Economist John Cochrane Is Still Worried About the Debt


Q&A

The U.S. national debt held by the public is currently almost $22 trillion, or about $67,000 per citizen, surpassing the country’s annual GDP for the first time since World War II. The Congressional Budget Office predicted in March that the U.S. debt would grow to 102 percent of GDP by the end of 2021, to 107 percent by 2031, and to 202 percent by 2051. Those estimates came before President Joe Biden signed the $1.9 trillion COVID-19 relief bill, which made the long-term budget outlook even worse.

Fiscal hawks have been sounding the alarm about rising debt levels for decades, but their nightmare scenario of runaway inflation hasn’t come to pass. How do we know if this time is different? In April, Reason‘s Zach Weissmueller spoke with the Hoover Institution’s John Cochrane, an economist and self-proclaimed debt crisis “doomsayer.”

Q: At the end of World War II, the debt-to-GDP ratio was similar to today’s, the economy boomed, and we were able to slowly grow our way out of it. Is that a good analogy to the pandemic?

A: We borrowed a ton of money to save the world from fascism. Then we stopped spending money. The war was over. The U.S. after World War II ran steady primary surpluses—whereas right now we’re talking about at least 3 to 5 percent primary deficits forever, plus stimulus in every crisis, plus Social Security and Medicare.

After World War II, we had stronger GDP growth than ever seen in history, driven by productivity growth in a very deregulated, innovative economy. What we’re talking about now is starting at 100 percent debt to GDP, and then the big borrowing starts and continues forever in a very slow-growing, very regulated, high-tax economy.

Q: Some economists say low interest rates are the new normal, and so we shouldn’t worry about government borrowing.

A: The size of borrowing we’re forecasting makes this low interest rate argument completely irrelevant. The low interest rate argument says, “If we borrow a bunch and then stop borrowing any more, we can roll over the debt at a low interest rate, and over 50 to 100 years, the debt-to-GDP ratio will slowly come back.”

We have 5 percent of GDP that we’re borrowing on a regular basis, 20 percent of GDP that we borrow in every crisis. This whole business of “borrow once, and then just roll it over and wait 50 or 100 years for it to melt away” is just not what is going on in the U.S. right now.

Q: But aren’t we also in a special position where we can get away with issuing more debt because the dollar is the global reserve currency and everybody wants it?

A: There’s a lot of little nice things going for us. But let’s not overdo it. Foreign central banks want to hold some dollars, but they don’t want to double, triple, quadruple, quintuple the number of dollars that they hold.

And who knows how long it’ll last? We get that [reserve currency status] because of our great political stability, our unwavering commitment to low inflation, our unwavering commitment to always paying off our debts, our commitment to a strong dollar. Sooner or later, people are going to start looking around unless we shape up.

Q: What do you think of the argument that the doomsayers have been wrong thus far about a debt crisis?

A: Guilty as charged. But the nature of what we face is not an easily predictable thing. In California, we live on earthquake faults. We haven’t had a major earthquake for about 100 years. “What are you worried about? Why should we buy earthquake insurance?” That’s the nature of the danger that faces us. It’s not a slow, predictable thing. It is the danger of a crisis breaking out.

So I’m happy to be wrong for a while, but that doesn’t mean the earthquake fault is not under us and growing bigger as we speak.

This interview has been condensed and edited for style and clarity. For a video version, visit reason.com.

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London Office Workers Demand $7,000 Payoff Before Returning To Office

London Office Workers Demand $7,000 Payoff Before Returning To Office

“Freedom Day” has come and gone, and yet the small businesses and retail shops flanking London’s retail district are still struggling as the number of white-collar workers flocking to the City and other parts of the city remains well below its pre-pandemic level. One reason is that British workers are digging in their heels and demanding a pay raise or some other form of compensation in exchange for returning to the office.

According to surveys from YouGov, and Locatee, office workers want pay raises equivalent to the cost of some annual railway season tickets to return to their desks full-time after the pandemic.

With COVID-19 restrictions leaving many offices empty, white-collar staff have spent 16 months mostly working from home. Just 17% now say they actively want a full-time return to the office, research for workplace analytics firm Locatee shows.

As rising wages for hourly workers fail to keep pace with inflation, just 17% of white collar workers say they would actively want a full-time return to the office. However, 43% told YouGov that a cash incentive might help change their minds. In London, the average worker who said cash would be a suitable incentive asked for £5,100 (just under $7K), which covers the annual cost of a railway ticket between London and the commuter town of Turnbridge Wells in Kent.

According to Bloomberg, the survey results “underscore the difficulties in engineering a post-pandemic ‘new normal’. Most firms are already planning on recalling staff, but some of the big banks in the UK and Europe have been less eager than their American counterparts. The rise of the Delta variant has also prompted some large companies to reconsider their timeline.

“The appetite for remote working will remain high for the foreseeable future,” said Thomas Kessler, CEO of Locatee, a purveyor of “workplace insights”. “However, the importance of physical office space in underpinning company culture should not be underestimated, particularly after a year of reduced colleague interaction.”

