The Diseased, Lying, Condition of America’s ‘News’Media

Eric Zuesse, originally posted at strategic-culture.org

Both President Trump and former President Obama are commonly said in America’s ‘news’ media to be or to have been “ceding Syria to Russia” or “ceding Syria to Russia and Iran,” or similar allegations. They imply that ‘we’ own (or have some right to control) Syria. That’s not only a lie; it is a very evil and harmful one, dangerously goading the U.S. President to go even more against Russia (and Iran) (and, of course, against Syria) than has yet been done — but the ‘news’media don’t care about that evil, and that falsehood, and that dangerousness — they do it anyway, and none of them attacks the others for perpetrating this vicious war-mongering lie, that lying provocation to yet more and worse war than already exists there. And the fact that none is exposing the fraudulence of the others on this important matter, is a yet-bigger additional scandal, beyond and amplifying the media’s common lying itself. Because they all function here like a mob, goading to more and worse invasions, and doing it on the the basis of dangerous lies — that America, and not the Syrians themselves, own Syria.

These lies simply assume that America (probably referring to the U.S. Government, but whatever) somehow “has” or else “had” Syria (so that America can now ‘cede’ it, to anyone); and this assumption (that the U.S. somehow owns Syria) is not only an imperialistic one (which is bad, and wrong, in itself), but it reduces to nothingness the rights (in the minds of the American public) of the Syrian people, to control their own land. That lie is what America’s ‘news’media won’t expose, but instead they all cooperate with it, when they’re not actually participating, themselves, in spreading these lies.

What they are doing is also to slur Russia, and to slur Iran, for having accepted the request from Syria’s Government, for assistance in protecting Syria’s Government, against the tens of thousands of jihadists who had been recruited throughout the world by the Saudi-American alliance, to overthrow and replace Syria’s Government, to replace it with one that would be appointed by the Saud family (’America’s ally’), the fundamentalist-Sunni royal family who (as the absolute monarchy there) do actually own Saudi Arabia — a monarchical dictatorship, which the U.S. Government calls an ‘ally’.

The evilness of this imperialistic assumption, which is being constantly spread by the U.S.-and-allied ‘news’media, is as bad as is its falseness, because “America” (however one wishes to use that term) never had, never possessed, any right whatsoever to control Syria. Of course, neither does Russia possess such a right, nor does Iran, but neither Russia nor Iran is asserting any such right; both instead are there to protect Syria’s national sovereignty, against the invaders (including the U.S., and the Sauds’ regime). But the U.S.-and-allied ‘news’media don’t present it that way — the honest way — not at all. Such truths are instead suppressed.

I was immediately struck by this false and evil assumption that the U.S. owns Syria, when reading the June 15th issue of The Week magazine. It contained, under its “Best Columns” section, a piece by Matthew Continetti (“Obama Too Good for America”), which says, among other falsehoods, “Obama was wrong about a lot of other things, too, like … ceding Syria to Russia.” That phrase, “ceding Syria to Russia” rose straight out from the page to me as being remarkable, stunning, and not only because it suggests that America owns that sovereign nation, Syria. I was especially struck by it because the CIA has several times attempted Syrian coups and once did briefly, in 1949, overthrow and replace Syria’s democratically elected President. But is that really something which today’s America’s ‘news’media should encourage the American public to be demanding today’s American politicians to be demanding from today’s American President? How bizarre, even evil, an idea is that? But it is so normal that it’s a fair indication of how evil and untrustworthy today’s American ‘news’media actually are. I just hadn’t noticed it before.

Publishing such a false and evil idea, without any accompanying commentary that truthfully presents its context and that doesn’t simply let the false and evil allegation stand unchallenged — that instead lets it be unchallenged both factually and morally — is not acceptable either factually or morally, but then I checked and found that it’s the almost universal norm, in today’s U.S. ‘news’media. For examples:

