Moon of Alabama Brecht quote
July 29, 2021

China Cracks Down On Tech - Its People Benefit

Back when Stephen S. Roach was Morgan Stanley's chief economist Moon of Alabama often quoted from his columns. Fifteen years ago Roach spoke out against globalization and emphasized the need of labor power. His takes stood in stark contrast to the conventional wisdom of that time. Roach retired from Morgan Stanley around 2011 and has since been a senior lecturer at the Yale School of Management.

While I had not read Roach for some time I today stumbled over a column of his which I find astonishingly wrong and badly argued.

Roach writes about China's recent clamp down on fin-tech, internet monopolies and private education companies:

China’s regulation of its spirited tech sector could be a tipping point for the economy

The subtitle is a good summary of the column:

There are legitimate reasons for China’s anti-tech campaign, but when the full force of regulation is used to strangle the business models and financing capacity of the economy’s most dynamic sector, it weakens confidence and the entrepreneurial spirit

China has recently cracked down and financial consumer services, hail services and private education companies. Alibaba's fintech spin off Ant was prohibited from going public. Didi, the Uber of China, went public in U.S. capital markets even though it been warned not to do so. Its apps were taken down and it will have to pay a severe fine. Other tech companies are also under pressure says Roach:

Moreover, there are signs of a clampdown on many other leading Chinese tech companies, including Tencent (internet conglomerate), Meituan (food delivery), Pinduoduo (e-commerce), Full Truck Alliance (truck-hailing apps Huochebang and Yunmanman), Kanzhun’s Boss Zhipin (recruitment), and online private tutoring companies like TAL Education Group and Gaotu Group. And all of this follows China’s high-profile crackdown on cryptocurrencies.

It is not as if there were a lack of reasons – in some cases, like cryptocurrencies, perfectly legitimate reasons – for China’s anti-tech campaign. Data security is the most oft-cited justification.

This is understandable in one sense, considering the high value the Chinese leadership places on its proprietary claims over big data, the high-octane fuel of its push into artificial intelligence. But it also smacks of hypocrisy in that much of the data has been gathered from the surreptitious gaze of the surveillance state.

The issue, however, is not justification. Actions can always be explained, or rationalised, after the fact. The point is that, for whatever reason, Chinese authorities are now using the full force of regulation to strangle the business models and financing capacity of the economy’s most dynamic sector.

Stephen Roach thinks, wrongly, that it is bad to restrict certain business models and financing through public offerings. But from China's point of view it makes perfect sense. Why should it care how much money foreign investors lose by that:

Beijing is pursuing other goals: reining in the power of its tech titans and boosting startups; protecting social equality; and making sure the cost of living in cities isn’t so high that families aren’t willing to have children. And Beijing is suspicious of companies that are skilled at raising capital overseas—beyond its watchful eye.
Sometimes, China might feel it’s being hijacked by hot foreign money. For example, Beijing wanted to scale down investment in for-profit education as early as 2018, but venture capital kept pouring in. Now the lucrative bet has been called to a halt.

Or consider geopolitical risks. Because of the [variable interest rate corporate] structure, in theory, DiDi, which is incorporated in the Cayman Islands, didn’t need Beijing’s approval to list in New York. But China’s cybersecurity office was concerned enough about DiDi’s data security—such as possible exposures to sensitive government locations—that it suggested the company postpone its IPO. DiDi ignored the warning, and we all know how it’s turning out.

The companies Roach listed are largely monopolies. They often buy up competitors and thereby, like Microsoft does in the U.S., prevent innovation. Moreover Alibaba's Ant tried to be a bank without being regulated as one. It promoted consumer credit and pulled people into debt. The delivery services and hauling services abused their workers. The tutoring companies took extremely high prices and distorted the otherwise equal chances between pupils, the basis of China's meritocracy.

All that is enough reason to strongly regulate them. But what was probably even worse is that the greedy owners of those companies planned to go public in western capital markets. They would thereby fall under foreign regulators and foreign laws. Other countries would probably gain access to the data they collect and use that against China. On top of that foreigners would gain the profits the companies make in China. At a time of a longer conflict between the U.S. and China it is better for Chinese companies to stay at home.  If these companies really need more capital to grow they can find enough in China and do not need to go abroad.

Socialism with Chinese characteristics simply does not prioritize speculative capitalism over other values.

Stephen Roach knows that but he dislikes it. He argues that the regulation crack down on those companies diminishes the confidence in China. That is correct with regards to the confidence of 'western' speculators. But Roach argues, without evidence, that the clamp down will also hit the confidence of Chinese consumers who will thereby spend less:

Nor is the assault on tech companies the only example of moves that restrain the private economy. Chinese consumers are also suffering.

Rapid population ageing and inadequate social safety nets for retirement income and health care have perpetuated households’ unwillingness to convert precautionary saving into discretionary spending on items like motor vehicles, furniture, appliances, leisure, entertainment, travel, and the other trappings of more mature consumer societies.
The reason is that China has yet to create a culture of confidence in which its vast population is ready for a transformative shift in saving and consumption patterns.
Confidence among businesses and consumers alike is a critical underpinning of any economy.

But why should a crackdown on abusive conglomerates diminish Chinese consumer confidence. Might it not do the opposite?

Roach does not think so:

Modern China lacks this foundation of trust that underpins animal spirits. But while this has long been an obstacle to Chinese consumerism, now distrust is creeping into the business sector, where the government’s assault on tech companies is antithetical to the creativity, energy and sheer hard work they require to grow and flourish in an intensely competitive environment.

I have frequently raised concerns about the excesses of fear-driven precautionary saving as a major impediment to consumer-led Chinese rebalancing. But the authorities’ recent moves against the tech sector could be a tipping point. Without entrepreneurial energy, the creative juices of China’s New Economy will be sapped, along with hopes for a long-promised surge of indigenous innovation.

Why should people not save for their old age and consume on 'trappings' instead? Why should they take up credit? Why should they accept abusive monopolies and financial speculation?

Roach's argument is disingenuous as he answers none of the above questions.

Others, like Berkshire Hathaway's vice chairman Charlie Munger, are much wiser:

Berkshire Hathaway vice chairman Charlie Munger praised the Chinese government for silencing Alibaba's Jack Ma in a recent interview, adding that he wishes US financial regulators were more like those in China. "Communists did the right thing," Munger, the 97-year-old longtime friend of Warren Buffett, said about the handling of Ma, who criticized officials in Beijing last year for stifling innovation.
Although he would not want "all of the Chinese system" in the US, Munger did say "I certainly would like to have the financial part of it in my own country."
Munger also told CNBC's Becky Quick that while "our own wonderful free enterprise economy is letting all these crazy people go to this gross excess," the Chinese "step in preemptively to stop speculation."

China has decided to live by producing stuff instead of by betting on financial speculation. It does not favor the finance, insurance and real estate (FIRE) sectors which dominate the U.S. economy. Unlike the U.S. China puts socialism before shareholders which in the end increases consumer confidence:

The Hang Seng Tech index, launched with fanfare last July and comprising internet darlings-turned-gargantuan blue chips such as Tencent and Alibaba, has cratered 40% since February to record lows.
Investors have so far responded with alarm that tipped on Tuesday towards panic. They dumped health stocks in anticipation the sector will be next in the firing line, even as the property and education sectors reel.

Housing, medical and education costs were the “three big mountains” suffocating Chinese families and crowding out their consumption, said Yuan Yuwei, a fund manager at Olympus Hedge Fund Investments, who had shorted developers and education firms.

“This is the most forceful reform I’ve seen over many years, and the most populist one,” Yuan said. ”It benefits the masses at the cost of the richest and the elite groups.”

With the crackdown on the big tech companies smaller ones will have a chance to grow. Workers will get better wages. Consumers will no longer have to spend on much too expensive services.

Now what are the real reasons why you think that is bad, Mr. Roach?

Posted by b on July 29, 2021 at 17:08 UTC | Permalink

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Posted by: Paul | Jul 30 2021 16:05 utc | 97

Thanks for that link, how tech is understood is quite revealing, the soviet shuttle Buran was the first space ship -back in 1988- that went to space and returned to earth in automatic mode without pilots, sort of a space drone, with a computer named Biser-4, clock speed of 4Mhz and 128K of memory. Any smartphone today would multiply that computing power by an amazing amount, and all we have got out of those amazing processors and enormous quantities of memory is tikTok clips.

And that's what I meant when I complained about trying to rescue a computer that is not older that ten years, as consumers instead of instructing ourselves about some of the inner workings of computing which after all is basic high school mathematics and logic, we as a herd have been directed to the "what can I do for you today”, falling in the trap of buying the washing machine and the programs to wash apart, and having to renew them every six months, hail Bill Gates and his "business model" which now it seems he wants to apply to the vaccine world.

Posted by: Paco | Jul 30 2021 16:41 utc | 101

@2 above I linked to this article, "Living in China’s Technological Miracle", but judging from the commentary, few bothered reading it. I find it difficult to choose which set of stats to excerpt as they're all extremely remarkable, but I'll use these:

"With internet-related industries taking a huge step, the country has rolled out 916,000 5G base stations, accounting for 70 percent of the world's total, and it's now home to over 365 million 5G-connected devices, making up 80 percent of the world's total, according to latest official data.

"The country's rise as a global leader in the 5G era, with domestic heavyweights including Huawei sitting atop the world's 5G-related patents, has unnerved the US in particular. Feeling frequently on edge over the past few years, the US government has gone to desperate lengths to add a rising number of Chinese entities and businesses to its export control and sanction lists....

"In a fresh sign, Shanghai, where its Pudong New Area has recently been declared to be built into a pioneer area for socialist modernization in the coming decades, on July 21 unveiled a plan for the development of strategic, emerging industries during the 14th Five-Year Plan (2021-25). The development plan prioritizes breakthroughs in 6G core technologies and the active participation in 6G standardization competitions."

China will have 6G before US-based telecoms finish emplacing their 5G networks, which they now lie about by saying they're complete. Then there's Quantum Computing, which the article didn't mention. The Chinese cat is showing its much better at catching mice than the Western cat causing the West to be both stunned and envious.

