Monday, May 22, 2017

If China Can Fund Infrastructure With Its Own Credit, So Can We


The basic truth about money is that it doesn't matter what it is made of compared to what are the mechanisms for making it valuable. Money that can be traded for necessary items such as food and energy is always valuable. Money created to fund human inventiveness also falls into this category. Which is why people who understand this know that so long as it is spent to create necessary items such as infrastructure, the amount of money that can be created without triggering inflation is nearly limitless. The key is spending the new money right away on the products of human genius and hard work.

And so we see that China could build 12,000 miles of high-speed rail in a decade (among a host of other major infrastructure projects) without becoming Zimbabwe. If China had created a massive pile of new money and used it to fund a massive global shopping spree, the outcome would have been dramatically different.

Here's to Ellen Brown who has rediscovered the arguments for why massive amounts of fiat money CAN (under the right conditions) lead to massive increases in prosperity. And because climate change can only be meaningfully addressed by massive amounts of new and significantly redesigned infrastructure, and since this project is absolutely necessary for continued human life on earth, Brown is addressing THE most important topic in all of political economy.

If China Can Fund Infrastructure With Its Own Credit, So Can We

by ELLEN BROWN, MAY 18, 2017

May 15th-19th has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion.

While American politicians debate endlessly over how to finance the needed fixes and which ones to implement, the Chinese have managed to fund massive infrastructure projects all across their country, including 12,000 miles of high-speed rail built just in the last decade. How have they done it, and why can’t we?

A key difference between China and the US is that the Chinese government owns the majority of its banks. About 40% of the funding for its giant railway project comes from bonds issued by the Ministry of Railway, 10-20% comes from provincial and local governments, and the remaining 40-50% is provided by loans from federally-owned banks and financial institutions. Like private banks, state-owned banks simply create money as credit on their books. (More on this below.) The difference is that they return their profits to the government, making the loans interest-free; and the loans can be rolled over indefinitely. In effect, the Chinese government decides what work it wants done, draws on its own national credit card, pays Chinese workers to do it, and repays the loans with the proceeds.

The US government could do that too, without raising taxes, slashing services, cutting pensions, or privatizing industries. How this could be done quickly and cheaply will be considered here, after a look at the funding proposals currently on the table and at why they are not satisfactory solutions to the nation’s growing infrastructure deficit.

The Endless Debate over Funding and the Relentless Push to Privatize

In a May 15, 2017, report on In the Public Interest, the debate taking shape heading into National Infrastructure Week was summarized like this:
The Trump administration, road privatization industry, and a broad mix of congressional leaders are keen on ramping up a large private financing component (under the marketing rubric of ‘public-private partnerships’), but have not yet reached full agreement on what the proportion should be between tax breaks and new public money—and where that money would come from. Over 500 projects are being pitched to the White House. . . .

Democrats have had a full plan on the table since January, advocating for new federal funding and a program of infrastructure renewal spread through a broad range of sectors and regions. And last week, a coalition of right wing, Koch-backed groups led by Freedom Partners . . . released a letter encouraging Congress “to prioritize fiscal responsibility” and focus instead on slashing public transportation, splitting up transportation policy into the individual states, and eliminating labor and environmental protections (i.e., gutting the permitting process). They attacked the idea of a national infrastructure bank and . . . targeted the most important proposal of the Trump administration . . . —to finance new infrastructure by tax reform to enable repatriation of overseas corporate revenues . . .
In a November 2014 editorial titled “How Two Billionaires Are Destroying High Speed Rail in America,” author Julie Doubleday observed that the US push against public mass transit has been led by a think tank called the Reason Foundation, which is funded by the Koch brothers. Their $44 billion fortune comes largely from Koch Industries, an oil and gas conglomerate with a vested interest in mass transit’s competitors, those single-rider vehicles using the roads that are heavily subsidized by the federal government.

