Tom Palley on why Obama is failing

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Tom Pal­ley has writ­ten an excel­lent opin­ion piece for the Finan­cial Times on why Obama is fail­ing, and he requested that I repro­duce it here. How­ever, to read it, I’d pre­fer if you clicked on the link in the title of Tom’s piece below. That will take you to the Finan­cial Times blog itself–the more hits that pieces like this are seen to get in the con­ven­tional media, the bet­ter (to encour­age this, there are some links in the Finan­cial Times piece that I haven’t repro­duced in this repost).

Though I con­cur with Tom’s opin­ions, I can fully under­stand Obama’s deci­sion to use the same advi­sors that Clin­ton before him (and to some extent Bush) had also used. Fun­da­men­tally, Obama is a politi­cian, not an expert in eco­nom­ics, and as a politi­cian deter­mined to take an intel­li­gent approach to the prob­lems con­fronting Amer­ica, he sen­si­bly decided to get his infor­ma­tion on these chal­lenges from the very best.

How was he to know that the world’s lead­ing econ­o­mists, the “very best” in this cru­cial field, actu­ally knew noth­ing about how the real econ­omy actu­ally functions?

Only after 2 years in office, when the econ­omy is not recov­er­ing from the reces­sion as his advi­sors told him it would, and the reme­dies that he throws at it (on their advice) turn out to be more damp squibs that the weapons of mass eco­nomic recon­struc­tion he was told they would be, must it slowly be dawn­ing on him that may don’t under­stand the economy.

He’s learn­ing the hard way the les­son I and many other crit­i­cal econ­o­mists acquired as we stud­ied for our eco­nom­ics degrees–mostly by react­ing incred­u­lously to weird propo­si­tions that our Pro­fes­sors would use to derive their models–that there is some­thing rot­ten in the state of eco­nomic thinking.

For­tu­nately, I had time to under­take schol­arly research to con­firm that ini­tial gut­tural reac­tion. Yes, what sim­ply felt like crap to me rather than wis­dom, really was crap: the weird propo­si­tions that my Pro­fes­sors would put for­ward were kludges to hide fun­da­men­tal flaws in the under­ly­ing the­ory. In full view in the aca­d­e­mic lit­er­a­ture of eco­nom­ics, paper after paper proved that the the­ory did not hold together.

Some­times, as with Piero Sraffa, a critic had proven a fatal flaw in one aspect of the the­ory (in Sraffa’s case, the the­ory of income dis­tri­b­u­tion and the con­cept of a pro­duc­tion func­tion link­ing out­put of goods to inputs of labor and cap­i­tal). Other times, it was an “own goal”, as lead­ing neo­clas­si­cal econ­o­mists tried to prove some­thing they hoped was true–such as that mar­ket demand curves obeyed all the laws they had derived for indi­vid­ual demand curves, and that they there­fore nec­es­sar­ily sloped down­wards so that there could be only one equi­lib­rium between sup­ply and demand–and proved that this wasn’t true.

In any gen­uine sci­ence, these dis­cov­er­ies, being fun­da­men­tal to the the­ory, dev­as­tat­ing in their impact and vast in num­ber, would have caused an intel­lec­tual cri­sis that would ulti­mately have led to a revolution–as with the shift from the Ptole­maic to the Coper­ni­can view of the struc­ture of the solar sys­tem. But in eco­nom­ics, what hap­pened instead was that these flaws were ignored–if they had been dis­cov­ered by the crit­ics like Sraffa–or papered over by truly absurd assump­tions, if they had been “own goals”.

The end result was that eco­nomic the­ory was an utter sham­bles of false abstrac­tions, and I wrote Debunk­ing Eco­nom­ics to bring this to the atten­tion of peo­ple who fight­ing for social jus­tice but whose endeav­ors were being blocked by economists.

Unfor­tu­nately, Obama didn’t read it.

