Open Thread

 People might have thoughts on the "debate" or anything.

Ponzi Finance II: quid pro quo

The real story revealed by the New York Times Trump tax returns bombshell is not that Donald Trump paid no taxes in 10 out of 15 years or that he paid $750 in 2016 and 2017. The real story is that he doesn't have net income to service his debt. There is nothing inherently illegal about that. He did it before in the 1980s and when real estate prices stopped rising in 1990, his creditors were left holding the bag.

Hyman Minsky wrote about Donald Trump's investment strategy in a 1990 talk, "The Bubble in the Price of Baseball Cards."

One of the puzzles of the 1980s was the rapid rise in the financial wealth of Donald Trump, author of The Art of the Deal, and what else. Trump’s fortune was made in real estate. Many large fortunes have been made in real estate, since real estate is highly leveraged. Two factors made Trump somewhat unique — one was the he developed a fortune in the period of high real interest rates, and the second was that the cash flows on most of Trump’s properties were negative.

Trump’s wealth surged because the market value of his properties — or at least the appraised value — was increasing faster than the interest rate. Trump obtained the funds to pay the interest on his outstanding loans by increasing the draw under what in effect was a home equity credit line. The efficiency with which Trump managed these properties was more or less irrelevant — hence Trump could acquire the Taj Mahal in Atlantic City without much concern about the impacts on the profits of the two casinos he already owned. Trump was golden — he had a magic touch — as long as property prices were increasing at a more rapid rate than the interest rate on the borrowed funds.

The puzzle is that the lenders failed to recognize that the arithmetic of his cash flows was virtually identical with that of the developing countries; in effect Trump was Brazil in drag. In the short run Trump could make his interest payments with funds from new loans — but when the increase in property prices declined to a value below the interest rate, Trump would become short of the cash necessary to pay the interest on the outstanding loans.

The increase in U.S. real estate prices in the 1980s was regional, and concentrated in the Northeast and in coastal California; for the country as a whole, real estate did not increase relative to the price level. The regional dispersion in the movement in real estate prices more or less paralleled the changes in personal income. Real estate prices dipped in the oil patch, climbed modestly in the rust belt, and surged in those areas that benefitted from the rapid increases in incomes in banking and financial services — sort of a derived demand from the financial success of Drexel Burnham. In effect, those individuals with high incomes in financial services — and with the prospect of sharp increase in incomes — set the pace for increases in real estate prices. 

...

Trump’s cousins were alive and well and flourishing in Tokyo, Taipei and Seoul especially in the second half of the 1980s. The prices of equities and real estate were increasing because they were increasing — the "greater fool theory" may have been relevant, in that the recent buyers believed there was a greater fool to whom they could sell these assets before the bubble imploded.

In any market economy the price of real estate will tend to reflect both its rental return and the rate of return on the riskless bond. Real estate is a riskier investment than bonds and even public utility stocks, so the anticipated return should be higher. But the real estate offers investors a more effective hedge against inflation. The cliché, "land is a good investment, the price of land always increases is right, wrong and irrelevant. The price of land rises and the price of land sometimes falls — the relevant question is whether the anticipated increase in the price of land is sufficiently higher than the interest rate on bonds to justify a riskier investment.

To make a long story short, when the interest rate on bonds rose above the rate of increase in real estate prices, Trump's real estate stopped being a "good investment." He could no longer pay off his old loans with the proceeds of new loans. Since his properties were money losers, there was no question of paying off his loans from his negative cash flow. That was Trump Ponzi Finance I.

The mystery of Ponzi Finance II is who would be "stupid" enough to loan hundreds of millions of dollars to a guy who had a track record of defaulting on hundreds of millions of dollars of loans and was recycling the same old racket? I'm sure you've all heard the expression quid pro quo? 

 

 

A Beady-Eyed Religious Fanatic For The Supreme Court

 Others may not see what I see when I look at a full-face photo of Amy Conet Barrett, but I see someone who looks like a fanatic to me, although that may be me reading in what I have heard of her views on things, she being Trump's nominee for the SCOTUS, with GOPsters in the Senate hypocritically ready to put her in there in time to help Trump steal the election.  

I know we are not supposed to pick on people for their religious views, but she does belong to a weird cult, the Praise for People group, which is not strictly Catholic as many have claimed, but did come out of the Catholic Charismatic movement in 1971 with most of its members Catholic.  It accepts such things as speaking in tongues, which is not something generally accepted by most Catholics, generally something practices by extreme Protestant sects. It also is sexist, with women forbidden from holding leadership position and with each member having to follow the lead of a "Head.

Those defending Barrett claim she is "very intelligent."  I am sure she is, but that does not keep her from being a fanatic.  She clerked for the late Justice Scalia, and conservatives want someone like him, but her views are more extreme than his.

Of course, she has criticized Roe v. Wade as well as the ACA, with a case on that being heard on Nov. 10 by the SCOTUS.  Clearly this is the issue Dems need to run hardest on in trying to oppose her, which will be hard given that even Sen. Murkowski of AK is thinking of supporting her.

As an example of just how extreme she is I note one item I have seen written about things she has written in academic publications.  It is known that she is an "Originalist," a term Scalia used for himself, which means one tries to rely on the original meaning of a term in a case from when the Constitution was writeen or when an amendment was adopted.  However, what is not so well known is that there are factions among these people, and apparently Barrett is part of an especially extreme faction that views both the 14th and 15th Amendments as not being legitimate because when they were passed by Congress, the Confederat states were not represented in Congress. Of course these amendments, especially the 14th, are the foundation of all SCOTUS rulings on civil rights and against discrimination on any grounds.

