun in Johnny Mandel’s musical score.

The wild comedy turns grim at the end, grim and suspenseful, and is only saved by a deus ex machina. But forget that. Go to the theater to enjoy this farce. The cold war has owed us all a good laugh for a long, long time.

[Demeter]

1. no bank failure yet--but the night is young

[xchrom]

23. US REGULATORS CLOSE SMALL CHICAGO BANK

http://hosted.ap.org/dynamic/stories/U/US_BANK_CLOSURES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-23-19-31-54

WASHINGTON (AP) -- Regulators have closed a small lender in Chicago, making it the second U.S. bank failure of 2015 following 18 closures last year.

The Federal Deposit Insurance Corp. said Friday that it has taken over Highland Community Bank, which operated two branches.

The bank had $54.7 million in assets and $53.5 million in deposits as of Dec. 31.

United Fidelity Bank, based in Evansville, Indiana, agreed to assume all of Highland Community Bank's deposits and to buy essentially of the failed bank's assets.

The failure of Highland Community Bank is expected to cost the federal deposit insurance fund $5.8 million.

U.S. bank failures have been declining since peaking at 157 in 2010 following the financial crisis and the Great Recession.

[Demeter]

2. Perhaps the first thing about this film that strikes the viewer is the ensemble

Instead of the common practice of making the entire picture revolve around one starring actor, Jewison let each and every actor shine. Every person is there for a reason--there are no faceless crowds that could be computer synthesized.

The second striking fact is that it is authentic Americana.

The Russian Lieutenant Yuri Rozanov (Alan Arkin) ties up the NYC playwright Walt Whittaker (Carl Reiner, who serves as narrator/observer/witness) and the authentic New England Northern Belle who operates the antiquated party-line phone system (I had a neighbor that could have done the same role, when I lived in the hinterlands of Massachusetts, a dear lady who spoke exactly as Tessie O'Shea does)




The VFW-obsessed ex-military blowhard, a forerunner for the Tea Party Fendall Hawkins (Paul Ford)



the hunky sailor Alexei Kolchin (John Phillip Law), who looks more Dutch than anything, but is a basso to die for....and his sweet-young-thing American love interest Alison Palmer (Andrea Dromm), with whom he wants a "peaceful coexistence"...



And of course, there's Jonathon Winters, an original who never fit into any category...



and we haven't even scratched the surface!

[MattSh]

35. I guessed correct!

Though I try not to overdo it, I do try on occasions to correct some of the more glaring "misconceptions" about this part of the world here on DU. And Thursday I was thinking I needed something more humorous to counter some of the deliberate paranoia here. Then I thought of this film. Then I saw your post.

Some of the "misconceptions" I took on this week...

http://www.democraticunderground.com/1014995508
http://www.democraticunderground.com/10026105748
http://www.democraticunderground.com/1017238943

Then the thought occurred to me that Yatsenyuk and Col. Klink have a few similarities too. What do you think? I do have some photoshop skills; maybe I can do a mashup of the two. Although that monocle will be a bit of a headache to work with. And there's not that may photos of Colonel Klink of a suitable image size to work with.

[Demeter]

40. If you are that bored, Matt

I guess great minds think alike! I had similar responses to the rumblings on DU.

[MattSh]

53. Bored?

I'd rather that you refer to it as keeping one's sanity.

Whoops, I just lost it there for a moment. Now it's back.

That's quite important when everybody else is losing theirs.

[Demeter]

3. The best films come from books, IMO, and so it is with Russians

It is based on the Nathaniel Benchley novel The Off-Islanders, and was adapted for the screen by William Rose.

Plot

The Soviet submarine Спрут (pronounced "sproot" and meaning "octopus&quot draws too close to the New England coast one morning when its captain (Theodore Bikel) wants to take a good look at America and runs aground on a sandbar near an island off Cape Ann, Gloucester. Rather than radio for help and risk an embarrassing international incident, the captain sends a nine-man landing party, headed by his zampolit (Political Officer) Lieutenant Yuri Rozanov (Alan Arkin), to find a motor launch to help free the submarine from the bar. The men arrive at the house of Walt Whittaker (Carl Reiner), a vacationing playwright from New York City. Whittaker is eager to get his wife Elspeth (Eva Marie Saint) and two children, obnoxious nine and half-year-old Pete (Sheldon Collins) and three-year-old Annie (Cindy Putnam), off the island now that summer is over.

Pete tells his dad that "Russians with machine guns" dressed in black uniforms are near the house, but Walt is met by the men who identify themselves as Norwegian fisherman. Walt buys this, and to teach Pete a lesson about judging others, asks if they are "Russians with machine guns", which startles Rozanov into admitting that they are Russians and pulling a gun on Walt.

Rozanov promises no harm to the Whittakers if they hand over their station wagon and provide information on the military and police forces of their island. Although Walt and Elspeth provides the keys, the sailors are perplexed as to why there are no military personnel on the island, and only a small police force. Before the Russians depart, Rozanov orders one of the sailors, Alexei Kolchin (John Phillip Law), to prevent the Whittakers from fleeing. An attractive 18-year-old neighbor, Alison Palmer (Andrea Dromm), who works as a babysitter for Annie, expected to work that day and finds herself captive as well.

The Whittakers' station wagon quickly runs out of gasoline, forcing the Russians to walk. They steal an old sedan from Muriel Everett (Doro Merande), the postmistress; she calls Alice Foss (Tessie O'Shea), the gossipy telephone switchboard operator, and before long, wild rumors throw the entire island into confusion.

As level-headed Police Chief Link Mattocks (Brian Keith) and his bumbling assistant Norman Jonas (Jonathan Winters) try to squelch an inept citizens' militia led by blustering Fendall Hawkins (Paul Ford), Walt, accompanied by Elspeth, manages to overpower Kolchin, because the Russian is reluctant to hurt anyone.

During the commotion Kolchin flees, but when Walt and Elspeth leave to find help, he reappears, saying that although he does not want any fighting, he must obey his superiors in guarding the residence. Alexei promises he will not harm anyone and offers to surrender his submachine gun as proof. Alison tells Kolchin that she trusts him and does not need to hand over his firearm, and Alexei chooses to walk along the beach with Alison and Annie to build rapport. Kolchin becomes fond of Annie, giving her Russian translations of various words, as well as Alison, with whom he finds commonality with despite their different cultures and backgrounds.

Trying to find the Russians on his own, Walt is re-captured by them in the telephone central office. After subduing Mrs. Foss and disabling the island's telephone switchboard, seven of the Russians appropriate civilian clothes from the dry cleaners, manage to steal a cabin cruiser belonging to a U.S. Senator, and head to the Octopus, still aground on the sandbar.

Back at the Whittaker house, Kolchin is by now falling in love with Alison. At the phone exchange, Walt manages to free himself. He and Elspeth return to the house and almost shoot Rozanov, who arrives there just before they do. With the misunderstandings cleared up, the Whittakers, Rozanov and Kolchin decide to head into town together to explain to everyone just what is going on.

As the tide rises, the Octopus floats off and proceeds on the surface to the island's main harbor. Chief Mattocks arrives with the rest of the villagers and the militia force, the men armed with everything from a harpoon and a bow and arrows to .22s, Winchester lever actions, 12 gauge shotguns, and military surplus rifles.

With Political Officer Rozanov acting as translator, the Russian captain threatens to open fire on the town with his deck gun and machine guns unless the seven missing sailors are returned to him, his crew facing upwards of a hundred armed, apprehensive, but determined townspeople.

Chief Mattocks warns the Soviet officer, "You come in here, scaring people half to death, you steal cars and motorboats, and you cause damage to private property and you threaten the whole community with grievous bodily harm and maybe murder. Now, we ain't going to take any more of that, see? We may be scared, but maybe we ain't so scared as you think we are, see? Now you say you're going to blow up the town, huh? Well, I say, all right! You start shooting, and see what happens!"

As the Captain and Chief Mattocks glare at each other, two small boys go up in the church steeple to see better. With tension approaching the breaking point, one of the boys (Johnny Whitaker) slips and falls from the steeple, but his belt catches on a gutter, leaving him precariously hanging forty feet in the air. Immediately uniting to save the child, the American islanders and the Russian submariners form a human pyramid and Kolchin rescues him.

Peace and harmony is established between the two parties, but unfortunately the over-eager Hawkins has contacted the Air Force by radio. In a joint decision, the submarine heads out of the harbor with a convoy of villagers in small boats protecting it.

Kolchin says goodbye to Alison, the stolen boat with the missing Russian sailors aboard intercepts the group shortly thereafter, and the seven board the submarine, just before two Air Force F-101B Voodoo jets arrive. They break off after seeing the escorting flotilla of small craft, and the submarine is free to proceed to deep water and safety.

[Demeter]

4. Production Notes

Although set on the fictional "Gloucester Island" off the coast of Massachusetts, the movie was filmed on the coast of Northern California, mainly in Mendocino. The harbor scenes were filmed in Noyo Harbor, a small town south of Fort Bragg, California. Because of the filming location on the West Coast, the dawn scene at the beginning of the film was actually filmed at dusk through a pink filter.

The submarine used was a fabrication. The United States Navy refused to loan one for the production and barred the studio from bringing a real Russian submarine, forcing the studio to create their own. It was segmented into four parts, each having its own motor to power it.

The planes used were actual F-101 Voodoo jets from the 84th Fighter-Interceptor Squadron, located at the nearby Hamilton Air Force Base. They were the only Air Force planes that were based near the location of the supposed island.

The title alludes to Paul Revere's Ride, as does the subplot in which the town drunk (Ben Blue) rides his horse to warn people of the "invasion".

According to Norman Jewison, the film — released at the height of the Cold War — had considerable impact in both Washington and Moscow. It was one of the few films of the time to portray the Russians in a positive light. Senator Ernest Gruening mentioned the film in a speech in Congress, and a copy of it was screened in the Kremlin. According to Jewison, when screened at the Soviet film writers' union, Sergei Bondarchuk was moved to tears.

Pablo Ferro created the main title sequence, using the American flag's red, white and blue colors and the Soviet hammer and sickle as transitional elements, zooming into each to create a montage, which ultimately worked to establish the tone of the film. The music in the sequence alternates between the American "Yankee Doodle" march and a Russian marching song called "Polyushko Pole" (Полюшко Поле, usually "Meadowlands" in English).

Much of the dialog was spoken by the Russian characters, and few American actors of the era were proficient in a Russian accent. Musician and character actor Leon Belasco, who was born in Russia, spoke fluent Russian and specialized in foreign accents during his 60-year career, was the dialog director.

John Phillip Law's consistently, magnificently incorrect pronunciation of difficult English phonemes, most notably in his slow, careful, hopeless struggle to master Alison Palmer's name (ah-LYEE-sown PAHL-myerr), was remarkably authentic by the standards of the day. Arkin, a Russian speaker, did so well as Rozanov that he would be sought for both American characters and a few ethnic ones.

Another star of the film, Theodore Bikel, was able to pronounce Russian so well, despite not actually being able to speak it, that he won the role of the submarine captain.

[Demeter]

5. Opening credits

[calikid]

47. Noyo Harbor is"the" harbor within the town of Fort Bragg,

not a city south of Fort Bragg.

[Demeter]

49. thanks!

[Hugin]

68. One of my favorite movies, Demeter.

Thanks for the trip down memory road.

[Demeter]

69. You are welcome! thanks for dropping in!

[Demeter]

6. More film clips and trailers

&list=PL7C73843B21CCE513

[Demeter]

7. In this time of efforts to restart a Cold War, it is helpful to look back

The Russians are coming is a phrase attributed to United States Secretary of Defense James Forrestal in 1949. In full, Forrestal said "The Russians are coming. The Russians are coming. They’re right around. I’ve seen Russian soldiers."

Forrestal allegedly uttered those words while suffering from mental illness, not long before purportedly committing suicide. The allegation originated with Forrestal's bitter political enemy, columnist Drew Pearson, and has been verified by no other person. This is what Townsend Hoopes and Douglas Brinkley have to say about the episode in their 1992 book, Driven Patriot, the Life and Times of James Forrestal:

Pearson had, in fact, decided to fire his heaviest ammunition in a radio broadcast on April 9. He charged that Forrestal, awakened by the sound of a fire siren (on the night of April 1 at Hobe Sound), had rushed out of his cottage screaming, “The Russians are attacking.” He defined Forrestal’s condition as “temporary insanity.” In subsequent newspaper columns he asserted that Forrestal made three suicide attempts while in Florida – by drug overdose, by hanging, and by slashing his wrists. According to a later statement by [Navy psychiatrist Captain George] Raines, all of these assertions were lies.
– pp. 455–456.

James Vincent Forrestal (February 15, 1892 – May 22, 1949) was the last Cabinet-level United States Secretary of the Navy and the first United States Secretary of Defense.

His death by falling was ruled a suicide, and was controversial.

[Demeter]

8. russian song featured in the film

[MattSh]

17. I see your Volga Boatmen and raise you a Kalinka...

Nice, though I much prefer this guy...

http://en.wikipedia.org/wiki/Evgeny_Belyaev

[Demeter]

32. After two bad experiences, I've sworn off tenors

but that was nicely done!

[Demeter]

9. The summer after this film was released was the start of the Long Hot Summer rioting

and the assassination of MLK, Jr. in 1968 finished the brief hope that shone on the world: Vietnam became more of a quagmire, inflation soared, and so many unlikely things transpired.

but this goal of "peaceful coexistence" has not left our hearts, dreams, mythology.

[Demeter]

10. A Lawyer’s Error Could Cost $1.5 Billion: Business of Law

http://www.bloomberg.com/news/2015-01-23/a-lawyer-s-error-could-cost-1-5-billion-business-of-law.html?cmpid=yhoo

A lawyer’s error -- not caught by bankers or more senior attorneys at two firms -- could result in a huge loss for JPMorgan Chase Bank NA.

A federal appeals court in Manhattan on Wednesday ruled that creditors of the predecessor to General Motors Co. (GM) may be entitled to $1.5 billion stemming from a mistake in the recording of security interests in JPMorgan’s financing.

An associate at Mayer Brown LLP, using information from a paralegal, made the initial error, but it went undiscovered by senior lawyers at the firm as well as attorneys at Simpson Thacher & Bartlett LLP, which represented JPMorgan, according to the appeals court. Employees at the bank also didn’t find the error.

While the blunder isn’t surprising, the potential size of the fallout is startling. It’s not the first time a seemingly simple error by a big-firm lawyer could prove costly for a client. ...

MORE EXAMPLES AT LINK

JPMORGAN CAN'T CATCH A BREAK, CAN THEY?

[Demeter]

11. Russia faces $40 billion battle to stave off banking crisis

https://finance.yahoo.com/news/russia-faces-40-billion-battle-154110107.html

Russia may have to spend more than $40 billion this year to avert a banking crisis, as the growing likelihood of a sharp recession threatens to pile extra costs on a sector suffering from Western sanctions over Ukraine and a plunge in the rouble. Russian banks are seeing a deterioration in their loan quality, a rise in their risk management costs and increase in their cost of funding, and banking executives and analysts predict things are going to get worse. This represents a major challenge to President Vladimir Putin, who took power 15 years ago in the ashes of a crisis that wiped out the financial system, and whose popularity partly rests on his reputation for restoring stability.

"We expect a contraction in the number of small, medium and large banks this year," Mikhail Zadornov, head of VTB 24, the retail arm of No. 2 bank VTB, said on Thursday. "It will be hard for all banks. The weakest will leave the market," he said.