Posted by: karlof1 | Jul 30 2021 16:42 utc | 102

Posted by: vk | Jul 30 2021 15:39 utc | 94

China and Russia are certainly not third world countries. GDP per capita of US$24,000 and US$27,000 at PPP. Portugal is US$34,000 and is considered to be a developed country, Greece is US$28,000. At current growth rates China will be ahead of Greece very shortly, Portugal this decade. Of course, within China there will be regions (e.g. Shanghai) with GDP per capital and population levels equal to Germany.

Brazil has de-developed in the past couple of decades, with the economic share of the extractive and agricultural sectors increasing and manufacturing decreasing. The GINI is 53.4 with a GDP per capita PPP of US$17,000 (US$8,700 at market exchange rates), so the vast majority are poor (significantly poorer than in Russia or China) with a tiny rich elite. The land of the favelas.

Posted by: Roger | Jul 30 2021 17:06 utc | 103

@ karlof1 (#100),

It is all about VALUES and not catching mice. Imperialists are the best in catching mice and STEALING LIVES.

What are West’s core values?
China’s values: “The 12 values, written in 24 Chinese characters, are the national values of "prosperity", ... "civility" and "harmony"; the social values of "freedom", "equality", "justice" and the "rule of law"; and the individual values of "patriotism", "dedication", "integrity" and "friendship".”

Who are leaders with integrity in the West?
It seems like there are no leaders with integrity in the West, as none can name any. Is the West morally, intellectually and soon financially bankrupt?

Who are the citizens with moral courage in the West?
One isn’t seeing any citizens protesting about their enslavement, abuses and looting. It looks like the West is full of DISQUALIFIED citizens.

Where are the good citizens of the West?

Posted by: Max | Jul 30 2021 17:14 utc | 104

@guidoamm #84
You're in a hole and you keep digging.
Overspending is not the issue itself. China has been executing much the same scale of "overspending" as the US. The difference is not in the relative amount spent but in the results achieved.
If you "overspend" but get double digit GDP growth rates, that's perfectly fine. If, on the other hand, you go from $9T debt to $28T debt even as your people, infrastructure, etc do not improve - then clearly this was a mistake.
Secondly, "Ooverspending" at a sovereign level is impossible unless said sovereign borrows money in foreign currencies. The biggest trap the US via the IMF and World Bank lay for 2nd and 3rd world countries is the gigantic dollar loans which can only be used for things which benefit the US and/or which hurt the borrower's economy (i.e. austerity).
Until you extricate yourself from whatever bad sources of financial ideology you are presently basing on, you're simply not going to be a credible source of any wisdom.
A historical source of "overspending" bullshit is the libertarians and their Mises/von Hayek gods - both of which were literally parasites supported by rich sponsors. An offshoot would be Stockman - another example of useful idiot.
Ultimately, those with cash to devalue don't want it to happen and are happy to fund ideological partisans such as the above to carry their political water - yet ultimately a sovereign government has the capability to make choices which hurt some people but benefit most. The tragedy of the United States for the last generation is that this government has utterly given up any attempt at its fiduciary duty towards its people in favor of self-enrichment via favoring the PMCs, billionaires and what not.

Posted by: c1ue | Jul 30 2021 17:18 utc | 105

@Max #98
How deliciously ironic that you cite Amazon as an example.
Amazon is unquestionably a net negative for the people of the United States. It is Walmart online.
But it makes Walmart look like a piker. The Waltons created a behemoth by streamlining the destruction of American production via the mass-importation of imported goods (largely from China).
Amazon redoubles this by removing even the crappy jobs and tax base created by Walmart - but with the extra benefit of bypassing sales tax for a decade-plus and ongoing sidestep of all local/state regulatory requirements.
Apple is another fine example. They make nice products, but the reality is that they sell to the PMCs and oligarchy. It is like saying Gucci is a major driver of the Italian economy - which it absolutely is not.
Zara, Zegna - consumer clothing. Really?
What builds a nation is infrastructure and cost basis. Not a single one of those companies does a damn thing to benefit there.
Audi, BMW, Toyota: export machines which benefit enormously from home country subsidies and sell to the wealthy in other countries.
You really need to at least try to understand the difference between limousine liberal mercantilism and real nation building: reducing rentier impacts on food, housing, utilities and transportation; improving communications, education, infrastructure and so forth. In this respect, Huawei and Cisco have made material contributions to their respective economies even as Apple does not and never will.
If every Apple product in the world magically disappeared, people would be mad but they'd switch over to a Samsung or whatever and life would go on. If every Huawei or Cisco product magically disappeared, people would die.
That's the difference between something real vs. something nice but ultimately unimportant.

Posted by: c1ue | Jul 30 2021 17:28 utc | 106

China is doing almost everything right these days. Their outreach to Taliban is a clear sign they have the balls to call it and also the dare to cut the crap.

This is all about the pipeline from Iran to Xinjiang. This is going t benefit both Iran and China massively, while Taliban gets a fat transit fee revenue stream. Iran standard of living will boost; Afghanistan will get deerly needed revenues for requilding their country and China gets more predictable oil supplies less dependent upon vulnerable shipping lanes.

I can see China brokering a long-lasting peace between Shiah Iran and the Sunni Afghans. After all, the Taliban are not the Saudi Wahhabbi gang on CIA/Israel payroll.

This is Chinese wisdom and collected behavior in action. Once the pipelines from Siberia is completed their oil supplies are virtually 100% secure. The US "freedom of navigation" bullying will likely disappear very fast.

Posted by: Harald | Jul 30 2021 17:29 utc | 107

Max @104--

Clearly, you're unfamiliar with the famous adage by Deng Xiaoping. Here it is with some context:

"Deng Xiaoping, in the 1970s, placing pragmatism at the heart of party governance, as opposed to ideological rigidity. As Deng famously said, 'It doesn’t matter what colour the cat is as long as it catches the mouse,' and on that premise justified the reform of China’s economy, mixing socialist ideas with market methods."

Deng chose pragmatism as the vehicle to advance the #1 value of China's longstanding civilization and the CCP's goal--the uplifting of its people.

Posted by: karlof1 | Jul 30 2021 17:42 utc | 108

Peter AU1 @59

No one is denying that Ukraine had BUKs in position. That is covered in the article I linked (did you read it?):

The Downing of Malaysian Airlines MH17: The Quest for Truth and Justice. Review of the Evidence

The article goes onto summarise the evidence (that is in the public domain) but which dogmatic advocates of a BUK shoot down refuse to allow into their worldview:

"The Flight Path of MH17 Was Changed? July 17 Plane Route was over the Ukraine War-zone

The maps" (see the above linked article) "clearly indicate a change in flight path for Malaysian airlines MH17 on July 17. They also indicate on the map the two regions of Ukraine which are part of the warzone, namely Donetsk and Lugansk.

The first dynamic map compares the two flight paths:

• It indicates the regular flight path on July 16th which takes the plane in a Southeasterly direction across the Sea of Azov.

• The second flight path which is that of July 17th takes the plane over the Donesk oblast warzone, bordering onto Lugansk oblast.

The information conveyed in these maps suggests that the flight path on July 17 was changed.

MH17 was diverted from the normal South Easterly route over the sea of Azov to a path over the Donetsk oblast.

Who was behind the change of the flight path? And why was the flight path changed?"


"All the eyewitnesses interviewed by the BBC confirmed the presence of a Ukrainian military aircraft flying within proximity of Malaysian Airlines MH17 at the time that it was shot down:

• Eyewitness #1: There were two explosions in the air. And this is how it broke apart. And [the fragments] blew apart like this, to the sides. And when …

• Eyewitness #2: … And there was another aircraft, a military one, beside it. Everybody saw it.

• Eyewitness #1: Yes, yes. It [second aircraft] was flying under it, because it could be seen. It was proceeding underneath, below the civilian one.

• Eyewitness #3: There were sounds of an explosion. But they were in the sky. They came from the sky. Then this plane [second plane] made a sharp turn-around like this. It changed its trajectory and headed in that direction [indicating the direction with her hands]."

"Several other reports and eyewitness testimonies confirm the presence of a second aircraft. Of significance is a December 2014 report by Komsomolskaya Pravda which conducted an interview with a Ukrainian serviceman.

While the substance of the interview (translated from Russian) is contradictory it nonetheless suggests the presence of a second aircraft as confirmed by the suppressed BBC report."

Monitoring OSCE team did not found evidence of a missile fired

"The monitoring OSCE team has not found evidence of a missile fired from the ground as conveyed by official White House statements. As we recall, the US ambassador to the UN Samantha Power stated –pointing a finger at Russia– that the Malaysian MH17 plane was “likely downed by a surface-to-air missile operated from a separatist-held location”:

The team of international investigators with the Organisation for Security and Cooperation in Europe (OSCE) are uncertain if the missile used was fired from the ground as US military experts have previously suggested, the Wall Street Journal (WSJ) reported. (Malay Mail online, emphasis added)

The initial OSCE findings dispelled the claim that a BUK missile system brought down the plane.

Evidently, inasmuch as the perforations are attributable to shelling, a shelling operation conducted from the ground could not have brought down an aircraft traveling above 30,000 feet."

"No firm evidence that a BUK missile had actually been fired on July 17th 2014

Expert analysis confirms that the firing of a BUK missile would have left a visible white vapor trail in the sky for about ten minutes after firing (see below).

According to witnesses in Donesk oblast, no vapor trail was seen in the sky on that day. What they saw was a second plane.

There were various images of smoke trails presented and analyzed. (see the BBC documentary). These pictures however do not correspond to a clearcut white vapor trail associated with the launching of a BUK missile.

There were no satellite images or photographic evidence of a vapor trail."

"Report of the Russian Union of Engineers (RUE)

A detailed and comprehensive report by the Russian Union of Engineers (English translation) largely corroborates the presence of a Second Aircraft (confirmed by eye witnesses, BBC interviews).

“… Russian air traffic control recorded the ascent of a Ukrainian Air Force aircraft, presumably an Su-25, in the direction of the Malaysian Boeing 777. The distance between the SU-25 aircraft from the Boeing 777 was between 3 and 5 km.”

The RUE report also corroborates the “bullet hole” analysis as well as the statements of the OSCE and Peter Haisenko (mentioned above):

• A detailed analysis of its fragments can provide a more complete picture of the causes of the crash. … you can see the different forms of damage to its shell or skin – tears and factures, holes with folds on the outer and the inner sides of the fuselage, tell- tale signs of a powerful external impact on the plane.