Nearly one-third of people presently looking for work now expect to work from home at least two days each week. Meanwhile, roughly 24% of companies are standing by their demands that workers return to the office full time. Younger workers are typically more eager to return to the office (where they’re more likely to enjoy socializing with other younger workers). But for older workers with a family or children, the preferences are clear – and pretty soon, employers might be forced to settle for a ‘hybrid’ set up – whether they like it or not.

Tyler Durden
Thu, 07/22/2021 – 05:45

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What Will This New Wave Of Lockdowns Do To The Global Economy?

What Will This New Wave Of Lockdowns Do To The Global Economy?

Authored by Michael Snyder via TheMostImportantNews.com,

For a few months a lot of people were convinced that humanity’s efforts to defeat COVID were being successful, and many believed that the pandemic would soon be behind us for good.  But now the “Delta variant” is spreading like wildfire all over the globe, and this is prompting national governments around the world to institute a new wave of restrictions and lockdowns.  Needless to say, the restrictions and lockdowns that we witnessed in 2020 were absolutely devastating for the global economy, and many areas of the planet remain economically depressed as a result.  As the “Delta variant” continues to spread, will this new wave of restrictions and lockdowns push the world economy into another major downturn during the second half of 2021?

I am extremely concerned about how some national governments are choosing to respond to this new variant.  In particular, I think that officials in Australia have gone completely nuts.  Now that a third state has implemented new restrictions, more than half of the country is currently under lockdown…

More than half of Australia’s 25 million people were under lockdown on Tuesday after a third state adopted movement curbs to rein in the highly contagious Delta variant of coronavirus.

Australia’s infections and deaths are well below other developed nations, but its use of lockdowns, prompted by a sluggish vaccination campaign, is putting pressure on the national government, with polls at their lowest in a year and just months before elections are due to be held.

Once upon a time, I used to recommend Australia as a potential relocation destination.

But I don’t think that I will ever be able to recommend Australia again after what we have witnessed during this pandemic.

Things have gotten really crazy in Japan as well.  Because they are hosting the Olympics, officials have instituted extremely strict restrictions, and this is definitely rubbing a lot of people the wrong way.

Savannah Guthrie is in Japan right now, and she says that it is like “stepping back in time”

“They have very strict protocols here,” Savannah said. “In a way it’s like stepping back in time. At least for those of us in (the United States), at the height of the pandemic, we remember the washing of the hands, the mask-wearing, all of that. It’s just like that here. It’s really locked down here in Tokyo.”

I don’t usually use the word “paranoia” very much, but in this case I believe that it is justified.

Those that are traveling to Japan for the Olympics are being forced to be tested for COVID over and over again

Savannah said that the protocols began before she even left the United States. International visitors to Japan have to take two coronavirus tests before they get on a plane. The first has to be taken about 96 hours before travel, the second 72 hours before.

After landing in Tokyo, visitors have to test again at the airport, and then take a daily test for the first three days in the country.

But even with such dramatic restrictions, the “Delta variant” just continues to spread, and the head of the Tokyo games is openly admitting that he is “prepared to discuss a last-minute cancellation” of the Olympics…

As Games-linked Covid cases continue to rise in a city rising in indignation at the Olympics taking place, Tokyo 2020 chief Toshiro Muto said he was prepared to discuss a last-minute cancellation.

Isn’t that insane?

According to Muto, officials are watching the number of new cases in Japan very carefully

“We can’t predict what will happen with the number of coronavirus cases. So we will continue discussions if there is a spike in cases.

“We have agreed that based on the coronavirus situation, we will convene five-party talks again.

“At this point, the coronavirus cases may rise or fall, so we will think about what we should do when the situation arises.”

Over in France, the implementation of new “health pass” rules is creating a giant uproar…

From July 21st, health passes are required to enter public cultural and leisure venues that welcome 50 people or more. This applies to venues such as theatres, cinemas, libraries, theme parks, concert halls, festivals, museums and monuments, and takes effect ahead of a wider extension of the health pass rules from August 1st.

From now on, those that have not been vaccinated will be relegated to second class status in France, but the truth is that “fully vaccinated” people are catching the “Delta variant” too.

In fact, a “fully vaccinated” White House official and a “fully vaccinated” aide to Nancy Pelosi both just tested positive for COVID.

The “Delta variant” is taking the U.S. by storm, and Los Angeles County has become one of the epicenters of this new outbreak…

Los Angeles County is now recording more than 10,000 coronavirus cases a week — a pace not seen since March — an alarming sign of the dangers the Delta variant poses to people who have not been vaccinated and heightening pressure on health officials to reverse the trend.

A Los Angeles Times data analysis found L.A. County was recording 101 weekly coronavirus cases for every 100,000 residents, up from 12 for the seven-day period that ended June 15. That means the county has surpassed the threshold to have “high” community transmission of the disease, the worst tier as defined by the U.S. Centers for Disease Control and Prevention.

Mask mandates are back, and that certainly will not help the California economy, but what many small business owners are deathly afraid of is another long-term lockdown

“In general, nobody likes wearing masks – I don’t know anyone that cheers having to wear one – but if the choice is another 15 months of shutdown or wearing a mask inside, then I will be happy to wear a mask,” said Cache Bouren, owner of Haberdasher in San Jose.