So now a man who had hopes to be remem­bered for not only being America’s first black Pres­i­dent, but also for being one of its great social reform­ers as well, will prob­a­bly go down like Her­bert Hoover, who is known more for his fail­ure to pre­vent the Great Depres­sion than for any­thing else. To cite Wikipedia here:

When the Wall Street Crash of 1929 struck less than eight months after he took office, Hoover tried to com­bat the ensu­ing Great Depres­sion with vol­un­teer efforts, none of which pro­duced eco­nomic recov­ery dur­ing his term. The con­sen­sus among his­to­ri­ans is that Hoover’s defeat in the 1932 elec­tion was caused pri­mar­ily by fail­ure to end the down­ward eco­nomic spi­ral. As a result of these fac­tors, Hoover is ranked poorly among for­mer US Presidents.

Such will almost cer­tainly be Obama’s fate as well, though not because he was a poor Pres­i­dent but because he was deter­mined to be a good one, and he there­fore fol­lowed the advice of the econ­o­mists in com­bat­ing the begin­nings of the Sec­ond Great Depres­sion. How was he to know that their way­ward eco­nomic the­o­ries had actu­ally helped set up this cala­maity in the first place, and that hav­ing caused it by means they did not under­stand, that they were the last ones who were able to give him the eco­nomic advice he actu­ally needed?

So much for me; over now to Tom’s views–and please read them via the link, as requested. One of the many rea­sons that neo­clas­si­cal eco­nom­ics has become dom­i­nant is that news­pa­per edi­tors believed, as Obama did, that the dom­i­nant econ­o­mists were the best ones, and non-orthodox thinkers like Tom and I were shut out of the opin­ion pieces even more effec­tively than we were mar­gin­al­ized within the eco­nom­ics pro­fes­sion itself. The more pieces like Tom’s get read in the main­stream media, the sooner those days will be over–and the long-overdue intel­lec­tual rev­o­lu­tion in eco­nom­ics can begin.

Deaf to History’s Rhyme: Why Pres­i­dent Obama is Failing

Finan­cial Times Econ­o­mists’ Forum, Decem­ber 2, 2010

Copy­right Thomas I. Palley

The great Amer­i­can nov­el­ist Mark Twain observed “his­tory does not repeat itself but it rhymes.” Today the rhyme is with the 1930s, and if you don’t hear it read FDR’s great Madi­son Square Gar­den speech of Octo­ber 1936:

For twelve years this nation was afflicted with hear-nothing, see-nothing, do-nothing gov­ern­ment. The nation looked to gov­ern­ment but the gov­ern­ment looked away. Nine mock­ing years with the golden calf and three long years with the scourge! Nine crazy years at the ticker and three long years in the bread­lines! Nine mad years of mirage and three long years of despair! Pow­er­ful influ­ences strive today to restore that kind of gov­ern­ment with its doc­trine that that gov­ern­ment is best which is most indifferent.”

Despite this clar­ity, the Obama admin­is­tra­tion insists on hear­ing a rhyme with the 1990s. That tone deaf­ness has its roots in polit­i­cal choices made at the administration’s out­set and explains why the admin­is­tra­tion has stum­bled so badly in its first years. If con­tin­ued, the eco­nomic and social con­se­quences will be grave.

In 2008 Pres­i­dent Obama cap­tured the nation with a mes­sage of change, yet in office he has cho­sen to deliver change of style rather than change of sub­stance. At the head­line level this choice was reflected in his call for bi-partisanship that looked to split the dif­fer­ence with Repub­li­cans. In eco­nomic pol­icy, it was reflected in the whole­sale reap­point­ment of the Clin­ton admin­is­tra­tion team led by Larry Sum­mers and Tim­o­thy Gei­th­ner, a case of con­ti­nu­ity not change.