Clearly, not all Republicans are opposed to funding infrastructure, since Donald Trump’s $1 trillion infrastructure plan was a centerpiece of his presidential campaign, and his Republican base voted him into office. But “establishment Republicans” have traditionally opposed infrastructure spending. Why? According to a May 15, 2015 article in Daily Kos titled “Why Do Republicans Really Oppose Infrastructure Spending?”:
Republicans – at the behest of their mega-bank/private equity patrons – really, deeply want to privatize the nation’s infrastructure and turn such public resources into privately owned, profit centers. More than anything else, this privatization fetish explains Republicans’ efforts to gut and discredit public infrastructure . . . .

If the goal is to privatize and monetize public assets, the last thing Republicans are going to do is fund and maintain public confidence in such assets. Rather, when private equity wants to acquire something, the typical playbook is to first make sure that such assets are what is known as “distressed assets” (i.e., cheaper to buy).
A similar argument was advanced by Noam Chomsky in a 2011 lecture titled “The State-Corporate Complex: A Threat to Freedom and Survival”. He said:
[T]here is a standard technique of privatization, namely defund what you want to privatize. Like when Thatcher wanted to [privatize] the railroads, first thing to do is defund them, then they don’t work and people get angry and they want a change. You say okay, privatize them . . . .
What’s Wrong with Public-Private Partnerships?

Privatization (or “asset relocation” as it is sometimes euphemistically called) means selling public utilities to private equity investors, who them rent them back to the public, squeezing profits from high user fees and tolls. Private equity investment now generates an average return of about 11.8 percent annually on a ten-year basis. That puts the cost to the public of financing $1 trillion in infrastructure projects over 10 years at around $1.18 trillion, more than doubling the cost. Moving assets off the government’s balance sheet by privatizing them looks attractive to politicians concerned with this year’s bottom line, but it’s a bad deal for the public. Decades from now, people will still be paying higher tolls for the sake of Wall Street profits on an asset that could have belonged to them all along.

One example is the Dulles Greenway, a toll road outside Washington, D.C., nicknamed the “Champagne Highway” due to its extraordinarily high rates and severe underutilization in a region crippled by chronic traffic problems. Local (mostly Republican) officials have tried in vain for years to either force the private owners to lower the toll rates or have the state take the road into public ownership. In 2014, the private operators of the Indiana Toll Road, one of the best-known public-private partnerships (PPPs), filed for bankruptcy after demand dropped, due at least in part to rising toll rates. Other high-profile PPP bankruptcies have occurred in San Diego, CA; Richmond, VA; and Texas.

Countering the dogma that “private companies can always do it better and cheaper,” studies have found that on average, private contractors charge more than twice as much as the government would have paid federal workers for the same job. A 2011 report by the Brookings Institution found that “in practice [PPPs] have been dogged by contract design problems, waste, and unrealistic expectations.” In their 2015 report “Why Public-Private Partnerships Don’t Work,” Public Services International stated that “[E]xperience over the last 15 years shows that PPPs are an expensive and inefficient way of financing infrastructure and divert government spending away from other public services. They conceal public borrowing, while providing long-term state guarantees for profits to private companies.” They also divert public money away from the neediest infrastructure projects, which may not deliver sizable returns, in favor of those big-ticket items that will deliver hefty profits to investors.

A Better Way to Design an Infrastructure Bank

The Trump team has also reportedly discussed the possibility of an infrastructure bank, but that proposal faces similar hurdles. The details of the proposal are as yet unknown, but past conceptions of an infrastructure bank envision a quasi-bank (not a physical, deposit-taking institution) seeded by the federal government, possibly from taxes on the repatriation of offshore corporate profits. The bank would issue bonds, tax credits, and loan guarantees to state and local governments to leverage private sector investment. As with the private equity proposal, an infrastructure bank would rely on public-private partnerships and investors who would be disinclined to invest in projects that did not generate hefty returns. And those returns would again be paid by the public in the form of tolls, fees, higher rates, and payments from state and local governments.

There is another way to set up a publicly-owned bank. Today’s infrastructure banks are basically revolving funds. A dollar invested is a dollar lent, which must return to the bank (with interest) before it can be lent again. A chartered depository bank, on the other hand, can turn a one-dollar investment into ten dollars in loans. It can do this because depository banks actually create deposits when they make loans. This was acknowledged by economists both at the Bank of England (in a March 2014 paper entitled “Money Creation in the Modern Economy”) and at the Bundesbank (the German central bank) in an April 2017 report.