“Facing the idea of another six to eight months without any real revenue coming [is] a very scary thing,” admitted Bouren, who is set to open up a new bar called Cash Only soon.

In 2020, countless small businesses in the United States shut their doors on a permanent basis, and countless others barely survived.

In fact, one recent survey found that approximately 20 percent of all the small businesses that actually survived “came frighteningly close” to shutting down for good…

One in five small business owners came frighteningly close to shuttering their business for good during the COVID-19 pandemic. A new survey polled 1,000 small business executives to analyze the impact the pandemic had on their businesses and how they’re planning to recover moving forward.

Three in four respondents agree the past year was the hardest they’ve ever had in business. Those challenges include dealing with decreased sales (46%), fewer customers (42%), and lower production (37%). Two in five small business executives had to take a pay cut to keep their companies afloat during COVID. Other areas bosses cut down on in 2020 include the cost of supplies (40%) and marketing budgets (37%).

We simply cannot afford another round of lockdowns here in the United States.

And the same thing is true for countries all over the globe that have previously experienced lockdowns.

But as the “Delta variant” continues to spread, it appears to be inevitable that more new lockdowns will continue to be rolled out.

Is this going to be the answer every time a new health crisis erupts?  Because I believe that we have now entered an “era of pestilences”, and I also believe that the health threats that are ahead of us are going to be far worse than what we have already been through.

The world economy was just getting back to some semblance of “normalcy”, and now things are starting to get completely nuts again.

This pandemic is like a nightmare that never seems to end, and the way that officials have reacted all over the world has just made things even worse.

*  *  *

It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.

Tyler Durden
Thu, 07/22/2021 – 05:00

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Brickbat: She’s Just Giving Them a Hand


sailor_1161x653

The British Royal Navy has kicked out a sailor who pleaded guilty to three counts of sexual assault against other sailors and Royal Marines, one count of battery and one count of violence against a superior officer during a drunken spree while she was on a cold weather exercise. Able Seaman Jodie McSkimmings reportedly tried to kiss colleagues and demanded sex, and when they refused she groped them and tried to undress them. She also sat in the lap of a sergeant and punched him “at 100 percent force” when he refused her advances, according to prosecutors. She then punched a corporal in the face. Her attorney blamed her behavior on mental health issues which were exacerbated by “misogynistic bullying” by colleagues.

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Hungary’s Orban To Bring Referendum Over Controversial LGBTQ Law After EU Blowback

Hungary’s Orban To Bring Referendum Over Controversial LGBTQ Law After EU Blowback

Along with Jarosław Kaczyński’s Poland, Viktor Orban’s Hungary’s has developed a reputation as one of the “bad boys of Europe” due to Orban’s embrace of what he calls “illiberal democracy.” A strident nationalist, Orban has closed Hungary’s borders to immigrants, drove out meddlesome foreign NGOs backed by billionaire George Soros, and other policies that are at odds with Brussels’ meddlesome, transnational priorities.

At a time when the EU needs Hungary (whose notoriously low corporate tax rate has been a boon for economic growth) to help support America’s international trade agenda which currently involves convincing the world (or at least the OECD) to adopt a minimum corporate tax rate, Brussels has renewed its rhetorical attacks on Budapest, demanding that the country scrap a new LGBTQ+ law.

Hungary says the law bars young children from being exposed to “sexual propaganda”, while the European Commission insists it discriminates against LGBTQ+ people.

A spokesman for the Hungarian government defended the law and said the EU is open to discuss it.

“We stand ready to debate the law with those who have spoken out against it,” he told the BBC on Tuesday. “The law is strictly about the protection of children. It says that for minors under 18, sexual education has to be appropriate and what we don’t want is the intrusion of so-called LGBTQ+ lobby NGOs and pressure groups walking into kindergartens and schools to explain to children why it’s a great idea to have hormone treatments and operations to change their sex before they’re 18. These are not acceptable practices.”

Speaking in a video published on Wednesday, Orban bashed the EU’s latest attack, insisting that he is not willing to back down in accordance with the EU’s demands.

“Hungarian laws do not permit sexual propaganda in kindergartens or schools, on television and in advertisements,” Orban said, adding that, in Western Europe, LQBTQ+ activists propagate their message in educational institutions, something Hungarians are against.

In response to the EU’s legal action against Hungary, Orban said he would now hold a five-question referendum on the issue. Here are the questions, according to RT. The EU is already pushing a plan to tie access to the bloc’s recovery funds to upholding the rule of law, something over which Budapest decided to take the European Commission to court over.

  1. Do you support the holding of a lesson on sexual orientation in a state education institution without parental consent?
  2. Do you support the promotion of gender reassignment treatments for minors?
  3. Do you support the availability of gender reassignment treatments for minors?
  4. Do you support the unrestricted presentation of media content of a sexual nature to minors regarding their sexual development?
  5. Do you support the presentation of gender-sensitive media content to minors?

The law, which the EU has denounced as anti-LGBTQ, has prompted outrage in Brussels, with one of Europe’s longtime leaders, Dutch PM Mark Rutte, even suggesting that Hungary should consider leaving the bloc.

