1040 Trots 'Socialism Conference' blends Gender, Regime-Change & collaboration with CIATrots 'Socialism Conference' blends Gender, Regime-Change & collaboration with CIA

Trots 'Socialism Conference' blends Gender, Regime-Change &
collaboration with CIA

Newsletter published on July 19, 2019

(1) Trots call themselves 'Socialist' but 'Anti-Communist'
(2) Trots 'Socialism Conference' blends Gender, Regime-Change &
collaboration with CIA
(3) Trots' Socialism Conference: 'No Borders, No Bosses, No Binaries'
(4) Trots' Main Target Is Destroying The Family
(5) Candace Owens, a Black conservative commentator, turns Hate
allegations back on Dems
(6) Berkeley City Council votes to replace gendered names, including
'he,' 'she,' 'him,' and 'her'

(1) Trots call themselves 'Socialist' but 'Anti-Communist'
- by Peter Myers, July 19, 2019
Deception rules! As Confucios said, the first place to start is
correcting the language.

These 'Socialists but Anti-Communists' are in fact Trotskyists, with a
few Anarchistic fellow-travellers. But they're not real Anarchists like
Bakunin, because they support repressive laws against 'Hate' speech.
They're just Trots.

They are, in fact, Communists; by 'Socialism' they mean the Communism of
the early Soviet Union, before Stalin overthrew Trotsky.

They say that they are 'Anti-Communist', but this simply means
'Anti-Stalin'.

I now accept that Alexandria Ocasio-Cortes is a Trotskyist; I was wrong
about her. But I still think that Sanders is not a Trotskyist, and
electable.

The media keeps calling Trots 'Socialists', as if there is no other kind
of Socialism. But postwar Britain and Australia were Socialist -
Christian Socialist. We had public ownership of much of the economy, and
full employment, but with Christian social values.

These Trots belong to the faction of Max Shachtman; other factions of
Trots do NOT collaborate with the CIA.

(2) Trots 'Socialism Conference' blends Gender, Regime-Change &
collaboration with CIA

https://thegrayzone.com/2019/07/06/dsa-jacobin-iso-socialism-conference-us-funded-regime-change/

DSA/Jacobin/Haymarket-sponsored ‘Socialism’ conference features US
gov-funded regime-change activists

The 2019 Socialism Conference, sponsored by American leftist juggernauts
the DSA, Jacobin magazine, and ISO’s Haymarket Books, features
regime-change activists from multiple US government-funded NGOs.

By Ben Norton and Max Blumenthal

Socialism is now apparently brought to you by the US State Department.

 From July 4 to 7, thousands of left-wing activists from across the
United States are gathering in Chicago for the 2019 Socialism Conference.

At this event, some of the most powerful institutions on the American
socialist — but avowedly anti-communist — left have brought together a
motley crew of regime-change activists to demonize Official Enemies of
Washington.

One anti-China panel at the conference features speakers from two
different organizations that are both bankrolled by the US government’s
soft-power arm the National Endowment for Democracy (NED), a group
founded out of Ronald Reagan’s CIA in the 1980s to grease the wheels of
right-wing regime-change efforts and promote "free markets" across the
planet.

Another longtime ally who has spoken at every single annual Socialism
Conference since 2009, Anand Gopal, works at a liberal foundation that
is directly funded by the US State Department. He is headlining a panel
this year to provide "A Socialist View of the Arab Spring."

Yet another 2019 conference panel rails against the socialist
governments of Nicaragua and Cuba — two-thirds of John Bolton’s "troika
of tyranny" — with outspoken proponents of regime change. One of the
speakers, Dan La Botz, hosted an event in 2018 that featured right-wing
Nicaraguan activists wearing masks and disguised as students, who were
junketed to meet with Republican lawmakers in Washington by the US
government-funded right-wing organization Freedom House.

The Socialism Conference’s regime-change lobbying "Nicaragua expert" La
Botz has admitted in leaked emails obtained by The Grayzone that "there
is virtually no left among the opposition" to Nicaragua’s democratically
elected socialist government.

La Botz, a leader within Democratic Socialists of America, likewise
acknowledged in these emails that there is "little likelihood of an
outcome to the rebellion that goes beyond a more democratic capitalist
regime." But he has still vociferously lobbied for Nicaragua’s
Sandinista government to be overthrown by US government-backed
insurgents — and is using his platform at the biggest socialist
conference in the United States to do it.

Merging of largest US socialist organizations

The 2019 Socialism Conference is advertised under the catchy slogan: "No
borders, no bosses, no binaries."

Each ticket comes in at a neat $105 per person (or a $250 "solidarity
rate," for the hardcore supporters) — and this doesn’t include the rate
for the rooms at the hotel where it’s held.

For years, the Socialism Conference functioned as a platform for the
International Socialist Organization (ISO), a small group steeped in the
tradition of sectarian American Trotskyite politics, which pushed a
hardline anti-communism and attacked virtually all socialist governments
in history as "not truly socialist."

Founded in 1977 after a long line of sectarian splits, the ISO never
became a significant political force. It was mostly relegated to
recruiting young impressionable students on liberal arts college campuses.

As an avowedly anti-communist organization, the ISO eschewed symbols
long associated with the communist left, like hammers and sickles and
red flags. Instead, it chose a clenched fist — one eerily similar to the
symbol used by the US government-funded Serbian activist group Otpor and
similar offshoots in Eastern Europe, which carried out Washington-backed
neoliberal "color revolutions" in the years following the collapse of
the Soviet Union and the restoration of capitalism.

ISO Otpor fist symbols

The ISO claimed to be anti-war, but its leaders spent a disproportionate
percentage of their time and resources attacking the anti-imperialist
left. They could more accurately be referred to as the
anti-anti-imperialist left.

This March, the ISO voted to dissolve — in a decision some former
members joked was the most democratic act ever undertaken by the
organization, which had been dominated by an unelected leadership of
veteran Trotskyite activists.

The dissolution was prompted by evidence that the ISO’s steering
committee mishandled sexual assault allegations. It also came as the
ISO’s membership was shrinking and rapidly being absorbed by a newly
burgeoning anti-communist organization, the Democratic Socialists of
America, or DSA.

Now that the ISO has dissolved, some of its past prominent members have
entered the ranks of the DSA, burrowing from within to inject their
anti-anti-imperialist politics into the group.

Because Trotskyites are so sectarian and notoriously incapable of
holding together organizations, they are infamous for infiltrating
larger, more popular groups and trying to take them over, in a tactic
known as entryism.

This is precisely the strategy being used by former members of the ISO —
and by another tiny US Trotskyite organization, Solidarity, which was
led by anti-Nicaragua regime-change activist and Socialism Conference
speaker Dan La Botz, now a leader in DSA.

Democratic Socialists of America is the largest self-described socialist
organization in the United States, with more than 60,000 card-carrying
members. It is also very heterogeneous, with many internal
contradictions and conflicting political views.

In 2019, for the first time, the organizers of the Socialism Conference
— including many holdovers from the ISO leadership — joined together
with two new sponsors: DSA, and the closely DSA-allied Jacobin magazine,
another platform for anti-communist and anti-anti-imperialist politics.

At the bottom of the Socialism conference website, a note reads,
"Brought to you by Haymarket, Jacobin, and the Democratic Socialists of
America." Haymarket is the book publishing arm of the now defunct ISO,
and its editorial board features some of the group’s former leaders.

Socialism 2019 sponsors Haymarket Jacobin DSA

Top speakers at the conference include Democracy Now host Amy Goodman,
Jacobin magazine founder and editor Bhaskar Sunkara, and journalist
Naomi Klein, the inaugural Gloria Steinem Endowed Chair in Media,
Culture and Feminist Studies at Rutgers University. Klein was chosen to
head the final plenary, titled "Care and Repair: The Revolutionary,
Democratic Power of a Global Green New Deal."

The 2019 Socialism Conference, like its annual predecessors, combines
calls for radical economic democratic transformation and progressive
social progress with the demonization of independent foreign governments
that are targeted by the US government for regime change, such as
Nicaragua, Cuba, Syria, Iran, China, and Russia.

The schedule of panels on foreign policy and international issues
features a veritable who’s who of leftist regime-change activists. There
is even a talk devoted specifically to demonizing the anti-imperialist left.

Curiously, the 2019 Socialism Conference has no panels devoted
specifically to Venezuela, which since this January has endured a US-led
right-wing coup attempt, and which is suffering under suffocating
sanctions that amount to a de facto economic blockade. In the past, the
ISO has harshly criticized Venezuela’s democratically elected socialist
government, condemning Presidents Hugo Chávez and Nicolás Maduro for not
being radical enough and for not supposedly implementing the vague
concept of "socialism from below."

In this way, the 2019 Socialism Conference also stands out as a sign of
the effective political merging of what had previously been two distinct
political trends: the Cliffite Trotskyites of the International
Socialist Organization and the anti-communist social democrats of the
Democratic Socialists of America.

Anti-China ‘workers’ rights’ groups funded by anti-labor US government

One of the most eyebrow-raising panels at the 2019 Socialism Conference
is entitled "China and the US: Inter-Imperial Rivalry or Class Struggle
and Solidarity?" The panel portrays the US and China as equally
malicious imperialist powers, downplaying and whitewashing the uniquely
destructive nature of Washington’s foreign wars and corporate domination.

The panel features three speakers, two of whom work for anti-China
groups that are funded by the US government’s regime-change arm, the
National Endowment for Democracy. The third speaker is Ashley Smith, a
former leader of the ISO who has spent the past eight years
romanticizing foreign-backed, far-right sectarian Islamist "moderate
rebels" in Syria.

Socialism 2019 China US inter-imperial rivalry panel

The first speaker listed on the panel is Elaine Lu, the program officer
at China Labor Watch. This group is described by the Socialism
conference website simply as "a New York-based NGO advocating for
workers’ rights in China."

What Socialism Conference sponsors DSA, Jacobin, and Haymarket did not
disclose is that its speaker’s employer is funded by the National
Endowment for Democracy.

The NED states without qualification that its goals include supporting
"free markets" abroad. At the top of the about page on its website is a
video of right-wing cold warrior Ronald Reagan inaugurating the US
government-funded body.

NED Ronald Reagan free markets

The National Endowment for Democracy’s 990 tax forms show how
Washington’s regime-change arm has bankrolled China Labor Watch for
years. Substantial NED funding goes back to at least 2009.

According to the NED’s 2015 form 990, China Labor Watch received a
$150,000 grant that year. On the NED’s 2013 tax form, it lists another
$110,000 grant for China Labor Watch.

China Labor Watch NED funding 2015

In 2014, China Labor Watch got $150,000 from the NED. According to the
group’s annual report that year, its total revenues for all of 2014 was
$238,003, meaning 63 percent, or nearly two-thirds of its funding came
from the US government.

China Labor Watch’s other major donor is the Tides Foundation, a liberal
organization that also happened to be one of the main financial
sponsor’s of the ISO’s parent non-profit. In 2014, Tides gave $40,645 to
China Labor Watch, another 17 percent of its budget that year.

Joining Elaine Lu as the other main speaker on the Socialism
Conference’s anti-China panel is Kevin Lin, who coordinates the China
program at the Washington, DC-based NGO the International Labor Rights
Forum.

The Socialism Conference once again failed to mention that this group is
also bankrolled by the National Endowment for Democracy.

International Labor Rights Forum NED funding 2016

According to the NED’s 2016 form 990, the US government’s regime-change
arm gave the International Labor Rights Forum $150,000 that year alone.