• Of particular note are the holes folded inward in the fuselage. They are round- bored, and usually grouped. Such holes can only be formed by metal objects with a circular cross-section, possibly rods or shells from an aircraft gun. The question arises: who could deliver such projectiles to the aircraft, by what means, and what might they look like?"

Posted by: ADKC | Jul 30 2021 17:47 utc | 109

@ c1ue | Jul 30 2021 17:28 utc | 106... good examples and analogies.. thanks...

Posted by: james | Jul 30 2021 18:05 utc | 110

@ c1ue (#106),

Amazon, Apple,... serve their customers well. You’re missing the key drivers of their decisions and making accusations without understanding reality. One would blame their decisions on Americans craving for CHEAPER products. It is unfortunate that Americans income for the low and middle class aren’t increasing.

“Anyone who does not understand history as a chain of decisions and events and instead always takes only the end link of a long chain into account – will not understand anything at all.”

Remember, Apple built the best manufacturing plant in Fremont, California. Initially, Apple & Mac computers were made there. In 1990, Windows was introduced and Asian manufactures started selling PCs in the U$A. Americans started purchasing those low cost no-brand PCs and Windows became the market leader. Macintosh was still made in the United States and expensive, its market share became stagnant. Yes, Apple made some business mistakes. It had to adopt to the PC world and manufacturer in Taiwan and China to SURVIVE. Why weren’t Americans purchasing Macs made in the United States and purchasing cheaper PCs?

Amazon, is just a big market with great customer experience and service. Amazon isn’t driving the DEMAND, they are just a service provider. They sell American, German, Japanese,... products. Let the best product win! It is the customers that decide “what to buy.” If customers buy American products, they will supply those. It is different from Walmart which limit choices.

Americans need to understand the key differences between Industrialists (Steve Jobs, Elon, Jeff, Andy Grove,...) and Speculators/International Financiers. The former are nation’s assets and latter liabilities. Very few Americans help their entrepreneurs, who go through a hell to build those companies. One can’t ignore failed entrepreneurs, who don’t have much support networks. They don’t even get unemployment benefits. Why?

If we want a better nation then we need to have INTEGRITY, which includes Empathy, as a core value.

One can only lead by examples. What are U$A’s core values?

Posted by: Max | Jul 30 2021 18:10 utc | 111

@ karlof1 (# 107),

I am familiar with the adage by Deng Xiaoping. However, do you really understand its real meaning? The words “catches the mouse,” means OUTCOMES. Focus on the RESULTS. Eric Li has emphasized this point many times. It means the system needs to be outcome driven and not procedural, but pragmatism to deliver results.

What drives good outcomes for nation’s success? Good values, shared vision, pragmatism, execution, accountability,... Culture is the SOUL of a nation. Culture is defined by VALUES. The power of culture is deeply embedded in the vitality, creativity, and cohesion of a nation. Strategy without culture is powerless; but culture without strategy is aimless.

Even evil practices pragmatism to survive and enhance control. The Western cat that you’re talking about is focused on building a global empire and wants ALL mice. The very fact you can’t state West’s values, name West’s leaders with integrity, citizens with moral courage, ... shows the DARK SOUL of the Western cat. Greed is a bottomless pit.

“Corrupt citizens breed corrupt rulers, and it is the mob who finally decides when virtue shall die.”

Posted by: Max | Jul 30 2021 18:55 utc | 112

@Max #110
What is really sad is that you've bought the marcom department's bullshit hook, link and sinker without apparently even attempting to understand what really goes on.

Amazon serves their customers well - the same can be said for the Stasi.
Creating a parasitic business that induces a net negative for its host economy is not what a sovereign nation would consider a success. You say Apple has served its customers well? Who are Apple's customers, really? Apple products were *always* extremely expensive. Kudos to their accurately gauging just how to maximize revenue on product, but that's the same strategy Microsoft and other monopolists employed.
Furthermore, Apple's products are so expensive that they could easily manufacture their products in the US. But of course, Apple doesn't actually care about regular Americans (or Chinese or Europeans), they only care about the their core PMC/oligarch customer base.
What you still don't understand is that these companies have great customer service because they extract maximum profit from their customers - and serve only the small percentage of people who can afford their products.
Is that praiseworthy in a generic sense? Sure but it isn't anything like building a company that actually helps everyone.
The Department of Motor Vehicles in any given state is generally an awful experience - yet people get driver's licenses and are tested to see if they have some minimal experience of the rules of the road and basic driver process/safety.
How useful would a DMV be that served the 10% amazingly well but ignored the 90%?
So no, I know exactly where you are coming from and explicitly reject this thinly disguised neoliberal nonsense for what it is.

Lone Skum: smart guy, serious cokehead (I've been in several parties where he was present). But his main talent is the harvesting of government money. Tesla, Solar City and SpaceX derive literally billions from both state and US federal governments.

Andy Grove: He did well with Intel, but he also had no problem with monopolistic tendencies. I worked in AMD in the mid 1990s; in that era, we had created a processor that was superior to the top line Intel process in raw performance. To be fair, it was because we continued to focus on raw speed whereas Intel (under Grove) had decided to focus more on power efficiency.
Rather than compete in the market, Grove and his minions correctly ascertained that we at AMD could not manufacture our high end processors anywhere except in the AMD Texas fab - and that fab had a distinct capacity limitation.
Their response was to slash top end processor prices while (very) slow rolling the price reductions in the older lines, reductions which normally occur with new generation processor introductions. This was an out and out market dominator play - Intel knew they would continue to sell 85% of all the processors out there because they had the capacity and AMD didn't. But by slashing top end prices, they ensured that AMD could never generate enough revenue to increase market share/capacity. Oh and a big honking pile of money went to the Clinton Administration/Democrat party to ensure that the anti-monopolists wouldn't get into the action.
Your list of notables is weak and clearly not thought out.
I personally have more respect for people like Ross Perot - who correctly identified that outcome of NAFTA and publicly campaigned against it, even ran for President, as opposed to bathing in the adulation of fanbois and snorting cocaine.

Posted by: c1ue | Jul 30 2021 20:56 utc | 113

@ c1ue (#112), Please be realist. There is no perfect human being or an entity. What is best efficiency from a machine?

I personally know these industrialists and they were individuals with pragmatism and excellent creativity. They worked hard and made sacrifices. Checkout Laurene jobs philanthropy. Why don’t you name individuals and companies that are good examples? Are there none. Why is no one stating West’s values, West’s leaders with integrity, citizens with moral courage, ... ?

DMV is no better. With people traveling less over the last two years, did they discount car registration fees by 25% like insurance companies? DMV and everyone can do better.

Let’s see your list of notables.

Posted by: Max | Jul 30 2021 21:23 utc | 114

Duncan Idaho @37: "Like all other Marxist Governments, this one has never gotten to the "dictatorship of the proletariat" stage."

You do know that the CPC has nearly 100 million members, right? Those CPC members do not just occasionally vote for political prostitutes owned and vetted by business elites like people in the West imagine party membership to entail. It is more accurate to think of the nearly 100 million CPC members as a mammoth distributed congress or parliament. They are certainly not all financial or business elites, though a few may be, but the ones I met seemed very much working class.

Remember that the CPC is very rigorously meritocratic, so the members that end up in highly visible positions tend to be very capable individuals. You could think of them as being "elites" in the sense that they are among the best at what they do, but they are not the wealthy capitalist elites that run western countries by buying political prostitutes (that's a capital crime in China, and rightly so).

What do you imagine "dictatorship of the proletariat" is supposed to look like?

Posted by: William Gruff | Jul 30 2021 21:51 utc | 115

Serious question to all you China worshipers...
When are you moving there?
When are you taking your family and moving to what is clearly the greatest nation on the planet?
Please share your plans of your upcoming move here and now.
Convince me that I won't be imprisoned for being a Muslim, or accused of being a spy, or have my business stolen at the whims of the CCP.
I'm not holding my breath....surprise me!

Posted by: JoeG | Jul 30 2021 21:56 utc | 116

Cory Doctorow wrote about Arise - a scam company I've known about for a few years. Arise's model predates Uber and is yet another evolution of the "putting out" scam invented in the early industrial era:
Pluralistic article on Intuit and Arise

Intuit customer service whistleblower revealed another scandal, one that sprawled outside of Intuit and spilled over into the world's largest blue-chip companies from Disney to Airbnb to Comcast and more.

That was the story of Arise, yet another cult-like business that you have almost certainly interacted with, without knowing it.

On its surface, Arise is an outsource customer service company. Other businesses pay it to staff their phones and answer customer queries.

But Arise is many other things. For one thing, it's a pyramid scheme: the people who work for it – disproportionately Black women – are not classed as employees, but as "contractors." They are paid for recruiting their friends to work for it.

That might sound like a nice way to help a business staff its call-centers, but you need to understand that Arise has no call centers or staff – its workers take calls from their homes.

Those workers aren't employees – they're misclassified as "independent contractors."

If you want to work for Arise, you have to pay them for the privilege. Not only do you have to buy a computer and phone, you have to pay to get trained for each firm whose calls you'll be taking.

If you quit, you have to pay Arise for "early termination" of your contract.

Believe it or not, those are the best parts of working for Arise. When you are an Arise worker, you can be terminated without notice or cause – forfeiting the money and time you spent for training and equipment. You can get fired by Arise itself, or by any of its customers.

Reps from Arise and its customers listen in on your calls. If your children make noise in the background, you can lose everything. Same if your neighbor's dog starts barking. Forget about running a fan or air conditioner – the noise is "unprofessional."

The Arise story prompted outrage from the public – and it sent Propublica's investigators deeper into the story. They documented how the Department of Labor knew about Arise's illegal and abusive conduct, and let them get away with it for years.

And here's the most amazing part: Propublica never stopped reporting on this story. This month, Ariana Tobin, Ken Armstrong and Justin Elliott worked with Brooke Stephenson to tell Arise workers' stories in their own words.

These stories reveal Arise's lies about its working conditions, as workers describe how they were unequivocally ordered never to hang up on customers, even in the face of death and rape threats, racist abuse, and sexual harassment.

Arise may tell regulators and reporters that its workers are empowered to hang up the phone if the man on the other end is masturbating, but the women who endure this abuse tell a very different story:

The writers connect Arise's working conditions with the promises made by temp agencies for generations – companies like "Kelly Girl," who promised a disposable, attractive, pliable and hardworking woman whom a company could work like a government mule and then discard.