Now, the admin­is­tra­tion is sink­ing under fail­ure of its eco­nomic pol­icy. That fail­ure is due to its attempt to revive a 1990s par­a­digm that never worked as adver­tised and can only deliver stag­na­tion. Painful though it is for Democ­rats to acknowl­edge, the real­ity is the eco­nomic poli­cies of Pres­i­dent Clin­ton were largely the same as those of Pres­i­dent Bush. On this the record is clear for those will­ing to see. The Clin­ton admin­is­tra­tion pushed finan­cial dereg­u­la­tion; twice reap­pointed Alan Greenspan; pro­moted cor­po­rate glob­al­iza­tion through NAFTA and China PNTR; ini­ti­ated the strong dol­lar pol­icy; spoke of the “end of the era of big gov­ern­ment”; con­tem­plated pri­va­ti­za­tion of Social Secu­rity; and struck down a core ele­ment of the New Deal by end­ing the right to welfare.

The main dif­fer­ence between the Clin­ton and Bush admin­is­tra­tions was the former’s will­ing­ness to offer some helping-hand poli­cies to cush­ion the harsh effects of the invis­i­ble hand. Dif­fer­ences in out­comes were not pol­icy dri­ven but reflect the fact the Clin­ton admin­is­tra­tion enjoyed the good for­tune of the Inter­net invest­ment bub­ble. It also ben­e­fit­ted from the begin­ning of the hous­ing bub­ble when Amer­i­can fam­i­lies had plenty of untapped home equity and credit.

Pres­i­dent Obama’s fate­ful deci­sion to go with Clinto­nom­ics meant the reces­sion was inter­preted as an extremely deep down­turn rather than a cri­sis sig­nal­ing the bank­ruptcy of the neolib­eral par­a­digm that has ruled both Repub­li­cans and Democ­rats for thirty years. That implied the reces­sion could be fully addressed with stim­u­lus, which was the same response as the Bush admin­is­tra­tion to the reces­sion of 2001.

The cur­rent reces­sion is the deep­est eco­nomic down­turn since the Great Depres­sion of the 1930s, invit­ing com­par­isons with Pres­i­dent Franklin Delano Roo­sevelt. FDR had the advan­tage of tak­ing office three years into the Depres­sion when the unem­ploy­ment rate was near 25 per­cent. The ver­dict was in: the sys­tem needed change. Pres­i­dent Obama took office as the cri­sis was deep­en­ing. Those who had designed the sys­tem could still argue it could be revived and as estab­lish­ment insid­ers they had the upper hand. But that argu­ment is done and today the prospect is of long stagnation.

The New Deal was a break with both the pol­i­tics and eco­nomic poli­cies of the past. Its eco­nomic pol­icy inno­va­tions like Social Secu­rity, the Secu­ri­ties and Exchange Com­mis­sion, the Fair Labor Stan­dards Act, and the Wag­ner Act grant­ing the right to orga­nize, are still cel­e­brated. How­ever, it was FDR’s new pol­i­tics of sol­i­dar­ity and com­pas­sion that cre­ated the nec­es­sary polit­i­cal space: sol­i­dar­ity that rec­og­nized the coun­try was in the Depres­sion together and com­pas­sion that rec­og­nized many were suf­fer­ing through no fault of their own. That is the polit­i­cal rhyme Pres­i­dent Obama must hear, while the New Deal is the pol­icy rhyme.

The President’s fail­ure to deliver on the country’s desire for change of sub­stance has left a vac­uum that is being filled by dan­ger­ous unsta­ble forces. This is the tale of the Tea Party, which is a tale that has res­o­nance for Europe. The eco­nomic risk, already more advanced in Europe, is a doubling-down of dis­as­trously failed hard­core neolib­eral eco­nomic poli­cies. The polit­i­cal risk is a rise of intol­er­ance and xenophobia.