The International Labor Rights Forum likewise received $96,590 from the
NED in 2015, and $62,500 in 2014.

The Socialism Conference also identified Kevin Lin as a co-editor of the
Made in China journal, which focuses on labor rights. A disclaimer at
the bottom of the publication’s swanky website notes that it is funded
by the European Union’s Horizon 2020, a neoliberal business program
which the European Commission describes as "the financial instrument
implementing the Innovation Union, a Europe 2020 flagship initiative
aimed at securing Europe’s global competitiveness."

Made in China funding European Union

These are the financiers behind the speakers that the Socialism
Conference and its sponsors the DSA, Jacobin, and Haymarket brought
together to explain why China is a malevolent imperialist power.

Some of these groups may seem progressive, but they operate in effect as
vehicles for US government soft power, exploiting the cause of human
rights or labor rights to undermine and destabilize foreign governments
that Washington has targeted for regime change.

China Labor Watch and the International Labor Rights Forum are far from
the only ostensibly progressive anti-China groups funded by the US
government.

Other China-related NED grantees include "human rights" organizations
like the Network of Chinese Human Rights Defenders, Human Rights in
China, China Aid, China Change, and China Rights in Action (another
Tides grantee), along with the New York-based Chinese Feminist
Collective and news websites like China Digital Times.

China Labour Bulletin, which maintains a map of strikes going on across
the gigantic country, is likewise frequently cited by left-wing websites
in the US. While its slogan is "Supporting the Workers’ Movement in
China," China Labour Bulletin (CLB) is actually based in Hong Kong, and
it is funded by the US government.

CLB notes on its website that it "receives grants from a wide range of
government or quasi-government bodies, trade unions and private
foundations, all of which are based outside of China." For decades,
CLB’s founder and executive director Han Dongfang broadcasted anti-China
programming on Radio Free Asia, a US government-funded propaganda outlet
that was founded by the CIA to push anti-communist disinformation. Han’s
work is funded by the National Endowment for Democracy, and he was a
leader of the 1989 Tiananmen Square protests.

The ISO’s newspaper Socialist Worker has praised Han Dongfang as a
leftist hero, without ever disclosing his extensive links to the US
government’s regime-change machinery. Socialist Worker has repeatedly
drawn on the work of China Labour Bulletin, over more than a decade. The
ISO’s journal the International Socialist Review has also relied on the
US government-funded organization’s research, and Jacobin magazine has
noted CLB’s "roots go back to the Tiananmen Square protests."

Human Rights Watch, another key part of the regime-change lobby, has
lionized Han, happily noting that his show on the US government’s Radio
Free Asia "is one of the network’s most popular programs."

China is just one of the countries where the US government’s soft-power
arm funds such putative progressive groups. The NED likewise funds many
liberal anti-Cuba organizations, such as the Foundation for Human Rights
in Cuba, Center for a Free Cuba, the Cuban Institute for the Freedom of
Expression and Press, and the news website CubaNet. Or there are
NED-funded groups pushing regime change against Syria and Iran, like the
Damascus Center for Human Rights Studies and Human Rights Activists in Iran.

While the United States has one of the lowest rates of unionization in
the industrialized world, a bloody history of worker repression and
anti-labor laws, and historically weak unions among those that still do
exist, its regime-change arm the NED has funded workers’ rights groups
to promote a progressive image of America abroad.

For decades, for instance, the NED has bankrolled the international
Solidarity Center of the major union federation the AFL-CIO. The center
receives tens of millions of dollars from the US government’s
regime-change arm annually, and returns the favor by avoiding topics
that would anger the US State Department and bite the hand that feeds it.

Throughout the Cold War, the AFL-CIO remained a reliably anti-communist
union that received funding from US government agencies, including the
CIA, in order to combat and ultimately try to eliminate communist
influence in the American labor movement. It was a textbook example of a
controlled opposition.

This is not to say that NED-funded groups cannot at times have a
positive impact on the lives of average people in repressive
environments. But their work is always part of a larger agenda, with
ulterior imperial motives guiding them along the way. A controlled
opposition can make some changes, but it always remains controlled.

US State Department-funded speaker providing ‘socialist’ take on ‘Arab
Spring’ Yet another speaker at the 2019 Socialism Conference works for a
liberal foundation directly funded by the US government.

Journalist Anand Gopal, who has been a close ally of the ISO for a
decade, has a panel all to himself this year: "A Socialist View of the
Arab Spring."

The Socialism Conference website did not provide a bio for Gopal, yet
alone disclose that his employer is funded by the US government. It
simply described him as a "Pulitzer-Prize nominated journalist," and
said he will explain how to understand "the lessons of the protests,
uprisings, rebellions, and wars that shook the Arab world beginning in
2011."

Left unmentioned is that Gopal serves as a "fellow with the
International Security Program" at the New America Foundation. This
foundation’s website makes it very clear that it is directly funded by
the US State Department, along with massive corporations and banks —
clearly institutions that are invested in advancing the revolutionary
socialist cause.

New America Foundation funding US State Department

Anand Gopal has harshly attacked the anti-imperialist left for opposing
the international proxy war on Syria. He strongly supported the Syrian
opposition, which is dominated by Salafi-jihadists, but which Gopal has
consistently whitewashed and portrayed as a supposedly progressive force.

Gopal likewise reported inside al-Qaeda-occupied territory, which The
New Yorker euphemistically described as "Syria’s Last Bastion of
Freedom." And he has constantly downplayed the billions of dollars of
funding and weapons from the US, Europe, Israel, Saudi Arabia, Turkey,
and Qatar that kept the Syrian opposition afloat, fueling the brutal war
for years.

Going back to at least 2009, Gopal has spoken at every single one of the
ISO’s Socialism Conferences — in 2018, 2017, 2016, 2015, 2014, 2013,
2012, 2011, and 2010.

Gopal has also done more than a dozen extensive interviews for the ISO’s
newspaper Socialist Worker and journal the International Socialist
Review, blaming the rise of ISIS on Official Enemies and spreading the
conspiracy theory that the US is actually "helping the regime" of Syrian
President Bashar al-Assad, not truly trying to overthrow it.

‘Socialist’ lobbying for US-backed right-wing coup in Nicaragua Another
noteworthy 2019 Socialism Conference panel, called "Problems of the US
Left: The Cases of Cuba and Nicaragua," is led by Dan La Botz and Samuel
Farber, veteran Trotskyite activists and outspoken proponents of regime
change in the two respective countries.

The speakers’ problem with the US left appears to be that it has
demonstrated too much solidarity with socialist governments in Havana
and Managua, which, in their view from inside the United States, "rely
more on bureaucracy than democracy."

Farber is a Cuban exile who left the country for unspecified reasons in
1958 – a year before its revolution – and spent the rest of his life as
a professional critic of its socialist government. Today, he contributes
regular attacks on the Cuban Revolution to journals from Jacobin to New
Politics to In These Times, where he published a trenchant denunciation
of Fidel Castro upon his death in 2016.

Farber accuses Castro of developing a model of "state capitalism,"
wielding a term Trotskyite ideologues routinely fling at any
revolutionary government that is insufficiently pure. He calls for "a
revolutionary democratic alternative… through socialist resistance from
below."

The concept of regime change "from below" is also central to the
rhetoric of exile groups like the People’s MEK, a US- and Saudi-backed
cult of personality that calls for toppling Iran’s government through
"indigenous regime change."

Dan La Botz, for his part, has risen to prominence as a full-time
opponent of another member of the Trump administration’s "troika of
tyranny": the socialist government of Nicaragua, and the Sandinista
movement that it represents.

La Botz has published an anti-Sandinista manifesto with ISO publisher
Haymarket Books, which is advertised as a survey of "the failures of the
Nicaraguan Revolution, by one of the most important Marxist-historians
of Latin America."

In June 2018, as a US-backed, violent regime-change attempt surged
across Nicaragua, threatening the rule of democratically elected
President Daniel Ortega, La Botz attempted to mobilize left-wing US
support for the anti-Sandinista opposition. That month, he joined an
anti-Sandinista event — co-sponsored by DSA’s New York branch,
Haymarket, the academic journal NACLA, and the Marxist Education Project
— at Saint Peter’s Church in New York City, to drum up local support for
the coup.

The event featured speeches by several Nicaraguan anti-Sandinista
activists who were involved in the regime-change attempt, including
self-described students who wore masks on stage, concealing their
identities from the audience.

Dan La Botz Nicaragua coup event masks

The Grayzone has obtained internal DSA email reports authored by La Botz
which revealed that, days after the event at Saint Peter’s Church, those
same students met with right-wing Republican legislators on Capitol
Hill, including neoconservative Senators Marco Rubio, Ted Cruz, and
Ileana Ros-Lehtinen.

The students beamed with pride, appearing without masks in photo ops
with the avowedly anti-socialist members of Congress. Their trip was
financed by Freedom House, a right-wing soft-power organization that is
funded almost entirely by the US government.

Senator Ted Cruz ? @SenTedCruz

Humbled to meet with Nicaraguan student leaders who are risking their
lives fighting for freedom. Their bravery and perseverance will overcome
the Ortega dictatorship’s tyranny. #SOSNicaragua

The students’ US-backed delegation included Victor Cuadras, a fanatical
right-wing activist who openly supported Donald Trump’s agenda for Latin
America and blamed the governments of Cuba, Venezuela and Nicaragua for
the caravan of desperate asylum seekers on the US-Mexico border.

Max Blumenthal ? @MaxBlumenthal

Victor Cuadras (@AndinoCuadras), the Nicaraguan student coup leader who
was flown to DC by US govt @freedomhouse to drum up regime change,
echoes and endorses Donald Trump's anti-migrant fanaticism against the
#Caravan

On June 15, 2018, Dan La Botz sent an email report to DSA leadership,
reflecting on the event. He acknowledged that "the Nicaraguans both on
the panel and in the public had virtually no political analysis and no
vision or program for the future of their country."

Then in a follow-up email report sent to DSA leadership on July 24, La
Botz defended the students’ collaboration with neoconservative
politicians like Rubio and Cruz.

"The students, ages 21 to 24 or so, who spoke on our panel then went off
to speak with Republican legislators, guided by a rightwing foundation,"
he wrote. "While, of course, we do not think that this is a good
strategy, this is perfectly understandable given that the Republicans
are in power and have the ability to do something about Nicaragua."

While marketing the anti-Sandinista activists as grassroots youth
deserving of left-wing solidarity, La Botz admitted in his internal DSA
report, "Nicaraguan opponents of the regime in the United States hold a
wide variety of political views, though there is virtually no left among
the opposition here that I am aware of."

And while publicly framing the regime-change operation in Nicaragua as a
progressive uprising, La Botz privately conceded, "There is, however,
little likelihood of an outcome to the rebellion that goes beyond a more
democratic capitalist regime."

An excerpt from an email report on Nicaragua to DSA leadership, written
by Dan La Botz

As The Grayzone reported in 2018, the US government’s regime-change arm
the National Endowment for Democracy boasted of spending millions on
anti-Sandinista civil society and media outfits "to lay the groundwork
for insurrection" in the years and months ahead of the coup.

While the coup attempt in Nicaragua was portrayed as a peaceful people’s
uprising by figures like La Botz, it was in fact a violent putsch that
saw armed elements erect roadblocks across the country, holding up
ambulances, torturing, brutalizing, kidnapping, and murdering supporters
of the Sandinistas.

Anti-Sandinista insurgents dragged an unarmed, on-leave police officer
to death from a truck and then burnt his corpse at a roadblock. They
raped a 10-year-old girl at a roadblock and burnt the homes of local
Sandinista legislators. They occupied and ransacked a public university
campus, wrecked a women’s health center, and torched a daycare center.