I shall add that indeed I am sorry RBG did not take the reportedly subtle invitation to resign that Obama offered to her in a lunch in 2013. But I also understand why she did not. One factor was that she had this competition with her old friend going on, Scalia, for whom Barrett clerked.  By the time he died 11 months before the next president would be sworn in was too late for her to do so, as we all know McConnell blocked even the moderate centrist Merrick Garland from even getting a hearing. And, of course, RBG was expecting HRC to be the next prez.  But that did not work out, much to all our disappointments, and for RBG, well, it looks that her final wish will not be obeyed, even though it is supported by a solid majority of the American public, including even 49% of Republicans reportedly. But the current Senate is not paying any attention to that in their rush to confirm Barrett before the election.

Barkley Rosser

Open Thread

It annoys me when people "comment" by pasting articles from the media that are unrelated to the original posts they are pasted to. The original post may get 500 or less visits and it is likely the irrelevant article is read by no one -- and certainly not by me. So here is a space for readers to paste articles from the media that they perhaps think no one else has seen. If it is successful in diverting irrelevant pasting, maybe I'll put up an open thread regularly.

Laughing to keep from Freaking Out

 On the theory that one effective weapon against an Insane Clown Would-be Dictator is ridicule, here is something I wrote a while ago.

The Second Coming 

“This is the greatest president for Jews and for Israel in the history of the world. Not just in America, Trump is the best president for Israel in the history of the world. And the Jewish people love him like he is the King of Israel. They love him like he is the second coming of God." –Wayne Allan Root

 “I take the gospel whenever it’s possible, but with a grain of salt.” –Sportin’ Life, in Porgy and Bess

 

Ok, Scoffers, I scoffed, too. But I went back to the Scriptures –the true scriptures, not the ones the dem--marxist-atheist haters just make up—and Lo, what do I find?

 Jesus made his first million shekels selling water with a little purple food-coloring as Jesus Wine. 

He met the woman at the well and called her a “Horse-face.”

 He started Jesus University, which promised that graduates would be able to do miracles just like him, the curriculum of which consisted of memorizing the entirety of The Art of the Heal, a Ghost-written, worthless piece of fiction. He was sued for fraud and settled.

 He started a foundation, the Jesus Foundation, which solicited funds for the poor and used them to pay off his own debts and finance giant pictures of himself.

 He mocked lepers and amused his followers with imitations of them.

 He sent the wise-men away from the manger, telling them “I love the poorly-educated.”

 After threatening Satan with fire and fury, he met him and “fell in love.”

 He evaded taxes and stone-walled all of Herod’s tax collectors’ requests for information, telling them, “You’ll have better luck getting a camel through the eye of a needle than you will getting a penny from me!”

 When he began to go bald, he went into the desert and asked God to “Take this cup from me.” God replied: “Verily I say unto you, comb it over already!”

 He threw the money-changers out of the Temple so he could turn it into luxury condos – financed by coerced loans from the money-changers themselves, who were never repaid.

 His dismissal of aspiring candidates for discipleship on his show Celebrity Disciple --“You’re damned!”— became a by-word in Jerusalem.

 Of course, his success came at a price. He knew what God wanted in return: that he must suffer for the sins of mankind by forfeiting his life. Here is where his brilliant negotiating skills saved him. As it is written: “God so loved the world that he gave His only begotten Son....bone-spurs.

"Constitutionalism"

Democratic Despotism: 

"We find latent in their conception of law— and some have been publicly preaching this view— that law emanates solely from the will of the majority of the people, and can, therefore, be modified at any time to meet majority wishes. This doctrine is absolutely totalitarian, and is contrary to our basic conceptions of the source of law. We have seen that our political system is predicated on the doctrine that there are some immutable laws of nature and certain other divinely sanctioned rights, which the Constitution and our tradition recognized as being above and beyond the power of the majority, or of any other group of individuals or officials of the Government. There are, also, other rights, which because of man's historic experience, that are specifically protected by the Constitution, and which can only be modified under the prescribed method set forth in the Constitution; and, consequently the majority- will is not free to modify them as it pleases, but only in the circumscribed manner prescribed by the Constitution. That is why our system has been characterized as a government of laws, not of men. That is the distinction between impersonal law and personal law. Americanism is the system of government by impersonal law: totalitarianism is the system of government by personal law.” (emphasis added) -- Raoul E. Desvernine, vice-president of the American Liberty League, Democratic Despotism. 1936 (cited in "Business Organized as Powerr: The New Imperium in Imperio" see also "Constitutionalism: Political Defense of the Business Community during the New Deal Period.")

"Business Organized as Power":

"As stated in its constitution, the [American Liberty] League's purposes were, among others, "to defend and uphold the Constitution of the United States," "to teach the necessity of respect for rights of persons and property," "to encourage and protect individual and group initiative and enterprise, to foster the right to work, earn, save and acquire property, and to preserve the ownership and lawful use of property when acquired." To win these goals the League went further than any previous liberty-loving, liberty-saving organization in our history. Crucial to its functioning was the National Lawyer's Committee, a group of some 58  prominent attorneys, which issued reports or opinions in advance of Supreme Court decisions, opinions setting aside with solemnity and erudition one after another of the entire New Deal legislative mélange. The League went still further: this private court having, for example, formally declared the Wagner Labor Relations Act unconstitutional, openly advised employers to ignore its provisions."

