Mystery Economic Theater 2015

[Xyzzy]

http://arstechnica.com/business/2015...tax-loopholes/

[ewmayer]

Originally Posted by Xyzzy

http://arstechnica.com/business/2015...tax-loopholes/

Indeed - this is the reason the CBO 'analysis' of da Trumpsta's tax proposal is worthless - if companies actually *paid* a loophole-free 15% on profits that would represent a rather large net revenue *gain*, and would also be fairer to small businesses, which [a] have all the corporate-tax paperwork burden but lack the global scale required to game the system in the above way, and [b] create most new jobs.

[ewmayer]

Excellent long-form weekend-worthy read by one of the few practicing economists I have genuine respect for:

Michael Hudson: The Paradox of Financialized Industrialization | naked capitalism

No observer of Marx’s epoch was so pessimistic as to expect finance capital to overpower industrial capitalism, engulfing economies as the world is seeing today. Discussing the 1857 financial crisis, Marx showed how unthinkable anything like the 2008-09 Bush-Obama bailout of financial speculators seemed to be in his day. “The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values.”[6]

Marx wrote this reductio ad absurdum not dreaming that it would become the Federal Reserve’s policy in autumn 2008. The U.S. Treasury paid off all of A.I.G.’s gambles and other counterparty “casino capitalist” losses at taxpayer expense, followed by the Federal Reserve buying junk mortgage packages at par.

I do agree with one reader, however, that Hudson is a tad too flattering to his Chinese hosts, criticizing the trajectory of their 'red capitalism' and its recent devolution - cheered and egged on by the government until far too late in the game - into full-on multiple-intertwined-bubble manias only in rather roundabout fashion.

[ewmayer]

'Stunning' Rise in Death Rate, Pain Levels for Middle-Aged, Less Educated Whites | naked capitalism

A stark warning about the level of distress in America comes from an important study by Angus Deaton, the 2015 Nobel prize winner in economics, and his wife Anne Case. We’ve embedded their short and readable article at the end of this post. The authors found that from 1999 to 2013, the death rate among non-Hispanic whites aged 45 to 54 with a high school education or less rose, while it fell in other age and ethnic groups. This is an HIV-level silent epidemic: AIDS killed an estimated 650,000 from the mid-1980s to present, while an estimated close to half-million died in half that time period who would have lived had their mortality rates fallen in line with the rest of the population. It is hard to overstate the significance of these findings.

My friends, such things are merely the price of making the world safe for the Looter Elite and their neoliberal-economist apologists.

Long reader discussion on this one, well worth setting aside and reading in several smaller installments. In particular I found the sub-discussion of why this trend apears to be predominantly affecting whites rather than black and hispanics especially interesting.

[davar55]

Originally Posted by Xyzzy

http://arstechnica.com/business/2015...tax-loopholes/

I wish you'd commented on this, even in a small way.
I only read a part of it consequently.

Yes the tax code needs revision, simplification, an overhaul.
But the overseas tax loophole issue would disappear, if
corporate tax structure weren't so overbearing, so our
best wouldn't need such shelters.

[ewmayer]

This article pretty much demolishes the 'development good' pillar of the quasi-religion known as modern macroeconomics:

How Globalization Fuels Terrorism and Fundamentalism: To really understand the rise of religious fundamentalism and ethnic conflict we need to look at the deep impacts of the global consumer culture on living cultures throughout the planet.

The creation of a global monoculture in the image of the West has proven disastrous on many counts, none more important than the violence it does to cultures that must be pulled apart to accommodate the process. When that violence spins out of control, it should remind us of the heavy cost of leveling the world’s diverse multitude of social and economic systems, many of which are better at sustainably meeting people’s needs than is the system that aims to replace them.

Until about 500 years ago, local cultures throughout the world were the products of a dialogue between humans and a particular place, growing and evolving from the bottom up in response to local conditions. Cultures have absorbed and responded to outside influences such as trade, but the process of conquest, colonialism, and development that has affected so much of the world is fundamentally different: it has forcefully imposed change from the outside. And since the end of World War II, the forces dismantling local economies have grown far more powerful. Today, speculative investment and transnational corporations are transforming every aspect of life—people’s language, their music, their buildings, their agriculture, and the way they see the world. That top-down form of cultural change works against diversity, against the very fabric of life.