These are not nor­mal times. If the admin­is­tra­tion per­sists with its deaf­ness to his­tory it will surely hit the rocks and an his­tor­i­cal oppor­tu­nity for pro­gres­sive change will be squan­dered. Worse yet, its deaf­ness will leave the field open to the extreme right whose “blame-the-victim” social mes­sage and “liquidationist-austerity” eco­nomic poli­cies clearly con­firm today’s rhyme is with the his­tory of the 1930s.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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90 Responses to Tom Palley on why Obama is failing

  1. Derek says:

    You’re being a bit unfair to Smith’s suc­ces­sors. David Ricardo in par­tic­u­lar did some good work at the begin­ning of the 19th C. Things only started going badly wrong with eco­nom­ics at the end of the 19th C when the ultra-rich realised that they could influ­ence the direc­tion of eco­nom­ics research by threat­en­ing to to with­hold their char­i­ta­ble dona­tions to uni­ver­si­ties and foun­da­tions who were giv­ing tenure to pro­fes­sors that were pro­duc­ing the “wrong kind” of research or edu­cat­ing their stu­dents to hold “incor­rect” beliefs. Mason Gaffney and Fred Har­ri­son have writ­ten an inter­est­ing book on this par­tic­u­lar aspect of eco­nomic his­tory. It’s called “The Cor­rup­tion of Eco­nom­ics” and dis­cusses why neo­clas­si­cal eco­nom­ics was orig­i­nally cre­ated to replace clas­si­cal economics.

  2. Brian Macker says:


    You are an igno­ra­mus when it comes to Aus­trian eco­nom­ics. Aus­tri­ans do not believe that the mar­kets are per­fect and can cor­rect any prob­lem. In fact, one of their main points is how free bank­ing causes the busi­ness cycle. Mur­ray Roth­bard is com­pletely against free bank­ing. I’d con­tinue to cor­rect all your mis­takes but I’ve got bet­ter things to do. Stop lis­ten­ing to straw man claims about the the­ory and read it for yourself.

  3. BrightSpark1 says:

    Derek, the sys­tem suf­fered its first sys­tem fail­ure in the 1840’s, early nine­teenth cen­tury. A depres­sion occurred, which meant that when the Irish potato crop failed, even the great British Empire, where the elight­en­ment began was unable to look after peo­ple at it’s own heart and over one mil­lion peo­ple died. The song “Hard Times” was writ­ten by Stephen Fos­ter in the US about this depres­sion. The ultra rich of the Britain were the true killers of the Irish farm­ers not the potato blight.

    I feel cer­tain that even Ricardo did not try out the view from the shoul­ders of New­ton. Even clas­si­cal eco­nom­ics did not ade­quately fol­low on from the work of Smith.

  4. TruthIsThereIsNoTruth says:

    Hi Brightspark1,

    I was think­ing of reply­ing to your orig­i­nal post but this beauty cap­tures a good deal of what I was going to say (in a way)

    even the great British Empire, where the elight­en­ment began was unable to look after peo­ple at it’s own heart”

    I’m won­der­ing what the the­ory of eco­nom­ics would have looked like were it invented in one of the coun­tries enslaved (colonised) by ‘the Great British Empire’. Or could Smith have come up with his enlight­ened the­ory if the Empire wasn’t in the busi­ness of slave labour and min­eral extrac­tion from it’s colonies. It’s easy to attribute great eco­nomic pros­per­ity to enlight­ened the­ory when one is pil­lag­ing the world.

  5. mahaish says:

    prob­lem is derek,

    the ludi­crouse pro­pos­tions con­tained in ricar­dian equiv­i­lence are still part of one vari­ant of the main­stream agenda, and they have done more harm than good, in my opinion,

    the rea­son why we need more gov­ern­ment aus­ter­ity in this cri­sis accord­ing to its sup­port­ers, is that we have a whole nation of ricar­dian con­sumers run­ning around antic­i­pat­ing tax increases as a con­se­quence of larger gov­ern­ment deficits. they are appar­ently sav­ing for their future tax bills.

    so many holes in such a pro­por­si­tion that it would get envi­ouse glances from swiss cheese makers.