The "Trump Effect" On Happiness

 In a column in yesterday's Washington Post, Dana Milbank has written on "Trump has made our lives worse. Here's the proof."  He labels this apparent outcome the "Trump Effect."

Since 1972 the National Opinion Research Center (NORC) at the University of Chicago has annually studied the nation's mood. They survey people to find out how they identify their level of happiness. As of this summer an all time record low of 14% declared themselves "very happy." This compares with 29% saying that at the lowest point after the 2008 financial crisis. OTOH, fully 36% declared themselves to be "satisfied" with their financial situation and a record low expressed dissatisfaction, the survey taken at a time when expanded unemployment benefits were still in effect.  But Milbank declared that this amounted to a disjuncture between peoples' economic conditions and declared happiness, with this contradicting, or at least failing to support, a longstanding finding from happiness surveys in the past.

This may be an overstated conclusion. Milbank did not report on it, but studies over the years have found that higher income people tend to declare themselves to be happier than lower income people. This may still hold.  In the US this finding has been part of the famous "Easterlin Paradox," that higher income people report higher levels of life satisfaction (or happiness) at any given point in time while over time as national income rises, happiness levels do not rise. Indeed, another data source with a longer time horizon on this found US national happiness to have gradually declined since 1957. It must be noted that this finding of declining national happiness as national income rises does not show up in al nations, although it has been observed in several others besides the US, leading to much controversy and debate. Richard Easterlin himself (still alive well into his 90s) has emphasized the impact of distribution of income and perceived economic security, with peoples' happiness depending on how they compare themselves with others.  So even though income rose rapidly, the ending of old age pensions and rising income inequality led happiness levels in China to decline from around 1990 to around 2004, although they have increased again since as pensions were extended to rural areas.

In any case, even as there seems to have been a drift over time downwards in US happiness levels even as national income has risen, Milbank sees the NORC time series as exhibiting a specifically identifiable "Trump Effect."  In 2017, the first year of his presidency, 21 states exhibited a decline in happiness while not a single one showed an increase.  Apparently there was a correlation with voting, with most of the clearly declining states being ones that did not support Trump. But Milbank notes that there seems to have been no offset of an increase in happiness in states that did support him. While views of "pleasure in activities and positive energy from friends, family, and leaders" were stable from 2014 through 2016, but fell noticeably in 2017 and have stayed down since.

Other studies have found similar results, with unsurprisingly things worsening during the pandemic. The American Psychological Association found in 2017 that two thirds of the US population, including a majority of Republicans, were "stressed about the future of the nation." This rose to 83% this year, with 66% declaring that the government was mismanaging the pandemic. According to Rachel Garfield of the Kaiser Family Foundation, an August poll found 53% of the population say that their "mental health" has been "hurt," with rising problems regarding sleeping, eating, and alcohol and drug abuse.  Those reporting "depressive symptoms" quadrupled to 40% during the pandemic.

It is unsurprising that things would get worse during the pandemic, but Milbank notes they had already worsened prior to the pandemic starting even while the economy was still getting better on most fronts.  That Trump is perceived to have handled the pandemic more poorly than leaders in nearly every other nation certainly adds to the idea that he has especially aggravated the unhappiness problem in America, exacerbating the apparent "Trump Effect" that had already been going on.  Milbank notes Trump administration official Michael Caputo taking a leave of absence this past week due to his high "stress level" and declares that if Trump is reelected "Surely four more years would cause the losing of the American mind." There really is little to add to this foreboding forecast, although getting the pandemic back under control might mitigate this somewhat, assuming that happens.

Barkley Rosser  

The Danger Of Fascism With The Death Of RBG

 I try to avoid these terms like "fascism," but it has become clear that Donald J. Trump actively seeks to become an at least authoritarian leader of the US, indeed openly arguing that the Constitution's limit of only two terms should not hold for him.  We face a clear danger of a contested election that may end up in the Supreme Court. If Trump can put a flunky into the court before the election we may have them putting him in despite a situation where he has clearly lost. And given his recent behavior, backed by a friendly SCOTUS, he would be in position to impose a fascist dictatorship in this nation.

I also note that she died on Rosh Hoshanah, and in the Jewish tradition this is a portentious time to die, with one doing so being especially blessed.  I do not know how all this will turn out, and I can think of scenarios where her death at this time may lead to a more progressive future, but she was a very great woman deserving of the most profound respect and admiration, who should rest in the greatest of peace.

Clearly Mitch McConnell hypocritically seeks to impose a Trump appointee before the election, or if not then, during the following lame duck session.  So far Romney (R-UT) and Murkowski (R-AK) have said they will not go along with this, but two more GOP Sens must step forward to block this. That may happen.  But if it does not, then the Dem senators must simply shut the Senate down, which I think is about the only thing they can do, given that the filibuster was abolished (by Dems)for judicial appointments. But I think they can simply bring the whole place to a halt, and it may come to that.

Barkley Rosser

Putting the CULTURE back in cultural Marxism

My previous postings on "political correctness" and "cultural Marxism" have from time to time brought inquiries from researchers into the right-wing calumnies against the Frankfurt School. I carry no brief for Herbert Marcuse or Theodore Adorno, although I do have a soft spot for Walter Benjamin, who was not formally a Frankfurter even though he hob-nobbed with them.