The armed opposition wreaked this havoc while attacking police stations
with mortars and gunfire, during a national dialogue in which the police
were ordered to remain in their barracks. In the end, Nicaragua’s
opposition caused the deaths of over 60 innocent people, while grinding
the country’s previously productive economy to a halt.

Once the coup was extinguished, the US Congress passed the Nica Act
without debate, imposing harsh sanctions on Nicaragua’s economy that
emulated those already leveled against Venezuela and Iran.

On January 9, Dan La Botz appeared at a meeting of the New York City DSA
Anti-War Working Group to amp up the attack on Nicaragua’s socialist
government. There, he was challenged by Gunar Olsen, a contributor to
The Grayzone, about the event he organized last year with masked
right-wing Nicaraguan students sponsored by Freedom House.

La Botz claimed that the event had originally been planned as a
discussion of his book, but that "somebody said, these students were
coming through. And I said, that sounds great."

He continued: "My view is, they came from their country because someone
gave em some money, and they can come to the United States and they
wanted to talk to somebody who might be able to help their country… It
may have been though that there were some conservative political forces
working with them and the Republicans, it may have been that there was
some of those four students that was more hip than the others but it
wasn’t my impression."

La Botz concluded by telling Olsen and the DSA crowd, "I don’t feel at
all bad, I don’t think it was a terrible thing. I think they were four
young people coming to this country that wanted to speak there. We
didn’t know they were going there, we didn’t know where they were
heading, I didn’t know they were gonna speak there. Would I do it again?
If I knew what was going to happen I’d probably say, let’s see if we can
find some other students."

However, in his private email assessment of the event to DSA leadership,
La Botz had defended the students’ subsequent meetings with right-wing
Republicans as "perfectly understandable."

In his internal DSA report, La Botz went on to characterize those in the
US left that opposed the coup in Nicaragua as "foreign leftists" who are
"backers of Putin, Assad, Iran, Hamas, and now Ortega."

La Botz did not respond to several attempts to reach him by phone.

‘Revolutionary socialists’ funded by the non-profit industrial complex
The force behind the annual Socialism Conference, the International
Socialist Organization marketed itself as a radical, even revolutionary
movement supporting "socialism from below." But it was deeply embedded
in the non-profit industrial complex.

The ISO operated legally through its parent non-profit organization the
Center for Economic Research and Social Change. A tax-exempt 501(c)(3)
organization, CERSC received huge grants from the Tides Foundation.

The Tides Foundation is well known for funding progressive groups, but
only as long as they do not rock the boat too much.

A Canadian environmental activist who has participated in projects
funded by Tides told The Grayzone that the foundation funded a trip to
the 2011 United Nations Climate Change Conference in Durban, South
Africa, but eventually pulled funding for their environmental group’s
excursion to the 2012 UN conference in Doha, Qatar, because the
foundation was afraid the activists would carry out peaceful forms of
civil disobedience.

"They funded some people — those who wouldn’t rock the boat because they
didn’t want people engaging in civil disobedience," the Canadian
environmental activist told The Grayzone.

Another activist published a "whistleblower’s open letter to Canadians"
explaining that the Tides Foundation, which funded many
environmentalists in the country, was "too afraid of reprisals from the
government to act," after the office of right-wing Prime Minister
Stephen Harper threatened to challenge the foundation’s charitable status.

Why a milquetoast liberal foundation would fund the ISO, a supposedly
revolutionary socialist organization, raises serious questions about
that group’s agenda.

In fact, while the Tides Foundation was serving as one of the biggest
financiers of the ISO, it was also funding Democratic Party-aligned
organizations and even pro-Israel groups like J Street and the New
Israel Fund, which actively campaign against the Palestinian call for
BDS (Boycott, Divestment, and Sanctions against Israel) and support the
preservation of a settler-colonialist ethnically exclusivist state.

Haymarket Books, blending important literature with regime change
propaganda While the ISO was marginal during its existence, it punched
above its weight through front organizations and prominent members who
worked in the mainstream media and academia.

The ISO’s publishing arm, Haymarket Books, has been especially
influential. Haymarket describes itself as a "radical, independent,
nonprofit book publisher based in Chicago," which had been the base for
the ISO.

Haymarket has indeed published many important books on pressing issues.
However, it has supplemented these works with anti-anti-imperialist
screeds that echo the US State Department’s rhetoric, but framed as
"from the left."

Among Haymarket’s most aggressively marketed releases of 2018 was "The
Impossible Revolution," a collection of essays by the Syrian exiled
writer Yassin al-Haj Saleh, who now lives in Turkey and functions as a
lodestar to self-styled left-wing supporters of regime change in Syria.

Al-Haj Saleh’s book was blurbed by Charles Lister, a former functionary
of the UK’s Conservative Party who became a top lobbyist for arming
Salafi-jihadist insurgents in Syria at the Gulf monarchy-funded Middle
East Institute in Washington, DC.

State Department cables exposed by WikiLeaks indicate that Yassin al-Haj
Saleh was a US government informant in regular correspondence with
American officials in Damascus. One such memo, dated April 24, 2006,
features advice by al-Haj Saleh apparently delivered to US officials in
the country to use Islamism as a weapon against the government of Bashar
al-Assad.

Yassin al-Haj Saleh WikiLeaks cable Islamists

Haymarket has also recently published "Indefensible," a book-length
denunciation of the anti-imperialist left by the writer Rohini Hensman.

The manifesto features ham-fisted attacks on journalists Julian Assange,
John Pilger, and Seymour Hersh, along with unqualified support for
virtually every US and NATO military intervention in the past 30 years,
as well as the dirty war on Syria and the Maidan coup in Ukraine.

Anand Gopal, the longtime ISO ally who speaks at the Socialism
Conference every year, while working for a liberal foundation funded by
the US State Department, praised Hensman’s book as a guide to "how to be
a principled internationalist in the era of imperialism."

More recently, Hensman took to the DSA’s official website to attack The
Grayzone editor Max Blumenthal, Seymour Hersh, and Robert Fisk as
"neo-Stalinists" engaged in a "convergence" with neo-Nazis. No evidence
was provided to support the extreme claim.

Ashley Smith, an ideologue of the now-defunct ISO, says he is currently
writing another anti-anti-imperialist book for Haymarket entitled
"Socialism and Anti-Imperialism."

Tiny, irrelevant Trotskyite groups, from South to North America

Trotskyite groups are notorious throughout the world for their extreme
sectarian tendencies. The organizations rarely last long, frequently
splintering into tiny groupuscules over political disagreements.

Unsurprisingly, then, the so-called "left" opposition in Nicaragua,
Venezuela, and Cuba — which is celebrated by Trotskyite groups like the
ISO — is in fact infinitesimal and insignificant.

Nils McCune, a socialist and environmental activist who has lived in
Nicaragua for years, explained in an interview on our podcast Moderate
Rebels that one of these parties, the Movement for the Renovation of
Sandinismo (MRS) is a tiny group that is irrelevant in the country.
Unable to mobilize popular support, this "left" opposition can only
lobby the US government for regime change.

As Blumenthal, a co-author of this article, revealed in MintPress News,
the MRS has received direct support from the US government in its
campaign to prevent the election of Daniel Ortega as president, and
lobbied for sanctions against Nicaragua after he was elected.

Similarly, in Venezuela the ostensible left opposition has offered
"critical support" to Washington’s regime change efforts.

This February, a leader of the marginal Venezuelan Trotskyite group
Marea Socialista held a friendly meeting with Juan Guaidó, the
US-appointed right-wing coup leader.

On February 5, Guaidó tweeted a photo of a meeting with Marea
Socialista’s Nicmer Evans.

Juan Guaidó hails from the far-right party Voluntad Popular, which was
practically founded by the US government and has been deeply involved in
street violence throughout Venezuela.

Jesus Rodriguez Espinoza, a Chavista who lives in Venezuela and is
editor of the independent news website, the Orinoco Tribune, told The
Grayzone when we reported in the country in February that Marea
Socialista is "tiny" and has "no power." He was genuinely surprised at
how much coverage these minuscule groups have received in the US
progressive media, because inside Venezuela they have negligible influence.

Yet the Trotskyite organization has constantly been given a platform by
the ISO’s newspaper Socialist Worker (Marea Socialista even enjoys its
own tag on the website). Jacobin Magazine, the self-declared "leading
voice of the American left," has also given a huge platform to Marea
Socialista operatives to push for what they call a "Chavismo from below"
— despite the fact that the Trotskyite group is virtually unknown to
average Venezuelans, including to millions of poor and working-class
Chavistas.

Also featured in the February 5 photo of the meeting with US-backed coup
leader Juan Guaidó was the anti-Maduro liberal intellectual Edgardo
Lander, who is popular in anti-communist left-wing circles in the US but
almost unknown inside Venezuela. Like Marea Socialista, Lander has
enjoyed very positive coverage in the progressive Anglo press.

Democracy Now, which has advanced regime-change propaganda on Syria on
repeated occasions, offered its platform to Lander this May. Hosts Amy
Goodman and Nermeen Sheikh lobbed softball questions at the
intellectual, and failed to disclose that he met with Guaidó.

In his Democracy Now segment, Lander admitted that his outfit is a
"small collective," whereas the Chavista movement he criticizes is
massively popular in working-class barrios across the country.

The International Socialist Organization has played a similar role in
the US, with little visibility outside the left and almost no grassroots
base.

Now that the ISO has disbanded, its veterans can reach into the rapidly
growing ideologically diffuse world of Democratic Socialists of America,
using platforms like Socialism 2019 to infect DSA’s youthful core with
the imperial politics of regime change – but always "from the left," and
always "from below."

By Ben Norton and Max Blumenthal

Max Blumenthal is an award-winning journalist and the author of several
books, including best-selling Republican Gomorrah, Goliath, The Fifty
One Day War, and The Management of Savagery. He has produced print
articles for an array of publications, many video reports, and several
documentaries, including Killing Gaza. Blumenthal founded The Grayzone
in 2015 to shine a journalistic light on America’s state of perpetual
war and its dangerous domestic repercussions.

Ben Norton Ben Norton is a journalist and writer. He is a reporter for
The Grayzone, and the producer of the Moderate Rebels podcast, which he
co-hosts with Max Blumenthal. His website is BenNorton.com, and he
tweets at @BenjaminNorton.

https://bennorton.com

(3) Trots' Socialism Conference: 'No Borders, No Bosses, No Binaries'

https://www.dailysignal.com/2019/07/15/i-went-to-a-socialism-conference-here-are-my-6-observations/

I Went to a Socialism Conference. Here Are My 6 Observations.

Jarrett Stepman

/ @JarrettStepman / July 15, 2019

While you were enjoying your Fourth of July weekend, I was attending a
national conference on socialism.

Why? Because socialism is having its moment on the left.

Since there’s often confusion as to what socialism really is, I decided
to attend the Socialism 2019 conference at the Hyatt Hotel in Chicago
over the Fourth of July weekend.

The conference, which had the tag line "No Borders, No Bosses, No
Binaries," contained a cross-section of the most pertinent hard-left
thought in America. Among the sponsors were the Democratic Socialists of
America and Jacobin, a quarterly socialist magazine.

The liberal Left continue to push their radical agenda against American
values. The good news is there is a solution. Find out more

The walls of the various conference rooms were adorned with posters of
Karl Marx and various depictions of socialist thinkers and causes.

Most of the conference attendees appeared to be white, but identity
politics were a major theme throughout—especially in regard to gender.