Arise preys on the economically precarious and traps their whole families into literal conspiracies of silence, as spouses and children tiptoe around their homes to spare their mothers the economic catastrophe of being summarily fired.

The powerful words of the women answering these calls are a reminder of the human cost of systemic racism and sexism, and the willingness of the world's largest companies to exploit it.

Great customer service - based on terror, financial blackmail and outright illegal practices.

Posted by: c1ue | Jul 30 2021 22:12 utc | 117

“Corrupt citizens breed corrupt rulers, and it is the mob who finally decides when virtue shall die.”

I am only reading your idiotic comments because I am reading from my phone, at home I just block your sanctimonious bullshit. It's my fault that I was born into a thoroughly corrupt system, if only I were more virtuous, then my leaders would follow my lead. Pull your head out of your ideological ass and quit polluting this site with your naivety. You are worse than vk, and up until a few minutes ago,I did not think that was possible.

Life doesn't happen according to text book theories.

Posted by: David F | Jul 30 2021 22:15 utc | 118

@Max #113
Wow, I should be impressed that a multi-billionaire throws off a few million for charity? Their net worth grows faster than that in hours, if not minutes.

As for my list:

Theodore Roosevelt. He comes into the Presidency on a wave of insurance and other FIRE money - but recognizes this as being destructive of society and pushes the entire US government to do something about it.

Andrew Jackson. A son of a bitch by all accounts, racist etc. But he also recognized the budding evil of the 2nd Bank of the United States and did something about it.

Franklin Delano Roosevelt. Many flaws, but he turned against his own class because he believed going down the wrong path would result in revolution. Many of the institutions he and his presidential administrations created have lasted generations and have proven to be worthy - as repeal of them led to disaster.

On the industrialist side:

Edison actually made stuff. He did engage in some anti-competitive practices but Tesla's methods were never going to work in that era, nor did Edison build his empire like Bell with AT & T.

Andrew Carnegie - did anti-competitive stuff but also actually made his factories more efficient. And donated enormous sums to create hospitals, bridges, universities etc.

There are many examples out there - none of them involve high flying, tweet emitting, Davos attending self promoters.

Posted by: c1ue | Jul 30 2021 22:19 utc | 119

@ David F (#117),

“A people that elect corrupt politicians, imposters, thieves and traitors are not victims … but accomplices.”

How long have people been voting in the so called fake democracy, U$A (Usury, Slavery, Armaments), a suzerainty? How many voted in the 2020 presidential election? 15O MILLION. What are their core values?

“If honesty were suddenly introduced into American life, the whole system would collapse."
George Carlin

Posted by: Max | Jul 30 2021 22:33 utc | 120

@ c1ue (#118), so you have no notables from the last seventy years. Did the U$A win or lose WWII?

I too admire admire Andrew Jackson. Name a president that has been assassinated, I admire them. Such as Abraham Lincoln, John F Kennedy, ... along with presidential candidates Huey Long, Robert Kennedy. They had a good vision for Americans and wanted to do good.

George Westinghouse was better than Edison and Tesla enjoyed working with him. His employees respected him a lot. A man of integrity. Similarly, I respect entrepreneurs that create positive value for the world and create good jobs such as Steve Jobs, Andy Grove, Amar Bose, Akio Morita, Ren Zhengfei,... Those who treat their employees and customers well. Damon Vrabel was a good American patriot.

Posted by: Max | Jul 30 2021 22:46 utc | 121

I personally haven't partakes in said shit show for over 30 years.

People are stupid. What's your point?

You are an ideologue, which shows you are no smarter than the fool's that believe that voting makes a difference.

Posted by: David F | Jul 30 2021 23:06 utc | 122

@ David F (#121), I too have refused to vote and give any legitimacy to the system. No personal accusations and attacks.

By far, stupidity has always been in the majority. This is the best we can do folks?

"Day by day the money-masters of America become more aware of their danger, they draw together, they grow more class-conscious, more aggressive. The [first world] war has taught them the possibilities of propaganda; it has accustomed them to the idea of enormous campaigns which sway the minds of millions and make them pliable to any purpose.

American political corruption was the buying up of legislatures and assemblies to keep them from doing the people's will and protecting the people's interests; it was the exploiter entrenching himself in power, it was financial autocracy undermining and destroying political democracy. By the blindness and greed of ruling classes the people have been plunged into infinite misery."
– Upton Sinclair, The Brass Check - 1923

It is taking a long time for Americans to learn reality and wake up. Time will reveal reality...

Posted by: Max | Jul 30 2021 23:41 utc | 123

Fascinating debate/discussion going on in this thread. I'm particularly interested in the views being expressed by c1ue and Max. I think you may have more in common than it seems, but that's beside the point. I was just sent this link from the Gravel (RIP) Institute about how college/university in the USA became a scam and it touches on several of the sub-topics you guys have been referencing. It's a short 8 minutes, and maybe stuff you both already know, but might be a good reference for others anyway.

How college loans became a scam

Posted by: Tom_Q_Collins | Jul 30 2021 23:41 utc | 124


When are you taking your family and moving to what is clearly the greatest nation on the planet?

Whenever Uncle Sam pay me back what is owed (SS, Medicare fund, etc.) and allow me to liquidate asset without taking half as taxes, I'm good as gone. Meanwhile, I'm brooding as an hostage of a wealth robbery.

Posted by: Oriental Voice | Jul 31 2021 0:01 utc | 125

b, there is another person posting as 'Paul.' Please ask them to differentiate themselves.

Posted by: Paul | Jul 31 2021 0:30 utc | 126

The Brass Check, good book. Have you learned nothing from reading it? Have you read anything else he has written?

It's a fucked up world, do the best you can within the parameters that are dictated to you, take care of you and yours. The world will straighten itself out, or it won't. Nothing you or I are going to do will change that.

It's not my job to save all the stupid people. Nature will take care of that.

This blog is great when people discuss things and it sucks when people try to push their own ideological ideas onto others. Repeatedly.

Posted by: David F | Jul 31 2021 0:33 utc | 127

Interesting slant on the China vs. Outlaw US Empire competition. The nature of the paper:

"The tech war is not a competition of technological prowess between China and America, but an attempt by the US to strangle China’s tech advance by denying it access to technology. It is a complex dance as America tries to block some technology and China tries to develop a substitute. The action is largely in the trenches, out of sight of the public."

The writer's position on Wokeism shouldn't detract from the points made.

Posted by: karlof1 | Jul 31 2021 1:15 utc | 128

@ David F (#126), Action is the endpoint of a thought. Ideas are cheap, execution is everything. Life is about creating oneself, not operating within confined boundaries.

“Some men see things as they are, and say why. I dream of things that never were, and say why not.”
– Robert Kennedy

It is you who are pushing ideology, by stating:

“It's a fucked up world, do the best you can within the parameters that are dictated to you, take care of you and yours. The world will straighten itself out, or it won't. Nothing you or I are going to do will change that... It's not my job to save all the stupid people. Nature will take care of that.”

You made your choice. Don’t push it on others. Your forked tongue comes across as that of Wormtongue.

Let the best vision WIN. Gandalf’s team is here!

Posted by: Max | Jul 31 2021 1:23 utc | 129

ADKC 108

The problem is there is only shrapnel and blast damage to the cockpit. Enough hi definition photos could be found in the year or two after the downing. The cannon fire craze took off because of an airline pilot. Makers of the BUK missile reproduced the fragmentation pattern on a fuselage. At the time Ukraine was putting out reasonable accurate maps of the front lines that could be checked against social media from eastern Ukraine. There were two places the nazis could get within BUK missile range. When Russia military made its sat pics from the day before public, two launchers were stationed at the southern one of those points.

Posted by: Peter AU1 | Jul 31 2021 1:27 utc | 130

karlof1, apologies if you have linked to this article by Pepe Escobar elsewhere and I missed it - or had to wait since the site wasn't friendly to my computer. The article is "The Taliban go to Tianjin" and if you would say that it is a mindbender I would agree. And another apology for it being off-topic, though China is in the forefront, along with nine Taliban leaders in a truly magnificent opening photograph.

Takes my breath away. Sort of reminds me of that passage in Scripture when after so much back and forth between Job and his comforters, finally God answers.

Only in China, I think; only in China.

Posted by: juliania | Jul 31 2021 1:40 utc | 131

karlof1 | Jul 30 2021 16:42 utc | 102

For some time I have been considering China a communication super power, not just voice data and video but transportation as well.
Until US under Trump cranked up its war against China, China had not put so much R&D into civil aircraft manufacturing and Chip making
A lot of investment required in those areas which, as these were easily available elsewhere, other communication priorities were put first. Now, especially chip making, will be given huge priority. Designing making the equipment to make the chips is the big thing. Perhaps in as little as five years China will be world leader in cutting edge chip manufacturing. US throws money at a problem, China throws thinkers and scientists at a problem.

Some time back now, I watched a video on China's largest excavator manufacturer. The had already started building 5G diggers. That means if the digger is operating in a remote or dangerous site, the operator can work it from wherever in a second or separate cab. Would be a huge asset for our fly in fly out mining here in oz, but I doubt we will see this sort of thing for another fifty years or more.

Posted by: Peter AU1 | Jul 31 2021 2:05 utc | 132

A piece here from global times re chip manufacturing.
"Wuhan-based Yangtze Memory Technologies Co (YMTC) has put into mass production a 128-layer memory chip, a feat of domestic chipmaking in terms of stacking density, addressing China's missing link in high-end solid state drives (SSDs), according to media reports.

Powev Electronic Technology Co, a Shenzhen-based storage and memory manufacturer, recently took the wraps off its newest upscale SSD under its subsidiary brand, Asgard, based on YMTC's 128-layer 3D three-level cell (TLC) NAND flash memory. According to industry insiders, the announcement suggests YMTC's 128-layer technology has officially been massed produced, Chinese news site reported on Thursday.

The Wuhan-based 3D NAND flash memory maker was only established in July 2016. In April 2020 it announced that its 128-layer technology had passed sample verification on the SSD platform, less than a year after its 64-layer TLC 3D NAND flash memory was produced in volume."

Posted by: Peter AU1 | Jul 31 2021 2:25 utc | 133

“Some men see things as they are, and say why. I dream of things that never were, and say why not.”
– Robert Kennedy

You do realize that people made good money writing those inspiring tidbits.