On 17 April 2018, CBS News headlined “Lindsey Graham ‘unnerved’ after Syria briefing: ‘Everything in that briefing made me more worried’” and presented that U.S. Senator saying, “It seems to me we are willing to give Syria to Assad, Russia, and Iran.” He was criticizing President Trump as being “all tweet and no action.” He wanted more war, and more threat of war. But when President Obama had repeatedly denied in public that only the Syrian people should have any say-so over whom Syria’s leaders ought to be, U.N. Secretary General Ban ki-Moon repeatedly contradicted the U.S. President’s viewpoint on this, and he said, “The future of Assad must be determined by the Syrian people.” If the American people have become so dismissive of international law as this, then is it because the U.S. ‘news’media start with the ridiculously false presumption that “America” (whatever that refers to) is the arbiter of international law, and therefore has the right to dictate to the entire world what that law is, and what it means? Is America, as being the dictator over the whole planet, supposed to be something that Americans’ tax-dollars ought to be funding — that objective: global dictatorship? How does that viewpoint differ, then, from perpetual war for perpetual ‘peace’ — a dictum that’s enormously profitable for America’s big ‘Defense’ contractors, such as Lockheed Martin, but that impoverishes the general public, both in America, and especially in the countries (such as Syria) where ‘our’ Government drops bombs in order to enforce its own will and demand, that: “Assad must go!”

In fact, as any journalist who writes or speaks about the Syrian situation and who isn’t a complete ignoramus knows, Bashar al-Assad would easily win any free and fair Presidential election in Syria, against any contender. His public support, as shown not only in the 2014 Syrian Presidential election, but also in the many Western-sponsored opinion-polls in Syria (since the CIA is always eager to find potential candidates to support against him), show this.

On 17 December 2016, Eric Chenoweth, a typical neocon Democratic Party hack, headlined “Let Hamilton Speak: Recapturing American Democracy”, and he wrote: “Trump’s statements and appointments make clear he intends to tilt American policy to serve Russian interests: ceding Syria to Russia by ending support to pro-Western rebels; possibly lifting economic sanctions and recognizing the annexation of Crimea; proposing an alliance with Russia in the war on terror while remaining uncommitted to the defense of NATO allies, in particular the Baltic countries vulnerable to Russian aggression. Restoring American Democracy When they meet on December 19, Republican Electors who reflect on their constitutional duty should not then affirm Trump’s election.” Those “pro-Western rebels” in Syria were actually led by Al Qaeda’s Syrian branch. Without them, the U.S. regime wouldn’t have had any “boots on the ground” forces to speak of there. In fact, the U.S. regime has actually been fronting for the Saud family to take over control of Syria if and when Syria’s Government falls. The Saud family even selected the people who in the U.N. peace talks on Syria represent ‘the rebels’ — the Sauds, who have been Syria’s enemy ever since 1950, selected ‘Syria’s opposition’, who were now seeking to take over Syria if and when ‘America’s moderate rebels’ succeed. Both Al Qaeda and ISIS are actually fundamentalist-Sunnis, like the Saud family are, and Assad’s Government is resolutely non-sectarian. Assad himself is a non-Islamist Alawite Shiite secularist, which virtually all fundamentalist Sunnis (such as the Sauds are) are taught to despise and to hate — especially because he’s Shiite. The U.S. regime knows that neither it, which is considered Christian, nor Israel, which is theocratically Jewish, could practically succeed at imposing rule in Syria, but that maybe the Sauds could — so, they are the actual leaders of the ‘pro-Western’ forces, seeking to replace Syria’s secularist Government. Overthrowing Syria’s Government would be their victory. It would be the Saud family’s victory. But this fact is kept a secret from the American public, by the U.S.’news’media.

Back on 17 September 2016, shortly before the change in U.S. Administrations, Obama bombed the Syrian Government’s garrison in Der Zor, or Deir Ezzor, which is the capital of Syria’s oil-producing region. He did it in order to enable ISIS forces, which surrounded the city, to rush in and conquer it. Obama did this only eight days after his Secretary of State, John Kerry, had conceded to the demand by Sergei Lavrov, Russia’s Foreign Minister, Russia’s demand that in a cease fire, Russia be allowed to continue bombing not only ISIS there, which Kerry agreed should continue to be bombed by both the U.S. and Russia, but also Al Qaeda’s forces — which until 9 September 2016, Obama refused to allow to be bombed during a cease-fire. But, finally, after a year of deadlock between Russia and the United States on that crucial issue, Kerry and Lavrov both signed a cease-fire agreement, and it allowed both ISIS and Al Qaeda-led forces to continue being bombed. (Russia had been bombing both, ever since 30 September 2015, when Russia began its bombing campaign in Syria.) That cease-fire went into effect on September 12th. Then Obama, unannounced — and a great disappointment to his Secretary of State, who wasn’t informed of this in advance — broke the agreement, by bombing the Syrian outpost in Deir Ezzor — and that’s the moment when Vladimir Putin quit his efforts to get agreements from Obama, because Putin now recognized that Obama was totally untrustworthy.