At the registration desk, attendees were given the option of attaching a
"preferred pronoun" sticker on their name tags.

In addition, the multiple-occupancy men’s and women’s restrooms were
relabeled as "gender neutral," and men and women were using both.
Interestingly enough, the signs above the doors were still labeled with
the traditional "men’s" and "women’s" signs until they were covered over
with home-made labels.

One of the paper labels read: "This bathroom has been liberated from the
gender binary!"

While the panelists and attendees were certainly radical, and often
expressed contempt for the Democratic Party establishment, it was
nevertheless clear how seamlessly they blended traditional Marxist
thought with the agenda of what’s becoming the mainstream left.

They did so by weaving their views with the identity politics that now
dominate on college campuses and in the media and popular entertainment.
The culture war is being used as a launching point for genuinely
socialist ideas, many of which are re-emerging in the 21st century.

Here are six takeaways from the conference:

(i) Serious About Socialism

A common line from those on the modern left is that they embrace
"democratic socialism," rather than the brutal, totalitarian socialism
of the former Soviet Union or modern North Korea and Venezuela. Sweden
is usually cited as their guide for what it means in practice, though
the reality is that these best-case situations show the limits of
socialism, not its success.

It’s odd, too, for those who insist that "diversity is our strength" to
point to the culturally homogenous Nordic countries as ideal models anyway.

It’s clear, however, that while many socialists insist that their ideas
don’t align with or condone authoritarian societies, their actual
ideology—certainly that of those speaking at the conference—is in no
sense distinct.

Of the panels I attended, all featured speakers who made paeans to
traditional communist theories quoted Marx, and bought into the ideology
that formed the basis of those regimes.

Mainstream politicians may dance around the meaning of the word
"socialist," but the intellectuals and activists who attended Socialism
2019 could have few doubts about the fact that Marxism formed the core
of their beliefs.

Some sought to dodge the issue. One was David Duhalde, the former
political director of Our Revolution, an activist group that supports
Sen. Bernie Sanders, I-Vt., and that was an offshoot of Sanders’ 2016
presidential campaign.

Duhalde said that Sanders is a creation of the socialist movement—having
had direct ties to the Socialist Party of America in his youth—but
hasn’t maintained an official connection to socialist political
organizations throughout his political career.

Sanders’ position, according to Duhalde, is "anti-totalitarian" and that
he favors a model based on "neither Moscow, nor the United States, at
least in this formation."

It’s a convenient way of condemning capitalist-oriented societies while
avoiding connections to obviously tyrannical ones.

It was also difficult to mistake the sea of red shirts and posters of
Marx that adorned the walls at the conference—or the occasional use of
the word "comrades"—as anything other than an embrace of genuine
socialism, but with a uniquely modern twist.

(ii) Gender and Identity Politics Are Ascendant

Transgenderism, gender nonconformity, and abolishing traditional family
structures were huge issues at Socialism 2019.

One panel, "Social Reproduction Theory and Gender Liberation," addressed
how the traditional family structure reinforced capitalism and contended
that the answer was to simply abolish families.

Corrie Westing, a self-described "queer socialist feminist activist
based in Chicago working as a home-birth midwife," argued that
traditional family structures propped up oppression and that the modern
transgender movement plays a critical part in achieving true
"reproductive justice."

Society is in a moment of "tremendous political crisis," one that
"really demands a Marxism that’s up to the par of explaining why our
socialist project is leading to ending oppression," she said, "and we
need a Marxism that can win generations of folks that can be radicalized
by this moment."

That has broad implications for feminism, according to Westing, who said
that it’s important to fight for transgender rights as essential to the
whole feminist project—seemingly in a direct shot at
transgender-exclusionary radical feminists, who at a Heritage Foundation
event in January argued that sex is biological, not a societal
construct, and that transgenderism is at odds with a genuine feminism.

She contended that economics is the basis of what she called
"heteronormativity."

Pregnancy becomes a tool of oppression, she said, as women who get
pregnant and then engage in child rearing are taken out of the workforce
at prime productive ages and then are taken care of by an economic provider.

Thus, the gender binary is reinforced, Westing said.

She insisted that the answer to such problems is to "abolish the
family." The way to get to that point, she said, is by "getting rid of
capitalism" and reorganizing society around what she called "queer
social reproduction."

"When we’re talking about revolution, we’re really connecting the issues
of gender justice as integral to economic and social justice," Westing said.

She then quoted a writer, Sophie Lewis, who in a new book, "Full
Surrogacy Now: Feminism Against Family," embraced "open-sourced, fully
collaborative gestation."

(iii) Open Borders Is Becoming a Litmus Test

It’s perhaps not surprising that socialists embrace open borders. After
all, that’s becoming a much more mainstream position on the left in general.

The AFL-CIO used to support immigration restrictions until it flipped in
2000 and called for illegal immigrants to be granted citizenship.

As recently as 2015, Sanders rejected the idea of open borders as a ploy
to impoverish Americans.

But Justin Akers-Chacon, a socialist activist, argued on a panel, "A
Socialist Case for Open Borders," that open borders are not only a
socialist idea, but vital to the movement.

Akers-Chacon said that while capital has moved freely between the United
States and Central and South America, labor has been contained and
restricted.

He said that while working-class people have difficulty moving across
borders, high-skilled labor and "the 1%" are able to move freely to
other countries.

South of the border, especially in Mexico and Honduras, Akers-Chacon
said, there’s a stronger "class-consciousness, as part of cultural and
historical memory exists in the working class."

"My experiences in Mexico and my experiences working with immigrant
workers, and my experiences with people from different parts of this
region, socialist politics are much more deeply rooted," he said.

That has implications for the labor movement.

Despite past attempts to exclude immigrants, Akers-Chacon said, it’s
important for organized labor to embrace them. He didn’t distinguish
between legal and illegal immigrants.

For instance, he said one of the biggest benefits of the Immigration
Reform and Control Act of 1986 was that there was a brief boost in union
membership amid a more general decline in unionism.

Besides simply boosting unions, the influx "changed the whole AFL-CIO
position on immigrants, [which was] still backwards, restrictive,
anti-immigrant," Akers-Chacon said.

"So, there’s a correlation between expanding rights for immigrants and
the growth, and confidence, and militancy of the labor movement as a
whole," he said.

(iv) ‘Clickbait’ Communism Is Being Used to Propagandize Young Americans

The magazine Teen Vogue has come under fire recently for flattering
profiles of Karl Marx and promoting prostitution as a career choice,
among other controversial pieces.

It would be easy to write these articles off as mere "clickbait," but
it’s clear that the far-left nature of its editorials—and its attempt to
reach young people with these views—is genuine.

Teen Vogue hosted a panel at Socialism 2019, "System Change, Not Climate
Change: Youth Climate Activists in Conversation with Teen Vogue." ...

The panel moderator was Lucy Diavolo, news and politics editor at the
publication, who is transgender.

"I know there’s maybe a contradiction in inviting Teen Vogue to a
socialism conference … especially because the youth spinoff brand is a
magazine so associated with capitalist excess," Diavolo said. "If you’re
not familiar with our work, I encourage you to read Teen Vogue’s
coverage of social justice issues, capitalism, revolutionary theory, and
Karl Marx, or you can check out the right-wing op-eds that accuse me of
‘clickbait communism’ and teaching your daughters Marxism and revolution."

The panel attendees responded enthusiastically.

"Suffice to say, the barbarians are beyond the gates. We are in the
tower," Diavolo boasted.

(v) The Green Movement Is Red

It’s perhaps no surprise that an openly socialist member of Congress is
pushing for the Green New Deal—which would essentially turn the U.S.
into a command-and-control economy reminiscent of the Soviet Union.

Rep. Alexandria Ocasio-Cortez’s chief of staff Saikat Chakrabarti
recently said, according to The Washington Post: "The interesting thing
about the Green New Deal is it wasn’t originally a climate thing at all."

"Do you guys think of it as a climate thing?" Chakrabarti asked Sam
Ricketts, climate director for Washington Gov. Jay Inslee, who is
running for president in the Democratic primary. "Because we really
think of it as a how-do-you-change-the-entire-economy thing."

Economic transformation barely disguised as a way to address
environmental concerns appears to be the main point.

One of the speakers on the Teen Vogue climate panel, Sally Taylor, is a
member of the Sunrise Movement, a youth-oriented environmental activist
group that made headlines in February when several elementary school-age
members of the group confronted Sen. Dianne Feinstein, D-Calif., about
her lack of support for the Green New Deal.

The other speaker on the Teen Vogue climate panel was Haven Coleman, a
13-year-old environmental activist who has received favorable coverage
for leading the U.S. Youth Climate Strike in March. She was open about
the system change she was aiming for to address climate change.

She noted during her remarks that she was receiving cues from her
mother, who she said was in attendance.

Haven said the answer to the climate change problem was moving on from
our "capitalistic society" to something "other than capitalism."

Interestingly, none of the glowing media profiles of Haven or the
Climate Strike mentioned a link to socialism or abolishing capitalism.

6. Socialism Can’t Be Ignored as a Rising Ethos on the Left

According to a recent Gallup survey, 4 in 10 Americans have a positive
view of socialism. Support among Democrats is even higher than among the
general population, with a majority of Democrats saying they prefer
socialism to capitalism.

But many who say they want socialism rather than capitalism struggle to
define what those terms mean and change their views once asked about
specific policies.

As another Gallup poll from 2018 indicated, many associate socialism
with vague notions of "equality," rather than as government control over
the means of production in the economy.

What’s clear from my observations at Socialism 2019 is that traditional
Marxists have successfully melded their ideology with the identity
politics and culture war issues that animate modern liberalism—despite
still being quite far from the beliefs of the average citizen.

Socialists at the conference focused more on social change, rather than
electoral politics, but there were still many core public policy issues
that animated them; notably, "Medicare for All" and government
run-health care, some kind of Green New Deal to stop global warming (and
more importantly, abolish capitalism), open borders to increase class
consciousness and promote transnational solidarity, removing all
restrictions on—and publicly funding—abortion, and breaking down social
and legal distinctions between the sexes.

They were particularly able to weave their issues together through the
thread of "oppressor versus oppressed" class conflict—for instance,
supporting government-run health care meant also unquestioningly
supporting unfettered abortion and transgender rights.

Though their analyses typically leaned more heavily on economic class
struggle and determinism than what one would expect from more mainstream
progressives, there wasn’t a wide gap between what was being discussed
at Socialism 2019 and the ideas emerging from a growing segment of the
American left.

(4) Trots' Main Target Is Destroying The Family

https://townhall.com/tipsheet/timothymeads/2019/07/16/socialists-main-target-is-destroying-the-family-n2550084

Socialists' Main Target Is Destroying The Family

Timothy Meads | @Timothy__Meads |Posted: Jul 16, 2019 4:05 PM

The ever intrepid Jared Stepman spent his Fourth of July weekend
attending the "Socialism 2019" conference in Chicago to get a firsthand
look at the far-left base of the Democratic Party. The conference had
the tagline "No Borders, No Bosses, No Binaries," and was sponsored by
the Democratic Socialists of America and Jacobin magazine. The event was
pretty much exactly what you expected it to be. However, perhaps the
most surprising thing was the explicit honesty the speakers had for
their disdain of the traditional American family and why things like
abortion, transgender issues, and even Teenvogue were so crucial to
their fight to destroy capitalism.

The panel titled "Social Reproduction Theory and Gender Liberation"
focused specifically on how destroying the traditional family means
getting rid of gender roles.

