Friday, Mar 10, 2017

Crisis: Steve Bannon's Illusions, Russian Story, American Health Care, Social Obligations

Sections                                                                     crisis index

1. Steve Bannon’s Apocalyptic ‘Unravelling’
2. Why the Russia Story Is a Minefield for Democrats and the

The American Health Care Act Is a Wealth Grab, Not a Health

4. Michael Hudson: Retirement? What Social Obligation?

This is a Nederlog of Friday
, March 10, 2017.

Summary: This is an ordinary crisis log with four items and four dotted links: Item 1 is about an article by Alastair Crooke on Steve Bannon (who seems to be too sympathetic to Bannon); item 2 is about an article by Matt Taibbi who points out that there is no evidence about the stories of Russian interference with Trump or the American elections; item 3 is about an article by Richard Eskow that points out that the Republican Health Care Act is a wealth grab (and he is right); and item 4 is about an interview with Michael Hudson, who insists - quite correctly - that health care and retirement are social obligations much rather than that these have to be prepaid by
everyone who receives them, or else they will receive hardly anything.

March 10: As to the updating problem: The Danish site is OK once again (it immediately - within 2 minutes - shows today's NL after uploading); the Dutch site was OK today (for me). Where my site on stuck for others I have NO idea: It may be December 31, 2015. (They do want immediate payment if you are a week behind. They have been destroying my site now for over a year. And I completely distrust them, but also do not know whether they are doing it or some secret service is.)
1. Steve Bannon’s Apocalyptic ‘Unravelling’

The first item today is by Alastair Crooke (<-Wikipedia) on Consortium News:

This starts as follows:
Steve Bannon is accustomed to start many of his talks to activists and Tea Party gatherings in the following way: “At 11 o’clock on 18 September 2008, Hank Paulson and Ben Bernanke told the U.S. President that they had already stove-piped $500 billions of liquidity into the financial system during the previous 24 hours – but needed a further one Trillion dollars, that same day.

“The pair said that if they did not get it immediately, the U.S. financial system would implode within 72 hours; the world’s financial system, within three weeks; and that social unrest and political chaos could ensue within the month.” (In the end, Bannon notes, it was more like $5 trillion that was required, though no one really knows how much, as there has been no accounting for all these trillions).
I say. I do so because I did not know this, although I recognized there was an economical crisis happening on September 1, 2008, when I first wrote about it (in Dutch). Of course, the Dutch government did not believe so, until some months later, for that is how accurate and truthlike Dutch governments are normally.

In case you want to know what I wrote about the financial crisis nearly years ago, you need to be able to read Dutch, but it is quite interesting and starts here. And on September 18, 2008 (when the above-mentioned scandal happened) I was writing about Keynes.

Incidentally - back to the last quote - I suppose that the explanation for "
it was more like $5 trillion that was required, though no one really knows how much, as there has been no accounting for all these trillions" is that this amount of money was simply printed (and the connection of money and gold (<- Wikipedia) has been cut by Richard Nixon in 1971).

But this is a supposition I make: I don't know. Here is more on Bannon:

But, Bannon says — in spite of all these esoteric, unimaginable numbers wafting about — the Tea Party women (and it is mainly led by women, he points out) get it. They know a different reality: they know what groceries now cost, they know their kids have $50,000 in college debt, are still living at home, and see no jobs in prospect: “The reason I called the film Generation Zero is because this generation, the guys in their 20s and 30s: We’ve wiped them out.”

And it’s not just Bannon. A decade earlier, in 2000, Donald Trump was writing in a very similar vein in a pamphlet that marked his first toying with the prospect of becoming a Presidential candidate: “My third reason for wanting to speak out is that I see not only incredible prosperity … but also the possibility of economic and social upheaval … Look towards the future, and if you are like me, you will see storm clouds brewing. Big Trouble. I hope I am wrong, but I think we may be facing an economic crash like we’ve never seen before.”

Well... firstly, Bannon is only speaking metaphorically when he says "the guys in their 20s and 30s: We’ve wiped them out": No, he (or they) have not: They merely took all the money they could get from them, and then left them with huge debts for their education at the homes of their parents.

And secondly, here is a link to a Wikipedia lemma about Generation Zero, which I link to because it mentions a crisis theory (that appears nonsense to me [1]) that seems to occupy Bannon's mind a lot. This is from the last linked Wikipedia lemma:

Historian David Kaiser, who was consulted for the film said that it focused on a key aspect of Strauss and Howe's theory: "the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one”. Bannon, Kaiser states, was "very familiar with Strauss and Howe’s theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while.”