Contrary to conventional wisdom, money is not fixed and scarce. It is “elastic”: it is created when loans are made and extinguished when they are paid off. The Bank of England report said that private banks create nearly 97 percent of the money supply today. Borrowing from banks (rather than the bond market) expands the circulating money supply. This is something the Federal Reserve tried but failed to do with its quantitative easing (QE) policies: stimulate the economy by expanding the bank lending that expands the money supply.

The stellar (and only) model of a publicly-owned depository bank in the United States is the Bank of North Dakota (BND). It holds all of its home state’s revenues as deposits by law, acting as a sort of “mini-Fed” for North Dakota. According to reports, the BND is more profitable even than Goldman Sachs, has a better credit rating than J.P. Morgan Chase, and has seen solid profit growth for almost 15 years. The BND continued to report record profits after two years of oil bust in the state, suggesting that it is highly profitable on its own merits because of its business model. The BND does not pay bonuses, fees, or commissions; has no high paid executives; does not speculate on risky derivatives; does not have multiple branches; does not need to advertise; and does not have private shareholders seeking short-term profits. The profits return to the bank, which distributes them as dividends to the state.

The federal government could set up a bank on a similar model. It has massive revenues, which it could leverage into credit for its own purposes. Since financing is typically about 50 percent of the cost of infrastructure, the government could cut infrastructure costs in half by borrowing from its own bank. Public-private partnerships are a good deal for investors but a bad deal for the public. The federal government can generate its own credit without private financial middlemen. That is how China does it, and we can too.

For more detail on this and other ways to solve the infrastructure problem without raising taxes, slashing services, or privatizing public assets, see Ellen Brown, “Rebuilding America’s Infrastructure,”a policy brief for the Next System Project, March 2017. more

Sunday, May 21, 2017

'Doomsday’ seed vault meant to survive global disasters breached by climate change


Those of us who live in the frozen north tend, I believe, to understand more of the nuances and implications of climate change. We burn FAR more than our share of fuels, we are the folks who made industrialization happen, and even the slowest among us understand that without fuels, the cold will kill us very quickly. The overwhelming majority of the land on earth is found in the northern hemisphere so not surprisingly, most of the more dramatic manifestations of climate change happen where we cold-weather fire-starters set up our civilizations.

But even assuming that, the two stories below are amazing. One concerns how melting permafrost in Norway is threatening the seed vault that was supposed to protect the plant genetics of the planet for "eternity." The other concerns the likelihood that a failed Gulf Stream could leave Europe with the charming weather of North Dakota.

In all fairness, because we cold-weather denizens use an outsized share of carbon fuels, we should be threatened by most of the big climate-change disasters. Once upon a time, not so long ago, we would be just the folks to tackle a solution for such possible catastrophes. Unfortunately, the culture of the North is a shadow of what it was just two or three generations ago.

Wednesday, May 17, 2017

USA auto sales drop for four straight months


Probably the main observation from my Chicago trip was the seemingly huge mismatch between the purveyors of high quality goods at amazingly reasonable prices presented with all the élan the marketing geniuses can muster and the lack of shoppers buying these offerings. There is something definitely weird about the economy that does not seem to be showing up in the big-time statistics such as unemployment and inflation. Yes, there are those who watch retail sales who see some major-league catastrophes but because retailing is so hopelessly overbuilt, these same folks seem to still be overlooking the more general collapse of purchasing power.

And as if on cue, we are seeing the end of the major USA auto boom that has been driven by low interest rates, cheap fuels, and a wide selection of well-built vehicles. Well, interest rates are still low, the cars are still excellent, and fuels are quite cheap yet sales seem to have hit a wall. Apparently the folks who could buy a new car have bought that car with a five year warranty and payment schedule. So this sales slump could last awhile.

