A Deal Worth Doing…

A Deal Worth Doing…

“We (the U.S.) can’t project power from bankruptcy court.”

-       Senator Rand Paul

By J.M. Hamilton (8-13-15)

Humans, to varying degrees, are all too often narcissistic, xenophobic, and racist.  Some of this might be genetic, and undoubtedly, much of this is learned behavior; some of this is fear driven.  Our brains, and subconscious, are wired for patterned thinking, and are prone to generalizations.  In many instances, we don’t do nuance well.  Once beliefs are hard wired, it can be taxing to learn something new, and many don’t try; but rather, often eschew any and all facts and information contrary to already established beliefs.  It seems that many go out of their way to avoid learning something new.

We can see some of this thinking, or the lack thereof, at play in the current debate over the Iranian nuclear treaty, presently before the United State Senate.

An example of some of the current generalized thinking might be:

U.S. Democracy:  Good

Iranian Theocracy:  Bad

But let’s look at it another way or add a shade of nuance:

U.S. Democracy, owned and operated by a Plutocratic Elite, which owns monopolies and cartels throughout the U.S.:  

Uh, Good… maybe.  Probably not?

Iranian Theocratic Republic, owned and operated by the Iranian Revolutionary Guard, which is worth billions generated by monopolies established throughout Iran:

Yes, bad.

Often conveniently omitted from politicians’ and the punditry’s dialogue about Iran is how the CIA, and British government, overthrew a democratically elected Iranian government in1953, because they had the audacity to ask for royalty statements from a subsidiary of BP (aka the British Anglo-Iranian Oil Company).  When BP failed to deliver the royalty information and was subsequently nationalized, the Iranian democratic government, conveniently, suffered a CIA/British backed coup.  Thus giving birth to one of the nastiest dictatorships ever installed by the Anglo-American governments, under the Shah of Iran’s auspices.  Post –Coup, the Seven Sisters oil companies moved into Iran, and the Shah’s reign of terror ran until 1979, when an Islamic revolution took hold.

Many decades later, one could say the ’53 Iranian coup defines “blowback.”   So with this added shade of nuance:

U.S. Democracy, engaged in CIA sponsored dirty tricks, and supporting a cruel dictatorship in support of an Anglo-American oil cartel:   

Abysmal at best.

Iranian Democracy, nationalizing an abusive British oil monopoly, while Iranian citizens lived in poverty:   

From the point of view of the BP oil monopoly, Bad!

The point I’m leading up to is that arms control and nuclear proliferation agreements are not negotiated in a vacuum.  Nation states pursue their own interests, and the counterparties certainly do not always act as the U.S. government and her citizens would want them to, or like to dictate.  Intertwined and superimposed within arms control negotiations are a deep, and sometimes mutual, understanding of the economics, history, and politics each country brings to the table. 

If we review then these dynamics (economics, history and politics), President Obama’s Iranian deal not only makes perfect sense, but may be a brilliant strategic coup, especially when we consider America’s troubled state of affairs.

Economics & The Military Industrial Complex

J.M.H. has written a couple of pieces recently about America’s debt predicament.   Our private and public debt to GDP ratio, particularly with unfunded and underfunded liabilities added in, is well in excess of 200%.  Our debt burden has grown so onerous that the Federal Reserve has printing trillions to keep the bond vigilantes at bay, help service the debt load, and bailout the Wall Street cartel.

How the U.S. got here was by no accident.  Two major wars were launched during the Bush (W) administration, and metastasized into nation building exercises without end.  To this day, we still have roughly 10,000 troops in Afghanistan, and a renewed advisor/troop build up in Syria and Iraq.  These two badly managed wars were pointless exercises, with foreseeable outcomes (i.e. U.S. failure, but MIC management and stockholder enrichment).

These wars effectively bankrupted the nation, and are symptomatic of a mentality (strongly prevalent among Republicans) that believes force and military might are the answer to every foreign policy problem the U.S. faces.

The Obama Administration deserves some credit for attempting to end and prevent the cycle of abuse, suffered by the men and women who serve and the U.S. taxpayer.  For surely, that is exactly what the detractors of the Iranian deal hope to achieve: Start up another Middle East war, this time against Iran.  President Obama took some heat for saying as much within the last week or two.  But anybody who listened to the GOP debate last Thursday evening basically heard the same thing:  A Republican Party that is clamoring for yet another war in the Middle East; a GOP that has learned absolutely nothing from Afghanistan and Iraq (or Vietnam); and who would put this country into an even deeper fiscal hole by starting up another credit card war.  (As an aside, it’s interesting isn’t it… from the perspective of the GOP leadership, there’s plenty on money to go bombing around the globe, but never quite enough money to give teachers a raise, rebuild U.S. infrastructure, or to care for the indigent.)

Of course, war, and waving the flag, are both highly convenient distractions from the real problems that this country faces.  Topics that were conveniently omitted from last Thursday’s Republican debate.  Problems such as:  race relations; ever rising wage and wealth inequality; campaign finance reform; and the obscene amounts of money flowing into U.S. elections.

Senator Rand Paul said it best:  It’s hard to project global power from a bankruptcy court.  The reality is America will never be able to pay back the money it owes, and at some point, this nation too (like Greece and Puerto Rico) will need to default or write down its debt.  In short, the national debt, TBTF banks, and the MIC are all threats to our national security and our financial well being. 