It so happens that one of my correspondents has written a brief essay defending the conspiracy theory that the Frankfurt School was a bought and paid for tool of the Comintern. The defense hinges on the fact that Frank Brooks Bielanski, who claimed "evidence" that the Institute for Social Research was a Communist front financed from abroad, was "director of investigations" for the O.S.S. and not some random F.B.I. special agent.

Oh, well, if the director of investigations said so... 

On the other hand, the argument reeks of appeal to self-styled authority. So who was this Frank Bielanski character? It turns out he was a private investigator both before and after World War II and before that a Wall Street broker. His investigative specialties appear to have been burglary and illegal wiretapping. He was also a G.O.P. dirty tricks operative. But enough of the character assassination. I'm not here to ad hominem.

UPDATE: Mr. Bielanski testified "off the record" in 1946 before a House committee under the pseudonym of "Mr. Brooks." At that time, he described his position with the O.S.S. as special adviser to the Security Office of the Office of Strategic Services. He described his employment before the war as public relations and, before that, an "ordinary businessman." He was brought to the committee by Congressman George Dondero.

What really fascinates me about Bielanski is his association with a coterie of cultural counter-revolutionaries that also included George Dondero, Michigan Congressman who railed against "Modern Art Shackled to Communism."

My apologies for only having the first page of this treatise. If you get through this and want more, you can always Google it. Dondero's indictment of modern art really, really puts the "cultural Marxism" meme in perspective. Alongside the Museum of Modern Art, Kandinsky, Picasso, Duchamp et al. surrealism, cubism, expressionism, dadaism, abstractionism (sic) &tc. the Frankfurt School's alleged assault on Western Civilization hardly amounts to a snowflake on the tip of an iceberg.

Reactionaries were against modernism before they were against postmodernism.

Au Revoir, Robert J. Samuelson

 For quite a few years not so long ago I was regularly posting here variations on "Today is Monday, so on the WaPo editorial page Robert J. (not related to Paul A.)* Samuelson is calling yet again for Social Security benefits to be cut," and he did indeed do that very frequently over a long time.  However, today was his final column for the Washington Post, so we shall no longer have RJS to kick around, sob! It was titled, "Goodbye, readers, and good luck - you'll need it."  There is also a letter to the editor from former publisher, Donald Graham, praising RJS and reminiscing knowing him as a freshman in 1962 at Harvard.  Graham noted RJS eschewed a nominal non-partisan position and studied and thought hard about his columns, even as Graham himself disagrees with some of RJS's long held positions, noting in particular RJS's longstanding support for privatizing Amtrak.  He also noted, as RJS himself stated in this final column, he is not an economist; he has merely reported on economics for a long time, starting at the Post in 1969 and columnizing on economics since as far back as 1977 in various venues.

I also disagree with RJS on privatizing Amtrak, although this is not a topic he has written much in recent years, although he did mention it in this final column.  I would argue that he has ignored that governments fund highways, which gives vehicles a competitive edge on trains, which governments do not provide or support.  So I certainly see a case for government aid to railroads, with Amtrak certainly one of the more heavily used lines in the nation.

I should note what RJS spent most of his last column writing about. He argues the biggest story of his career has been "the rise and fall of macroeconomics."  But then he turned to economists. Much of it is on the money.  He says some nice things about us in general: "With some exceptions most are intelligent, informed, engaged and decent." But then we have been wrong about a lot of things, such as deciding at various points that recessions will never happen again, although RJS admits that he did not recognize the housing bubble or foresee the Great Recession (some of us here or associated with us here did, but RJS largely ignored us). He also accurately notes that many economists take stronger positions than they might otherwise out of a desire for power and position in this or that administration, and also claim to have more influence on the economy than we do.  And then he notes the unwillingness of most to change their minds after a certain point, something he himself exhibited on some of his more strongly held views.  

Of course the one he pushed so hard for so long that I and some others of us bashed him for repeatedly was indeed his constant refrain to cut Social Security benefits, with a final swing at this in general terms in this final column: "From 2010 to 2030, the elderly's share of the population (65 and over) is projected to rise from 13 percent to 20 percent. Spending on Social Security and Medicare will skyrocket, and already is. Yet we have done little to prevent spending on the elderly from squeezing the rest of the federal budget."  So, there we are; it is Monday and yet again, if for the last time, Robert J. (not related to Paul A.) Samuelson is calling for cuts in Social Security benefits!

Of course this statement took its more general form, throwing Social Security and Medicare in together.  I must grant that this time he left them together and did not pull Social Security out separately as he did so many times in the past.  But this was an old trick: point at rising trends in spending in both, which we know are much more due to rising Medicare costs, which are driven heavily by longterm rising medical care costs in general, but then he would pivot to focus on calling for cuts in Social Security benefits.  This seem to reflect an old view that "nothing can be done about medical care politically" (despite Obama passing the ACA with much effort), but that somehow a compromise was politically possible on Social Security, reflecting a memory of Reagan and Tip O'Neill cutting one in 1983 with the Greenspan Commission, which raised taxes and cut benefits for Social Security.  The idea that another round of this was needed was pushed by Bill Clinton in the 90s, and several bipartisan commissions were formed to pull it off, but somehow they all ran into political problems. It became this established delusion in various VSP circles that such a deal should be made, and it has remained entrenched on the WaPo ed page with Fred Hiatt and others, not just RJS. 

I must note that while I beat up on him relentlessly over this matter, I have done so less in the last few years.  It is not that he changed his mind, but he wrote about it much less.  He noted in this final column that he is "repelled" by Trump, and so I found myself much more frequently agreeing with him as he would criticize Trump economic policies ranging from his "help the rich" tax cuts through his trade protectionism to his awful environmental policies.  He would occasionally reprise these old views to maintain his independence, but much more of this attention was focused on the Trump policies.