There is also an institutional reason why car sales might never see another 17.55 million unit sales year like 2016 again. Electric cars. Compared to electric cars, the  internal combustion (ICE) vehicle suddenly seem hopelessly complex and unreliable. A well maintained 10-year-old EV is a new battery pack and tires from being essentially a new car. A brushless electric motor has almost nothing to wear out and EVs do not even need gearboxes and exhaust systems. But because going electric involves a bunch of lifestyle changes, it is unlikely there will be a massive boom in EV sales even when the day arrives when EVs have become superior in every objective category for a buy consideration.

Monday, May 15, 2017

What Exxon-Mobil knew


The story of what the oil companies once knew and promoted on the subject of climate change is deep and complex and for me, endlessly fascinating.
  • I find that the scientists at big oil knew a very great deal about climate change and their role in it as early the 1980s not the least bit surprising.
  • What I find less believable is the notion that big oil spent big money to broadcast their enlightened views on climate change. I know of no one, including me, who has any recollection of those efforts. Like most, I thought climate change was a theory discovered by the heavy hitters at NASA as a spin-off of the explorations of Venus and its CO2-rich atmosphere. My views are a lot more nuanced and complex since James Hanson's testimony in 1988 but the extent of the scientific understanding of big oil is still news to me.
  • The really big story (from my perspective) are the events that made the oil companies change course so dramatically. What happened in those momentous years of the late 1980s—the fall of USSR and the Berlin Wall and end of ideological competition to the most grotesque forms of Robber Baron capitalism? the ideological triumph of monetarism and neoliberalism? the examples of "problem-solving by mandate" in the automobile industry and against Dupont and their Freon? 
  • What made their road from enlightened to irresponsible so short—was their institutional mandate for business-as-usual so powerful?
  • It is possible that even big oil, with all its resources, really did not know what to do about so massive a problem as climate change?
What? It's a damn shame the oil companies did not act to change the world as mandated by their own scientific research. It would have been most interesting to watch them try!

Thursday, May 11, 2017

The Dying Days of Liberalism: Max Forte nicely summarizes Tom Frank's Listen Liberal

Well, of course it would happen that a few days after posting I have yet to see a decent summary of Thomas Frank's new book Listen Liberal, I find one.

First, a tip of the hat to Yves at Naked Capitalism, for linking to Canadian anthropology professor Max Forte's Donald Trump, Empire, and Globalization: A Reassessment, which is a very long but excellent and important article. Because of its length, I will plug it again in another post on Saturday, so people can wade into it over the weekend.

For now, let me point you to Forte's much shorter January 2017 posting, The Dying Days of Liberalism How Orthodoxy, Professionalism, and Unresponsive Politics Finally Doomed a 19th-century Project.

Forte is professor of Anthropology and Sociology at Concordia University in Montréal, Québec, and is a member of the Concordia University Faculty Association (CUFA), the trade union body for full-time faculty, and the Canadian Association of University Teachers (CAUT). His two writings I have perused so far are wonderful essays combining the knowledge and methodology of several disciplines, making for some of the best political economy I have read in a while. And, as I wrote at the beginning, his article includes an excellent summary of Listen Liberal:
....Thomas Frank’s Listen Liberal is worth reading in particular for its chapter devoted to “The Theory of the Liberal Class,” which makes extensive use of the writings of sociologists and political scientists. The book opens with a quote from David Halberstam’s 1972 book, The Best and the Brightest, a quote that speaks of, “a special elite, a certain breed of men whose continuity is among themselves. They are linked to one another rather than to the country; in their minds they become responsible for the country but not responsive to it”.

