April 24, 2014

Some links on Ukraine

 

Ukraine oil pipelines

China/Russia pipelines: Reuters on the fossil fuel geopolitics behind the Ukraine conflict

MOSCOW/BEIJING, April 23 (Reuters) – Europe’s plans to reduce its dependence on Russian energy as the Ukraine crisis threatens supplies are spurring efforts by Russia’s top producer, Gazprom, to sign a deal next month to pump gas to China, industry sources say.

The elusive deal, slated to be signed next month when Russian President Vladimir Putin is expected to visit China and seen as vital if Russia is to be a big player in Asian gas markets, would wrap up a decade of talks in which price has been the main obstacle.

“Judging by the speed of work which is under way in Gazprom, I would say that the possibility that the deal would be signed is 98 percent,” a Gazprom source said, adding agreement on what China would pay for the gas was close. [READ THE REST.]

Cutting off Ukraine: The FT on Russia’s risk of killing its golden goose

Arseniy Yatseniuk, Ukraine’s beleaguered premier, claims his country is facing not just military aggression from neighbouring Russia, but “another kind of aggression – aggression through its gas supplies”.

Russia’s military intervention in Ukraine is all too real. President Vladimir Putin admitted last week that gunmen who helped Moscow annex Ukraine’s Black Sea peninsula of Crimea last month were Russian. Few western leaders doubt that pro-Russian separatists in eastern Ukraine also include Russian soldiers.

Yet while it is difficult to disentangle the gas dispute from the geopolitical crisis, the accusation of “energy aggression” by Russia and its natural gas monopoly, Gazprom, is less clear cut.

By cutting off gas to Ukraine in 2006 and 2009 amid pricing disputes, Gazprom has hardly endeared itself to Kiev, or to European customers further west – which experienced disruptions to Russian supplies through the massive transit pipelines that run across Ukraine.

Now, paradoxically, Russia seems to be putting maximum pressure on its neighbour’s struggling government, while doing its best to avoid cutting off supplies. [READ THE REST]

Send a message to Putin: WSJ on why a trans-Atlantic energy partnership makes geostrategic sense

Energy has always been central to creating a trade and investment bloc through the Transatlantic Trade and Investment Partnership. If a TTIP agreement can reduce wide differences in energy prices between Europe and the U.S., Europeans will pay less for energy, while American energy producers will finally be able to profit from the recent energy boom by selling at competitive market prices. Trying to artificially hold down prices has heavy costs for domestic producers, encourages consumption, and dampens energy production over…  [READ THE REST]

April 3, 2014

Was Marx Right?

marx

For Karl Marx’s birthday last year, his hometown of Trier, Germany, displayed 500 figures by Ottmar Hoerl. Thomas Wieck/Agence France-Presse-Getty Images

In the golden, post-war years of Western economic growth, the comfortable living standard of the working class and the economy’s overall stability made the best case for the value of capitalism and the fraudulence of Marx’s critical view of it. But in more recent years many of the forces that Marx said would lead to capitalism’s demise – the concentration and globalization of wealth, the permanence of unemployment, the lowering of wages – have become real, and troubling, once again.

The fall of communism discredited Marx’s political vision. But, as observers have wondered before, is his view of our economic future being validated?

Here’s the voice of reason in the debate:

November 8, 2013

Could Israel Become a Cultural Superpower?

Israeli supermodel Bar Refaeli was painted onto a Southwest Airlines plane to promote the 2009 Sports Illustrated Swimsuit Issue. Photo: Christopher Ebdon / flickr

You don’t have to have a huge army or a major global economy to have influence way beyond your size.

