Monday, November 7, 2022

Economics In Practice

 Not Buying It,

  I keep thinking that the world needs a new theoretical economic framework, but maybe I'm wrong. What I see going on now with global central banks, does not appear to be based upon neoliberal economic theory, as taught in universities. Theoretical excuses are provided, and are often pretty lame, while it is apparent that the real levers being pulled are serving politically powerful interests, and are weaponized, even as the productivity of the real economy is in decline.
  Numerous bottlenecks have been put in place in the fossil fuel supply chains, which nourish industrial-economy. We have seen the self-starving sanctions "against Russia", imposed upon Europe, and the destruction of the Nordstream pipelines by NATO, as the NATO naval practice-maneuvers against submarine warfare were coming to a close after 3 months. 
  Oil refineries in the US have been defunded, excluded from consideration as an investment, based on government policy. Now they are a bottleneck. They have been run so intensively for the past year in the US that there are accidents, fires and explosions. Maintenance and repair are costs that are reportedly being minimized.
  In any economy, supply bottlenecks provide points of control to throttle the economy down. They also create points where prices can be massively raised, and everything still looks normal. It seems that we are seeing the reduction of western industrial economy by the employment of these choke points, perhaps a little ahead of the decline in available oil. The choke points can become the focus, rather than the decline of available oil. The economic downturn does not "demand" as much oil.
  All of this is reactionary and manipulative, but fails to address the development of an efficient political-economy to provide for the human needs of societies, as the world proceeds into an epoch of less cheap oil. Perhaps the plan is to phase-out the populations who are accustomed to having plenty of energy, resources, products and services. There is a rationale to that. Maybe we're no good at using less, and it's too hard to teach somebody that.
  The one thing which appears to be the basis of the workings of the economic control levers, is that the people working the levers get to keep working the levers. They are so good at it by now. 
  I can't help but wonder if some simple things that I do, like vegetable gardening, riding a bike, sharing discoveries and ideas might contribute to a new synthesis. A new synthesis might not look too different from the norm of a few generations ago, or life in other countries we might have visited in our travels.

Pepe Escobar, Berlin goes to Beijing: the real deal
​  ​Solid German business sources completely contradict the “message” delivered by the German Council on Foreign Relations on the trip to China.
​  ​According to these sources, the Scholz caravan went to Beijing to essentially lay down the preparatory steps for working out a peace deal with Russia, with China as privileged messenger.
​  ​This is – literally – as explosive, geopolitically and geoeconomically, as it gets. As I pointed out in one of my previous columns, Berlin and Moscow were keeping a secret communication back channel – via business interlocutors – right to the minute the usual suspects, in desperation, decided to blow up the Nord Streams.
​  ​Cue to the now notorious SMS from Liz Truss’s iPhone to Little Tony Blinken, one minute after the explosions: “It’s done.”
​  ​There’s more: the Scholz caravan may be trying to start a long and convoluted process of eventually replacing the US with China as a key ally. One should never forget that the top BRI trade/connectivity terminal in the EU is Germany (the Ruhr valley).
​  ​According to one of the sources, “if this effort is successful, then Germany, China and Russia can ally themselves together and drive the US out of Europe.”
​  ​Another source provided the cherry on the cake: “Olaf Scholz is being accompanied on this trip by German industrialists who actually control Germany and are not going to sit back watching themselves being destroyed.”

A Michael Hudson interview from this summer is published now, pertaining to his Destiny Of Civilization book
  Hudson points out that in the late 1800s Classical Economics sought to promote a prosperous society by reducing parasitic rent collection, and by  providing at low cost infrastructure that served all aspects of society, like roads, water, sewers, electricity, communications , schooling, insurance, pensions and medical care.
This "Fordist" model of capitalism was advancing until the first world-war placed all involved nations into excessive debt, which removed their initiative, especially Germany, which had led the way under Bismarck. The UK was also seriously impaired. Rentier-interests in banking and finance regained an upper hand.
  In the second world war, some of this was sorted out, and state-socialism had a resurgence until the Reagan/thatcher/Blair epoch, where common properties were sold off to private entities, which purchased them with debt-bearing loans. This required double-rent payments, usually at the expense of reliability and modernization of infrastructure.
  This rentier-based neoliberalism is a modern rent-collecting neo-feudalism. As it spreads rent collection globally, impoverishing workers everywhere, and degrading public infrastructure everywhere, it erodes the constructive forces of industrialism, while preventing the address of the consequences of industrialization, like pollution and industrial disease.
  Hudson sees the modern state in the west as having shifted from protecting borrowers, through bankruptcy proceedings, to protecting debt-holders, as in the case of student-loans and national debts which can never be discharged, and create a form of permanent slavery or peonage.
  Hudson points out that most of this is concentrated in the $US financial system, and is coming to a crisis point this fall (i.e. now). Much of the $US debts are within the western countries, but they are also systemically important in debtor countries like Argentina, though they may be owed to local financial elites in those places.
  Hudson discusses the Asian tradition, and near-eastern tradition of debt cancellation at the beginning of the reign of a new monarch, to stabilize society. He discusses the wars fought over this and their outcomes. He discusses that China sees debt in this light, and the benefits to society of letting resources go into new endeavors, rather than stagnating in paying-off the debts of failed projects.
  Hudson does not see a ready path for the west to re-invigorate productive economy, since both wings of the American uniparty are captured by rentier interests, which continue to bleed the productive economy, and dictate national and international policy positions. He sees this going on for 20 years of separation of global economies into a closed western-bloc, and a broader and more flexible rest-of-the-world.  (One might nurture a glimmer more of hope than that, perhaps?)

