Sir Paul Collier ‘reviews’ ten books at The Times Literary Supplement. Almost Marx comments, part II

I will continue my comment on Paul Collier’s TLS Book review. I will quote from his essay and those quotations will be underlined and colored to indicate quotation, and my comments will be in bold italics. I try to address Collier’s arguments, but in a more pointed and schematic way.

‘For social dem­ocracy, well-founded opposition to racism elided into the espousal of multiculturalism and global citizenship.’

Collier fails to understand that Cosmopolitanism prevails as fact not as speculative, he hasn’t read Ulrich Beck’s 20 Questions.

For example, as Rajan and Zingales propose, such an entitlement could finance mid-career re-education. Per capita, Britain has the finest higher education sector in the world, but to date its financial incentives have been to expand through foreign postgraduates rather than mature nationals.

Uber, airbnb (and Amazon) are tax scams.

Collier present a good idea appropriated from Rajan & Zingales. Uber is more likely Neo-Liberal, in the sense that it undermines the power of the states and municipalities, to subject transportation of persons to licensing in the public interest: The Market determines all things!  

As decency has eroded, their pay has risen 80 per cent in the past decade, with negligible evidence of enhanced performance.

Notice that argument as to CEO pay, is placed in the arena of wanting morality, a favorite ploy of Conservatism, although the register sifts quickly back to the question of performance, and the notion of ‘bonus-driven short-termism’. Robber Capital is ‘normalized’, yet doesn’t escape without a mild scolding!

The composition of corporate boards could reflect the range of society’s interests in such decisions, whether through the appointment of members to represent specific interests, or with legal mandates on all board members to give due weight to non-commercial interests. Either would force difficult trade-offs to be faced inside boards, internalizing them rather than relying on the external policing of regulation. The average duration of a shareholding in a company is less than two months: it is ridiculous that this is the only interest group represented on boards. Proper regulation could help to get companies to respect the wider interests of society, but the exclusive reliance on regulation repeatedly founders on the rocks of the superior knowledge of insiders.

Here is the latest of the many schemes to de-regulate, or at the least to check the government  controls on corporate governance, by including on these corporate boards: ‘whether through the appointment of members to represent specific interests, or with legal mandates on all board members to give due weight to non-commercial interests.’ Will this mechanism replace regulatory laws and sanctions or be an addition to the current laws? Could the reader speculate what  the ‘Hard Pragmatist’ Collier would choose?

For young working-class people, the lifting of social restraint has come at a high price: the discipline of “respectability”, for all its stultifying pressures, helped to reduce early mistakes that now trap people into long-term frustration. They suffer the twin tyrannies of social services and political correctness. Social service departments, run by tick-box decision-taking, remove thousands of “at-risk” children into a morass of foster care. A more viable alternative would be intensive and sustained mentoring and support for young parents. Political correctness has enforced the public narrative that all lifestyles are “equally valid”, confusing the necessary lifting of stigma with the damaging falsehood that the stability of a relationship is inconsequential for parenting. The huge financial costs of dysfunctional childrearing are currently borne by society: the responsible “just about managing” are right to be angry about single mothers on benefits (though not with them).

Collier enters the territory of the soft-core authoritarianism of Cass Sunstein’s ‘Nudge’. Read Jeremy Waldron’s review of ‘Why Nudge? The Politics Of Libertarian Paternalism’: http://www.nybooks.com/articles/2014/10/09/cass-sunstein-its-all-your-own-good/

Or read Mr. Sunstein’s review of Sarah Conly’s ‘Against Autonomy, Justifying Coercive Paternalism’ :

http://www.nybooks.com/articles/2013/03/07/its-your-own-good/

This another aspect of Collier’s ‘Hard Pragmatism’?

 ‘Single mothers on benefits’ is uncomfortably close to Ronald Reagan’s 1976 rallying cry of ‘Welfare Queens driving Cadillacs’!

Liberal disdain has been driven by fears that nationalism would incite a return to majority violence against minorities, and by the hope that nation-based governance can be superseded by multiculturalism and global citizenship. Neither the fears nor the hopes are well founded.

The necessary and compelling idea of the shared destiny of the Commonwealth, and its being writ large, in the idea and practice of Cosmopolitanism, are not antithetical but complimentary. The Multicultural framing is self-serving, if not mendacious! This idea of Cosmopolitanism as inclusive of other forms of allegiance is outside the ken of Collier’s ‘Hard Pragmatism’? again he hasn’t read Ulrich Beck’s 20 Questions.

Almost Marx

http://www.the-tls.co.uk/articles/public/how-to-save-capitalism/

 

 

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Sir Paul Collier ‘reviews’ ten books at The Times Literary Supplement. Almost Marx comments

Sir Paul Collier ‘reviews’ ten books on Capitalism in the Times Literary Supplement of January 25 2017, under the title of ‘How to save capitalism from itself’:

1.Marc Levinson

AN EXTRAORDINARY TIME

The end of the postwar boom and the return of the ordinary economy.
336pp. Random House. £20.