Accept the world as it is, not how you wish it was. - David F


Posted by: David F | Jul 31 2021 2:46 utc | 134

C1UE @14

The Chinese salt tolerant rice was not strictly GMO as far as I understand it. Rather it was selectively bred, an entirely different method, and not as in modern GMO food, synonymous with Roundup Ready. Not to say that Chinese rice was any less exposed to agricultutal chemicals but not in the same was as true GMO.

Posted by: K | Jul 31 2021 2:51 utc | 135

@ David F (#133), it is unfortunate that you lack conscience and comprehension. God is watching us! Remember, “In God We Trust”.

Gandalf is enjoying watching deceivers. They can’t make excuses, such as “I didn’t know,” anymore. Wormtongue’s wasn’t free ever. Saruman’s staff is broken! Interesting times...

Posted by: Max | Jul 31 2021 3:29 utc | 136

My bad, I didn't realize you were a child. I would never speak so harshly to you had I known.

Great books, superb story. Absolutely, one of my favorites.

Get out of your mothers basement, go smoke some pot, chase some tail, maybe even try some mushrooms, but be careful, you seem rather fragile. Another option is too just grow the fuck up.

Maybe, after some or all of that, you might be in a position to form a coherent world view. However, I must warn you that there are no valid world views.

These might help you get a better understanding of your place in the world:

Carl Sagan - A Pale Blue Dot
David Foster Wallace - What is water?
Pink Floyd - Time

You run and you run to catch up with the sun, racing around to come up behind you again.

The sun is the same in a different way, but your older, shorter of breath and one day closer to death.



Posted by: David F | Jul 31 2021 4:11 utc | 137

@128 Max

Astute observation. It was ideology - of a sort - and it was pushed.

Nihilism: one of the two great extremes, one of the two great errors. Couldn't help thinking of this:

Big Lebowski - Nihilists

Posted by: Grieved | Jul 31 2021 4:33 utc | 138

@ Grieved (#137), thanks. Will check it out.

@ David F (#136), what you say, doesn’t matter. Time will reveal reality. Kairos will define the future! Think different.

Posted by: Max | Jul 31 2021 5:02 utc | 139

@115 JoeG "When are you moving there?"

Why would I do that, Joe?

I don't live in a s**thole country, so I don't have to flee anything.

I live in a middle-ranking country where life is quite good, and I'm perfectly happy here.

But being perfectly happy where I am does not mean that I can not see that my country is nowhere near as powerful as China, nor does it mean that I must pretend that my compatriots and I are in some (and always undefined) way "exceptional", or somehow superior in any way to the Chinese.

It's always a zero-sum game for some people, isn't it?


Posted by: Yeah, Right | Jul 31 2021 5:24 utc | 140

apple expropriating cultural icons... interesting concept.... i always thought apple was a con job... that is just more proof for me... i never thought of steve job as some type of genius... marketing guru maybe...

Posted by: james | Jul 31 2021 5:28 utc | 141

that rah rah, we are the greatest nation bs sure has a lot of followers... another example of some type of cultural dystopia the people didn't pick up on yet...

Posted by: james | Jul 31 2021 5:31 utc | 142

// "The difference is not in the relative amount spent but in the results achieved."

Indeed. Hence the reason that today 1 additional Dollar of debt no longer generates a positive return in GDP terms.

Once again. These are compounding dynamics.

// "Ooverspending" at a sovereign level is impossible unless said sovereign borrows money in foreign currencies."

I now understand where our difference stems from. Your position is that a sovereign issuer cannot go bankrupt. History shows otherwise.

// "The biggest trap the US via the IMF and World Bank lay for 2nd and 3rd world countries is the gigantic dollar loans which can only be used for things which benefit the US and/or which hurt the borrower's economy (i.e. austerity)."

Undoubtedly. As a by the by, having run out of dinky countries to trap, the IMF and the WB have turned their attention to Western countries.

// "Until you extricate yourself from whatever bad sources of financial ideology you are presently basing on..."


// "... you're simply not going to be a credible source of any wisdom."

I am not trying to be a source of wisdom. We are discussing an issue here.

// "The tragedy of the United States for the last generation is that this government has utterly given up any attempt at its fiduciary duty towards its people in favor of self-enrichment via favoring the PMCs, billionaires and what not."

It is not a new phenomenon. You can most certainly not pin it on the last generation. It is merely the function of an exclusivist, centralized monetary system subject to compounding dynamics.

A legitimate question would be, should be, why out of all possible monetary systems that could have been implemented have various governments opted for this one in particular.

One of the fundamental questions that should be asked: why should a monetary system be predicated on debt? If an entity arrogates itself the privilege to create a medium of exchange, what possible advantage could be gained by basing it on debt? Creating for creating, why choose to attach interest payments to the very first token created?

Paying back the very first token created could not be achieved if not by the creation of a second token. Debt is what makes this dynamic compound. This is what guarantees that this particular monetary system must, MUST, create ever greater amounts of debt. If credit markets should stall or, Ye Gods! reverse, the system would implode.

The only difference between monetary policy in the USA and Zimbabwe is merely one of scale. The US$ circulates globally not only as US$ but also as all sovereign currencies that use it as reserve. So, in the case of the US$ the natural ramifications of a monetary system predicated on debt are spread out geographically and temporally. Zimbabwe $s circulate in the immediate vicinity of the issuer. In both cases chickens will come home to roost; sooner in Zimbabwe than in the USA but home they shall come.

Posted by: guidoamm | Jul 31 2021 5:35 utc | 143

David F "“Some men see things as they are, and say why. I dream of things that never were, and say why not.”
– Robert Kennedy

You do realize that people made good money writing those inspiring tidbits.

Accept the world as it is, not how you wish it was. - David F"

Some attempt to change without out first seeing it as it is. Others see it as it is and are too apathetic to try and change anything.

Small fry like most of us here have to live within a system without much hope of changing it. I guess you wouldn't be commenting here if you just accepted the world or your part of the world without thinking it needed changing.

Posted by: Peter AU1 | Jul 31 2021 5:56 utc | 144

Roger @ 90

Wow, a Moscow Times article that denigrates Russia! Care to show the actual question, not the Moscow Times result! Life in Russia is not perfect, but the extended family still exists, and people look out for each other. People still grow food there, not forced to buy it. My daughter's grandmother has 14 Sot (one Sot is 100m2) of arable soil. Two Aunts have 5 Sot each. Her FIL has 35 Sot. This continues throughout the extended and intertwined families. Pickling and bottling (what North Americans call canning), is still practised. Root cellars exist, even near big cities, and people fill them.

I remember an "uncle" declaring that he would no longer grow potatoes, and his mother launched ​into a tirade of how potatoes saved the Russian peoples during the Patriotic War, the Revolution, the Great Patriotic War and the collapse of the Soviet Union. He still grows potatoes!

Posted by: Cossack | Jul 31 2021 6:21 utc | 145

clue @ 79

So less than 20% of GDP is "Massive energy exports", good to know!

Posted by: Cossack | Jul 31 2021 6:26 utc | 146

It is the Dépêche d'Ems all over again.

In 1870, in order to trigger the Franco-Prussian War, Bismarck edited and leaked an internal message from Prussian King Wilhelm I, reporting demands made by the French ambassador.

The French went ape, went to war and that was the end of the French Empire.

Posted by: Vincent Tayelrand | Jul 31 2021 7:29 utc | 147

The West (doesn't want to) understand China.

Throughout its long and checkered history the Chinese central governments often made decisions based of what was considered to be moral in a Confucian context, rather than what economically expedient.

In many ways Xi Jinping is following that same old policy and in doing so he is trying to avoid the pitfalls that have now trapped the developed world

Posted by: Vincent Tayelrand | Jul 31 2021 7:51 utc | 148

@115Joe the G-man

Here's a video of a young British muslim woman living in China. Note the lack of Kidnappings, interrogations and what ever other feverish torture-porn fantasies you enjoy dreaming about China.

There are plenty of muslims in China, Chinese and foreign, with social media accounts who daily debunk your psyop. However, I know that your fellow agents try their best to mass report these people and get their accounts deleted, sometimes with success.

Other than muslims, of course, there are plenty of non-muslims from around the world living in China. Many share their experiences on twitter, youtube etc, though again they routinely get attacked by the western establishment that wishes to keep an iron curtain wrapped tightly around the mind of every inhabitant of the West.

I live in China having escaped the inhumane, one party dictatorship of Tory Britain.

Posted by: ukdefector | Jul 31 2021 9:21 utc | 149

@ Posted by: David F | Jul 31 2021 4:11 utc | 137

You accuse me of being an ideologue for quoting Marx only to recommend Carl Sagan, David Foster Wallace and Pink Floyd (!!)?

You're the personification of Western imbecilization, that's an objective truth.

Posted by: vk | Jul 31 2021 14:14 utc | 150

@Max #121
The US didn't win WW2 militarily. Russia did.
The US used WW2 to bleed Russia and the UK, as well as of course defeat Germany, in order to gain full ascendance in the world stage.
This pattern has been attempted to be repeated ever since by the US oligarchy.
So yes, no heroes in the last 70 years.
This period was marked by the Cold War - which is increasingly clearly manufactured in every respect. This period was also marked by an unending succession of US military interventions which overwhelmingly did nothing but damage the host countries and America society and finances: Korea, Vietnam, Iraq, Afghanistan, Grenada, Panama, etc etc.
Eisenhower did talk about the MIC, but as a departing speech after decades of serving said MIC - so I can't say much overall credit can be given.
But apparently you didn't catch Ross Perot - whom I already noted. There are individuals, here and there, who still exemplify the best of what America is propagandistically supposed to offer, but the reality is very, very different.

Posted by: c1ue | Jul 31 2021 14:54 utc | 151

@K #135
GMO = genetically modified organism.
You can use CRISPR, you can use radiation, you can use "naturally" occurring mutations - it is all the same thing.
Yes, you can insert specific gene sequences using CRISPR - but those same sequences can, in very low probability, occur using the other 2 methods as well.
To me, personally, I do not distinguish between methods used - I focus on the outcome. India has retained the vast assortment of rice varieties at the cost of visibly lower average food production. One of the key points of the World Bank paper was that the extra China food production led to other beneficial outcomes - it just didn't say how this food production occurred. It was Yuen.