While one provision of the controversial law focuses on increasing the punishment for convicted pedophiles, another  stipulates that LGBTQ+ issues cannot be portrayed or promoted to under-18s. Orban says the law has been misunderstood by those in the EU, stating: “This is not against homosexuality. It’s about the right of the kids and the parents.”

In addition to pushing for Hungary’s outcast from the EU, PM Rutte has also said his “goal is to bring Hungary to its knees on this issue”. We suspect Orban won’t simply stand by and allow that to happen.

Tyler Durden
Thu, 07/22/2021 – 04:15

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Brickbat: She’s Just Giving Them a Hand


sailor_1161x653

The British Royal Navy has kicked out a sailor who pleaded guilty to three counts of sexual assault against other sailors and Royal Marines, one count of battery and one count of violence against a superior officer during a drunken spree while she was on a cold weather exercise. Able Seaman Jodie McSkimmings reportedly tried to kiss colleagues and demanded sex, and when they refused she groped them and tried to undress them. She also sat in the lap of a sergeant and punched him “at 100 percent force” when he refused her advances, according to prosecutors. She then punched a corporal in the face. Her attorney blamed her behavior on mental health issues which were exacerbated by “misogynistic bullying” by colleagues.

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UK’s House Of Lords Is Concerned Over A Dangerous Addiction To QE

UK’s House Of Lords Is Concerned Over A Dangerous Addiction To QE

Authored by Mike Shedlock via MishTalk.com,

When and how will central banks escape their addiction to QE? That question was addressed in a report by the UK House of Lords.

The House of Lords is Investigating a Dangerous Addiction to QE

The report is through the eyes of the UK regarding the Bank of England but the comments and concerns apply to every central bank. Here are some snips.

Lords: In the UK, quantitative easing was envisaged, at the point of introduction in 2009, as a short-term measure to support the economy through the global financial crisis. However, over the last decade or so, the programme has expanded substantially, and it has become the Bank of England’s main monetary policy tool.

Mish: It was supposedly going to be short-term everywhere. It wasn’t.

Bank of England Balance Sheet

Lords: We launched this inquiry at this juncture for several reasons. First, the quantitative easing programme has not been subject to sufficient scrutiny, including in Parliament, given its size, longevity and economic importance. The increased role of the Bank of England in the economy merits enhanced accountability by Parliament. Second, the substantial escalation of quantitative easing during the COVID-19 pandemic was unprecedented. Third, we wished to examine the extent to which quantitative easing has achieved its stated objectives, along with its effects on the real economy, growth and inflation.

Lords: Professor Tim Congdon, Founder and Chairman of the Institute of International Monetary Research, told us that the use of quantitative easing in 2009 prevented a deflationary spiral from taking place. He said that without quantitative easing, “the quantity of money would have fallen very rapidly”. Adam Posen, President of the Peterson Institute for International Economics, said that quantitative easing “tends to work most powerfully when a financial panic is under way”, but its ability to stimulate spending and investment in stable economic conditions is like “pushing on a string.”

Mish: Pushing on a string is a Keynesian analogy. Yet, it is very clear that QE did not stimulate bank lending in the US, EU, or Japan.

Lords: Professor Philip Davis, Professor of Banking and Finance at Brunel University and a Fellow at the National Institute of Economic and Social Research (NIESR), said there is “some evidence” of pension funds engaging in a “search for yield” through investment in leveraged alternative assets, structured products, private equity and derivatives. Nigel Wilson, Chief Executive Officer at Legal & General, said that quantitative easing is not the right policy tool for stimulating sustainable economic growth. He said that quantitative easing had boosted asset prices and stabilised financial markets successfully, but that it cannot be expected to create sustainable economic growth, for which an active fiscal policy was needed instead.

Mish: Correct. QE undoubtedly suppressed interest rates, encouraged financial speculation, and hurt pension plan goals. It also kept zombie corporations alive at great expense and hurt price discovery. 

LordsLord Macpherson of Earl’s Court, former Permanent Secretary at HM Treasury, told us that the effectiveness of quantitative easing had diminished over time. When it was first deployed in 2009—after interest rates were cut from 4.5% in October 2008 to 0.5% in March 2009—it “had a real impact”. However, he argued that when long-term interest rates are close to the zero lower bound the Bank of England must “buy a great deal of debt to have any impact at all.

Mish: It is now extremely counterproductive. The Fed crams money down banks’ throats and they don’t want it and cannot use it. The result has been a massive surge in reverse repos.

LordsWhile the evidence on quantitative easing’s economic impact is mixed, we note that central bank research tends to show quantitative easing in a more positive light than the academic literature. We conclude, on balance, that the evidence shows quantitative easing has had limited impact on growth and aggregate demand over the last decade. To stimulate economic growth and aggregate demand, quantitative easing is reliant on a series of transmission mechanisms that operate primarily in and through financial markets. There is limited evidence to suggest that these increase bank lending or investment, or boost consumer spending by wealthy asset holders.

Mish: Don’t ever expect policy makers, academia, or politicians to admit they were wrong.

Lords: One of the deliberate consequences of quantitative easing is to raise asset prices. There is a body of evidence that perceives this to have increased wealth inequalities. However, when we asked the Governor whether quantitative easing had increased wealth inequality in the UK, he said that he “would not agree.”