By supporting the Iranian deal, the nation prevents Iran from becoming a nuclear power for at least another decade, while also giving America an opportunity to address its very real domestic problems.  Problems the GOP obviously, would rather not address or talk about.

History

If we look back in history, great leaders have acted in a contrarian manner, and pivoted in ways that were completely unexpected to better protect this nation and its people.

President Kennedy, the Demo-Hawk, signed a nuclear test ban treaty with the Soviets to protect the planet from nuclear contamination and fallout. 

Richard Nixon, an ardent anticommunist, when the nation was war weary and in the midst of a recession, pivoted to China.  This was done at a time when it was feared in some quarters that China and Russia might unite against the U.S. (when the nation was exhausted and truly weakened, from another failed nation building exercise, called Vietnam).   The pivot to China was an excellent demonstration of both realpolitik (something that J.M.H. is not always a fan of, but it has its usefulness), and the opening of channels of communication with a powerful frenemy.

Ronald Reagan, perhaps the ultimate cold warrior, opened up significant dialogue with Chairman Gorbachev to bring about substantial reductions in both countries’ nuclear arsenal.  This too, was done at a time when the nation was coming out of a significant recession, and still war weary.   Like President Obama’s critics today, armchair warriors, and chicken hawks thought Mr. Reagan had lost his mind, and the criticism was harsh --- such is the power of the U.S. war lobby that President Eisenhower warned us about.  Here, it's particularly useful to note that Reagan took out the Soviet regime w/out firing a shot in anger.  That's the mark of a great leader, and very Sun Tzu.

Nixon and Reagan both had their detractors, at a time when this nation was far less politically polarized than it is today; but in retrospect, we now see that the moves made by the aforementioned Presidents were for the good of the country, and quite possibly shielded this nation from a war, or worse, nuclear annihilation. 

(Interestingly, America was far less polarized under Kennedy, Nixon and Reagan than under President Obama.  The top tax rates for these Presidents, respectively, were/are:  Kennedy 90% income/25% capital gains - the same as under Eisenhower; Nixon 77 to 70% income/36.5 to 27.5% capital gains; Reagan 69% income/28 to 20% capital gains; and President Obama 35% income/15% capital gains.  Is there a lesson here?  Yes, the lower the tax rates on the rich, the more economically and politically polarized our nation becomes, but that’s a topic for another day.)

President Obama has taken another bold pivot, done the unexpected, at a time when the nation is sagging under a mountain of fiscal mismanagement and debt (and two very badly botched wars).  Call this the gift that keeps on giving, left behind by his predecessor, Mr. George W. Bush.  History tells us that the Iranian deal should be viewed in exactly the same light as the deals and relations fostered by Messrs. Kennedy, Nixon, and Reagan.  

Don’t just take my word for it… dozens of U.S. Generals have already gone on record stating their support for the Iranian deal.

Really, the Iranians are more dangerous than the former Soviet Union? 

Hardly.  But you wouldn’t know it from the GOP’s cacophony of continuous calls for more war.

Politics

One can learn much about the Iranian deal by studying the parties that oppose it, and their reasons for opposing it.

First, we have the oil rich Arab monarchies or despots, Saudi Arabia, the U.A.E., and Qatar.  Also known as our so-called allies in the region.  These monarchies are well known for human rights abuses, abhorrent treatment of women, and the fundamentalist spread of Wahhabism, a most virulent form of the Sunni branch of Islam.  In fact, the oil rich monarchies have been responsible for the expansion of this religion and the chaos that often ensues, in the form of terrorism.  Here, think of ISIS or ISIL, and also, the House of Bin Laden and its ties to The Kingdom, as just a couple of examples.

The U.S. has been kissing up to these monarchies for decades because we needed the oil, and with U.S. military backing, these “royal” abominations have enjoyed considerable power and leverage over the Arab countries of Islamic Shia faith (i.e. Syria, Iraq and Iran).  In short, the U.S. has often run around the globe putting out fires started by Saudi Arabia and Qatar, w/out addressing the root cause, the Kingdoms themselves…. Again, because of the oil.

But the U.S. has rapidly become energy independent, and if like Germany, we push renewables to supplying 33% of U.S. energy needs, we can kiss our dependence on Middle East oil good by, forever.  And good riddance.

The aforementioned monarchies know this, and they especially don’t like a deal with Iran that will reinvigorate the Iranian economy, and drive the price of oil down further, globally.  This is a region that is heavily dependent upon natural resources for state cash flow.  The Middle East also has some of the highest unemployment rates in the world, which makes the region exceptionally volatile, and also makes jihad and fundamentalist Islam appealing.  A resurgent Iran (Shia) will be a direct counterbalance to the impunity with which the Sunni monarchies have been operating in the region for decades.

Here, President Obama’s and the Security Counsel’s (P5+1+EU) goal in striking the Iranian deal appears not unlike former Secretary of State Kissinger’s advocacy of realpolitik.  That is, at a time when the U.S. is over-extended economically, fiscally, and militarily, and our European allies have no will to fight, why not establish a Iranian/Shia force in the region to help offset Saudi/U.A.E./Qatar/Sunni hegemony’s worst excesses?  