2.Jonathan Tepperman

THE FIX

How nations survive and thrive in a world in decline
320pp. Bloomsbury. $28.

3. Ruchir Sharma

THE RISE AND FALL OF NATIONS

Ten rules of change in the post-crisis world
480pp. Allen Lane. £25.

4. Deidre McCloskey

BOURGEOIS EQUALITY

How ideas, not capital or institutions enriched the world
768pp. University of Chicago Press. £31.50.

5. Rgahuram G. Rajan and Luigi Zingales

SAVING CAPITALISM FROM THE CAPITALISTS

Unleashing the power of financial markets to
392pp. Princeton University Press. Paperback, $45.

6. Joel Mokyr

A CULTURE OF GROWTH

The origins of the modern economy.
400pp. Princeton University Press. £27.95.

7. Wolfgang Streeck

HOW WILL CAPITALISM END?

Essays on a failing system
272pp. Verso. £16.99.

8. Sean Meighoo

THE END OF THE WEST

And other cautionary tales
272pp. Columbia University Press. £30.

9. Darrell West

MEGACHANGE

Economic disruption, political upheaval
200pp. Brookings Institute Press. $24.

10. Peter Frase

FOUR FUTURES

Life after capitalism
160pp. Verso. Paperback, £8.99.

Before you read my comments or his essay, read the Wikipedia entry under his name, although I’ll provide the first three paragraphs of his impressive CV:

Sir Paul Collier, CBE (born 23 April 1949)[1] is professor of economics and public policy in the Blavatnik School of Government at the University of Oxford.

He is also a director of the International Growth Centre, the director of the Centre for the Study of African Economies, and a fellow of St Antony’s College, Oxford.

From 1998 until 2003 he was the director of the Development Research Group of the World Bank. In 2010 and 2011, he was named by Foreign Policy magazine to its list of top global thinkers.[2][3] Collier currently serves on the advisory board of Academics Stand Against Poverty (ASAP).

https://en.wikipedia.org/wiki/Paul_Collier

But read, after his CV, the first two paragraphs of his essay, and marvel at his contempt for some of the books and their authors, that looks very much like the arrogance of a technocrat/academic/politician that few would question, certainly no student in an academic  setting.

In The Future of Socialism Antony Crosland redirected the Left from Marxism to social democracy. Written in 1956, it anticipated what became the dominant European philosophy. Social democracy successfully addressed the major problems of the time; but new problems have since arisen for which it lacks a credible narrative, or a credible solution. Social democracy now lies in ruins, its ragbag of policies rejected by electorates. Its heyday was the trente glorieuses, 1945–75, but, as Marc Levinson recounts in An Extraordinary Time, the splendid outcomes during these years cannot be attributed primarily to good economic policy choices. Rather, fortuitous technological changes and one-off structural opportunities coincided to lift Western living standards. In the very different circumstances of today, returning to the Keynesianism and redistributive taxation of 1960s social democracy is unlikely to restore Eden. Levinson’s book, which takes the sorry story of economic mismanagement through to 1990, is a valuable antidote to all passionately held economic ideologies. Levinson shows that the Keynesian “fine tuning” of demand was abandoned for good reason; but its replacement by tax cuts for the wealthy and monetary targeting fared no better. For those so inclined, I recommend combining this study with Paul Romer’s brilliant paper “The Trouble with Macroeconomics” (freely available online), which demolishes the past twenty-five years of macroeconomic theory. Reading these two together it becomes clear that no shiny economic theory is going to restore mass prosperity.

Meanwhile, the only contemporary eruptions from the Left are pantomime Marxism. In the decade preceding the demise of Communism there was an upsurge in books predicting the demise of capitalism, and memories have evidently receded sufficiently to support a revival. The ideological vanguard will find Wolfgang Streeck’s How Will Capitalism End? satisfyingly turgid and pretentious, while for the useful idiots I recommend Peter Frase’s Four Futures: Life after capitalism as engagingly inspirational. If you enjoy these books, you may also, as the phrase goes, enjoy Harry Potter. Yet, while capitalism at last stands electorally victorious and philosophically without serious rival, its performance has become manifestly unsatisfactory. Its core credential of steadily rising general living standards has been badly tarnished: a majority now expect their children’s lives to be worse than their own. It is time for “The Future of Capitalism”. Unfortunately, nobody has yet successfully written that book. In its absence, I will try to weave something from the strands of recent contributions to the field.

http://www.the-tls.co.uk/articles/public/how-to-save-capitalism/

Take this sentence that occurs in the first part of paragraph one:

‘Social democracy now lies in ruins, its ragbag of policies rejected by electorates.’