Rather than focus on “the One Percent,” Frank asks that we look critically at “the Ten Percent,” which includes “the people at the apex of the country’s hierarchy of professional status,” from which the Ivy Leaguer Obama came, as did most of his Ivy League cabinet, explaining the self-justifying and self-flattering slew of comments from Obama about those who are “qualified” to govern and “knowing what you’re talking about”. Professionals value credentialed expertise, and tend to listen mostly just to each other. They monopolize the power to prescribe and diagnose, in consultation with each other: “The professions are autonomous; they are not required to heed voices from below their circle of expertise” (Frank, 2016, p. 23). Professionals emphasize “courtesy” with one another (hence the incessant tone policing), and show high contempt for those of lesser rank, including precarious professionals. Post-industrial technocrats, the ones who hail the “knowledge economy” and “education” as a solution to all social problems, have bred their own ideology: professionalism. Frank notes that as a political ideology, professionalism is “inherently undemocratic, prioritizing the views of experts over those of the public” (p. 24). Though they usually claim to act in the public interest, Frank observes that they have increasingly abused their monopoly power, started looking after their own interests, and increasingly act as a class (p. 25), an “enlightened managerial class” of quasi-aristocrats (p. 26). Frank’s critique outlines how the Democrats became the party of the professional class, disposing of labour along the way (p. 28). As a result, they care little about inequality, because their own wellbeing is founded on it. Inequality is essential to professionalism (p. 31). Meritocracy is opposed to solidarity (p. 32).
I want to emphasize "Inequality is essential to professionalism." It goes a long way in explaining why the devotees of identity politics came unhinged over Bernie Sanders's campaign; they are now vehemently arguing "Minorities are sick and tired of being told that economic equality will fix all the racism, sexism and the social injustices in the world" as someone commented in a recent posting of mine on DailyKos.

On pages 32-33 of Listen Liberal, Frank writes:
There is no solidarity in a meritocracy. The very idea contradicts the ideology of the well-graduated technocrats who rule us…. Leading members of the professional class show enormous respect for one another—what I call “professional courtesy”—but they feel precious little sympathy for the less fortunate members of their own cohort [such as] colleagues who get fired, or even for the kids who don’t get into “good” colleges. That life doesn’t shower its blessings on people who can’t make the grade isn’t a shock or an injustice; it’s the way things ought to be.
Frank identifies the terrible consequences this professional class ideology has for liberalism and democracy. One important consequence is that professionals hold the traditional Democratic Party base—organized labor and the working class—in low regard, bordering on contempt. This contempt surfaces over and over again when a professional class twit points to industrial automation as being the cause of lost jobs, absolutely refusing to even discuss the result of the disastrous policies of globalization and free trade. Here, for example, is the founder of DailyKos a few days after the November 2016 election: Be happy for coal miners losing their health insurance. They're getting exactly what they voted for. Here is an investment advisor who is a minority, indulging in some particularly cruel class consciousness: We are going to outsource your job. And there is Hillary Clinton's use of the label "deplorables" to describe her opponent's working class supporters.

This contempt for the working class, Frank writes, has been documented in study after study of the professional-class. For the professional class, unions, factory work, farm work, and most any blue collar occupation “signify lowliness, not status.” This was well understood by Thorsten Veblen: at the very beginning of his 1899 classic The Theory of the Leisure Class (And Frank named his first chapter “The Theory of the Professional Class”), Veblen writes:
the distinction between classes is very rigorously observed ; and the feature of most striking economic significance in these class differences is the distinction maintained between the employments proper to the several classes. The upper classes are by custom exempt or excluded from industrial occupations, and are reserved for certain employments to which a degree of honour attaches… the upper classes are exempt from industrial employments, and this exemption is the economic expression of their superior rank…. Manual labour, industry, whatever has to do directly with the everyday work of getting a livelihood, is the exclusive occupation of the inferior class.
Frank continues:
Professionals do not hold that other Democratic constituency, organised labour, in particularly high regard. This attitude is documented in study after study of professional-class life. One reason for this is because unions signify lowliness, not status. But another is because solidarity, the core value of unions, stands in stark contradiction to the doctrine of individual excellence that every profession embodies. The idea that someone should command good pay for doing a job that doesn’t require specialised training seems to professionals to be an obvious fallacy.
The result is not pretty. As Forte writes near the beginning of his essay:
Liberal democracy has been reduced to a shell, more a name than a fact that deserves the name. For many years, liberalism has been liberal authoritarianism or post-liberalism or neoliberalism, with a high elitist disdain for democracy and a fear of the masses everywhere. Promises of inclusion, fairness, and welfare, were replaced by sensitive-sounding rhetorical tricks and tokenism. Moral narcissism, virtue signalling, identity politics, and building patchwork quilts of diversity were the order of the day....