Mish: The key word is “deliberate”. Central banks purposely sponsored bubbles hoping to avoid later consequences.

Lords: Other witnesses told us that the more persistent than expected use of quantitative easing over the last decade had led to excessive and potentially destabilising risk-taking in markets. Dr Mohamed El-Erian, President of Queens’ College Cambridge and Chief Economic Adviser at Allianz, told us that markets are in a bubble in which “financial assets are totally decoupled from [economic] fundamentals.

Mish: Totally agree. The Bank of England of course disagrees, so does the Fed, BOJ, etc.

LordsQuantitative easing hastens the resulting increase in the cost of servicing the Government’s debt if interest rates were to rise across the curve. On 6 July 2021, the Office for Budget Responsibility said that since 2008, the proportion of Government debt on which interest rates respond within the first year “has more than doubled”, which “has made the first-year fiscal impact of a one percentage point rise in interest rates six times greater than it was just before the financial crisis, and almost twice what it was before the pandemic, just 18 months ago.” Unwinding quantitative easing is a process sometimes referred to as quantitative tightening, which is a contractionary policy applied to decrease the amount of money and liquidity in the economy. This process will involve central banks reducing the size of their balance sheets. They can do this by allowing their bond holdings to mature rather than replacing them, tapering or slowing the amount of asset purchases made, or selling gilts back to the market. In 2013, the Federal Reserve announced it would begin to reduce or ‘taper’ the pace of its asset purchases. In reaction to the announcement, which was not expected by the financial markets, bond yields and financial market volatility rose significantly. This response by the financial markets was known as a ‘taper tantrum’ in the financial media.

Lords: There is an increasing risk that central banks are facing a “no-exit paradigm” from quantitative easing. No central bank has managed successfully to reverse its asset purchases over the medium to long-term, and the key issue facing central banks as they look to halt or reverse quantitative easing is whether it will trigger panic in financial markets that spills over into the real economy.

Mish: Central banks discuss tapering but never succeeded. Are they now trapped in a “no-exit paradigm”? 

Lords: Quantitative easing’s precise effect on inflation is unclear, and the magnitude of recent quantitative easing on future inflation has not yet been established. However, we heard that the latest round of quantitative easing could have an inflationary effect as it coincides with substantial Government spending, bottlenecks in supply, and a recovery in demand after the COVID-19 pandemic.

Mish: The inflationary aspect has largely been in the price of assets. However, there is a knock on impact in which people feeling wealthy buy cars extra homes take excess vacations etc, boosting consumer prices as well.

Lords Conclusions

  • When quantitative easing was introduced it was envisaged that it would support the UK economy after a sharp fall in aggregate demand following the 2008–09 global financial crisis. However, over the last decade it has been deployed in various circumstances quite different from those of 2009 to tackle a range of different problems. This has had a ratchet effect, whereby the scale of quantitative easing has been increased repeatedly, with no subsequent attempts to reverse it. This has only served to exacerbate the challenges involved in unwinding the policy. 

  • Trade-offs that may have been acceptable in a policy designed as a temporary measure have become increasingly controversial as the programme has persisted. 

  • Quantitative easing has also made Bank of England and HM Treasury policymaking more interdependent, blurring monetary and fiscal policy, and this has started to erode the perception that the Bank has acted wholly independently of political considerations. We are concerned that scepticism of the Bank’s stated reasons for quantitative easing grew significantly during the COVID-19 pandemic, when many market participants said that they believed the Bank of England had used quantitative easing primarily to finance the Government’s deficit spending.

  • Finally, we are concerned that the scale of quantitative easing exposes the Bank of England to political pressure not to raise interest rates if rising inflation does not prove to be short-term as is forecast by the Bank.

Mish Conclusion

The concerns of the House of Lords are well stated and should be heeded but they won’t be anywhere. 

Despite the clear market response that QE serves no purpose, and is in fact counterproductive, central banks remain committed to it.

For a discussion of the negative impacts of QE that some might equate to “pushing on a string”, please see Down the Rabbit Hole in Reverse Repos, What is the Fed Doing?

Also note that Economic Nonsense is Extremely Well Anchored in Fantasyland, and Not Just at the Fed

*  *  *

Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.

Tyler Durden
Thu, 07/22/2021 – 03:30

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Pegasus Spyware Targeted French President Macron – “Extremely Serious” Breach Under Investigation

Pegasus Spyware Targeted French President Macron – “Extremely Serious” Breach Under Investigation

The latest victim who was targeted using the phone hacking spyware Pegasus has been revealed to French President Emmanual Macron – part of a growing list that’s said to include some 600 government officials and politicians from over 30 countries. Israeli tech firm and Pegasus-developer NSO Group is in damage control mode after an international consortium of news outlets has published dozens of stories exposing the hacks. Pakistan Prime Minister Imran Khan is also on the list.

It’s believed that governments used the Israeli company’s military-grade hacking tools to access the phones of dissidents, activists and journalists in countries like UAE, Saudi Arabia, Morocco, and even Hungary. The fact that heads of state were also likely targeted suggests that customers also turned the powerful spyware against foreign rivals and enemies, or perhaps to get a leg up in major business or political negotiations. The Independent writes that the following 10 governments are believed to be NSO customers:

Azerbaijan, Bahrain, Kazakhstan, Mexico, Morocco, Rwanda, Saudi Arabia, Hungary, India and the United Arab Emirates (UAE).

