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Authored by James Petras via The Unz Review,

As the US strives to overthrow the democratic and independent Venezuelan government, the historical record regarding the short, middle and long-term consequences are mixed.

We will proceed to examine the consequences and impact of US intervention in Venezuela over the past half century.

We will then turn to examine the success and failure of US ‘regime changes’ throughout Latin America and the Caribbean.

Venezuela: Results and Perspectives 1950-2019

During the post WWII decade, the US, working through the CIA and the Pentagon, brought to power authoritarian client regimes in Venezuela, Cuba, Peru, Chile, Guatemala, Brazil and several other countries.

In the case of Venezuela, the US backed a near decade long military dictatorship (Perez Jimenez ) roughly between 1951-58. The dictatorship was overthrown in 1958 and replaced by a left-center coalition during a brief interim period. Subsequently, the US reshuffled its policy, and embraced and promoted center-right regimes led by social and christian democrats which alternated rule for nearly forty years.

In the 1990’s US client regimes riddled with corruption and facing a deepening socio-economic crises were voted out of power and replaced by the independent, anti-imperialist government led by President Chavez.

The free and democratic election of President Chavez withstood and defeated several US led ‘regime changes’ over the following two decades.

Following the election of President Maduro, under US direction,Washington mounted the political machinery for a new regime change. Washington launched, in full throttle, a coup by the winter of 2019.

The record of US intervention in Venezuela is mixed: a middle term military coup lasted less than a decade; US directed electoral regimes were in power for forty years; its replacement by an elected anti-imperialist populist government has been in power for nearly 20 years. A virulent US directed coup is underfoot today.

The Venezuela experience with ‘regime change’ speaks to US capacity to consummate long-term control if it can reshuffle its power base from a military dictatorship into an electoral regime, financed through the pillage of oil, backed by a reliable military and ‘legitimated’ by alternating client political parties which accept submission to Washington.

US client regimes are ruled by oligarchic elites, with little entrepreneurial capacity, living off of state rents (oil revenues).

Tied closely to the US, the ruling elites are unable to secure popular loyalty. Client regimes depend on the military strength of the Pentagon —but that is also their weakness.

Regime Change in Regional-Historical Perspective

Puppet-building is an essential strategic goal of the US imperial state.

The results vary over time depending on the capacity of independent governments to succeed in nation-building.

US long-term puppet-building has been most successful in small nations with vulnerable economies.

The US directed coup in Guatemala has lasted over sixty-years – from 1954 -2019. Major popular indigenous insurgencies have been repressed via US military advisers and aid.

Similar successful US puppet-building has occurred in Panama, Grenada, Dominican Republic and Haiti. Being small and poor and having weak military forces, the US is willing to directly invade and occupy the countries quickly and at small cost in military lives and economic costs.

In the above countries Washington succeeded in imposing and maintaining puppet regimes for prolonged periods of time.

The US has directed military coups over the past half century with contradictory results.

In the case of Honduras, the Pentagon was able to overturn a progressive liberal democratic government of very short duration. The Honduran army was under US direction, and elected President Manual Zelaya depended on an unarmed electoral popular majority. Following the successful coup the Honduran puppet-regime remained under US rule for the next decade and likely beyond.

Chile has been under US tutelage for the better part of the 20th century with a brief respite during a Popular Front government between 1937-41 and a democratic socialist government between 1970-73. The US military directed coup in 1973 imposed the Pinochet dictatorship which lasted for seventeen years. It was followed by an electoral regime which continued the Pinochet-US neo-liberal agenda, including the reversal of all the popular national and social reforms. In a word, Chile remained within the US political orbit for the better part of a half-century.

Chile’s democratic-socialist regime (1970-73) never armed its people nor established overseas economic linkage to sustain an independent foreign policy.

It is not surprising that in recent times Chile followed US commands calling for the overthrow of Venezuela’s President Maduro.

Contradictory Puppet-Building

Several US coups were reversed, for the longer or shorter duration.

The classical case of a successful defeat of a client regime is Cuba which overthrew a ten-year old US client, the Batista dictatorship, and proceeded to successfully resist a CIA directed invasion and economic blockade for the better part of a half century (up to the present day).

Cuba’s defeat of puppet restorationist policy was a result of the Castro leadership’s decision to arm the people, expropriate and take control of hostile US and multinational corporations and establish strategic overseas allies – USSR , China and more recently Venezuela.