Already by late September of 2015, even prior to Russia’s having been requested by President Assad to enter the war in order to speed up the defeat of what Washington still calls ‘the rebels’, it was clear that Washington (actually Riyadh) wasn’t going to take over Syria; and Americans were — and are — being taught by the ‘news’media, that this was because Obama was ‘weak’ and didn’t care enough about ‘human rights’ in Syria, and about ‘democracy’ in Syria. So, on 28 September 2015, Matt Purple at the libertarian “Rare Politics” site, headlined “Pentagon admits that the Syrian rebels it trained handed over weapons to al Qaeda”, and he wrote “Neoconservatives wail that President Obama is ceding Syria to Russia — but the reason the Russians are taking the lead is precisely because America has sidelined itself.” But the U.S. regime hadn’t at all “sidelined itself”; it continued — and it continues to this day — its invasion and occupation of that land. Trump’s policy on Syria is basically a continuation of Obama’s — and it’s not at all “ceding Syria to Russia,” or “ceding Syria to Russia and Iran.”

Because of America’s ‘news’media, it still isn’t “ceding Syria to the Syrians” — as Ban ki-Moon and international law would. That wouldn’t be profitable for Lockheed Martin etc. (whose biggest customers other than the U.S. Government are the Sauds, and Trump alone sold $400 billion of U.S. weapons to them); so, it’s not done.

Syria’s sovereignty is utterly denied by the U.S. regime, but if the U.S. regime were to succeed, the big winners would actually be the Saud family.

Do the American people have sovereignty, over ‘their’ (our) Government? U.S. ‘news’media effectively ban that question. Perhaps what controls the U.S. Government is the Saudi-Israeli alliance: the Sauds have the money, and the Israelis have the lobbyists. Of course, the U.S. ‘news’media are obsessed whether Russia controls the U.S. Government. That diversionary tactic is extremely profitable to companies such as General Dynamics, and America’s other weapons-manufacturers, which thrive on wars — especially by selling to the Sauds, and to their allies (and, obviously, not at all to Russia).

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Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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How the New York Times Lies About Lies: Obama v. Trump as Example

Eric Zuesse, originally posted at strategic-culture.org

Although the New York Times says that President Donald Trump lies vastly more than did President Barack Obama, the definite liar in that comparison — based on the factual record, to be presented here — is the New York Times itself. It lies in alleging this, which isn’t to say that either President lies more frequently than the other, but instead, that the Times’s calculation fails to count, at all, but instead altogether ignores, some of President Obama’s very worst lies — ones that were real whoppers. These were lies that were essential to his maintaining support among Democrats (such as the owners of this corporation, the NYT, are), and that would keep Democrats’ support only if they judged him by his words and not by his deeds: failed to judge him by his actual decisions and actions (such as the NYT’s owners do — or else they secretly know the truth on this, but prevent this truth from being published by their employees). Even to the present day, Obama is evaluated by Democrats on the basis of his lies instead of on the basis of his actions. He’s admired for his stated intentions and promises, which were often the opposite of what his consistent actual decisions and actions turned out to be on those very same matters, on which he had, in retrospect, quite clearly lied (though this was covered-up at the time — and still is).

For example, among the list of lies that the NYT counts from Obama, is excluded Obama’s having asserted on 20 May 2009, at the signing into law of both the Helping Families Save Their Homes Act and the Fraud Enforcement and Recovery Act: “This bill nearly doubles the FBI’s mortgage and financial fraud program, allowing it to better target fraud in hard-hit areas. That’s why it provides the resources necessary for other law enforcement and federal agencies, from the Department of Justice to the SEC to the Secret Service, to pursue these criminals, bring them to justice, and protect hardworking Americans affected most by these crimes. It’s also why it expands DOJ’s authority to prosecute fraud that takes place in many of the private institutions not covered under current federal bank fraud criminal statutes — institutions where more than half of all subprime mortgages came from as recently as four years ago.”

Also not counted, but excluded, by the NYT, as having been an Obama lie, was his 24 January 2012 State of the Union Address assertion: “Tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. (Applause.) This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans. Now, a return to the American values of fair play and shared responsibility will help protect our people and our economy.”

