Tuesday, March 13, 2012

489 Soros: collapsing US Economy to spark Street Violence

George Soros: collapsing US Economy to spark Street Violence

(1) How Economists Contributed to the Financial Crisis
(2) Germany proposes that a European commissioner be appointed to run
the Greek economy
(3) Congressman Ron Paul: One Worlders Will Fall
(4) Jewish Finance Capital offshores American jobs - Brother Nathanael
(5) Turbo-Capitalism destroys the American dream - Edward Luttwak
(6) George Soros on the Coming U.S. Class War
(7) George Soros: collapsing US Economy to spark Street Violence

(1) How Economists Contributed to the Financial Crisis


by John T. Harvey

February 6, 2012

A lot of blame has been spread around regarding the financial collapse
and the onset of the Great Recession. Greedy speculators, big banks,
Wall Street executives, and Fannie Mae and Freddie Mac have all taken
turns as whipping boys. But one group has largely avoided their fair
share of attention: economists. They were the ones who provided the
intellectual justification for the transformation of our economy over
the past thirty years. They stood idly by as jobs went overseas, demand
was sapped by increasingly uneven distributions of income, competition
was destroyed by lax attitudes towards antitrust laws, and safeguards
were discarded in the financial sector. More than that, many actually
praised these events. This is not insignificant. Much of the
financialization of the U.S. economy (the shift from producing goods and
services to managing financial wealth that played such a central role in
our collapse) could not have occurred without economists offering their
tacit and open approval. Opposition would have slowed, if not stopped,
these trends.

There was actually a poll among economists to determine which of their
brethren they thought most responsible for our current debacle. The
"winners" were as follows:

Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve System
from 1987 to 2006, Alan Greenspan both led the over expansion of money
and credit that created the bubble that burst and aggressively promoted
the view that financial markets are naturally efficient and in no need
of regulation.

Milton Friedman (3,349 votes): Friedman propagated the delusion, through
his misunderstanding of the scientific method, that an economy can be
accurately modeled using counterfactual propositions about its nature.
This, together with his simplistic model of money, encouraged the
development of fantasy-based theories of economics and finance that
facilitated the Global Financial Collapse.

Larry Summers (3,023 votes): As US Secretary of the Treasury (formerly
an economist at Harvard and the World Bank), Summers worked successfully
for the repeal of the Glass-Steagall Act, which since the Great Crash of
1929 had kept deposit banking separate from casino banking. He also
helped Greenspan and Wall Street torpedo efforts to regulate derivatives.

{Comment (Peter M.): the three above economists are all Jewish}

One might wonder how there could be such a disconnect between the
theories employed by these economists and the real world. But, to those
of us in the profession, it comes as no surprise. Some of us have been
worried to death about it for years.

The short answer is, the incentive structure in mainstream (or
Neoclassical) economics is skewed towards rewarding people for building
complex mathematical models, not for explaining how the actual economy
works. You might assume those two things are connected in some tangible
way, but that's not necessarily the case. I think the non-economist
would be absolutely shocked by some of the things we learn in graduate
school. For example, I wonder how many people know the formal Monetarist
(Milton Friedman's school of thought) explanation of how the Great
Depression occurred? Their analysis depends on the existence of
something called money illusion on the part of workers. The idea is that
laborers are never quite certain what the current cost of living is
since they do not keep a careful accounting of their expenditures.
Meanwhile, firms are pretty darn sure what prices are because it is so
important to their livelihood to pay close attention. Now imagine the
following. Let's say there is a massive collapse in the supply of money,
leading to a fall in prices (which is, as I have pointed out elsewhere
(albeit, in terms of the opposite direction), based on a very poor
understanding of the modern financial system; but, in the interest of
keeping things simple, I'll concede the point here). The fall in prices,
because it means they are earning lower profits, leads firms offer lower
wages to their employees. But–and here's what they say happened in the
Great Depression–workers, not realizing because of money illusion that
the cost of living has declined (and that firms' offer is therefore not
unreasonable), quit their jobs. And that, apparently, is how
unemployment rose to 25% in the 1930s: the money supply fell, lowering
prices, leading firms to offer lower wages, and causing workers to
VOLUNTARILY QUIT THEIR JOBS! I don't know about you, but that's one of
the most ridiculous explanations I have ever heard in my entire life. It
also puts into perspective the above quote criticizing Friedman's approach.

This is not completely atypical. It is a function of the fact that
economists spend too much time developing complex thought experiments
and clever stories and not working to understand the complexities of the
real-world economy. A famous book published in 1990 showed evidence of
this in the top graduate programs in our discipline (The Making of an
Economist by Arjo Klamer and David Colander, Westview Press). When asked
what was most important to success as an economist, students ranked
these skills in this order (page 18):

1. Being smart in the sense of being good at problem solving.
2. Excellence in mathematics.
3. Being very knowledgeable about one particular field.
4. Ability to make connections with prominent professors.
5. Being interested in, and being good at, empirical research.
6. Having a broad knowledge of the economics literature.
7. Having a thorough knowledge of the economy.