A final point he made that has me thinking personally is that a reason he gave for retiring now, even as so much is going on, is his feeling of being "a man of the 20th century, but we are now facing the problems of the 21st century, which demand new policies and norms."  This may well be a major factor for him, with indeed his views on Social Security really seeming left over from the 1990s.  As he is just a few years older than I am, it makes me think that the same could be said of me, perhaps.  But I did see the housing bubble and the Great Recession.  I think I shall stick around for some more time.

*Regarding people related to the late Paul A. Samuelson or not but with the same name commenting on economics, it should be noted that Paul's son, William F. Samuelson, is fairly respectable economist who has published on risk and auctions and some other topics, now an emeritus prof from the Management Dept. at Boston University.  He does not share the last name, but the prolific and prominent Lawrence Summers is Paul Samuelson's nephew.  There is also a non-relative, Larry Samuelson, a highly respected evolutionary game theorist at Yale University. In any case, Robert J. Samuelson is neither related to Paul A., nor has he been an economist, although he is probably a better non-economist economist than some others who pose as one, such as say Larry Kudlow.

Barkley Rosser

Trump’s Law & Order = Ronnie Thompson’s Shoot First and Ask Questions Later

Summer Concepcion reports on something I find very alarming: President Trump leaned into his self-proclamation of being the President of “law and order” further as he appeared to approve of the “retribution” of federal law enforcement officers fatally shooting a man suspected of killing a pro-Trump supporter amid protests in Portland, during an interview on Fox News that aired Saturday night. After mocking Portland mayor Ted Wheeler for refusing Trump’s offer to send in federal troops to the city to quell protests, the President then turned his focus to the fatal shooting earlier this month of Michael Forest Reinoehl — a man suspected of killing a member of the Patriot Prayer group during violent clashes in Portland — by U.S. Marshals. “We sent in the U.S. Marshals for the killer, the man who killed the young man on the street. He shot him… just cold blooded killed him,” Trump said. “Two and a half days went by, and I put out ‘when are you going to go get him?’ And the U.S. Marshals went in to get him, and they ended up in a gunfight.” Trump called Reinoehl a “violent criminal” before suggesting that his extrajudicial killing was par for the course. “This guy was a violent criminal, and the U.S. Marshals killed him,” Trump said. “And I will tell you something — that’s the way it has to be. There has to be retribution when you have crime like this.” I went to college in Macon, Georgia when Ronnie Thompson was mayor. Quinton David Palmer, a thirteen year old Macon child, brought this lawsuit against Macon Police Officers Roger Hall and Larry Foster, Macon Mayor Ronnie Thompson and the individual aldermen[1] of the City of Macon for his being unconstitutionally and unlawfully shot by Police Officer Hall on February 18, 1973 … RONNIE THOMPSON MAYOR CITY OF MACON GEORGIA 31201 June 19, 1970 EXECUTIVE ORDER FROM: MAYOR RONNIE THOMPSON TO: CHIEF J. F. FLYNT As you know we are receiving more and more threats from a few dissenting people who are interested only in violence. Anyone trying to cause violence in the City of Macon must be dealt with accordingly. People engaged in burning, looting, killing and the destruction of property, etc. must answer to the strongest reply available. Lawlessness designed to produce anarchy and the destruction of the City of Macon will not be tolerated. No policeman, no volunteer policeman will be asked to face the enemy unarmed. See that we have sufficient arms, ammunition and equipment. Those people engaged in lawlessness and anarchy must be stopped. SHOOT TO KILL! Mayor Thompson called this “shoot first and ask questions later” and argued this order should be carried out even if a person was merely taking a $2 shirt. Quinton David Palmer was a 13 year old black boy who was merely carrying a BB gun.

The Bahrain-Israel Mutual Recognition

 This freshly announced mutual recognition follows the one between the UAE and Israel, which set a new pattern, with Bahrain and possibly others (Oman?) predicted to follow.  I am not surprised it was Bahrain that was next, although it may prove to be the only one.  There are several reasons why it was most likely to be next, and why we might not see Oman join in, although that cannot be ruled out.

I see three reasons why Bahrain was most likely to be next, although there are really two fundamental ones with the third arising from those.  The most fundamental one is that of the 6 members of the Gulf Cooperation Council (GCC), now largely in shatters due to the sanctions on one of them (Qatar) by several others (Saudi Arabia (KSA), UAE, and Bahrain), is the only one where a Sunni minority is ruling over a Shia majority, with the Sunni-Shia conflict a central part of the conflict with Iran that many of them have, with Iran run by Shia, of course, where they are a majority.  The Shia of Bahrain have been restive and rose up against King Hamad during the Arab Spring that began in 2011, only to be violently put down. But, unsurprisingly, the king and those around him are especially worried about the Shia and have strongly supported the anti-Iran coalition, which includes Israel. It is this alliance that is at the heart of the new round of recognitions, with UAE leader, Prince Zayed, arguably the leader of the anti-Iran group in the GCC, along with KSA Crown Prince, MbS, although due to opposition of the Saudi religious leaders who are concerned about the Palesrtinians, MbS himself is not seen as likely to follow UAE and Bahrain to recognize Israel, although there is clearly a de facto alliance against Iran between them.