Given history, Sunni oppression of a Shia minority is highly destabilizing.

For many of the reasons that Sunni Arab governments don’t like the Iranian deal, Israel, the preeminent superpower in the region, doesn’t like the deal either.  Israel, the only Middle East nuclear power, enjoys supremacy over all the countries in the region, particularly with U.S. backing (which is not going away).  Like any superpower, its regional, perhaps global, dominance is supported by, and conversely related to, the weakness of other Middle East countries.   While a resurgent Iran is not a direct threat to Israel’s primacy, it certainly does make things more challenging; but at a time when the U.S. is growing more energy independent, and winded from decades of failed Middle East military adventures, Israel is well positioned, indeed better positioned than ever, to continue its regional dominance and control. 

In short, nobody screws with Israel, and those that dare, have paid a very dear price.  The U.S. can no longer afford to police the Middle East, and so our allies/proxies/new found friends should, as they have the greatest interest in doing so. It's in the economic interests of all countries in the region to play nicely in the sandbox.

It’s interesting to note that the hawks in the Israeli government have a near lock on the United State’s Middle East foreign policy, by controlling at least one U.S. political party, the Republicans (in fact, GOP candidate Romney said he’d subcontract out Middle East foreign policy to the State of Israel).  Israel is a terrific friend and ally, but does the U.S. really want to subcontract out its foreign policy to any country?  Taking Mr. Romney’s logic a step further, why not pass U.S. sovereignty onto Canada or Exxon?  (Note, a majority of Americans of Jewish heritage support the Iranian deal.)

The GOP receives tens of millions of dollars in campaign contributions, and additional lobbying efforts, from AIPAC, Big Oil, Sheldon Adelson, and the U.S. defense industry.  These industries, and the aforementioned countries, have a vested interest in: not seeing the Iranian deal go through; war; and they also stand to profit from the deal's failure, mightily.

While J.M.H. is not a fan of Mr. Trump, if he’s said at least one thing truthfully, repeatedly, in the last sixty days, it’s this:  These politicians are owned by special interests, and they do whatever the special interests tell the GOP to do.  Therefore, the GOP leadership’s slavish devotion to Big Oil, the MIC, and right-wing Israeli politicians.

Hence, the extreme optics of nearly every GOP presidential candidate trashing the Iranian deal before the ink was dry, or they possibly could have read the agreement.

The Iranian deal is undoubtedly far from perfect.  But given the economics, history, and politics surrounding the region, the U.S., and members of the UN security counsel (P5+1+E.U.), there is little doubt that this deal is far better than the alternative, War with Iran (a War which will almost assuredly hasten Iran’s march towards nuclear weapons).

For as any world leader is quick to recognize, the U.S. doesn’t mind throwing its martial weight around countries who do not possess nukes; but historically, the U.S. takes a far more diplomatic tack, once a country has acquired nuclear weapons.  That’s not opinion, that’s fact.  A deal that pulls back Iran’s nuclear timetable by a decade or more is a deal worth doing.

The alternative, War with Iran, could prove to be the United States undoing.  The credit cards are maxed, and Mr. Paul’s comment about projecting power from a bankruptcy court is highly prescient.

Copyright JM Hamilton Publishing 2015

Financial Engineering for The People

Financial Engineering for The People

Debt, once accumulated, constrains demand.

-       The Atlantic

Commodity-price weakness correlates with slower global economic growth.

           -      Barron’s

By J.M. Hamilton (7-31-2015)

The global economy is swimming against a tide of an ocean of debt and interest payments, and the tide and the ocean…. Well, they’re winning.  As recently mentioned in my piece, the Downward Spiral, debt among the Western democracies has actually increased, since the 2008 financial crisis, and it’s having a stagnating impact upon economies, and weighing heavily upon aggregate demand.  Lower aggregate demand and consumption feeds upon itself, and when combined with the forces of globalization and automation, mean fewer jobs, depressed wages, and sub-par economic growth.  In major economies around the globe (China, Japan, Europe, and the U.S.), we see that combined private and public sector debt is at 200% of GDP, or greater (especially, when we add in unfunded or underfunded future liabilities).

As a result, central banks – always ready for action – have stepped into the breach, and printed an ocean of liquidity (aka debt), in attempt to spur inflation and kick start economies.  But with nearly every central bank printing money and/or manipulating currencies, the macro impact tends to be zero sum, particularly when it comes to aiding exports. 

Major corporations, in the face of lower aggregate demand, have taken the flood of easy money, and resorted to financial engineering.  Among the tricks of the trade, financial engineering has led to: stock buy backs to goose earnings per share; mergers and acquisitions to increase market share; the formation of monopolies and cartels to enhance pricing power; the use of derivatives, swaps and repos (aka off balance sheet accounting, often utilized for betting, obscuring debt, and to enhance leverage); and central banks' easy money policies have made it easier for corporations to engage in reorganizations, and labor, tax, and regulatory arbitrage.