No, I did not accidentally type the list backwards! And, if anything,
the relegation of "knowledge of the economy" to dead last has become
worse. Courses that would have provided context and empirical grounding
to theory have been slowly replaced over the past thirty years by those
teaching more mathematical methods. Today, students learn more about set
theory than they do about the merger movements of the late 19th and
early 20th centuries – if they hear about the latter at all, which is
increasingly unlikely. Moreover, winning the publishing game means
writing articles that are more general, theoretical, and mathematical.
The author of a piece on the evolution of the specific institutional
structure of the financial sector in the United States from 1980 to
1990, for example, even if well-written and firmly grounded in theory,
would find it difficult to publish in any of the "top" journals. This
would hurt the career advancement of a middle- to senior-level economics
professor and could be a death sentence for the junior one, needing, as
they do, to earn tenure in order to keep their job.

Not that I have anything against mathematics. My first college major was
physics and I have always enjoyed the subject. I was one of those
strange kids who loved word problems and derived great joy from figuring
out the underlying logic of mathematical relationships (no, I didn't
date very much!). But for economists, math should be no more than a
tool, not the end in itself. I'm afraid that's not the case, so much so
that today a common pattern is for a student to earn a math degree as an
undergraduate and then pursue an economics PhD. Are they really
interested in understanding unemployment, inflation, poverty, pricing,
consumer choice, etc., or have they found a place where doing what they
do best is rewarded?

This doesn't mean that nothing useful gets done, but there are built-in
incentives against it. Nor do I mean to implicate all of economists.
Many DID raise the alarm and tried very hard to get the attention of the
powers that be. But, they were in the minority and members of schools of
thought largely dismissed by mainstream economics (e.g.,
Institutionalism, Post Keynesianism, and Modern Monetary Theory). Their
graduate programs DO force students to learn about the structure of the
actual economy (although still with plenty of math, but this time as the
means rather than the end) and their journals DO reward authors who
tackle the extremely complex and much messier task of figuring out what
caused real-world economic disasters and successes. This is the sort of
work that needs to be encouraged.

There was, incidentally, a second poll asking who most accurately
forecast the financial crisis. The winner was, by a wide margin,
Professor Steve Keen of the University of Western Sydney. The page
announcing the award says this about Professor Keen's work:

In December 2005, drawing heavily on his 1995 theoretical paper and
convinced that a financial crisis was fast approaching, Keen went
high-profile public with his analysis and predictions. He registered the
webpage www.debtdeflation.com dedicated to analyzing the "global debt
bubble", which soon attracted a large international audience. At the
same time he began appearing on Australian radio and television with his
message of approaching financial collapse and how to avoid it. In
November 2006 he began publishing his monthly DebtWatch Reports (33 in
total). These were substantial papers (upwards of 20 pages on average)
that applied his previously developed analytical framework to large
amounts of empirical data. Initially these papers analyzed the Global
Financial Collapse that he was predicting and then its realization.

In the 1995 article referenced above, Keen takes pains to model
explicitly the features of a modern financial system (see Steve Keen,
"Finance and Economic Breakdown: Modeling Minsky's 'Financial
Instability Hypothesis,'" Journal of Post Keynesian Economics, vol.17,
no.4, Summer 1995, pp.607-635). For him, there are no helicopters
increasing the money supply by dropping cash, no households with perfect
working models of the economy in the backs of their heads, no
depressions caused by the fact that workers suddenly and voluntarily
quit their jobs en masse, no speculators who know the future (all of
these are actually features of popular mainstream economic approaches).
His paper contains a great deal of math, but as a tool rather than an
end. Among his key conclusions are:

• "…capitalist expectations of profit during booms can lead them to
incur more debt than the system is capable of financing" (p.633).
•  ...a breakdown results when there is a debt-induced recession,
leading some capitalists to go bankrupt and lenders to "write off bad
debts and suffer capital losses" (p.633).
• "…a rise in income inequality (between workers and capitalists) leads
to a period of instability and then collapse" (p.633).
• "…a long period of apparent stability is in fact illusory, and the
crisis, when it hits, is sudden – occurring too quickly to be reversible
by changes to discretionary policy at the time" (p.633).
•  ...the weight of the collapse may be so great that monetary (he
specifically mentions lowering interest rates) and fiscal policy are
powerless to reverse the trend.

All this was written in the midst of the longest peacetime expansion in
US economic history, a period when some mainstream economists were
declaring it a "New Economy" where recession had been banished forever.
His predictions – and this is just a small subset of his work – were
eerily accurate and based on work well outside of what is recognized as
worthwhile in mainstream economics. He has continued to constantly
update his work in his blog: http://www.debtdeflation.com/blogs/.  If
you have never heard of him, that's not surprising. You probably don't
read too many academic journals. The real problem is, most economists
have never heard of him either. If we are to truly recover and put
ourselves back on the track to prosperity, that has to change. It is
vital that our profession revise its incentive structure such that
models that more closely reflect the complex institutional structures
and behaviors in the real world are valued above those that look pretty,
but tell us nothing.

