The Western Empires: rises, falls, and now what?

The US was the dominant world power, but has been failing, compounded by desperate plans for hegemony and appalling errors and lies over a long period. Will President Trump overpower the Deep State and restore the US in a unipolar world, perhaps in conjunction with President Putin and Chairman Xi?

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President Putin: US Middle Class Voted Trump Because Globalization Is Killing Them

President Putin, US Middle Class Voted Trump Because Globalization Is Killing Them  Recent interview with the Financial Times, 6 September 2019

Stating the obvious can be very refreshing

In a recent interview with Lionel Barber, editor of the Financial Times, Russian President Vladimir Putin had some very interesting and accurate comments about the current political situation in the United States, particularly as it relates to America’s middle class.  Here are some of the key comments:

“Russia has been accused, and, strange as it may seem, it is still being accused, despite the Mueller report [on the investigation into allegations of Russian meddling in the 2016 presidential campaign], of mythical interference in the US election. What happened in reality? Mr Trump looked into his opponents’ attitude to him and saw changes in American society, and he took advantage of this.

You and I are talking ahead of the G20 meeting. It is an economic forum, and it will undoubtedly have discussions on globalisation, global trade and international finance.

The middle class in the US has not benefited from globalisation?.?.?.?The Trump team sensed this very keenly and clearly and they used this in the election campaign.  Has anyone ever given a thought to who actually benefited and what benefits were gained from globalisation, the development of which we have been observing and participating in over the past 25 years, since the 1990s?

China has made use of globalisation, in particular, to pull millions of Chinese out of poverty.

What happened in the US, and how did it happen? In the US, the leading US companies — the companies, their managers, shareholders and partners — made use of these benefits. The middle class hardly benefited from globalisation. The take-home pay in the US (we are likely to talk later about real incomes in Russia, which need special attention from the government). The middle class in the US has not benefited from globalisation; it was left out when this pie was divided up.

The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump’s victory, rather than in any alleged foreign interference. This is what we should be talking about here, including when it comes to the global economy.” (my bolds)

Mr. Putin clearly lays the defeat of Hillary Clinton in 2016 at the feet of disillusioned American middle class voters.  Let’s look at some of the reasons for this disillusionment:

1.) Stagnant wages:  Here is a graphic showing what has happened to median real wages for full-time workers aged 16 and over since 1979 (setting 1979 wages at 100).

Over the four decade period since the beginning of 1979, real wages for American full-time workers has only increased by 6.6 percent.  If that isn’t wage stagnation, I don’t know what is.

Here is a graphic showing what has happened to the median weekly nominal earnings for American full-time workers aged 16 and over since 1979:

Over the four decade period, median nominal wages for the second quartile of American workers have increased by 293 percent.

Here is a graphic showing what has happened to nominal corporate profits since 1979:

Over the four decade period, profits for Corporate America have increased by 696 percent or 2.4 times that of its wage earners over the same period.

2.) CEO to worker wage disparity:  Here is a table from the Institute for Policy Studies showing the most egregious examples of CEO-to-worker pay gaps:

Here is a graphic from the Economic Policy Institute showing how the CEO-to-worker compensation ratio has changed since 1965:

CEO compensation has even grown when measured against the top 0.1 percent.

3.) Taxation:  As shown on this graphic, Main Street America is paying a higher and higher share of Washington’s total tax revenue:

…when compared to Corporate America as shown on this graphic, keeping in mind that corporate profits have grown at 2.4 times that of median nominal wages.

4.) Trade balance:  Here is a graphic showing how the United States trade balance has changed since 1992:

Despite these comments made in May 2000 by then President Bill Clinton and former Federal Reserve President Alan Greenspan about the advantages of Permanent Normal Trade Relations (PNTR) with China:

…it is clear that admitting China to the World Trade Organization has had a massive negative impact on America’s manufacturing industry and its accompanying negative impact on wages and salaries for American workers.