In any case, the Western model that is being pushed on the world is not replicable: the one-eyed economists who look at electronic signals to tell them whether economies are healthy or “growing fast enough” don’t do the arithmetic needed to see if the earth has enough resources for their abstract models to work. It is little more than a cruel hoax to promise the poor of the world that development and free trade will enable them to live like Americans or Europeans, who consume ten times their fair share of resources. For all but a small minority, the American Dream is a physical impossibility. No wonder then that increased poverty and breakdown lead to rising resentment of Westerners—particularly Americans, who are seen as the main proponents and beneficiaries of the global economy. This despite the fact that the American Dream is now beyond the reach of most Americans, as well.

An NC reader comments:

We Americans must finally begin to face reality. We live in a country that is driving the world to collapse with juvenile notions of unlimited economic “growth.” Every day we inflict more misery on people around the world. We are heedless of others’ concerns and dismissive of their complaints. Instead we threaten, bribe, and bully until the resistance is squelched. As such, we are now the Evil Empire of our fervid imaginations:

I am become death, the destroyer of worlds. -- J. Robert Oppenheimer

We live in a nation that drives the agenda for the entire world and we are destroying everything. We are forcing a fever on the planet that will result in convulsions unseen in human history. We are so arrogant that we no longer accept the science that we count as the basis for our self-proclaimed enlightened civilization. Instead, we tromp around the world forcing our sick culture down the throats of innocent people and then we recoil in horror when the consequences of our actions are brought home to us.

We Americans live in a sick fantasy world of greed and consumerism. Why are we surprised when other peoples develop their own sick fantasy worlds in response?

[only_human]

Originally Posted by ewmayer

This article pretty much demolishes the 'development good' pillar of the quasi-religion known as modern macroeconomics:

How Globalization Fuels Terrorism and Fundamentalism: To really understand the rise of religious fundamentalism and ethnic conflict we need to look at the deep impacts of the global consumer culture on living cultures throughout the planet.


An NC reader comments:

Here is one the stories of imposing trade:
https://en.wikipedia.org/wiki/Matthe...2.E2.80.931854

The Perry Expedition: Opening of Japan, 1852–1854

In 1852, Perry was assigned a mission by American President Millard Fillmore to force the opening of Japanese ports to American trade, through the use of gunboat diplomacy if necessary.[8] The growing commerce between America and China, the presence of American whalers in waters offshore Japan, and the increasing monopolization of potential coaling stations by the British and French in Asia were all contributing factors. The Americans were also driven by concepts of Manifest Destiny and the desire to impose the benefits of western civilization on what they perceived as “backwards” Asian nations. The Japanese were forewarned by the Dutch of Perry’s voyage, but were unwilling to change their 220-year-old policy of national seclusion.[9] There was considerable internal debate in Japan on how best to meet this potential threat to Japan’s economic and political sovereignty. On November 24, 1852, Perry embarked from Norfolk, Virginia for Japan, in command of the East India Squadron in pursuit of a Japanese trade treaty

First visit, 1853
Perry finally reached Uraga at the entrance to Edo Bay in Japan on July 8, 1853. His actions at this crucial juncture were informed by a careful study of Japan's previous contacts with Western ships and what he knew about the Japanese hierarchical culture.
As he arrived, Perry ordered his ships to steam past Japanese lines towards the capital of Edo, and turn their guns towards the town of Uraga.[10] Perry refused Japanese demands to leave, or to proceed to Nagasaki, the only Japanese port open to foreigners.[10]
Perry attempted to intimidate the Japanese by presenting them a white flag and a letter which told them that in case they chose to fight, the Americans would destroy them.[11][12] He also fired blank shots from his 73 cannons, which he claimed was in celebration of the American Independence Day. Perry's ships were equipped with new Paixhans shell guns, cannons capable of wreaking great explosive destruction with every shell.[13][14] He also ordered his ship boats to commence survey operations of the coastline and surrounding waters over the objections of local officials.
In the meantime, the Japanese government was paralyzed due to the incapacitation by illness of Shogun Tokugawa Ieyoshi and by political indecision on how to handle the unprecedented threat to the nation’s capital. On July 11, Rōjū Abe Masahiro temporized, deciding that simply accepting a letter from the Americans would not constitute a violation of Japanese sovereignty. The decision was conveyed to Uraga, and Perry was asked to move his fleet slightly southwest to the beach at Kurihama (in modern-day Yokosuka), where he was allowed to land on July 14, 1853.[15] After presenting the letter to attending delegates, Perry departed for Hong Kong, promising to return the following year for the Japanese reply.[16]
Second visit, 1854