John T. Harvey
I am a Professor of Economics at Texas Christian University, where I
have worked since 1987. My areas of specialty are international
economics (particularly exchange rates), macroeconomics, history of
economics, and contemporary schools of thought. ...

(2) Germany proposes that a European commissioner be appointed to run
the Greek economy

From: "Sandhya Jain " <sandhya206@bol.net.in> Date: Sun, 5 Feb 2012
08:12:17 +0530


Germany's Role in Europe and the European Debt Crisis

George Friedman

5 February 2012

The German government proposed last week that a European commissioner be
appointed to supplant the Greek government. While phrasing the German
proposal this way might seem extreme, it is not unreasonable. Under the
German proposal, this commissioner would hold power over the Greek
national budget and taxation. Since the European Central Bank already
controls the Greek currency, the euro, this would effectively transfer
control of the Greek government to the European Union, since whoever
controls a country's government expenditures, tax rates and monetary
policy effectively controls that country. The German proposal therefore
would suspend Greek sovereignty and the democratic process as the price
of financial aid to Greece.

Though the European Commission rejected the proposal, the concept is far
from dead, as it flows directly from the logic of the situation. The
Greeks are in the midst of a financial crisis that has made Greece
unable to repay money Athens borrowed. Their options are to default on
the debt or to negotiate a settlement with their creditors. The
International Monetary Fund (IMF) and European Union are managing these

Any settlement will have three parts. The first is an agreement by
creditors to forego repayment on part of the debt. The second is
financial help from the IMF and the European Union to help pay back the
remaining debt. The third is an agreement by the Greek government to
curtail government spending and increase taxes so that it can avoid
future sovereign debt crises and repay at least part of the debt.

Bankruptcy and the Nation State

The Germans don't trust the Greeks to keep any bargain, which is not
unreasonable given that the Greeks haven't been willing to enforce past
agreements. Given this lack of trust, Germany proposed suspending Greek
sovereignty by transferring it to a European receiver. This would be a
fairly normal process if Greece were a corporation or an individual. In
such cases, someone is appointed after bankruptcy or debt restructuring
to ensure that a corporation or individual will behave prudently in the

A nation state is different. It rests on two assumptions. The first is
that the nation represents a uniquely legitimate community whose members
share a range of interests and values. The second is that the state
arises in some way from the popular will and that only that popular will
has the right to determine the state's actions. There is no question
that for Europe, the principle of national self-determination is a
fundamental moral value. There is no question that Greece is a nation
and that its government, according to this principle, is representative
of and responsible to the Greek people.

The Germans thus are proposing that Greece, a sovereign country,
transfer its right to national self-determination to an overseer. The
Germans argue that given the failure of the Greek state, and by
extension the Greek public, creditors have the power and moral right to
suspend the principle of national self-determination. Given that this
argument is being made in Europe, this is a profoundly radical concept.
It is important to understand how we got here.

Germany's Part in the Debt Crisis

There were two causes. The first was that Greek democracy, like many
democracies, demands benefits for the people from the state, and
politicians wishing to be elected must grant these benefits. There is
accordingly an inherent pressure on the system to spend excessively. The
second cause relates to Germany's status as the world's second-largest
exporter. About 40 percent of German gross domestic product comes from
exports, much of them to the European Union. For all their discussion of
fiscal prudence and care, the Germans have an interest in facilitating
consumption and demand for their exports across Europe. Without these
exports, Germany would plunge into depression.

Therefore, the Germans have used the institutions and practices of the
European Union to maintain demand for their products. Through the
currency union, Germany has enabled other eurozone states to access
credit at rates their economies didn't merit in their own right. In this
sense, Germany encouraged demand for its exports by facilitating
irresponsible lending practices across Europe. The degree to which
German actions encouraged such imprudent practices -- since German
industrial production vastly outstrips its domestic market, making
sustained consumption in markets outside Germany critical to German
economic prosperity -- is not fully realized.

True austerity within the European Union would have been disastrous for
the German economy, since declines in consumption would have come at the
expense of German exports. While demand from Greece is only a small
portion of these exports, Greece is part of the larger system -- and the
proper functioning of that system is very much in Germany's strategic
interests. The Germans claim the Greeks deceived their creditors and the
European Union. A more comprehensive explanation would include the fact
that the Germans willingly turned a blind eye. Though Greece is an
extreme case, Germany's overall interest has been to maintain European
demand -- and thus avoid prudent austerity -- as long as possible.

Germany certainly was complicit in the lending practices that led to
Greece's predicament. It is possible that the Greeks kept the whole
truth about the Greek economy from their creditors, but even so, the
German demand for suspension of Greek national self-determination is
particularly striking.

In a sense, the German proposal merely makes very public what has always
been the reality. For Greece to have its debt restructured, it must
impose significant austerity measures, which Athens has agreed to. The
Germans now want a commissioner appointed to ensure the Greek government
fulfills its promise. In the process, the debt crisis will profoundly
circumscribe Greek democracy by transferring fundamental elements of
Greek sovereignty into the hands of commissioners whose primary interest
is the repayment of debt, not Greek national interests.