  6. mahaish says:

    inter­est­ing anec­dote about hoover being an engi­neer, brightspark1

    sud­denly i feel a lit­tle downcast,

    here i am think­ing we might be bet­ter served by there being more engi­neers in politics,

  7. Philip says:


    Good overview. A great deal of eco­nomic the­ory (neo­clas­si­cal and Aus­trian) is still stuck in the 19th cen­tury, the cor­ner­stones of Marx­ism (ratio­nal cen­tral plan­ners, LTV, falling rate of profit, etc.) have been fal­si­fied and Key­ne­sian­ism in gen­eral has been neutered by the main­stream to make it more palatable.

    The engineer/physics view­point is an inter­est­ing one and is likely to be the even­tual sav­ior of eco­nom­ics. You would prob­a­bly be inter­ested in the work by a physi­cist turned econ­o­mist Joseph McCauley. He has writ­ten an excel­lent book called Dynam­ics of Mar­kets: Econo­physics and Finance, its well worth read­ing. Using exten­sive math­e­mat­ics, he shows why mod­el­ing mar­kets using sta­tic equi­lib­rium mod­els are com­pletely invalid.

    In one of his jour­nal papers he advo­cates the following:

    I there­fore sug­gest that the econ­o­mists revise their cur­ricu­lum and require that the fol­low­ing top­ics be taught: cal­cu­lus through the advanced level, ordi­nary dif­fer­en­tial equa­tions (includ­ing advanced), par­tial dif­fer­en­tial equa­tions (includ­ing Green func­tions), clas­si­cal mechan­ics through mod­ern non­lin­ear dynam­ics, sta­tis­ti­cal physics, sto­chas­tic processes (includ­ing solv­ing Smoluchowski–Fokker–Planck equa­tions), com­puter pro­gram­ming (C, Pas­cal, etc.) and, for com­plex­ity, cell biol­ogy. Time for such classes can be obtained in part by elim­i­nat­ing micro– and macro-economics classes from the cur­ricu­lum. The stu­dents will then face a much harder cur­ricu­lum, and those who sur­vive will come out ahead.” (p. 608).

    McCauley, Joseph. 2006. Response to ‘‘Wor­ry­ing Trends in Econo­physics’’, Phys­ica A, Vol. 371, pp. 601–609

  8. Derek says:

    Under­stood and agreed, mahaish. The thing is that Ricardo him­self thought that Ricar­dian Equiv­a­lence was bol­locks. He raised it as a the­o­ret­i­cal pos­si­bil­ity only to denounce it as a prac­ti­cal actu­al­ity. In his own words…

    But the peo­ple who paid the taxes never so esti­mate them, and there­fore do not man­age their pri­vate affairs accord­ingly. We are too apt to think that the war is bur­den­some only in pro­por­tion to what we are at the moment called to pay for it in taxes, with­out reflect­ing on the prob­a­ble dura­tion of such taxes. It would be dif­fi­cult to con­vince a man pos­sessed of £20,000, or any other sum, that a per­pet­ual pay­ment of £50 per annum was equally bur­den­some with a sin­gle tax of £1000.

    In fact it was actu­ally the mod­ern neo­clas­si­cal econ­o­mist, Robert Barro, who went on to pro­mote Ricar­dian Equiv­a­lence as being a sen­si­ble way of look­ing at the world in the 1970s, as part of his ratio­nal expec­ta­tions hobby-horse.

    Poor old Ricardo will be spin­ning in his grave to see such an unre­al­is­tic view of the world as Ricar­dian Equiv­a­lence becom­ing mainstream.

