Interesting & Important News & Analysis, September 18, 2019

Concerning Hong Kong:

What are individuals fighting against?

What are individuals fighting for?

How are individuals going about it?

Those are the questions that matter most.

It isn’t helpful to condemn an entire protest movement by lumping some people together who are focused on fighting for things that aren’t enough of an improvement over what they are fighting against. It isn’t wise to be simply against US imperialism such that one is turning a blind eye to Chinese dictatorship that includes huge anti-democratic infringements on personal and group liberties, which infringements are for the sake of self-appointed, ruthless dictators who ban Orwell’s book, Animal Farm, because it explains that some animals (in this case, Stalinists-Maoists) are more equal than others.

Hong Kong Protestors: Hooligans or Heroes?

The reason Hong Kong is being ‘left behind’ is because of its antiquated British-era laws, rules and regulations, its extreme capitalist system; because of “too little of Beijing”, not “because of too much of it.”

These hooligans are going against the interests of their own people, and their own people are now cursing them. Not loudly, yet, as rioters have clubs and metal bars, but cursing.

Western media chooses not to hear these curses. But China knows. It hears.

Businesses are Walking a Fine Line Between Innovation and Cybersecurity

Asked to evaluate the current status of their cybersecurity efforts, 55 percent of executives and 61 percent of business staff rated it as completely satisfactory. Among information technology staff – the employees that should have the best understanding of risks and readiness – just 35 percent are completely satisfied.

This is one of the reasons why the Glass-Steagall Act should not have been repealed.

JPMorgan Learned ‘Spoof’ Method From Bear Stearns, U.S. Says

The Magnitskiy Myth Exploded [Most people spell it Magnitsky]

… I can find no truthful report of the judgement in the mainstream media at all.

The myth is that Magnitskiy was an honest rights campaigner and accountant who discovered corruption by Russian officials and threatened to expose it, and was consequently imprisoned on false charges and then tortured and killed. A campaign over his death was led by his former business partner, hedge fund manager Bill Browder, who wanted massive compensation for Russian assets allegedly swindled from their venture. The campaign led to the passing of the Magnitskiy Act in the United States, providing powers for sanctioning individuals responsible for human rights abuses, and also led to matching sanctions being developed by the EU.

However the European Court of Human Rights has found, in judging a case brought against Russia by the Magnitskiy family, that the very essence of this story is untrue.

Craig is correct that the mainstream media reports the story as if the European Court of Human Rights has completely upheld Bill Browder’s narrative. It certainly can’t be the case that none of them actually read the court’s judgement. Therefore, at least some of them are deliberately concealing the fact that the court ruled that Browder’s narrative turn the actual chronology of events on its head. The only reason to do that is to cast a very negative light on Russia based upon falsehoods. That’s exactly the sort of thing I hate, and you should too.

False propaganda leads to war. War is the greatest of human evils.

I’m not a big fan of Human Rights Watch. They have a history of not offering what I consider compelling-enough evidence but rather simply buying into stories they’re told if those stories fit HRW’s biases. However, I’ve seen report after report from other sources, credible sources, that do substantiate HRW’s report in this instance. Besides, Bolsonaro has condemned himself from his own mouth and by his own reported actions. Everything fits.

Amazon deforestation is driven by criminal networks, report finds

So, this is good with a qualification.

If You Don’t Understand Banks, Don’t Write About Them

Here’s where it runs into some difficulty for lack of sufficient explanation.

Banks don’t “lend out” reserves, except to each other. Reserves are created by the central bank and only held by banks.

There are excess reserves (above the 10% required reserves Frances mentions in her article), which can be lent out to regular borrowers in that the bank can create credit against those reserves ten-fold. Yes, it is semantics. Once they are “lent out,” they are no longer excess reserves but regular reserves. When people complain that banks are hoarding cash and not lending out their reserves but simply letting them sit earning interest at the Fed, they are referring to what I just explained (though, they might not fully understand it). MMTers have often gotten hung up on this.

Frances Coppola is explaining MMT and doing it quite well, I might add, as most MMTers never bother differentiating between the British system versus the US system. I’ve often complained about that because leaving it out has caused massive, needless confusion amongst the masses.

Here’s a good follow-on.

Repo Market Chaos Signals Fed May Be Losing Control of Rates

One of the key U.S. borrowing markets saw a massive surge Monday, a sign the Federal Reserve is having trouble controlling short-term interest rates.

Amid the settlement of Treasury coupon auctions and the influx of quarterly corporate tax payments, the rate on overnight repurchase agreements soared by as much as 248 basis points to 4.75%, the highest level since December, according to ICAP pricing. It came back down to 2.50%, still up 23 basis points for the day. Curvature Securities spotted a different peak: 8%.

While the spike doesn’t necessarily mean credit markets are seizing up or a financial calamity is imminent, it could hamper the Fed’s ability to steer the economy. As the Federal Open Market Committee meets this week, this surge could force yet another tweak to the central bank’s interest on excess reserves rate to help ensure its main tool for guiding the economy — the fed funds rate — stays within policy makers’ preferred band.

