Week-end Wrap – Political Economy – May 28, 2023

Week-end Wrap – Political Economy – May 28, 2023

by Tony Wikrent

War

Why Are We in Ukraine? 

Benjamin Schwarz, Christopher Layne [Harpers, June 2023 issue, via Naked Capitalism 5-22-2023]

Both the global role that Washington has assigned itself generally, and America’s specific policies toward NATO and Russia, have led inexorably to war—as many foreign policy critics, ourselves among them, have long warned that they would….

Initiated by the Clinton Administration while Boris Yeltsin was serving as the first democratically elected leader in Russia’s history, NATO expansion has been pursued by every subsequent U.S. administration, regardless of the tenor of Russian leadership at any given moment... Thus did the United States recklessly embark on a policy that would “restore the atmosphere of the cold war to East-West relations,” as the venerable American foreign policy expert, diplomat, and historian George F. Kennan had warned. Writing in 1997, Kennan predicted that this move would be “the most fateful error of American policy in the entire post-cold-war era.”

….By embracing what came to be called its “unipolar moment,” Washington demonstrated—to Paris, Berlin, London, New Delhi, and Beijing, no less than to Moscow—that it would no longer be bound by the norms implicit in great power politics, norms that constrain the aims pursued as much as the means employed. Those who determine U.S. foreign policy hold that, as President George W. Bush declared in his second inaugural address, “the survival of liberty in our land increasingly depends on the success of liberty in other lands.” They maintain, as President Bill Clinton averred in 1993, that the security of the United States demands a “focus on relations within nations, on a nation’s form of governance, on its economic structure.” 

….Moscow’s alarm over the hegemonic role America had assigned itself was intensified by what could fairly be characterized as the bellicose utopianism demonstrated by Washington’s series of regime-change wars....

Rather than attempting to maintain that stable nuclear balance, however, Washington has been pursuing nuclear dominance for the past thirty years…. [While there] was the precipitous qualitative erosion of Russian nuclear capabilities…. [US] didn’t fit with the aim of deterring an adversary’s nuclear attack—which requires only the nuclear capacity for a “countervalue” strike on enemy cities. They were, however, necessary for a disarming “counterforce” strike, capable of preempting a Russian retaliatory nuclear response. “What the planned force appears best suited to provide,” as a 2003 RAND report on the U.S. nuclear arsenal concluded, “is a preemptive counterforce capability against Russia and China. Otherwise, the numbers and the operating procedures simply do not add up.”

….Two critical events precipitated Russia’s war in Ukraine. First, at NATO’s Bucharest summit in April 2008, the U.S. delegation, led by President Bush, urged the alliance to put Ukraine and Georgia on the immediate path to NATO membership. German chancellor Angela Merkel understood the implications of Washington’s proposal: “I was very sure . . . that Putin was not going to just let that happen,” she recalled in 2022. “From his perspective, that would be a declaration of war.” America’s ambassador to Moscow, William J. Burns, shared Merkel’s assessment. Burns had already warned Secretary of State Condoleezza Rice in a classified email….

The second precipitating event came when Ukraine began talks about forming an “association agreement” with the European Union in September 2008 and, in October, applied for a loan from the International Monetary Fund to stabilize its economy after the global financial collapse. 

The War in Ukraine Was Provoked—and Why That Matters to Achieve Peace 

[Common Dreams, via Naked Capitalism 5-24-2023]

IS NATO A NAZI ORGANIZATION?

[MATT EHRET AND CARY HARRISON ON KPFK 90.7 FM] 

[Bitchute, via Naked Capitalism 5-24-2023]

What if the celebrations of the victory over fascism in 1945 was a bit premature? What if leading Nazis were absorbed into NATO after the war and went on to play leading roles in carrying out terrorism, assassinations and a broader infiltration of western governments under the banner of a new rules-based order of globalization?

Week-end Wrap – Political Economy – May 21, 2023

Week-end Wrap – Political Economy – May 21, 2023

by Tony Wikrent

(anti)Republican Party debt charade

Six Legal Reasons the Federal Budget Is Its Own ‘Debt Ceiling’ - and ‘Floor’

Robert Hockett, May 11, 2023 [Forbes, via It’s not just the 14th Am. There are (at least) 5 other ways the Debt Ceiling is unconstitutional, by Bethesda 1971, DailyKos]

... In 1921, through the Budget & Accounting Act, Congress vested primary budget formulation responsibility with the President, establishing both detailed timetables and the predecessor of today’s Office of Management and Budget (OMB) to help shepherd the process along. The ‘debt ceiling’ is rooted in this era, during which Congress relinquished its previous role as legislator of every distinct federal bond-issuance. This Congress did to afford the President – by their own law our primary budget-formulator – more flexibility in determining revenue sources for funding the growing variety of legislated programs. That’s right, the original ‘ceiling’ was about affording the President more discretion, not less.