The Judgment of Athens

The Greeks have two choices. First, they can accept responsibility for
the debts on the terms negotiated and accede to the constraints on their
budget and tax discretion whether imposed by a commissioner or by a less
formal structure. Second, they can default on all debts. As we have
learned from corporate behavior, bankruptcy has become a respectable
strategic option. Therefore, the Greeks must consider the consequences
of simply defaulting.

Default might see them frozen out of world financial markets. But even
if they don't default, they will be present in those markets only under
the most constrained circumstances, and to the primary benefit of
creditors at that. Moreover, as many corporations have found, borrowing
becomes more attractive after default, as it clears the way to new
post-default debt. It is not clear that no one would lend to Greece
after a default. In fact, Greece has defaulted on its debt several times
and managed to regain access to international lending.

More significantly, defaulting would allow Greece to avoid fueling its
internal political crisis by forfeiting its national sovereignty. Much
of the political crisis inside of Greece stems from the Greek public's
antipathy to austerity. But another part, which would come to the fore
under the German proposal, is that the Greeks do not want to lose
national sovereignty. In their long history, the Greeks have lost their
sovereignty to invaders such as the Romans, the Ottomans and, most
recently, the Nazis. The brutal German occupation still lives in Greek
memories. The concept of national self-determination is thus not an
abstract concept to the Greeks. Its loss plus austerity imposed by
foreign powers would create a domestic crisis in which the Greek state
would be seen as an economic and political enemy of Greek national
interests along with the commissioner or some other mechanism. The
political result could be explosive.

It is unclear if the Greeks will opt not to default. The certain price
of default -- being forced to use their national currency instead of the
euro -- actually would increase national sovereignty. There will be
economic pain if the Greeks continue with the euro, and there will be
economic pain if the Greeks leave the euro; the political consequences
of losing sovereignty in the face of such pain could easily be
overwhelming. Default, while painful to Greece, might well be less
painful than the alternative.

The German Dilemma

The Germans are caught in a dilemma. On the one hand, Germany is the
last country in Europe that could afford general austerity in troubled
states and the resulting decline in demand. On the other hand, it cannot
simply tolerate Greek-style indifference to fiscal prudence. Germany
must have a structured solution that to some degree maintains demand in
countries such as Spain or Italy; Germans must show there are
consequences to not complying with the orderly handling of debt without
default. Above all, the Germans must preserve the European Union so they
can enjoy a European free-trade zone. There is thus an inherent tension
between preserving the system and imposing discipline.

Germany has decided to make an example of the Greeks. The German public
largely has bought into Berlin's narrative of Greek duplicity and German
innocence. German Chancellor Angela Merkel has needed to frame the
discussion this way, and she has succeeded. The degree to which the
German public is aware of the complexities or the consequences of a
generalized austerity for Germany is less clear. Merkel must now satisfy
a German public that questions bailouts and sees Greece as simply
irresponsible. Capitulation from Greece is necessary for her as a matter
of domestic politics.

The German move into questions of sovereignty has raised the stakes in
the debt crisis dramatically. Even if the Germans simply back off this
demand, the Greek public has been reminded that Greek democracy is
effectively at stake. While Greece may have borrowed irresponsibly, if
the price of that behavior is yielding sovereignty to an unelected
commissioner, that price not only would challenge Greek principles, it
would bring Europe to a new crisis.

That crisis would be political, as the ongoing crisis always has been.
In the new crisis, sovereign debt issues turn into threats to national
independence and sovereignty. If you owe too much money and your
creditors distrust you, you lose the right to national
self-determination on the most important matters. Given that Germany was
the historical nightmare for most of Europe, and it is Germany that is
pushing this doctrine, the outcome could well be explosive. It could
also be the opposite of what Germany needs.

Germany must have a free-trade zone in Europe. Germany also needs robust
demand in Europe. Germany also wants prudence in borrowing practices.
And Germany must not see a return to the anti-German feeling of previous
epochs. Those are several needs, and some of them are mutually
exclusive. In one way, the issue is Greece. But more and more, it is the
Germans that are the question mark. How far are they willing to go, and
do they fully understand their national interests? Increasingly, this
crisis is ceasing to be a Greek or Italian crisis. It is a crisis of the
role Germany will play in Europe in the future. The Germans hold many
cards, and that's their problem: With so many options, they must make
hard decisions -- and that does not come easily for postwar Germany.

(Courtesy Stratfor)

(3) Congressman Ron Paul: One Worlders Will Fall


Steve Watson


April 6, 2011

Congressman Ron Paul, icon to liberty lovers the world over, sent a
stark message this week to ruling elite "internationalists" attempting
to expand globalism via the Western military industrial complex – you
will fail.

Speaking on the nationally syndicated Alex Jones Show, Paul expressed
his concern that a deeply malign form of globalism is being promoted and
expanded on the back of international crises, namely the political
upheaval in the middle east and north Africa, coupled with ongoing
financial meltdown.

"The new world order people see it as an opportunity to move one step
forward." Paul stated, alluding to an infamous description of the
current US led international coalition of powers.