While drawing links from economic class to voting patterns is difficult given that education impacts voting rates, it is pretty clear that Vladimir Putin’s observations about American society and the growing sense that middle class America is being left behind is accurate.  It is becoming increasingly clear that globalization benefits the few at the top and leaves behind the vast majority of society who feel that their place in society is under threat.

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Can the American Economy Be Resurrected?

Can the American Economy Be Resurrected  By Paul Craig Roberts, 27 August 2019

“Lenin said that capitalists would sell the Communists the rope to hang them. But as matters turned out, capitalists let China sell them the labour that served to hang American capitalism.” — Michael Hudson

I was surprised to be given credit by readers for Trump ordering American corporations out of China and to bring the jobs back to the American workers that the corporations had abandoned. American economists, financial media, and Washington policymakers had never paid any attention to my analysis of US economic decline in terms of globalism and the offshoring of US jobs and technology, and I thought readers hadn’t either. Many readers tell me that economics is over their heads. My economic articles are the least read on my website.

I was again surprised when foreign media, including Press TV in far distant Iran, immediately contacted me requesting an interview about my influence on the White House. What does it all mean?

First, I will say that it is possible that someone showed Trump my latest column ( https://www.paulcraigroberts.org/2019/08/21/what-globalism-did-was-to-transfer-the-us-economy-to-china/ ), and that the light switched on. But it is also possible that Trump ordering the corporations home is just an escalation in his threats and reflects not his understanding but the impotence of tariffs to correct the lack of good jobs for Americans and the decline in their real incomes.

However, in the event a light went on in the White House, and that Trump might be shown how to proceed in bringing the offshored jobs back to America where they belong, I will address the issue. If nothing else, perhaps at some distant time historians of economic thought will write that only Paul Craig Roberts and Michael Hudson had a clue about the collapse of US economic power.

To recap before we move forward. When the Soviet Union unexpectedly and suddenly collapsed, China and India gave up on socialism and opened their economies to Western capital. The Soviet Union did not collapse because Reagan won the cold war, a goal that Reagan disavowed, but because hardline elements in the Communist Party leadership were concerned that Gorbachev was careless in trusting the Americans and was retreating from the Soviet Empire too cavalierly. To halt the dissolution of the empire that protected Russia from land invasion, the hardline Communists placed President Gorbachev under house arrest. It was this that initiated the collapse that left Yeltsin, a Washington puppet, in charge as Washington dismantled the Soviet Union and proceeded to steal, together with Israel, Russia’s resources.

The conclusion reached by India and China, the countries with the largest populations, was that socialism leads to collapse, but capitalism leads to riches. For the first time the vast under-employed labor resources of the world’s two most populous countries were available for foreign exploitation. The labor could be exploited, that is, paid less than its contribution to output, because an immense over-supply of labor existed in the labor market. The excess supply of labour meant that that a work force could be hired for far less than it contributed to the corporation’s earnings.

Corporate CEOs and directors—and Wall Street—noticed this opportunity to increase profits. The first corporations that rushed into China were disappointed, and the word went out that the opportunity wasn’t as good as it looked. But China worked to make offshored production a lucrative adventure, and manufacturing jobs left the US by the droves. The consequence was that the US Middle Class shrunk, and with it the tax base of states and cities. America ceased to prosper, but the economic hurt was covered up with fake inflation, employment, and GDP growth reports, and Federal Reserve printing of massive amounts of money that propped up the prices of financial assets and real estate.

When the hurt became harder to hide, China was blamed for hurting American workers by exporting too much to America. The people blaming China did not bother to look at the percentage of imports from China that consisted of Apple computers and iPhones, Nike shoes, Levi Strauss jeans, etc. The offshored production of US firms constitutes a large percentage of imports. Goods and services produced by US firms offshore count as imports when they are brought back to the US to sell.

In other words the “Chinese import problem” was in fact the offshored production of US firms brought back to sell to Americans who no longer were involved in the production of the goods and services and, therefore, did not have any income from the production of what they purchased. In contrast, the offshoring corporate shareholders were rolling in money.