Russia's central bank has already relaxed regulation of banks, and the government has pledged support of more than 1.2 trillion roubles ($19 billion) this year after spending more than 350 billion roubles in 2014. But analysts say this is a fraction of what is needed. The anti-crisis measures will significantly add to pressures on Russia's international reserves and the budget, which is already forecast to run a deficit of up to 3 percent of gross domestic product this year, hurt most by a collapse in oil prices which is withering the country's export revenues.

"To preserve the status quo, banks may need far more capital than 1 trillion roubles," said Yaroslav Sovgyra, associate managing director for Moody's ratings agency in Russia.

[MattSh]

12. Despite western propaganda, Russia is not in economic crisis -- Puppet Masters -- Sott.net

Capital outflow crisis does not exist. Companies are solvent and in the process of repaying debt. Contrary to doom-mongering from outside the country, in Russia there is perfect calm

Following the prophecies of doom that were going the rounds in December the rouble appears to have stabilised, the Central Bank's reserves are intact and the government looks calm and in control.

This appearance of calm appears to have annoyed some of the government's Western critics.

The economist Anders Aslund sees it as evidence that "Putin is in denial".

Most remarkably, the Economist sees the government's "Zen-like calm" as "proof" "the economic crisis has officially arrived".

This rather begs the question of what the Economist would make of signs of panic. Would that be proof the crisis is officially over?

Nobody denies Russia faces a difficult year. The sanctions are obliging Russian companies to pay off their foreign debts at the same time as the dollar price of oil - Russia's main export commodity - has halved, making repayment more difficult.

The rouble as a result has come under serious pressure and has halved in value. Investment and spending as a result are being cut back.

The rouble's fall is causing inflation this year to be significantly higher than it has been over the last few years or that the authorities had planned for. This in turn will cause real incomes to drop.

Complete story at - http://www.sott.net/article/291629-Despite-western-propaganda-Russia-is-not-in-economic-crisis

[Demeter]

33. The Empire Creates Its Own Reality

and then a little child calls out: "But the Emperor has no clothes on!"

And the name of that child? Edward Snowden.

[MattSh]

13. Russian Foreign Debt Fell $130 Billion in 2014 - Russia Insider

Last edited Sat Jan 24, 2015, 09:29 AM - Edit history (1)

Russia's overall foreign debt fell by nearly $130 billion in 2014, Central Bank data showed on Tuesday, with total debt standing at $599.5 billion on Jan. 1, 2015.

Foreign debt has been falling rapidly in recent months as companies pay off foreign loans. Western sanctions imposed over the Ukraine conflict are making it harder for them to borrow abroad and refinance their debt.

However, much of the decline was a nominal effect. The ruble's devaluation has reduced the dollar value of foreign debts denominated in rubles.

Foreign exchange reserves have also been falling rapidly, declining last year to $385.5 billion from $509.6 billion.

The Central Bank said external debt of companies and banks at the start of 2015 stood at $547.6 billion, down from $651.2 billion a year earlier and from $659.4 billion on July 1.

Complete story at - http://russia-insider.com/en/2015/01/21/2581

[Demeter]

34. Vocabulary Review time: AUTARKY

au·tar·ky
ˈôˌtärkē/
noun
noun: autarky; noun: autarchy

economic independence or self-sufficiency.
a country, state, or society that is economically independent.
plural noun: autarkies; plural noun: autarchies

Origin


early 17th century: from Greek autarkeia, from autarkēs ‘self-sufficiency,’ from autos ‘self’ + arkein ‘suffice.’


It's a word that came into use just before WWII.

Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic systems. Autarky exists whenever an entity can survive or continue its activities without external assistance or international trade. If a self-sufficient economy also refuses all trade with the outside world then it is called a closed economy.

Autarky is not necessarily an economic phenomenon; for example, a military autarky would be a state that could defend itself without help from another country, or could manufacture all of its weapons without any imports from the outside world.

Autarky can be said to be the policy of a state or other entity when it seeks to be self-sufficient as a whole, but also can be limited to a narrow field such as possession of a key raw material. For example, many countries have a policy of autarky with respect to foodstuffs and water for national security reasons.

Modern examples

Mercantilism was a policy followed by empires, especially in the 17th and 18th centuries, forbidding or limiting trade outside the empire. In the 1930s, autarky as a policy goal was sought by Nazi Germany, which maximized trade within its economic bloc and minimized external trade, particularly with the then world powers such as Great Britain, the Soviet Union, and France, with which it expected to go to war and consequently could not rely upon.

The economic bloc wherein trade was maximized comprised countries that were economically weak—namely, those in South America, the Balkans and eastern Europe (Yugoslavia, Romania and Hungary)—and had raw materials vital to Germany's growth. Trade with these countries, which was negotiated by then Minister of Economics Hjalmar Schacht, was based on the exchange of German manufactured produce directly for these materials rather than currency, allowing Schacht to barter without reliance on the strength of the Reichsmark. However, although food imports fell significantly between 1932 and 1937, Germany's rapid rearmament policy after 1935 proved contradictory to the Nazi Party autarkic ambitions and imports of raw materials rose by 10% over the same period.

Today, complete economic autarkies are rare.

A possible example of a current attempt at autarky is North Korea, based on the government ideology of Juche (self-sufficiency), which is concerned with maintaining its domestic localized economy in the face of its isolation. However, even North Korea has extensive trade with the Russian Federation, the People's Republic of China, Syria, Iran, Vietnam, and many countries in Europe and Africa. North Korea has also had to import food during the 1990s due to widespread famine.

Bhutan, seeking to preserve a manorialist economic and cultural system centered around the dzong, had until the 1960s maintained an effective economic embargo against the outside world, and has been described as an autarky. With the introduction of roads and electricity, however, the kingdom has entered trade relations as its citizens seek modern, manufactured goods.

Historical examples

• Afghanistan under the Taliban, from 1996 to 2001.
  
  
• Albania became a near-autarky in 1976, when Communist Party leader Enver Hoxha instituted a policy of what he termed "self-reliance". Outside trade increased after Hoxha's death in 1985, though it remained severely restricted until 1991.
  
  
• Burma followed a policy of autarky known as the Burmese Way to Socialism under dictator Ne Win, who ruled the country from 1962 to 1988.
  
  
• Cambodia under the Khmer Rouge, 1975–1979.
  
  
• Classical Greece idealized economic self-sufficiency at the level of oikos and city-state. This ideal broke down over time, and was redundant by the Hellenistic period.
  
  
• Nazi Germany under Adolf Hitler attempted to end international trade and considered economic self-sufficiency to be ideal. However, tasked with establishing full autarky in Germany as part of the Four Year Plan, (beginning in 1936) Hermann Göring failed to close the German economy.
  
  
• Guyana under Forbes Burnham's PNC dictatorship, from 1970 to 1985
  
  
• India had a policy of near-autarky that began after its establishment as an independent state, around 1950; it increased until 1980 and ended in 1991 due to imminent bankruptcy.
  
  
• Italy, Benito Mussolini claimed to be an autarky,[8] especially after the 1935 invasion of Abyssinia and subsequent trade embargoes. However, it still conducted trade with Germany and elsewhere.
  
  
• Japan was partially an autarky during the era known as the "Edo period", prior to its opening to the west in the 1850s, as part of its policy of sakoku. There was a moderate amount of trade with China and Korea; trade with all other countries was confined to a single port on the island of Dejima.
  
  
• North Korea's official state ideology, Juche, is somewhat based on autarky, though North Korea is not a genuine autarky as it conducts principles of trade with a few nations, as well as benefits on Chinese capital and trade.
  
  
• Romania in the 1980s. Nicolae Ceaușescu proposed such goals as paying the entire foreign debt and increasing the number of items produced in the country and their quality. The aim of these policies was to reduce dependency on foreign imports, as the relationship of Ceaușescu with both Western and Communist leaders was worsening.
  
  
• South Africa was a partial autarky during the later Apartheid era, when the country faced ever increasing economic sanctions from the international community, including an increasing oil embargo that motivated the state to embark on a successful coal-to-oil project and also establish its own military industries, including the creation of its own atomic bomb.
  
  
• Spain, under dictator Francisco Franco, was an autarky from 1939 until Franco allowed outside trade again in 1959, coinciding with the beginning of the Spanish miracle.
  
  
• The United States, while still emerging from the American Revolution and wary of the economic and military might of Great Britain, came close to complete autarky in 1808 when President Jefferson declared a self-imposed embargo on international shipping. The embargo lasted from December 1807 to March 1809.
  
  
• In the Dominican Republic, the rural peasants, escaped slaves, and freed slaves that lived in the sparsely populated woodland interior of the island nation between the 1600s and early 1900s. The weak Dominican government had no control on these autonomous subsistence agriculture based communities.
  

[Demeter]

36. Variations on the theme

Local Autarky

Urban Homesteading and Integral Urban House
Mutualism (movement)
Commune
Kibbutz Movement
Utopian Socialism
Survivalism

National Autarky

Left-Wing proponents of Autarkic Principles:

Statist:

Syndicalism
Social corporatism and Neo-Corporatism

Anti-Statist:

Anarcho-syndicalism, De Leonism, Solidarity Unionism,
Anarchist Communism, Council Communism, Collectivist Anarchism
Solidarity Economy

Left-Wing opponents of Autarkic Principles:

Proletarian Internationalism,
World Communism,
Stateless Communism,
World Revolution,
Permanent Revolution
Trotskyism,
Fourth International

Right-Wing proponents of Autarkic Principles:

Fascism, State Capitalism
Business Nationalism
Producerism

Right-Wing opponents of Autarkic Principles:

Classical Liberalism, Neoliberalism
Neoconservatism
Libertarianism, Libertarian conservatism
Liberal Internationalism
Anarcho-capitalism

Autarkic principles without political affiliation:

Nationalism
Isolationism

Macroeconomic Theory of Autarky

Proponents or Partial-Proponents of Autarky:

Mercantilism, Alexander Hamilton
Protectionism, Friedrich List
Infant Industry Argument
Nationalization
Import Substitution Industrialization
Raúl Prebisch, Hans Singer, Celso Furtado
Structuralist economics
Anti-Globalization Movement
Core-Periphery Model
Singer-Prebisch thesis

Opponents of Autarky:

Economic liberalism
Neoclassical Economics
Austrian School of Economics
Privatization
Free Trade
Free trade agreement
Globalization
Milton Friedman

Relevant Microeconomic Theory Topics

Robinson Crusoe economy
Fundamental theorems of welfare economics

[MattSh]

14. Russia's Duma mulls a bill that would let Russia stop paying debts to aggressors and the states....

Russia's Duma mulls a bill that would let Russia stop paying debts to the aggressors and the states who introduced economic and financial sanctions against Russia.

Indeed, why should Russia continue to pretend that it is "business as usual," when the West tries to depose the Russian government and is making normal relations impossible? Why should Russia's obligations be kept as usual, when the West is making it clear that it is free to discard any rules and any of its own obligations?

Indeed, why should Russia pay debts which the West makes under sanctions much harder to pay back, in addition to freezing (and seizing) selected Russian assets? But with the one exception of agricultural products, Moscow tried to make virtue out of weakness (or incompetence? or impotence?) by "not responding," that is, by boasting of not taking any systemic defensive and much needed counter-measures, thus letting the West to play the game of progressive intimidation in which the West was promising possible future softening of actions that hurt Russia in exchange for real, major present concessions on the ground (principle already tried with Milosevic and Yanukovich: you retreat or disarm now and we will think about our reciprocity once the situation on the ground has radically changed as a result of you making the first step or "you shoot yourself first and we will then think whether we should do something similar as we make you believe that we have promised&quot .

... removed one line here...

Jon Hellevig: "If this goes forward then hell is loose. Law initiative aims at terminating of payments of Russian debt to foreign countries that have imposed sanctions on Russia. This would be done by amending the civil law provision of force majeure by adding sanctions among such conditions. - The law initiative stems from a known radical lawmaker, so we cannot know if it will fly. But the respected paper Izvestia already wrote about it. Maybe testing the reactions?"

Complete story at - http://vladimirsuchan.blogspot.com/2015/01/russias-duma-mulls-bill-that-would-let.html

[Demeter]

37. It's an interesting political argument

But even though the US is drowning in its own greed at the moment and dissipating its might on countless fruitless imperial wars, I wouldn't want to chance it.

After all, we need a shining example of a nation for the rest of humanity to admire...

[Demeter]

59. Russian "Elite" Warns Of War With The U.S. By Miriam Elder

“If there is no banking relationship, it means the countries are on the verge of war.”

http://www.buzzfeed.com/miriamelder/russian-elite-warns-of-war-with-the-us?utm_term=4ldqpia#.liX8rOVZdY

DAVOS, Switzerland — The head of a leading Kremlin-owned bank warned on Friday that further banking sanctions would lead Russia and the U.S. to the “brink of war.” Andrei Kostin, the head of VTB, reacted angrily when asked what the consequences would be if Russia were excluded from the Swift banking system, a secure means of moving money across borders. If it were to happen, Kostin told a session on the Russian economy at the World Economic Forum in Davos,

“ambassadors can leave capitals. It means Russia and America might have no relationship after that.”

“If there is no banking relationship, it means the countries are on the verge of war, or definitely in the cold war,” he said in English, growing increasingly red in the face. “It will be a very dangerous situation.”

He said that if Russia were excluded from the Swift system, it would make the U.S.–Russia relationship akin to the U.S.–Iran one. He made the comments after noting that Russia had recently created its own alternative to Swift. The U.S. and EU have imposed numerous sanctions on Russia, including against VTB. (Kostin is not on the sanctions list, and recently spoke to the Wall Street Journal about vacationing in Aspen, Colorado.) Igor Shuvalov, a deputy prime minister and the head of Russia’s delegation to Davos, issued a stern warning to those who would imagine Russia without President Vladimir Putin.

“I support my president 100%,” Shuvalov said. “When people ask that, they don’t understand the Russian character, they don’t know Russian history.”

“If we think someone from the outside wants to change our leader, to go against our will … we will be united like never before.”

He brushed off questions about Ukraine and warned the West that it must treat Russia like an equal partner rather than having the country “sit in the corner.” If it failed to treat Russia equally, Shuvalov warned, Ukraine “will be a huge wound for the next 10 years.”

Both Kostin and Shuvalov lamented the current economic situation, which has seen Russia burn through its reserves as the ruble plummets. The ruble has lost almost 50% of its value in the past few months and Russia is facing recession following years of oil-fueled growth.

“There is nothing good in the current situation,” Shuvalov said. “It’s very difficult. I think it will get worse.”

He said the key now was to “teach people — from state corporations to citizens — to live differently.”

SO, THE BANKERS ARE UNHAPPY...NEVER ANGER A BANKER, EVEN IF HE'S NOT IN YOUR COUNTRY!

[MattSh]

62. The key point here is...

He made the comments after noting that Russia had recently created its own alternative to Swift.

.....

Russia's Alternative to SWIFT Would Cause Big Problems for the West - Russia Insider

The Inevitable Blowback of Russia’s New Interbank System

Iran isn’t in a position to challenge the United States. But when the U.S.’ most loyal ally in Europe, the United Kingdom, called for Russian banks to be ejected from SWIFT during the height of the Ukraine crisis, the two Anglo countries met their match.