"Bush senior bragged about that, remember he didn't want to go to
Congress, he came and got a token approval in 1990/91 for the Persian
Gulf war, but he got his orders from the UN, he didn't need to go to
Congress… That was the first time I heard a president use the words 'new
world order', anyone who used that had to be a conspiracy nut, but Bush
was saying this is what we need to do for the 'new world order'." Paul

"They go to war under NATO and the UN, not by the Congress," Paul added.
"But ultimately the big one is to control the money, so they are making
their plans to have a world wide fiat currency through the IMF/World
Bank operations."

As reported in the Financial Times and elsewhere recently, the IMF
strongly advocates the eventual introduction of a global currency,
called the "bancor", based on its own synthetic paper currency special
drawing rights (SDRs), claiming it would "stabilise" the international
monetary system.

"The new world order is certainly looking at this monetary crisis, we
want the Constitution, sound money, gold and silver, but at the same
time the internationalists are planning for their international fiat
currency." Congressman Paul stated.

Paul, also a member of the Joint Economic Committee, the Committee on
Financial Services and the Chairman of the House Financial Services
Subcommittee on Domestic Monetary Policy, believes that sound monetary
policy will eventually be recognized as the solution to the financial
crisis, rather than a system of global regulation and global currency
being pushed by such unaccountable global bodies as the IMF and World Bank.

"They have a long way to go because what they advocate is still fake
money and they have to defy the market place." Paul said. "They may make
the attempt and they may be able to cause a lot of harm in the meantime,
but ultimately sound money wins out. Hopefully we do our job and liberty
wins out over the tyrants."

"The bankruptcy will bring us to our knees, but lets just hope we can
put it back together in a lot better shape than we have it now." the
Congressman added.

Paul, who is also a serving member on the House Foreign Affairs
Committee, is adamant too that despite the recent military activity in
Libya and elsewhere, ultimately, the move to expand the 'new world
order' brand of globalism by force is destined to fail.

"It's not going to work for them, no matter how hard they try and how
many temporary military victories they have, it's going to be a failed
system." he said.

"It will serve its purpose in many ways by bringing us to our knees and
some of them like the opportunity, they don't let emergencies go to
waste, they take advantage of it and that's why they think they can
advance a new world order and one world government under these
conditions." the Congressman added.

"I think our message is spreading and I hope we are going to be very
good competitors with these one worlders." Paul concluded.

During the interview Paul also gave the strongest indication yet that he
will announce a presidential run for 2012 within the next few weeks.

Stock up with Fresh Food that lasts with eFoodsDirect (Ad)

"We're getting awfully close," Paul explained, "and there are just a few
other things I have to iron out personally to make my final decision."

Watch the interview below: ...

(4) Jewish Finance Capital offshores American jobs - Brother Nathanael

Date: Thu, 2 Feb 2012 20:51:19 -0800 (PST) From: Brother Nathaniel
Subject: The New Jewish Class Wars (BroN On Video!)


The New Jewish Class Wars

By Brother Nathanael Kapner

A new kind of class war is being waged in America that few are willing
to admit.

And this is the annihilation of the Middle Class due to the offshoring
of US factories—with its attendant blue and white collar jobs—to China
and India.

And not a single candidate, not even Ron Paul, is willing to talk about it.

The only one was Donald Trump, and he was forced out of the running a
long time ago.

The idea of class wars began when Jewish agitator, Karl Marx, published
his Communist Manifesto some 150 years ago.

Marx called for the toppling of the managerial-commercial class, the
"bourgeois," to be replaced by the "proletariat," that is, the "working
man." And this would result in a classless society.

Well, one has to laugh.

For at the very same time Marx penned his ideas, the boast of his Jewish
co-religionist, Mayer Amschel Rothschild: "Give me control of a nation's
money and I care not who makes its laws," was being put into practice by
Rothschild's Jewish sons.

Today, this boast finds its realization in the power of Jewish Finance
Capital centered around the privately-owned Federal Reserve Bank whose
principal shareholders and directors include the Rothschilds, Goldman
Sachs, and JP Morgan Chase.

As we saw in the "Too Big To Fail Scam" of 2008, these people can print
their own money, lend it to the American taxpayer AT INTEREST, and
demand it be given back to them in the form of a "bail out" – ALL at
taxpayers' expense. If you're not enraged then you're NOT listening.

It all boils down to this.

The New Jewish Class Wars is NOT being waged NOT by the "proletariat"
but by Jewish Finance Capital, led here in America by Goldman Sachs,
Citigroup, and JP Morgan Chase, who underwrite the stocks of US
corporations and thus dictate policy of where their products are made.

They're "Made in China" and 'Finessed in India."

And thus, the Middle Class in America has been effectively destroyed.

And all that's left is a Great Divide between two classes: the Judaic
elite and the politicians, generals, journalists, academics, pencil
pushers, and hamburger flippers who work for them.

You might call it modern day feudalism: the Jewish Elite and their
Shabbos Goys.

And if the Marxist cry, "Workers Unite!" could be heard all the way to
China and India, it will most certainly fall on deaf ears.

For the "proletariat" over there – thanks to Goldman Sachs and friends –
are very happy to have American jobs!