In contrast, a US military backed military coup in Brazil (1964) endured for over two decades, before electoral politics were partially restored under elite leadership.

Twenty years of failed neo-liberal economic policies led to the election of the social reformist Workers Party (WP) which proceeded to implement extensive anti-poverty programs within the context of neo-liberal policies.

After a decade and a half of social reforms and a relatively independent foreign policy, the WP succumbed to a downturn of the commodity dependent economy and a hostile state (namely judiciary and military) and was replaced by a pair of far-right US client regimes which functioned under Wall Street and Pentagon direction.

The US frequently intervened in Bolivia, backing military coups and client regimes against short-term national populist regimes (1954, 1970 and 2001).

In 2005 a popular uprising led to free elections and the election of Evo Morales, the leader of the coca farmers movements. Between 2005 – 2019 (the present period) President Morales led a moderate left-of-center anti imperialist government.

Unsuccessful efforts by the US to overthrow the Morales government were a result of several factors: Morales organized and mobilized a coalition of peasants and workers (especially miners and coca farmers). He secured the loyalty of the military, expelled US Trojan Horse “aid agencies’ and extended control over oil and gas and promoted ties with agro business.

The combination of an independent foreign policy, a mixed economy , high growth and moderate reforms neutralized US puppet-building.

Not so the case in Argentina. Following a bloody coup (1976) in which the US backed military murdered 30,000 citizens, the military was defeated by the British army in the Malvinas war and withdrew after seven years in power.

The post military puppet regime ruled and plundered for a decade before collapsing in 2001. They were overthrown by a popular insurrection. However, the radical left lacking cohesion was replaced by center-left (Kirchner-Fernandez) regimes which ruled for the better part of a decade (2003 – 15).

The progressive social welfare – neo-liberal regimes entered in crises and were ousted by a US backed puppet regime (Macri) in 2015 which proceeded to reverse reforms, privatize the economy and subordinate the state to US bankers and speculators.

After two years in power, the puppet regime faltered, the economy spiraled downward and another cycle of repression and mass protest emerged. The US puppet regime’s rule is tenuous, the populace fills the streets, while the Pentagon sharpens its knives and prepares puppets to replace their current client regime.

Conclusion

The US has not succeeded in consolidating regime changes among the large countries with mass organizations and military supporters.

Washington has succeeded in overthrowing popular – national regimes in Brazil, and Argentina . However, over time puppet regimes have been reversed.

While the US resorts to largely a single ‘track’ (military coups and invasions)in overwhelming smaller and more vulnerable popular governments, it relies on ‘multiple tracks’ strategy with regard to large and more formidable countries.

In the former cases, usually a call to the military or the dispatch of the marines is enough to snuff an electoral democracy.

In the latter case, the US relies on a multi-proxy strategy which includes a mass media blitz, labeling democrats as dictatorships, extremists, corrupt, security threats, etc.

As the tension mounts, regional client and European states are organized to back the local puppets.

Phony “Presidents” are crowned by the US President whose index finger counters the vote of millions of voters. Street demonstrations and violence paid and organized by the CIA destabilize the economy; business elites boycott and paralyze production and distribution… Millions are spent in bribing judges and military officials.

If the regime change can be accomplished by local military satraps, the US refrains from direct military intervention.

Regime changes among larger and wealthier countries have between one or two decades duration. However, the switch to an electoral puppet regime may consolidate imperial power over a longer period – as was the case of Chile.

Where there is powerful popular support for a democratic regime, the US will provide the ideological and military support for a large-scale massacre, as was the case in Argentina.

The coming showdown in Venezuela will be a case of a bloody regime change as the US will have to murder hundreds of thousands to destroy the millions who have life-long and deep commitments to their social gains , their loyalty to the nation and their dignity.

In contrast the bourgeoisie, and their followers among political traitors, will seek revenge and resort to the vilest forms of violence in order to strip the poor of their social advances and their memories of freedom and dignity.

It is no wonder that the Venezuela masses are girding for a prolonged and decisive struggle: everything can be won or lost in this final confrontation with the Empire and its puppets.

via ZeroHedge News http://bit.ly/2TtTylo Tyler Durden

Even as the US brought sanctions against Venezuela’s state-run oil company, oil prices have slumped over the past week, erasing some of a January rebound that saw crude prices rebound alongside equities. But oil bulls who worried that Saudi Arabia and Russia’s tandem production cuts wouldn’t be enough to finally wedge a floor under crude prices can relax: Because if a plan reported Tuesday by the Wall Street Journal pans out, OPEC might recover the price-setting power it is in fear of ceding to the US as the shale boom continues to…well…boom.