But both statements were lies. The Inspector General of the U.S. Department of Justice issued on 13 March 2014 its “Audit of the Department of Justice’s Efforts to Address Mortgage Fraud,” and reported that Obama’s promises to prosecute turned out to be just lies. DOJ didn’t even try; and they lied even about their efforts. The IG found: “DOJ did not uniformly ensure that mortgage fraud was prioritized at a level commensurate with its public statements. For example, the Federal Bureau of Investigation (FBI) Criminal Investigative Division ranked mortgage fraud as the lowest criminal threat in its lowest crime category. Additionally, we found mortgage fraud to be a low priority, or not [even] listed as a priority, for the FBI Field Offices we visited.” Not just that, but, “Many Assistant United States Attorneys (AUSA) informed us about underreporting and misclassification of mortgage fraud cases.” This was important because, “Capturing such information would allow DOJ to … better evaluate its performance in targeting high-profile offenders.”

Privately, Obama, early in his Administration, had told Wall Street executives that he would protect them. That statement, made in private to the leaders of Wall Street, turned out to have been honest. Though he lied often to the public, he never (so far as the available public record has shown) did so in private (except that he lied in private to Vladimir Putin, but neoconservatives such as the NYT’s owners and executives and editors don’t mind that at all — but they also don’t count it, at all).

On 27 March 2009, Obama assembled the top executives of the bailed-out financial firms in a secret meeting at the White House, and he assured them that he would cover their backs; he promised them “My administration is the only thing between you and the pitchforks”. It was never on the White House website; it was leaked out, which is one of the reasons Obama hates leakers (such as Chelsea Manning, Edward Snowden, and Julian Assange). What the DOJ’s IG indicated was, in effect, that Obama had kept his secret promise to them.

Here is the context in which he had said that (from page 234 of Ron Suskind’s 2011 book, Confidence Men, with boldfacings by me):

“My administration is the only thing between you and the pitchforks.”

It was an attention grabber, no doubt, especially that carefully chosen last word.

But then Obama’s flat tone turned to one of support, even sympathy. “You guys have an acute public relations problem that’s turning into a political problem,” he said. “And I want to help. But you need to show that you get that this is a crisis and that everyone has to make some sacrifices.” According to one of the participants, he then said, “I’m not out there to go after you. I’m protecting you. But if I’m going to shield you from public and congressional anger, you have to give me something to work with on these issues of compensation.”

No suggestions were forthcoming from the bankers on what they might offer, and the president didn’t seem to be championing any specific proposals. He had none: neither Geithner nor Summers believed compensation controls had any merit.

After a moment, the tension in the room seemed to lift: the bankers realized he was talking about voluntary limits on compensation until the storm of public anger passed. It would be for show.

Obama said “Everyone has to make sacrifices,” but he was talking to people who simply refused to be included in that “everyone.” As the mega-crooks who had been profiting from the crimes that had brought about the global economic collapse, those “sacrifices” should have been life-imprisonments. Only by means of such accountability, would their successors not try anything of the sort that these banksters had done. But such was not to be the case. So, the crimes continued.

Obama kept his word to them. The banksters got off scot-free, and kept their personal hundreds of millions of dollars ‘earned’.

He had been lying to the public, all along. Not only would he not prosecute the banksters, but he would treat them as if all they had was “an acute public relations problem that’s turning into a political problem.” And he thought that the people who wanted them prosecuted were like the KKK who had chased Blacks with pitchforks before lynching. According to the DOJ, their Financial Fraud Enforcement Task Force (FFETF) was “established by President Barack Obama in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.” But, according to the Department’s IG, it was all a fraud: a fraud that, according to the DOJ, itself had been going on since at least November 2009.

The IG’s report continued by pointing out the Obama-appointed Attorney General’s lies, noting that on 9 October 2012, “the FFETF held a press conference to publicize the results of the initiative,” and:

“The Attorney General announced that the initiative resulted in 530 criminal defendants being charged, including 172 executives, in 285 criminal indictments or informations filed in federal courts throughout the United States during the previous 12 months. The Attorney General also announced that 110 federal civil cases were filed against over 150 defendants for losses totaling at least $37 million, and involving more than 15,000 victims. According to statements made at the press conference, these cases involved more than 73,000 homeowner victims and total losses estimated at more than $1 billion.

“Shortly after this press conference, we requested documentation that supported the statistics presented. … Over the following months, we repeatedly asked the Department about its efforts to correct the statistics. … Specifically, the number of criminal defendants charged as part of the initiative was 107, not 530 as originally reported; and the total estimated losses associated with true Distressed Homeowners cases were $95 million, 91 percent less than the $1 billion reported at the October 2012 press conference. …

“Despite being aware of the serious flaws in these statistics since at least November 2012, we found that the Department continued to cite them in mortgage fraud press releases. … According to DOJ officials, the data collected and publicly announced for an earlier FFETF mortgage fraud initiative – Operation Stolen Dreams – also may have contained similar errors.”