The notion that ‘social democracy lies in ruins’ is not true, what lies in ruin is Neo-Liberal policies adopted in both America and Britain, that began with the rise of Thatcher and Reagan. Those ‘ragbag policies’ rejected by electorates are Neo-Liberal not social democratic!

Another:

‘In the very different circumstances of today, returning to the Keynesianism and redistributive taxation of 1960s social democracy is unlikely to restore Eden.’

This is pure economic metaphysics, all the reader needs to do is remind herself how utterly minuscule was the attempt of the Neo-Liberals to use Keyenesian methodologies, for fear of breaking with the hollowed Free Market trinity of Hayek/Mises/Friedman!

Number three:

Reading these two together it becomes clear that no shiny economic theory is going to restore mass prosperity.

The premier technocrat has no answers, as the mirage of ‘mass prosperity’ is now as distant, as the profits of tax evading Global Corporations, from the nation states that were once their homes.

Number four:

Meanwhile, the only contemporary eruptions from the Left are pantomime Marxism. In the decade preceding the demise of Communism there was an upsurge in books predicting the demise of capitalism, and memories have evidently receded sufficiently to support a revival.

Mr. Collier crows about the demise of the Soviet Union, by framing his comment in the notion of ‘pantomime Marxism’ as a resurgence of not-quite-real critique of Marx in a less than potent form: a usable caricature. One would think that a defender of Capitalism, in the ninth year of its precipitous decline, except for the financial sector and their vultures, like Paul Singer or Mitt Romney, would be less inclined toward the mirage of post Cold War triumphalism, allied to a retrograde Capitalist apologetics.

Number five:

The ideological vanguard will find Wolfgang Streeck’s How Will Capitalism End? satisfyingly turgid and pretentious, while for the useful idiots I recommend Peter Frase’s Four Futures: Life after capitalism as engagingly inspirational. If you enjoy these books, you may also, as the phrase goes, enjoy Harry Potter.

The reader can only find this string of insults against Streeck and Frase, as instructive of the contempt that expresses itself as derision: comparing the books by these two authors to be in the same genre as Harry Potter: fantasy and wizardry. This one time  World Bank employee has an ideology of his own, but his critique, in this case, is reduced to playground taunts. The reader finds herself in the position of wanting a more potent,critically focused evaluation of Capitalism. The TLS proclaims itself as the premier publication in the world of ideas,literature etc., Collier’s essay put that claim into doubtful territory, as maladroit polemic is what the reader is presented in these opening paragraphs.

Yet, while capitalism at last stands electorally victorious and philosophically without serious rival, its performance has become manifestly unsatisfactory. Its core credential of steadily rising general living standards has been badly tarnished: a majority now expect their children’s lives to be worse than their own. It is time for “The Future of Capitalism”. Unfortunately, nobody has yet successfully written that book. In its absence, I will try to weave something from the strands of recent contributions to the field.

What that reader gets is more muted triumphalism, no matter how misplaced, and the assurance of the enlightenment to follow, from this well credentialed and experienced technocrat. With the proviso that the book on the ‘Future of Capitalism’ has yet to be successfully written.

The patient reader is rewarded with Collier’s statement of principals:

But for present purposes it is Tepperman’s conclusion that is valuable: eschew ideology; focus on pragmatic solutions to core problems, adjust as you go, but be as tough as is necessary. A viable future for capitalism will cut across the ideological baggage of the twentieth century: forget Left versus Right, set aside the familiar pious moralizing and start from the problems. As Tepperman argues, the leaders who stuck rigorously to this approach initially faced intense criticism. Pragmatism is guaranteed to offend the ideologues of every persuasion and they are the people who dominate the media. An identity of being “on the Left” has been a lazy way of feeling morally superior; an identity of being “on the Right” has been a lazy way of feeling intellectually superior. Welcome to pragmatism: the hard centre.

‘Welcome to pragmatism:the hard center’ is his declared ideological position, yet the very idea of ‘pragmatism’ is its adaptability to change in all its iterations, as the basis for action! This is the statement, or better yet the throwing down of the gauntlet, of an intellectual bully, the ruthless Technocrat who brooks no dissenters. All is ex cathedra pronouncement! What is the reader to make of this exercise in blatant paranoia mongering? Pragmatism is guaranteed to offend the ideologues of every persuasion and they are the people who dominate the media. Collier declares himself and his fellow travelers as victims, before the fact. Isn’t that the claim that the ‘Right’ continually makes against the ‘Left’?

Mr. Collier then shifts  focus to what the Financial Times has called ‘The Rebellion Against The Elites’ and he dubs ‘sans cool’ maladroit word play on ‘sans culottes’. His attempt to trivialize the justifiable anger of the ‘masses’, at technocrats like himself, is framed as lame comic patter: the defensiveness of an expert who has been found out? Collier does not qualify as one of Adam Smith’s Impartial Spectators! I can speculate that Collier is an avid reader of ‘The Wealth of Nations’, but has ignored, maybe even scorns , ‘The Theory of Moral Sentiments’, as part of Smith’s unrealized Enlightenment project of a ‘Science of Man’.