With the US having cemented its new position as the biggest oil producer in the world thanks to shale, and President Trump exerting pressure on Saudi Arabia to drive oil prices lower, WSJ reports that Saudi Arabia and its Gulf allies in OPEC have proposed a formal alliance with a 10-nation group of petroleum producers led by Russia – and alliance that would “transform the cartel” (which has recently suffered speculation that it has lost its relevance after Qatar announced its plans to leave the bloc).

However, Iran and some of its allies within the cartel have opposed the tighter partnership, fearing it could lead to Saudi Arabia and Russia dominating the organization.

The proposal would formalize the loose union between members of the Organization of the Petroleum Exporting Countries and the group led by Moscow, which includes some former Soviet republics and other countries. The two groups have increasingly worked together in recent years, including in December when they agreed on a deal to curb production.

Iran and other producers have opposed a tighter partnership, fearing it could be dominated by Saudi Arabia and Russia, according to officials in the cartel. Riyadh and Moscow are the world’s top two oil exporters. A Russian energy ministry spokeswoman didn’t respond to a request for comment.

Given that Saudi needs oil back at $80 a barrel to balance its national budget, the alliance would likely be geared toward Saudi and Russia achieving the goal of higher prices. To achieve higher prices, they need more leverage against the US.

To be sure, it’s not like this level of collusion between OPEC and non-OPEC producers would be unprecedented. The two groups have been increasingly working together in recent years. As recently as December, the 14-member OPEC and the 10-member bloc led by Russia struck a deal to cut production in a bid to lift prices after global oil prices shed more than one-third of their value during the month of October.

According to a proposal detailed by WSJ, once formalized, the deal – which would function like a non-legally-binding, informal arrangement, wouldn’t be all that different than the process that led to the December agreement.

In December, the 14-strong OPEC and 10 allies led by Russia reached a new agreement to tackle an oversupplied global crude market by cutting production by a combined 1.2 million barrels a day.

At the time, the groups put off a final decision on the nature of their future cooperation. The groups first collaborated in late 2016 to help oil prices to rebound after a two-year crash. It was Russia’s first solid alliance with the cartel in decades.

Under the proposal, OPEC would continue regular meetings to agree on production and monitor implementation with the Russia-led group, according to OPEC officials. Under the current draft document, the alliance could last up to three years and wouldn’t be legally binding, one of the OPEC officials said.

Participants still need to iron out differences, said another OPEC official. The first cartel official said all sides were likely to end up agreeing on some arrangement as oil prices could crash without a deal.

Still, a more formalized – but still not legally binding – pact faces some hurdles from wary members of OPEC, because some members of the new pact would need to run the issue by their Parliaments. And Iran wants any relationship with producers outside of OPEC to remain as loose as possible. Ideally, Tehran would want the expanded group to meet as infrequently as possible – only when a market crisis requires it – and it would also like all OPEC and non-OPEC members to attend the same meeting. Oman, meanwhile, would like to limit the number of meetings with the non-OPEC members.

Suhail Al Mazrouei, the UAE energy minister, reportedly said that a long-term pact still faces hurdles (though the current plan would call for the alliance to last three years).

Notably, the plan is a compromise between the status quo and a Saudi and Russia-led proposal that called for the creation of an entirely new bloc which would have been de facto controlled by the Kingdom and Russia, which would have been granted full membership. 

The latest proposal is a compromise of earlier plans floated by the Saudis and Emiratis. Under its own proposal, Saudi Arabia advocated the creation of a completely new organization integrating Russia as a full member. In June, Crown Prince Mohammed Bin Salman, through his oil minister Khalid al-Falih, proposed a new Vienna-based cartel, according to OPEC officials.

The structure would have ended OPEC’s current United Nations-style, egalitarian system, in which each member has the same power to vote on decisions regardless of the size of its production. Instead, the new organization would have bestowed outsize power on Saudi Arabia and Russia.

The Saudi proposal irked OPEC members Iran, Iraq, Nigeria, Angola and Algeria. At the meeting in December, Iraq’s oil minister, Thamir Ghadhban, reminded Mr. Falih that OPEC had been founded in Baghdad—a pointed criticism of the plan. At the gathering, the Saudi minister said he had no plan to create a new organization.