Basically, the IG’s report said that the Obama Administration had failed to enforce the Fraud Enforcement and Recovery Act of 2009. This bill had been passed overwhelmingly, 92-4 in the Senate, and 338-52 in the House. All of the votes against it came from Republicans. (Perhaps Obama was secretly a Republican.) The law sent $165 million to the DOJ to catch the executive fraudsters who had brought down the U.S. economy, and it set up the Financial Crisis Inquiry Commission, and had been introduced and written by the liberal Democratic Senator Patrick Leahy. President Obama signed it on 20 May 2009. At that early stage in his Presidency, he couldn’t afford to display publicly that he was far to the right of every congressional Democrat, so he signed it.

Already on 15 November 2011, Syracuse University’s TRAC Reports had headlined “Criminal Prosecutions for Financial Institution Fraud Continue to Fall,” and provided a chart showing that whereas such prosecutions had been running at a fairly steady rate until George W. Bush came into office in 2001, they immediately plunged during his Presidency and were continuing that decline under Obama, even after the biggest boom in alleged financial fraud cases since right before the Great Depression. And, then, on 24 September 2013, TRAC Reports bannered “Slump in FBI White Collar Crime Prosecutions,” and said that “prosecutions of white collar criminals recommended by the FBI are substantially down during the first ten months of Fiscal Year 2013.” This was especially so in the Wall Street area: “In the last year, the judicial District Court recording the largest projected drop in the rate of white collar crime prosecutions — 27.8 percent — was the Southern District of New York (Manhattan).” On 29 July 2015, Syracuse University’s TRAC Reports headlined “Federal White Collar Prosecutions At 20-Year Low,” and linked to their full study, which showed that, whereas in fiscal year 2004-2005, under George W. Bush, “Bank Fraud” had been the #1 most-prosecuted of all ”white collar crime matters,” it was, in the latest fiscal year, 2014-2015, only #3.

These were extremely serious crimes: they crashed the world’s economy in 2008. But there was no White House interest in pursuing them. Instead, the Obama Administration blocked any such prosecutions, or even investigations into specific cases. An example: In January 2011, there was “The Financial Crisis Inquiry Report” from the Commission (FCIC, or Financial Crisis Inquiry Commission) that was appointed by the President and the leaders of both political Parties in Congress. It was rigged. An instance of this rigging appeared even in the NYT. On 21 September 2013, a non-NYT reporter, William D. Cohan, formerly of Wall Street but now an independent investigative journalist, managed to headline there, “Was This Whistle-Blower Muzzled?” and he described how Richard M. Bowen III, who had testified to the FCIC, was muzzled by them. Bowen’s attorney told him that Bradley J. Bondi, the FCIC’s deputy general counsel, demanded changes in his testimony, and personally threatened that he “thinks that the way it’s written now, Citi will declare war on both you and the F.C.I.C., and it will primarily consist of an effort to discredit you.” Bowen was advised by his attorney, “Remove the names of people at Citi,” as the way to prevent further retaliation. It was done.

However, when a bilked federal agency sued the banksters, quashing the crimes wasn’t quite so easy. Shahien Nasiripour, at huffingtonpost, bannered, on 16 May 2011, “Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers,” and he reported that the Inspector General of the U.S. Department of Housing and Urban Development had carried out audits of Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial, and found, in each case, that they had swindled the Federal Government. “The internal watchdog office at HUD referred its findings to the Department of Justice, which had to decide whether to file charges” under “the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government.” All of “the audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes … using defective and faulty documents.” Obama’s ‘Justice’ Department refused even to prosecute, much less to pursue, any of these mega-crooks, who had cheated the U.S. Government — ultimately U.S. taxpayers.

At lower levels of the Federal Government, there was a desire to prosecute banksters. The official “2010 Mortgage Fraud Report” by the FBI analyzed “the breadth and depth of mortgage fraud crimes perpetrated against the United States and its citizens during 2010,” and found that, “Mortgage fraud continued at elevated levels in 2010, consistent with levels seen in 2009.” However, the FBI is only an investigative arm of the U.S. Government, not actually a prosecutorial agency. Only the Executive is that: the President, via his chosen U.S. Attorney General, refused to prosecute banksters.