The new problems that pragmatism needs to fix are manifested in the new anger against elites. The social basis of that anger is spatial, educational and moral. It is the regions rebelling against the giant agglomerations: Northern England versus London and the South, the heartlands versus the coasts. It is the less educated rebelling against the more educated. It is the struggling “just-about-managing” rebelling against the feckless. The ill-educated, toiling provincial has replaced the working class as the revolutionary force in society: not the sans culottes so much as the sans cool. So what are these people angry about? Partly their gripes are economic. The fortunes of the new elite have risen, often undeservedly, while those of the sans cool have deteriorated. Anger is tinged with fear: for the sans cool economic security is collapsing. But anger and fear go beyond the economic: people see that the members of the educated southern/coastal elite are intermarrying (“assortative mating”) and embracing a globalized identity, while asserting their moral superiority by encouraging their favoured priority groups to elevate characteristics such as ethnicity and sexual orientation into exclusive “community” identities. The sans cool understand that both the withdrawal by the elite and the emergence of new favoured groups apparently creaming off benefits weaken their claim to help, just as their need for support is increasing. Effectively – and pragmatically – addressing these three concerns of the sans cool is the challenge facing our leaders.

In this portion of Collier’s polemic, in which the books and authors are reduced to mere bit players, in his little melodrama of resentments, real and imagined, and provide the rhetorical facts, that fuels the exposition  of his ‘Hard Pragmatism’. In sum the changes to tax policy must favor the good ‘Innovators’ and penalize  the bad ‘Rent Seekers’. This kind of reductivism would shame even a dime store Marxist!

The new problems that pragmatism needs to fix are manifested in the new anger against elites. The social basis of that anger is spatial, educational and moral. It is the regions rebelling against the giant agglomerations: Northern England versus London and the South, the heartlands versus the coasts. It is the less educated rebelling against the more educated. It is the struggling “just-about-managing” rebelling against the feckless. The ill-educated, toiling provincial has replaced the working class as the revolutionary force in society: not the sans culottes so much as the sans cool. So what are these people angry about? Partly their gripes are economic. The fortunes of the new elite have risen, often undeservedly, while those of the sans cool have deteriorated. Anger is tinged with fear: for the sans cool economic security is collapsing. But anger and fear go beyond the economic: people see that the members of the educated southern/coastal elite are intermarrying (“assortative mating”) and embracing a globalized identity, while asserting their moral superiority by encouraging their favoured priority groups to elevate characteristics such as ethnicity and sexual orientation into exclusive “community” identities. The sans cool understand that both the withdrawal by the elite and the emergence of new favoured groups apparently creaming off benefits weaken their claim to help, just as their need for support is increasing. Effectively – and pragmatically – addressing these three concerns of the sans cool is the challenge facing our leaders.

Mr. Collier then places the Metropolis as the villain, to the angry provincials, who seek to do what to this center of power? The city provides scale, specialization and extraordinary connectivity to the technocrat not to the lowly laborer. What does the city of London make? It provides the hive for the Finacialization of the whole of the human endeavor, certainly the keystone of Mr. Collier’s ‘hard pragmatism’. Collier panders to the real complaints, dissatisfactions, the rage of ‘the provinces’ and ‘the less educated’  with these two sentences, separated by the dismal science extemporizing of the technocrat:

The provinces are right to be angry.

The less educated are also right to be angry.

One marvels at Mr. Collier’s technocratic myopia! Once Capitalists, small business owners and providers of services, were integral parts of communities that served the needs of its neighbors. Capitalism is a monster whose only rationale is profit, at any cost, and Mr. Collier is its lackey.  Serving the needs of the community is an utterly alien notion/practice to this expert! Does the reader have an answer as to the why of Marx’s return? I have run out of patience with Mr. Collier’s ‘Hard Pragmatism’, which is quite transparently an evolution, or more tellingly, a de-evolution of the demonstrably poisonous Neo-Liberalism. I will let Wolfgang Streeck speak in his 2013 essay titled ‘How Will Capitalism End?’

Five disorders

Capitalism without opposition is left to its own devices, which do not include self-restraint. The capitalist pursuit of profit is open-ended, and cannot be otherwise. The idea that less could be more is not a principle a capitalist society could honour; it must be imposed upon it, or else there will be no end to its progress, self-consuming as it may ultimately be. At present, I claim, we are already in a position to observe capitalism passing away as a result of having destroyed its opposition—dying, as it were, from an overdose of itself. For illustration I will point to five systemic disorders of today’s advanced capitalism; all of them result in various ways from the weakening of traditional institutional and political restraints on capitalist advance. I call them stagnation, oligarchic redistribution, the plundering of the public domain, corruption and global anarchy.