  9. BrightSpark1 says:

    G’day mahaish
    The leader of the worlds cur­rently most suc­cess­ful and pop­u­lous coun­try China, Hu Jin­tao is in fact an engi­neer. The trou­ble is that while he knows how to use tech­nol­ogy to cre­ate wealth his under­stand­ing of the mess that is neo­clas­si­cal eco­nom­ics appears to be want­ing. China is at present accept­ing IOUs in return for cargo as Japan has been doing for many years. The Japan­ese have not ben­e­fited for accu­mu­lat­ing IOU’s which they can­not spend and nei­ther will the Chi­nese. China has an expo­nen­tially grow­ing cur­rent account “invest­ment” which is really worth­less if Hu took the time to con­sider this and per­haps he has, he would see the folly. But per­haps even in com­mu­nist China neo­clas­si­cal eco­nomic the­ory has ascen­dancy he may be find­ing him­self in the same posi­tion as did Her­bert Hoover. I don’t think that we will find a solu­tion until after the whole sys­tem falls in a heap yet again.

    Lets hope we can climb on the shoul­ders of New­ton and Smith when this hap­pens and not per­sist with Smith’s throw away line (the “invis­i­ble hand”) as the world has done after the pre­vi­ous three depressions.

  10. Derek says:

    That’s a good point, BrightSpark1. The best engi­neer in the world is use­less if the engi­neer­ing the­o­ries that he is using are wrong. And that is the basic prob­lem: the mod­ern neo­clas­si­cal syn­the­sis just con­tains too many flaws to be use­ful for macro­eco­nom­ics. That is why Prof Keen’s work is so impor­tant. We are at a stage where we need to review what has been achieved in eco­nom­ics over the last 300 years and decide what is worth keep­ing and what should be thrown out. Only then will econ­o­mists be able to do work at any­where near the level of reli­a­bil­ity that engi­neers can.

  11. peterjbolton says:

    All ‘eco­nomic / banker’ induced fail­ures end in war — appears to be his­tor­i­cally cor­rect in one form or another:
    Read­ing as widely as pos­si­ble and being retired that means I inhale a lot of infor­ma­tion, opin­ion, sta­tis­tics, etc., and I am now of the impres­sion that we will soon expe­ri­ence, here in Aus­tralia, another war. I explain very briefly: Greenspan openly pushed for the inva­sion of Iraq from Clinton’s pres­i­dency onwards 24/7.

    The neo­cons pushed des­per­ately the PNAC which was wars for a hun­dred years or so. The FedRes is des­per­ately try­ing to keep US influ­ence at its peak while killing off every­thing else includ­ing its own peo­ple. Was in Iraq, Afghanistan, Pak­istan, Yemen, Soma­lia, Euroa­sia, Koreas’, the Arc­tic NATO alliance, South Amer­ica, etc. The US behav­ior is per­ceived as pure insan­ity. But, what if Greenspan knew what was com­ing around the mid 90’s and then the pre­lude of 1997? Cer­tainly the have the resources to arrive at that con­clu­sion with a fairly low risk of error, and of speak of total Global Sys­temic Col­lapse (GSC), in other words, a global Dark Age, by 2011/2012.

    Australia’s PM Julian Gillard is now on pub­lic record as hav­ing invited US mil­i­tary occu­pa­tion of Aus­tralia and it is rumored that in WA alone this will involve some 100,000 on-shore US ser­vice­men. A US team led by a high rank­ing US Gen­eral is cur­rently tak­ing stock. The pur­pose of this mil­i­tary occu­pa­tion is appar­ently as stated, a joint US/Australian con­fronta­tion with China. Is this what Rudd meant as “force”? Gillard deposed Rudd as PM appar­ently with the assis­tance of the Amer­i­cans, and Israeli via the sub­ter­ranean ser­vices of Sen­a­tor Arbib, the US secret source (deep throat perhaps?)

    Has Wik­ileaks been com­pro­mised — cer­tainly Zbig­niew Kaz­imierz Brzezin­ski seems to think so and he should know being fairly expe­ri­enced at such things, and many other ana­lysts have been reports cer­tain bias which could induce a per­cep­tion of planned instabilities.