A few weeks ago, Russia announced its intention to launch an alternative to SWIFT by May 2015. Russia’s new interbank system would dominate transactions in rubles, with conversion to and from U.S. dollars at either end.

For example, an Iranian government agency could use dollars to buy rubles, transmit them via the Russian system, and have them paid to a supplier in Europe who then converted them back to dollars.

Short of hacking into the Russian system, the U.S. would have no way of knowing who was paying what to whom or for what reason.

Opportunity or Curse?

It’s not hard to imagine the opportunities this could present — and I’m dead sure the IRS and other U.S. agencies are doing so right now. One relates to “terrorist” financing and sanctions-evasion. But there are others.

For example, “U.S. persons” could send funds to a FATCA-compliant bank overseas, withdraw them, convert into rubles, and have them sent across the Russian interbank system to a non-compliant bank. They would then be outside the international tax reporting system the U.S. is trying so desperately to construct.

Complete story at - http://russia-insider.com/en/2014/12/15/1890

This will also highly complicate the matter of the west imposing sanctions anytime somebody displeases them. This may be as big a challenge to US hegemony as dropping the petrodollar. This may be the proverbial 1-2 punch.

[Demeter]

63. US NeoCon Neoliberals Hoist on Its Own Petard--Again

How hysterically funny and delicious is that?!

[MattSh]

16. Is the Irritating Twit that Is Anders Aslund Ever Going to Tire of Getting Russia Economy Wrong?

Quite an interesting putdown for one of those ever-persistent, and annoying, Putin bashers.

Anders Aslund proves me wrong, over and over again. Every time I think I’ve seen the stupidest, most pedantic, most off-the-wall leap for mediocrity from the atrophied pecan in his head, he surpasses his previous foamy wild-eyed assessment of reality.

Rodeo clown dressed as economist. All of it delivered in that whiny Swedish accent that makes him sound like he needs to be changed, and put straight to bed for a nap. I hasten to add that the Swedish accent is not annoying in all its speakers – pretty much only Aslund and the Swedish Chef from “The Muppets”, to whom he bears an astonishing resemblance.

And it doesn’t end with physiognomy; they share a similar grasp of economics and government.

I can’t wait, I’m lowering interest rates, my people say:
“King, how are you such a genius?
There’s a roof overhead and food on our plates!”
It’s laissez-faire, I don’t even care
Let’s make Friday part of the weekend.”
– Moxy Fruvous, from “King of Spain”

Hey, remember when Aslund was president of that country; Jeez, what was it called?

Anyway, he became president way back in the late 90’s, almost further back than pterodactyls can remember, it’s not surprising that the details are a little fuzzy.

I do remember that when he became president, the country was on the ropes: the inflation rate was around 27% (now it’s 11.4%), the unemployment rate was 12% (now it’s 5.2%), and per-capita GDP was about $3,500.00 USD (now it’s $7,000.00 USD).

Adjusted for PPP, it’s about $25,000.00 per year, the highest it’s ever been. Personal income tax rate was a flat rate of 13%, and it still is.

In how many other countries has the electorate seen its tax rates remain the same for 14 years?

Complete story at - http://russia-insider.com/en/2015/01/17/2488

[Demeter]

38. I'm sniggering, because....

long story.

"the atrophied pecan in his head"

I will have to memorize that one, should I ever again encounter MY "stupidest, most pedantic, most off-the-wall" Swede.

[MattSh]

15. 17,600 Laid-Off Canadian Target Workers Stunned At Ex-CEO's "Walk-Away" Package | Zero Hedge

Earlier this month, Target announced it would close all of its 133 stores in Canada, laying off the 17,600 employees north of the border.

As CBC reports, Target's "employee trust" package for its Canadian workers, announced last week, amounts to around $56 million, providing each worker with 16 weeks of pay.



But - what is perhaps more stunning is that, depending on who’s doing the calculation, the golden handshake "walk-away" package handed to ex-CEO Gregg Steinhafel last May is in roughly the same ballpark at around $61 million, including severance of $15.9 million.

It appears underperforming is the new killing it...

Complete story at - http://www.zerohedge.com/news/2015-01-22/17600-laid-canadian-target-workers-stunned-ex-ceos-walk-away-package

[MattSh]

18. The Humane Thing to Do Is to Let Ukraine Default - Russia Insider

Ukraine is a big country. After Russia it is the second largest in Europe. It is also a very populous country. It numbers 45 million people. I'm told that is more than lived in the entire Roman Empire.

In economic terms, however, Ukraine is sadly a minnow. Its GDP is about $180 billion.

In other words, its economy is smaller than that of Peru, Romania, Kazakhstan, Portugal and Greece — all of whom have far smaller populations and none of whom are known for exceptional wealth.

Ukraine’s budget in recent years has hovered at just under $60 billion. That is a small number.

Primarily due to a drastic fall in the exchange rate of its currency, its 2015 budget only amounts to $30 billion.

By comparison Slovenia is a post-Communist country in Central Europe of 2 million people. It has a budget of $20 billion.

Russia’s 2015 budget is $390 billion (3-4 times Ukraine’s population but 12 times the budget).

.....

As said Ukraine looks big on a map, and $40 billion is in some ways a laughable amount of money (say if you’re China, or the Pentagon), but we’re talking about a state which now collects less than $30 billion per annum in revenue.

Rather than help, any aid packages are looking a lot like signing up Ukrainians for a life of debt slavery.

Complete story at - http://russia-insider.com/en/2015/01/22/2650

Whoomp there it is

Of course, I understand that letting Ukraine default is out of the question.

George Soros in particular stands to lose billions should Ukraine default. That's why he recently called on the USA and the EU to come up with an additional bailout package of $50 billion. And that's over and beyond anything the IMF should authorize.

[Demeter]

39. Soros should enjoy what he has...he is mortal and 85 years old

and has enough for a small country.


His story is interesting...I will feature him next weekend, if nothing more worthy surfaces.

[xchrom]

19. The Oil Crash Is Making The Strong Stronger

http://www.businessinsider.com/the-oil-crash-is-making-the-strong-stronger-2015-1

Pride of place in this week's Houston Auto Show goes to "Texas Edition" trucks: hulking vehicles, selling for $50,000 and upwards, specially designed for the Lone Star state's expansive tastes. Allout Offroad customises them further, lifting the chassis to fit outsize wheels and tyres. They are selling "like crazy", says the firm's boss, Chance Kamp. "People can afford to put gas in them now."

Houston, America's fourth-largest city, is poised between the joys of cheap fuel and the pain of the industry which produces it. Dave Lesar, chief executive of Halliburton, which provides drilling and pumping services, says its customers are cutting spending by 25-30%. On January 21st BHP Billiton, a giant miner and oil producer, said it would cut the number of its onshore oil rigs in America by 40%. A so-far modest fall in the total number of active rigs (see first chart) is set to accelerate.

A survey of 225 companies by Barclays, a bank, forecasts that if crude settles in a range of $50-60 a barrel (it was below $50 in the middle of this week) the industry worldwide will cut its capital spending by 9% this year, to around $620 billion.

Consolidation has been under way for months. Last year, before the oil price's latest tumble, Halliburton, which is the world's second-biggest oil-services firm, agreed a merger with the third-biggest, Baker Hughes. The intention is to save $2 billion a year in costs. Both firms announced strong profits on January 20th, while warning of hard times ahead. Baker Hughes said it would cut 7,000 jobs and a fifth of its capital spending; Halliburton has already cut 1,000 outside America, and says it will shed more labour at home in the weeks ahead. Total, an integrated oil giant from France, this week said it would speed up a cost-cutting programme.



Read more: http://www.economist.com/news/business/21640328-amid-gloom-and-cutbacks-industry-strong-will-get-stronger-tough-get-going#ixzz3PjvmPz98

[Demeter]

41. Dallas Lives

[xchrom]

20. Oil Companies Are Looking At 'Outright Liquidations'

http://www.businessinsider.com/oil-drillers-going-bust-2015-1

The carnage from low oil prices is about to get even uglier.
Conway Mackenzie, the largest restructuring firm in the US, says that oil drillers will begin shutting down as soon as the second quarter, followed closely by explorers, according to Bloomberg's Joe Carroll.

The game changed when on Jan. 5 crude broke $50 per barrel for the first time since April 2009, when the economy was in recession. Here's what Conway's John T. Young told Bloomberg:

"When I saw WTI hit $65, I thought we're going to be really busy with restructurings ... When it hit the $40s, I knew we were looking at outright liquidations."

Young also said oil drillers needed to check whether the producers they worked for had a financial plan in case their future cash flow faltered.



Read more: http://www.businessinsider.com/oil-drillers-going-bust-2015-1#ixzz3PjwWVlu8

[xchrom]

21. VIEWS OF THE ECB STIMULUS FROM THOSE WHO MUST MAKE IT WORK

http://hosted.ap.org/dynamic/stories/E/EU_ECB_STIMULUS_VIEWS_ON_THE_GROUND?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-24-03-09-59

- Mario Polegato, billionaire chairman of Italian shoe company Geox SpA:

Polegato feels the ECB's stimulus will help companies like his by bolstering consumers' confidence in the economy and holding down the euro's value, thereby making exports more affordable overseas.

- Elpida Yiannaka, co-owner of wine bar, Nicosia, Cyprus:

Yiannaka opened the 50-seat Vini Platea a couple of months ago in the historic center of old Nicosia within the Cypriot capital's Venetian-built walls. The summer will be pivotal to deciding whether it would be wise to expand.

- Joao Felix, CEO of a Lisbon startup that operates a car-sharing system for company fleets and private owners:

"It's a turning point, no doubt about it," Felix says at his small downtown office, where his four staffers sat at computers and a Lisbon city map covered one wall.

[Demeter]

80. Benchmarking the ECB’s QE Program by Yves Smith

http://www.nakedcapitalism.com/2015/01/benchmarking-ecbs-qe-program.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. The ECB is set to announce the details of its QE program tomorrow. Many analysts and investors have been trying to puzzle out how its operations might work, since those details will make a difference in what impact if any it has.

Frankly, we are hugely skeptical of this initiative. The US version, which is bizarrely touted as a success, further zombified the economy. It goosed asset prices, which widened wealth and income inequality. Now respectable economists are decrying the widening gap between rich and poor and the lack of class mobility as a brake on growth, yet they also refused to endorse debt restructuring and much more aggressive fiscal spending. And some experts contend that the reason the Fed decided to end QE last summer was that it came to recognize the costs outweighed what if anything it produced in the way of benefits. Of course, they can never admit that publicly or even privately if true.

In Europe, there is even more reason to be expect QE to be at best ineffective. Unlike the US, where as a matter of policy, a lot of financing takes place through the capital markets (for instance, credit card debt, subprime auto loans, home loans are all securitized to a large degree), in Europe, far more credit is on bank balance sheets, and small to medium sized corporate lending is far more important than in the US. Thus, while as we have repeatedly explained, putting money on sale is unlikely to result in more borrowing unless the cost of money is the biggest cost of running your business (ie, you are a bank or a speculator), in Europe you have the added layer that reducing investment yields is unlikely to change how credit officers view lending to small/medium sized enterprises (assuming they even want to borrow) in a weak, deflationary economy.

This Bruegel post describes the major options that the ECB has in designing its QE program, which will help readers benchmark tomorrow’s announcement. One might politely describe the choices as bad and less bad.

By Guntram B. Wolff, Director of Bruegel and former member of the European Commission, Marcel Fratzscher, and Michael Hüther, a German economist and director of the Institut der deutschen Wirtschaft. Originally published at Bruegel

The ECB’s Dilemma: German Opposition to Government-Bond Purchases by the European Central Bank is Solidifying Ahead of the Programme’s Likely Announcement

Authors: Guntram B. Wolff, Marcel Fratzscher, Michael Hüther

German opposition to government-bond purchases by the European Central Bank is solidifying ahead of the programme’s likely announcement on January 22. Elections in Greece that could bring a government that will seek to negotiate the country’s debt with official creditors puts the ECB’s decision under even greater scrutiny. The fact that the ECB did not share losses in the previous round of Greek debt restructuring highlights the problem of sovereign QE, which is not feasible or will be ineffective if fiscal implications are excluded. The design of the programme is therefore crucial.

ECB is falling far short of fulfilling its mandate of keeping inflation below but close to 2%

With the euro-area inflation rate at minus 0,2% and an increasing de-anchoring of inflation expectations, the ECB is falling far short of fulfilling its mandate of keeping inflation below but close to 2%. Many German economists and politicians downplay this failure by trying to re-define price stability as an inflation rate above zero. This is wrong for a number of reasons. A third of the sectors in the euro area, including in Germany, is in deflation. Low inflation is harmful because it makes price adjustment harder, undermines investment and renders debt service more difficult.

Monetary policy alone cannot fix all the problems of low growth and low inflation as many Germans rightly point out. Significant structural reforms and investment to stimulate higher demand will pay off rather quickly. A strong commitment to such reforms is essential for exiting the crisis. Nevertheless, the ECB should not and cannot hide behind slow government progress on reform, but should instead fulfill its mandate.

The more and longer that inflation expectations remain unanchored, the harder it will become for the ECB to regain credibility

The reason for the growing German opposition to a sovereign QE programme is the fear that it could result in illicit monetary financing of governments. A QE programme would have to be combined with an implicit understanding that the ECB accepts losses on the same terms as private creditors in case of a debt restructuring. Otherwise, the purchase of low-rated government debt would be largely ineffective and could even lead to an increase in sovereign yields.The ECB has four options.

The first is to wait and hope for the best. This is the preferred strategy of many Germans, but would be dangerous and irresponsible. The more and longer that inflation expectations remain unanchored, the harder it will become for the ECB to regain credibility and achieve price stability, and the higher will be the real economic costs for the euro area and for Germany.

The second option would be to allocate the potential losses from purchases to the individual national central banks in the euro area. This might sound like an attractive option, but would be counter-productive by increasing sovereign spreads and worsening financial fragmentation within the euro area. And it would send a devastating signal that the single monetary policy would be single in name only.

The third option is to focus government bond purchases on highly rated debt only to limit the balance sheet risks to the ECB. This strategy could succeed, but the ECB would have to buy large amounts of already low-yielding, “safer” euro area sovereign debt and hope that private investors subsequently rebalance their portfolios towards riskier euro-area countries.

The fourth option– while accepting that the founding fathers of the euro might not have foreseen that monetary policy has to accept some fiscal risks – would be for the ECB to purchase sovereign debt according to the capital key of individual euro-area countries, with adjustments for those without sufficient amounts of privately held sovereign debt. The Treaty does not prohibit such purchases in secondary bond markets. The ECB’s governing council has expressed its intention to expand the balance sheet by €1 trillion. As this will hardly be possible with private sector assets only, the ECB could buy a portfolio of government debt combined with a portfolio of private debt.

The ECB needs to urgently show its uncompromising determination to fulfil its mandate and repair monetary transmission in the euro area.

The ECB needs to urgently show its uncompromising determination to fulfil its mandate and repair monetary transmission in the euro area. Accepting some fiscal risks is reasonable and unavoidable. The fourth option is the most promising strategy for the ECB to raise inflation expectations credibly and durably, avoid stagnation and help end the debt crisis. It is a risky strategy, but the other strategies are riskier.

[xchrom]

22. MCDONALD'S EARNINGS FALL; CHANGES AFOOT TO WOO CUSTOMERS

http://hosted.ap.org/dynamic/stories/U/US_EARNS_MCDONALDS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-23-19-49-14

NEW YORK (AP) -- McDonald's isn't lovin' it, and it's going to do something about it.