(5) Turbo-Capitalism destroys the American dream - Edward Luttwak

Luttwak, a Zionist Jew, seems ambivalent about it. Writing in 2000, he
predicts great increases in poverty, crime, and unemployment - but
defends the new deregulated Capitalism anyway


Turbo-Capitalism: Winners and Losers in the Global Economy

Edward N. Luttwak (Author), Weidenfeld & Nicolson (Author)

Publication Date: March 1, 2000

In this incisive and controversial exposé of the hidden effects of
today's free-market capitalism, Edward Luttwak describes in powerful
detail how it vastly differs from the controlled capitalism that
flourished from 1945 to the 1980s. Turbo-capitalism is private
enterprise liberated from government regulation, unchecked by effective
trade unions, unfettered by concerns for employees or communities, and
unhindered by taxation or investment restrictions. The winners in this
free-for-all are getting much richer, while the losers are becoming
poorer and are forced by downsizing to take the traditional jobs of the
underclass. Led by the United States, closely followed by Britain,
turbo-capitalism is spreading fast throughout Europe, Asia, and the rest
of the world without the two great forces that check its enormous power
in the United States: a powerful Legal system and the stringent rules of
American calvinism. Luttwak exposes the major societal upheavals and
inequities turbo-capitalism causes and the broad dissatisfaction and
anxiety that may result.

Editorial Reviews

Amazon.com Review

A new kind of capitalism is raging around the globe--and its economic
and social consequences could be crippling. In Turbo-Capitalism, Edward
Luttwak, a noted international strategist and consultant, warns that the
free market has gone amok. He predicts possible massive increases in
poverty, crime, and unemployment, especially in the Third World, which
lacks the political and legal systems of the U.S. Unlike the benign,
carefully controlled capitalism that ruled from the 1940s to the 1980s,
this new whirlwind capitalism will eventually create tremendous social
upheaval. "Allowing turbo-capitalism to have its way, as in the United
States and the United Kingdom, results in widening income differentials
in exchange for not-so-rapid growth," writes Luttwak, who provides
plenty of statistics to support his argument. Luttwak acknowledges that
economic progress could be crippled if the world returns to the old
model of government regulation, and this he calls the "great dilemma,"
with no easy answers.

While Luttwak's interest is more global, he offers some domestic
examples to illustrate the effects of capitalism unleashed. He points to
Boeing, which suffered from massive layoffs in the 1990s, even as
aircraft orders soared. And he ridicules the notion that high-tech will
come to the rescue with thousands of new jobs for downsized blue-collar
and white-collar workers, calling these hopes "The Microsoft Mirage." A
sweeping, sometimes densely written treatise, Turbo-Capitalism raises
important questions for policymakers and business leaders. --Dan Ring
--This text refers to an out of print or unavailable edition of this title.

 From Publishers Weekly

Since the administrations of Reagan and Thatcher, the virtues of
deregulation and privatization have become accepted wisdom in the U.S.
and the U.K. Luttwak, a senior fellow at the Center for Strategic and
International Studies in Washington, D.C., and the author of The
Endangered American Dream, has dubbed this free market, with its
accelerated rate of structural change, "turbo-capitalism." Although he
shares the general opinion that deregulation, privatization and
globalization have reinvigorated sleepy economies, he writes that within
the shiny apple of prosperity achieved in the U.S. and Britain lurks a
worm in the form of reduced real wages, greater income inequality and
increased alienation among those excluded from the benefits of growth. ...

(6) George Soros on the Coming U.S. Class War

Date: Mon, 30 Jan 2012 15:01:08 -0500 (EST) From: IHR News <news@ihr.org>


Jan 23, 2012 12:00 AM EST

You know George Soros. He's the investor's investor—the man who still
holds the record for making more money in a single day's trading than
anyone. He pocketed $1 billion betting against the British pound on
"Black Wednesday" in 1992, when sterling lost 20 percent of its value in
less than 24 hours and crashed out of the European exchange-rate
mechanism. No wonder Brits call him, with a mix of awe and annoyance,
"the man who broke the Bank of England."

[...] He won't discuss his portfolio, lest anyone think he's talking
things down to make a buck. But people who know him well say he
advocates making long-term stock picks with solid companies, avoiding
gold—"the ultimate bubble"—and, mainly, holding cash.

He's not even doing the one thing that you would expect from a man who
knows a crippled currency when he sees one: shorting the euro, and
perhaps even the U.S. dollar, to hell. Quite the reverse. He backs the
beleaguered euro, publicly urging European leaders to do whatever it
takes to ensure its survival. "The euro must survive because the
alternative—a breakup—would cause a meltdown that Europe, the world,
can't afford." He has bought about $2 billion in European bonds, mainly
Italian, from MF Global Holdings Ltd., the securities firm run by former
Goldman Sachs head Jon Corzine that filed for bankruptcy protection last

Has the great short seller gone soft? Well, yes. Sitting in his
33rd-floor corner office high above Seventh Avenue in New York,
preparing for his trip to Davos, he is more concerned with surviving
than staying rich. "At times like these, survival is the most important
thing," he says, peering through his owlish glasses and brushing wisps
of gray hair off his forehead. He doesn't just mean it's time to protect
your assets. He means it's time to stave off disaster. As he sees it,
the world faces one of the most dangerous periods of modern history—a
period of "evil." Europe is confronting a descent into chaos and
conflict. In America he predicts riots on the streets that will lead to
a brutal clampdown that will dramatically curtail civil liberties. The
global economic system could even collapse altogether.