A second reason Bahrain was more likely to be next is that it is more subject to US pressure as it hosts the home base in the Persian Gulf of the US Navy's 5th fleets, something rarely mentioned in the media, and has been since the 1950s. That dates back to when what is now the UAE was still being ruled by UK as the Trucial States.  On top of that Bahrain is the smallest of the GCC members and also is the one that has been running out of oil more than the others (all of them produce at least some oil).  In short, King Hamad is much more susceptible to US pressure to recognize Israel, although given his unhappiness with his Shia population and support for the anti-Iran coalition, he has been more inclined to go along anyway.

Another reason, which basically follows these others, is that Bahrain is indeed part of the GCC group that is sanctioning/boycotting fellow GCC member, Qatar, for its apparent unwillingness to join the anti-Iran coalition.  Indeed, Qatar and Iran have a joint deal for managing certain natural gas fields in the Gulf, and Qatar, which has the world's highest per capita income, also hosts al=Jazeera, which has reported on dissident movements in several of its GCC partners, another source of anger.  Of course, while Trump initially forgot about this as MbS and Jared Kushner pushed him into supporting the anti-Qatar sanctions, Qatar hosts a major US air base, so the US military did manage to get to Trump to back off overtly supporting the anti-Qatar boycott, although the US has failed to bring that conflict to a conclusion.

So, what about the other two members of the GCC: Oman and Kuwait?  I cannot rule out Oman recognizing Israel, but it lacks several of the elements one finds in both Bahrain and UAE.  One is that it alone among Muslim nations in the world is not dominated by either Sunnis or Shia.  The majority of the population and the leaders are Ibadi Muslims, an ancient sect of Islam, that is barely present anywhere else in the world. But that has allowed Oman to stand aside from the regional Sunni-Shia conflict, and indeed it has played a role as intermediary between the two sides.  It was through Oman that the Obama admin made its initial approaches to Iran when it started negotiating the JCPOA nuclear deal that Trump has since withdrawn from. It is also Oman that shares with Iran the crucial Strait of Hormuz at the entrance to the Persian Gulf.  As a result of this, Oman has not joined the anti-Qatar sanctions/boycott, although it is not as pro-Iran as Qatar seems to be.  Oman is extremely independent and proud of being so.  It joined the GCC to keep the Saudis happy, who organized the group, but it does what it wants.  It indeed has apparently had informal friendly relations with Israel, which may lead it to recognize Israel as part of its being friendly with everybody policy.  But it would not be doing so either as part of an anti-Iran alliance or to kowtow to the US, although it does not mind keeping the US happy as well.

As for Kuwait, it has long been at the top of per capita income among this group, having the second largest pool of oil in the world, one of the reasons Saddam Hussein invaded the place.  It has been surpassed by Qatar in per capita income, but it remains very high up there and is also fairly small, although bigger than either Bahrain or Qatar.  The problem for Kuwait is that it almost borders Iran, with just a small amount of Iraq between them (where the Shatt-al-Arab empties into the Gulf, the short river that is formed when the Tigris and the Euphrates come together).  It is predominantly Sunni and has a long history of friendship with the Saudi royal family.  But its proximity to Iran has it not wanting to join in the overtly anti-Iran alliance, in that regard being a bit like Oman.  Also, it has a large Palestinian refugee population, possibly up to a quarter of the population, and recognizing Israel is not something favored by that portion of their population.

So, it is not surprising that Bahrain has recognized Israel.  Oman might do so also, although I am not holding my breath on that one, and if they do, it will be to maintain their independent "friendly with all sides" approach rather than the kowtowing to UAE and US that is going on heavily with Bahrain.

Barkley Rosser

The Wit and Wisdom of A. Fauci

 From Woodward's book: Fauci says Trump's attention span is a negative number. 

By the way, is there any group organizing to raise money to pay the "poll-tax" that the egregious Florida Republican legislature and courts are assessing on ex-felons?  

How Big Of a "Hoax" Is That "Dirty Dossier"?

 In the wake of the Atlantic story by Jeffrey Goldberg about President Trump reportedly referring to the dead Americans lying in the Aisne-Marne Cemetery near Paris as "losers"  and "suckers," along with a lot of other embarrassing things for him, Trump has called Goldberg a "slimeball" and that that this report is another "hoax" like "the dirty dossier" of Steele, along with "Russia, Russia, Russia" also being a "hoax," of course, despite the recent bipartisan Senate Intelligence Committee report further verifying that there was even more Russian interference in the 2016 election than the Mueller Report verified (105 meetings between Trump campaign officials and various Russians, with several of those officials then lying under oath about their contacts).  

Of course, Trump is on tape calling the late John McCain a "loser" because he was captured by the Viet Cong during the Vietnam War. I thought when he said that it would be the end of this then primary campaign, but it barely budged him a notch, the first sign of how he could get away with outrageous statements and actions that would do in other politicians.  But his base viewed McCain as a "RINO" traitor to their cause, so it was OK to diss him hard.  But now this new report is hitting Trump hard, especially given the widespread reporting of polls showing active military members supporting Biden over him and reports of retired Marines who has Trump signs in their yards throwing them in the garbage. The dead at Aisne-Marne did not run against Trump in a primary or contest for control of the Republican Party.  They died in a crucial battle that stopped the final German effort to conquer  Paris in the WW I.

So Russia was not a hoax, but what about that infamous Steele dossier?  Of course for those who get all their new from Fox, where Trump is also having a problem with their national security reporter supporting some of the Goldberg article, referring to the Steele dossier as "dirty" is a regular button to push to make the faithful sit up and bark their support.  It is like "Benghazi," something pounded on so often the faithful are fully indoctrinated that there is something there. About every other night Hannity reminds the suckers that it "has been completely discredited" and "was bought and paid for by Hillary Clinton."  