Corrie Westing, a self-described queer socialist feminist activist based
in Chicago working as a home-birth midwife, argued that traditional
family structures propped up oppression and that the modern transgender
movement plays a critical part in achieving true "reproductive justice."

Society is in a moment of "tremendous political crisis," one that
"really demands a Marxism that’s up to the par of explaining why our
socialist project is leading to ending oppression," she said, "and we
need a Marxism that can win generations of folks that can be radicalized
by this moment."She contended that economics is the basis of what she
called "heteronormativity." [...]

Pregnancy becomes a tool of oppression, she said, as women who get
pregnant and then engage in child rearing are taken out of the workforce
at prime productive ages and then are taken care of by an economic provider.

Thus, for Westing, getting rid of capitalism would usher in a new
society organized around "queer social reproduction."

"When we’re talking about revolution, we’re really connecting the issues
of gender justice as integral to economic and social justice," Westing said.

An easy way of getting more on board with this line of thinking, another
panel determined, was through "clickbait communism."

"I know there’s maybe a contradiction in inviting Teen Vogue to a
socialism conference...especially because the youth spinoff brand is a
magazine so associated with capitalist excess," Lucy Diavolo, the
outlet's transgender news and politics editor said. "If you’re not
familiar with our work, I encourage you to read Teen Vogue’s coverage of
social justice issues, capitalism, revolutionary theory, and Karl Marx,
or you can check out the right-wing op-eds that accuse me of ‘clickbait
communism’ and teaching your daughters Marxism and revolution."

The panel discussed how the outlet actually does quite well with young
people. For this reason and others, as Stepman noted, these ideas cannot
be cast off or ignored anymore. They are slowly seeping into the
Democratic Party.

"What’s clear from my observations at Socialism 2019 is that traditional
Marxists have successfully melded their ideology with the identity
politics and culture war issues that animate modern liberalism—despite
still being quite far from the beliefs of the average citizen," Stepman
remarked.

(5) Candace Owens, a Black conservative commentator, turns Hate
allegations back on Dems

From: JUDY schuchmann <judyschuchmann1@gmail.com>

https://www.youtube.com/watch?v=qCxYexboSAY

Candace Owens - Rep. Buck - 9 April 2019
286,011 views

Red Times

Published on 10 Apr 2019

House Judiciary Committee Hearing on Hate Crimes

The House Judiciary Committee held a hearing to examine and discuss how
to combat white nationalism and hate crimes.

Facebook and Google outlined what their companies are doing to identify
and remove hate speech and content.

Candace Owens, a Black conservative commentator, turned the tables,
stating that Leftists had repeatedly tried to stop her addressing
audiences. She rejects Black Lives Matter, and says that, under Trump,
Blacks are getting off welfare and into jobs.

(6) Berkeley City Council votes to replace gendered names, including
'he,' 'she,' 'him,' and 'her'
"policeman," "policewoman," "chairwoman," and "chairman" will be
changed, as will "he," "she," "him," and "her.

City Of Berkeley Bans Gendered Words Like ‘Manhole’ And ‘Manpower’ From
Code Book

https://dailycaller.com/2019/07/18/berkeley-manhole-gender-neutral/

July 18, 2019 11:46 AM ET

One of California’s most liberal cities voted Tuesday to revamp its city
code book by replacing terms like "manhole" and "manpower" with
gender-neutral terms.

The Berkeley City Council voted to replace around three dozen terms
found in the municipal code. Terms like "policeman," "policewoman,"
"chairwoman" and "chairman" will be changed, as will "he," "she," "him"
and "her."

Rigel Robinson, the Democratic city council member who wrote the
ordinance, said the change is necessary because a "male-centric" city
code is "inaccurate and not reflective of our reality."

"Women and non-binary individuals are just as entitled to accurate
representation. Our laws are for everyone, and our municipal code should
reflect that," ...

1039 UPDATE Ellen Brown: China & Japan show how to pay for it - with MMT

UPDATE Ellen Brown: China & Japan show how to pay for it - with MMT

Newsletter published on July 12, 2019

(1) MMT and the Budget Deficit
(2) Ellen Brown: China & Japan show how to pay for it - with MMT
(3) China Invents a Different Way to Run an Economy
(4) The Problem With "Modern Monetary Theory" Is That It's True
(5) How Bankers Became the Top Exploiters of the Economy, by Michael Hudson
(6) Deficit Owls: MMT Explained
(7) Examples of Financial Transactions - approved by Geoffrey Gardiner

(1) MMT and the Budget Deficit
by Peter Myers, July 12, 2019

Michael Hudson, Geoffrey Gardiner, Stephen Zarlenga, L. Randell Wray,
Henry Liu and other dissident economists honed their debating skills for
many years in an internet forum called Gang8, hosted by Arno Mong Daastol.

Gardiner and others were conservatives favouring capitalist banking,
whereas Hudson, Zarlenga, Wray and Liu favoured socialist banking.

I was privileged to receive the emails, and on a few occasions to
participate.

It was a great education in economics and banking.

Wray and Hudson have gone on to champion Modern Monetary Theory (MMT),
as a way out of the Budget Deficit.

The Budget Deficit exists because the 1% (a.k.a. the Ruling Class) don't
pay tax. Corporations avoid tax by using Tax Havens and Transfer Pricing.

Governments, instead of taxing them, are forced to borrow from them.

Whenever a politician canvasses taxing them, they use the 'Mainstream
Media', which they also own, to scare the Middle Class into thinking
that THEY will be the target of the new tax laws. Thus that politician
fails to get into power.

The only time they have accepted high taxation is during WW1 and WW2,
where their own assets were on the line, and in the postwar period until
Margaret Thatcher and Ronald Reagan re-launched Capitalism.

MMT is based on the 'State Theory of Money', first published by Georg
Friedrich Knapp in 1905.

It says that governments don't need to borrow to fund their financial
needs. Instead, a state-owned national bank can create debt-free money
for government to spend; the same money is accepted by government for
payment of taxes.

Famous examples are (a) Lincoln's Greenbacks, used to fund the northern
side in the Civil War (b) Bradbury Pounds, used by Britain in WW1 (c)
The Commonwealth Bank of Australia (the publicly owned Reserve Bank)
funding the Trans-Australia Railway and the Australian National
(shipping) Line in the early twentieth century.

Opponents of the Green New Deal say, 'Where's the Money Coming from?"
And Ellen Brown rightly explains, "From our own Publicly-Owned banks,
which we will create as part of the process".

At the start of WW1, Britain's Globalised financial system was so
interconnected with Germany's  that Britain could not fund the war; it
was bankrupt. As a solution, Bradbury Pounds were issued by the British
Treasury, not by the Bank of England. This was debt-free money.

In the same way, the US Treasury, a publicly-owned body, could issue
Dollars, instead of the privately owned Fed. This would be debt-free
money. At present, the US Government pays interest on the money it spends.

Alternatively, the Fed could be nationalised and made a branch of the
Treasury.

We need MMT, because we can't make the 1% pay tax.

(2) Ellen Brown: China & Japan show how to pay for it - with MMT

https://ellenbrown.com/2019/07/10/how-to-pay-for-it-all-an-option-the-candidates-missed/

How to Pay for It All: An Option the Candidates Missed

Posted on July 10, 2019 by Ellen Brown

The Democratic Party has clearly swung to the progressive left, with
candidates in the first round of presidential debates coming up with one
program after another to help the poor, the disadvantaged and the
struggling middle class. Proposals ranged from a Universal Basic Income
to Medicare for All to a Green New Deal to student debt forgiveness and
free college tuition. The problem, as Stuart Varney observed on FOX
Business, was that no one had a viable way to pay for it all without
raising taxes or taking from other programs, a hard sell to voters. If
robbing Peter to pay Paul is the only alternative, the proposals will go
the way of Trump’s trillion dollar infrastructure bill for lack of funding.

Fortunately there is another alternative, one that no one seems to be
talking about – at least no one on the presidential candidates’ stage.
In Japan, it is a hot topic; and in China, it is evidently taken for
granted: the government can generate the money it needs simply by
creating it on the books of its own banks. Leaders in China and Japan
recognize that stimulating the economy is not a zero-sum game in which
funds are just shuffled from one pot to another. To grow the economy and
increase GDP, demand (money) must go up along with supply. New money
needs to be added to the system; and that is what China and Japan have
been doing, very successfully.

Before the 2008-09 global banking crisis, China’s GDP increased by an
average of 10% per year for 30 years. The money supply increased right
along with it, created on the books of its state-owned banks. Japan
under Prime Minister Shinzo Abe has been following suit, with massive
economic stimulus funded by correspondingly massive purchases of the
government’s debt by its central bank, using money simply created with
computer keystrokes.

All of this has occurred without driving up prices, the dire result
predicted by US economists who subscribe to classical monetarist theory.
In the 20 years from 1998 to 2018, China’s M2 money supply grew from
just over 10 trillion yuan to 180 trillion yuan ($26T), an 18-fold
increase. Yet it closed 2018 with a consumer inflation rate that was
under 2%. Price stability has been maintained because China’s Gross
Domestic Product has grown at nearly the same fast clip, by a factor of
13 over 20 years.

In Japan, the massive stimulus programs called "Abenomics" have been
funded through its central bank. The Bank of Japan has now "monetized"
nearly 50% of the government’s debt, turning it into new money by
purchasing it with yen created on the bank’s books. If the US Fed did
that, it would own $11 trillion in US government bonds, four times what
it holds now. Yet Japan’s M2 money supply has not even doubled in 20
years, while the US money supply has grown by 300%; and Japan’s
inflation rate remains stubbornly below the BOJ’s 2% target. Abe’s
stimulus programs have not driven up prices. In fact deflation remains a
greater concern than inflation in Japan, despite unprecedented debt
monetization by its central bank.

China’s Economy: A Giant Ponzi Scheme or a New Economic Model?

Critics have long called China’s economy a Ponzi scheme, doomed to
collapse in the end; and for 40 years China has continued to prove the
critics wrong. According to a June 2019 report by the Congressional
Research Service:

Since opening up to foreign trade and investment and implementing
free-market reforms in 1979, China has been among the world’s
fastest-growing economies, with real annual gross domestic product (GDP)
growth averaging 9.5% through 2018, a pace described by the World Bank
as "the fastest sustained expansion by a major economy in history." Such
growth has enabled China, on average, to double its GDP every eight
years and helped raise an estimated 800 million people out of poverty.
China has become the world’s largest economy (on a purchasing power
parity basis), manufacturer, merchandise trader, and holder of foreign
exchange reserves.

This massive growth has been funded with credit created on the books of
China’s banks, most of which are state-owned. Even in the US, course,
most money today is created on the books of banks. That is what our
money supply is – bank credit. What is different about the Chinese model
is that the Chinese government can and does intervene to direct where
the credit goes. In a July 2018 article titled "China Invents a
Different Way to Run an Economy," Noah Smith suggests that China’s novel
approach to macroeconomic stabilization by regulating bank credit
represents a new economic model, one that may hold valuable lessons for
developed economies. He writes:

Many economists would see this approach as hopelessly ad hoc, haphazard,
and interventionist — not the kind of thing any developed country would
want to rely on. And yet, it seems to have carried China successfully
through several crises, while always averting the catastrophic financial
crash that outside observers have been warning about for years.

