Archive for September, 2021

Anti-China Fever in the US: a lethal contagious disease

Monday, September 20th, 2021

Much of the United States (especially Washington, DC) is in the grip of a contagious lethal anti-China fever which is spreading fast.

Even people I usually admire and respect have become infected. Reason and facts have lost all capacity to inoculate.

Fortunately, I was sent a vaccine (that takes one minute to administer) which I would like to share with you:

WATCH HERE

Three points in response to China (& Russia) hawks:

(1) A mirror is a very good thing to have in these situations (probably the most valuable & cost-effective piece of equipment the Pentagon could purchase right now). When wondering about China’s naval posture in the South China Sea or Russia’s response to eastward NATO expansion, use the mirror to reflect on the Monroe doctrine & how we would react if a Chinese flagged 7th fleet were cruising the Caribbean.

(2) Ukraine & Taiwan are both special unresolved historical situations. They should each be treated as such, carved out as best possible, and not allowed to poison the entire relationship. The mortal danger is the US war lobby exploits those situations to provoke Russia and China, hoping the resulting optic will favor their ugly ambitions.

(3) In his later years, George Kennan, architect of the containment doctrine, believed the best way to deal with the Russians is to leave them to themselves (i.e. they will sabotage themselves on their own). That continues to be good advice & also has relevance for China.

Financialization revisited: the economics and political economy of the vampire squid economy

Wednesday, September 1st, 2021

This paper explores the economics and political economy of financialization using Matt Taibbi’s vampire squid metaphor to characterize it. The paper makes five innovations. First, it focuses on the mechanics of the “vampire squid” process whereby financialization rotates through the economy loading sector balance sheets with debt. Second, it identifies the critical role of government budget deficits for the financialization process. Third, it identifies the critical role of central banks, which are the lynchpin of the system and now serve as de facto guarantors of the value and liquidity of private sector liabilities. Fourth, the paper argues financialization imposes a form of policy lock-in. Fifth, it argues financialization transforms popular attitudes and understandings, thereby generating political support despite poor economic outcomes. In effect, there is a politics of financialization that goes hand-in-hand with the economics. The paper concludes with some observations on why mainstream macroeconomics has no equivalent construct to financialization and discusses the disquieting unexplored terrain that the economy is now in.

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