Posted by: c1ue | Jul 31 2021 15:00 utc | 152

@Cossack #146
Russia is either the largest or 2nd largest oil exporter in the world, depending on who is measuring.

Russia is also the largest natural gas exporter by far.

Not clear to me why you cannot admit the reality that Russia is a massive energy exporter.

If we look at Russia's exports: #3 is Aluminum at $6.6B
But #2 is Natural Gas @ $42.9B and #1 is oil at $183.7B

It is safe to say that energy exports are the vast majority of all Russian exports, and that these exports fuel a double digit percentage of Russia's federal budget (40%? 50%?).
Yes, this energy is a lower percentage of GDP (16%? 20%?) - mostly because Russia actually does a decent job of feeding/clothing/manufacturing for itself, but it is a massive mistake to think said energy exports aren't absolutely vital for Russia's economy to function.

Posted by: c1ue | Jul 31 2021 15:07 utc | 153

Posted by: guidoamm | Jul 31 2021 5:35 utc | 144

Paying back the very first token created could not be achieved if not by the creation of a second token. Debt is what makes this dynamic compound. This is what guarantees that this particular monetary system must, MUST, create ever greater amounts of debt. If credit markets should stall or, Ye Gods! reverse, the system would implode.
This statement is just internet mysticism and easy to prove that it is false. For five years after the big Wall Street crash of 2008 the loans of US depository institutions did not grow "ever greater amounts of debt" and yet there was no implosion of the money system which is administered by these depository institutions. No deposit was lost. Payments and transactions made from and to these US deposit accounts carried on as usual with no interruptions. If you needed currency the deposit institutions were there to convert your deposits into cash you could put in a vending machine or whatever.
When a borrower makes an interest payment (on a loan from a deposit institution) that is income to the deposit institution. That money is used to pay its employees, pay utilities and other expenses and pay dividends to the owners of the depository institution. In other words, the income circulates in the economy and might even be used over and over again to pay for interest on loans. It is no different than if you paid for tickets to a sporting event. Some of the money goes to the owners, some goes to employees and some to keep the lights on. The money doesn't disappear into a black hole never to be seen again.
This is in sharp contrast to the funny money system created by Wall Street. Trillions of dollars worth of the funny moola created by Wall Street evaporated in 2008. If you look at the statistics for Fedwire transactions from early in 2008 to the end of that year you will see that daily average money transfers dropped by almost one trillion dollars a day. That was because close to ten trillion dollars in Wall Street created tokens that had been (before the crash) accepted as "money good" suddenly were no longer accepted as money. Nobody would touch those tokens with a 10 foot pole.

As Hyman Minsky used to say "Anybody can create money. Getting others to accept it is the problem"

Posted by: jinn | Jul 31 2021 15:12 utc | 154

@c1ue #41

The reality? While Marxist/Communist/Leninist nations have successfully transitioned from 3rd world to 2nd world - none of them either took root in a 1st world nation (unlike Marxist/Leninist dogma) or have been able to transition into a 1st world nation.

Yes, they didn't take root in "1st world" and Lenin explained why. There is this thing called imperialism. Can you give me a "1st world" nation that a) did not have a colonial/imperialist legacy or b) was not the beneficiary of the imperialist block? For part (b) I have in mind the european US satrapies in the post WWII period that received Marshal funding and subsequently were integrated in the imperialist block as minor players. I cannot think of a *single* nation that has reached "1st world" status outside Europe, North America or Japan. You could say South Korea(or Taiwan) but you have to remember these countries(they are not rly countries) have received more US backing than the European satrapies.

I'm sorry, but Marxism isn't all correct either.
It makes no provision whatsoever for corruption.

That's is not even wrong. Corruption does not and cannot come into play in the description of the motion of an economy *as a system* in the same way the existence of fish and whales swimming around cannot come into the model describing water motion (fluid mechanics) of the open sea.

Posted by: galerkin | Jul 31 2021 15:19 utc | 155

Speaking of 1st world and 2nd world nations is in my opinion bad wording. As c1ue as conceded himself these notions were coined during the Cold War with mainly an ideological-political divide in mind. In my opinion it is better to use the more contemporary notions of "emerging economies" or "middel income countries" instead.

The observation, however, is entirely correct. It´s a very important observation because without this in many developments especially during the Cold War remain mysterious.

In every country which were developing countries when the communists took power (Cuba, North Korea, Vietnam, China) the political system remained stable after 1991. They had popular support because their covernments achieved the transition from developing country to middle income country: A functioning state, educational system, medical system, infrastructure and - as vk has pointed out - no worries about the next meal. Whatever the shortcomings of these political regimes might have been - the achievements clearly outweigh the shortcomings. Hence genuine popular support

In every country where the communists came to power when they were already at least middle income countries - including the countries where the communist rule hadn`t been imposed by Moscow but came to power by popular support (Yugoslavia, Albania) - the regimes collapsed in 1989-1991. The reason is these countries already had a functioning state, educational system, medical system, infrastructure and basic food safety before the communists. That doesn`mean they didn`t have social problems or were necessary particular wealthy. But the weren`t developing countries either. The only thing the communists managed to add to the mix was on-party-rule, police state and decades of economic stagnation.

Posted by: m | Jul 31 2021 15:49 utc | 156

@galerkin #155
If Imperialism is the reason why the proletariat didn't rise up in the Western democracies/industrialized nations - how do you explain the ongoing failure to rise up after the retreat of imperialism post-WW2? It has been 70 years after all.

As for corruption:
Wow. If there is a single socio-political phenomenon which has been consistent and documented throughout history, it is corruption.

To say that it isn't something an economic system has to concern itself about is naivete of the highest degree.

Try again.

Posted by: c1ue | Jul 31 2021 15:50 utc | 157

@ c1ue (#151), please be assured that I am in sync with reality.

Ross Perot was all talk. Who did he sell his firm to?

There is a big gap between talk and walk. Even Trump talked about draining the swamp. What happened to the swamp? Most politicians are good at deceiving the public. Name a good politician and one can name a dead politician.

“Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.”

Posted by: Max | Jul 31 2021 16:08 utc | 158

@ guidoamm (#143), agree that, “One of the fundamental questions that should be asked: why should a monetary system be predicated on debt?”

@ jinn (#151), thanks for your insights.

Who wants to make us all, whether we be nations or individuals, slaves to debt? Money is created as debt, so the society can be CONTROLLED using banks by the Rulers. You control the debt, you control everything.

Money Power = Land x Lives x Loans

The single biggest problem is the Money As Debt system, aka money creation by private banking at interest using their central-private banking system. Under the present insane system, RULERS are allowed to create ALL money out of thin air, and they're allowed to LEND that money to governments, businesses & individuals, forcing us into debt, forcing us to pay interest, when the government could simply create the exact same money debt free and interest free.

This is THE issue... everything else pales in comparison. The totally unnecessary and fraudulent Money As Debt monetary system is what enables the Global Financial Syndicate to control politicians, the government, and public policy to their advantage. It enables all other problems, including economic crashes and unnecessary wars based on lies.

If the public is unable to grasp this core issue, then nothing else will matter... we're doomed, headed straight for the bankster-run authoritarian tyranny of the New World Order, a fascist nightmare in which they will own and control everything and everyone, and which they have been planning for well over a hundred years.

On the other hand, if the public can somehow come to understand this very basic concept and then come together to end the private creation of money at interest by the banks, then all other problems can be solved... history has proven that.

A wise individual said it well:
"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits [loans at interest], and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits."

The best lesson series on the Monetary Power

Why do many not question the fact, that the nation’s money supply being in the hands of private coterie is effectively prima facie evidence that the administration is already under the thumb of the private Money Power?

Why should a small private clans of people (Money Power) profit by renting humanity its money supply?

Posted by: Max | Jul 31 2021 16:45 utc | 159

The single biggest problem is the Money As Debt system, aka money creation by private banking at interest using their central-private banking system. Under the present insane system, RULERS are allowed to create ALL money out of thin air, and they're allowed to LEND that money to governments, businesses & individuals, forcing us into debt, forcing us to pay interest

That is just more internet mysticism.
If you don't like the way commercial banks operate then put your money in a Credit Union. Do that and you will be part owner of an entity that creates "money out of thin air".
Of course, you can also put your money into Wall Street. Wall Street also creates "money out of thin air" but that money has a habit of disappearing back into thin air from time to time. And when that Wall Street money does disappear back into air is when millions of workers who had no part in the Wall Street foolishness are made to pay for it by losing their jobs and livelihoods.
Nobody is "forcing us into debt, forcing us to pay interest" - that's just more internet BS. If someone chooses to borrow money with interest attached they do so because they perceive it to be financially advantageous to do so. It only becomes financially disadvantageous if they lose the income stream they were counting on to make that contractual arrangement work in their favor.

Posted by: jinn | Jul 31 2021 18:03 utc | 160

@c1ue #153:

It is safe to say that energy exports are the vast majority of all Russian exports, and that these exports fuel a double digit percentage of Russia's federal budget (40%? 50%?).

As of 2020, oil & gas account for 28% of Russia’s budget and 15.2% of Russia’s GDP.

Posted by: S | Jul 31 2021 18:14 utc | 161

I think that China, Russia, and other countries should stop the trade in $, euros and pound especially raw materials and critical supply. For example, Russia is still selling rocket motors for space vehicles to the USA but it should do in barter motor for some critical needs for RF (for example some supply under sanctions) and they should create more and more goods with intended for only barter. Similar to rare earth from China, lithium, etc and extend to other raw materials. It would significantly affect the FED printing press in a very fast manner, a couple of years at most.

Posted by: Igita | Jul 31 2021 18:16 utc | 162

@ jinn (#160), your nonsense propaganda exposes your reality. Time will validate reality!

Posted by: Max | Jul 31 2021 18:35 utc | 163

Peter AU1 @129

Really? I think the problem is this:

"The Australian coronial evidence is direct; having been prepared for the Coroners Court of Victoria, it has been tested for legal admissibility. There is also a great deal of it. It is supported by Dutch prosecutor and head of JIT, Fred Westerbeke who has acknowledged that 25 metal particles, shards, or fragments have been found... Dutch sources, who ask for anonymity, do not believe Westerbeke is deliberately lying. They believe he is making a public record of the verifiable evidence, and also the interpretation which the Ukrainian and US Governments are insisting upon. The Dutch sources credit Westerbeke with exposing the contradiction.