So: if these sorts of lies weren’t outright frauds against the American public, then what could possibly be?

But that’s not all of what belongs in the “whopper” or “Big Lie” category from Obama: he lied constantly about Ukraine, and about Syria, and about Russia and about his intentions toward Russia, and about his proposed international-trade treaties: TPP. TTIP, and TISA.

None of these whoppers was included in the listing that the NYT presented in their 14 December 2017 article “Trump’s Lies vs. Obama’s”.

In addition, Obama lied massively regarding his foreign-policy intentions and actions, and the NYT (like other U.S. ‘news’media) hid and hide the truth and asserted, and they continue to assert, his lies on those matters, even though they were often blatantly false; so that the NYT’s ‘news’-reports on those key matters of U.S. foreign relations — not only on the U.S. Government’s actions, but even on its intentions — constitute egregiously false ‘history’ on those key matters of Obama’s foreign policies, and no historian (but only, at best, a ‘historian’) can unquestioningly trust that newspaper regarding those matters. Especially, a citation of the NYT as presenting truth regarding either Syria or Ukraine should elicit strong suspicion from a reader, not trust. This is not to say that other American newspapers are any better, nor that highly respected American journalists who are employed by other U.S. media deserve to be trusted, but only that the NYT isn’t, and doesn’t. No intelligent person can trust it. The record of its deceitfulness is clear, especially on important political matters.

I am nonpartisan toward persons and toward political parties, and consider all of America’s Presidents since 1981 (if not since 1968, but with the exception of Carter) to be and have been loathsome people (not even well-intentioned), but ‘news’media such as the New York Times aren’t any more trustworthy (nor more honest) than these Presidents have been, and the pontifications from such ‘news’media (in both their ’news’-reporting and opinion-pieces) are just propaganda, mixtures of truths with lies — and more and more of the public are coming to recognize this disgusting fact, so these media’s pretenses to honesty and trustworthiness are having fewer and fewer believers. But these media claim that fake ‘news’ comes only from their non-mainstream competitors (some of which are actually far more honest than they). Preserving their cartel is crucial to them. And it’s crucial to the people who benefit from this cartel.

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Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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Gresham’s Law and Bitcoin

Gresham’s law holds that “bad money drives out good money,” meaning that given a choice of currencies (broadly speaking, “money” that serves as a store of value and a means of exchange), people use depreciating “bad” money to buy goods and services and hoard “good” money that is appreciating or holding its value.

As this dynamic plays out, eventually there is little “good money” in circulation and the economy suffers accordingly.

Correspondent AK recently submitted an insightful discussion of Gresham’s law and bitcoin:

1: Discussions surrounding Bitcoin and Gresham’s law immediately devolve into a debate about historical formulation or wording of Gresham’s law. Gresham’s law includes the notion that one or several currencies must be accepted at a defined value under legal tender law. However, the wider economic phenomenon that “powers” Gresham’s law is a universal phenomenon that is independent of any particular legal or cultural context.

To wit, in economic exchange where the seller will accept two different commodities as payment, the buyer will tend to pay with the commodity that in his own eyes is of inferior or lesser value. When this phenomenon is replicated in a large number of economic exchanges, and in reference to the same two commodities, this results in the “bad” currency driving from circulation the “good” currency, as buyers in the marketplace pay with the inferior or lesser-valued commodity (as viewed from their own point of view), when the seller will accept two different commodities as payment.

2: This phenomenon, which we could refer to as Gresham Effects, is independent of the legal framework operating at any given time. If you will accept as payment milk with an expiration date two days from now or milk with an expiration date ten days from now, I will tend to pay you with the milk with an expiration date two days from now. If many similar exchanges occur in the marketplace, this will result in the “bad milk” driving driving the “good milk” from circulation as market participants routinely offer only the milk expiring in two days in their exchanges.

3: Therefore, if in the marketplace sellers are willing to accept either Bitcoin or fiat currency as payment, the phenomenon Gresham Effects tells us that buyers will offer the commodity they view as inferior or of lesser value in these economic exchanges. If market participants generally view fiat currency units as inferior or as lesser in value than Bitcoin currency units, and if this value judgment is repeated in many economic exchanges, this can be expected to result in the “bad” money (fiat) driving the “good” money (Bitcoin) from circulation.