So countries like India and China can refine and/or relabel Russian crude and sell it at market prices, like they have been doing? 
It's a point of control for flows and rent-extraction, an economic choke-valve.
Russian Oil Price Cap Will Not Apply To Resold Cargoes

Mike Whitney says the world is now in WW-3 as the west ($US-Empire) fights to prevent the rise of China to global dominance.
​  ​This is why we are experiencing the redivision of the world into warring blocs. This is why we are seeing the roll back of 30 years of Globalization and massive suppy​-​line disruption. And this is why Europe has been thrust headlong into frigid darkness and forced deindustrialisation. All of these suicidal policies were concocted for one purpose and one purpose alone, to maintain America’s exalted spot in the global system. That is why all of humanity is presently embroiled in a Third World War; a war that is designed to prevent China from becoming the world’s biggest economy; a war that is designed to preserve US global primacy.

​  ​Russia’s foreign ministry said it fears that the world’s five declared nuclear powers are “on the brink of a direct armed conflict,” with Moscow warning of a catastrophic fallout and insisting that avoiding a clash is its top priority.

​But who will oversee and regulate the W.H.O.?   Thanks Red.
​  ​Earlier in 2022, the proposal for a WHO international Pandemic Treaty has raised alarms over the organization’s usurping the individual sovereignty of nations. The Treaty, which is scheduled to be finalized by May 2024, is largely a result of the WHO’s numerous inconsistencies, inadequacies and failures during the Covid-19 pandemic. If we call a spade a spade, the WHO has proven itself inept in handling any pandemic. Therefore, for the hardened globalists such Bill Gates and the leaders of the US and EU who wholly support the WHO, it makes perfect sense that the bumbling bureaucracy should be given more authority and control over global health.
​  ​The Pandemic Treaty would authorize the WHO complete control over both governments’ and civil societies’ internal preparedness over actions and policies to tackle future pandemics.

​2.3 million fake-American-jobs added since March in an election year? Huh? Why? Has this ever happened before?

​The stage is now set to remove Joe Biden for incompetence and let the blame go with him. 
Who might be his designated replacement, and when?​ That seems flexible.

Ukraine Starlink Terminals Reportedly Go Dark Over Funding Issues
However, one senior defense official told CNN that the Pentagon is actively negotiating with SpaceX to get the much-needed resources to keep Starlink operational in Ukraine.

Iran says it did sell a limited number of military drones to Russia, but last year, before there was a war in Ukraine.

  This is an excellent explanation of a critical process in weather-patterns on our living planet, the Biotic Pump, whereby the transpiration of forests creates an updraft, which drops as condensed rain. The condensation of vapor into falling water droplets reduces the local air pressure, and thereby draws-in moisture-laden air from nearby oceans or seas, which is at a higher pressure.
  I am now much better informed and more clearly understand the biotic-pump process, which is actually the main driver of inland rainfall patterns on continents.
The forest must be mature and varied to work at its best to draw moist air currents reliably from the oceans and seas.
Grasslands cannot be competent in this task.
Immature commercial forests can be erratically competent in this task.

  This description of a current weather manipulation over North America seems to be a synthetic mimic of the biotic pump. In this manipulation moisture in the air at night is chemically caused to precipitate, removing water vapor, which drops, and lowering the pressure, which draws moist air in from the coast. The clearing of the night skies causes earth to cool by radiating warmth out into the cold of space at night. Dane Wiggington says this is being done right now over the American northwest, and northern midwest. It's an interesting explanation, and makes the weather worth watching, to see if his assertion is supported or not.

  Coffee is good for you. Think of it as a vegetable. 
Dripped through a paper filter remains slightly better than other preparation options. 
2-3 cups every day seems to be the sweet-spot for benefits, but it's a fairly wide sweet spot. Thanks Charles.

Vegetable Soup Drinker (pictured with garlic and cabbage winter garden rows starting to come up)


  1. Rosnay viewed economics as the study of energy surrogates, ultimately solar-derived, in his book, Macroscope, translated from French, out of print but available on the Internet. He got the idea from an American ecologist named Odum.

    I enjoy reading your digests.

    1. I read that thre were 2 American ecological brothers named Odum.,is%20named%20in%20his%20honor.
      Photosynthetic ceiling is also a useful construct. So much sunlight falls in an area in a year and it can only do so much photosynthesis (Amazon rain-forest) or photovoltaic electrical generation. There are a lot of calculable outer-limits in our world.