    To me the sit­u­a­tion today in global mat­ters sug­gests that the banker/politico lead­er­ship is irrepara­ble with­out a total col­lapse, as has always been the case, more or less, and the amount of debt, must be destroyed (I use this term as it will not be for­given) so my sense is that a “con­fronta­tion” for supremacy and power, is about to be launched from, Aus­tralia soil, albeit with the vision that the US will be the sole winner.

    I have approached this mat­ter with Occam’s Razor and can say, more than 30 years on thought and research; I hope that I am wrong, whereas I did pre­dict a global Dark Age in late 2006, after pre­dict­ing cor­rectly the col­lapse of the USSR, the 1997 Asian cri­sis, the 2000/2001 walk-in-the-park, but never a global war of des­per­a­tion at any point of time.

    Now I do… and is scares the hell out of me. If I am indeed cor­rect, many anom­alous events of the past are clearly explained and all will make sense; the whole crazi­ness of human­i­ties vs. human­i­ties, but if I am wrong, I will be prefer­ably happy. As such, the sta­tis­tics and charts, and indi­ca­tors will be of lit­tle value as the out­come will deter­mine the way for­ward — or back­wards, whichever be the case.

  12. mahaish says:

    ” The pur­pose of this mil­i­tary occu­pa­tion is appar­ently as stated, a joint US/Australian con­fronta­tion with China.”

    this may hap­pen sooner than we think peterj,

    the fly in the oin­ment geo polit­i­cally and eco­nom­i­cally may end up being what tran­spires on the 38th parallel .

    think ive men­tioned this mant times before, the geo polit­i­cal dog wags the eco­nomic tail in many ways.

    and one of those dogs in the pack, just hap­pens to be the hege­monic rivalry between the chi­nese and the yanks when it comes to the 38th parallel.

    china has always had a strate­gic inter­est in the korean penin­sula going back many mile­nia, mainly as a bul­wark against japan­ese hege­monic ambi­tions. bit­ter mem­o­ries indeed for them .

    but ever since the gen­eral sherman(a heav­illy armed amer­i­can mer­chant ship) steamed up the tae­dong river in 1866, in order to sub­mit the locals in the her­mit king­dom to trade with the amer­i­cans , and duely pro­ceeded to fire upon them when the locals took offence( the amer­i­cans were all killed by the locals by the way), amer­i­can hege­monic inter­est in the sea of japan and the yel­low sea have been sown

    the eco­nomic deck of cards the yanks and the chi­nese have built for them­selves may well come tum­bling down as a con­se­quense of the seeds sown over a hun­dres and fifty years ago, as i sus­pect amer­i­can grapeshot in one form or another will again be heard in the her­mit king­dom in our lifetime

  13. mahaish says:

    China has an expo­nen­tially grow­ing cur­rent account “invest­ment” which is really worth­less if Hu took the time to con­sider this and per­haps he has, he would see the folly”

    folly indeed brightspark1,

    per­haps the chi­nese lead­er­ship think they can defeat their inglo­ri­ous past when it comes to these matters,

    they have played this game before and lost. then it was with the british. now its the americans.

    chi­nese his­tory through­out the 19th and early 20th cen­tury is tes­ta­ment to the fail­ure of poli­cies , they are cur­rently per­su­ing, just the veneer has changed.

    any­body think­ing the chi­nese are just going to waltz towards global pre emi­nence in the 21st cen­tury, need to remind them­selves of one very bru­tal fact , dare i say curse about chi­nese history,

    every change of dynasty has just about brought with it a bloody civil war.

    the so called com­mu­nists are at 60 years and count­ing. how long will it be before they face dynas­tic meltdown

  14. peterjbolton says:

    @ mahaish…

    strangely, hav­ing spent many years in both the US and China I don’t see any coherency today with my obser­va­tions and mem­o­ries of the past, as impres­sive as they were. I always won­dered why the Chi­nese with their wealth of ancient philoso­phies, adopted under Mao, some­thing as crude, rude and prim­i­tive as Marx­ism. But then, I real­ized (even­tu­ally) that this is where Aus­tralia has been, is, and the USA aspires to be, and is almost there, and just about all coun­tries are head­ing in this direc­tion, if not already there, while all paus­ing in the warm oxi­dized ooze of fas­cism prior to des­o­la­tion; odes of v. Hayek and The Road to Serf­dom; a cyn­i­cal & cycli­cal given event horizon.