The world's largest hamburger chain reported falling earnings and sales for its fourth quarter on Friday and says it is going to take action this year to save money and bring customers back. This includes slowing down new restaurant openings in some markets.

It's also making changes to its menu and looking to offer customers more options to customize their burgers.

But the fast-food giant said its problems won't be fixed overnight: It expects sales to remain weak through the first half of this year while it deals with the fallout from a food-safety scandal in China, global economic uncertainty and shifting tastes among diners.

[Demeter]

42. In desperation last week, I ate McDonalds

the fries were terrible! I was at an unfamiliar outlet, so it could have been franchise incompetence.

The bacon cheese burger was good, because of the bacon, I suspect, which covers up a lot of inadequacies....

[xchrom]

24. DAVOS WATCH: WEEK OF MEETINGS, SPEECHES ENTERS LAST DAY

http://hosted.ap.org/dynamic/stories/E/EU_DAVOS_WATCH?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-24-07-00-44

DAVOS, Switzerland (AP) -- The World Economic Forum held in the Swiss ski resort of Davos has the official goal of "improving the state of the world." In practice, it's a massive networking event that brings together 2,500 heads of state, business leaders, philanthropists and artists.

Here are some glimpses of what's happening and being discussed at Davos on Saturday, the forum's last day:

STATE OF MIND

Sitting in silence on a chair and thinking of nothing is not something you'd think people come to do at Davos.

But that's what dozens of business leaders, politicians and power brokers do every morning at a meditation session that kicks off the daily schedule.

[xchrom]

25. SkyMall Is Earthbound, But Its Legacy of Nutty Gifts Lives On

http://www.businessweek.com/articles/2015-01-24/skymall-is-earthbound-but-its-legacy-of-nutty-gifts-lives-on

How did they know you needed a $25 Mounted Squirrel Head while hurtling toward Antigua at 600 miles an hour?

And a $500 Volkswagen Camper Tent to go with it.

In the end it was a shaky bet for SkyMall, especially as the in-flight catalog of absurd gadgets and gimmicky home goods was passed over for online retailers and the fun to be found on your tablet or phone. The FAA loosened the rules on using devices on takeoff and landing, and now SkyMall has filed for bankruptcy protection.

Founded in 1990, SkyMall succeeded by peddling weird wares to a captive audience of bored airline passengers with money to burn, as they browsed the seat pockets for anything to pass the time. It touted itself as a purveyor of “unique merchandise” and never had to defend that claim against vigorous dispute. Around 650 million people a year viewed the catalog, according to the company’s website.

[Demeter]

43. Some recovery we're in, no?

Perhaps recovery of one's senses, if not recovery of one's economic firepower.

[xchrom]

26. U.S. Seeks Review of Sweeping Ruling Limiting Insider Cases

http://www.bloomberg.com/news/2015-01-24/u-s-seeks-review-of-sweeping-ruling-limiting-insider-cases.html

Federal prosecutors in New York asked an appeals court to reverse a sweeping ruling making it harder for them to win insider-trading cases.

The Dec. 10 decision by a three-judge panel overturned the convictions of two former hedge fund managers and may lead to the dismissal of charges against others found guilty in a multiyear insider-trading probe.

It’s rare for appellate courts to agree to reconsider a ruling, especially when the original decision was decided unanimously. In last month’s 3-0 decision, the U.S. Court of Appeals in New York said recipients of inside tips are guilty only if they knew the data came from someone who had a duty to keep it secret and got a benefit for leaking it.

Prosecutors Friday asked for a rehearing by the panel and a hearing by the full court.

[Demeter]

44. Desperation--and the Chutzpah to go with it for it

[xchrom]

27. Draghi Dodges QE Disappointment With Plan That Might Work

http://www.bloomberg.com/news/2015-01-22/draghi-dodges-qe-disappointment-with-plan-that-might-just-work.html

Mario Draghi has delivered a classic European compromise. It even has a chance of working.

With a headline value of 1.14 trillion euros ($1.28 trillion), the bond-buying plan unveiled by the ECB president on Thursday was welcomed by investors, even with its concessions to critics and a flurry of fine print. Draghi pledged to spend until there’s a “sustained adjustment” in inflation and Italy’s Ignazio Visco said the program is open-ended.

The euro fell to an 11-year low and bonds rose after the long-awaited arrival of a mode of stimulus that central banks in the rest of the developed world adopted years ago. Draghi said the plan will help return inflation to the ECB’s goal, while still giving a nod to the German-led concerns that defined much of the region’s response to the financial crisis.

[xchrom]

28. Home-Sales Winning Streak Ends, First-Time Buyers Go Missing

http://www.bloomberg.com/news/2015-01-23/sales-of-existing-homes-in-the-u-s-rise-less-than-forecast.html

A three-year winning streak for sales of previously owned homes in the U.S. ended in 2014 as some investors stepped out of the market and first-time buyers failed to fill the void.

Purchases totaled 4.93 million last year, down 3.1 percent from the 5.09 million houses sold in 2013, figures from the National Association of Realtors showed Friday in Washington.

The share of American homebuyers making their first purchase dropped in 2014 to its lowest level in almost three decades, according to the Realtors group. At the same time, employment gains, growing consumer confidence, mortgage rates at historically low levels and government efforts to lower purchasing costs probably will help bolster demand in 2015.

“Demand has been pretty sideways,” said Jay Feldman, an economist at Credit Suisse in New York. “There are various positives and I don’t see any big negatives for housing. The improving labor market and low mortgage rates will support the housing recovery.”

[kickysnana]

83. GOP Congress. n/t

[xchrom]

29. High-Frequency Probe’s First Target Is Barclays

http://www.bloomberg.com/news/2015-01-23/high-frequency-probe-s-first-target-is-barclays.html

New York Attorney General Eric Schneiderman’s 10-month investigation into high-speed trading has so far led to one big target: Barclays Plc. (BARC)

Almost a year after New York’s top cop made a splash with subpoenas of six high-frequency trading operations, the names of some of these firms cropped up in documents filed this week in the state court in Manhattan. The firms aren’t defendants, though. They are listed as part of Schneiderman’s proposed updated complaint against Barclays, which ran the private trading venue, or dark pool, where these firms traded.

Schneiderman’s suit doesn’t allege any wrongdoing by the high-frequency trading firms. Its focus, instead, is whether Barclays lied to its customers about what HFT firms were doing inside Barclays’s dark pool, one of Wall Street’s largest in-house trading platforms.

“High-frequency trading and dark pools are legal businesses and can be beneficial to the market,” said Deborah Meshulam, a partner at DLA Piper who specializes in securities enforcement. “Unless there are changes in the regulations, then it is hard to say just how many high-frequency-trading related cases will come to light.”

[xchrom]

30. Head West for Best Look at U.S. Oil Drillers’ Pain

http://www.bloomberg.com/news/2015-01-23/head-west-for-best-look-at-u-s-oil-drillers-pain.html

Little is going right for California’s oil industry.

Turns out the state’s shale formation holds less promise than producers expected. Aging conventional wells are drying up. And a rebound in output that cost drillers as much as $3 billion annually to create has been overshadowed by shale oil gushing from wells in North Dakota and Texas.

Then, of course, came the collapse in oil prices -- a seven-month, 57 percent drop that was exacerbated by OPEC’s refusal to cut output in order to squeeze the U.S. shale drillers. No state is feeling that pressure more than California. Drillers there have idled more rigs -- on a proportional basis -- than those in any other part of the country.

“We spent a lot of money to go out and drill and use new technologies just to stop production from depleting in our mature fields,” Rock Zierman, chief executive officer of trade group California Independent Petroleum Association, said by phone. “It took us a lot of capital to basically run in place and now we’re looking at crude prices under $40 a barrel.”

[magical thyme]

79. spent a lot of money....and a lot of water

in a region facing a megadrought. Dumbasses.

[MattSh]

31. "If You Question Authority, You Are Mentally Ill", Report Finds | Zero Hedge

Submitted by Pater Tenebrarum via Acting-Man blog,

Only the Sheeple Are Sane

This post is about an issue that is by now a bit dated (though the topic as such certainly isn’t), but we have only just become aware of it and it seemed to us worth rescuing it from the memory hole. In late 2013, the then newest issue of the American Diagnostic and Statistical Manual of Mental Disorders (DSM for short) defined a new mental illness, the so-called “oppositional defiant disorder” or ODD.

As TheMindUnleashed.org informs us, the definition of this new mental illness essentially amounts to declaring any non-conformity and questioning of authority as a form of insanity. According to the manual, ODD is defined as:

[…] an “ongoing pattern of disobedient, hostile and defiant behavior,” symptoms include questioning authority, negativity, defiance, argumentativeness, and being easily annoyed.

In short, as Natural News put it: According to US psychiatrists, only the sheeple are sane.

Every time a new issue of the DSM appears, the number of mental disorders grows – and this growth is exponential. A century ago there were essentially 7 disorders, 80 years ago there were 59, 50 years ago there were 130, and by 2010 there were 374 (77 of which were “found” in just seven years). A prominent critic of this over-diagnosing (and the associated over-medication trend) is psychologist Dr. Paula Caplan. Here is an interview with her: (interview at link)

As MindUnleashed notes:

“Are we becoming sicker? Is it getting harder to be mentally healthy? Authors of the DSM-IV say that it’s because they’re better able to identify these illnesses today. Critics charge that it’s because they have too much time on their hands.

New mental illnesses identified by the DSM-IV include arrogance, narcissism, above-average creativity, cynicism, and antisocial behavior. In the past, these were called “personality traits,” but now they’re diseases. And there are treatments available.”

Complete story at - http://www.zerohedge.com/news/2015-01-21/if-you-question-authority-you-are-mentally-ill-report-finds


“I see before me words you should not have written…”, by Raymond Pettibone, the cover artist of punk band “Black Flag”.

[Demeter]

45. There's a treatment for arrogance?

Last edited Sun Jan 25, 2015, 11:00 AM - Edit history (1)

Somehow, I doubt drugs and/or talk therapy will be effective. Electroshock is too horrible for anyone.

We have time-honored, effective means of dealing with arrogance--a good pounding (physical or other) however, is therapeutic for both the inflictor and the afflicted.

VIDEO INTERVIEW WELL WORTH WATCHING:

&x-yt-ts=1421914688&feature=player_embedded&x-yt-cl=84503534

[Demeter]

46. The Terrorists Are Coming, the Terrorists Are Coming!

https://cinebeats.wordpress.com/2007/11/12/the-terrorists-are-coming-the-terrorists-are-coming/

I recently had the opportunity to see Norman Jewison’s extremely silly and sometimes smart 1966 comedy The Russians Are Coming, the Russians Are Coming for the first time in about 20 years when it played on TCM. When I was a kid The Russians Are Coming, the Russians Are Coming was one of my favorite comedies for reasons I can’t really explain, except it seemed to portray adults as I saw them then – easily frightened big kids who projected their fears onto their children and conformed to every bad idea that society and the government tossed their way.

I was afraid the film wouldn’t hold up after such a long period of time between my last viewing so my expectations were extremely low going into the movie but once it ended my appreciation for it remained. I really admire its undeniable charm and the way it manages to cram complex ideas into easily digested entertainment that the whole family can enjoy. Simply put, it’s a lightweight version of Kubrick’s brilliant Dr. Strangelove (1964) and it works.

...

There are some standout performances in The Russians Are Coming, the Russians Are Coming, including Carl Reiner’s terrific turn as a comedy writer trying to calm the paranoid town and the very funny Alan Arkin playing a smart Russian Lieutenant who’s trying to get a handle on the slowly escalating events all around him. Brian Keith is also very good as the town Sheriff who can’t believe the situation he’s found himself in. Arkin’s Russian Lieutenant and Keith’s small town Sheriff could have been roles written purely for easy laughs but they’re not. Viewers are asked to sympathize with both men in some ways and we do. The gorgeous John Philip Law also shows up as a Russian solider who speaks a little bit of English and ends up falling for a perky American blond played by Andrea Dromm. The two young lovebirds make a cute couple and their romance echoes themes found in Shakespeare’s classic play Romeo and Juliet, which gives the film an emotional core that I personally found rather sweet and appealing.

The beauty of The Russians Are Coming, the Russians Are Coming seems perfectly clear today as we deal with some vaguely defined idea of an enemy we’re supposed to fear enough to give up our Constitutional Freedoms and basic human compassion for. The film has often been unfairly criticized for its dated jokes, simple plot and silly slapstick style humor. But if the ideas presented in Norman Jewison’s film are so dated, simple and silly, why are people still making the same absurd mistakes outlined in a movie made some 40 years ago? If anything, the film’s basic premise and themes are as pertinent as ever. Underneath all the movie’s jokes and gentleness, The Russians Are Coming, the Russians Are Coming knows that war is a nasty business and there are rarely any victors.

[Demeter]

48. The $9 Trillion US Dollar Carry Trade is Blowing Up

http://www.zerohedge.com/news/2015-01-23/9-trillion-us-dollar-carry-trade-blowing

The US Dollar rally, combined with the ECB’s policies are at risk of blowing up a $9 trillion carry trade.

When the Fed cut interest rates to zero in 2008, it flooded the system with US Dollars. The US Dollar is the reserve currency of the world. NO matter what country you’re in (with few exceptions) you can borrow in US Dollars. And if you can borrow in US Dollars at 0.25%... and put that money into anything yielding more… you could make a killing. A hedge fund in Hong Kong could borrow $100 million, pay just $250,000 in interest and plow that money into Brazilian Reals which yielded 11%... locking in a $9.75 million return.

This was the strictly financial side of things. On the economics side, Governments both sovereign and local borrowed in US Dollars around the globe to fund various infrastructure and municipal projects...Simply put, the US Government was practically giving money away and the world took notice, borrowing Dollars at a record pace. Today, the global carry trade (meaning money borrowed in US Dollars and invested in other assets) stands at over $9 TRILLION (larger than the economy of France and Brazil combined). This worked while the US Dollar was holding steady. But in the summer of last year (2014), the US Dollar began to breakout of a multi-year wedge pattern:





Why does this matter? Because the minute the US Dollar began to rally aggressively, the global US Dollar carry trade began to blow up. It is not coincidental that oil commodities, and emerging market stocks took a dive almost immediately after this process began.



This process is not over, not by a long shot. As anyone who invested during the Peso crisis or Asian crisis can tell you, when carry trades blow up, the volatility can be EXTREME. The market drop in October was just the start. Once the US Dollar rally really begins picking up steam, we could very well see a crash.

[Demeter]

50. ECB Risks German Bonds Mismatch Exceeding 100 Billion Euros

http://www.bloomberg.com/news/2015-01-22/ecb-buying-risks-98-billion-euro-mismatch-for-german-bonds.html

The European Central Bank will have to win a battle for bonds as it seeks to meet its balance-sheet target by buying sovereign debt. Banks and pension funds are already competing with investors for a dwindling supply of conventional German bunds. Add ECB purchases and prices may rise so far they cancel out all interest payments on Europe’s benchmark government securities. The central bank will buy 60 billion euros ($68 billion) of public and private bonds a month, starting in March, President Mario Draghi said in Frankfurt on Thursday.

Of that, about 45 billion euros probably would be sovereign debt, according to a central bank official, equating to more than 100 billion euros of German securities this year, based on purchases being conducted in proportion to euro-zone members’ contributions to the ECB’s capital. That would shrink the tradable market for German bonds in a year when the debt agency already planned to reduce the amount of conventional bonds outstanding by 8 billion euros.