Since Bitcoin was not in wide circulation to begin with, Gresham Effects in this case has the effect of preventing or suppressing the wide-scale use of Bitcoin as an exchange currency. This situation can be expected to last for as long as sellers are willing to accept either fiat currency or Bitcoin as payment and buyers view Bitcoin currency units as superior or of greater value than fiat currency units. In short, due to Gresham Effects Bitcoin will not become a widely circulating medium of exchange while these conditions persist.

Interpretation: To me, this indicates or implies that Bitcoin’s use case is more as a ‘reserve currency/store of value’ and less as a currency for use in daily transactions. In general, I will not relinquish my Bitcoins in exchange for t-shirts or Snickers bars if the seller will accept either Bitcoin or fiat currency. I will prefer to pay for t-shirts and Snickers bars using fiat currency.

On the other hand, when I want to purchase something and I do not have enough fiat currency to pay for it, in this case I may use my “reserve” currency, Bitcoin. For example, if I want to purchase a house and I only have enough fiat currency for 20% of the price, in this case I may use my reserve currency to pay the other 80%. This example assumes that paying the full price by fiat currency is not an option. If I had enough fiat currency to pay the entire price I would pay by fiat currency.

The significance here is that those who are envisioning a future in which Bitcoin becomes a widely circulating medium of exchange may be envisioning something that is at odds with the laws of economics. Both economic law and empirical evidence seem to indicate that due to Bitcoin’s strictly limited supply, market participants may refrain from offering Bitcoin as payment in daily transactions. Bitcoin may have very important use cases, but its most most important use case may not be a widely circulating medium of exchange.

Thank you, AK. As anyone who follows cryptocurrencies knows, the objections to cryptocurrencies and bitcoin specifically are legion: it’s not stable, it can’t be trusted, it isn’t “real money,” etc.

I’d like to illustrate “real money” with a chart of the bolivar, the national currency of Venezuela. Note that until relatively recently the bolivar traded (at least at the official rate) at around 10 bolivars to one U.S. dollar (USD) and around 25 to the USD on the black market (i.e. free market). These exchange rates slowly moved higher, but few expected the bolivar to depreciate to an appalling free-market rate of 100 to one USD.

Rather suddenly, the state issued fiat currency bolivar lost the majority of its purchasing power. This loss of purchasing power, also known as inflation, gathered momentum and is now at hyper-inflationary rates: a few months ago it only took 237,000 bolivars to buy one USD, and now in June it takes 2,800,000 bolivars to buy one USD.

Not to put too fine a point on it, but the Venezuelan citizen who converted all the family’s bolivars to bitcoin two years ago (June 2016) would have preserved the purchasing power of their “money.” So while the Bank of International Settlements (BIS, which is owned by 60 central banks) is pleased to declare bitcoin untrustworthy and in effect, not “real money,” unlike the stable, secure, trustworthy fiat currencies issued by central banks, it pays to reconsider Gresham’s law before concluding bitcoin isn’t “real money.”

SUMMER BOOK SALE through JUne 30, 2018:

22% discount on Inequality and the Collapse of Privilege and Why Our Status Quo Failed and Is Beyond Reform

Kindle edition now $2.99, print edition now $6.95.

50% discount on An Unconventional Guide to Investing in Troubled Times

Kindle edition now $2.99, print edition now $9.95. 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

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Onward to Stock Market Nirvana… Or Not

At long last, we have reached the Nirvana of consensus: the stock market is heading to new all-time highs. Even the perma-Bear camp seems to have accepted the inevitability of new all-time highs ahead: The FANG stocks are hitting new highs, the Russell 2000 Small-Cap Index is hitting new highs, and the laggard S&P 500 is sure to catch up to its peers, as it climbs the ladder of higher lows. Once again we’ve reached the Nirvana of ever-higher stock valuations.

Or not. That troublesome kid watching the naked Emperor ride past in his imaginary finery keeps muttering about rising wedges. Consider the Russell Small-Cap Index (RUT):

The Raging Bull of the FANG stocks, Netflix:

The S&P 500:

And the so-called “fear index,” the VIX, reduced to the Nirvana of complacency and supreme confidence:

The Nirvana of January–super-low VIX and an ever-rising stock market– was disrupted by an unwelcome eruption of reality.

The beaten down VIX traced out a couple of blue wedges before the eruption, but let’s ignore them. What matters is order was restored to the Universe by the triumph of complacency and confidence as the VIX was ground down to sub-12 levels again.

Rising wedges tend to lead to declines, so ignore them. Never mind their ubiquity– Nirvana blasts right through resistance and rising wedges.