    And while all and sundry amuse their gaze on the numeric fire­works of the phase tran­si­tional ener­get­ics in their trans­lated form of unbe­liev­able and cer­tainly erratic sta­tis­tics, the game being played out is actu­ally sur­vival, the basic and fun­da­men­tal drive of every bio­log­i­cal cell in exis­tence, and in the form of the USA, per­haps the play of extremis — that is to say, the last days of the organ­ism brought about by the joys of the final­i­ties of cancer.

    In this Epoch, it is well known that “lead­er­ship” is drawn from the low­est com­mon denom­i­na­tor of soci­ety, or, you might say, the dregs (which cer­tainly agrees with ancient descrip­tions as “camp-followers” — [and their infer­nal stench, clang­ing pots, and bark­ing dogs]), and where mod­ern psy­chi­atric research sug­gests that such per­sons desire, a pri­ori, to pre­side over… — and they don’t par­tic­u­larly have a pref­er­ence as to what they pre­side over, eg suc­cess or dis­as­ter — as long as they pre­side over something!

    Korea: I have also spent much time here too — and the artis­tic senses have always impressed me as does the sense of Zen of the Japan­ese (besides the food and hooch of both Nations) — but… is this the flash point? No doubt we shall find out soon.

    Destruc­tive evo­lu­tion”: if this is the point then we have it all wrong about our­selves but maybe the eco­nom­ics is entan­gled into our Laws of Ther­mo­dy­nam­ics where to me, it all then makes sense. Par­menides inferred there was just physics and human behav­ior but the infer­ence went fur­ther to sug­gest that there was just physics. Quan­tum entan­gle­ment, which really just means, a scalu­lar anal­ogy… or meta-physics

    What­ever, the pound­ing of can­non will not be wel­come — all for the sake of the igno­rance that we elect to “lead­er­ship” so that they can cor­rupt us with their already cor­rupted and fatally flawed bank­ing sys­tem, which always ends in War, more never less.

  15. John Prentice says:

    LOL. Once again Bolton, you do not under­stand. Marx­ism? A pure intel­lec­tual fan­tasy based sim­il­iarly on Hayek and “free mar­ket” fraud. The free mar­ket is a pure intel­lec­tual idea. It has no “basis” in nature. To the mate­ri­al­is­tic mas­ters, a func­tion of dom­i­na­tion of the mer­chant caste.

    We will not have coun­tries or folk, we will have the inter­na­tional mar­ket. Basi­cally one world gov­ern­ment by mar­ket sta­tism. Marx’s attempt was to push this to the next level of “equal­ity” was a hute. Fici­tional. To say the US wants to go there is redicu­lous. Every­thing the “gov­ern­ment” does is by the means of the mar­ket. The mar­ket was not “hell­bent” on delever­ag­ing like Keen thinks, but instead was ready to use the gov­ern­ments power to stop it in its tracks. They want the old asset infla­tion regime back to cover the implo­sion that the cur­rent global sys­tem has cre­ated. They think if they can cre­ate another bub­ble in finan­cials, they can also force unbal­anced global sphere back into bal­ance slowly over time. So when the next bub­ble pops in a few years. The eco­nomic land­scape will be ready for liq­ui­da­tion with­out sys­tem­atic failure.

    A pure fan­tasy for sure.

    You need to read Evola, Spengler,Yockey.

    Also, Hayeks road to serf­dom was about the “free mar­ket” itself, it only uses “social­ism” as a cover. Failed men like Hayek rep­re­sent the weak­ness of the enlight­ment. The party is over for materialism.

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