“It’s going to cause a huge shock to the supply-demand balance in the European government-debt market,” Anthony Doyle, investment director at M&G Group Plc in London, said before the ECB’s decision was announced. “We might not be too far off the German bund market looking like the Swiss one, with a negative yield out to 10 years. It’s pretty crazy.”

A rally in German securities pushed yields on 10-year bonds lower in 11 of the past 12 months as investors accepted ever-diminishing payments to own the securities. Prices on notes due in as much as four years are already so high that yields have turned negative, meaning buyers get back less than they pay to buy the securities if they hold them to maturity...ECB buying will be carried out in line with the capital key, Draghi said, which is a measure roughly in proportion to the size of each nation’s economy. Adjusted for non-euro-region central banks, that works out as a 25.6 percent share for Germany, according to calculations based on data on the ECB’s website.

If the ECB purchases about 450 billion euros of sovereign bonds over 10 months, about 115 billion euros would be earmarked for German debt. The exact amount has yet to be officially specified because the ECB plans to include debt of agencies and European institutions, as well as asset-backed securities and covered bonds in its purchases. As of Dec. 31, Germany had 1.16 trillion euros of tradable securities. The difficulty for the ECB may be flushing out sellers and getting them to buy other assets instead. Banks and insurers need Germany’s AAA securities to bolster their balance sheets and pension funds mop up bunds to match their liabilities. In a low-growth environment with scant inflation, investors are sticking with bonds, particularly when the ECB is levying charges on its overnight deposit facility. Meanwhile, supply is shrinking. The German debt agency plans to sell 147 billion euros of conventional bonds this year, compared with redemptions of 155 billion euros, according to its outlook published in December. As much as 14 billion euros of inflation-linked bonds, which are also eligible for ECB purchase, will also be issued.

“The euro-zone banks own something like 30 percent of their countries’ bonds,” said Markus Allenspach, head of bond research at Julius Baer Group Ltd. in Zurich. “New issues are relatively limited so it’s a question of the price -- at what level will the banks decide to sell the paper?”

....

“Global central banks are petrified of deflation,” said M&G’s Doyle, whose firm oversees the equivalent of about $389 billion. “The real effectiveness of QE is through the portfolio-rebalancing effect. The world is running out of positive-yielding government bonds.”

[Demeter]

51. Meet the New King, Same as the Old King: Price-Crushing Oil Policy Stands

http://www.bloomberg.com/news/2015-01-23/saudi-arabia-s-new-king-seen-sticking-with-oil-production.html

King Salman, Saudi Arabia’s new ruler, will keep Oil Minister Ali Al-Naimi in his post, bolstering expectations that he will continue the policy of maintaining crude output to preserve market share even as prices have plunged. Salman, 79, issued a royal decree to retain current ministers, according to the official Saudi Press Agency. Al-Naimi led OPEC’s Nov. 27 decision to maintain its crude production even as shale supplies spurred U.S. output to the highest in three decades. Salman said on Saudi national television that he will maintain the policies of his predecessor.

With production of 9.5 million barrels a day and exports of 7 million, Saudi Arabia accounts for more than a 10th of global supply and a fifth of crude sold internationally. The country’s refusal to surrender market share to rising U.S. output has contributed to the worst slump in prices since the global credit crisis of 2008...

In theory, Saudi oil decisions are made by a Supreme Petroleum Council headed by the king and made up of senior members of the royal family, ministers and industry leaders. In practice, decisions seem to have been left in Al-Naimi’s hands, said Simon Henderson in an October research note for the Washington Institute. “Although he is in his late seventies and said to be looking forward to retirement, Naimi retains a firm grip,” Henderson said. Al-Naimi, who has driven decision-making since 1995, has said he’d like to devote more time to his other job, chairman of the science and technology university named after the late sovereign. While no member of the ruling Al-Saud clan has ever served as oil minister, Prince Abdulaziz bin Salman, a son of the new king, is assistant oil minister and a regular participant in OPEC meetings.

[Demeter]

52. Prince Alwaleed: We'll Never See Oil at $100-Plus Again

http://www.bloomberg.com/video/what-can-we-expect-from-saudi-arabia-s-king-salman-7UF~C3UhSGGI4Hx1Iyn3NA.html

VIDEO INTERVIEW

[Demeter]

54. IT SEEMS ONE CANNOT HAVE A CRISIS WITHOUT COMIC RELIEF

The Many Lives of Darth Vader
Alan Taylor

Since his debut in the 1977 movie Star Wars, Darth Vader has been a rather busy Sith Lord. Apart from appearing in several movies since, Vader has also taken time out to participate in many other activities. For example, in recent months, he has shown a keen interest in Ukrainian politics. Over the years, news photographers have captured Lord Vader at premieres, rallies, promotional events, conferences, and sporting events, and even caught him at some low points, including a bank robbery. Gathered here are a handful of images of Vader's offscreen appearances around the world (Earth).

I HAVE SELECTED THE UKRAINIAN SIGHTINGS--FOR THE REST, SEE LINK

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img06
A common sight in Kiev, Ukraine. Kiev's mayoral candidate for the Internet Party arrives to speak to the media on Volodymyrska Hill on May 22, 2014 in Kiev./Dan Kitwood/Getty Images

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img09

Lord Vader speaks in front of Ukraine's Central Election Commission building. A man wearing the outfit of Darth Vader, who announced he was running for president as the official candidate of the Ukrainian Internet Party, speaks as he takes part to a protest action in Kiev on April 3, 2014./Sergei Supinsky/AFP/Getty Images

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img14

Impressive. Most impressive. A man wearing the outfit of Darth Vader, who announced he was running for president as the official candidate of the Ukrainian Internet Party (UIP), grabs a piece of meat from a market stall in front of the Central Election Commission building in Kiev on April 3, 2014./Sergei Supinsky/AFP/Getty Images

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img18

You may dispense with the pleasantries. Kiev's mayoral candidate for the Internet Party arrives to speak to the media on Volodymyrska Hill on May 22, 2014 in Kiev, Ukraine./Dan Kitwood/Getty Images

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img21

All too easy. Darth Vader, previously known as Viktor Shevchenko, waits to receive his ballot papers at a polling station during parliamentary elections in Kiev, Ukraine, on October 26, 2014.

http://www.theatlantic.com/photo/2014/10/the-many-lives-of-darth-vader/100842/#img24

Obi-Wan never told you what happened to your father. A candidate representing the Internet Party of Ukraine kneels in front of a crying boy during a meeting with supporters and voters in Kiev on October 22, 2014./Reuters/Valentyn Ogirenko

SEEN THE SITH LORD AROUND, MATT?

[Demeter]

55. Nick Turse: A Shadow War in 150 Countries

http://www.tomdispatch.com/blog/175945/

From the point of view of the U.S. military and the national security state, the period from September 12, 2001, to late last night could be summed up in a single word: more. What Washington funded with your tax dollars was a bacchanalia of expansion intended, as is endlessly reiterated, to keep America “safe.” But here’s the odd thing: as the structure of what’s always called “security” is built out ever further into our world and our lives, that world only seems to become less secure. Odder yet, that “more” is rarely a focus of media coverage, though its reality is glaringly obvious. The details may get coverage but the larger reality -- the thing being created in Washington -- seems of remarkably little interest...America’s Special Operations forces are a striking example of this phenomenon. The commando is, by now, a national culture hero, the guy who stands between Hell and us. But what special ops forces really do all -- and I mean all -- over the planet, doesn’t seem of any particular interest to Americans in general or the mainstream media in particular. The way those “elite” forces have parlayed their popularity into a staggering growth rate and just what that growth and the actions that go with it actually mean in terms of, say, blowback... well, that’s something you’re simply not going to read much about, other than at a website like this one.

In fact, we’ve focused on the spectacular growth of this country’s special forces outfits, what that has meant globally, and the ethos of the organization for years now. Nick Turse, in particular, has in the past and again today done the kind of reporting on and assessment of special forces operations that should be the coin of the realm, but couldn’t be rarer in our world. If you want to know, for instance, just how many countries special forces operatives have set foot in from 2011-2014 (150 on a planet with only 196 nations), this is the place to come...

The Golden Age of Black Ops
Special Ops Missions Already in 105 Countries in 2015
By Nick Turse

In the dead of night, they swept in aboard V-22 Osprey tilt-rotor aircraft. Landing in a remote region of one of the most volatile countries on the planet, they raided a village and soon found themselves in a life-or-death firefight. It was the second time in two weeks that elite U.S. Navy SEALs had attempted to rescue American photojournalist Luke Somers. And it was the second time they failed.

On December 6, 2014, approximately 36 of America’s top commandos, heavily armed, operating with intelligence from satellites, drones, and high-tech eavesdropping, outfitted with night vision goggles, and backed up by elite Yemeni troops, went toe-to-toe with about six militants from al-Qaeda in the Arabian Peninsula. When it was over, Somers was dead, along with Pierre Korkie, a South African teacher due to be set free the next day. Eight civilians were also killed by the commandos, according to local reports. Most of the militants escaped.

That blood-soaked episode was, depending on your vantage point, an ignominious end to a year that saw U.S. Special Operations forces deployed at near record levels, or an inauspicious beginning to a new year already on track to reach similar heights, if not exceed them.

During the fiscal year that ended on September 30, 2014, U.S. Special Operations forces (SOF) deployed to 133 countries -- roughly 70% of the nations on the planet -- according to Lieutenant Colonel Robert Bockholt, a public affairs officer with U.S. Special Operations Command (SOCOM). This capped a three-year span in which the country’s most elite forces were active in more than 150 different countries around the world, conducting missions ranging from kill/capture night raids to training exercises. And this year could be a record-breaker. Only a day before the failed raid that ended Luke Somers life -- just 66 days into fiscal 2015 -- America’s most elite troops had already set foot in 105 nations, approximately 80% of 2014’s total.

MUCH MORE AT LINK


Nick Turse is the managing editor of TomDispatch.com and a fellow at the Nation Institute. A 2014 Izzy Award winner, he has reported from the Middle East, Southeast Asia, and Africa and his pieces have appeared in the New York Times, the Los Angeles Times, the Nation, and regularly at TomDispatch. His New York Times bestseller Kill Anything That Moves: The Real American War in Vietnam received a 2014 American Book Award.

[Demeter]

56. Who suffers if Obamacare subsidies go away? Surprise

http://www.cnbc.com/id/102360549

The kind of people who were more likely to vote for Mitt Romney over President Barack Obama in the 2012 election also turn out to be the same kind of people who would be most likely to lose their Obamacare health insurance if a looming Supreme Court case goes against the president, according to a new analysis.

Obamacare enrollees who are white, live in the South and have jobs with modest incomes would be disproportionately affected by an adverse ruling for Obama at the high court, which could come this June, the study by Urban Institute researchers found.

The researchers earlier this month found that 6.3 million people would lose health coverage because they would no longer be eligible for subsidies if the Supreme Court rules that such federal financial aid issued to customers on the HealthCare.gov Obamacare insurance exchange is illegal, as plaintiffs claim. Without those subsidies to help pay for premiums in the 37 states served by the federal exchange, the plans would become unaffordable for that number of people, the Urban Institute said...

[Demeter]

57. Revised Greek Default Scenario: Liabilities Shifted to German and French Taxpayers; Bluff of the Day

http://globaleconomicanalysis.blogspot.com/2015/01/revised-greek-default.html

Dr. Eric Dor, director of IESEG School of Management in Lille, has an update on bank exposure to Greek debt liabilities.

The numbers are roughly in line with figures I have posted earlier, but the breakdowns and other details are interesting. TABLE AT LINK

Exposure of European Banks

The exposure of European banks to Greek public and private debt is most interesting. Nearly all the liabilities have been shifted from banks to the public. For example the exposure of German banks to the Greek public sector is now limited to $181 million.

AS W WOULD SAY: "MISSION ACCOMPLISHED!"



German Bank Claims on Greek Public Sector

The exposure of French banks to the public sector of Greece is now limited to $102 million.

French Bank Claims on Greek Public Sector



MORE

[Demeter]

58. One last gasp for the 'one-size-fits-all’ euro

http://www.telegraph.co.uk/news/worldnews/europe/11363345/One-last-gasp-for-the-one-size-fits-all-euro.html


Telegraph View: The crisis in the eurozone proves that Britain was wise to stay out. One size does not fit all of Europe's economies

The fate of the euro dramatically contradicts the fantasy that one size fits all. Trying to operate one currency to satisfy the needs of 19 countries of varying size, wealth and political dynamics was always going to be a near-impossible task. Yesterday, the European Central Bank tried one last attempt to make it work. The ECB announced that it would inject at least €1.1 trillion into the eurozone economy. The value of the currency immediately fell to an 11-year low against the dollar.

Thank goodness the UK never joined the euro – despite the advice of many prominent public figures, some of whom have still failed to recognise how wrong they were. Its problem has always been that what has suited one part of the eurozone has not suited the needs of another.

In the old days, a country such as Greece or Italy could deflate its currency independently to remain competitive in hard times. But imprisoned within the euro, options have been dictated by a bank that has bowed to the demands of Germany – a richer, more powerful nation terrified of reliving the catastrophic inflationary spiral of its past. Nobody can blame the Germans for acting within their own interests. What is strange is that one set of interests should enjoy such priority over another in a supposedly democratic union of equals.

The result: the ECB waited too long to act. It can be sensible to reflate, providing the conditions are right. Britain and the US started doing it some time ago – the US pumping the equivalent of 25 per cent of its annual GDP into the economy. The eurozone has thus joined the party long after everyone else, and even so will only spend something equivalent to just over 10 per cent of its GDP. In the short term, the action may well work, for the markets seem to be showing initial enthusiasm. But in the long term it is clear that the only way for the eurozone to achieve the economic harmony it seeks is through ever-closer political union. That would require treaty change that, in turn, would require national referendums.

For a majority of the British public, the proposition of entering even further into a political project that has not delivered the economic goods would be an anathema. And the rise of populist, anti-establishment parties across Europe suggests that many Europeans would say “non” to the idea, too. As the bank creates money to stave off a series of bigger decisions that will some day have to be answered, the wisdom of reassessing the UK’s relationship with the EU looks more profound. A serious renegotiation of the terms of membership followed by an in/out referendum, as proposed by the Conservatives, is eagerly awaited.

[Demeter]

60. Compare & Contrast Obama’s Reaction to the Deaths of King Abdullah & Hugo Chávez By Glenn Greenwald

https://firstlook.org/theintercept/2015/01/23/compare-contrast-obamas-reaction-king-abdullah-hugo-chavez/

Hugo Chávez was elected President of Venezuela four times from 1998 through 2012 and was admired and supported by a large majority of that country’s citizens, largely due to his policies that helped the poor. King Abdullah was the dictator and tyrant who ran one of the most repressive regimes on the planet.

The effusive praise being heaped on the brutal Saudi despot by western media and political figures has been nothing short of nauseating; the UK Government, which arouses itself on a daily basis by issuing self-consciously eloquent lectures to the world about democracy, actually ordered flags flown all day at half-mast to honor this repulsive monarch. My Intercept colleague Murtaza Hussain has an excellent article about this whole spectacle, along with a real obituary, here.