India benefited from receiving US IT and software engineering jobs, which could be performed anywhere and the work product sent over the Internet. Indian education and English language skills made it easy for US tech firms to use work visas to bypass US university graduates.

What resulted over the last quarter century was the dismantling of the supply chains and labor force that supported American manufacturing and industry. The once booming factories and industrial sites are closed and run down or converted into condos or apartments. If Trump can bring the US corporations home, where do they go?

The offshoring era wasn’t a six-month economic recession. It was years when skilled and experienced labor aged and died, and no new entrants learned the skills and work discipline. Today China is a fully developed manufacturing and industrial economy. The United States is not.

For the US corporations to come back home, they have to leave a developed economy in China for a semi-developed or undeveloped one in the US. If they are compelled to do this all at once, they will lose their production in China before they can recreate the plant and equipment, work force, supply chains, and transportation systems essential to renew the US as a manufacturing and industrial power. If you look at the payroll jobs reports, it has been many years since the US created manufacturing and industrial jobs.

A quarter century of capitalist flight from the American work force has left the United States similar to India a half century ago, a country whose jobs consist mainly of lowly paid domestic service jobs. The absence of liveable jobs is why so many Americans aged 24-34 cannot live an independent existence and live at home with parents or grandparents. It is why university graduates cannot repay their student loans and have been turned into debt slaves.

In order to bring American corporations home from China, this is what Trump has to do. The transition has to be gradual. The corporations can only phase out their offshored production in China as they can recreate the necessary conditions for producing in the US. The process is, in effect, like bringing development to an undeveloped economy.

Trump, that is, the US government, will have to compensate the corporations for the enormous increase in their labor (and regulatory, liability, etc.) costs associated with again producing for US markets with US labor by changing the way the corporations’ income is taxed. Companies that produce for their domestic market with domestic labor would have a low tax rate. Companies that produce abroad with foreign labor for their US market would have a high tax rate. The difference in the tax rates can be calculated to offset the labor cost differential. Companies that produce abroad for sale abroad would not be affected.

If Trump orders US corporations out of China before they can reconstruct the conditions for manufacturing and industry in the US, the firms will be without sales and revenues and fail.

The question is raised whether Trump can order US firms to leave China and return home. There are two reasons Trump’s order might be simply rhetoric. One is that the corporations are content with their existing profits that flow from low cost labor and have no intention of losing the cost savings. US global corporations have the wealth to interfere in US elections and elections in every country in which they have a presence. If Trump goes against the global corporations, he will not receive their campaign funds. His opponent will instead.

Trump can make the argument that the offshoring deal only worked for the corporations, not for the American people. “Free market” economists gave assurances that better jobs would take the place of the manufacturing jobs moved offshore and that offshore production would pay back to the US consumer in lower prices more than the loss of wages from the offshored jobs. This was not the case. Have any of you experienced lower prices of Nike shoes, Levi jeans, Apple computers and iPhones? The corporations did not deliver on the free market promise. They lowered their costs but kept the prices up. Not a single one of the better jobs materialized. Trump will need these arguments to put the corporations on the defensive.

The second reason is that Trump is alleged not to have the power to order US corporations to leave China and to return to their American work force, whatever is left of it. At one time this was probably the case. In 1952 President Truman nationalized the the American steel industry in order to prevent a strike that would have stopped steel production during the Korean War. The Supreme Court ruled against Truman. But today after the extraordinary accumulation of powers in the presidency from the Clinton, George W. Bush, and Obama regimes, and the powers given by Congress to the executive branch to fight “the war on terror,” the president today can rule by executive order.

Trump has cited the 1977 International Emergency Economic Powers Act as law empowering him to order US firms home from China. He has many additional powers. A president who has the power to detain in violation of habeas corpus US citizens indefinitely without evidence presented to a court, and who can order the execution of US citizens on suspicion alone without due process of law, can order whatever he wants.