Personally, I don’t see it as a problem at all. If the Fed wants to, it can put a daily limit on such swings, just the way the stock market does.

Here’s another related one.

Misunderstanding Liquidity, Misunderstanding QT

It’s looking more and more like we’re going to see “labor” (unions) going out on strike. More and more young people are showing an interest in joining unions and using strikes as a means to take back power from ownership and management. Union management is undergoing heavier scrutiny by the rank and file too to cut out corruption (and collusion with ownership/management).

There appears to be an international workers’ movement up swelling right now. The mainstream media has been deliberately avoiding reporting that news for obvious corporate reasons.

Personally, I’m not a huge fan of unionism. I’d rather see grassroots economic democracy, but I can sure understand why young people are searching around old ideas for any ideas on how to get rid of our unnecessary and counter-productive austerity (neoliberalism).

Keep a monthly eye on the following:

Current Employment Statistics – CES (National): CES Strike Report

Here’s another one from the BLS that sheds light on the history of labor strength in the US.

Why This Counts: What Do We Know about Strikes and Lockouts?

You can also read about what Ronald Reagan did to labor: Professional Air Traffic Controllers Organization (1968)

That was the biggest direct hit to unionism so far in my lifetime. When coupled with all the “trade deals” offshoring US jobs and all the deregulation of the financial sector, it really revved up the destruction of much of the middle class in America.

Are you still invested in a dying energy sector that needs to be killed off before it kills us off?

What’s Behind the World’s Biggest Climate Victory?

The chief executive of the world’s largest private coal company sat before a group of U.S. lawmakers who wanted to know whether the fuel had a future. He didn’t hesitate. “Coal,” he said, “is the future.”

It was 2010. Coal supplied nearly half of America’s power, the executive testified, and was growing more than 1.5 times faster than oil, natural gas, nuclear and renewables combined. Global demand was on pace to rise 53% within two decades. And renewable energy? Not an option. “Wind and solar comprise just 1% of today’s U.S. energy mix,” Gregory Boyce, then the chief executive of Peabody Energy Corp., told the members of Congress. “It is unrealistic to suggest that renewables could replace conventional baseload fuels.”

Not quite. This April, for the first time ever, renewable energy supplied more power to America’s grid than coal—the clearest sign yet that solar and wind can now go head-to-head with fossil fuels. In two-thirds of the world, they’ve become the cheapest forms of power.

Solar and wind will power half the globe by 2050, based on BloombergNEF forecasts. By that time, coal and nuclear will have all but disappeared in the U.S., forced out by cheaper renewables and natural gas.

… An industry that once relied on heavy subsidies and was propped up by government mandates is now increasingly standing on its own.

Peabody, meanwhile, went on to declare bankruptcy in 2016, along with most every other major coal producer in America.

If you’re still invested in dying energy, you need to read the following linked article.

As Big Oil Digs for More Despite Climate Risks, Investor Lawsuits May Grow

“In making investment decisions, company directors are legally obliged to have regard to material climate-related financial risks, including stranded asset risk,” said Peter Barnett, an attorney with the nonprofit environmental law organization ClientEarth. “We expect to see much greater shareholder scrutiny, and indeed litigation, over large-scale investment in fossil fuel assets that will not be profitable in a low-carbon world.”

HUD Charges Groups With Fair Housing Act Violations

The U.S. Department of Housing & Urban Development (HUD) has announced that it is charging housing professionals based in New York, Pennsylvania and Georgia with discrimination for failing to design and construct a 40-unit condominium development in Brooklyn, N.Y, in accordance with the accessibility requirements of the Fair Housing Act.

Who was the architect?

Deregulation is definitely a bad idea for solving homelessness. Housing subsidization or outright public housing are the solutions.

White House floats ‘humane policing’ to clear homeless from streets

Unfortunately, there are those who think all of this is some sort of terrible color revolution. It doesn’t have to turn out to be. Wish the people good luck, and stand up for them. Don’t just say there are only two options: imperial domination from outside or dictatorship from within.

Will Sudan Break Through to Democracy?

The question now is whether factions within the military, the Islamic opposition, or various rebel groups will end up preventing the transition to democracy under elections planned for 2022.


Personality Tests Are the Astrology of the Office

“Human behavior is multifaceted and complex and dependent on your environment and biological state, whether you’re depressive, manic, caffeinated. I’m skeptical of what you can learn from answering ten questions or observing someone’s behavior for just 30 minutes.”

She pointed out that while a rigorous assessment of someone’s personality would have to involve multiple close observations of their behavior over a sustained period, the typical psychometric test comes as a one-and-done.

There are psychological tests that can reveal dishonest streaks even when the applicant is trying hard to avoid tipping his or her hand. However, relying exclusively upon them could open a can of liability worms.

The problem is that the system can be overwhelming.