Saudi Arabia’s Tyrant King Misremembered as Man of Peace
By Murtaza Hussain

https://firstlook.org/theintercept/2015/01/23/saudi-arabias-king-misremembered-man-peace/



After nearly 20 years as de facto ruler of the Kingdom of Saudi Arabia, King Abdullah ibn-Abdulaziz al-Saud died last night at the age of 90. Abdullah, who took power after his predecessor King Fahd suffered a stroke in 1995, ruled as absolute monarch of a country which protected American interests but also sowed strife and extremism throughout the Middle East and the world.

In a statement last night Senator John McCain eulogized Abdullah as “a vocal advocate for peace, speaking out against violence in the Middle East”. John Kerry described the late monarch as “a brave partner in fighting violent extremism” and “a proponent of peace”. Not to be outdone, Vice President Joe Biden released a statement mourning Abdullah and announced that he would be personally leading a presidential delegation to offer condolences on his passing.

It’s not often that the unelected leader of a country which publicly flogs dissidents and beheads people for sorcery wins such glowing praise from American officials. Even more perplexing, perhaps, have been the fawning obituaries in the mainstream press which have faithfully echoed this characterization of Abdullah as a benign and well-intentioned man of peace.

Tiptoeing around his brutal dictatorship, The Washington Post characterized Abdullah as a “wily king” while The New York Times inexplicably referred to him as “a force of moderation”, while also suggesting that evidence of his moderation included having had: “hundreds of militants arrested and some beheaded”. (emphasis added)

While granting that Abdullah might be considered a relative moderate within the brazenly anachronistic House of Saud, the fact remains that he presided for two decades over a regime which engaged in wanton human rights abuses, instrumentalized religious chauvinism, and played a hugely counterrevolutionary role in regional politics.

Above all, he was not a leader who shied away from both calling for and engineering more conflict in the Middle East....MORE

MORE FROM GREENWALD, TOO, AND IT ISN'T PRETTY!

[Demeter]

61. Draghi's "No-growth" QE: Money for Stocks, Zilch for the Economy By Mike Whitney

http://www.informationclearinghouse.info/article40796.htm

Let’s say you’re diagnosed with colorectal cancer. But instead of going to a professional for help, you decide to treat yourself with glycerol suppositories and high doses of Vitamin C... Well, then, you’re probably going to die, right? This same rule applies to economics. If you try to reduce unemployment and boost growth by doing something completely unrelated to the problem itself, like dumping trillions of dollars into financial assets, then you’re not going to get the results you want. This is largely the problem we face today. All of the economies controlled by the western bank cartel–Australia, Canada, US, UK, Eurozone, and Japan—are suffering from chronic lack of demand, the likes of which could be easily remedied by following Keynes recommendation of “government directed investment”. But instead of putting people to work building bridges and fixing roads which would provide them with the money they need to spend at the shopping malls and car lots; our glorious bank masters have decided to subsidize all-manner of risky speculation by dropping rates to zero and pumping money into the financial markets. The beneficiaries of this process, called Quantitative Easing, are the people who typically prosper from Central Bank policy: The Moocher Class. Take a look at this chart from Bill Moyers. This is “who wins and who loses” with QE.

Average income growth in US recoveries: top 10% versus the bottom 90%. (Graph: Pavlina Tcherneva)


(Smart Charts: An Economic Recovery for the 1%, Bill Moyers)

See that small blue line heading straight down on the far right side. That’s you and me. We’re the victims of this policy. And, no, I am not going to bore you with a lot of blather about 1 percent-this and 1 percent-that. You’ve heard it a million times before, and don’t need to hear it from me. But it IS important that you get a visual idea of how the policy works, because we’re not talking about a “free market” here. We’re talking about policy, the way the Central Bank rigs the system in order to transfer wealth to a specific group of powerful constituents. Let’s just call it political economy, because that’s what it is. The Fed keeps its thumb on the scale so its moneybags buddies can make out like bandits. That’s how it works.

Why does this matter?

Because on Thursday, European Central Bank president and former Goldman Sachs managing director Mario Draghi launched the latest iteration of QE. The ECB plans to buy 60 bln euros ($70B USD) in sovereign and agency bonds per month starting March 2015 until September 2016. That’s roughly €1.1 trillion altogether. So now global investors will be able to profit off stocks in the EU adding to their bulging cash-trove while widening the chasm between themselves and the lowly 99 percent. Here’s part of the official statement from the ECB:

“(The ECB) decided to launch an expanded asset purchase programme encompassing the existing purchase programmes for asset-backed securities and covered bonds. Under this expanded programme the combined monthly purchases of public and private-sector securities will amount to 60 billion euros.

They are intended to be carried out until end-September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below but close to 2 percent over the medium term.” (TEXT – ECB President Draghi’s statement on QE programme, Reuters)

Did you catch that part about how QE will “be conducted until we see a sustained adjustment in the path of inflation”? That means the bond-splurge could go on forever. It’s completely open-ended. But what Draghi fails to mention is that QE has never succeeded in reaching the central bank’s 2 percent inflation target. Never. Not in the US, not in the UK, and not in Japan. In fact, we can’t be sure that QE boosts inflation at all. Judging from past experience, it certainly doesn’t look like it. So for Draghi to say that he’s going to keep his foot on the gas until he hits his target is like me saying “I’m going to keep step-dancing until Mom gets over her Lupus.”

Is there a connection between step-dancing and lupus? Nope. Nor is there connection between QE and inflation, except asset inflation that is, which explains why stocks have more than doubled in the last 5 years. But stock prices don’t show up in the CPI, so Draghi can dump as money as he likes into financial markets and it’s never going to show up in the data. Pretty clever, eh? And there’s no proof that QE lowers interest rates either, so the idea that loading up on government bonds, increases lending is also false. Check this out from economist John Aziz at Pieria:

(The) “presumption that central banks are lowering interest rates is at odds with the evidence. This graph via Matt O’Brien from last year shows that each time the Federal Reserve has commenced a program of quantitative easing interest rates have actually risen. ….:

?w=500

And each time the Federal Reserve has tapered its bond-buying programs, interest rates have fallen back lower.” (Does QE Lower or Raise Interest Rates: the Evidence, John Aziz, Pieria)

Can you believe it? So QE has had the exact opposite effect on bond yields (rates) that it was supposed to have, which makes sense when you realize that investors have just been following the actions of the Central Banks rather than market fundamentals. But –when QE ends– then investors return to the safety of bonds which pushes yields back down again. This has been particularly noticeable since the end of QE3. Yields on benchmark 10-year Treasuries have plunged from roughly 2.70% in October when the program ended to 1.83% today. In other words, it is cheaper to borrow money today than it was when the Fed was purchasing $85 in bonds every month. This is not the way QE was supposed to work.

But here’s the deal: The way QE is supposed to work and the way it actually works, is the difference between public relations and reality. Bernanke and Co. know the difference. You can trust me on this. Monetary policy is not a random, shot-in-the-dark experiment with uncertain outcomes. The reason that inequality has grown to levels not seen since the Gilded Age, is because the Fed knows who is supposed to gain from its programs, and implements its polices accordingly. Nothing is left to chance. So what’s Draghi’s game? Is he merely flooding the markets with liquidity to push stocks higher and further enrich the investor class or is there something else going on here?

How about the banks? Could EZQE (Eurozone QE) actually be a stealth bailout of the banks? Check out this blurb from macronomy.blogspot.com:

“Société Générale in their European Banks note from the 9th of January:

“€600bn of lost corporate lending….The European corporate loan book has shrunk by €600bn since 2009, the point at which corporate credit volumes began to retreat. Around €450bn of this shrinkage has taken place in the last three years – the period of austere governments and regulators. Almost all of this correction is down to three banking systems: Spain (€400bn lost from peak), Italy (€100bn lost) and Greece (€30bn lost).

The total euro area banking system has shed €7tn in assets since 2008. The first chunk of assets fell away in 2008-09 (typically non-lending assets – subprime, etc.). The second chunk of assets has been falling away since 2011.

At the total balance sheet level, it is actually Germany that has seen the lion’s share of the balance sheet decline. This is largely linked to the non-lending assets that fell away in 2008-09.

(Credit–Quality Street, Macronomics)

EU banks have lost “€7tn in assets since 2008″?

Wow. It looks to me like the entire system is still in trouble six years after Lehman Brothers crashed. Could that explain what’s going on? Could that explain why Draghi has pushed so hard for QE; to bailout the banks? Indeed. And while most experts agree that QE will do almost nothing to stimulate growth or reduce soaring unemployment, they also agree that it will push bank stocks higher, intensify their gambling operations, and help them to conceal their lack of capital. The EU banking system is seriously undercapitalized and needs to be restructured so the debts can be written down. QE helped to avoid that painful remedy in the US. Draghi hopes it will work in Europe as well.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at [e-mail].

[Demeter]

64. Putin's New Gas Strategy Is Brilliant (Putin's New Gas Strategy Actually Makes Sense)

http://www.bloombergview.com/articles/2015-01-22/putin-s-new-gas-strategy-actually-makes-sense

(THIS ARTICLE WAS REPOSTED AT RUSSIA-INSIDER http://russia-insider.com/en/2015/01/22/2644 )

When Russia canceled a planned pipeline to deliver natural gas to Europe across the Black Sea last month and said it would redirect the project to Turkey, some thought it was a bluff, others a sign of financial weakness and still others a rebuke to the West over Ukraine as President Vladimir Putin turned elsewhere to look for new partners. In reality, the change made good commercial sense and should have happened years ago, according to a new report by some of the most knowledgeable people on Russia's gas industry. The shift also means that Gazprom, Russia's state-controlled gas company, won't be able to completely cut Ukraine out of the transit business, as the original South Stream pipeline had sought to do, for years to come. And, the authors might have added, the new arrangement is healthier for Europe, too.

Putin's Pipeline Politics

The cancellation of South Stream is part of a broader change of strategy for Gazprom that plays to the company's strengths, say Jonathan Stern, Simon Pirani and Katja Yafimava at the Oxford Institute for Energy Studies. The previous strategy WAS to acquire distribution networks deep in EU markets. And while the report's authors are more cautious, this was also in part politically motivated. It was meant to exert Russian political power as much as to make profits for Gazprom, which is one reason the European Union drew up regulations to obstruct it.

South Stream was expensive -- conservatively priced at about $20 billion and by some estimates as much as $65 billion. It never made commercial sense, even when EU demand for gas was projected to soar and Gazprom controlled prices by negotiating separate long-term contracts with individual buyers...Today, Gazprom faces new price competition from spot markets at gas hubs around the EU. Plus, new EU rules -- some still being written -- would force Gazprom to open up its European pipelines to other suppliers and distributors.

The Ukraine crisis prompted EU officials to move aggressively against South Stream for not complying with the new rules. And collapsing oil prices (to which long-term gas contracts are tied) made the economics of South Stream look even worse. Eventually, Gazprom pulled the plug. The company then proposed redirecting the pipeline project to Turkey, its second-largest customer in Europe and the only European market projected to grow strongly. The gas Turkey now gets via Ukraine would come direct from Russia. And any additional amounts could be taken to a hub at Turkey's EU border and sold. Nevertheless, Gazprom would still need to send substantial amounts of gas to Europe through Ukraine until at the very least 2020, according to the Oxford report.

It's by now clear that Gazprom's pivot to Turkey was not a bluff, even if negotiations on price and the pipeline's route continue. Gazprom has already allocated resources to the Turkish project. Nor was the South Stream decision based only on cost. That couldn't explain why Gazprom hired two barges and 200 personnel to start laying pipes on the seabed, Stern and his team said. Other decisions taken at about the same time suggest a bigger shift at play: Gazprom abandoned efforts to buy 100 percent of the Opal gas pipeline, which lies entirely within Germany. It also walked away from advanced talks on an asset swap that would have given more extraction assets in Western Siberia to the Wintershall unit of BASF Group, in exchange for Gazprom's full ownership of the German company's interest in a domestic storage and trading business in Germany.

Not long before, Gazprom had finally agreed on terms to supply piped gas to China and iced its plans to develop terminals to export liquid natural gas. Putin sold that move as punishment for the EU and proof he could find alternative markets. But in essence, Gazprom is returning to the business it knows better than anyone else and the one it can more easily afford: extracting and delivering natural gas through pipelines. Russia's gas giant no longer has ambitions to own the whole extraction-to-European-consumer chain, or to invest in expensive LNG technologies. Instead, it will have a simpler, transactional relationship with the EU in the sale and purchase of gas. And that is exactly as it should be.

[Demeter]

65. "Thank You for Your Service!" Chief of US Army in Europe While Awarding Medals to Maimed Ukrainians

A new low. Even worse than Victoria Nuland and her Maidan cookies

http://russia-insider.com/en/2015/01/22/2644

General Ben Hodges, Chief of the US Army in Europe, awarded US army medals to Ukrainian soldiers in Kiev's Central Military Hospital on January 22.

https://www.youtube.com/watch?x-yt-cl=84503534&feature=player_embedded&v=ZxNa4wpgWL8&x-yt-ts=1421914688

The video was made by "independent" Hromadske TV, a station that publicly admits it is funded by money coming from the US and Dutch embassies—and George Soros.

The General said the medal is "a symbol of the US army in Europe" and is given "for excellence". Interesting choice of words. And actually these coins are not even medals, they are unit coins for a coin challenge. The coins are the "NEW U.S. Army Europe - Sword of Freedom Challenge Coin. 60335." priced at $8.79 from ebay. In description of the coin it is stated: "This coin pays tribute to the tireless commitment and outstanding dedication to duty demonstrated by every member of U.S. Army Europe."

Instead of making sure that you get arm prosthesis worth of 100 thousands Euros that will enable you to live normal life, we will give you worthless piece of metal.

The general finished his visit by thanking the soldiers for their service.

Does this even need comment? This is more patronizing and degrading than Victoria Nuland with her Maidan cookies.

These Ukrainian soldiers are mostly lower class folks who are dying for Western ambitions in Eastern Europe and Eurasia. Once there's no use for them anymore, they will be forgotten. But at least they'll have a US Army challenge coin?

[MattSh]

71. Hromadske TV

has also had one of their "journalists" advocate genocide against the Russian population in the east.

Bogdan Boutkevitch: “You need to kill 1.5 million people in Donbass”

http://slavyangrad.org/2014/08/01/ukrainian-journalist-openly-calls-for-genocide-on-hromadske-tv-financed-by-us-and-netherlands/

[Demeter]

66. Uncle Sam Is Coming After Your Savings By Megan McArdle

http://www.bloombergview.com/articles/2015-01-23/obama-s-tax-on-529-college-savings-targets-middle-class

Earlier in the week, I discussed the Obama administration's proposal to tax earnings on so-called 529 college savings plans, part of a package of tax hikes that will pay for new programs such as his proposal to make the first two years of community college free. This has been touted as a plan to hike taxes on the rich to help the middle class, but in fact it's more of a plan to redistribute money from the upper middle class to the lower middle class. As I noted then, this proposal is not going anywhere, not just because Republican congressmen will block it, but because it would be very unpopular with affluent blue-state voters who currently vote for Democrats. About the only people I saw defending this particular idea were blue-state singles who haven't yet confronted the monstrous expense of shepherding their progeny into the new mandarin class to which they belong.