With multinationals, banks, and shadow banking turning to financial engineering to increase profits, less money is spent on R&D, production growth, CAPEX, and enhancing and training human capital.  Candidate Clinton has drawn attention to the short-term focus of financial engineering, vis a vis, the long-term focus of sound business fundamentals and top line growth.   But with everyone swimming against the same tide of debt, and facing lower aggregate demand, how do CEOs and government policymakers go about shifting focus, from the myopic to the long term?  More importantly, can the drag and weight of private sector debt – even public debt -  be addressed?  

Moreover, can financial engineering, that has been such a boon to the elite and the one percent, be turned to the benefit of the global economy and utilized to increase higher aggregate demand?  That’s exactly the point of today’s piece, but first a paragraph or two on paper currencies and the nature of debt.

Pull a dollar out of your purse or wallet, or if you don’t carry any currency, look at your checking account on line, and tell me what you see?  If you’re looking at the American dollar, you are looking at paper, or more precisely - cotton or linen, and it’s backed by absolutely nothing….. other than the willingness of our government to print more of it.  The same can be said of most, if not all, global currencies.  They are all untethered from gold and precious metals, and many free float against each other (that is, when the banking cartel isn’t colluding to fix FX and LIBOR, or a country doesn’t peg their currency to another).  Ultimately, a currency’s value is a reflection of the government’s fiscal and monetary policies, as well as, said country’s macro fundamentals.  History, too, plays no small role in the perception of a currency’s value as a storehouse of wealth.

In short, the purchasing power of the dollar is faith based.  Those who hold dollars believe that their purchasing power will remain relatively stable, vis a vis, alternative currencies. 

Who said faith is in decline in America?  

The same can be said of debt.  It’s an accounting entry, and recognition that the borrower will payback the lender the principal at an agreed upon interest rate. 

Debt too, is faith based.

What has been shocking too many fiscal conservatives, myself included (at times), is that the Fed’s printing presses has not set off massive paroxysms of inflation; but the lack of inflation (admittedly, there is some inflation out there; look at the price of higher education) has less to do with the Fed’s glowing printing presses, and has more to do with the record numbers of unemployed, the large number of citizens who have given up looking for work, and the resulting, diminished aggregate demand.   There’s that ginormous public and private sector debt again, killing animal spirits, growth, opportunity, and demand.

Arguably, what gives the dollar its resiliency, in the face of The Fed’s myriad machinations, is that there are fewer and fewer alternative currencies for consumers and businesses to turn to; and the key alternative currencies face the same plight as the dollar.  In short, the printing presses churn and smoke in Japan, China, Russia, and the E.U.  With central banks engaged in economic and financial warfare around the globe, with beggar thy neighbor policies, it’s not entirely surprising that the dollar is still in demand.  In short, the U.S. dollar is the leper among global currencies, with the fewest spots.

So what have we learned, since ’08?

-       We’ve learned that a cartel of currencies, and central banks, can manipulate their currencies with minimal harm to the currencies' value, as long as the central banks, directly or indirectly, behave in a coordinated fashion (and as long as the global economy and aggregate demand are in a slump).

-       We’ve learned that in crisis after crisis, private bank lending, and loose underwriting standards, have set off manias, madness, and bubbles (fueled by central bank easy money policies).  And that governments and centrals banks, particularly in governments where democracy is for sale, will, often, willingly ride to the private banking cartels rescue.  In short, not only is the government responsible for public sector debt, but ultimately, thanks to TBTF, the government is responsible for private sector debt in many instances, as well.

-       Moreover, Western democracies and central banks create and reaffirm moral hazard and the crony economy, not only by bailing out the banking cartel, but also by swapping out toxic assets/toxic debt, and by placing said debt on government and central bank balance sheets.  Essentially placing the taxpayer on the hook for private banking institutions worst excesses.  (See the Federal Reserve and the European/U.S. troika.)

It’s just another form of financial engineering, and the manifestation of the crony economy, at a macro level.

So what to do?

An idea came to me recently when I saw German Bunds cross over into negative yield territory.

Why can’t central bankers engage in financial engineering for the people, instead of the elite?

Since currency and debt are made up of ether anyway, and faith, why not in a coordinated fashion park some of that debt in an offshore special purpose vehicle (SPV), at a negative yield in perpetuity, and let the debt wind down off central banks’ and governments’ balance sheets?

What better way to create new stimulus for the economy?

Think about it, what’s holding up the global economy?  Answer:  Over indebted consumers and governments.  So why can’t central banks purchase said debt (e.g. quantitative easing); place same debt in a SPV at a negative yield; and the debt is effectively off government, central bank, and consumer’s balance sheets.

“Ah,” but my critics will argue, “Citizens will flee to stronger currencies.”

“What ‘stronger currencies’ would that be?” Say I.  “Particularly if this is executed in a coordinated fashion by all key central banks, globally.”

“Moral hazard!” Critics shriek.

“Like the moral hazard we saw in 2008, when banks (who caused the crisis), and the plutocracy, were bailed out, globally, at the expense of everyone else?” I respond.

Think about it… with a SPV destined, or set up for bankruptcy, trillions in government debt could be wiped out globally, with just a few accounting entries.