AFP via Getty Images

But in terms of world leaders also reportedly targeted, Macron may be the most visible and influential European figure thus far. 

“French newspaper Le Monde reports that Moroccan intelligence services identified a phone that Mr Macron had been using since 2017,” BBC reports of the new revelation. However, Morocco has denied ever being a client of NSO, despite the country’s name being all over the recent reporting.

The French presidency’s office has yet to confirm if Macron was a victim of a hack, and it’s as yet unclear if his phone was breached using Pegasus, but it called the allegations “very serious” if confirmed. 

“If confirmed this would be extremely serious”a statement from Macron’s office said while saying a major investigation is underway.

According to the BBC, “Numbers on the leaked list are also said to include those of President Baram Salih of Iraq and South Africa’s Cyril Ramaphosa, as well as the current prime ministers of Pakistan, Egypt and Morocco, and the King of Morocco.”

Saudi Arabia was behind an NSO spyware attack on Jamal Khashoggi’s associates and family both before and after his murder, according to the new revelations…

As we described previously, Pegasus is a very advanced malware that infects iOS and Android devices to allow operators of the spyware to copy messages, photos, calls and other data, including secretly activate microphones and cameras. Based on the investigation of leaks initially reported in Forbidden Stories, the leak contains a list of 50,000 phone numbers that have been identified as those of people of interest by clients of NSO since 2016.

The list includes many close family members of one country’s ruler, suggesting he might have instructed the country’s intelligence agencies to explore the possibility of tracking and spying on their own relatives. Forbidden Stories has summarized the enormity of the leak and follow-up investigative reporting as follows:

An unprecedented leak of more than 50,000 phone numbers selected for surveillance with Pegasus, a spyware sold by Israeli company NSO Group, shows how this technology has been systematically abused for years to spy on journalists, human rights defenders, academics, businesspeople, lawyers, doctors, union leaders, diplomats, politicians and several heads of states.

Likely we have only witnessed the tip of the iceberg in terms of both government officials and journalists and activists targeted, with the further obvious implication of Israeli intelligence being at the center of this – as The Washington Post has recently explored.

Meanwhile, NSO Group has announced it’s shutting down all media inquiries related to the ongoing scandal…

Tyler Durden
Thu, 07/22/2021 – 02:45

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Klaus Schwab ‘The Humanist’ Versus Klaus Schwab ‘The Terrorist’

Klaus Schwab ‘The Humanist’ Versus Klaus Schwab ‘The Terrorist’

Authored by Joaquin Flores via The Strategic Culture Foundation,

The rising technocratic dystopia may appear to carry forward the legacy of social-democracy, though perversely, and therefore the utilization of Green parties and social-democratic parties in Europe to implement these is both predicted and rational.

There are two men named Klaus Schwab, no doubt.

One man named Klaus Schwab is seen by the true-believers, fachidiots, the liberal intelligentsia, the institutionally refined population, as a man who deeply cares about humanity. It seems they believe his warnings to be earnest even if uncannily and strikingly prescient. The World Economic Forum after all, must have been established out of great concern for humanity since it is propped up chiefly by the most humane institution in human history, the International Monetary Fund. This Klaus Schwab is a humanist.

So perhaps this is precisely the case for the true-believers; those who accept at face value the new Schwabian ‘distinction’ we are asked to appreciate between a shareholder capitalism and a capitalism 2.0, a stakeholder capitalism.

Then there is a second man named Klaus Schwab, who is seen by the rest of the world and the thinking people within it, for the monster that he is. A grimacing Klaus Schwab who appears on smartphone and tablet screens to warn of impending doom, no going back to normal, new pandemics which will strike very soon, and a wave of cyber-attacks. This Klaus Schwab is a terrorist at large, a character who like Dr. Fauci and Bill Gates appear like a central casting dispatch of Bond villains.

For people who haven’t traded in basic social intelligence for social credit realize that if the person who is issuing warnings of catastrophes is best friends with the very same people who will go on to create those catastrophes, those aren’t warnings. Just like for Fauci who said in 2017 that a massive pandemic would strike within Trump’s term. Those are not warnings, they are threats. Schwab is the one delivering the threats; Schwab is the terrorist.

Why is it so hard to understand that the WEF only does what’s in the interest of the IMF?

How are we to understand shareholder capitalism from stakeholder capitalism?

The idea of ‘socially responsible’ capitalism isn’t a new one. It represented the centrist wing of fascism some 90 years ago; it is to wit the embodiment of the last century’s corporatist and technocratic ideal until about the 1970’s with the introduction of Friedmanism. In that sense, we can say that the U.S. and EU existed on two separate trajectories, with more of the underpinnings of the EU based in the idea of social responsibility in the board room.

In our past work in the section on corporate ideology and the state in The Great Reset Morality: Euthanization of the Inessentials , we discussed the bifurcation of the corporatist idea of social good, a type of stakeholder capitalism that existed alongside progressivist ideas. These were trumpeted as reasons that socialism was not necessary, since what was good for corporations was also good for society because these industrialists needed strong communities to create stable conditions, well paid workers to buy the products they produced. This was the era of capitalism before globalization. We also had believers in this ideal, like Henry Ford.