"Other Dutch investigators believe the reason the current Dutch Minister of Security and Justice, Ard van der Steur (right) dismissed pathologist George Maat after he gave a lecture on the identification of the MH17 victims, was that the government wanted to warn the Dutch against revealing what the Australians had already reported – that there was no evidence of more than 7,800 pieces of shrapnel in a Buk warhead...

"The record by Maat’s Australian team members at Hilversum is that no Buk detonation could have taken place without filling the bodies of passengers on the left (port), forward side of the cabin, but the evidence of the bodies shows this didn’t happen. Direct testimony from the sister of the pilot of MH17, Captain Wan Amran (Hamrin), corroborates that whatever detonated to destroy the aircraft, it released little shrapnel, and none struck her brother. The pilot was seated on the left side of the cockpit. Verified site photographs of pieces of the cockpit’s outer panels, compiled in this montage by BellingCat, show the damage to the fuselage.

"Wan Lailatul Masturah, the pilot’s sister, went to Hilversum to identify the body of her brother. Representing his wife, she escorted his coffin home for burial near Kuala Lumpur.

“ "They showed me the pictures on the camera. It was full length picture and he wasn’t damaged, just slightly burnt. I was able to identify him. The person who cleaned the bodies told us our brother’s body was in the best condition with nothing missing.”

"Malaysia not only disallows inquests. It has forbidden family members of the 43 Malaysian victims from opening the coffins. None of the kin of those killed was permitted to view the victims in their coffins, Wan Lailatul Masturah said. “We were not allowed by the government, nobody must see. All the corpses who came back were not allowed to be opened.”

"The co-pilot, Capt Eugene Choo, appears to have been cremated in The Netherlands, before his remains were repatriated."


Posted by: ADKC | Jul 31 2021 18:35 utc | 164

Peter - Life is too short to waste it trying to change the world. The problems that afflict the world are thousands of years old. What are the chances of making any significant change? Can any animal be other than what it is simply because it desires otherwise? Regardless of what the situation is there will always be the desire that it were otherwise. So, no I am not out to change anything.

Vk - what pray tell is wrong with the three people I mentioned? Are you familiar with the first two examples I suggested? Hardly controversial subjects.

You are an ideologue because you think an idea about a form of government is going to make the world a utopia. I did say dipshit was worse than you, so cheer up,you are not my least favorite poster.

Both of you need to get a life, which obviously neither of you possess or you wouldn't be posting 20 or 30 comments everyday trying to convince people that your ideas are the solution to humanities woes.

Posted by: David F | Jul 31 2021 21:22 utc | 165

@ Posted by: David F | Jul 31 2021 21:22 utc | 165

But your conceptualization of an ideologue is, by itself, an ideology. Also, you trying to dictate what I must do in my private life is also, to say the least, totalitarian/dictatorial.

So, you're basically projecting yourself on me.

Posted by: vk | Jul 31 2021 21:31 utc | 166

If you really want to do something, you'll find a way. If you don't, you' ll find an excuse.

“Change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can't ride you unless your back is bent.”
- Martin Luther King, Jr.

What FRACTAL emerges from epochs in the history of humanity?

Posted by: Max | Jul 31 2021 21:53 utc | 167

@Max #158
I consider spending a huge amount of money and running as an independent Presidential candidate to be putting your money where your mouth is.
Unlike limousine liberal wankers who say they want to save the environment, but flit around the world in private jets.
So thank you - you still are on a continuous fail streak.

Posted by: c1ue | Jul 31 2021 23:26 utc | 168

Wall Street Max wrote:

"Time will validate reality"

Wall Street is always always seeking validation

Posted by: jinn | Jul 31 2021 23:40 utc | 169

@ jinn (#169), c1ue (#168), Time will tell... 🕯

I am no Wall Street, when I promote SOVEREIGN MONEY and SOVEREIGNTY.

“The bankers are collecting tribute from the community on the community's credit... Commercial banking and issuing of credit should be exclusively a government function. Private financiers are not entitled to any profit on credit”

No more monetary imperialism and enslavement.

Posted by: Max | Jul 31 2021 23:49 utc | 170

How many faces does the Max vomatorium have?

The Max vomatorium that I interacted with wrote that sovereign finance needs to exist, but only to provide competition to private finance which they insist needs to continue

And then there is the repetition of In God We Trust at the end of may comments, the usage of ALL CAPS and the insertion of graphics to bolster their BS....sure sign of vacuous BS.

Tiresome to skip over like vk but I am glad to read that I am not the only one that finds vk BS to also be very tiresome.

Posted by: psychohistorian | Aug 1 2021 1:12 utc | 171

@171 psychohistorian

Skipping is tiresome? Oh, no - let's change that paradigm. Skipping is magnificent. It's practically flying:

Michael McIntyre on Walking and Skipping | Live at the Apollo [2 mins]

Posted by: Grieved | Aug 1 2021 2:37 utc | 172

@ Grieved | Aug 1 2021 2:37 utc | 172 with the link to skipping...thanks

It made me remember a period in the rehab of my pelvis, as a 60 something, where I was skipping around the neighborhood in Portland to help break up fasciation and I got some interesting looks....GRIN I could give a shit what I looked like; it worked!!

My latest look maker is ending my walks with a few standing squats atop the spring supported purple Barney dinosaur in the local park.

All we have to share with others is the example of how we live our life.

Posted by: psychohistorian | Aug 1 2021 2:50 utc | 173

@ psychohistorian (#171), people are reading my comments, shared links and watching videos. Twelve individuals have watched the debunking money lesson since this afternoon, and based on the past link analysis at least 25+ individuals would have read that comment. Similarly, on average 50+ people read my comments and in the best case it reached 150+. Those are good numbers!

Just to be clear, in our previous engagement about the monetary system, I promoted sovereign money and public/community credit. I also stated that individuals can decide what they want to do with their EARNED MONEY and the private finance operates using that earned money only. I also stated that the banks can’t create money as credit.

Before commenting on the MoA, I read comments from various individuals to understand MoA barflies. I agreed with you on the problem of the private finance. However, when I engaged with you on the SOLUTIONS, your solution ideas were worse than the existing system. Your solution ideas would do more harm to our nation instead of building a better sovereign monetary system. However, you’re only a TALKER. Haven’t seen you where actions about the monetary developments are happening. Action is the window to the soul.

Posted by: Max | Aug 1 2021 3:34 utc | 174

@ Max | Aug 1 2021 3:34 utc | 174 who wrote
Haven’t seen you where actions about the monetary developments are happening. Action is the window to the soul.

Maybe you missed it with all your BS creation but I have written here multiple times about having an I Support Public Banking sign in my front yard with link to and have written to my representatives about public banking.

Go pollute some other bar with your BS because that is all the action you have shown you are capable of here. I trust b will note your claim of readership on his blog as some sort of validation of your comments.

Posted by: psychohistorian | Aug 1 2021 4:19 utc | 175

@ psychohistorian (#175), “Public Banking sign in my front yard with link to and have written to my representatives about public banking.” I didn’t miss them as they are nothing and won’t achieve much RESULTS, just bragging. Aren’t these representatives that are in private banks pocket? In the digital age, you’re using 20th century tactics. You haven’t invested at all, just talking. If you aren’t at the table, you’re on the MENU.

Have you ever introduced a successful innovation at a global scale and driven market adoption? Have you led a team to introduce an innovation? Do you even know what it takes to drive a change? Based on your talk, one doesn’t see any experience of driving a change.

You’re just crawling in circles. When you start walking uphill then talk.

Posted by: Max | Aug 1 2021 4:52 utc | 176

Max @Aug1 4:52 #176

Have you ever introduced a successful innovation at a global scale and driven market adoption?

You've mentioned this before. What is your innovation?


Posted by: Jackrabbit | Aug 1 2021 5:24 utc | 177

"@ psychohistorian (#171), people are reading my comments, shared links and watching videos. Twelve individuals have watched the debunking money lesson since this afternoon, and based on the past link analysis at least 25+ individuals would have read that comment. Similarly, on average 50+ people read my comments and in the best case it reached 150+. Those are good numbers!"

Fuck off troll. What, you work in one of yankistan's troll factories?

Posted by: Peter AU1 | Aug 1 2021 5:31 utc | 178


// "This statement is just internet mysticism"

Not to pick on the USA but it is the reserve currency of the West so we go directly to the source. The charts are similar in all countries making use of the US$ as reserve currency.

Behold the magic of Swap Lines. Change the dates to suit your interest in particular time periods.

Total Public Federal Debt

Posted by: guidoamm | Aug 1 2021 5:42 utc | 179

@ Max | Aug 1 2021 4:52 utc | 176 who writes out of their ass about innovation but provides no examples of such.

In 1985 I was putting computer terminals on fork lift trucks, teaching union fork lift truck drivers to talk to computers, building/deploying hand held bar code scanning applications...I started working with bar codes in 1980...were you out of the womb yet?

Oh yeah, I had a US utility patent 6,209,954 in my name that I sold in 2013.

How about if you go away until you can identify yourself like I do here and present some facts justifying your BS like you have just challenged me to do and I have done so.

Posted by: psychohistorian | Aug 1 2021 5:47 utc | 180


// "As Hyman Minsky used to say "Anybody can create money. Getting others to accept it is the problem"

Creating something that will be accepted as medium of exchange is not difficult at all. In one fell swoop, you would also re-instate the right to private property.

A centralised monetary authority however, cannot contemplate allowing individuals to create their own medium of exchange.
I refer you here to research 2 interesting cases over the past 50 years.

Bernard Von NotHaus and his Liberty Dollars.

José Beraha Zdravko and his Gold Sovereigns.

In both cases, these 2 gentlemen created their own currency that was readily accepted by counterparties in full knowledge of what they were accepting. Prosecution therefore, did not originate from complaints instigated by the public or any of the counterparties to Mr. Zdravko or Mr. VonNothaus's transactions. Prosecutions where initiated by sovereign states.

Interestingly enough, in the Middle East you can still find and trade over the counter a number of Gold Sovereigns created by various private entities. Some of these coins (very rare today) are the actual originals made by Zdravko.

A bit of tangential trivia.