Children could be fed and schooled, infrastructure could be rebuilt, aggregate demand could rise, and corporations would be reinvigorated by top line growth, and wouldn’t need to resort to financial engineering?   Such an experiment/program would need to start small, say a trillion per central bank, to learn what the ramifications are.  Admittedly, bond yields might be driven lower, as investors chased yield on fewer bond offerings.  With cleared up government and central bank balance sheets, bond yields would fall further; participating governments might actually see their currencies appreciate and grow in strength, creating negative short to intermediate treasury yields (based upon the belief the currency would grow stronger as national debt was eliminated over time).

Those who would object most to such a scheme would be banks, mutual funds, shadow banking, investors, and pension funds.  But with a reinvigorated economy, unencumbered by debt, this would create demand for new private sector financing, additional debt, and would be a boon to the stock market.   Counter-intuitively, and as stated above, the value of currencies might actually rise, as government balance sheets were cleared.

Such a scheme would need to focus on expunging and resolving government debt and consumer debt, in order for it to be successful.  Global governments and central banks have tried bailing out the elite, to the exclusion of everyone else, and the effects of trickle down fiscal and monetary policy surround us (including, but not limited to:  gross wage and wealth inequality, stagnation, unsustainable debt, nation states indentured to banks and shadow banking, sovereignty destroyed by central banks and the IMF, fewer employment opportunities, and suppressed wages).  Eliminating government and consumer debt would free up aggregate demand, generated by governments and the 99%.  Governments would be free to increase social spending, and may even be able to keep tax rates down, as unsustainable debt loads would no longer have to be serviced.  Consumer debt could be purchased as well – by central banks, say mortgages, and sent to the SPV as well.  The U.S. government already holds the vast majority of residential mortgages in GSEs, Freddie and Fannie.

Austerity might even become a historical artifact, a footnote in economic history. 

Keys to success are:  Few global currencies or a cartel of currencies; coordinated efforts among all central banks to send a proportionate amount of government and consumer debt into oblivion, at negative yields in perpetuity; containing and monitoring aggregate demand so as to not outstrip supply (hence, preventing insipient and pernicious inflation); and in regards participating currencies, central banks maintaining full faith in their value.

Corporations and big business, might cry out initially; but like most government social programs (like the MIC, Medicare –Part D, Romneycare, the Surveillance State, etc.), corporations with a vested interest would likely come around pretty quickly.  And by removing debt off the 99%’ balance sheet, many consumers would be free to save and spend again.  The pick up in aggregate demand could create a boom in profits, hiring, and cause wages to rise higher.

Further down the road, governments might begin to pay citizens a living wage, without a labor obligation.  Such a scheme might prove most timely, as robots and automation replace humans, and the demand for human labor is mitigated and ultimately, eliminated.  Our debt based economy would turn right side out, and quite possibly, become an economy based upon manufacturing, production and services, again (with banking providing a supporting, not the lead role).

P.S.

And while we are dreaming.... global coordination, and enforcement, of tax, regulatory, carbon emissions, and labor policies will prevent nation states from being played off upon one another, so as to level the playing field among all nations, and place the 99% on equal footing with the 1% for a change.

Copyright JM Hamilton Publishing 2015

Thank you, Mr. Trump

Thank you, Mr. Trump

“When the going gets weird, the weird turn pro.”

“It never got weird enough for me.” 

- Hunter S. Thompson

J.M. Hamilton (7-18-2015)

Mr. Thompson was correct. 

And his thoughts on the “weird,” and the strange, were only topped by Mr. Twain’s observation: “Truth is stranger than fiction, but it is because Fiction is expected to stick to the possibilities; Truth isn’t.”

How else to explain the freak show that has become today’s GOP, with Mr. Donald Trump as its ringmaster.

In a million years, who would have thought that in the year of our Lord, 2015, the Republican Party would burst into flames and self-immolate; not by the hand of an Anarchist, Socialist, or a bleeding heart Democrat…. No, but by the hand of one of their very own, a Republican, and a rather wealthy one at that.

And for a minute there I honestly believed I was suffering from writer's block.  Thank you, Mr. Trump.

It’s one thing to accuse Republicans of being racist, fatuous, morally bankrupt, and the party of the one percent; but quite another to see the leading candidate in the Republican Party, Mr. Donald Trump, not only confirm these observations, but embrace and shout out these truths with great pride.  Here’s a man who states, before Iowa social conservatives, that he’s never asked for God’s forgiveness (and yet, he attends church).  Not only is Mr. Trump arrogant, going off half-cocked, but arguably, he’s dangerous.  Not for telling his version of the truth, mind you, but for the pride and hubris from which these remarks emanate.

In short, it would appear that Mr. Trump’s filter is damaged or non-existent; either that, or like a spoiled child, the sycophants surrounding Mr. Trump have never told him “no,” or that he’s wrong.  Donald Trump is exactly what you get when you live in a bubble, and everybody tells you how wonderful you are.

Then again, the truth is stranger than fiction, and the truth does indeed set us free, so perhaps, the U.S. owes the billionaire a debt of gratitude for telling his version of the truth.

To think, Mr. Trump is leading in current GOP polling.  What does it say about today’s Republican Party, that Donald Trump has alienated nearly every American, and more than a few corporations and multinationals, excepting of course, the bible toting/gun loving, angry, White American male?

In a matter of weeks, Mr. Trump has confirmed all that is dark and venal about today’s GOP, and the American political process.  Allow me to paraphrase, please, Mr. Trump’s observations.