Based on the powers created by Republicans during the George W. Bush Regime and Democrats during the Obama Regime, President Trump has the power to arrest CEOs and boards of directors that have offshored production on the grounds that they are conspiring with China to steal American jobs and to drive the United States down into the ranks of Third World Countries. A far better case could be made for this than for the absurd Russiagate story that was used to stop Trump from normalizing relations with Russia.

To insure that he has the deep state’s support, all Trump has to do is to remind the US military/security complex that the United States cannot continue to produce the weapon systems necessary to remain as the world’s hegemon unless it can reestablish its manufacturing and industrial capability. Andrei Martyanov in his new book, The Real Revolution in Military Affairs ( https://www.claritypress.com/product/the-real-revolution-in-military-affairs/ ) proves that in decisive weapons systems and force integration, the US is completely outclassed by the Russians, and in some respects by the Chinese. Indeed, it is not clear that the US is capable of defeating Iran in conventional war. The parts of many US weapons systems are produced abroad, which raises the question of supply during times of war.

With the backing of the deep state, Trump can order the corporations home.

For years John Whitehead and I have stressed that Washington is creating a dictatorship. If the deep state is on Trump’s side, he becomes a dictator who can dispense with elections and dispense with his opposition. To be clear, not only can Trump do this, but any future president can. The only question is who will be the target? White people? Offshoring corporations who have ruined America for their own profits? Russia? China? Iran?

No, I haven’t gone off the deep end. I am describing for you the extrapolation of the implications of what we are witnessing and living. An American President elected by Americans dispossessed of their jobs and their livelihoods by greed-driven US corporations and faced with unlimited illegal immigration to drive down the wages of the lowly paid jobs that still exist, an American President who, like Ronald Reagan, declared peaceful intentions toward Russia in order to reduce the likelihood of a nuclear war that would destroy all life on Earth—it is this President who is under attack.

Why is the President who wants to restore American jobs and reduce the threat of nuclear war so vehemently opposed by the American presstitute media, the liberal/progressive/left, the Democratic Party, and millions of otherwise doomed Americans? The only reason such an absurd attack on Trump could take place is that the military/security complex was behind it. Otherwise, a president with all the powers that have been accumulated in the presidency over the past quarter century could have arrested his opponents and held them in indefinite detention. Even President Lincoln could do this to 300 Northern newspaper editors during the War of Northern Aggression. Lincoln even exiled a US Congressman who was critical of Lincoln’s invasion of the Confederacy.

Trump is correct that if the US is to remain a world power, it is necessary to restore manufacturing and industrial capability. If the US is to absorb the massive number of third world peoples it has admitted, it is necessary to restore middle class jobs and the ladders of upward mobility.

The way Trump should proceed is to explain to the corporations that they have inflated their profits in the near term at the cost of destroying consumer purchasing power, and thereby their sales, in the longer term. Americans whose real incomes are not rising do not have the discretionary purchasing power with which to purchase the goods and services that provide revenues to US corporations. Of course, the CEOs and directors are not here in the longer run, and they might not care. But a president can make it a patriotic issue and put them on the spot.

Next Trump needs to work with the corporations to alter the way they are taxed and to recreate the conditions necessary to restore manufacturing in the US. This is not a simple task. It requires cooperation, not conflict.

In the meantime immigration must be put on hold as there is no economy to absorb the immigrants, and Washington needs to stop its wars. The associated costs, debt, and risks are far greater than the benefits. If the US does not reverse its course, it will end up an undeveloped country. This is a far greater threat to us than alleged dictators and alleged terrorist-supporting states in the Middle East.