Regarding "being discredited," this has not happened despite various GOP congresspeople repeating this line endlessly in various hearings.  Indeed, well over 70% of it has been verified.  Most of it is true.  It accrurately reported on some of the activities of Trump associates later reported on in the Mueller Report and now the Senate Intelligence Report. But, of course, that some of that material appeared in the "dirty dossier" is supposed to be why we are not supposed to accept either of those reports.  

As it is, a few items in  it have been disproven.  Curiously most of those had to do with Carter Page, exaggerated claims that he was going to get a big payment from Gazprom, although he did in fact meet with their officials as reported in the dossier.  The FBI investigation of Page is indeed the one place where all the hysterical Trumpist conspiracy theorists have something: there were inaccuracies in one of the petitions for renewal of the  FISA application for the FBI to investigate Page, who had been investigated in the past for his activities with Russians.  The biggest blooper, not due to the dossier, was the failure of the FBI to note that Page had been used as a CIA informant, and one low level FBI official has been indicted for this Clinesmith, probably the only person who will be indicted, even though Hannity keeps calling for John Durham to come forth with his report and indictments of all the Obama/Biden people who were "spying on the Trump campaign," something that Trump himself has called "treason."  Barr has made it clear he will dump whatever there is onto us in in October, but as of now it looks like this Clinesmith messing with the FISA app is about all there is. In any case, the Page investigation was a bust and it was briefly supported by some erroneous material in the Steele dossier, but this does not amount to much.

There are other items in the dossier which the truth or falsity of remain unestablished.  The most notorious one is the item that caught initial attention when the dossier was first publicly revealed, the "pee tape" claim about Trump and some prostitutes. This was considered outrageous, but given that we have since learned that Trump has paid off prostitutes to keep quiet, this no longer seems like much of a big deal, and indeed there are apparently a number of observers who claim it probably happened.  So the item that makes the dossier "dirty" is probably true, but now who cares? and it does remain unverified.  But the bottom line remains that over 70% of it has been verified.  The claims that it has been "discredited" are simply false. But what is another lie coming out of Trump anyway?

On the matter of being "bought and paid for by Hillary Clinton," there is some truth to that.  The initial investigation of the possible Trump/Russia connection was initiated by the Jeb Bush primary campaign.  When he withdrew it did eventually come to funded by the DNC and the Clinton campaign.  But, in the end, this becomes a so what?  That in and of itself does not prove that what was reported in the dossier is false. And, indeed, a solid majority of what is in it has been verified, and the fundamental claim that the Trump campaign was operating in a cooperative manner, whatever wording one wants to use, has also clearly been established.  The "dirty dossier" is not a hoax, and "Russia, Russia, Russia" is also not a hoax, with them openly at it again for 2020, with Trump's flunky DNI Chief now refusing to testify before Congress on the matter, and specific allegations of such interference being made, such as Russians being behind a lot of the social media accounts of Biden supposedly suffering from dementia, poor "sleepy Joe," which increasingly looks to be just totally fake news.

So, sorry, Mr. Trump, this line of argument does not remotely get you off the hook for having called US war dead "losers" and "suckers."

Barkley Rosser

What is Looting?

"Looting is a natural response to the unnatural and inhuman society of commodity abundance." -- Guy Debord, “The Decline and Fall of the Spectacle-Commodity Economy.”

The photograph used in Andy Warhol's 1964 print, “Race Riot” was taken by Charles Moore and was published in LIFE magazine in May of 1963. Warhol used it without permission and Moore sued. Eventually there was an out-of-court settlement. The scene depicted was not a "Race Riot" as Warhol's presumably ironic title claimed. It was a police attack ordered by Police Commissioner "Bull" Connor on a nonviolent demonstration in Birmingham, Alabama.

I remember these photos well because they appeared at the dawn of my political awakening. I was 15. The Warhol print sold in 2014 for $62,885,000. I had to stop myself when I started to type $62,885.00. I thought the latter figure was a lot of money. No, $62,885,000. 

The text in the LIFE feature where the Birmingham photo appeared claimed that Martin Luther King Jr.’s strategy of nonviolent direct action invited police brutality and “welcomes it as a way to promote the Negroes' cause."

 

Excuse me? Nonviolent protests invite police brutality? Where have we heard that legend before? Remember, though this was the voice of liberal journalism "sympathetic" to the civil rights cause. 

Sometimes a moment of clarity strikes when I see an absolute denial that there can be any justification whatsoever for some action or expression. This happened in response to the outrage provoked by an NPR interview with the author of a recent book that offered a defense of looting. Intuitively, I would consider looting to be troubling, frightening -- something I would rather have nothing to do with. But utterly, completely indefensible? 

The virulence of the rejections made me curious. I'm familiar with affirmative historical analysis of other "indefensible" actions. People may be familiar with the writing on rioting by Charles Tilly, E. P. Thompson, Eric Hobsbawm, Peter Linebaugh, Nick Blomley and others. But these focus mainly on pre-modern or early modern episodes. As a phrase in Hobsbawm's classic essay "The Machine Breakers" suggests "collective bargaining by riot" was seen by him as anticipatory of later trade union strikes.