Everyone else seems to be somewhere between confused and aghast. One comment in particular struck me, as I saw it several times on social media and in writings: "How would you feel if they did this to Roth IRAs?" Why did I find that particular question a compelling topic for a column? Because it's a question we may have to ask ourselves. As I observed when I first wrote about the plan, the very fact that we are discussing taxation of educational savings -- redistributing educational subsidies downward -- indicates that the administration has started scraping the bottom of the barrel when seeking out money to fund new programs. Why target a tax benefit that goes to a lot of your supporters (and donors), that tickles one of the sweetest spots in American politics (subsidizing higher education), and that will hit a lot of people who make less than the $250,000 a year that has become the administration's de facto definition of "rich"? Presumably, because you're running out of other places to get the money. The top tax rate on people who make more than $413,000 ($464,000 for married couples) is already almost 40 percent. That's on top of Medicare taxes (2.9 percent, not capped), Social Security taxes, state and local taxes (in a deep blue area like New York City, these can amount to 10 percent, though you get some of that back by deducting state taxes from your federal tax) -- a marginal tax rate of around 45 to 50 percent in blue states, and possibly even more if you run a business.

Capital gains are taxed at a lower rate, of course. But if you combine the Obamacare capital income surcharge for higher earners, and the administration's new proposal to raise the base rate to 28 percent, you're looking at a capital gains tax of almost 32 percent for people who make more than $200,000 a year ($250,000 for married couples). We are simply running out of room to pay for generous new programs with higher taxes on the small handful of people who make many hundreds of thousands of dollars a year. I'm not saying that it's impossible, politically or otherwise, to further raise their tax rates. I'm just saying that there's not all that much money there left to get. Yes, I know that tax rates used to be much higher in the middle of the 20th century. However, eye-popping, high-double-digit rates fell on a much smaller share of the population, and therefore didn't raise all that much money; they were mostly symbolic, especially since they were combined with a much more generous array of deductions. Also, there's a reason that countries largely stopped trying to enact such heavy tax rates; in an era when global capital, and people, move pretty freely, they turned out to be mostly counterproductive. This is also why we don't try to tax the bejesus out of capital income, much as many would like to; old capital flees, and new capital doesn't get formed, as savers decide it's not worth it.

What that tells us is that politicians will need to reach further down the income ladder in order to fund new spending -- indeed, to fund the spending we've already done, in the form of entitlement promises. Where will they go for that money? Once you've hit your fiscal capacity to tax the rich, a few big sources of tax revenue are left:

1) A value-added tax. Very efficient and generates a lot of money because evasion is very difficult; it is almost self-enforcing. It minimizes economic distortion, and what distortions it does introduce encourage savings over consumption. It is also highly regressive. So it's hard to see where the political support will come from: Progressives hate the regressivity, conservatives, the imposition of a large new tax that will squeeze a lot of money out of people.

2) Raising income taxes on the middle class. Also raises a lot of money -- the middle class mostly have salary income, and they don't have the ability of the wealthy to shift their income between, say, capital gains and ordinary income. This will raise a lot of money (note that the Bush tax cuts on the middle class, which were made permanent in 2010, cost about three times as much as those on the wealthy.) It will also rile many millions of people, who will make angry phone calls to their representatives.

3) Tax the savings of the middle class. This could take many forms: lowering the dollar value of an estate that is exempted from tax, eliminate the basis-step up that such estates currently enjoy, or start to pare back on tax-advantaged savings like Roth IRAs and 529 educational savings accounts. (Traditional IRAs and 401(k)s already have their withdrawals taxed as ordinary income, which will make it harder for the government to claw back the tax benefit they've already extended without outright seizing the accounts.) This will also cause a mass freakout, but of a smaller number of people, since a surprising number of affluent people save very little of their income.

The third option is the worst, from an economic point of view -- the last thing we want to do is discourage saving, given how little of it Americans do. On the other hand, it may be the most politically palatable.

Does that mean you should forget the Roth IRA?

I've thought a lot about this question , and the tentative conclusion I have come to is that you have to save the money somewhere, so you might as well put it in a tax-advantaged account. Yes, I understand the temptation to implement Plan Grasshopper in the face of future tax hikes, but before you pull the trigger, I suggest you try to draw up a household budget living only on what you're likely to qualify for in the way of Social Security benefits. I'd rather live comfortably with a higher tax rate than scrape along on what the government will give me. And there are real benefits to a Roth IRA. For one thing, because you put in post-tax dollars, you have to save more and consume less now, which is good fiscal discipline. For another, there's a good chance that any future attempt to tap this money will -- because of the political optics -- come in the form of taxing only future contributions, rather than contributions that have already been made. This seems worth the risk to me, though I certainly see the arguments against.

What it does argue for is diversifying where you put your money: some in traditional IRAs and 401(k)s, some in Roth, and hopefully, some in regular taxable accounts, because you've already maxed out your tax-advantaged contributions. That way a change in a single program doesn't radically alter your retirement and college plans. What it also argues for is saving even more than you are. The government is going to come for its money one way or another, and the best way to deal with that is to have more than you need.

THE LADY HAS GOT TO BE KIDDING. THE ONLY THING THAT WOULD WORK WOULD BE HAVING MORE SAVINGS THAN THE GOVERNMENT NEEDS!

[magical thyme]

82. taxing the sole benefit of having a 529 or a Roth makes absolutely zero sense.

If they're going to tax the earnings, you may as well simply open an individual account and not have to follow their rules for distributions.

You've already paid income taxes on Roth IRAs. Their sole benefit is tax-free earnings. In order to qualify for those tax free earnings, you have to meet a qualifying event and have owned the Roth for 5 years. Take the earnings out early and not meet the qualifications, and you pay a 10% penalty on the earnings, along with taxes.

So I'd just close the Roth and stick the money in an individual account. No rules on when I take the money out; it's there for emergencies or retirement, whichever comes first. Nobody to answer to.

[Demeter]

67. Removing the Social Security Tax Cap Would Benefit Most Workers

http://www.nakedcapitalism.com/2015/01/removing-social-security-tax-cap-benefit-workers.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



Yves here. As we and others have discussed at some length, the concern over Social Security funding is vastly overhyped. As Nicole Woo discusses in this Real News Network interview, one simple fix, that of eliminating the cap on who is subject to the tax, would solve most of the gap that is anticipated in long-term projections. And the Social Security tax as now constituted is regressive and thus promotes inequality, so lifting the cap also moves the tax system toward being more progressive. That’s before we get to the MMT issue that “taxing” to fund any government activity is a political mechanism that is a holdover from the gold standard days, and not how government functions are funded operationally.

In fact, with more and more promised pensions being slashed, and investment returns flagging thanks to QE and ZIRP, the notion that ordinary people can save enough for their retirement is a chimera. Thus preserving and strengthening Social Security is more important than ever.


https://www.youtube.com/watch?x-yt-ts=1421914688&x-yt-cl=84503534&v=J82ctuhO030&feature=player_embedded

[Demeter]

70. Initial closing reports from Davos are---uninspiring

And when did they ever get around to talking about current reality? I think the reporters were locked out of anything worth reporting.

Or perhaps the 1% are really into Reality Avoidance this year.

[MattSh]

73. This year?

This century is more like it!

[MattSh]

72. I posted this a while back, but since it does fit the theme....

Hey, it's got Cossack dancing, and bears, and a Russian tank commander stealing the girl! It's got it all!

[Demeter]

74. Lawyers = Crime Enablers: Maine Bar Counsel Punts on Sanctioning Foreclosure Attorneys' Bogus Affida

Lawyers as Crime Enablers: Maine Bar Counsel Punts on Sanctioning Foreclosure Attorneys for Bogus Affidavits

http://www.nakedcapitalism.com/2015/01/lawyers-as-crime-enablers-maine-bar-counsel-punts-on-sanctioning-foreclosure-attorneys-for-bogus-affidavits.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Yves here. Upon occasion, we’ve commented on the critically important role that attorneys and accountants too often play as enablers of fraud and criminal activity. In essence, if you are an individual or business and you can get a lawyer to sign off on dubious conduct, the attorney has provided a critically important liability shield to you. Even worse, it is well-nigh impossible for wronged parties, such as victims of stock frauds, to sue the advisors, that make the investment look attractive. As we wrote in ECONNED:

Legislators also need to restore secondary liability. Attentive readers may recall that a Supreme Court decision in 1994 disallowed suits against advisors like accountants and lawyers for aiding and abetting frauds. In other words, a plaintiff could only file a claim against the party that had fleeced him; he could not seek recourse against those who had made the fraud possible, say, accounting firms that prepared misleading financial statements. That 1994 decision flew in the face of sixty years of court decisions, practices in criminal law (the guy who drives the car for a bank robber is an accessory), and common sense. Reinstituting secondary liability would make it more difficult to engage in shoddy practices.

One of the lines of defense is for attorneys general and regulators to intervene. Sadly, almost none have pursued this angle; a rare exception is New York Superintendent of Financial Services Benjamin Lawsky, has had the guts to go after one of the very most prestigious law firms in the US, Sullivan & Cromwell, for essentially making another firm, PriceWaterhouseCoopers, the bagholder for “scrubbing” a report to regulators on illegal wire transfers.

But for the most part, regulators and judges rely on state bar associations to police their own. One area where the abuses were large-scale and flagrant, robosiging, show how this sort of private regulation is a joke. Tom Cox, the Maine attorney who exposed GMAC’s document fabrications and made “robosigning” a national topic, shows how unwilling state bar associations are to make a serious go of punishing persistent, clearly documented misconduct....

DETAILS AT LINK

[Demeter]

75. IN A FEW HOURS, GREECE GOES TO THE POLLS

And our best wishes go with them!

Syriza faces a choice between capitulation and open sedition

http://www.versobooks.com/blogs/1824-frederic-lordon-syriza-faces-a-choice-between-capitulation-and-open-sedition

This Sunday, 25 January, Greeks will vote in parliamentary elections of potentially historic importance, with Alexis Tsipras’s Syriza coalition currently ahead in the opinion polls. But according to Frédéric Lordon, Germany’s grip on the situation and the Greek radical Left party’s own inconsistencies might condemn it to some painful acrobatics.

For a long time Europe has been caught in a constitutional trap of its own making, with its neo-liberal treaties offering just two ways out of the current impasse: 1) the financial collapse of the European project, under the weight of its own internal contradictions; or 2) some political mishap coming along that will overthrow the whole system. The ECB’s announcement of the OMT programme (1) has avoided the first of these eventualities – for now – which leaves the second. And that’s the reason why the ‘European-institutional party’ has come to see democracy not as a normal state of political life but rather as a permanent source of threats – and it thinks itself justified in using any means necessary to stamp them out...Without here questioning any further the real solidity of the barrier erected to outcome 1 (the OMT), let’s ask if it can really be true that, despite the degree to which political institutions have been taken away from us in almost all countries, there remains the slightest possibility of outcome 2 (short of an uprising proper, of course)? The Syriza experience (if there is one) will soon give us the answer. We can hardly say that the circumstances that Tsipras faces are ideal.

After all, Germany is very conscious of the present danger, and has tried to trip Syriza up already by saying that the Eurozone is indeed prepared to deal with a Grexit scenario. This is a way of fixing in advance the terms of the power relations that will inevitably take shape when a Syriza government makes known its plans for renegotiation.

On ‘the CDU’ and ‘selfishness’

In general these are difficult days for the pro-EU commentariat, dispirited as they are by its stubborn, rigid approach which – they understand well enough – ends up giving Europe a bad name. Seeking to contain their despondency, they have found just one solution – a two-sided one laying blame at the door of the CDU (2) (‘It’s not Germany doing it – it’s the German Right’) or indeed ‘selfishness’ (‘the Germans don’t want to pay for anyone else’). Clearly, this double explanation is a double error, as is immediately obvious when we note that the French ‘Left’ is a zealous member of the neo-liberal European project, as are all the parties of the Left (or rather, the left wing of the Right) in Europe. These parties are the functional equivalents of the CDU’s opponent, the SPD (3) – which is itself just as right-wing as they are. But we can also see this error in the lasting influence of a feeble ‘intellectual’ response that systematically relies on only moral explanations, or explaining things in terms of morality – in this case, ‘selfishness’, as if ‘sharing’ would resolve all our problems… Such is the poverty of a political construct that can only hope to mask its congenital flaws through appeals to virtue. Nothing about what Germany is doing has anything to do with ‘the Right’ or ‘selfishness’; and it has everything to do with standing up for principles – which have nothing to do with morals. These are monetary principles, ones inscribed in a collective, cross-party belief that took shape after the trauma of hyperinflation in 1923. Rightly or wrongly (wrongly, as it happens) they see this hyperinflation as the antechamber of the greatest disaster of all – Nazism.

So in the recurring negotiations with Greece, for Germany it’s not really a question of ‘paying’ or ‘not paying’. Rather, it’s about defending orthodox principles – balancing budgets, the complete independence of the central bank, forbidding any monetary financing of deficits – that Germany has made into an economic constitution, a substitute national identity, an imaginary rampart against social chaos, and the sine qua non condition of its participation in the single currency. Losing billions of euros – well, Germany would accept that without hesitation if Europe ever abandoned the monetary imperatives Germany has thus far imposed on it, forcing Germany – Germany! – to leave the Eurozone at the cost of reintroducing the Mark and torpedoing the country’s trade surpluses. Better that than transgress its principles. Better alone with its principles than having to put up with the company of the irresponsible.

Is Merkel bluffing? No.

..........................

There’s good reason to ask ourselves this, when we know all about the anxiety that surrounded the possibility of Greece leaving the Eurozone in 2012. Has anything changed that might give some credibility to Germany’s apparent new-found light-mindedness on this score? Yes, indeed, one essential thing did change: that is, thanks to the restructuring of the Greek debt in 2012. Its effect – after the private lenders had digested the haircut (4) – was to shift the greater part of the Greek debt onto public creditors, with the EU, the European Stability Mechanism (ESM), the IMF and the ECB together now holding some €254bn of the debt, as compared to €44bn for private creditors. The fears that a Grexit scenario inspired at that time were essentially linked to the reactivated systemic risk should the country default on a €360bn debt of which almost 85% was owed to private creditors. The very fact of restructuring showed that this fear had probably been overestimated, since the private creditors absorbed losses of between 50 and 70% of the debt’s nominal value without this causing any apparent damage. All the more so given that systemic risk is no longer on the table – ‘we can keep going’, concluded Germany, which has never stopped thinking about its own banks throughout this whole affair (6).

If it seems possible enough to control the specifically financial collateral damage resulting from a Greek exit/default, then how about the collateral political effect – the risk of contagion? We can be sure that one country leaving the Eurozone would be a thunder bolt, and there is every possibility that it would be emulated elsewhere. Not least in Portugal and Spain, which are set to hold elections in November and December respectively. But what would be the contagion effect of the Grexit experience at that point? It probably wouldn’t be at its most enticing, you’d have to fear. We must be honest enough to say that as well as the logistical difficulties of bringing back the Drachma, the imperfections in the imposition of capital controls, de facto super-devaluation, the immediate effect of imported inflation, the slower effect on Greece’s exports, and so on, would all mean the exit/default process likely beginning with a period of chaos. And it would take at least twelve and more likely eighteen months not just to stabilise the situation but also for the benefits of this to materialise. Whereas at the end of 2015 it would be at the bottom of the abyss – the worst possible image for a Euro-exit strategy, whereas the ‘we told you so’ pro-EU champagne socialists would be popping corks.