Health Insurance That Doesn’t Cover the Bills Has Flooded the Market Under Trump

Had Diaz gone to the ACA marketplace, the family would have qualified for subsidies, but Thiel didn’t mention that, Diaz says. …

For years, the Diazes had paid for comprehensive coverage from Aetna, but the insurer had recently announced it would no longer offer ACA plans in more than two-thirds of the U.S. counties it served, including the couple’s, citing cost-control concerns. Eager to avoid the ACA marketplace, which she’d heard negative stories about, Marisia turned to Google to find a provider. …

… The family switched to a comprehensive, ACA-compliant insurance policy in December 2017. With government subsidies, it costs less than they were paying for junk insurance.

“Eager to avoid the ACA marketplace, which she’d heard negative stories about, …” was a huge mistake. Such choices do not excuse broker negligence or corruption. I’m not making a judgment here about Thiel. I’m making a general statement.

States Protecting Residents Against Skimpy Short-Term Health Plans

Short-term plans can offer healthier people lower premiums (because they include fewer benefits and cover less costly populations), so they lure healthy enrollees away from the individual and small-group markets, leaving a less healthy and thus costlier group behind. This dynamic, known as adverse selection, will likely raise premiums for traditional, more comprehensive health coverage and undermine ACA protections for people with pre-existing conditions.


The Official U.S. Poverty Rate is Based on a Hopelessly Out-of-Date Metric

In 2018, the official poverty threshold for a family of two adults and two children was $25,465 or about $2,100 a month. If it had been set at half of median disposable income, it would have been $38,098, or $3,175 monthly. Ask yourself: If you were part of a couple raising two children, could you afford the basics on $25,000 a year without going into debt or being evicted? Do you think other people would view you as no longer poor if your family’s income was a bit over $25,000?

Much “foreign aid” is taxpayer-funded plundering of the global South

Up until 2015, neither USAID nor OPIC had experienced a discouraging word from the public. But then came a seminal and scathing paper from economists Christopher Coyne and Abigail Hall Blanco about USAID operations. They accused the agency of failing to lift global South countries from poverty for half a century, finding USAID to be nothing more than an expensive, taxpayer-supported tool for helping U.S. businesses obtain billions in profits and become a global “illiberal hegemony.”

Coyne and Hall Blanco wrote that most USAID staffers regarded locals as backward inferiors (and were cordially detested in return). The authors concluded that the agency’s “noble rhetoric of humanitarian intervention and the desire to spread liberal values is simply cover for the true motivations behind foreign interventions.”

… 800 overseas bases, it says, for peacekeeping duties. Those bases, however, house USAID field staff to provide humanitarian and disaster relief, and agency staffers have also been “helping” the military to understand “the political terrain or economic aspects of a given contingency environment.” Still, without accompanying disasters, it seems more likely that those bases were set up to help U.S. companies get their financial footholds in host countries.

Column: Jeff Bezos [allegedly] becomes the first CEO to break his pledge to dump the ‘shareholder value’ model

To be fair, some of the part-timers losing their eligibility for the company plan may do better on price and even service in the Obamacare market, especially if they’re eligible for premium subsidies. We don’t know how good the Whole Foods plan was, or what it cost part-time workers.

I typically like Michael Hiltzik’s column, but why didn’t he find out first?

I disagree.

Low interest rates can dampen competition and hurt productivity growth

When interest rates are very low and fall toward zero, the strategic effect is stronger than the traditional effect because industries are more monopolistic. The leading firm’s competitors stop investing as they fall too far behind and the prospect of catching up to the leader becomes weaker. The leader also stops investing once the threat of being overtaken by competitors becomes too small. And when this occurs across industries, the overall productivity growth of the economy falls.

To be sure, when interest rates are high, a decline in interest rates boosts economic growth initially—the traditional effect is stronger than the strategic effect. But rate cuts when interest rates are “sufficiently low,” the co-authors say, dampen growth.

The title of the article says, “Low interest rates can dampen competition and hurt productivity growth.” However, the article doesn’t support that thesis at all. If it were to, then raising rates would stimulate competition and productivity growth, which isn’t what has happened but the opposite. Even if rates were to have been higher all along, the gap between competitors would still have widened, and the losing competitors would still have stopped trying to catch up. It’s not as if the stronger competitor wouldn’t have been able to widen the gap under higher interest rates.

The beauty of a Green New Deal is that it would pay for itself

There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.

That’s not true. The third way is to issue the money without issuing bonds. It’s definitely the right way to fund the Green New Deal.

She’s completely correct.

Greta Thunberg to Congress: ‘You’re not trying hard enough. Sorry’

The Taliban are violating everyone’s international human and civil rights.

Afghanistan’s Taliban tells teachers, students to block presidential elections or risk death

Edward Snowden: Trump administration sues NSA whistleblower over new memoir

Snowden revealed to the American People that what is supposed to be the People’s government was deliberately lying to the People and was deliberately illegally (unconstitutionally) spying on the People en masse. How then can Snowden’s actions be illegal? They cannot. Case closed.