Since the creation of the central bank and the imposition of this particular variety of monetary system in the West at the turn of the last Century, there is only one brief period of time where a country successfully neutralized and circumvented a national central bank. This happened under Hjialmar Shacht, German Minister of Economy in Nazi Germany. In the sheer mountain of literature and research available on this particular chapter of history, there is remarkably little on the economic and financial aspect of how Germany did what it did in those 6 years.

One more bit of trivia. In those 6 years, Germany went from a country that was on its knees, where famine and disease were ravaging the population to the forefront of technological development. For example. In 1939 Germany had developed a radio guided bomb controlled by a joystick mounted in an aircraft's cockpit.

Posted by: guidoamm | Aug 1 2021 6:32 utc | 181

@ Jackrabbit (#177),

When I mentioned about innovation, I also stated that it became #1 product at the global level in units, revenue and profits. We were being attacked at the low end by Asian companies and Americans were purchasing those low cost products. I led the team to out-innovate them. The CFO got scared by the innovation as at it would cannibalize our high end - pro version. Instead of being happy of the accomplishment, many got worried. I personally addressed their concerns and convinced them to launch it at a significant personal risk. Luck blessed us and it achieved fabulous results, and we became the global market leader. After it became #1, naysayers started to take credit! Awesome RESULTS are great success! I also mentioned then that I had launched a successful global payment service, so know the payment arena well. Multiple other innovations and have built successful businesses! Also had mentioned, next upcoming innovation, a media platform. Meet Joe... 😊

The key point: When introducing a game changing innovation, one comes across many skeptics, all saying it won’t work and complaining.

@ Peter AU1 (#178), don’t panic and think clearly. After psychohistorian complained, I got curious and wanted to learn about reality, how many are reading my comments. Since designing and developing a media platform, have everything to conduct experiments. So I conducted a few experiments and numbers are positive. The best part of the RESULTS is that the trajectory is uphill!

Orcs (they have dark conscience) see most things negatively and rarely ask good questions. They follow orders.

@ psychohistorian (#175), your patent is an invention, not an innovation. What is the difference between an invention and innovation? It seems like you didn’t learn much to drive adoption. Results matter.

Last comment of the post. Cheers...

Posted by: Max | Aug 1 2021 6:36 utc | 182


Some time ago, western search engines changed from nearest match to most liked (duckduckgo 2013-14) and became useless.. Some comment sections have a thing called best and they place that comment on top. Not the blog owner but the platform owner. As useless as the best liked or most veiwed in search engines.
Somewhat like a bodybuilder preening in front of a mirror.

Posted by: Peter AU1 | Aug 1 2021 7:30 utc | 183

Max @Aug1 6:36 #182

AFAICT you have no basis for lecturing psychohistorian:

  1. It appears that your successful innovation had nothing to do with finance.
  2. You "also launched" a global payments service which we can surmise didn't do so well.
  3. Because you are against cyrptocurrencies, your global payments service likely accepted currencies that you now rail against.

Your constant reference to yourself as Gandalf and your opponents as orcs is also disturbing. This fantastical metaphor betrays a conceited sense of self that makes all critics into monsters that you must slay to prove yourself. This would explain your frequent challenges (often posed as questions) as well as some of the conflict that you've had with others at moa.

I hope that you take this 'reality check' as constructive criticism. But I expect that you will now mentally place me into the 'orc' category.


Posted by: Jackrabbit | Aug 1 2021 12:41 utc | 184

Posted by: guidoamm | Aug 1 2021 5:42 utc | 179

Total Public Federal Debt
Since you changed the subject to USA govt federal debt let's look at that in the context of the ongoing discussion of what constitutes the money supply used in the USA economy.
The federal debt is certainly part of the money supply, but it is only the debt in the hands of the private sector that matters. The money that the federal govt owes to itself is not in circulation so that can't be counted as circulating money. The federal debt in private hands is the currency used mostly by Wall Street firms and other large financial firms while bank deposits and cash are used mostly by Main Street.
So lets compare the two money supplies. This graph shows the money supply used by Wall Street( circulating TSY securities) and the money supply used by Main Street(deposits):

It is interesting that the two money supplies are about the same size and have been for decades.
So how does the Fed's QE affect these 2 money supplies? When the Fed buys TSY securities on the open market it takes Treasuries out of circulation and creates deposits which adds to the money supply of Main Street and subtracts from the money supply of Wall Street.
So lets see what that looks like if we reverse QE and add QE amount back to the money supply used by Wall Street and take the deposits created by QE away from Main Street:
Without QE Main Street would be starved for money and Wall Street would be drowning in it.

Those 2 graphs linked above are in direct contradiction with most Internet myths about money.
I fully expect that 99% of the people viewing those graphs will say to themselves 'that doesn't fit with my understanding of money and so I will pretend I never saw that'. That is an indication of of how powerful the Wall Street propaganda, that so many useful idiots repeat endlessly, has been.

Posted by: jinn | Aug 1 2021 14:09 utc | 185

@ Posted by: jinn | Aug 1 2021 14:09 utc | 185

Federal debt is important, but you must pay attention to private debt. It is private debt - not public debt - which will be the downfall of the USA.

It is because of private debt that the Fed is keeping interest rates so low.

Posted by: vk | Aug 1 2021 14:46 utc | 186

vk wrote:

It is private debt - not public debt - which will be the downfall of the USA.
It is because of private debt that the Fed is keeping interest rates so low.
OK but the private debt and the downfall of the USA wasn't what was being discussed.
but because you bring it up...
Yes the private debt markets dictate interest rates and the Fed has no choice but to follow whatever rates the private markets set. This is simply a matter of supply and demand. There is an enormous amount of money that private investors would like to lend and on which they would like to collect interest, but there is not enough creditworthy borrowers willing to pay that interest. Back 20 years ago the solution private investors came up with for not enough creditworthy borrowers was to lend to borrowers that were not creditworthy -what could go wrong?. That strategy blew up in 2008 and that drove private credit market interest rates to zero and the Fed has had no choice but to follow.

Posted by: jinn | Aug 1 2021 16:09 utc | 187

"Full Truck Alliance (truck-hailing apps Huochebang and Yunmanman)" where on the web I can find it?

Posted by: global truck bloger | Aug 1 2021 16:29 utc | 188

What matters is the amount of interest payments owed by the state.

Because government does not generate profit, interest payments are passed unto the productive economy. Ergo. As debt expands, so does the fiscal burden on productive society.

Fiscal pressure manifests through legislation.

As legislation becomes gradually more labyrinthine and restrictive, barriers to entry in business rise AND business is offshored.

As this dynamic develops, fiscal revenue decreases which prompts an increase in fiscal pressure.

Posted by: guidoamm | Aug 1 2021 17:23 utc | 189

@ Posted by: guidoamm | Aug 1 2021 17:23 utc | 189

This process also happens to the private sector. The result is the process we call nowadays "financialization".

Posted by: vk | Aug 1 2021 17:42 utc | 190


Certainly. As fiscal revenue declines, legislation becomes more complex thus more restrictive. As total debt increases, interest rates are manipulated lower and the productive part of the economy is gradually stifled in favour of ever larger economic entities. This is brought about by liquidation of existing economic realities, the gradual decline in the rate of creation of new economic realities, the amalgamation of existing economic realities till, eventually, fiscal gimmickry (i.e. financialization) becomes an ever greater component of he wider economy. A good case in point was GM; a company that ceased generating profits in its core business but was making a killing with its financing arm GMAC.

Posted by: guidoamm | Aug 2 2021 3:53 utc | 191

c1ue | Jul 29 2021 23:19 utc | 42

Ditto China: they likely have the largest economy now, but they also have 4x more people than the US - meaning each person is 1/4 as wealthy.

Well! There's a surprise!! In 1949, they were widely thought to be the poorest country on the planet, only 72 years ago, and after surviving American sabotage, boycotts, color revolutions, cold wars and hot wars, you would have thought they could have become more prosperous than that! (Sarcasm.)

I would also remark that the US, while less than a quarter China's size has more citizens in absolute poverty, more people who are homeless, than does China and many more people in jail.

Slightly OT, perhaps: I see that the western press has, the other day, "found a re-education camp, large enough to house 10,000 people". They now have to find only another 99 such, to account for their first million internees!

Posted by: foolisholdman | Aug 2 2021 19:49 utc | 192

foolisholdman | Aug 2 2021 19:49 utc | 193

The "re-education camp" was in Xinjiang.

Posted by: foolisholdman | Aug 2 2021 19:53 utc | 193

@ Posted by: guidoamm | Aug 2 2021 3:53 utc | 192

It has nothing to do with legislation and everything to do with rates of investment. The more indebted a private enterprise is, the less it is inclined to invest. Investment rates then secularly go down because both debt and investment is a subtraction of profit of the indebted capitalist. The only way out is investing the money directly in the financial sector, which gives money out of money.

Posted by: vk | Aug 2 2021 19:58 utc | 194

vetinLA | Jul 30 2021 0:09 utc | 47

MIXED economies work, it doesn't have to be one or the other, as debated ad nausea, on MSM.

As Marx said: "Capitalism is a revolutionary system". So it is, but any revolution need leading, as "without leadership" it will rapidly develop into a dog-eat-dog scrum and the worst will end up on top of the heap of bodies and other wreckage.

Posted by: foolisholdman | Aug 2 2021 20:03 utc | 195

NemesisCalling | Jul 30 2021 5:16 utc | 66

the greenback has been the raison d'etre of China's ascendancy?

The "the raison d'etre of China's ascendancy" is NOT the greenback, but is (1)the result of a lot of extremely hard work and sacrifice by a vast number of Chinese and (2)the cunning, understanding and ingenuity of the CPC. The first of these produced the wealth that China now has and the second prevented the west from taking it all.

The CPC understood that the western capitalists were forced by their own rules to go to where they could make the most profit and th CPC knew that they could take advantage of that fact to gain capital and technical knowledge that they needed to develop the Chinese economy. They were, however, cunning enough never to let the western or their own capitalists buy politicians or political power. The western capitalists were happy to take advantage of the opportunities that the opening up of China gave them and the US neocons thought that as the Chinese grew more prosperous they would become more like themselves and they would be able to crush the Unions, in the US and they could just "exploit the stupid Chinese". A mistaken idea, as it has turned out.

Posted by: foolisholdman | Aug 2 2021 20:49 utc | 196

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