...It’s not a small thing that has fallen here, not merely the defeat of Hillary Clinton and Americans rejecting Obama’s “legacy”. We are dealing with a series of institutions, an expert class, and a network of political and corporate alliances, that is being shaken beyond repair. We are in the earliest days of a historical transition, so it’s not clear what is coming next, and the labels that have been proliferating demonstrate confusion and uncertainty—populism, nativism, nationalism, etc.
....liberalism will not disappear outright, and not instantly. Ideas don’t ever really die, they’re just archived. [Emphasis mine.]

Tuesday, May 9, 2017

The origins of the Democratic Party's looming catastrophe

It is becoming a constant struggle to combat despondency, as I watch USA Democratic Party leaders shuck and jive, wriggle and squirm, to avoid having to accept any responsibility for their disastrous and destructive neoliberal economic policies of the past half-century. It's a tragedy having Donald Trump as President, with reactionary Republicans in control of the House and Senate. But having Democrats unwilling to address their own role in creating the widespread misery and discontent that is fueling political populism, thus crippling their ability to oppose Trump and the Republicans, is a catastrophe. Because without the Democratic Party in USA renouncing neoliberalism and putting forward a grand vision for a $100 trillion rebuilding of the world economy to stop global climate change, that political populism has no where to go except to the right.

The origins of the Democratic Party's insouciance today is the Party's response to the Republican victories of 1968 and 1980. The latter was an especially severe blow, because the common wisdom held that the Republican Party was on the verge of extinction because of the Watergate scandal. Democratic control of the Senate with 61 seats, flipped to Republican control of 53 seats. The Democratic majority in the House was reduced from 292 Representatives to 242.

The Democratic Party leadership responded to these electoral disasters by abandoning their traditional alliance with organized labor and beginning to shun the working class--explicitly The future of the Party, they declared, lay in embracing instead the rising new “professional class.” This is abundantly documented by Thomas Frank in his most recent book, Listen Liberal. A shorter summary is by Matt Stoller in The Atlantic this past October, just before the election: How Democrats Lost Their Populist Soul. Summaries of Stoller’s article are available on DailyKos here and here. There are a number of reviews of Frank’s book available with a search of the InterTubez, but I have yet to read one that is a truly adequate summary. The book is just too chock full of details, names, and dates, and it packs a wallop. Anyone still thinking in terms of Hillary versus Bernie should be shamed into silence if they manage to read the entire book. Unfortunately, I think most Hillary partisans will find the book much too painful and discomfiting to read in its entirety.

However, the key to understanding why the embrace of a “post-industrial” new “professional class” was such a disaster eludes both Frank and Stoller. First, no modern economy can ever be truly post-industrial. Modern standards of living would simply collapse without the products of industrial mass production. Just think of what would happen if there were no longer so simple a thing as medicine bottles. How would you store and distribute anti-biotics? Pain relievers? The special medications that today keep hundreds of millions of people alive, who a century or two ago would quickly expire because of their illness or disorder? I’d be willing to bet that without continued production of the trillions of medicine bottles each year, about half the human population would die off within five years. The really sick thing is: there are many so called “liberals” and “progressives” who think such a die off is not such a bad thing.

Second, the embrace of one specific class or another directly violates the republican (small “r”, not Republican Party) political economy of the U.S. republic, which is founded on the Constitutional mandate to promote the General Welfare. It is this Constitutional mandate that sets the USA apart from and above all other governments before it—monarchies, aristocracies, oligarchies, and dictatorships. It is what is supposed to distinguish the USA economy from the mercantalist economies of old Europe: all economic activity is supposed to strengthen not the state and the elites who control it (as was the case with mercantalism), but the entire nation—all the people. (And note that conservative and libertarian scholars explicitly attack the General Welfare principle for being the bedrock of the “nanny state.” The Confederacy that split the Union and fought to preserve slavery copied the U.S. Constitution, but deliberately removed any mention of the General Welfare—and conservative and libertarian scholars have written that this was an “important improvement.”)