After receiving the Saudi proposal, Russia’s energy minister, Alexander Novak, told OPEC the decision is outside his control and escalated its study to foreign minister Sergei Lavrov and the Kremlin, the OPEC officials said. In late December, Moscow officially rejected the Saudi proposal.

“There will be no formal organization like OPEC,” Russian state TV RT quoted Mr. Novak as saying on Dec. 29. He cited the prospect of additional bureaucracy and antitrust risks for the decision.

OPEC members and Russia are expected to debate the proposal in Vienna during a meeting during the week of Feb 18. If OPEC and its sometimes fractious members decide to give it a shot in the name of pushing back against Trump, expect to see oil prices retrace their Q4 drop.

via ZeroHedge News http://bit.ly/2UNmtkR Tyler Durden

Authored by Charles Hugh Smith via OfTwoMinds blog,

All the policies that worked in the Boost Phase no longer work.

Natural and human systems tend to go through stages of expansion, stagnation and decline that follow what’s known as the S-Curve. The dynamic isn’t difficult to understand: an unfilled ecological niche is suddenly open due to a new adaptation; a bacteria evolves to exploit a new host, etc. Expansion is rapid until the niche is fully occupied, and then growth matures and stagnates; the low-hanging fruit has all been picked, and it’s much more costly to reach what little is left.

Human economies starved of capital, credit, access to markets and freedom are akin to unexploited ecological niches. Lacking capital, credit and the freedom to innovate, experiment and advance, economies wallow in a self-reinforcing stagnation.

Should capital, credit, access to markets and freedom become available, the economic expansion can be breath-taking. This is the basic script of postwar Japan and the Asian Tiger economies: economies with either minimal or war-damaged infrastructure, limited capital/credit and stifling status quo power structures that limited the freedom of the populace to access markets and innovations were suddenly open to credit, markets and innovation.

This territory of opportunity was quickly exploited in the Boost Phase: all the low-hanging fruit could finally be picked.

In the Boost Phase, policies that open the economy to credit and innovation generate virtuous cycles of expanding credit, markets, capital, employment and development. In the Boost Phase, everyone’s a genius; everyone joining the land rush can get a piece of the action.

In this expansive phase, everyone extrapolates this rapid growth into the future, as if the Boost Phase can last essentially forever. Thus all sorts of pundits predicted that Japan’s late-bubble GDP of 1989 would soon surpass the GDP of the U.S.

A year later, Japan’s bubble burst and it has wallowed in stagnation since. The policies of the Boost Phase all work because any loosening of limits works wonders in economies with an abundance of low-hanging fruit. But once the easy fruit’s been picked, those policies no longer have the same efficacy. In fact, policies that worked wonders are now active impediments, as they were designed for an era that has passed: all the low-hanging fruit is long gone.

We cling to whatever seems to have worked so gloriously in the past, long after the virtuous cycles have turned into self-defeating cycles that only deepen the stagnation and rot. Japan’s core policies remain fixed in 1955, or 1965 if one wants to be generous. Other than Softbank, no major Japanese corporations have emerged since 1955. The central state / central planning model of state agencies coordinating the expansion of exports with major corporations is now crippling Japan; that model worked wonders from 1955 to 1989 and then its internal limits became apparent.

The heavy cost of corruption that was offset by growth in the boost phase becomes destructive in the stagnation phase. Stripped of growth, the economy is sapped by institutionalized corruption: bribes, sweetheart deals, poor quality being ignored, accounting fraud–all become embedded and institutionalized, to the detriment of organic growth.

As a result of one disastrous policy after another–The Great Leap Forward, The Cultural Revolution–China’s 1989 economy was mired in 1949. Once the leadership enabled modest reforms that opened access to credit and markets, and the central planning machinery started building infrastructure at a scale unseen in world history, China’s Boost Phase took off.

But just as trees don’t grow to the moon, no Boost Phase lasts beyond the depletion of the low-hanging fruit. Rational investments in infrastructure and housing inevitably give way to speculative gambles, the classic recipe for mal-investment and excessive leverage that guarantee a collapse of the resulting credit and asset bubbles.

China entered 2008 with $8 billion in officially counted debt; 10 years later that debt is $40 trillion, plus unknown trillions more in the shadow banking system which expanded the options for risky speculation and massive expansions of credit.

Like all the other stagnating economies, China’s “solution” to stagnation was to expand debt-funded speculation and “investments” with little to no actual return.