It is no accident that the Liberty Bond Act of 1917 (original source of the ‘ceiling’), the 1913 vintage 16^th Amendment to the Constitution authorizing the federal income tax, the thereby enabled Revenue Act of 1913, the Federal Reserve Act of 1913, and the aforementioned Budget & Accounting Act of 1921 all came in rapid succession. In effect, these enactments, all passed by Congress and signed into law by the President, constituted one coherent federal budget regime.

All of this changed, however, in 1974. The ‘crisis’ that occasioned the change was brought on, like so many others of the era, by President Richard Nixon. Nixon had an unfortunate tendency to think himself more ‘imperial’ than the Constitution allowed, and took it upon himself to decide with unprecedented frequency what Congressionally legislated and funded programs, even though he had signed them into law in the first place, were worthy of actual execution and funding.

The practice in which he manifested this proclivity was known as ‘impoundment.’ The idea was that instead of spending what Congress had instructed him to spend and what he had agreed, by signing their legislation, to spend, Nixon was routinely spending only what he wished to spend, while ‘impounding’ the rest – in effect, holding it hostage.

Congress put an end to this chicanery by passing the Congressional Budget and Impoundment Control Act of 1974, pursuant to which both Congress and the President go through detailed procedural steps in formulating their own budgets, which budgets are then ‘reconciled’ and collated before being legislated into law piecemeal through sundry program authorization and appropriations acts passed by Congress and signed by the President. (The Supreme Court closed all plausible loopholes in the Act in Train v. City of New York one year later.)

AOC Dunks on McCarthy: If You Want To Cut Spending, What About No Yacht Tax Breaks?

Prem Thakker, May 19, 2023 [The New Republic]

[Twitter, via The New Republic 5-19-2023]

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The Beltway Media Is Spreading Debt Limit Misinformation  

Jason Linkins, May 20, 2023 [The New Republic]

The political press bears a share of the blame for the fact we are once again on the precipice of default.

...this might be a good occasion to point out the other big mistakes that have brought us to this point. Namely, those of the political media, who can rightly be said to have spent the last decade botching their coverage of the debt ceiling, mainly by failing to speak one plain truth: We keep getting dragged to the brink of default because the GOP has become a gang of extremists. This is villainy—their villainy—and the media has let them off the hook by treating this psychosis as all part of the natural order….

That the media cannot keep what is and what isn’t a “norm” straight in their head is the venial sin embedded within their debt ceiling coverage. The mortal sin is that the media has essentially conferred on the Republican Party the right to regularly stage these extortions. Imagine what would happen if the shoe was on the other foot—that a Democratic-controlled House majority was threatening to push the country into default unless a Republican president consented to a massive increase of the welfare state. It’s hard to imagine journalists referring to liberal hostage-taking as merely “the ordinary stuff of politics.”

This is another big lesson of the Obama era: The burden of bipartisanship, and the compromises that the media covets to a fetishistic extent, must be entirely shouldered by Democrats. (Marvel at the double standard: David Broder once made the insane insistence that the Obama-era Democrats needed to earn 70 Senate votes for any law they passed to be considered legitimate.) Throughout his tenure, Obama was regularly filleted for failing to reach a compromise with a Republican Party that had vowed to make him a one-term president by denying him a bipartisan win on anything. Pundits contorted themselves into pretzels in an attempt to ignore the fact that Obama and his fellow Democrats were the only party willing to stand in the ideological middle to make deals….

Obama spent an inordinate amount of time trying to play this game and please the naysayers. He allowed bipartisan “gangs” to build out their own health care reform ideas alongside the Affordable Care Act. He stumped for the votes of people like Olympia Snowe and Charles Grassley. He signed the Budget Control Act into law, unleashing the doomed “super committee” and the brutal sequestration budget cuts. And as soon as Obama was out of office, the moronic pundit drumbeat demanding more and bigger compromises fell silent. Donald Trump was never burdened by any such demands. The media’s bipartisanship fetishists essentially took four years off.