·      Mexicans are rapist and criminals.

·      I’ve never asked God for forgiveness (Presumably because Trump either doesn’t believe in God, or perhaps, Trump thinks he’s god, or maybe Mr. Trump is infallible.)

·      John McCain isn’t a hero because he was captured.  (Mr. Trump, of course, dodged and ducked the Vietnam war…. I wonder what Mr. Trump thinks of soldiers who were killed in action?)

·      The Vietnam War wasn’t worth fighting (Can we get Mr. Trump’s thoughts down on Iraq and Afghanistan?).

·      And it gets better… per the Guardian, Mr. Trump confirms that we no longer live in a democracy but a plutocracy.  Let’s let the Guardian take it from here:

“He used this to note his independence from special interests and attacked the massive fundraising tallies achieved by Jeb Bush and Hillary Clinton.  ‘Those people are controlled by whoever gave them their money, and I will tell you they are totally controlled,’ he said.”  "Mr Trump went on to say, 'I give to everybody, and they do whatever I say.'"

It’s not that the Democrats, or GOP- Lite, are a lot better than Republicans, both political parties service the plutocracy, but at least Dems are not hypocrites, and clearly are the lesser of two evils.  Both parties are socialist and love Big Government; but the GOP believes that welfare should go, not, to those most in need, but to the one percent, like Mr. Trump. 

Of course, there are more than a few Democrats, who are fully aware of what is going on (e.g. Mr. Trump’s support for the Clinton Foundation), and who are seeking out genuine change and reform:  Senators Elizabeth Warren and Bernie Sanders, immediately come to mind.

While one can’t help but feel revulsion for today’s GOP; we all should be thankful, Democrat and Republican alike, that Mr. Trump is the clearest example of why the GOP needs serious reform or should be abandoned altogether.  If nothing else, Mr. Trump’s comments show a political party in decline, and that is unelectable to the nation’s highest office.

The more serious questions, however, are what does it say about GOP supporters who would continue to rally behind the Trumpster, or even the Republican Party, after these latest ravings?  Will the GOP continue to follow him, lemming like, over the cliff, or will the Party finally seek real reform and rehab? 

As this Party is reactionary to its core, and has a very homogenous base, my guess is – even after this debacle – the Party will still eschew real change. 

Mr. Trump has not only filed four bankruptcies, but, like the Republican Party,  would appear to be morally bankrupt as well (especially, as he continues to play the race and fear cards, and insult war veterans).  

The GOP’s economic, political, social, and tax policies for the last thirty-five years created a ruling oligarchy, the binary economy, and monsters, like Mr. Trump.   

As such, the GOP appears to be reaping the bitter fruit that it has sown.  Eisenhower, Lincoln, and Reagan would be ashamed.

Copyright JM Hamilton Publishing 2015

No Social Justice, without Economic Justice

No Social Justice, without Economic Justice

“It’s when the tide goes out that you see who’s swimming naked.”

 - Matthias Matthijs, a professor at Johns Hopkins University SAIS.

J.M. Hamilton (7-9-2015)

It’s been a rough couple of weeks for Republicans, and in particular, social conservatives.  The looks of dismay, pain, and the classic signs of insomnia were all there, painted across sad right-wing faces.  That so much misery was heaped upon the GOP- faithful, by a Republican packed SCOTUS, struck some as poignant.

Given the doom and gloom surrounding the GOP, had there been a futures market, or ETF, in duct tape, I suspect speculators would have bet in advance of SCOTUS’ recent rulings, that this product would have flown off local hardware store shelves, and subsequently, would be wrapped around Evangelical and Baptist wrists (to prevent them from harming themselves).

This isn’t funny, and it’s serious business.  Runs on duct tape were widely reported in the news media, post SCOTUS rulings; and there were long lines filmed at various well-known box retailers, and home improvement centers, and posted on You Tube (not unlike Greeks lining up at an ATM).  It was a classic duct tape run, not unlike the infamous duct tape, and plastic sheeting, run of 2001 - 2002, post 9-11.

For religious conservatives, in addition to the Obama Presidency, the SCOTUS rulings were just another mile marker on the road to Hell, Armageddon, and the End Times, albeit not necessarily in that order.  Predictably, gays went on a post-ruling rampage and made straight couples renounce their hetero-vows and beliefs, and engage in homosexual love making. 

And several notable social conservatives were found on the floors of either 1950’s style bomb shelters, or the more modern equivalent, safe rooms: naked, curled up in the fetal position, and within the fog of a complete psychological break from reality.

What did it all mean?  Blank stares from the GOP faithful, and faux righteous indignation.  And finally, a collective blast of anger and denial from the two dozen, or more, GOP Presidential contenders, pandering to their base, the American Taliban.  Shucks, can’t the GOP buy off a perfectly good SCOTUS anymore, to execute and enforce the social laws of the land, as dictated for nearly two and a half centuries by old white men?  White males, of course, possess special magical powers, that no other humans, sex, or race possess… the ability to read the Creatress’ mind.

Arguably, the GOP faithful should have seen this coming a mile away.  If only they had read J.M.H.

The GOP, and Evangelicals, have made a deal with the devil for a long time, and the chickens not only came home to roost; but for social conservatives, their fine feathered friends were carrying Avian Flu.  