Then came a new idea, increasingly prominent in the American discourse into the 1980’s – where only the bottom line mattered. We can say that the Friedman period that had crept into culture in the 70’s had finally hit mainstream.

But ultimately, the old idea of social capitalism has come back in a new incarnation, a new branding, from the WEF – stakeholder capitalism and capitalism 2.0.

A critical difference that cannot be underscored enough, however, is that there is no long-term plan for the ISA (Ideological State Apparatus) of stakeholder capitalism. They simply use the term ‘capitalism’ to maintain social and ideological continuity from the present incarnation of monopoly capitalism. But the aim is to manage a strictly post-capitalist society. This is however not the one envisaged by the left, but rather one which develops new coercive and depopulating technologies along a misanthropic path towards the transition of the plutocracy into a technocracy.

Its true believers who assume that people are good when they say good things and make good promises, and entirely ignores centuries of peoples’ history or any insights into political and social theory: as Lord Acton, the British historian said: “All power tends to corrupt; absolute power corrupts absolutely.”

There is a reason we are seeing a resurgence of this old type of corporate ideal. As sovereign governments and democracies cease to exist, then the Friedmanian concept of externalizing costs which is unshakably a part of the present paradigm, can no longer be the official ideology of the ruling class.

In truth, they must maintain this cost-externalizing view, which is the foundation of and explanation for their misanthropic scheme. Paradigms are not shaken this way, they tend to crash and burn along with their adherents. This gives rise to what Pareto has called the rotation of elites. So, we can see that the present ruling class does not really embrace any change of tact. Rather, they see it as a new demagoguery.

And so we superficially see ‘stakeholder society’ embraced by a new ruling technocracy especially in light of automation and the fact that most of the human population will be a surplus and redundant one. Naturally, a shareholder society must give way to talking points about a stakeholder society.

And so we are asked to imagine that there is a revolutionary difference between the ‘old’ Friedmanian concept of the shareholder run society, is the new stakeholder run society. This happy talk began a few decades ago, when we were asked to embrace a ‘Capitalism 2.0’, capitalism with a friendly face, and so on. That has been the official ideology of social democracy in the post-war era, and for these reasons we see the European moderate left (what in the U.S. would be misframed as ‘far left’) can get behind the Great Reset agenda provided they ignore the actual needs or labor, whether organized or not.

The Great Hypocrisy of the Great Reset

The two men named Klaus Schwab are both voices in his reader. Any apparent focus on humanity, inclusion, improving living conditions, controlling the power of corporations in Schwab’s book ‘Covid-19: The Great Reset’, is cant lip-service to curry to the liberal-idealist segment of the institutionally refined population.

The WEF hosts forums on ‘Combatting Global Poverty’, and publishes reports like ‘Poverty: the past, present and future’.  As the primary think-tank of the IMF, it should come as no surprise that the actual aims of the WEF are to provide progressive cover for the upwards redistribution of capital to the same lending institutions which they serve, while disguising this through the reversal and bifurcation of the language in the Orwellian sense of ‘doublespeak’.  And it has been the concentration of capital along upwards distribution vertices – real capital flight – that is chiefly responsible for global poverty.

The World Economic Forum presents an upside-down world, one where their policy briefs and white papers voicing concerns about poverty are working in harmony with the IMF’s upwards distribution schemes. Reduction of the local power of sovereign states are framed as ‘anti-corruption’ and ‘transparency’. The austere reduction in access to health and human services in developing countries are viewed positively as economic growth indicators, despite the high causal direct relationship between austerity (via structural adjustment) and poverty.

They present the developing world’s compliance with global governance, i.e. stability, as directly related to poverty eradication – when in reality these two vectors are inversely related.

To wit, the more that countries comply with structural adjustment schemes, the more difficult it actually is to overcome poverty. The IMF had until now oriented its work towards geopolitical and geoeconomic monopolarity, with its own Trans-Atlantic hub as the loci of power.

Now it appears that the IMF and its Trans-Atlantic hub have given up on their aim of re-establishing their monopolar moment of the 1990’s.

It is true that many countries have made strides in overcoming poverty – this has been accomplished by struggling against the IMF, and creating alternatives to the IMF like BRICS. This is not to say that the countries behind BRICS are well intended, but that intentions here have little to do with the net benefit to borrowing countries introduced by the mere fact of a competing interest.

Klaus Schwab’s book ‘Covid-19: The Great Reset’ is written in an identical fashion: lamentations over economic crisis faced by populations are better read as exaltations. Descriptions of a dangerous process of dystopia formation in that book, openly referring to ‘The Handmaid’s Tale’, ought to be read as actual ‘solution’ traps in the works.