The high water mark of China’s financialization orgy was 2018. From now on, adding debt simply adds more drag on the underlying economy, as income is diverted to service speculative debt and defaults start hollowing out both the official banking system and the shadow banking system.

All the policies that worked in the Boost Phase no longer work. the policy tool chest is empty, and so China’s leadership is doing more of what’s failed: burying bad debt off the visible balance sheets, re-issuing new loans to pay off defaulted debt, and all the usual tricks of a failed banking/credit system.

Japan has papered over its systemic rot and decline for 30 years by using a financial Perpetual Motion Machine: the state borrows and spends trillions by selling bonds to the central bank, which in effect prints “free money” for the state to burn propping up a sclerotic, corrupt, failed status quo.

If that’s policy makers’ idea of success, they are delusional. Credit/asset bubbles all deflate, and central bank buying of assets only gives the lie to the illusion of stability and market liquidity.

Simply put, there is no indication China’s leadership has any plan to manage the inevitable stagnation and decline of China’s economy that is now painfully obvious to anyone with the slightest willingness to look beneath the flimsy propaganda of official statistics. They are not alone, of course; every other major economy is equally bereft of policies and equally dependent on bogus statistics and debt to paper over the decline.

*  *  *

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via ZeroHedge News http://bit.ly/2WLXxMq Tyler Durden

Authorities in Bangladesh are looking for a potential serial-killer vigilante after three men accused of rape were found dead with notes around their necks, according to the Daily Star – invoking images of Showtime’s fictional psychopath with a golden heart, Dexter. 

Instead of “Dexter,” however, the killer left notes on the body signed “Hercules.” 

“I am Rakib. I am the rapist of a madrasa girl…of Bhandaria. This is the consequence of a rapist. Be aware rapists…Hercules,” read the note attached to the body of 20-year-old accused rapist Rakib Hossain, one of two men who stood accused of participating in the gang rape of a madrasa student. 

Hossain, a law student at a private university, was found with a bullet wound to the head according to the officer in charge of the Rajapur Police Station, Md Jahidul Islam. 

On January 14, a madrasa student was allegedly gang raped by two men when she was on the way to her grandparents’ house.

Her father filed a case with Bhandaria Police Station accusing Sajal and Rakib on January 17.

On January 24, police recovered Sajal’s bullet-hit body in Jhalakathi’s Kathalia upazila, with a similar note hanging round the neck.

Sajal’s father Shah Alam Jommadar lodged a case with Kathalia Police Station over his son’s murder on January 26, said Md Eanamul Haque, officer-in-charge of the police station. –Daily Star

A third victim was one of four men accused of gang-raping a government worker in Savar, located near the capital city of Dhaka, on January 7 – around 270 kilometers (170 miles) away. The alleged rape victim was found dead hours after reporting the incident.

On January 17, police found the body of Ripon, 39, a key suspect in the gang rape and murder of a female garment worker, in Savar on the outskirts of the capital, with a similar note hanging around the neck.

In the early hours of January 7, an 18-year-old girl was found dead in her house in Ashulia’s Berun area, hours after she had filed a case with Ashulia Police Station against Ripon and three other co-workers for raping her.

Later, the girl’s father filed another case with Ashulia Police Station accusing Ripon and the three others of murdering his daughter. —Daily Star

“I am Pirojpur Bhandaria’s … rapist Rakib,” read the note around Ripon’s neck, according to the Dhaka Tribune newspaper. 

All three victims were found dead with bullet wounds and notes within the last two weeks. 

According to a 2015 special report submitted to the United Nations Human Rights Council, rape is the second-most common form of violence committed against Bangladeshi females – while the perpetrators are rarely punished. 

“In Bangladesh, women’s access to justice and participation in political and public life are particularly affected by violence against women,” reads the report by law professor Rashida Manjoo of the University of Cape Town. According to her report, limited resources, poor infrastructure and a lack of legal experts make it difficult for women to seek legal remedies after being raped. 

According to Reuters, Dhaka was ranked the seventh-most dangerous city in the world for women in 2017, and fourth when it comes to sexual violence in particular. Karachi, Pakistan, ranks #1. 

Police in Dhaka arrested 10 men last month in connection with the alleged rape of a woman who voted against the prime minister in Bangladesh’s December election.

The woman’s husband told Reuters that a group of 10-12 men barged into their house in the southeastern district of Noakhali on the night of the election, tied up him and his four children inside the house, and assaulted her.