Six years after Lehman, predictions of long-lasting economic stagnation are en vogue. A prominent example is a much-discussed paper by Robert Gordon, who argues that the main innovations that have driven productivity and economic growth since the 1800s could happen only once, like the increase in the speed of transportation or the installation of running water in cities. [29] Compared to them, the recent spread of information technology has produced only minor productivity effects, if any. While Gordon’s argument may seem somewhat technologically deterministic, it appears plausible that capitalism can hope to attain the level of growth needed to compensate a non-capitalist working class for helping others accumulate capital only if technology opens up ever new opportunities for increasing productivity. In any case, in what looks like an afterthought Gordon supports his prediction of low or no growth by listing six non-technological factors—he calls them ‘headwinds’—which would make for long-term stagnation ‘even if innovation were to continue . . . at the rate of the two decades before 2007’. [30] Among these factors he includes two that I argue have for some time been intertwined with low growth: inequality and ‘the overhang of consumer and government debt’. [31]

What is astonishing is how close current stagnation theories come to the Marxist underconsumption theories of the 1970s and 1980s. [32] Recently, none other than Lawrence ‘Larry’ Summers—friend of Wall Street, chief architect of financial deregulation under Clinton, and Obama’s first choice for president of the Federal Reserve, until he had to give way in face of congressional opposition [33] —has joined the stagnation theorists. At the imf Economic Forum on November 8 last year, Summers confessed to having given up hope that close-to-zero interest rates would produce significant economic growth in the foreseeable future, in a world he felt was suffering from an excess of capital. [34] Summers’ prediction of ‘secular stagnation’ as the ‘new normal’ met with surprisingly broad approval among his fellow economists, including Paul Krugman. [35] What Summers mentioned only in passing was that the conspicuous failure of even negative real interest rates to revive investment coincided with a long-term increase in inequality, in the us and elsewhere. As Keynes would have known, concentration of income at the top must detract from effective demand and make capital owners look for speculative profit opportunities outside the ‘real economy’. This may in fact have been one of the causes of the ‘financialization’ of capitalism that began in the 1980s.

https://newleftreview.org/II/87/wolfgang-streeck-how-will-capitalism-end

Almost Marx

 

 

 

 

 

 

 

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The Greek Melodrama, episode MCXXXIII:on the peril of dishonesty. A comment by Almost Marx

The ever evolving Greek Melodrama continues in the pages of The Financial Times.   Mr. Münchau’s essay is framed in a dire warning:A failure to tell the truth imperils Greece and Europe’ and its sub-headline ‘If the IMF pulls out, Europe will be free to mismanage the crisis on its own’ Financial Times headline writers sharpen or reduce to the lowest terms, to appeal to the prejudices of its readers! If one thing is glaringly obvious, it is that from the beginning of this Crisis, from the propaganda offensive of The Virtuous Northern Tier vs The Profligate Southern Tier that was proffered by the apologists of four time defaulter Germany, the preferred method was to engage in moral shaming of the Greeks as the ethical other, as outsiders from their Northern betters.

Yet it was Goldman Sachs that colluded with former Greek governments to hide the true level of Greek indebtedness:

Now, though, it looks like the Greek figure jugglers have been even more brazen than was previously thought. “Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future,” one insider recalled, adding that Mediterranean countries had snapped up such products.

Greece’s debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period — to be exchanged back into the original currencies at a later date.

http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman-sachs-helped-greece-to-mask-its-true-debt-a-676634.html

And not to forget the Germans and the fact that they defaulted 4 times in the 20th Century. Ms. Tett provides the reader with the pertinent data.

https://www.ft.com/content/927efd1e-9c32-11e4-b9f8-00144feabdc0

And then then there is this Financial Times news story :

Headline: Tsipras warns IMF and Germany over bailout talks

Sub-headline: Greek prime minister says negotiators ‘playing with fire’ for domestic gain

Greece’s prime minister Alexis Tsipras has warned the IMF and Germany to “stop playing with fire” at the expense of the Greek people, saying he is confident a bailout deal is within reach. Markets were hit this week by concerns that a deal might not be reached before July, when Greece is due to make a €7bn debt repayment. European negotiators are trying to seal a new agreement so Greece can release another tranche of funds from its most recent €86bn bailout to make the payment. Representatives of Greece’s lenders are set to return to Athens this week to check whether Greece has complied with a second batch of reforms agreed under the current bailout.

https://www.ft.com/content/37615178-f06a-11e6-95ee-f14e55513608

How long does it take for the political agents of the  E.U. to realize that ‘Reform’ and its instrument ‘Austerity’ are demonstrable, empirical failures? Even the IMF has reluctantly realized a portion of this reality:

Headline: Neoliberalism: Oversold?

Sub-headline: Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion

http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

Or have I phrased it as a question when it should be a statement about the self-serving myopia that pervades the European Union, under the leadership of its capos Merkel and the ECB. The EU was and remains a cartel with the trapping of a democracy, as Yanis Varoufakis pointed out long ago. In sum, it could be observed that Monnet’s vision was not democratic but corporatist, without engaging in hyperbole.