Mock Execution of Handmaids from the Dystopic drama series, ‘The Handmaid’s Tale’ – referred to in Schwab’s ‘Covid-19: The Great Reset’

In Klaus Schwab’s book ‘Covid-19: The Great Reset’, any potential ‘abuses’, ‘crimes’, and ‘dystopic futures’ arising from the social policies of the Great Reset, are contemplated or at least mentioned. In The Macro Reset chapter, section 1.6.3, subtitled ‘The Risk of Dystopia’, (pg. 167) for example, nightmarish visions like television’s ‘The Handmaid’s Tale’, ‘Black Mirror’, and the critiques of data mining and surveillance in ‘Surveillance Capitalism’, by Shoshana Zuboff, are discussed.

These dystopias are acknowledged as analogous to real and potential outcomes of the legislation and corporate policies that populations will suffer and endure at the hands of corporate and government policy as a result of the Great Reset.

On full display here in microcosmic form, is the entire ISA (Ideological State Apparatus) of the technocracy and, for some decades, neo-liberalism itself – through the parties of the 2nd International, through the NGOs of Soros and U.S.-AID and the NED, etc., ad infinitum.

Two Men Named Klaus Schwab

Schwab must be understood as a sort of Dr. Mengele of organizational psychology, and also ideologue for a new system which uses trauma – terrorist acts and terrorist threats – to introduce a new acceptance of reality in a horrific parallel to Max von Sydow’s character Dr. Naehring in Shutter Island.

Trauma is the point of entry, and prior crimes which have been made against humanity can be warped through this trauma into being crimes that humanity has made itself, and must now pay for and very dearly. The crimes of the ruling class against people are changed into crimes that the people have made and that the ruling class – the stakeholders (governments, NGO’s, institutions) must now correct. And the corrective measures will be punitive and disciplinary in nature.

Because the progressive ideology (modernity’s ISA) recognizes its present defects, it attempts to divide itself from the actual system it supports. It can be both the legitimating ideology of a system, and the primary critic of that system towards an improved future system. It legitimizes itself today based on things it promises can be fixed in the future.

Max von Sydow’s character ‘Dr. Naehring’ from the 2010 psychological thriller, Shutter Island

The WEF does not really need to listen to and hear the population’s actual problems, it can rely on an academy filled with professional critics which the system’s own academies produced, which use a concoction of ideology and speculation to synthesize something resembling a recognition of the population’s problems. This created the illusion that the system was pluralist, when it was practicing a high form of demagogic social psychology and sociology.

The technocracy of the modern plutocracy, as it transitions to a new kind of oligarchy, is similar to fascism in that it takes many of the tropes and discursive framings of anti-capitalism and social justice but in a way that punches downwards as fascism-in-power did, and weaponizes them in the interests of the decidedly anti-social and unjust technocratic leviathan.

The technocracy is different from fascism in that it uses the actual left, and clearly not the populist right. This is evidenced in Trumpism in the U.S. or Le Pen in France, whose base opposes the lockdowns, mask and vaccine mandates, business closures, and prison-like quarantines of the Covid-19 Great Reset. Here, the rising technocratic dystopia may even appear to carry forward the legacy of social-democracy, though perversely, and therefore the utilization of Green parties and social-democratic parties in Europe to implement these is both predicted and rational.

Worse still, center-right parties are also part of this scheme, and when they also move in lockstep with the Great Reset agenda, they can even receive positive press from the center-left (cultural left) establishment media which defines most of European and Western media at present.

And yet again, these are all political parties that, with the rise of neo-liberalism and globalization, in the aftermath of the destruction of the USSR, have for three decades (or more) taken up the mantle of corporate-public synergy – in the actual tradition of various fascisms, while not acknowledging so.

To refine this point with clarity: fascism and social democracy share a nearly identical conception of political economy (corporate-public synergy). If fascism is social democracy without pluralism nor a liberal conception of human rights – or rather – if social democracy is fascism but with pluralism and a liberal conception of human rights – then the technocracy founds itself on that shared political economy of fascism and social democracy as a starting point, merely paying lip service to pluralism and liberal conceptions of human rights while in fact using a fascist method of undemocratic and anti-pluralist governance. That is why we have two men named Klaus Schwab.

A July 15th 2021 Newsweek clipping shows that the movement against the 2030 Agenda is framed as ‘right-wing’.

Adding to this, the social media corporate technocrats who are committed to the Great Reset, use the imaginary threat of ‘the far right’, and now ‘vaccine hesitancy’, to pursue a censorship policy indistinguishable from totalitarianism (of either far left or far right).

In viewing the cynical perversion which is Klaus Schwab’s Great Reset text, his criticism of the very system he is developing within the very same book which touts its merits and inevitability, is so as to absorb, bureaucratize, professionalize, manage, subsume, and overtake actual criticisms of the emerging dystopia, as a form of ‘self-criticism’. The end-notes are filled with references to articles by authors and thinkers who are opposed to the rising technocracy, which the World Economy Forum exists solely in service of.

This gas-lighting ‘self-criticism’ is a method of control by the system over potential criticisms of the system. It is a contrived criticism, managed by the system and in service of the system, as it marches forward with those very same features being criticized, nonetheless.

Because regular people no longer possess political power in systems where corporate rule has replaced constitutional republics, the devastating costs will be pushed downwards.

For these reasons we can see that there are two men named Klaus Schwab.

Tyler Durden
Thu, 07/22/2021 – 02:00

via ZeroHedge News https://ift.tt/2UEFk6Z Tyler Durden