There also are supposed to be three earlier turnings, which I point out because Alastair Crooke also seems to take them seriously, whereas I don't. I will come to that in a moment, after quoting the last bit of Crooke from this article, and commenting on it:

And here, precisely, is the paradox: Why — if Trump and Bannon view the economy as already over-leveraged, excess-bubbled, and far too fragile to accommodate even a small interest rate rise — has Trump (in Mike Whitney’s words) “promised  … more treats and less rules for Wall Street … tax cuts, massive government spending, and fewer regulations … $1 trillion in fiscal stimulus to rev up consumer spending and beef up corporate profits … to slash corporate tax rates and fatten the bottom line for America’s biggest businesses. And he’s going to gut Dodd-Frank, the ‘onerous’ regulations that were put in place following the 2008 financial implosion, to prevent another economy-decimating cataclysm.”

The obvious answer to "the paradox" Crooke raises is that it is not a paradox, and it all is easily explained by noting that Trump and his billionaire friends have one rule and one motive that caps all other rules and all other motives: Profit. They will try to realize every profit they can, also if this is supposed to be silly in the longer term, and they do so because they know that wealth = power.

So for me this is not paradoxical at all, but not so for Alastaire Crooke, who proceeds to unfold Bannon's crisis theory. I will leave that to your interests. For me it is nonsense [1], although I suppose it might clarify Bannon's mind a little.

2. Why the Russia Story Is a Minefield for Democrats and the Media

The second item is by Matt Taibbi on Common Dreams:

This starts as follows:

Former Director of National Intelligence James Clapper appeared on Meet the Press this past weekend to discuss the Trump-Russia scandal. Chuck Todd asked: Were there improper contacts between the Trump campaign and Russian officials?

JAMES CLAPPER: We did not include any evidence in our report, and I say, "our," that's N.S.A., F.B.I. and C.I.A., with my office, the Director of National Intelligence, that had anything, that had any reflection of collusion between members of the Trump campaign and the Russians. There was no evidence of that…

CHUCK TODD: I understand that. But does it exist?

JAMES CLAPPER: Not to my knowledge.

Todd pressed him to elaborate.

CHUCK TODD: If [evidence of collusion] existed, it would have been in this report?

JAMES CLAPPER: This could have unfolded or become available in the time since I left the government.

This is the former Director of National Intelligence telling all of us that as of 12:01 a.m. on January 20th, when he left government, the intelligence agencies had no evidence of collusion between Donald Trump's campaign and the government of Vladimir Putin's Russia.

I quote this, in part at least, because I have been saying so since the end of last year,
and my main sources are two men who together worked for something like 60 years for the NSA or the CIA, namely William Binney and Ray McGovern.

They have been saying that, to the best of their knowledge, if the Russians did somehow collaborate in secret with Trump, or secretly hacked the American elections, there should have been some evidence for this, which there wasn't (to the best of everybody's knowledge who does not head the NSA, the CIA or the FBI).

And indeed no such evidence has ever been given. This doesn't mean it doesn't exist, but it does mean that it gets less and less likely it does, for the problems about Russian secret involvements with Trump and the American elections are there since three months and in fact seem to be mostly driven by hysteria in the Democratic Party and the media that collaborate with them.

At least, that is my explanation, and it seems to be Taibbi's as well. Here is more by Taibbi:

But the manner in which these stories are being reported is becoming a story in its own right. Russia has become an obsession, cultural shorthand for a vast range of suspicions about Donald Trump.

The notion that the president is either an agent or a useful idiot of the Russian state is so freely accepted in some quarters that Beck Bennett's shirtless representation of Putin palling with Alec Baldwin's Trump is already a no-questions-asked yuks routine for the urban smart set.

And yet, this is an extraordinarily complex tale that derives much of its power from suppositions and assumptions.

Yes, I agree.

My explanation amounts to this: If you have a theory without any evidence, all you have is a fantasy: a product from your imagination that - so far, at least - has no support in reality. You might say that these fantasies are suppositions or assumptions, but since this particular theory is not a scientific one but a political one, that may also be giving it too much honor.

And it seems rather evident to me that Russia's supposed involvement with Trump, and Russia's supposed hacking of the elections, were brought into being by the Democratic Party, and namely to shift the blame of Hillary's loosing the presidency from Hillary's many weaknesses to Trump's or Russia's - secret and manipulative - faults. It would have been a decent story with evidence, except that there has been no evidence for this, at least not in the last three months.

That is what I think. Here is part of what Taibbi thinks:

Reporters should always be nervous when intelligence sources sell them stories. Spooks don't normally need the press. Their usual audiences are other agency heads, and the executive. They can bring about action just by convincing other people within the government to take it.