Almost Marx

https://www.ft.com/content/87501830-ef85-11e6-930f-061b01e23655

 

 

 

 

 

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@Covel on ‘PC World’ or the enemy is the ‘Left’ & our Hero Trump. A comment by Almost Marx

In a polemical style reminiscent of Ayn Rand ranting about ‘Altruism’, as the poison that ales humanity, Mr. Covel mimics the literary style adapted from Robert Evans, in ‘The Kid Stays in the Picture’: full of bravado, but punctuated here by short exclamatory interjections, some  in italics, as he rages on about a ‘PC World’ in the clutches of the Neo-Liberal Cardinal Sin of Entitlement! The vehicle for his rage is the careful and consistent use of cliches. He bests, by quite a distance,one of the New York Times’ resident dunderheads, Thomas Friedman. That takes the concentrated effort, of a pontiff used to an eager audience of acolytes, who paid dearly to hear the ex cathedra pronouncements from his excellency.

Hidden among the dross of Mr. Covel’s rant, against the ‘Left’, in all its amorphous yet menacing iterations, is this paragraph that celebrates another Entrepreneur, President Trump:

Consider President Donald Trump’s non-PC perspective. His rise has nothing to do with his political positions. It’s all about a guy bringing a certain confidence, linguistic persuasion, and personal success. Of course, he will always be controversial, but he speaks the truth as he sees it. And that fascinates millions because it’s so damn unexpected. We aren’t use to seeing that. Too much of modern day is versed, rehearsed, and you are guilty if you don’t want to join the Kumbaya group hug.

Mr. Covel feels a sense of kinship with Trump, if feeling is the right word, in the rarefied air of the Mt. Pelerin Olympus? The kinship of two grifters running their con on the suckers, an homage to P.T. Barnum!

Almost Marx

PC Culture Has Created an Epidemic of Entitlement and It Needs to End

 

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Quantitative Easing in the Eurozone, or panic in Mont Pelerin Olympus, a comment by Almost Marx

Mr. Gallo, in his essay, advocates a ‘rethink’ for the E.U., led by The Germans, who defaulted four times in the 20th Century. Read Ms. Tett’s 2015 essay for the particulars:

https://www.ft.com/content/927efd1e-9c32-11e4-b9f8-00144feabdc0

The stark choice for the German led E.U. is reform or die! Rising ‘Populism’ of both ‘Left’ and ‘Right’: the Brexit and the Trump victory have increased ‘The Panic of the Elites’, enter stage right Mr. Gallo.

Eurozone leaders surely need a rethink of their strategy. One option is to build a more flexible union — with a “variable geometry”, as championed by German Finance Minister Wolfgang Schäuble. The alternative is one of a closer Europe, which both France and Italy support, as well as German opposition leader Martin Schulz. Whichever the way forward, however, eurozone institutions still have plenty of dry powder. The €500bn-strong European Financial Stability fund is still untapped, while Europeans support the EU project even in countries hard-hit by recessions: 73 per cent were either positive or neutral as of mid-2016, according to the European Commission’s eurobarometer.

The technocratic babble of ‘Variable Geometry’ is another name for Quantitative Easing. I provide three links below with pertinent data and thoughts on QE in American and European contexts*.

And then there is the usual attack on the Welfare State, that needs dismantling, in the face of the ‘Crisis’. Caused by the greed of Banks and Investment Houses not by the Welfare State indulging a lazy populace: we are in the ’76 Reagan territory of ‘Welfare Queens driving Cadillacs’ ! Although cloaked in respectable bourgeois political apologetics .

In the decades before the financial crisis, eurozone countries lagged behind the US and the UK, held back in part by higher taxes, less flexible labour markets and more generous welfare policies.

Mr. Gallo then quickly shifts to a sudden concern about ‘inequality’, a sea change in the Party Line of an Utterly failed Neo-Liberalism. The Populist Menace  is chasing him and his fellow travelers at The Financial Times and desperation, even panic has manifested itself in the Mont Pelerin Olympus!

*For some useful background on the Quantitative Easing question, see this essay by  Jeremy Green, Research Fellow, Sheffield Political Economy Research Institute (SPERI) at University of Sheffield, posted at the Naked Capitalism web site September 27,2013.

Headline:  The Regressive Politics of Quantitative Easing

Second, central bank leadership of the policy response also reflects a key feature of neoliberal political economy in practice. Despite all the rhetoric of free markets, competition and deregulation that has been the mainstay of neoliberalism, there is a central contradiction at its heart: neoliberalism has been extremely reliant upon the active interventions of central banks within supposedly “free” markets.

The crisis has been warehoused on the expanding balance sheets of central banks, demonstrating just how much scope for policy manoeuvre there is when governing elites want it. Government debt and private assets, including toxic mortgage-backed securities, have been indefinitely transferred onto central bank accounts. This strategy highlights the role of arbitrary accounting processes, shaped by state institutions, at the heart of supposedly “free market” economies.