Isn’t there a weak point in the German gambit, though, marked as it is by an obvious contradiction? After all, Germany has declared in advance that it is opposed to any restructuring of the debt owed to public creditors if Greece does stay… but if it ever did leave, the Greek debt titles would be worthless. To announce that the slightest concession is intolerable, before then saying that you’d in fact agree to losing everything, at the very least shows a rather wobbly grip of logic. It’s not a very credible position. Yet there is no contradiction, here, unless you take a restricted view: I repeat, Germany holds its principles closer than its loose change. Refusing to give in on the Greek debt has nothing to do with a selfish desire to save money and everything to do with saving a monetary dogma. The same one that Germany imposed on the Eurozone, scrupulous adherence to which is the condition of its own participation, and for which it is ready to pay billions.

.............................................

This political crisis is a crisis of sovereignty, a crisis of the attempt to lift economic policy out of democratic debate and reduce it to an automatic mechanism enslaved to the values/instructions enshrined in the European treaties. In these conditions, the European institutions’ relationship with the member states can be nothing other than a matter of surveillance, and, indeed, taking them under administrative supervision when they go too far off course. That’s the same logic that the mutualisation of the debt – the fetish solution advocated by engineer-economists lacking in any political vision – would take to unheard-of levels. Even if Germany did agree to eurobonds (which it would initially have everything to lose from) it would only do so in exchange for an unprecedented disciplining mechanism, as soon as a formal joint guarantee was established. Can we imagine Germany (indeed, not only Germany) agreeing to put its signature on notes issued by Greece, Spain and Portugal… or even France, without being certain of the absolute rectitude of their economic policies? Meaning, these countries’ absolute submission to draconian regulations that would make today’s situation look like a holiday camp. So the Eurobonds would have the same characteristics that the single currency does now – including the pure and simple dispossession of sovereignty. After all, the EU institutions would take over direct control of the economic policy of any member state that made the slightest infraction. Or there would be an aggravated version of the current rule-by-troika, this now having been established as a permanent EU institution....Well, questioner, the EU project has long forgotten that it’s meant to be democratic...

Syriza’s salvation won’t come from any European compromise nor from the chimera of the EU reflecting for a bit and deciding to reorganise its institutions. Such a proposal is as lacking in political realism as it is certain to be put off till some future point that never stops drifting further away. But the inanity of these false solutions doesn’t mean that there aren’t real ones. There is always an alternative. And in this case, the alternative is not to bend over backwards for the EU’s sake, but to overthrow the whole thing.




Notes

[1] Announced in July 2012 and implemented that December, the OMT (Outright Monetary Transactions) programme authorises the EBC to buy up potentially unlimited volumes of Eurozone sovereign bonds. This decision had an almost instant effect on investment, and it was probably this that saved the euro during its third crisis point (June 2012), which had looked like it might be fatal.

[2] Germany’s governing Christian Democrats.

[3] German Social Democrats.

[4] A haircut means the reduction of a borrower’s debt within the terms of a restructuring of that debt.

[5] Which breaks down as EU, €53bn; EMS, €141.8bn; IMF, €32bn; ECB, €27.7bn (according to Flash Natixis, 5 January 2015, no. 12).

[6] Much like all other countries.

MUCH MORE AT LINK

By Frédéric Lordon --Translated by David Broder.

What a Syriza Victory Would Mean for Europe--COUNCIL ON FOREIGN RELATIONS

http://www.cfr.org/greece/syriza-victory-would-mean-europe/p36017

NOTHING GOOD, AS FAR AS THEY ARE CONCERNED

Syriza’s Moment by E. AHMET TONAK

http://www.counterpunch.org/2015/01/23/syrizas-moment/

Efklidis Tsakalotos was interviewed by E. Ahmet Tonak for sendika.org in Turkey. Tsakalotos has a doctorate from Oxford, is professor of economics at the University of Athens, a member of Parliament with SYRIZA and responsible for the economic policy of Syriza.

Ahmet Tonak: Why is it so important for Greece to stay within the EU in a period where so many centrifugal forces are threatening at it, when it presents neither economically, nor politically a promising future? Does the EU represent the sole viable international alternative to a withdrawal into the national state? Is it not worth to fight for a socialist alternative at the European level, i.e. a United Socialist States of Europe?

Efklidis Tsakalotos: Precisely because there are so many centrifugal political forces! We in SYRIZA have said from the very first moment that the euro is at risk not from progressive forces but from the policies of austerity. As we know all forms of fixed exchange rate systems are threatened in times of recession and mass unemployment. Progressive people should fear that the break up of the euro could lead to a straight re-run of the 1930s: competitive devaluations, rival nationalisms and worse.

Ahmet Tonak: Even if Greece remains within the EU, why is it so important for Greece to remain in the Eurozone, given that many countries, not only the Euro-sceptic UK, but also Sweden, a country smaller than Greece, have kept out of it from the beginning? Is it safe to assume that the euro will definitely be able to weather the storm? If not, then why take the risk of a collective bankruptcy?

Efklidis Tsakalotos: Our support for the European project is strategic, no just tactical, as the previous answer made clear. What SYRIZA has argued is that problems such as debt constitute supra-national problems that must be redressed at the supra-national level. But this also goes for a whole set of other problems: confronting financial markets and multinational corporations, tax competition among economies, climate change and so on.

The idea that what would follow a collapse of the euro would be a better basis for integration does not seem to be one that has the backing of history. Once again the specter of the 1930s looms large....

I GUESS THEY HAVEN'T GOTTEN THE OBAMA MESSAGE: LOOK FORWARD, NOT BACKWARDS! MORE AT LINK

[Demeter]

77. Greece’s solidarity movement: ‘it’s a whole new model – and it’s working’

OCCUPY GREECE!

http://www.theguardian.com/world/2015/jan/23/greece-solidarity-movement-cooperatives-syriza

Citizen-run health clinics, food centres, kitchens and legal aid hubs have sprung up to fill the gaps left by austerity – and now look set to play a bigger role under a Syriza government...

“A long time ago, when I was a student,” said Olga Kesidou, sunk low in the single, somewhat clapped-out sofa of the waiting room at the Peristeri Solidarity Clinic, “I’d see myself volunteering. You know, in Africa somewhere, treating sick people in a poor developing country. I never once imagined I’d be doing it in a suburb of Athens.”

MORE

[Demeter]

76. America's Losing the Currency War AS IT HAS FOR EVERY OTHER WAR IT STARTED

http://www.bloombergview.com/articles/2015-01-23/europe-just-started-waging-currency-war-on-the-u-s-

U.S. hedge fund manager Ray Dalio pointed out in Davos yesterday that talk of purposeful currency devaluation to make up for an economy's inefficiency -- the engine of currency wars -- is a "conversation that is not polite to have." He is, perhaps, a little behind the times. World leaders increasingly feel comfortable talking openly of their plans to drive down exchange rates.

Italian Prime Minister Matteo Renzi told The Wall Street Journal this week that his "dream" was parity between the euro and the dollar. Italian exports have been growing lately, averaging 33.2 billion euros ($37.4 billion) in the first 11 months of last year, 1.7 percent higher than in the same period of 2013, but Renzi hopes more support from the European Central Bank can make up for the fact that labor productivity in his country is just 72.8 percent of the U.S. level.

No wonder the phrase "currency war" is now part of the mainstream discourse, not just one of Dr. Doom Nouriel Roubini's stock scares. In Davos, Goldman Sachs President Gary Cohn said this week that the world has been in a currency war since Japanese Prime Minister Shinzo Abe's policies started pushing down the yen's rate two years ago. After that, Europeans felt the pinch and started devaluing the euro. Now the ball is in Japan's court again, and the U.S. is "just sitting here watching, being the one country whose currency is rallying because everyone else is trying to devalue." Only recently, Switzerland has joined the U.S. "We're happy to have them on that side of the ledger," Cohn said sarcastically.

MORE

[tclambert]

78. D'oh, I thought the theme would be the movie "Simon," a greatly underappreciated classic.

A think tank brainwashes Alan Arkin into thinking he's an alien.

[Demeter]

81. I confess, I've never seen nor heard of that one

I will have to look it up!

[tclambert]

90. Here's the ancient preview:

The doctor at the end is the one who convinced Simon he was an alien, but, Frankenstein-like, loses control of his creation.

[Demeter]

91. Pretty kinky for 1980

[xchrom]

84. An Iowa Crowd Had A Surprising Reaction When Donald Trump Bashed Mitt Romney And Jeb Bush

http://www.businessinsider.com/r-potential-republican-presidential-candidates-compete-for-support-in-iowa-2015-1

One message that emerged at the Iowa Freedom Summit, a day of back-to-back speeches by about eight potential Republican candidates, is that establishment names Jeb Bush and Mitt Romney have some work to do to gain support of grassroots activists should they decide to run.

That view surfaced when New York developer and celebrity Donald Trump declared to the audience that Romney, the 2012 Republican nominee, cannot be allowed to run a third time and that former Florida Governor Bush is weighed down by concerns about his education and immigration policies.

"You just can't have those two," Trump said. His statement was predictable, coming from a showboat billionaire who says he is considering his own White House run, and that this time he is serious.

But the reaction from the crowd was noteworthy. Many in the room applauded and cheered at the idea that Romney and Bush should not run. Neither man attended the forum.



Read more: http://www.businessinsider.com/r-potential-republican-presidential-candidates-compete-for-support-in-iowa-2015-1#ixzz3PpEVZe5N

[xchrom]

85. Britain's Oil 'Cash Cow' Is At Risk

http://www.businessinsider.com/afp-plunging-prices-threaten-uks-cash-cow-oil-industry-2015-1

London (AFP) - With oil prices tumbling and ageing equipment making extraction ever more expensive, Britain's North Sea oilfields face a struggle for survival, threatening a vital source of income and energy.

The oil industry has been hard hit by crude prices falling more than 50 percent since June to less than $50 a barrel.

Energy giant BP recently announced it was cutting 300 local jobs, mostly in the Scottish city of Aberdeen, Britain's oil "capital".

Others, including Shell and Chevron, warned late last year of similar scale cuts.



Read more: http://www.businessinsider.com/afp-plunging-prices-threaten-uks-cash-cow-oil-industry-2015-1#ixzz3PpF7qFQd

[xchrom]

86. DAVOS WATCH: ECB STIMULUS IN FOCUS, WTO DEAL HOPES RAISED

http://hosted.ap.org/dynamic/stories/E/EU_DAVOS_WATCH?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-01-24-11-01-20

DAVOS, Switzerland (AP) -- The World Economic Forum held in the Swiss ski resort of Davos has the official goal of "improving the state of the world." In practice, it's a massive networking event that brings together 2,500 heads of state, business leaders, philanthropists and artists.

Here are some glimpses of what's being discussed at Davos on Saturday, the forum's last day:

TRADE DEAL BACK ON?

Apparently agreeing to leave finger-pointing behind, trade ministers from many of the world's biggest economies have agreed to push this year to complete an elusive trade round launched in Doha, Qatar, in 2001.

Twenty-one members of the World Trade Organization - among them Brazil, China, the European Union, Japan, Russia and the United States - backed efforts to conclude the so-called Doha Round negotiations with the aim of dramatically lowering trade barriers and revising trade rules, according to Swiss Economics Minister Johann Schneider-Ammann.

[xchrom]

87. The Uber Economy

http://www.theatlantic.com/business/archive/2015/01/is-uber-a-middle-class-job-creator-or-not/384763/

In the last few years, Uber has gone through a life cycle that once took successful companies decades to complete—from start-up to upstart, from pushy disruptor to pushy behemoth, from iPhone button to cultural icon. Uber’s executives don’t like to associate themselves with the “sharing economy,” the smattering of firms that allow average Joes to sell access to their fallow goods and services (rent my empty home on Airbnb, buy my open 3 p.m. hour on TaskRabbit). The company’s ambitions, it says, are grander. But for now, the vast majority of drivers are behind the wheel of their own car. “Sharing” is, to be quite literal, the majority business of Uber.

This puts Uber squarely in the crosshairs of a debate about what exactly this peer-to-peer economy means for the future of the economy. (Like all discussions that include the term “future of the economy,” this can amount to little more than rounding up some very recent developments and projecting forward 10 years with jaunty confidence.) Are these new companies creating value from nothing, or destroying the value of the formal economy? Are they inventing new, flexible ways for underemployed Americans to work, or are they contributing to the destruction of full-time jobs?

The typical Uber driver is a college-educated man, married with kids, who is supplementing a full- or part-time job with about 15 hours of driving a week, logging 20 to 30 trips, and earning an extra $300 to $400 a week (before factoring in the cost of gas and upkeep). That’s according to a new paper by Alan Krueger, the eminent Princeton economist who served as chairman of President Obama’s Council of Economic Advisers, working with Uber’s head of policy research, Jonathan Hall. Krueger and Hall based their research on both Uber's data and an online survey of 600 Uber drivers in 20 markets, including New York, Washington, and San Francisco.

The best way to review the paper's factoids is to flip through the pretty pictures. Uber's growth exploded in late 2013 thanks to the rise of its cheaper uberX program, which now accounts for more than 80 percent of its drivers. The largest market of uberX drivers is Los Angeles. The fastest-growing are new entrants Miami and Austin.

[xchrom]

88. The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs

http://www.epi.org/publication/the-manufacturing-footprint-and-the-importance-of-u-s-manufacturing-jobs/

While U.S. manufacturing has been hit hard by nearly two decades of policy failures that have damaged its international competitiveness, it remains a vital part of the U.S. economy.

The manufacturing sector employed 12 million workers in 2013, or about 8.8 percent of total U.S. employment. Manufacturing employs a higher share of workers without a college degree than the economy overall. On average, non-college-educated workers in manufacturing made 10.9 percent more than similar workers in the rest of the economy in 2012–2013.

This report examines the role manufacturing plays in employment at the national, state, and congressional district levels, including the number of jobs manufacturing supports, the wages those jobs pay, and manufacturing’s contribution to GDP. (This report updates an earlier EPI report but includes U.S. congressional district data for the first time.) The data show that manufacturing employment was stable for three decades until 1998, and has been on a largely downward trajectory since then, with traditional manufacturing states hit particularly hard. Given its size and importance, we cannot ignore the consequences of such a decline. Further, the policies that would help manufacturing the most are those that would help close the nation’s large trade deficit. Reducing this trade deficit would, in turn, provide a valuable macroeconomic boost to a U.S. economy that is still operating far below potential.

[xchrom]

89. “Right to Work” Is the Wrong Answer for Wisconsin’s Economy

http://www.epi.org/publication/right-to-work-is-the-wrong-answer-for-wisconsin/

Four years after Wisconsin severely restricted public employees’ right to collective bargaining, state legislators may soon consider whether to make Wisconsin a so-called right-to-work (RTW) state.

RTW laws have nothing to do with anyone being forced to be a member of a union, or forced to pay even a penny to political causes they do not support; that’s already illegal under federal law. What RTW laws do is to make it illegal for a group of unionized workers to negotiate a contract that requires each employee who enjoys the benefit of the contract to pay his or her share of the costs of negotiating and policing it. By making it harder for workers’ organizations to sustain themselves financially, RTW laws aim to restrict the share of employees who are able to represent themselves through collective bargaining, and to limit the effectiveness of unions in negotiating higher wages and benefits for their members.

A range of national evidence shows why Wisconsin lawmakers should reject RTW:

RTW is associated with lower wages and benefits for both union and nonunion workers. In a RTW state, the average worker makes 3.2 percent less than a similar worker in a non-RTW state.

Through weakening unions, RTW hurts the middle class. As union membership has declined in recent decades, the share of overall income received by the middle class is essentially at a 45-year low.