Commodore Perry's fleet for his second visit to Japan, 1854
Perry returned on 13 February 1854, after only half a year rather than the full year promised, and with ten ships and 1600 men. Both actions were calculated to put even more pressure onto the Japanese. After initial resistance by the Japanese, Perry was permitted to land at Kanagawa, near the site of present-day Yokohama on March 8, 1854 where after negotiations lasting for around a month, the Convention of Kanagawa was signed on March 31, 1854. Perry signed as American plenipotentiary, and Hayashi Akira, also known by his title of Daigaku-no-kami signed for the Japanese side. Perry departed, mistakenly believing the agreement had been made with imperial representatives, not understanding the true position of the Shogun, the de facto ruler of Japan.[17] Perry then visited Hakodate on the northern island of Hokkaido and Shimoda, the two ports which the treaty stipulated would be opened to visits by American ships.

Return to the United States, 1855
When Perry returned to the United States in 1855, Congress voted to grant him a reward of $20,000 (US$ 508,000 in 2015) in appreciation of his work in Japan. Perry used part of this money to prepare and publish a report on the expedition in three volumes, titled Narrative of the Expedition of an American Squadron to the China Seas and Japan. He was also promoted to the grade of rear-admiral on the retired list (when his health began to fail) as a reward for his service in the Far East.[18]

[Xyzzy]

http://arstechnica.com/science/2015/...-dodges-taxes/

The $160 billion merger, officially announced Monday, will allow Pfizer to move its executive offices to Ireland, thus lowering its tax rate, while also morphing into the world’s largest drug maker.

[ewmayer]

ZH's irony detector appears to be offline this day (text markups theirs):

The True Meaning Of Thanksgiving

In the wilderness of the New World, the Plymouth Pilgrims had progressed from the false dream of communism to the sound realism of capitalism. This year, at a time of economic uncertainty and growing political paternalism, when we, Americans sit around our dining table with family and friends, we should remember that what we are really celebrating is the birth of free men and free enterprise in that New World of America. The true meaning of Thanksgiving, in other words, is the triumph of Capitalism over the failure of Collectivism in all its forms.

And ZH like this meme so much, they posted a second piece on it a few hours later (again, highlights theirs):

The Real Non-PC Reason We Celebrate Thanksgiving

The Thanksgiving we celebrate is for the success of the Pilgrims after establishing property rights and free enterprise as that event laid the foundation for the growth of America. Were our Pilgrim and Jamestown colony forefathers to wake up from the dead and look at the graduated taxation (from each according to his ability) and welfare programs (to each according to his need) we have today they might offer us a lesson in history by simply quoting Goethe, “Those who do not learn from the lessons of history are doomed to relive them.”

Aside from the tiny niggle that the last quote is due to Santayana rather than Goethe - but hey, never let ugly facts get in the way of a good meme - and that the Pilgrims, were they around today, might be rather surprised to be labeled as proto-commies who embraced the 'sound realism of capitalism' when their very survival in the New World depended on a high degree of societal collectivism, and that their ‘success’ was based on what was effectively a huge land grab, this is fabulous stuff!

See, it's all about us exceptional 'Mericans and our capitalistic-enterprise-supporting prawperty rights. Even better if it's someone else's prawperty one is claiming rights to. Take that, y'all panty-waist Marxists! And after stuffing our gobs, those of us who are not too morbidly obese to walk more than a few feet can drive and waddle on over to the nearby Target, Walmart or Best Buy to fight some of our fellow citizens for the last of those gutdoorbuster deals made by Asian sweatshop laborers. Maybe a camera drone 'like the government spooks use!' for the kiddies or just for spying on the nude-sunbathing hottie a few blocks over. (Make sure to silently give thanks to Jesus as you zoom in on the hotness.)

[ewmayer]

Fascinating look inside Shenzen, the beating heart of China's colossal and wild-westish flexible manufacturing economy:

Inside China's Memefacturing Factories, Where The Hottest New Gadgets Are Made - BuzzFeed News

[Fusion_power]

The FED has officially adopted rules to end further lending to banks that are bankrupt and to prevent such lending in future.

The Fed officially adopted a new rule Monday that limits its ability to lend emergency money to banks. In theory, the new rule should quash the notion that Wall Street banks are "too big to fail." Translation: the government has to save them during a crisis.

Note that the new rules are carefully worded to permit lending to institutions having "liquidity issues" but prevent lending to those going bankrupt. Also, the FED gets to decide which category an institution falls under. There is nothing to prevent congress from authorizing a bailout similar to what was done for Chrysler.

No more bailouts? Yeah, right. - for foreign readers, this is a derisive term used to denote disbelief

http://money.cnn.com/2015/11/30/news...ail/index.html