"I am not here to cheer you up. The situation is about as serious and
difficult as I've experienced in my career," Soros tells Newsweek. "We
are facing an extremely difficult time, comparable in many ways to the
1930s, the Great Depression. We are facing now a general retrenchment in
the developed world, which threatens to put us in a decade of more
stagnation, or worse. The best-case scenario is a deflationary
environment. The worst-case scenario is a collapse of the financial system."

Soros's warning is based as much on his own extraordinary personal
history as on his gut instinct for market booms and busts. "I did
survive a personally much more threatening situation, so it is
emotional, as well as rational," he acknowledges. Soros was just 13 when
Nazi soldiers invaded and occupied his native Hungary in March 1944. In
only eight weeks, almost half a million Hungarian Jews were deported,
many to Auschwitz. He saw bodies of Jews, and the Christians who helped
them, swinging from lampposts, their skulls crushed. He survived, thanks
to his father, Tivadar, who managed to secure false identities for his
family. Later, he watched as Russian forces ousted the Nazis and a new
totalitarian ideology, communism, replaced fascism. As life got tougher
during the postwar Soviet occupation, Soros managed to emigrate, first
to London, then to New York.

Soros draws on his past to argue that the global economic crisis is as
significant, and unpredictable, as the end of communism. "The collapse
of the Soviet system was a pretty extraordinary event, and we are
currently experiencing something similar in the developed world, without
fully realizing what's happening." To Soros, the spectacular debunking
of the credo of efficient markets—the notion that markets are rational
and can regulate themselves to avert disaster—"is comparable to the
collapse of Marxism as a political system. The prevailing interpretation
has turned out to be very misleading. It assumes perfect knowledge,
which is very far removed from reality. We need to move from the Age of
Reason to the Age of Fallibility in order to have a proper understanding
of the problems."

Understanding, he says, is key. "Unrestrained competition can drive
people into actions that they would otherwise regret. The tragedy of our
current situation is the unintended consequence of imperfect
understanding. A lot of the evil in the world is actually not
intentional. A lot of people in the financial system did a lot of damage
without intending to." Still, Soros believes the West is struggling to
cope with the consequences of evil in the financial world just as former
Eastern bloc countries struggled with it politically. Is he really
saying that the financial whizzes behind our economic meltdown were not
just wrong, but evil? "That's correct." Take that, Lloyd Blankfein, the
Goldman Sachs boss who told The Sunday Times of London at the height of
the financial crisis that bankers "do God's work."

To many, the idea of Soros lecturing the world on "evil" is, well, rich.
Here, after all, is an investor who proved—and profited hugely from—the
now much-derided notion that the market, or in his case a single
investor, is more powerful than sovereign governments. He broke the Bank
of England, destroyed the Conservative Party's reputation for economic
competence, and reduced the value of the pound in British consumers'
pockets by one fifth in a single day. Soros the currency speculator has
been condemned as "unnecessary, unproductive, immoral." Mahathir
Mohamad, former prime minister of Malaysia, once called him "criminal"
and "a moron."

In the U.S., where the right still has not forgiven him for agitating
against President George W. Bush and the "war on terror" after 9/11,
which he described as "pernicious," his prediction of riots on the
streets—"it's already started," he says—will likely spark fresh
criticism that Soros is a "far-left, radical bomb thrower," as Bill
O'Reilly once put it. Critics already allege he is stoking the fires by
funding the Occupy movement through Adbusters, the Canadian provocateurs
who sparked the movement. Not so, says Soros.

Soros's fragrant personal life will also prompt many to pooh-pooh his
moralizing. Last year, Adriana Ferreyr, his 28-year-old companion for
many years, sued him in New York Supreme Court in Manhattan, alleging he
reneged on two separate promises to buy her an apartment, causing her
extreme emotional distress. Ferreyr, a former soap-opera star in Brazil,
said Soros had given the apartment he had promised her to another
girlfriend. She also claimed he assaulted her. Soros has dismissed
Ferreyr's claims as "frivolous and entirely without merit" and "riddled
with false charges and obviously an attempt to extract money."

Despite his baggage, the man who now views himself as a
statesman-philanthropist is undeterred. Having profited from unregulated
markets, he now wants to deliver us from them. Take Europe. He's now
convinced that "if you have a disorderly collapse of the euro, you have
the danger of a revival of the political conflicts that have torn Europe
apart over the centuries—an extreme form of nationalism, which manifests
itself in xenophobia, the exclusion of foreigners and ethnic groups. In
Hitler's time, that was focused on the Jews. Today, you have that with
the Gypsies, the Roma, which is a small minority, and also, of course,
Muslim immigrants."