The trade off or deal, made down at the cross-roads, was this:  White Social Conservatives (WSC), you vote the GOP into office.  The GOP will support your version of Sharia-law, vigilante justice, and white supremacy in the social hierarchy.  And in return WSC, you turn a blind eye as the GOP advocates and engages in: laissez faire economics, trickle down tax policies, ship WSC jobs offshore via free trade agreements, contaminate and pollute the Goddess' creation, and allow corporations to metastasize into cartels and monopolies (so powerful that they will take over U.S. and Western democracies, and establish their own global, extrajudicial world court (ICSID)--- not to mention their own religion, a/k/a crony capitalism).  Just turn the other cheek WSC, when said corporations own and operate a highly volatile global economy, based upon: financial speculation, Wall Street gambling (backstopped by the taxpayer), debt, regulatory and government capture, private equity chop shops, and exploiting third world resources, labor, and children.

Oops.  The second part of the GOP alliance doesn’t sound very “Judeo or Christian.”  Never, that I can recall, has there been a political party that is more bipolar than today's GOP: on one hand, you have an, alleged, highly "moral" evangelical base; while on the other hand, this same political party is financed, owned, and operated by highly amoral, secular, and money loving cartels and monopolies, like Wall Street.

I guess the WSC didn’t read the fine print on the GOP’s Faustian contract, written in blood; which states that in the event that WSC social values and beliefs conflict with the Corpocracy’s bottom line, we, the Multinationals of the World, shall prevail.

You see, SCOTUS didn’t go rogue after all, and neither did Justice Roberts.  A GOP packed SCOTUS just did its master’s bidding.  The Star Chamber (i.e. the Business Roundtable and the Chamber of Commerce) could no longer afford boycotts, or to be labeled racist or homophobic, in what was essentially the latest and greatest drive for civil rights and equality seen in America since the sixties.  Not only was the Bankocracy and Corpocracy worried about their bottom line, but SCOTUS, by making their recent decisions, essentially opened the door to removing the “homophobic monkey” off the GOP leadership’s back.  Hence, possibly making Republican candidates eligible for the Presidency, oh, in say, about another generation or two – that’s if the GOP still exists (Predictably, the GOP, who has no base other than the Business Roundtable, the plutocracy, and the WSC, has opted not to walk through the door that SCOTUS held open for them, at least not yet). 

In short, the WSC Party, the GOP, just in case anybody missed it, was affirmed to be, once again, the Plutocracy’s Party (and the Star Chamber can ill afford to have the American Taliban harming the Fortune 500’s bottom line, or the next quarterly statement, with rants against gays and gay marriage).

Romneycare… same thing.  Corporations love Romneycare.  President Obama, like Mr. George W. Bush before him, when both the Healthcare Reform Act and Medicare - Part D were negotiated, respectively, protected Big Healthcare’s/Big Pharma’s profits, first and foremost.  Both Presidents pledged to the major healthcare providers, doctors, and Big Pharma – in particular, behind closed doors, that the awesome power of the Federal government would not be used to negotiate lower drug/medical rates, on behalf of healthcare consumers and the taxpayer (unlike every other Western Democracy on the planet).   Not that they weren’t before - but thanks to Romneycare and Medicare, Part D - Healthcare and Big Pharma are now rolling in green grass with fat cows, and ultra-plush bottom lines (just ripe for further industry consolidation, leading to hegemonic cartel and monopsony powers over the nation's healthcare). 

Isn’t that special?

So in upholding Romneycare, once again, SCOTUS did what their masters told them.  Moreover, if you review most, if not all, of SCOTUS’ decisions in the last thirty days, here too, you can see corporate oversight and control, or the not so invisible hand.  We like to think of SCOTUS and The Fed as highly independent branches of government (just like they taught us is school), but that’s simply not true.

The moral of the story:  Be careful of a political party, and politicians, that services an ultra-powerful plutocracy.  That goes for Clinton loving Dems, too.  Republicans and Democrats are not exactly the same, but they are closer than you think, in terms of economic policy - especially, when it comes to servicing the plutocracy’s economic agenda.  Witness the recent love-fest between President Obama (the latest incarnation of Clintonian politics) and Congressional Republicans over TPP fast track authority.

Witness too, Mr. Blankfein’s support for Hillary and Jeb.

It seems unfair to play down, or celebrate, the corporate juggernaut’s role, entirely, for the passage of marriage equality and Obamacare; and yet, that’s what some opinion pieces did, here and here.  In the case of marriage equality, in particular, we can see what a politically motivated minority can achieve with a grass roots campaign, decades/centuries of patience and resistance against well established prejudice and oppression, and the rapid evolution of public thinking, not to mention a whole generation of WSC/Republicans dying off in large numbers.  Honestly, if some homophobic corporate management teams could have held out a little longer, w/out it impacting their bottom line, they would have; and many corporates will still tacitly sanction homophobia, directly and indirectly, in the workplace, despite all public disavowal and written H.R. guidelines to the contrary.  Like racism, homophobia will just be more subtle going forward.

Nevertheless, all circuitous machinations and motives aside, these SCOTUS rulings were a major win for the American people, tolerance, civil rights, and the long march towards social justice. 