Here is my 8 minute, 44 second interview with Press TV:
https://www.presstv.com/Detail/2019/08/24/604362/Trump-US-China-trade-war-Paul-Craig-Roberts?fbclid=IwAR01gfNoDWVKxmTftqg_kyu2-O5cLIXEZ5kLrsDrY-xQJCUbtZ8K82PlSyQ

https://www.paulcraigroberts.org/2019/08/26/can-the-american-economy-be-resurrected/

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The Jeffrey Epstein epistemological crisis

The Jeffrey Epstein epistemological crisis  By Joseph P Farrell, 18 August 2019

It’s been a long time since I actually blogged on the weekend, but with all the Epstein news and speculation out there, I simply had to do so, sort of as a “bonus” this week. To be frank, I had thought about doing this blog during the weekdays, but as this website as a more or less international audience, I thought that it would be better to do so as a kind of “extra” rather than fixate on it during the week.  But make no mistake, the Epstein case is significant, precisely because of its international nature. As no other case or individual, Mr. Epstein was connected. In the apt words of one American commentator, he was the most important prisoner in the world.

The case is significant also for an almost philosophical reason, because according to polls in America, the vast majority of people are simply not buying the suicide narrative, and of those who do, the outrage factor is in the red zone. Epstein has crystallized the sense of outrage so much that his case symbolizes a cultural and epistemological crisis that the country is in. Virtually every aspect of the narrative that we’re being told has already been questioned, and virtually every detail can be interpreted from a variety of points of view and in the absence of trust in any narrative put out by the government, speculations and theories abound, many of which make much more sense than the narrative we’re being asked to accept. In short, Epstein has created a kind of epistemological crisis: so deep is the cynicism now that – as I remarked in a private conversation to a friend – if the government investigation initiated by Attorney General Barr were to be completely transparent and tell the absolute truth, no one is going to believe it, and you can put me in that category. The institutions of government have lied to the American people for so long, and so deeply, the double standard application of law has become so apparent, that the cynicism runs so deep no one will believe them any more. That’s an epistemological crisis, a cultural one, and ultimately, a crisis of governance. At this stage, some big name people are going to have to appear in orange jump suits – and soon – or government regardless of who is running it is going to lose what tiny little shards of credibility it has left.

As a case in point to illustrate this “epistemological crisis”, consider the following article:

In the aftermath of Epstein’s suicide-Arkancide-substitution or whatever-it-was-that-happened last weekend, one school of thought quickly expressed itself, namely, that with Epstein officially out of the way, nothing could prevent the government from going in and seizing all sorts of stuff from his various properties and estates. Et voila! That’s what the article here states has happened, and in jig time too. Nothing suspicious about that (heavy cough). On the internet, a certain segment of people have commented that this is all “according to the plan worked out in detail years in advance” and so on, and that all is well. Trust the plan. I view this group with the same jaundiced skepticism as I do the whole Epstein whatever-happened story, and in the same sort of mood as I view the Inter-galactic Blue Chickens Disclosure group. In effect, they’re saying, “See? The FBI is on top of this, and they’re gathering more evidence! The arrests are about to begin!”

Really?!? Why couldn’t they be destroying evidence? After all, this was the same government that: (1) lied about JFK with its magic bullet-lone nut theory; (2) destroyed evidence at Waco, (3) destroyed evidence at Oklahoma City, and (4) repeated the performance on 9/11, and on and on we could go. The FBI, which was clearly politicized and weaponized by one political group against another – think Ohr, Stzrok, McCabe, Comey &c – is all of a sudden trustworthy? My point here is, that one may interpret each detail in a variety of ways, often mutually contradictory.

And that’s what I mean by an epistemological crisis. With so many reasonably articulated theories out there, with so little forthcoming, and with trust at an all time low and skepticism at an all time high, why should one believe anything the government or the media – and let us never forget the Clowns In America’s penetration of that media – says? One famous American tv talk show host, I’ve noticed, has been repeatedly stating in his broadcasts that the FBI is the world’s greatest investigative organization. Why would he be doing this? Because trust and respect are earned, not commanded, and the FBI has lost both. Don’t feed me the line that there are many good people in the organization, for an organization that can be so easily subverted and perverted by a few at the top is not an organization to be trusted. What holds true for a few popes and cardinals in the Middle Ages (or for that matter, more recently) holds true here. Penance requires the perp walks in this instance, and things are so bad that unless people start seeing the orange jump suits, no one is going to believe them any more.