It is "now more likely than not" that Greece will formally default in
2012, Soros will tell leaders in Davos this week. He will castigate
European leaders who seem to know only how to "do enough to calm the
situation, not to solve the problem." If Germany's Angela Merkel or
France's Nicolas Sarkozy nurses any lingering hopes of finding their
salvation outside the continent, they are mistaken. "I took a recent
trip to China, and China won't come to Europe's rescue," Soros says.
Despite all its woes, he nevertheless thinks the euro will—just

While Soros, whose new book, Financial Turmoil in Europe and the United
States, will be published in early February, is currently focused on
Europe, he's quick to claim that economic and social divisions in the
U.S. will deepen, too. He sympathizes with the Occupy movement, which
articulates a widespread disillusionment with capitalism that he shares.
People "have reason to be frustrated and angry" at the cost of rescuing
the banking system, a cost largely borne by taxpayers rather than
shareholders or bondholders.

Occupy Wall Street "is an inchoate, leaderless manifestation of
protest," but it will grow. It has "put on the agenda issues that the
institutional left has failed to put on the agenda for a quarter of a
century." He reaches for analysis, produced by the political blog
ThinkProgress.org, that shows how the Occupy movement has pushed issues
of unemployment up the agenda of major news organizations, including
MSNBC, CNN, and Fox News. It reveals that in one week in July of last
year the word "debt" was mentioned more than 7,000 times on major U.S.
TV news networks. By October, mentions of the word "debt" had dropped to
398 over the course of a week, while "occupy" was mentioned 1,278 times,
"Wall Street" 2,378 times, and "jobs" 2,738 times. You can't keep a
financier away from his metrics.

As anger rises, riots on the streets of American cities are inevitable.
"Yes, yes, yes," he says, almost gleefully. The response to the unrest
could be more damaging than the violence itself. "It will be an excuse
for cracking down and using strong-arm tactics to maintain law and
order, which, carried to an extreme, could bring about a repressive
political system, a society where individual liberty is much more
constrained, which would be a break with the tradition of the United

In spite of his warnings of political turmoil in the U.S., he has no
plans to engage in politics directly. "I would prefer not to be involved
in party politics. It's only because I felt that the Bush administration
was misleading the country that I became involved. I was very hopeful of
a new beginning with Obama, and I've been somewhat disappointed. I
remain a supporter of the Democratic Party, but I'm fully aware of their
shortcomings." Soros believes Obama still has a chance of winning this
year's election. "Obama might surprise the public. The main issue facing
the electorate is whether the rich should be taxed more. It shouldn't be
a difficult argument for Obama to make."

If there is a glimmer of hope for the world in 2012, Soros believes it
lies in emerging markets. The democratic-reform movement that has spread
across the Middle East, the rise of democracy and economic growth in
Africa, even reform in Russia may yet drag the world out of the mire.
"While the developed world is in a deep crisis, the future for the
developing world is very positive. The aspiration of people for an open
society is very inspiring. You have people in Africa lining up for many
hours when they are given an opportunity to vote. Dictators have been
overthrown. It is very encouraging for freedom and growth."

Soros insists the key to avoiding cataclysm in 2012 is not to let the
crises of 2011 go to waste. "In the crisis period, the impossible
becomes possible. The European Union could regain its luster. I'm
hopeful that the United States, as a political entity, will pass a very
severe test and actually strengthen the institution." Nor has he quite
given up hope that the central bankers and prime ministers gathering in
Davos this week have got what it takes to rally round and prove him
wrong. This time, being wrong would make him happy indeed.

(7) George Soros: collapsing US Economy to spark Street Violence

Date: Mon, 30 Jan 2012 15:01:08 -0500 (EST) From: IHR News <news@ihr.org>


Monday, 23 Jan 2012 07:12 AM

By Forrest Jones

As the U.S. economy worsens, protests such as those carried out by the
Occupy Wall Street movement will turn ugly, breaking down into waves of
violent unrest across the nation, says billionaire financier George Soros.

"It will be an excuse for cracking down and using strong-arm tactics to
maintain law and order, which, carried to an extreme, could bring about
a repressive political system, a society where individual liberty is
much more constrained, which would be a break with the tradition of the
United States," Soros tells Newsweek.

Unrest in the United States will serve as one of many symptoms of a
worsening global economy, which makes wealth preservation a priority
over getting rich.

"At times like these, survival is the most important thing," Soros tells

"I am not here to cheer you up. The situation is about as serious and
difficult as I've experienced in my career," says Soros, made famous by
betting against the pound in 1992 and pocketing $1 billion in the
process, he said.

"We are facing an extremely difficult time, comparable in many ways to
the 1930s, the Great Depression. We are facing now a general
retrenchment in the developed world, which threatens to put us in a
decade of more stagnation, or worse," he said.

"The best-case scenario is a deflationary environment. The worst-case
scenario is a collapse of the financial system." ...

While Soros agrees that a Greek default is likely, a messy one needs to
be avoided at all costs. ...

Can Obama be re-elected?

"Obama might surprise the public. The main issue facing the electorate
is whether the rich should be taxed more. It shouldn't be a difficult
argument for Obama to make."

No comments:

Post a Comment