As for the Goddess above, she does indeed work in mysterious ways. 

I must confess, mea culpa, to the best of my knowledge, there was no duct tape run, and no, gay citizens did not force born again Christians to engage in homosexual lust or love.  Nor did the heavens come crashing down, or the gates of hell open wide. The fact that none of these events took place is instructive.  No?

But I digress, because we need to eventually make it to the primary point of this piece; that is to say, ultimately, there can be no social evolution and justice, w/out economic evolution and justice.

The Greeks showed us that, today (Sunday 7-5-2015), as I write this post.  The Greeks, via Democracy and plebiscite, told their masters, the Troika/Banksters, to shove it Sunday, and that they had enough of the financial oppression dealt out by the international banking cartel.  Oppression led by the EU (headed up by Germany), the IMF (headed up by the U.S.), and the ECB (headed up by Goldman Sach's own, Mario Draghi).

Yes, Greeks made mistakes over the decades in electing leadership, who were owned by banks, and over committed on patronage and social spending.  But that was no reason, in the name of bank solvency and politics, to hold future generations of Greeks, and their economy, captive to the international banking cartel.

Here’s a big hint, and you don’t have to be an expert on bankruptcy, or hold a law degree to figure it out…. When you are borrowing money, as an individual, nation or corporation, to pay interest on your debt, it’s game over.  You are effectively insolvent.  But the Germans and the Troika couldn’t buy off Syriza, and neither Messrs. Tsipras or Varoufakis had plans to enter banking or corporate life after their political career, as a reward for playing Troika ball.  No this crew would not sacrifice Greek citizens to “extend and pretend” financial games (w/ a nod to Mr. Varoufakis), and leave the Greeks hostage to Troika blackmail.

In short, it’s time for debt restructuring, or better yet, debt forgiveness, or barring that, anarchy and default.  Ironically, the often technical, logical, and business savvy Germans, should have seen this coming a mile away, but instead, continued to dump money into a bankrupt country, in an effort to kick "the can" further down the road.  How smart was that?  It’s easy to blame the Greeks, but how about the private bank underwriters, who loaned the money to the Greeks in the first place?  Bankers also sold Greece the derivative and repo products used to obscure their national debt, in order to gain E.U. admittance.  Bankster moral hazard affirmed once again: a great deal of Greek debt has already been transferred to governments or government banks (a/k/a the Troika), and taken off private bank balance sheets. 

The Germans, of course, want their cake and to eat it too:  They want the benefits of an integrated E.U., complete with a depressed currency – to aid Germany’s export driven economy; and they want bankrupt nations, like Greece (who hold back the Euro from appreciating), to continue to “extend and pretend,” and pay back German banks, in perpetuity.  If you get the feeling that the Troika is just another payday lender, living off usury and the misery of others, you nailed it.  Conveniently, the present German government forgets the massive debt forgiveness that their country received, post WWII.

But heh, German politicians, like U.S. politicians, are owned by corporations and the plutocracy, and in particular bankers.  The private German banks, long since bailed out, still had some skin in the game, and did not want to take the financial hit for the inevitable.  And now, Sunday's plebiscite breathed new life into Syriza, the so-called "radical left government," and strengthened their hand, in what appears to be a land slide victory.  

You want to see "radical left?"  Take a look at the Bush Administration and its bailout of Wall Street banks, post 2008 Crash.

Last Sunday, all citizens of the world were Greeks.

Greeks are willing to accept a new currency; or debt restructuring; or even debt forgiveness and staying in the Euro; but they will no longer pretend that they are something that they are not: solvent.

And there is no shame in that.  Just ask, sometimes, Republican frontrunner, Mr. Donald Trump (w/ four business failures to his credit).  Mr. Trump has been richly rewarded for his bankruptcies (both financial and moral).  For the plutocracy, bankruptcy is an effective business strategy; for everyone else, the plutocracy would have us believe bankruptcy is shameful.  It’s just another double-standard the elite foist upon the 99%, daily.

In sum, Greek citizens took hold of their economic future and destiny Sunday evening.  Who knows, perhaps other oppressed nations, along the Southern periphery of Europe, will do the same?  Maybe Puerto Rico is next?  Which is the very reason that the Troika will do everything w/in its power to make Grexit a living nightmare for Greek citizens.  How shameful is that?

As an unreconstructed and unrepentant Liberal, I believe corporations are capable of doing great things, and committing great wrongs; but our Corporate Masters sometimes have to be led by market forces, the fourth estate, social media, consumers/employees, and the citizen’s of the world into doing the right thing. 

Like business advocacy and support for gay marriage, and Romneycare, who knows what economic, public policy, and governmental changes corporations might achieve?  With a little pressure from their clients and stockholders (if publicly traded), will Corporates soon demand: a fair an equitable tax code that eliminates corporate tax dodges, so that the middle class tax burden is reduced; a separation between money and state, so that our plutocracy becomes a democracy again; the break up of predatory monopolies and cartels, for a more healthier and saner mixed economy (in lieu of our crony economy); and terms limits for corrupt politicians, who make up the judiciary and the legislative bodies, in Washington and the states?

After all, the customer is always right.

Copyright JM Hamilton Publishing 2015