By Benjamin Kerstein in The Tower:

Despite its high international profile, Israel has always been a somewhat provincial county, with a domestic culture largely unknown to outsiders. The classic pieces of Israeli pop culture, such as the comedy group Ha’Gashash Ha’Hiver, Eretz Israel and Mizrahi music, and the classic bourekas movies, remain ubiquitous in Israel—most Israelis can quote lines from them at will—but almost nowhere else. Everyone in the world knows who Brad Pitt is, but no one outside of Israel knows Yehuda Levi, his rough Israeli equivalent. Indeed, when Yair Lapid suddenly emerged as Israel’s newest political star, the global media proved completely ignorant of a man who had been one of Israel’s most famous media personalities for decades. [READ THE REST]

September 30, 2013

Does money buy you more power in China or in America?

For anyone that thinks the “People’s [sic] Republic of China” is socialist, check this out from The Economist:

Many Americans grumble about the wealth of their politicians, but they are paupers compared with their Chinese counterparts. The 50 richest members of America’s Congress are worth $1.6 billion in all. In China, the wealthiest 50 delegates to the National People’s Congress, the rubber-stamp parliament, control $94.7 billion. Darrell Issa, a Republican from California, is the richest man in Congress, with $355m. China’s richest delegate is Zong Qinghou, boss of Hangzhou Wahaha Group, a drinks-maker, whose wealth is almost $19 billion (including assets distributed to family). Last year Mr Zong was China’s richest man, but was overtaken by Wang Jianlin, who is not a member of the NPC. Wealth can bring problems wherever you are. On September 20th, a man, angry at being refused a job, attacked Mr Zong with a knife near his home in Hangzhou. Mr Zong survived, with nasty cuts to his hand.

[READ THE REST]

July 23, 2013

Soft power: Qatar’s Foreign Policy Adventurism

John Kerry with the Emir of Qatar in Doha, Foreign Policy of Hamad bin Khalifa al Thani

John Kerry with the Emir of Qatar in Doha, June 2013 (Jacquelyn Martin/Courtesy Reuters)

Earlier this month, the Taliban opened an official office in Doha, landing Qatar once more in Western headlines. That might have been part of Qatar’s plan: the decision to host such a controversial office is symptomatic of a desire to play a central role in a wide array of important diplomatic issues. Yet the debacle of the office’s first 36 hours shows just how far Qatar still has to go.

[READ THE REST]

June 13, 2013

Israel’s arm trade with the Arab and Muslim world

English: This is a map of countries (in green)...

English: This is a map of countries (in green) that reject passports from Israel (blue). Countries that reject not only Israeli passports but also any passport which contain Israeli stamps or visas are in dark green. The depicted countries are (from left to right): Algeria, Libya, Sudan, Somalia, Saudi Arabia, Yemen, Lebanon, Syria, United Arab Emirates, Iran, Pakistan, Bangladesh, Malaysia and Brunei. (Photo credit: Wikipedia)

From Elder of Zion, who quote Haaretz:

Israel has exported security equipment over the past five years to Pakistan and four Arab countries, according to a British government report. The report, which deals with British government permits for arms and security equipment exports, says that in addition to Pakistan, Israel has exported such equipment to Egypt, Algeria, the United Arab Emirates and Morocco.

The report was released by Britain’s Department for Business, Innovation and Skills, which oversees security exports and publishes regular reports on permits granted or denied to purchase arms, military equipment or civilian items that are monitored because they can be put to security uses.

From January 2008 to December 2012, British authorities processed hundreds of Israeli applications to purchase military items containing British components for use by the Israel Defense Forces, or to go into systems exported to third countries.

The British reports also list the countries to which Israel sought to export the items. Among Israel’s clients are Muslim countries with which it does not have diplomatic ties. According to the report, in 2011 Israel sought to purchase British components to export radar systems to Pakistan, as well as electronic warfare systems, Head-up Cockpit Displays ‏(HUD‏), parts for fighter jets and aircraft engines, optic target acquisition systems, components of training aircraft, and military electronic systems. In 2010, Israel applied for permits to export electronic warfare systems and HUDs with components from Britain to Pakistan. Also in 2010, Israel sought permits to supply Egypt and Morocco with Israeli electronic warfare systems and HUD systems that use British parts.