This second point also directs us toward the reason why many people make the oversimplified argument that there is no difference between Democrats and Republicans, which is implicit in the results of the Washington Post /ABC News poll conducted in mid-April 2017 which that 67% of Americans think Democrats are out of touch with the concerns of average citizens. Embracing one specific class or another—for the Democrats, the “professional class”; for the Republicans, “entrepreneurs” or “job creators” or whatever—must be accompanied by the belief that the prosperity of that favored class will “trickle down” and “lift all boats.” Broken down in this way, it is easily apparent that Democratic economic policies are not that different from Republican economic policies. The major differences between the two parties is in their approach to how much of a social safety net there should be to alleviate the poverty that inevitably results from deindustrialization and an abandonment of the principle of promoting the General Welfare.

Friday, May 5, 2017

Has Putin driven Western politicians insane?


One of the sadder and more crazy outcomes of this fall's election is the Democratic Party's decision to blame their defeats on the Russians. That we are seeing McCarthyism II and Cold War: the next generation only this time perpetrated by so-called Liberals actually makes me feel sick at times.

I confess that I happen to feel a strong affinity for Russia and its people. Reason A is that as someone who grew up in arguably the coldest state in the continental USA, I have a highly developed sympathy for those who must cope with the nastiest of winters. Cold changes you.

After a short trip to Leningrad in 1972 where I learned a few of the incredible stories of what that city was willing to suffer to save itself during their Great Patriotic War (WW II), I determined to actually learn some of the history of this sprawling and nearly uninhabitable land populated by some of the most courageous humans to have ever walked the planet. Once you open that door, you have stumbled into an infinity of tales of heroic struggles against not only a harsh climate but murderous invaders, evil Tsars, serfdom, Marxist-Leninist crackpots, etc.

Fortunately, it isn't all tragedy. Perhaps my favorite story is about how Anatoly Tarasov figured out how to build an ice hockey program out of the ruins of WW II. Hockey is crazy difficult and very expensive yet out the ashes of near total national destruction, Tarasov invented a version of the game that even today is easily the most exciting to watch.

And these are the people we are supposed to hate. And lie about. And threaten with more warfare (as if the Russian people haven't suffered enough war at the hands of folks like Napoleon and Hitler.) This time though, the Russia-bashers have decided to make it personal. This time we are supposed hate Vladimir Putin above all. This is what makes Cold War II so surreal. The Russophobes would like to topple Putin but are confronted with the fact that he is wildly popular in Russia—mostly because he is arguably the best leader they have ever had (with the possible exception of Peter the Great.)

Hillary Clinton seems to hate Putin with the fire of 1000 suns. She is convinced he cost her the election. She has even called his election meddling an act of war. She is convinced that he hates her. And on that point, she might be right.

Putin has many reasons to detest Ms. Clinton. But in my mind, the one at the top must be her comparison of Putin to Hitler. Putin was the child of two people who actually survived the siege of Leningrad—a siege that killed his older brother.

Now I am pretty sure that Putin understands that virtually no one in the United States of Amnesia has any idea of how horrific the siege of Leningrad really was. After all, MOST 'Merikuns have no idea that Russia even fought in the Second World War. But for those fools, please be reminded that more Russians died due to that siege than all the USA, Brit, and French casualties of WW II combined. Many are buried in St. Petersburg's Piskaryovskoye Memorial Cemetery. According to their official records, from September 4, 1941 to January 22, 1944, 107,158 air bombs were dropped on the city, 148,478 shells were fired, 16,744 men died, 33,782 were wounded and 641,803 died of starvation.

My guess is that as a son of St. Petersburg / Leningrad, Putin has a much clearer idea of the savage nature of Hitler's Nazis than a moronic twinkie like HRC. Apparently, one of the joys of being a Wellesley grad is that it entitles you to compare anyone you don't like to Hitler. Actually knowing some history is not required.

I believe MOST of this Putin-bashing is a nasty combination of fear and impotence. Putin is an amazing fellow. The Russians have PLENTY of experience with shit leadership so when someone like Putin comes along, they respond to the difference. He could win all elections until he dies. He has lavish approval ratings—he may be the most popular politician on earth. The people who think just a few more $ to the NED will bring down his government are quite insane. So not only can Putin thumb his nose at the neocon plotters, he drives them further insane because there is nothing they can do about it.