Week-end Wrap – Political Economy – May 14, 2023

Week-end Wrap – Political Economy – May 14, 2023

by Tony Wikrent

Strategic Political Economy

Population Decline Will Change the World for the Better 

Stephanie Feldstein, May 4, 2023 [Scientific American, via Naked Capitalism 5-7-2023]

[TW: Feldstein’s article is representative of elite thinking on the issue of population growth, which is neo-Malthusian while straining to avoid the appearance of eugenics, which is considered very politically incorrect. Notably absent in this elite thinking is a sense of human purpose and even human grandeur, which used to be imparted by the ideology of civic republicanism before it was smothered by liberalism. Basically, human purpose should be to uplift and better the condition of all human beings, economically, materially, and culturally—in short, to build civilization. This does not mean humanity has absolute dominion to use and exploit nature at will. Rather, the human purpose includes a stewardship over nature: to continually explore and investigate nature and advance our understanding of nature, so that our use of nature and our relationship to nature becomes ever more aligned with the laws of nature. We know now that certain elements are toxic—in the 1950s, radium dosages were acceptable as a means of treating certain skin conditions, and widespread use and discharge of lead caused no concern. We also now realize that liberalism as political economy violates a number of laws of social science (very well documented in the 2009 book by Kate Pickett and Richard G. Wilkinson, The Spirit Level: Why More Equal Societies Almost Always Do Better. Fieldstone reflects some of these lingering ideas of civic republicanism when she writes:

Governments must invest in health care, support caregivers, help people who want to work longer do so, and redesign communities to meet the housing, transportation and service needs of older people. We need to move our economy toward one where people and nature can thrive. That means managing consumption, prioritizing social and environmental welfare over profits, valuing cooperation and recognizing the need for a range of community-driven solutions. These practices already exist—in mutual-aid programs and worker-owned cooperatives—but they must become the foundation of our economy rather than the exception.

We also need to bring together the reproductive rights and gender equity movements, and the environmental movement. Environmental toxicity, reproductive health and wildlife protection are deeply intertwined. Pollution, climate change and degraded ecosystems harm pregnant people, fetuses and children, and make it difficult to raise safe and healthy families.

Benjamin Franklin wrote that he was greatly influenced by Cotton Mather’s 1710 tract Bonifacius: Essays to Do Good.

There needs abundance to be done, that the Miseries of the World may have Remedies and Abatements provided for them; and that miserable people may be Relieved and Comforted. The world has according to the Computation of Some, above Seven hundred millions of people now Living in it. What an ample Field among all these, to Do Good upon! In a word, The Kingdom of God in the World, Calls for Innumerable Services from us. To Do SUCH THINGS is to Do Good. Those men Devise Good, who Shape any DEVICES to do Things of Such a Tendency; whether the Things be of a Spiritual Importance, or of a Temporal. You see, Sirs, the General matter, appearing as Yet, but as a Chaos, which is to be wrought upon. Oh! that the Good Spirit of God may now fall upon us, and carry on the Glorious work which lies before us!

This is the component of civic republicanism that modern proponents, such as Arendt, Rawls, and Skinner over: the positive requirement to do good. Or as Franklin summarized these ideas in his 1743 A PROPOSAL for Promoting USEFUL KNOWLEDGE among the British Plantations in America (pdf), citizens should aim to fellow human beings “at Ease, and afford Leisure to cultivate the finer Arts and improve the common Stock of Knowledge.”]

Week-end Wrap – Political Economy – May 7, 2023

Week-end Wrap – Political Economy – May 7, 2023

by Tony Wikrent

The ‘Free Market’ is a Fever Dream and Adam Smith Wasn’t in It [YouTube]

[Rhodes Center Podcast, via YouTube, Mar 31, 2023]

Mark Blyth interviews “Jacob Soll... professor of philosophy, history, and accounting at the University of Southern California, and in his book “Free Market: The History of an Idea,” he begins way back in ancient Rome, stops in 17th-century France with Louis XIV’s minister Jean-Baptiste Colbert, and, on the way to the present, barely mentions Adam Smith at all.”

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…. [1:16] French Minister Colbert reviled today as a so-called mercantilist who becomes the critical builder of markets and whose state-led form of development has had a far bigger impact on how the world actually works…. 