Here’s Haaretz’ graphical summary of the article:

Although at first glance it sounds a little alarming for Israel to sell to countries that consider it an enemy, I think it is a reasonable assumption that the Israeli government is careful not to give away any technologies that would hurt Israel’s defense.

Which means that this is about as massive a BDSFail as can be imagined!

Already the Arabic media are reporting this, so we can expect a backlash any moment now and the denials from Muslim countries will follow soon afterwards.

UPDATE: The first denial, from Pakistan.

UPDATE 2: #2 from Egypt. (h/t IranAware)

August 7, 2012

Porn queen’s money quote

Jenna Jameson at the Adult Entertainment Expo ...

Jenna Jameson at the Adult Entertainment Expo 2007, with short blonde hair (Photo credit: Wikipedia)

From Jeff Weintraub:

Jenna Jameson cuts to the heart of the matter

Quote of the Day

“When you’re rich, you want a Republican in office.”

— Porn star Jenna Jameson, quoted by CBS News, endorsing Mitt Romney for president at a San Francisco strip club.

Actually, the rich, unlike many other people, have mostly been doing fine during the Obama administration (not least because Obama and the Democrats saved the economy from going over the edge into a full-scale depression). They also did fine, incidenatlly, during the Clinton administration. And even if they wind up paying slightly higher taxes, at Clinton-era rates, they’ll still be doing fine. But that doesn’t prevent them fromwhining that they are being mistreated, and that any failure to accord them total deference (“class warfare”)  is somehow bad, not just for them, but for the public interest. Jenna Jameson, at least, seems to have been straightforward about her reasons for supporting Romney … now that she’s gotten rich herself.

(See the follow-up at The Borowitz Report.)

Jeff Weintraub also passes on some useful links on which economists are worth listening to. The first is from Jonathan Portes. Here’s his money quote:

My shortlist (apologies in advance to those I’ve omitted) of economists commenting on macroeconomic policy who I think qualify is something like the following:

  • KrugmanDeLong, and Wren-Lewis on fiscal policy when interest rates are at the zero lower bound;
  • Adam Posen on monetary policy when interest rates are at the zero lower bound;
  • Martin Wolf on private sector savings and public sector deficits (the financial balance approach);
  • Richard Koo on the implications of a “balance sheet recession”

Jeff W follows up here, with Brad DeLong and Mark Thoma. Finally, here is Bruce Bartlett on where the US Federal deficit came from.

July 20, 2012

The US Senate, HSBC and Saudi Funding of Terrorism

Hsbc

Hsbc (Photo credit: green_kermit)

via Paul Stott:

Today’s Telegraph Business pages and London’s City A.M. both gave priority to the US Senate Committee investigation into HSBC.

The Committee found HSBC’s lax procedures allowed it to be used to launder millions of dollars by Mexican drug cartels, the Saudi bank Al Rajhi (linked to Al Qaeda) and, in the face of international restrictions, the Iranian and Sudanese governments.
At the moment media attention in the UK is centred on Trade Minister Lord Green. An ordained Church of England Vicar who writes on business ethics, Green was Chairman of HSBC from 2003-6 and then Chief Executive until 2010, when he joined David Cameron’s government.

Researchers such as Robert Pape have in the past pinned down that Al-Qaeda appears to be a mostly Saudi organisation. Al Rajhi bank, the Kingdom’s largest financial institution, seems to have played a key role in the activities of the world’s most infamous terrorist organisation. The executive summary of Carl Levin‘s senate report states:

In particular, HSBC has been active in Saudi Arabia, conducting substantial banking activities through affiliates as well as doing business with Saudi Arabia’s largest private financial institution, Al Rajhi Bank. After the 9-11 terrorist attack in 2001, evidence began to emerge that Al Rajhi Bank and some of its owners had links to financing organizations associated with terrorism, including evidence that the bank’s key founder was an early financial benefactor of al Qaeda. In 2005, HSBC announced internally that its affiliates should sever ties with Al Rajhi Bank, but then reversed itself four months later, leaving the decision up to each affiliate. HSBC Middle East, among other HSBC affiliates, continued to do business with the bank.