But I had to do this blog for a very different reason, because there is a template in the case that no one – to my knowledge – has noticed. I noticed, but didn’t want to comment on it, lest people think that once again I’ve fallen off the end of the twig, hit my head, and become loonier than the usual high octane speculation. I decided to blog about this template when I received an email, or a comment – I don’t remember which – from someone whose initials I forget, who also noticed that same strange template, a template which may point a finger at whoever may have been behind his suicide, substitution, abduction, or whatever-it-was-that-actually-happened-last-weekend.

And that is, have you noticed the very strange and detailed parallels between the Epstein whatever-happened-last-weekend story, and that of Rudolf Hess? While there’s obviously much to distinguish the two, consider the following strange parallels:

(1) Both men were, at the time of their alleged suicides, the most important prisoners in the world, each having an international significance;

(2) Both men were under heavy guard and being watched constantly, and in maximum security prisons – the “tombs” in Epstein’s case, and Spandau in Hess’s;

(3) Both men allegedly committed suicide under circumstances that made their doing so next to physically impossible;

(4) Both men’s alleged suicides also invoked theories of substitutions and doubles, which theories included close examination of their physical appearance: World War One wounds suffered by Hess and the apparent lack thereof on Spandau Hess, and different nose and ear shapes between Epstein and the pictures of the body being we’ve been shown (always remembering that the mockingbird media might be deliberatelyobfuscating that data precisely in order to create a bit of “Epstein” theater to distract attention);

(5) Both men had strong ties to the British royal family;

(6) Both men stated prior to their deaths that someone would try to kill them;

(7) Both men had an international network of connections and knew “secrets” which if exposed could damage many reputations and operations;

(8) Both men were deeply connected to intelligence agencies;

(9) Both men had some sort of connection to Jewish interests, Epstein being Jewish, and connected to suspected Mossad interests, the Bronfmans, &c., and Hess being connected to the Haushofers (and let’s not forget Menachim Begin’s alleged warning to Carter about Hess);

(10) In the case of both men, governments moved quickly to seize papers and other evidence, and to obfuscate evidence, in Epstein’s case, as was seen above, by quick raids shortly after the whatever-it-was-that-happened last weekend, and in Hess’s case, both the UK and Nazi governments moved quickly to seize compounds and papers after his flight to Scotland, and then again, after his death when significant files in the UK went conveniently missing.

And on and on we could go.

It’s that template, here, in other words, that disturbs, particularly in Epstein’s case, for it suggests that an old playbook was dusted off, and reused.

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About Peter Senior

I'm a very experienced and pragmatic management consultant. I've reviewed and led the restructuring of many organisations - large and small corporations and Government Departments, much of the time as President of the New Zealand Institute of Management Consultants. Before that I was General Manager of a major NZ newspaper; earlier, an analyst for IBM UK. I gained an honours degree in engineering at London University, and studied management at Cambridge University. This wide range of experience has left me frustrated: I continue to see too many examples of really bad management. Sometimes small easily fixed issues; sometimes fundamental faults; and sometimes really tricky problems. Mostly these issues can be fixed using a mixture of common sense, 'management 101' and applying lessons from years of management experience. Unfortunately, all too often, politics, bureaucracy and daft government regulations get in the way; internal factors such as poor culture and out-of-date strategies are often evident. So what's gone wrong, and why, and most importantly, how to fix 'it'? I hope there are like-minded people 'out there' who will share their thoughts enabling 'us' to improve some significant management failures that affect the general public. If you just accept bad management, you don't have the right to complain! If you'd like to share thoughts on any aspects of management, send me an email to petersenior42@gmail.com . My latest project has the interim title 'You’ve been conned. Much of what you were taught and read is largely irrelevant, misleading or plain wrong – this is the REAL story of life: past, present and our possible future.' The working paper so far comprises 105 pages, many listing references and interim conclusions. The main problem is finding sufficient credible evidence, and realising the more Iearn, the more I realise I don't know!
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