Abenomics, Helicopter Money and Modern Monetary Theory

Noah Smith has also written about Japan’s unique model. After Prime
Minister Abe crushed his opponents in October 2017, Smith wrote on
Bloomberg News, "Japan’s long-ruling Liberal Democratic Party has
figured out a novel and interesting way to stay in power—govern
pragmatically, focus on the economy and give people what they want." He
said everyone who wanted a job had one; small and midsize businesses
were doing well; and the BOJ’s unprecedented program of monetary easing
had provided easy credit for corporate restructuring without generating
inflation. Abe had also vowed to make both preschool and college free.

Like China’s economic model, Abenomics has been called a Ponzi scheme,
funded by central bank-created "free" money. But whatever it is called,
the strategy has been working for the economy. Even the once-dubious
International Monetary Fund has declared Abenomics a success.

The Bank of Japan’s massive bond-buying program has also been called
"helicopter money" — a policy in which the central bank directly
finances government spending by underwriting bonds – and it has been
compared to Modern Monetary Theory, which similarly posits that the
government can spend money into existence with central bank funding. As
Nathan Lewis wrote in Forbes in February 2019:

In practice, something like "MMT" has reached a new level of
sophistication these days, exemplified by Japan. . . . The Bank of Japan
now holds government bonds amounting to more than 100% of GDP. In other
words, the government has managed to finance itself "with the printing
press" to the amount of about 100% of GDP, with no inflationary
consequences. [Emphasis added.]

Japanese officials have resisted comparisons with both helicopter money
and MMT, arguing that Japanese law does not allow the government to sell
its bonds directly to the central bank. As in the US, the government’s
bonds must be sold on the open market, a limitation that also prevents
the US government from directly monetizing its debt. But as Bank of
Japan Deputy Governor Kikuo Iwata observed in a 2013 Reuters article,
where the bonds are sold does not matter. What is important is that the
central bank has agreed to buy them, and it is here that US banking law
diverges from the laws of both Japan and China.

Central Banking Asia-style

When the US Treasury sells bonds on the open market, it can only hope
the Fed will buy them. Any attempt by the president or the legislature
to influence Fed policy is considered a gross interference with the
sacrosanct independence of the central bank.

In theory, the central banks of China and Japan are also independent.
Both are members of the Bank for International Settlements, which
stresses the importance of maintaining the stability of the currency and
the independence of the central bank; and both countries revised their
banking laws in the 1990s to better reflect those policies. But their
banking laws still differ in significant ways from those of the US.

In Japan, the Bank of Japan is legally free to set interest rates, but
it must cooperate closely with the Ministry of Finance in setting
policy. Article 4 of the 1997 Bank of Japan Act says:

The Bank of Japan shall, taking into account the fact that currency and
monetary control is a component of overall economic policy, always
maintain close contact with the government and exchange views
sufficiently, so that its currency and monetary control and the basic
stance of the government’s economic policy shall be mutually compatible.

Unlike in the US, Prime Minister Abe can negotiate with the head of the
central bank to buy the government’s bonds, ensuring that the debt is in
fact turned into new money that will stimulate domestic economic growth;
and he is completely within his legal rights in doing it.

The leverage of China’s central government over its central bank is even
stronger than the Japanese prime minister’s. The 1995 Law of the
People’s Republic of China on the People’s Bank of China states:

The People’s Bank of China shall, under the leadership of the State
Council, formulate and implement monetary policies, guard against and
eliminate financial risks, and maintain financial stability.

The State Council has final decision-making power on such things as the
annual money supply, interest rates and exchange rates; and it has used
this power to stabilize the economy by directing and regulating the
issuance of bank credit, the new Chinese macroeconomic model that Noah
Smith says holds important lessons for us.

The successful six-year run of Abenomics, along with China’s decades of
unprecedented economic growth, have proven that governments can indeed
monetize their debts, expanding the money supply and stimulating the
economy, without driving up consumer prices. The monetarist theories of
US policymakers are obsolete and need to be discarded.

"Kyouryoku," the Japanese word for cooperation, is composed of
characters that mean "together strength" – "stronger by working
together." This is a recognized principle in Asian culture and it is an
approach we would do well to adopt. What US presidential candidates from
both parties should talk about is how to modify the law so that
Congress, the Administration and the central bank can work together in
setting monetary policy, following the approaches successfully modeled
in China and Japan.

(3) China Invents a Different Way to Run an Economy
https://www.bnnbloomberg.ca/china-invents-a-different-way-to-run-an-economy-1.1110889

Noah Smith, Bloomberg News

(Bloomberg Opinion) -- In the U.S. and other developed countries, there
are three basic philosophies of macroeconomic stabilization. Each of
them was present in some form during the Great Depression, and each
survives to this day.

The first is Keynesianism, which centers around fiscal stimulus, mainly
in the form of increased government spending. The second is monetarism,
which holds that getting economies out of recession is the job of the
central bank, which can lower interest rates, engage in quantitative
easing or ease monetary policy in other ways. The third school holds
that recessions are a healthy and normal phenomenon, and that
governments shouldn’t try to fight them. This last idea was promoted by
the liquidationists during the Great Depression, and enjoyed a
resurgence of interest in the 1980s, eventually even winning a Nobel for
one of its leading proponents. {Milton Friedman - Peter M.}

These three approaches have been around so long that it’s tempting to
conclude that there aren’t any others. But it’s possible that there’s
something else out there -- a good way to stabilize the economy other
than fiscal or monetary policy. And it’s possible China may have been
the one to hit upon this alternative.

For the last quarter-century, growth in China has been remarkably
stable. Though there have been ups and downs, the country has never
recorded a recession in that time. During that period, real gross
domestic product growth has never fallen lower than 6 percent:

Of course, those are official government numbers, and many people accuse
China of fudging its statistics. Provincial and local officials have
incentives to report overly rosy growth figures, and the central
government may smooth out the GDP numbers in order to avoid having
capital flee from the country. Even China’s premier, Li Keqiang, once
called the country’s economic statistics "man-made and therefore
unreliable." For this reason, a number of independent observers have
constructed their own measures of Chinese growth, relying on data like
electricity usage to supplement the official numbers. But almost all of
them conclude that China hasn’t seen growth fall below zero in recent
years, despite a mild slowdown in 2015.

This is remarkable. Most fast-developing countries stumble at some
point. During its economic rise in the 1800s, the U.S. suffered numerous
panics and depressions (as recessions were then known). Japan’s catch-up
growth during the postwar period was remarkably rapid and steady, but it
suffered two recessions in the 1960s and 1970s. China, in contrast, has
now weathered both the Great Recession and its own stock market bubble
and crash without its growth ever once sliding into reverse.

How did China accomplish this feat? Monetary policy was certainly used
as a stabilization tool, but its interest rate moves haven’t been
particularly dramatic:

China did make use of fiscal policy in the Great Recession, running a
deficit of about 7 percent of GDP in 2009:

But the stimulus was over quickly, as China ran a small surplus the next
year. Fiscal policy might have been effective, but it wasn’t the whole
story.

In addition to spending more, China also directed banks to lend lots
more money. The World Bank estimated that increased bank credit
represented 40 percent of China’s stimulus. Much of the lending was done
by China’s four large state-owned banks. The money went to
infrastructure, real estate and all kinds of corporate projects, many of
which were carried out by the country’s state-owned enterprises. That
lending was often wasteful and probably hurt productivity, but saving
the economy from going off a cliff could easily have been worth it,
especially since a deep recession might have threatened the country’s
political stability.

In the years since the crisis, China has again and again turned to
credit policy to stabilize its economy -- encouraging banks to lend more
when there’s a risk of recession, and clamping down on credit when real
estate bubbles threaten to spin out of control. In 2011 the government
tightened lending in order to limit a possible housing bubble, and again
in 2013, and yet again in 2017. In 2014 it eased bank lending to
stimulate the economy. In 2016 it cut banks’ reserve requirements to
stimulate credit expansion. And recently, facing the threat of a trade
war with the U.S., it reduced reserve requirements again, and encouraged
lending with various other policy tweaks.

Although it’s hard to get a clear picture of China’s overall credit
policy -- because there are so many policy levers, and because so much
is done behind closed doors -- it appears that the country is feeling
out a novel approach to macroeconomic stabilization. That program
focuses on asset prices, bank finance, real estate and administrative
control of banks.

Many economists would see this approach as hopelessly ad hoc, haphazard
and interventionist -- not the kind of thing any developed country would
want to rely on. And yet, it seems to have carried China successfully
through several crises, while always averting the catastrophic financial
crash that outside observers have been warning about for years.

Is there a lesson for developed economies here? Countries such as Japan
and the European Union member nations use a lot of bank finance. The
U.S. tends to use bond markets more, but banks -- especially big banks
-- are extremely important in the real estate sector, which is a very
important factor in the business cycle. Could developed countries create
more policy tools to push banks to increase lending in recessions and
cut back when bubbles threaten? Or is China sui generis -- a model that
can’t be copied? Is China’s repeated intervention in credit markets
building up inefficiencies that will eventually bring the system down?
There’s no way to know the answers to these questions yet. But
macroeconomists should think about credit policy as an important
supplement to the traditional fiscal and monetary tools of
recession-fighting.

To contact the author of this story: Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story: James Greiff at
jgreiff@bloomberg.net

Noah Smith is a Bloomberg Opinion columnist. He was an assistant
professor of finance at Stony Brook University, and he blogs at Noahpinion.

(4) The Problem With "Modern Monetary Theory" Is That It's True
https://www.forbes.com/sites/nathanlewis/2019/02/21/the-problem-with-modern-monetary-theory-is-that-its-true/

Feb 21, 2019, 04:51pm

Nathan Lewis

"Modern Monetary Theory" basically posits that a government can pay its
bills by printing money. What exactly is so "modern" about this I don't
know. In the third century, the Roman government started paying its
bills by making coins with higher and higher denominations. I don't
think they ever made a "trillion denarii coin" but the value of the
denarius eventually fell to less than a millionth of its original value.
It is a recipe for disaster; but, even so, every government does it
today, to some extent.

The irony of it is: that a government can, in part, pay its bills with
the printing press, but this works best when the government acts as if
it cannot; for once a government goes too far down this road, the
government soon finds that confidence in the currency or the
government's bonds has fallen so far that it can no longer use
printing-press finance without disastrous and immediate consequences. In
short: it is best if you act as if you can't, even when you can.

Historically, beginning with the Bank of England in 1694, central banks
were private, for-profit institutions. By the end of the nineteenth
century, this model had spread over much of the world. Printing money,
as you might imagine, turned out to be very profitable. But, in time
people complained about this arrangement. During the twentieth century,
central banks spread still further, but they officially took on a more
public aspect, in which the interest income on their holdings of
government bonds were remitted to governments. The Bank of England was
officially nationalized in 1946. The Federal Reserve remains a
privately-owned entity, but it officially remits its income to the
Treasury. I often wonder if this is really true. Since the Federal
Reserve doesn't seem to want to be audited, I guess we will just have to
take their word for it.

Recently, the Federal Reserve held U.S. Treasury securities amounting to
about $2.2 trillion. The interest income from this is remitted back to
the Treasury. (In 2017 it was $80 billion, more than any other private
company.) The Treasury pays the Fed, and the Fed gives the money back to
the Treasury. It is as if the Treasury paid nothing at all. In effect,
the interest rate on these bonds is zero. If you issue a bond, and never
pay either interest or principal (the bonds are typically rolled into
new bonds upon maturity), then it is as if you made them disappear. The
Treasury has, over the course of decades, managed to make $2.2 trillion
of bonds disappear. This is functionally similar to if the Treasury
simply ordered up $2.2 trillion in the form of $100 bills on forklift
pallets, and used them pay bills.