There is plenty more along those lines – but I encourage you to read Levin’s report executive summary, and/or the report in full here.

May 9, 2012

The New Few: warning from a Tory radical

The New Few, or A Very British Oligarchy: Power and Inequality in Britain Now 
By Ferdinand Mount (Simon & Schuster 305pp £18.99)

From the ES review:

The New Few then races through some corrosive examples. The still-shocking £9bn HSBC takeover of sub-prime vultures Household, culminating in £53bn set-aside to sweep up this folly; the “festering morass of bad debts” that was HBOS; vainglorious Fred the Shred, and many more. The central concern is the arbitrary power of the CEO and decline of the active shareholder, interlocked with the rise of the fund manager with their top-slice off every transaction: a “croupier’s take”. In short, there was systemic collusion between the two dominant groups. “One set of oligarchs- the fund managers – approve the size of salaries, bonuses and pension pots for another set of oligarchs – the CEOs, board members and senior managers”.

Why so little appetite to confront these excesses? Mount identifies three basic reasons- or excuses, or illusions – that sustain the system. “The market is always right”; “big is beautiful”, and “complexity equals progress”: they echo the dominance of neo-liberalism, of a system too big to fail, due to the sheer complexity of financial products with no appreciation of moral hazard. A brief history of oligarchy follows, and the forces that shape it: war, technology, bureaucracy, forms of ideology – the links between money and power.

From Nick Cohen’s review: Continue reading

May 2, 2012

The Failure of Capitalist Production

This is the opening of an interview with Andrew Kliman, about his new book, The Failure of Capitalist Production. Read the whole thing here.

Jacket image for The Failure of Capitalist ProductionDuvinrouge: Can you tell me what the key message of your new book, The Failure of Capitalist Production, is?

Andrew Kliman: The Great Recession was waiting to happen. There were unresolved problems in the system of capitalist production that had been building up over a third of a century. The rate of profit fell and never recovered in a sustained manner, which resulted in persistently sluggish investment and economic growth, which in turn resulted in rising debt burdens. And these problems induced governments to solve them or paper them over with policies that made the debt build-up even bigger.

DVR: Your book is full of statistics and as we know interpretations of statistics can be very different. It would appear that your choice of historical cost as opposed to current cost is crucial. Please can you explain the difference?

Accountants can value assets at their current cost or at their original cost when they were acquired. The latter is usually called their “historical cost.” Both methods have their place. But one thing you can’t do is compute the rate of profit, i.e., the rate of return on investment, by dividing profit by the current cost of the capital assets. It’s not wrong to do this; it’s impossible. What you wind up with just isn’t a rate of return on investment. What the assets are currently worth is simply not the same thing as the amount of money that has actually been invested in them. To measure the latter, you have to take their historical cost and subtract depreciation.

DVR: You only look at US data, does this mean you can’t be sure that profit rates have fallen worldwide?

 

AK: Well, research I’ve done on rates of profit of U.S. multinationals’ foreign subsidiaries, only some of which is reported in the book, has led me to conclude that the worldwide rate of profit of all corporations, not just U.S. corporations and their subsidiaries, probably trended downward between the early 1980s and the Great Recession. U.S. subsidiaries’ rates of profit fell in the great majority of the 20 countries in which at least 1% of U.S. foreign investment is located. Also, the fall was very broad-based in terms of industrial composition—it wasn’t the case that subsidiaries’ rates of profit fell because, for instance, the manufacturing sector took an especially hard hit. I also found evidence that globally-operative forces, not only country-specific ones, tended to depress the rate of profit in a large majority of cases. When you put these facts together, it’s not easy to believe that there was something unusual about U.S. subsidiaries and corporations in the U.S. that caused their rates of profit to fall while the worldwide rate of profit was rising.

DVR: Is it your argument that the growth in debt is a consequence of the falling rate of profit?

[continue…]

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