I found the NPR interview somewhat flippant. Perhaps I'll return to that eventually. But in searching for affirmative analyses of 21st century rioting and looting I found some very interesting leads: Riot. Strike. Riot: The New Era of Uprisings by Joshua Clover, "Why is there no just riot theory?" by Jonathan Havercroft and, last but not least, the prophetic essay by Guy Debord alluded to in the title, "The Decline and Fall of the Spectacle-Commodity Economy." 

The latter article focuses on the Watts riot of 1965, which becomes eerily contemporary in the era following the murder of George Floyd. Just three weeks before he was assassinated, Martin Luther King Jr. acknowledged the inevitability, if not the legitimacy, of riots as "the language of the unheard." Yet 55 years after Watts it remains politically obligatory to unequivocally denounce riots and looting as having nothing to do with legitimate, peaceful protest. Talk about your "political correctness" speech police! To even question this knee-jerk denunciation is seen as "glorifying violence."

'I Plan to Lead Another Non-Violent March Tomorrow' is the caption of a 1964 cartoon from the Birmingham News by Charles Brooks. Judging from a wider sampling of Brooks's work, he was a “moderate.” 

"In an early Gallup question on the issue, Americans were asked whether tactics such as 'sit-ins' and demonstrations by the civil rights movement had helped or hurt the chances of racial integration in the South. More than half, 57%, said such demonstrations and acts of civil disobedience had hurt chances of integration, while barely a quarter, 27%, said they had helped."

A couple of novelists from back in the day wrote some interesting observations about questions. In Gravity's Rainbow, Thomas Pynchon wrote, "If they can get you asking the wrong questions, they don't have to worry about answers." "In the realm of totalitarian kitsch," Milan Kundera wrote in The Unbearable Lightness of Being, "all answers are given in advance and preclude any questions." Kundera went on to define kitsch as causing "two tears to flow in quick succession. The first tear says: How nice to see children running on the grass! The second tear says: How nice to be moved, together with all mankind, by children running on the grass! It is the second tear that makes kitsch kitsch."

There is also a kitsch of righteous indignation: the denunciation of the cowardly terrorist or, closer to home, of the rapacious extractive corporation. Or maybe it’s the $62, 885,000 sale in 2014 of an Andy Warhol print titled “Race Riot.” This is not to say that corporations are not rapacious or terrorists not cowardly for targeting innocent civilians. But those actions are at least explicable even if they’re not justifiable. Rioting and looting are commonly denounced as not only violent and "counterproductive" but as mindless and incoherent.

But what does all this have to do with environmental sustainability? As Joshua Clover points out, "It matters little whether one conceives of climate collapse as cause of refugees, or refugees the source of resource burdens. In the present world, immigration has become an ecological fact, ecology a matter of immigration." This is also true for racialized class stratification. Our present mode of circulation of commodities requires expansive policing, both of borders and of internal, "disadvantaged" communities. Mass incarceration is a feature of the Spectacle-Commodity economy, not a bug. And a print of a photograph of police attacking civil rights protesters can fetch $62,855,000. Sixty-two million, eight-hundred and fifty-five thousand U.S. dollars. And no cents.

It is logical to make legal appeals regarding legal questions," Debord wrote, "What is irrational is to appeal legally against a blatant illegality as if it were a mere oversight that would be corrected if pointed out.

Much of the conversation of environmental sustainability revolves around the question of how to educate and persuade consumers, policy makers or industries to act more intelligently and responsibly toward the environment. What if we are asking the wrong questions?

Should We Fear A Reappearance Of Inflation?

 In today's Washington Post Robert J. Samuelson has raised the possibility that the Federal Reserve may be setting the US up for a reappearance of inflation.  He invoked the 1960s and 1970s when supposedly the Fed allowed inflation to get out of control out of a supposedly misguided effort to bring down unemployment by allowing successive small increases in inflation. Supposedly the newly released report on changed Fed policies may be taking us back to those bad old days, even though for now RJS admits that inflation is low, with expectations of inflation only at 1.34%.  How worried should we be?

OK, I am not going to say that a resurgence of inflation is impossible.  I can imagine it possibly resurging, with such a development perhaps being associated with a sharp decline of the US dollar, perhaps associated with a turn from its use as a reserve currency.  I do not see that happening immediately, but there is a theoretical literature that suggests that such an event could happen rather suddenly at some point.  If so, then maybe it could be happen.  Is the new Fed policy likely to bring this on?

I suppose one reason to be concerned is that the supposedly new policy approach has been rather opaque.  I have had trouble getting a clear picture what the changes are in policy. The main reports have been relatively undramatic, basically an idea that at least through the next year there will be no interest rate increases.  Probably a bigger deal is that the Fed might tolerate inflation higher than the 2% targeted rate.

But a curious thing is that a funny thing has happened about that target.  As long noted by Dean Baker and some others, that 2% is a target, meaning that supposedly that is what the rate should be on average.  If that is the case, then we should expect it to be higher than 2% as much as it is below that rate. But in practice it seems that the "target" has become an upper limit, and Samuelson essentially refers to it this way.  This makes for the rather weird outcome that a reassertion of what has long been offficial policy but not followed in practice should again be the official policy is somehow a scary threat of a possible outbreak of future serious inflation.  This becomes a rather absurd analysis.

Addendum (9/1): I note one area where we have seen rising prices is for food, with many people worried about that, indeed, I have just heard a poll showing this being the top worry of Americans during the current pandemic.  As it is, this seems to be at least one supply-side driven element in inflation that is out there, probably not so important for longer run inflation policy.

Barkley Rosser