In the extant case, whether the investigation involved a potential Logan Act violation, or election fraud, or whatever, the CIA, FBI, and NSA had the ability to act both before and after Donald Trump was elected. But they didn't, and we know why, because James Clapper just told us – they didn't have evidence to go on.

Yes. Of course, James Clapper also is known as a liar to Congress, so you - or I, at least - cannot take his words very seriously, but then again it also seems odd if there
were evidence, for that then has been kept a secret for some three months (which seems to be in no one's interests).

Here is the last bit that I'll quote from Taibbi's article:

The press has to cover this subject. But it can't do it with glibness and excitement, laughing along to SNL routines, before it knows for sure what it's dealing with. Reporters should be scared to their marrow by this story. This is a high-wire act and it is a very long way down. We might want to leave the jokes and the nicknames be, until we get to the other side – wherever that is.

This is a bit vague, but it seems to involve what I said above: Considerable parts of the American media pretend there is evidence that Trump illegally collaborated with the Russians or that the Russians hacked the American elections to benefit Trump, but there is no evidence, or at least: no evidence has been given these last three months that this is or might be true.

This is quite problematic, and it is considerably more problematic if it is not merely the Democratic Party's spreading tales without evidence, but if these tales also link up with the Deep State's attempts to tame or to get rid of Trump, as may be the case.

3. The American Health Care Act Is a Wealth Grab, Not a Health Plan

The third item is by Richard Eskow on Common Dreams and originally on People's Action Blog:

This starts as follows:
The Republicans’ plan to replace the Affordable Care Act is a disaster for the health of the American people. But that may be nothing more than a byproduct of the bill’s main impact: it will increase inequality, and make the rich even richer than they’ve become in the last few decades.

It’s not a “health” plan. It’s a wealth grab for the already wealthy. Its benefits will go, first and foremost, to billionaires who make more money from investments than from work. The 400 highest-earning households in the country will get an average tax break of $7 million per year under the Republican plan.

Who will benefit the least? Teachers, nurses, firefighters… pretty much anyone who works for a living.

If this plan becomes law, the rich will get richer, most other people will lose out, and our nation’s already record-high levels of inequality will become even worse.

Yes, that seems a fair summary to me. Here is some more:

The middle class is dying all across America. More precisely, it’s being murdered. The Republican “health” plan would be one more nail in its coffin.

Four decades ago, the top 1 percent of the nation’s earners received about 10 percent of the nation’s income, while the bottom 50 percent earned about 20 percent. Today those numbers have been reversed (..)
There is a graphic illustrating this, that goes back to 1974, and shows this: Now the 1% of the rich get 20% of the national income, and the bottom 50% get 13% (and there are far more poor than rich).

There are four more graphics that I will leave to your interests (three out of four are quite clear, and incidentally show that the rich now earn
- proportionally - as much as the rich did in 1928, just prior to the Wall Street Crash of 1929 (<-Wikipedia)).

Here is who has to pay for the Republican's Health Care Act:

Naturally, all these giveaways to the wealthy come with a price tag. Who pays?

Anybody who currently gets healthcare through the ACA exchanges will suffer under the Republican plan. The average enrollee will face more than $2,400 in additional costs by 2020, according to one study, whose authors found that

For families with a head of household age 55 to 64, the bill would increase costs by $7,604. For families with income below 250 percent of poverty, the bill would increase costs by $6,228.

Those figures would get worse over time, because of the GOP plan’s design.

If we put the average costs at $7000 this means that on average the monthly bill of Americans increases by $583,33 (which is just the beginning).

Here is what it means for older Americans:

Older Americans who don’t yet qualify for Medicare will certainly suffer. The Republican bill allows insurers to charge up to five times as much in premiums for people who are approaching age 65. The AARP found that premiums would rise by as much as $3,600 for a 55-year old earning $25,000 per year, $7,000 for a 64-year old earning the same amount, and up to $8,400 for a 64-year old earning $15,000 a year. Out-of-pocket costs would probably rise “significantly,” too.

It so happens that I am in the Dutch pension schema, which is somewhat less bad than in most countries, and that even while I get less than almost everybody else, I do get around $15,000 a year (considering all). If I had been American (and 64) I would have to pay $700 a month just to be insured in the USA. In fact, I have to pay - forced by law - "a mere" 173,37 euros (but this used to be 50 euros in the 1990ies and 20 euros in the 1980ies, and even then all medical people made a whole lot of money).

Here is the last bit that I'll quote from this article:

This plan would be a catastrophe for most Americans. How can it be resisted?

First, it’s important to remember that the Affordable Care Act was not the ideal solution. Millions of people remain uninsured. Health care costs are still far too high, and they keep rising.