He is also an excellent example of what happens when someone in the old USSR educational system religiously did his homework. Compared to the dim bulbs we have in USA politics, he so outclasses them intellectually, he almost seems like he is from a different planet. And he sort of is. Bright guy, highly motivated, with a hyper-elite education.

In a saner world, we would have leadership that recognizes the opportunity to collaborate with such a gifted leader to solve some crazy-difficult problems. If we cannot get along with the best leadership Russia has to offer since Peter the Great, perhaps its our fault and not his.

Monday, May 1, 2017

Springtime in Chicago


Tony and I had a good reason to meet in Chicago last week. This is his home town and he offered to give me the "deindustrialization tour" of the Second City. So on a splendid spring day he drove me around while I observed. Not surprisingly, some parts of Chicago have absorbed the economic shock of globalism / neoliberalism far better than others.

Some observations:
  • The number of places to buy or eat good food seems limitless. The large ethnic populations like the Poles or Italians have their own supermarkets with an astonishing variety of offerings. While all this abundance of good eating appears to herald prosperity, the fact was that none of these establishments had many customers. The restaurant / supermarket business seems hopelessly overbuilt.
  • Even the high end retailers along the Miracle Mile seemed to lack sufficient customers.
  • Chicago built some pretty amazing public venues in recent years. One spanking new convention center looked to cover at least 5 city blocks. My guess is that the supply of convention space wildly exceeds the need world wide.
  • Considering all the talk of corruption in the Chicago construction business, some magnificent building has been done (see below). This pretty much validates Veblen theories in his Instinct of Workmanship.
  • The detritus of the South Side steel industry is gone. In its place are large empty fields covered in a lumpy soil that because it is spring, had a pretty good cover of grass. Some of the old industry remains. The Ford Torrence plant was still loading new Lincolns into rail cars. A solitary (but huge) Cargill grain elevator was still operating near the lakeshore—when we drove past it was maybe two miles away separated by a large expanse of grass waving in the wind. If you held your head so you could not see Lake Michigan, it looked astonishingly like North Dakota. One attempt at redevelopment produced a flat and treeless golf course with a overbearing clubhouse built on a hill that was probably the remains of a slag heap.
  • The South Side of Chicago where the housing is, is a scene of near hopeless devastation. Both the housing stock and people appear extensively damaged. The neighborhood businesses are in the beauty salon/tattoo parlor/small markets variety. The auto repair business seems safely in the hands of people advertising that they are Mexicans. Even though it was only 5:30 pm., many of those on the streets looked like they had gotten a head start on being wasted for the evening. Whatever it was, it conveyed an expression of profound aimlessness. What was so distressing was that this urban damage went on for miles.
  • Tony could not resist taking me back to the motel by way of Wrigleyville—the neighborhood surrounding the stadium where the long-hapless Cubs won the World Series of Baseball last fall. This is the North Side, home to an astonishing number of what we used to call Yuppies, and NO, I have no idea what supports such lifestyles. After eating at a sports bar maybe 50' from the entrance to the bleacher section of Wrigley Stadium, we found ourselves blocked in by a police SUV. I cringed a little but soon discovered the young cop was admiring my 21 yo Lexus. In my 67 years on earth, I have never been so kind and gracious to a cop before.
  • Tony stopped at one more sports bar because he has known the owner for years. There we got to watch the Preds-Blues game along with a handful of still-disappointed Black Hawk fans. In spite of the fact that Tony claims this bar serves one of the best pizzas in Chicago, it was also suffering from too few customers.
Chicago's economic ennui is likely shared across the world. But one thing is still abundantly clear—this was once a city of energy, distinction, and vast industrial power. This was a city built by folks of great imagination. Deindustrialization is the proximate cause of the widespread destruction of this city. But more importantly, most of the destruction demonstrates a failure of imagination. Of course, it requires SOME imagination to build a golf course on a slag heap but compared to what was once there, it demonstrates the imagination of a child playing grown-up. In my darker moments I am convinced that we are doomed because we have passed "peak imagination." I hope I am wrong.