… [8:58] Smith says guilds are the worst thing in the world — except that's where capitalism comes from it comes from... if you go to Florence and see the Duomo or the Palazzo Vecchio it's covered with all the signs of the guilds who pay for the government and they're very aware that they're paying for government... this is where Machiavelli comes in… remarkably visionary, Machiavelli… says, look all these Merchants are necessary but the state has to be richer than any single Merchant otherwise we have an oligarchy or a dictatorship. And of course that's what had happened under the Medici….

[10:03] ...so where you really make... a controversial contribution though is to really invert the relationship that we commonly have in our heads between France and the UK, and between the figures of Colbert and Smith. So let's go right into this… 

[11:38] [The supremacy of Smith is] an Anglo-Saxon fantasy, yes, to put it politely…. Colbert is a former businessman, but he's working for a monarchy he's got to raise funds so he tries to reorganize the government. But he doesn't believe in wealth hoarding; he doesn't believe that gold is just the simple road to riches; ...he believes he believes that manufacturing will create extensive expanding wealth, and so will imperial Seaborne trade….

[17:03] ...that myth does not exist in the mid-18th century; it doesn't even really exist under Smith. The Americans, people like [Alexander] Hamilton are reading Jacques Necker … Hamilton says he wants to be the new Colbert when he's building the American state. He doesn't talk about Smith; in fact please read his Report on Manufactures — it is a direct response to The Wealth of Nations. He basically knocks down every one of Smith's theories: the idea that agriculture will make you rich; the idea that open markets can work for developing nations like early America. He knocks it all down, and America has the highest rate of tariffs for the whole of the 19th century…. no one's heard of Henry Clay; no one has any idea this guy Henry Clay continues Hamilton's policies, calling it the American System, which is a system of tariffs and small subsidies for infant industry, which is how America gets on its feet. America is not a free market nation in the 19th century….

[18:40] England has this very special trick up its sleeve (France has some of this trick too), it's called the global Empire. It's an Empire run on coercion and gun boats, it's not that friendly, it's based on pillaging. We calculate that over 140 years Britain extracted around 44 trillion dollars from India alone. That's just the colony of India….

[19:06] The free marketeers who say they are against Empire Still are for maintaining the Empire  against uprisings. Theoretically they're against it, just like Smith is theoretically against slavery. But is he really against slavery? Are these guys really against Empire? Not when push comes to shove… This guy is essentially a huckster… the 18th century equivalent of somebody who's in the ideas industry, as Dan Dresner wrote about a few years ago. He makes his living getting grants from giant oligarchical landowners who basically allow him to do the things that he wants to do, and he writes very flattering books that never implicate them in anything….

Smith's a hedger. You have to think of Smith as a professor who's on the make with some big donors. He works for the donors. He actually lives in the donor's house, the Earl of Baklao [TW — name incorrect, but I can’t find correct name] who's really one of the richest most powerful men in all of Britain. These people run the parliament. They're trying to cleanse their lands of peasants and crafters so that they can put lambs or sheep and these high return cattle. So they're... land owning oligarchical agricultural entrepreneurs and if you read Smith that is what the system that he is talking about. Do businessmen exist? Yes. Does manufacturing exist? Sure, but they can never produce wealth on their own according to [Smith]— all wealth comes from agricultural labor and all industry is dependent on agricultural production. Which we know is just not true; that's not how it works.

There is a huge and long tradition of people desperately arguing that agriculture will not create enough wealth, it will not create stable wealth or growth, that you need for a modern commercial society. All these other authors who you've never heard of, but are in my book, are calling for this. Most notably Alexander Hamilton. And so Hamilton's the heir of a long tradition of market thinkers who don't believe that agriculture is the path to wealth. 

Smith is what we might call a medieval economist or a sort of neo-feudalist. This is not the father of capitalist thinking… [In the] Anglo-Saxon world we live in a bubble, I think. that came from the British Empire and then from American hegemony, and the fact is we've written a story that supports a certain narrative of how we got rich which just isn't the story at all. It just happens to back up lots of people's interests or certain interests.…

[27:21] But how did America actually get rich? There's a huge reaction first of all to FDR— that's so much of what people are angry about economically: FDR creating Social Security; FDR bringing the state more into the economy….  the narratives of the 20th century get written after the war and that's where a lot of this economic stuff comes from, especially in America, with the Austrian School and others. So there's definitely the material interest in telling a particular story because it protects ... the wealth and property rights of those who are telling the story….

[29:31] I don't know really good examples of wealth creation without government involvement at some point…. [TW: see my series on How America Was Built; some of the subsequently posted articles are listed at the end of HAWB 1954-1976: The three major developments in aerodynamics].