The best way to resist the Republican plan is by defending what we have – and fighting for healthcare that works for all the American people.

In the meantime, it’s important to remember that Trump and his fellow Republicans haven’t really created a “health” plan. They’ve created a “wealth” plan for their rich benefactors. This plan won’t just make people sicker. It will make the economy sicker, too, and we’ll all pay the price.

I think that is a reasonable assessment. And this is a recommended article.

4. Michael Hudson: Retirement? What Social Obligation?

The fourth and last item today is by Sharmini Peries on The Real News Network, who has an interview with economist Michael Hudson:
This starts as follows:

SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. I’m speaking with Michael Hudson about his new book J Is For Junk Economics: A Guide to Reality in the Age of Deception.

Thanks for joining me again, Michael.

This is merely to introduce the two speakers and to draw your attention to three earlier appearances of Michael Hudson (whom I like: he is a decent economist, which few economists are) in Nederlog, namely here, here and here.

Here is Hudson on Social Security:

SHARMINI PERIES: So, Michael, on page 260 of your book you deal with the issue of Social Security and it’s a myth that Social Security should be pre-funded by its beneficiaries, or that progressive taxes should be abolished in favor of a flat tax. Just one tax rate for everyone you criticize. We talked about this earlier, but let’s apply what this actually means when it comes to Social Security.

MICHAEL HUDSON: The mythology aims to convince people that if they’re the beneficiaries of Social Security, they should be responsible for saving up to pre-fund it. That’s like saying that you’re the beneficiary of public education, so you have to pay for the schooling. You’re the beneficiary of healthcare, you have to save up to pay for that. You’re the beneficiary of America’s military spending that keeps us from being invaded next week by Russia, you have to spend for all that – in advance, and lend the money to the government for when it’s needed.

Where do you draw the line? Nobody anticipated in the 19th century that people would have to pay for their own retirement. That was viewed as an obligation of society.
Yes indeed. Here is how the Americans were tricked, and namely by the neofascist Alan Greenspan:
The wool that’s been pulled over people’s eyes is to imagine that because they’re the beneficiaries of Social Security, they have to actually pay for it.

This was Alan Greenspan’s trick that he pulled in the 1980s as head of the Greenspan Commission. He said that what was needed in America was to traumatize the workers – to squeeze them so much that they won’t have the courage to strike. Not have the courage to ask for better working conditions. He recognized that the best way to really squeeze wage earners is to sharply increase their taxes. He didn’t call FICA wage withholding a tax, but of course it is. His trick was to say that it’s not really a tax, but a contribution to Social Security. And now it siphons off 15.4% of everybody’s pay check, right off the top.

More precisely:

Taking money out and giving it to the richest 5%, while making it appear as if all this deficit is the problem of the 95%, is “blame the victim” economics. You could say that’s the way the economic accounts are being presented by Congress to the American people. The aim is to popularize a “blame the victim” economics. As if it’s your fault that Social Security’s going bankrupt. This is a mythology saying that we should not treat retirement as a public obligation. It’s becoming the same as treating healthcare as not being a public obligation.

We have the highest healthcare costs in the world, so out of your paycheck – which is not increasing – you’re going to have to pay more and more for FICA withholding for Social Security, more and more for healthcare, for the pharmaceutical monopoly and the health insurance monopoly. You’ll also have to pay more and more to use public services for transportation to get to work, because the state is not funding that anymore. We’re cutting taxes on the rich, so we don’t have the money to do what social democracies are supposed to do.

Yes indeed. What "social democracies are supposed to do" is to keep capitalism minimally fair, which is somewhat difficult with such an unfair economical system as capitalism is, but which worked more than not between 1946 and 1980, when the non-rich got some more money, while the rich did not disappear at all. (After 1980, Reagan and the rich got in and managed - with the help also of Clinton and Obama - to give nearly everything back to the few rich that they had lost since 1930.)

And this is a recommended article.


[1] I simply have read too much economics and politics to believe in any general explanation these items (here taken as theories) can provide, and namely because there simply is not enough accurate knowledge about economics and politics (as real events) to provide such explanations.

As to economical theories: Things tend to go up and down, which means that they are mirrored somehow by some sine curve. That much we know and is a consequence of elementary mathematics. But to predict a future from such a sine curve means introducing assumptions that explain its actual form (in some detail), and such assumptions have two principal difficulties: (i) there is no good evidence any such set of assumptions does explain the particular form of the sine curve, indeed in part because (ii) there is not enough accurate
knowledge about economics and politics to provide such explanations.

At least, that is how it appears to me, on the basis of reasonable knowledge of economics and politics.

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