Given this room for manoeuvre, there is no doubt that a much more expansionary fiscal policy and a progressive taxation system could have been implemented in response to the crisis, but that response is foreclosed by the ideological confines of the prevailing neoliberal orthodoxy. Instead, we have monetary expansion and fiscal austerity.

In the present period, we’ve witnessed a similar form of wealth redistribution. Recent estimates by Berkeley professor Emmanuel Saez, an influential scholar of income inequality, suggest that 95% of wealth gains since 2009 have accrued to the top 1% of the US income distribution pattern. In Britain the experience has been very similar, with the Bank of England’s own report in 2012 suggesting that QE had benefited Britain’s richest 5% the most.

Quantitative easing is thus exposed. It’s not merely a technical remedy to a malfunctioning financial system, but rather a deeply political policy programme. There are winners and losers just as with any economic policy that affects the overall distribution of wealth and resources within society. The conventional fixation with GDP obscures these dimensions of the recovery and ignores key questions about the distribution of wealth within society.

http://www.nakedcapitalism.com/2013/09/the-regressive-politics-of-quantitative-easing.html

On the question of Quantitative Easing in an American context read this Fortune essay by Stephen Gandel.

 Headline: Big banks made $650 million off of Fed’s QE program
Jul 23, 2014

A recent study by a Fed economist and one from MIT estimate that Wall Street firms may have made as much as $653 million in fees selling bonds to the Fed. The economists, Zhaogang Song and Haoziang Zhu, conclude that, while that is a lot of money, it was probably a good deal for the Fed. Since QE has started, the Fed has bought $3.7 trillion in U.S. Treasury and mortgage bonds. The $653 million that the banks collected amounts to a commission of just under 0.02%, or 0.02 cents for every $100 in bonds that the Fed bought.

What’s more, QE started in early 2009. So Wall Street collected those fees over five years. And they are spread over a number of different firms. But the economists found that the fees were not spread evenly. Indeed, 70% of the fees the Fed paid Wall Street firms during the period that the professors examined—10 months from November 2010 to September 2011—went to five firms. And you can probably guess who got the most: Goldman Sachs (gs, -0.79%).

“Certain institutions have better access to the Fed and to the markets,” says Bob Eisenbeis, an economist and long-time Fed watcher at Cumberland Advisors. “We have an archaic system that needs to be reformed.”

http://fortune.com/2014/07/23/big-banks-made-650-million-off-of-feds-qe-program/

Yet as the essay progresses we encounter this:

‘The Fed buys its bonds in QE through a reverse auction process. It says it wants to buy bonds and then the firms shout out the prices they are willing to sell them at. The Fed picks the lowest price. But just 20 firms, so-called primary dealers, are allowed to compete in that auction, selling bonds to the Fed and receiving cash from the U.S. central bank.’

‘Along with Goldman, the banks that profited the most from QE trading during the period in question were Morgan Stanley (ms, +2.14%), Barclays (bsc), BNP Paribas (bnp.pa), and JPMorgan Chase (jpm, +1.44%). While Goldman raked in the most from the program, it was not the most profitable. That title went to JPMorgan, which appears to have made nearly $0.04 on every $100 in bonds it sold to the Fed. That’s a penny more than Goldman earned from these deals and the largest profit of all the primary dealers.

The banks probably would have made some of this money trading bonds with others if they hadn’t spent so much time trading with the Fed. Factor those missed opportunities in, and the excess fees the banks made from QE might drop to just $250 million.’

http://fortune.com/2014/07/23/big-banks-made-650-million-off-of-feds-qe-program/

Mr. Tyler Durden offers a summation of the insight of JPMorgan’s report on Q.E. and the European Central Bank, by Nikolaos Panigirtzoglou.

Headline :  “QE Benefits Mostly The Wealthy” JPMorgan Admits, And Lists 8 Ways ECB’s QE Will Hurt Everyone Else”

January 24,2015

Over the past 48 hours, the world has been bombarded with a relentless array of soundbites, originating either at the ECB, or – inexplicably – out of Greece, the place which has been explicitly isolated by Frankfurt, that the European Central Bank’s QE will benefit everyone.

Setting the record straight: it won’t, and not just in our own words which most are familiar with as we have been repeating them since 2009, but those of JPM’s Nikolaos Panigirtzoglou, who just said what has been painfully clear to all but the 99% ever since the start of QE, namely this: “The wealth effects that come with QE are not evenly distributing. The boost in equity and housing wealth is mostly benefiting their major owners, i.e. the wealthy.”

Thank you JPM. Now if only the central banks will also admit what we have been saying for 6 years, then there will be one less reason for us to continue existing.