The faithless few might be troubled by the similarities of late January to the present, but the faithful have supreme confidence in the Fed, the tremendous bite of the FANGs and the all-powerful forces of greed and complacency–a marriage made in heaven!

Here’s a look at the real Nirvana: the income and wealth gains of the top .1%.

Debt-serfs “own” nothing but debt, the Technocrat class shouldering student loans and mortgages keeps the machine running by working themselves to exhaustion, and the speculative class skims virtually all the gains.

Stock market Nirvana feeds wealth/income inequality Nirvana.

 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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Murder Incorporated

Murder Incorporated is a three-book series by Mumia Abu Jamal and Stephen Vittoria, which I can highly recommend based on the first book. The other two are not out yet.

Book One, “Dreaming of Empire,” is a critique of U.S. imperialism, a debunking of U.S. nationalist myths, a corrective or alternative history of the U.S. nation. Politically, a book like this would never be permitted in U.S. schools, and it’s clearly not aimed at clearing that hurdle. It uses curse words, which would provide a handy excuse for keeping it out. It’s also not straight history. It’s part chronological, part theme-based. It mixes historical accounts with pop-culture, with quotations from scholars, historical sources, and analysts interviewed by the authors.

Dreaming of Empire also does not try to leave the past in the past. Instead it proposes to explain current wars, the weaponization of outer space, and the rhetoric of contemporary U.S. politics through a myth-busting hard look at the past. And there’s little the U.S. public needs more. Indeed the authors seem to have concentrated on topics around which damaging myths have been constructed, including the glories and goodness of the Founding Fathers.

Reading here in Charlottesville, I’m struck by the extent to which local boys, Jefferson and Monroe (and the latter’s “Doctrine”), dominate this story. I wonder how many people realize that when a participant in a fascist rally here last summer drove his car into a woman and killed her, he was in that moment driving past the location of James Monroe’s first house here. I’m sure it’s more people than realize that Charlottesville is not a hotbed for fascists (they mostly come from elsewhere) but is a town that was founded by and which still prominently honors fascists avant la lettre.

The authors of Dreaming of Empire are smart enough not to call sacred founding fathers fascists as an idiot like myself might do. Instead they allow such fascists to convict themselves in their own words. Here we read John Winthrop thanking God for bringing deadly epidemics to native peoples, Benjamin Franklin crediting God with a plan to “extirpate” the “savages,” Jefferson advocating that tribes be “exterminated,” Jefferson likening African Americans to orangutans, and an Iroquois telling Washington to his face that women and children shudder at his name as that of a mass murderer, etc.

I think the focus on the founders of the fatherland as the creators of the Manifest Destiny demand for Lebensraum is entirely appropriate, even as the authors rightly trace the seeds of U.S. imperialism back to the British treatment of the Irish and the Spanish treatment of Jews and Muslims. I think, however, that a critique of World War II myths is even more necessary, and I hope one makes it into book 2 or 3. This book does, to its credit note the post-WWII globalization of the Monroe Doctrine. And I remain grateful to Mumia Abu-Jamal for his supportive review of my book War Is A Lie.

While the wars come fast and furious, there are at the moment many that are much better understood in the context of the history and the ideology illuminated in this book. The members of the so-called Democratic Party currently opposing diplomacy with North Korea or Russia and even trying to legislate a permanent occupation of South Korea cannot be fully understood solely through the lens of partisanship. Neither can the majority of U.S. senators who have openly voted for genocide in Yemen. The resistance to U.S. bases in Okinawa, the coups and attempted coups in Honduras and Nicaragua and Venezuela, the endless imperial outrages in Afghanistan and Iraq and Syria, the U.S. military expansion throughout Africa, the aggression toward Iran, the resistance to even nuclear disarmament, the attacks on international law — all of this, to be understood or stopped, has to be seen through the history of empire that long predates the current hegemonizing dotard in chief.

If I have any concern with this first book in its series, it is the same concern I have with many other books. Namely, this is a critique of violence that never gets around to explicitly advocating for the more powerful tools of nonviolence. The accounts of activism by the poor before, during, and after the American Revolution focus on violence. The Saint Patrick’s Brigade gets more attention than Henry David Thoreau. The Cuban Revolution gets extensive and familiar attention, while uses of nonviolence in El Salvador 1944 or dozens of other cases goes unmentioned. This bias is partially corrected by the book’s closing with details new to me about a peace activist, Malcolm Boyd.

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