{but Ellen says that the Fed deducts 6% for its 'expenses'; 6% of what?
Without an audit, how much the Fed skims off is unclear}

So we see that "printing press finance" has been going on for a long
time, and at a relatively large scale. The reason that this works is
because the Treasury doesn't get to decide how many bonds the Federal
Reserve buys, or, in crude terms, how much "money is printed." Since the
answer might be "zero"--and in recent months it has actually been
negative: the Federal Reserve has been reducing its government bond
holdings, in effect "unprinting" the money--the Treasury has to act as
if it did not have this advantage. The Treasury never gets to say: "we
want to fund this program so print us some money," even though
effectively the money is often printed and the program funded.

The Federal Reserve decides. So, how does it decide? Mostly it is a big
muddle, but the basic principle is this: the Federal Reserve is tasked
to provide the money that the economy "needs" to function. Actually, it
is the money that economic participants "demand." That money in your
wallet has to come from somewhere. If "supply" matches "demand," then
the value of the currency will maintain stability. "Demand" tends to
grow with a growing economy, so "supply" will also grow alongside--in
other words, money is "printed," with the government the eventual
beneficiary. Other factors can affect demand: since 2008, banks have
apparently wished to hold much more of their assets in the form of "bank
reserves," which basically means a cash account at the Federal Reserve.
The crisis of 2008 has made them much more wary about keeping enough
cash on hand to make payments. This is actually a return to
old-fashioned banking principles, after a long time in the 1970-2008
period when banks attempted to maximize profitability by holding as
little idle cash as possible.

Because we trust the Federal Reserve not to make too many mistakes
(rightly or wrongly), we are thus willing to hold ("demand") a large
amount of dollars. Because we "demand" this, the Federal Reserve can
thus "supply" a large amount of dollars, and the dollar does not lose value.

But this trust can be quickly undermined if the authority over how much
money is "printed" ("supplied") transfers from the Federal Reserve to
the Treasury; and the rationale for how much money is "printed" is no
longer the maintenance of a stable currency, but the Treasury's
deficit-financing needs. The Treasury would, of course, claim that
"maintenance of a stable currency" is very worthwhile, and that it
intends to do exactly that, just as recent MMT fans say that
money-printing is ultimately constrained by "inflation." But what the
MMT fans are talking about is what the Federal Reserve is already doing
-- without MMT. The only reason for the Treasury (per MMT) to use the
printing press expressly for financing is because it needs to or wants
to; and because it needs to or wants to, it will ignore inflationary
concerns, even if it says that it will not, because that is the only
reason to embark on this change in the first place.

The funny thing is, if the Treasury did take over the money-printing
role expressly for financing purposes, the value of the dollar would
probably fall and "inflation" would erupt, even if the Treasury didn't
print any money at all! (In other words, supply was unchanged.) This is
because a currency that is now being managed on those principles is,
obviously, an unreliable currency; and because nobody wants to hold and
unreliable currency, demand for the currency would fall. This is
sometimes called a failure of "confidence" or "faith"; somewhat
confusing terms to describe a change in the rational expectations of
future behavior. If you have falling demand and unchanging supply, you
get a fall in market value, which produces "inflation."

For example: in 1933 president Franklin Roosevelt said that he would
devalue the dollar, possibly printing money to do so. What happened is
that the dollar fell in value, without any money actually being printed
(money supply was unchanged) because who would want to hold a currency
that was going to be devalued?

There have been several instances in which the Treasury really did take
over the money-printing role. Each time was inflationary -- the Civil
War, World War I and World War II. The Treasury put a little pressure on
the Federal Reserve in the late 1960s to help fund deficits by stepping
up its bond-buying; this helped contribute to the breakdown of the
Bretton Woods system in 1971 and the following decade of "stagflation."

In practice, something like "MMT" has reached a new level of
sophistication these days, exemplified by Japan. This really is modern;
but I haven't seen any "MMT" theorist who can explain it. The Bank of
Japan now holds government bonds amounting to more than 100% of GDP. In
other words, the government has managed to finance itself "with the
printing press" to the amount of about 100% of GDP, with no inflationary
consequences. This has been possible due to the very large size of
Japans' banks, and the ability of the regulators to "persuade" these
banks to hold a very large portion of their assets in the form of BOJ
deposits. This in turn has been accomplished by forcing government bond
yields to zero; a level at which a bank would rather hold BOJ deposits
than government bonds. Since the "opportunity cost" of cash is zero,
demand for cash can be very large. It wouldn't work in the U.S., at
least at the same scale, because banks are a much smaller portion of the
economy.

It is hard to imagine how this sort of thing can end well. But, it has
been going on for some time now -- long enough to tempt the MMT fans to
indulge in their money-for-nothing fantasies.

When a government keeps its affairs in order, and acts as if it does not
need to rely on money-printing to get by, it actually gets a small
advantage from the money-creation process. But when a government
declares, via various silly justifications, that it intends to use the
printing press to finance itself, it typically finds that it cannot
without a currency breakdown. Currency traders know that he who panics
first panics best; to even talk about this sort of thing is dangerous.

(5) How Bankers Became the Top Exploiters of the Economy, by Michael Hudson

https://www.counterpunch.org/2017/03/15/how-bankers-became-the-top-exploiters-of-the-economy/

MARCH 15, 2017

How Bankers Became the Top Exploiters of the Economy

by MICHAEL HUDSON

The Next System Project’s Adam Simpson sat down with renowned economist
and economic historian Michael Hudson to discuss economic deceptions old
and new in the interview below. Michael Hudson is Distinguished Research
Professor of Economics at the University of Missouri, Kansas City and a
prolific writer about the global economy and predatory financial
practices. Among his latest books are Killing the Host: How Financial
Parasites and Debt Bondage to Ensure the Global Economy and its
follow-up J is for Junk Economics.

The transcript below has been edited for clarity.

Adam Simpson: So, Michael, I’m really glad to talk to you today. First,
I want to get to know a bit more about you before we dive into your new
book. I’ve heard you referred to as a heterodox economist. What does
that mean? How did you become heterodox?

Michael Hudson: "Heterodox" is a recent term coined mainly by the
University of Missouri at Kansas City where I’m a professor along with
Randall Wray and Stephanie Kelton and other members of the Modern
Monetary Theory (MMT) school of thought. The term simply means not
mainstream. We’re basically classical economists. We do what classical
economics used to do, which is to distinguish between earned and
unearned income. and between productive versus unproductive labor. And
we see that banks create credit – which governments could create just as
easily, along more socially and economically productive lines. We see
budget deficits as providing the economy with money to fuel growth.
That’s why Stephanie calls us "Deficit Owls" instead of the Republican
and Clintonite Deficit Hawks who prefer commercial banks to provide the
credit that the economy needs.

We look at how the economy, goods and services and labor, exists within
the context of wealth and assets and debt. And this is how people looked
at the economy before there was anti-classical reaction in the 1890’s.
We look at how land ownership, banks and credit shape the framework
within which the economy operates – at interest.

So we’re classical economists. Hyman Minsky was the main modern monetary
theorist. Heterodox meant that he got his ideas largely from Marx. You
can say classical political economy reached its logical conclusion with
Marx. Capital was the last great work of classical economics, and showed
where its logic was leading. Marx showed that capitalism itself was
revolutionary. Capitalism was a continually self-transforming system.
And so we’re looking at how the economy changes, not how it might settle
at equilibrium without political change. It evolves, in what Marx called
the laws of motion. So we’re putting the political back into what used
to be political economy – before the "political" was stripped out a
century ago and it moved toward today’s more tunnel-visioned
"economics." [...]

(6) Deficit Owls: MMT Explained

https://www.washingtonpost.com/blogs/wonkblog/post/you-know-the-deficit-hawks-now-meet-the-deficit-owls/2011/08/25/gIQAHsoONR_blog.html

You know the deficit hawks. Now meet the deficit owls.

By Dylan Matthews

February 19, 2012

About 11 years ago, James K. "Jamie" Galbraith recalls, hundreds of his
fellow economists laughed at him. To his face. In the White House.

What’s more, his father, John Kenneth Galbraith, was the most famous
economist of his generation: a Harvard professor, best-selling author
and confidante of the Kennedy family. Jamie has embraced a role as
protector and promoter of the elder’s legacy.

But if Galbraith stood out on the panel, it was because of his offbeat
message. Most viewed the budget surplus as opportune: a chance to pay
down the national debt, cut taxes, shore up entitlements or pursue new
spending programs.

He viewed it as a danger: If the government is running a surplus, money
is accruing in government coffers rather than in the hands of ordinary
people and companies, where it might be spent and help the economy.

"I said economists used to understand that the running of a surplus was
fiscal (economic) drag," he said, "and with 250 economists, they giggled."

Galbraith says the 2001 recession — which followed a few years of
surpluses — proves he was right.

A decade later, as the soaring federal budget deficit has sharpened
political and economic differences in Washington, Galbraith is mostly
concerned about the dangers of keeping it too small. He’s a key figure
in a core debate among economists about whether deficits are important
and in what way. The issue has divided the nation’s best-known
economists and inspired pockets of passion in academic circles. Any
embrace by policymakers of one view or the other could affect everything
from employment to the price of goods to the tax code.

In contrast to "deficit hawks" who want spending cuts and revenue
increases now in order to temper the deficit, and "deficit doves" who
want to hold off on austerity measures until the economy has recovered,
Galbraith is a deficit owl. Owls certainly don’t think we need to
balance the budget soon. Indeed, they don’t concede we need to balance
it at all. Owls see government spending that leads to deficits as
integral to economic growth, even in good times.

The term isn’t Galbraith’s. It was coined by Stephanie Kelton, a
professor at the University of Missouri at Kansas City, who with
Galbraith is part of a small group of economists who have concluded that
everyone — members of Congress, think tank denizens, the entire
mainstream of the economics profession — has misunderstood how the
government interacts with the economy. If their theory — dubbed "Modern
Monetary Theory" or MMT — is right, then everything we thought we knew
about the budget, taxes and the Federal Reserve is wrong.

Keynesian roots

"Modern Monetary Theory" was coined by Bill Mitchell, an Australian
economist and prominent proponent, but its roots are much older. The
term is a reference to John Maynard Keynes, the founder of modern
macroeconomics. In "A Treatise on Money," Keynes asserted that "all
modern States" have had the ability to decide what is money and what is
not for at least 4,000 years.

This claim, that money is a "creature of the state," is central to the
theory. In a "fiat money" system like the one in place in the United
States, all money is ultimately created by the government, which prints
it and puts it into circulation. Consequently, the thinking goes, the
government can never run out of money. It can always make more.

This doesn’t mean that taxes are unnecessary. Taxes, in fact, are key to
making the whole system work. The need to pay taxes compels people to
use the currency printed by the government. Taxes are also sometimes
necessary to prevent the economy from overheating. If consumer demand
outpaces the supply of available goods, prices will jump, resulting in
inflation (where prices rise even as buying power falls). In this case,
taxes can tamp down spending and keep prices low.

But if the theory is correct, there is no reason the amount of money the
government takes in needs to match up with the amount it spends. Indeed,
its followers call for massive tax cuts and deficit spending during
recessions.

Warren Mosler, a hedge fund manager who lives in Saint Croix in the U.S.
Virgin Islands — in part because of the tax benefits — is one proponent.
He’s perhaps better know for his sports car company and his frequent
gadfly political campaigns (he earned a little less than one percent of
the vote as an independent in Connecticut’s 2010 Senate race). He
supports suspending the payroll tax that finances the Social Security
trust fund and providing an $8 an hour government job to anyone who
wants one to combat the current downturn.