And of course, even the benefits to those who stand to gain the most from QE are only temporary. Because the same asset prices which rise thanks to money printing are only transitory, and ultimately mean reverting. To wit: “It potentially creates asset bubbles by lowering asset yields by so much relative to historical norms, that an eventual return to normality will be accompanied with sharp price declines.”

So enjoy your music while it lasts dear 0.1%. Collateral eligible for monetization is becoming increasingly scarce and by our calculations there is about 2 years worth of runway left for G3 assets before central bank interventions in the private market result in a complete paralysis of virtually every asset class, and the end of capital markets as we know them.

As for everyone else, here is a list of 8 ways that the ECB’s QE will hurt, not help, by way of JP Morgan.

http://www.zerohedge.com/news/2015-01-24/qe-benefits-mostly-wealthy-jpmorgan-admits-and-lists-8-ways-ecbs-qe-will-hurt-everyo

Almost Marx

https://www.ft.com/content/7c5fcd3e-ec8e-11e6-930f-061b01e23655

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Janan Ganesh advocates a ‘steel-tipped liberalism’. A comment by Political Observer

Mr. Ganesh is a talented feuilletonist, a form of journalism that was popular in continental Europe, pioneered by the exiled German poet Heine, that became the target of the ire, contempt of the most famous journalist in historical memory, Karl Kraus. As a journalistic form it is endlessly useful in its permutations/adaptations : Mr. Ganesh’s particular version of this genre is etched in acid and its companions bile and contempt.

In his latest essay ominously headlined:  Only a steel-tipped liberalism can defeat the populists’ . That ‘steel-tipped liberalism’ is in fact Neo-Liberalism, an utterly failed utopian scheme, on its last legs.While the sub-headline takes its impetus from the very ‘Populists’ he preaches against: ‘Politicians will need to hold the hawkish line and harden it on migration’ What might the reader take from this? That Mr. Ganesh defends, in his ex post facto way, the  importation of cheap labor from former European colonies? Or that this strategy  was once an effort by Conservatives, and the eventual Neo-Liberals, to check the power of Labor Unions? No surprise that the imponderables of human beings, and their suffering, involved in this evolving situation are beyond the ken of  Mr. Ganesh’s moral imagination.

The highlights of the Ganesh Arguments are worth an inspection, although considerations of space makes comments on each daunting, if not impossible:

Bathtub Fallacy, The most insidious art in politics is the steering of one’s opponent into fringe positions, Leaders of the Third Way, But liberal politicians will need to at least hold the hawkish line — on national security, crime, welfare dependency — that took them into office in the very recent past, and harden it on migration., Liberalism only wins when it is dunked in molten steel. , Canada’s prime minister and dreamboat of cosmopolitan piety, Justin Trudeau., They are beatable with patience and discipline. It would be worse than ironic if, in their efforts to de-liberalise the west, they made their opponents more liberal than they ever were before, than is sensible, than is electable.

My foreshortened collection of his arguments demonstrates, with a kind of clarity, that the position of Mr. Ganesh, and his carefully confected political antagonists, share some arresting political commonalities.

Political Observer

https://www.ft.com/content/28392422-ec4c-11e6-ba01-119a44939bb6

replytouraniacftfeb082017

http://on.ft.com/2lo2PtO

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@DouthatNYT asks the question ‘Who Are We’. American Writer comments

As usual Mr. Douthat points in many directions to ‘explain’ Trump and Trumpism. But the starring role in this melange of pop culture references, and a foreshortened potted American history, in its most usable shorthand version, is the naming of ‘Liberals’ and the ‘Left’ as the central actors in his turgid melodrama: this line of argument being a permanent garnish to the ex cathedra pronouncements of Our Man From Opus Dei . The ‘Liberals’ have not simply ceded their political territory to the ‘Left’, but are its callabos, in the demonizing of the exemplars of American Political Virtue, a selected list of the Left’s villains is provided. Absent from Douthat’s  list of American Heroes are Frederick Douglas and Abraham Lincoln, not speak of other less well known moral/political actors, although the ‘Christian Abolitionists’ do garner a mention.

Yet Douthat’s moralizing argument, about the centrality of the Liberal/Left moral/political nihilism elides from a potentially honest conversation, the fact that the 2008 economic catastrophe, and the codified Neo-Liberal Reforms, and the death of the notion of a Self-Correcting Market, are the watershed of that failure. Aided by the political actors of that Neo-Liberalism, the New Democrats and Republicans, who were the active agents of change that ended in catastrophe.The question of how the failure of that Neo-Liberal thought collective’s ideas, and political practices, contributed, or even paved the way, for Trump remain conveniently outside of the hectoring Douthat intervention. Mr. Douthat is too busy using the shibboleths of an American Catholic Conservatism to do battle with the perpetually heretical ‘cosmopolitan liberalism’ in thrall to a mendacious ‘Left Intelligentsia’.

American Writer

Who Are We? https://nyti.ms/2kADOyH

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