The theory’s followers come mainly from a couple of institutions: the
University of Missouri-Kansas City’s economics department and the Levy
Economics Institute of Bard College, both of which have received money
from Mosler. But the movement is gaining followers quickly, largely
through an explosion of economics blogs. Naked Capitalism, an irreverent
and passionately written blog on finance and economics with nearly a
million monthly readers, features proponents such as Kelton, fellow
Missouri professor L. Randall Wray and Wartberg College professor Scott
Fullwiler. So does New Deal 2.0, a wonky economics blog based at the
liberal Roosevelt Institute think tank.

Their followers have taken to the theory with great enthusiasm and pile
into the comment sections of mainstream economics bloggers when they
take on the theory. Wray’s work has been picked up by Firedoglake, a
major liberal blog, and the New York Times op-ed page. "The crisis
helped, but the thing that did it was the blogosphere," Wray says.
"Because, for one thing, we could get it published. It’s very hard to
publish anything that sounds outside the mainstream in the journals."

Most notably, Galbraith has spread the message everywhere from the Daily
Beast to Congress. He advised lawmakers including then-House Speaker
Nancy Pelosi (D-Calif.) when the financial crisis hit in 2008. Last
summer he consulted with a group of House members on the debt ceiling
negotiations. He was one of the handful of economists consulted by the
Obama administration as it was designing the stimulus package. "I think
Jamie has the most to lose by taking this position," Kelton says. "It
was, I think, a really brave thing to do, because he has such a big
name, and he’s so well-respected."

Wray and others say they, too, have consulted with policymakers, and
there is a definite sense among the group that the theory’s time is now.
"Our Web presence, every few months or so it goes up another notch,"
Fullwiler says.

A divisive theory

The idea that deficit spending can help to bring an economy out of
recession is an old one. It was a key point in Keynes’s "The General
Theory of Employment, Interest and Money." It was the chief rationale
for the 2009 stimulus package, and many self-identified Keynesians, such
as former White House adviser Christina Romer and economist Paul
Krugman, have argued that more is in order. There are, of course,
detractors.

A key split among Keynesians dates to the 1930s. One set of economists,
including the Nobel laureates John Hicks and Paul Samuelson, sought to
incorporate Keynes’s insights into classical economics. Hicks built a
mathematical model summarizing Keynes’s theory, and Samuelson sought to
wed Keynesian macroeconomics (which studies the behavior of the economy
as a whole) to conventional microeconomics (which looks at how people
and businesses allocate resources). This set the stage for most
macroeconomic theory since. Even today, "New Keynesians," such as Greg
Mankiw, a Harvard economist who served as chief economic adviser to
George W. Bush, and Romer’s husband, David, are seeking ways to ground
Keynesian macroeconomic theory in the micro-level behavior of businesses
and consumers.

Modern Monetary theorists hold fast to the tradition established by
"post-Keynesians" such as Joan Robinson, Nicholas Kaldor and Hyman
Minsky, who insisted Samuelson’s theory failed because its models acted
as if, in Galbraith’s words, "the banking sector doesn’t exist."

The connections are personal as well. Wray’s doctoral dissertation was
advised by Minsky, and Galbraith studied with Robinson and Kaldor at the
University of Cambridge. He argues that the theory is part of an
"alternative tradition, which runs through Keynes and my father and Minsky."

And while Modern Monetary Theory’s proponents take Keynes as their
starting point and advocate aggressive deficit spending during
recessions, they’re not that type of Keynesians. Even mainstream
economists who argue for more deficit spending are reluctant to accept
the central tenets of Modern Monetary Theory. Take Krugman, who
regularly engages economists across the spectrum in spirited debate. He
has argued that pursuing large budget deficits during boom times can
lead to hyperinflation. Mankiw concedes the theory’s point that the
government can never run out of money but doesn’t think this means what
its proponents think it does.

Technically it’s true, he says, that the government could print streams
of money and never default. The risk is that it could trigger a very
high rate of inflation. This would "bankrupt much of the banking
system," he says. "Default, painful as it would be, might be a better
option."

Mankiw’s critique goes to the heart of the debate about Modern Monetary
Theory — and about how, when and even whether to eliminate our current
deficits.

When the government deficit spends, it issues bonds to be bought on the
open market. If its debt load grows too large, mainstream economists
say, bond purchasers will demand higher interest rates, and the
government will have to pay more in interest payments, which in turn
adds to the debt load.

To get out of this cycle, the Fed — which manages the nation’s money
supply and credit and sits at the center of its financial system — could
buy the bonds at lower rates, bypassing the private market. The Fed is
prohibited from buying bonds directly from the Treasury — a legal rather
than economic constraint. But the Fed would buy the bonds with money it
prints, which means the money supply would increase. With it, inflation
would rise, and so would the prospects of hyperinflation.

"You can’t just fund any level of government that you want from spending
money, because you’ll get runaway inflation and eventually the rate of
inflation will increase faster than the rate that you’re extracting
resources from the economy," says Karl Smith, an economist at the
University of North Carolina. "This is the classic hyperinflation
problem that happened in Zimbabwe and the Weimar Republic."

The risk of inflation keeps most mainstream economists and policymakers
on the same page about deficits: In the medium term — all else being
equal — it’s critical to keep them small.

Economists in the Modern Monetary camp concede that deficits can
sometimes lead to inflation. But they argue that this can only happen
when the economy is at full employment — when all who are able and
willing to work are employed and no resources (labor, capital, etc.) are
idle. No modern example of this problem comes to mind, Galbraith says.

"The last time we had what could be plausibly called a demand-driven,
serious inflation problem was probably World War I," Galbraith says.
"It’s been a long time since this hypothetical possibility has actually
been observed, and it was observed only under conditions that will never
be repeated."

Critics’ rebuttals

According to Galbraith and the others, monetary policy as currently
conducted by the Fed does not work. The Fed generally uses one of two
levers to increase growth and employment. It can lower short-term
interest rates by buying up short-term government bonds on the open
market. If short-term rates are near-zero, as they are now, the Fed can
try "quantitative easing," or large-scale purchases of assets (such as
bonds) from the private sector including longer-term Treasuries using
money the Fed creates. This is what the Fed did in 2008 and 2010, in an
emergency effort to boost the economy.

According to Modern Monetary Theory, the Fed buying up Treasuries is
just, in Galbraith’s words, a "bookkeeping operation" that does not add
income to American households and thus cannot be inflationary.

"It seemed clear to me that . . . flooding the economy with money by
buying up government bonds . . . is not going to change anybody’s
behavior," Galbraith says. "They would just end up with cash reserves
which would sit idle in the banking system, and that is exactly what in
fact happened."

The theorists just "have no idea how quantitative easing works," says
Joe Gagnon, an economist at the Peterson Institute who managed the Fed’s
first round of quantitative easing in 2008. Even if the money the Fed
uses to buy bonds stays in bank reserves — or money that’s held in
reserve — increasing those reserves should still lead to increased
borrowing and ripple throughout the system.

Mainstreamers are equally baffled by another claim of the theory: that
budget surpluses in and of themselves are bad for the economy. According
to Modern Monetary Theory, when the government runs a surplus, it is a
net saver, which means that the private sector is a net debtor. The
government is, in effect, "taking money from private pockets and forcing
them to make that up by going deeper into debt," Galbraith says,
reiterating his White House comments.

The mainstream crowd finds this argument as funny now as they did when
Galbraith presented it to Clinton. "I have two words to answer that:
Australia and Canada," Gagnon says. "If Jamie Galbraith would look them
up, he would see immediate proof he’s wrong. Australia has had a
long-running budget surplus now, they actually have no national debt
whatsoever, they’re the fastest-growing, healthiest economy in the
world." Canada, similarly, has run consistent surpluses while achieving
high growth.

To even care about such questions, Galbraith says, marked him as "a
considerable eccentric" when he arrived from Cambridge to get a PhD at
Yale, which had a more conventionally Keynesian economics department.
Galbraith credits Samuelson and his allies’ success to a "mass-marketing
of economic doctrine, of which Samuelson was the great master . . .
which is something the Cambridge school could never have done."

The mainstream economists are loath to give up any ground, even in cases
such as the so-called "Cambridge capital controversy" of the 1960s.
Samuelson debated post-Keynesians and, by his own admission, lost. Such
matters have been, in Galbraith’s words, "airbrushed, like Trotsky" from
the history of economics.

But MMT’s own relationship to real-world cases can be a little
hit-or-miss. Mosler, the hedge fund manager, credits his role in the
movement to an epiphany in the early 1990s, when markets grew concerned
that Italy was about to default. Mosler figured that Italy, which at
that time still issued its own currency, the lira, could not default as
long as it had the ability to print more liras. He bet accordingly, and
when Italy did not default, he made a tidy sum. "There was an enormous
amount of money to be made if you could bring yourself around to the
idea that they couldn’t default," he says.

Later that decade, he learned there was also a lot of money to be lost.
When similar fears surfaced about Russia, he again bet against default.
Despite having its own currency, Russia defaulted, forcing Mosler to
liquidate one of his funds and wiping out much of his $850 million in
investments in the country. Mosler credits this to Russia’s fixed
exchange rate policy of the time and insists that if it had only acted
like a country with its own currency, default could have been avoided.

But the case could also prove what critics insist: Default, while
technically always avoidable, is sometimes the best available option.

(7) Examples of Financial Transactions - approved by Geoffrey Gardiner

I received tuition from Geoffrey Gardiner, formerly head of overseas
accounts at Barclays Bank in the City of London. Here is a discussion
between us, from 2010. I have not heard from Geoffrey for many years; he
was already old then. I'm sure he won't mind me forwarding this email
discussion to you.

examples of financial transactions

    Peter Myers 11 March 2010 14:00
To: G W Gardiner

Geoffrey,

I have drawn up a list of examples of financial transactions (below).

Can you verify that I have it right?

I'm asking you to correct my homework.

I'm sure you'll agree that my knowledge is increasing.

Peter

Mr P writes a check (cheque) for $Q on bank A to pay Mrs L who deposits
it into bank B:
Mr P.'s balance at bank A falls by $Q.
Mrs L's balance at bank B rises by $Q.
Bank A's balance at the Central Bank falls by $Q.
Bank B's balance at the Central Bank increases by $Q. This process is
called "clearing a check".

A company pays Tax to the Federal Government:
The company has an account at Bank C. It writes a cheque (check) on Bank
C for $T, payable to the Federal Government.
The company's balance at Bank C is reduced by $T.
Bank C's balance at the Central Bank is reduced by $T.
The Federal Government's balance at the Central Bank is increased by $T.

The Federal Government makes a payment of $R to Mr K, who deposits it
into Bank P:
Mr K's balance at Bank P increases by $R.
Bank P's balance at the Central Bank increases by $R.
The Federal Government's balance at the Central Bank falls by $R.

The Federal Government covers its Budget Deficit by issuing Treasury
Bonds for $G; they are bought by bank P, which wants to lower its
balance at the Central Bank (it earns interest on bonds, but not on
its balance at the Central Bank):
Bank P's balance at the Central Bank falls by $G.
The Federal Government's balance at the Central Bank increases by $G.

The Federal Government runs a Surplus of $D (taxes exceed expenditure),
and redeems Government Bonds owned by Bank P for $D:
Bank P's balance at the Central Bank increases by $D.
The Federal Government's balance at the Central Bank falls by $G.

Peter

examples of financial transactions

G W Gardiner 12 March 2010 20:33
To: Peter Myers

Peter,

Top marks. I wish academic economists grasped the accounting as well as
you have.

Geoff