The husband said she was raped because she voted for the main opposition Bangladesh Nationalist Party.  –Global News

In short, rape is so common in Bangladesh that it’s used as an intimidation tactic. Perhaps this will all change if Hercules continues his murder spree. 

via ZeroHedge News http://bit.ly/2UEb0ni Tyler Durden

Authored by Michael Snyder via The End of The American Dream blog,

Scientists tell us that someday the “Big One” will strike California and large portions of the coastline will plunge into the ocean “almost instantly”. 

Could it be possible that we are a lot closer to that day than many had anticipated?  Over the past several days, there has been a lot of shaking along the North American portion of the Ring of Fire.  In particular, during a 24 hour period over the weekend one area of the California coastline was hit by 10 earthquakes of at least magnitude 3.0, and this created such a stir that it made the front page of the Drudge Report.  The following comes from a local California newspaper…

Ten earthquakes of preliminary magnitudes between 3.0 and 4.5 struck off the coast of Northern California between Saturday and Sunday, the United States Geological Survey reports.

Hopefully all of this shaking will turn out to be nothing, but many are concerned that they could potentially be “foreshocks” of a larger event.

Once the first quake hit early on Saturday, they just kept happening one after another…

The first earthquake struck early Saturday morning at a magnitude of 4.3, while a second earthquake, of 3.2 magnitude, rumbled about 30 minutes later. Three additional earthquakes hit between 4:30 p.m. and 5:38 p.m. Saturday in the same area, registering magnitudes between 2.9 and 3.6, USGS reported. A 3.0-magnitude earthquake struck that night, at 11:37 p.m.

The geological activity continued into Sunday. USGS reported four earthquakes near Petrolia between 2:18 p.m. and 4:05 p.m. The earthquakes ranged in magnitude from 3.4 to 4.5.

Further south along the Ring of Fire, Mexico was hit by an even larger earthquake on Friday…

A strong earthquake jolted southern Mexico on Friday, rattling nerves and swaying tall buildings hundreds of miles away in the capital, but there were no reports of serious damage, injuries or deaths.

The U.S. Geological Survey reported that the quake had a magnitude of 6.6. It was centered about 10 miles from the city of Tapachula in Chiapas state and struck at a depth of 40 miles.

If you follow my work on a regular basis, then you already know that I have been regularly documenting the dramatic rise in global seismic activity.

The crust of our planet is cracked, and we are just floating on the pieces.  Now those pieces appear to be getting increasingly unstable, and that could mean big trouble for all of us.

I know that the weather is nice and that there are lots of good paying jobs out there, but at this point I don’t know why anyone would still want to live along the California coast.  In a previous article, I shared a quote from a news story about a scientific study that had come to the conclusion that a massive earthquake “could plunge large parts of California into the sea almost instantly”…

The Big One may be overdue to hit California, but scientists near LA have found a new risk for the area during a major earthquake.

They claim that if a major tremor hits the area, it could plunge large parts of California into the sea almost instantly.

The discovery was made after studying the Newport-Inglewood fault, which has long been believed to be one of Southern California’s danger zones.

And there probably will be little to no warning when that occurs.

One day it will seem like everything is just fine, and then disaster will strike.

According to Cal State Fullerton professor Matt Kirby, it is something “that would happen relatively instantaneously”…

Cal State Fullerton professor Matt Kirby, who worked with the Leeper on the study, said the sinking would occur quickly and likely result in part of California being covered by the sea.

“It’s something that would happen relatively instantaneously,” Prof Kirby said. “Probably today if it happened, you would see seawater rushing in.”

In other words, by the time you have figured out what is happening it will be too late.

Meanwhile, scientists are alarmed by the drama that continues to unfold at Mount St. Helens.

Most Americans think that it no longer poses an imminent threat, but the truth is that the area around the volcano has been very active in recent years…

Since 1980, the area around the volcano has experienced tens of thousands of small earthquakes and numerous minor eruptions.

Most notably, as of 2004, the volcano has been continuously erupting lava, which has created a large dome that is still growing.

Scientists tell us that the dome is “now taller than the Empire State building” and that it continues to grow about five meters a day…

He added: “What is really phenomenal is how much rock is still coming out of the ground.

“It’s now taller than the Empire State building.

“It’s coming up at five metres a day, more than 200 metres wide and it’s right here in our back yard.”

It is just a matter of time before we see another eruption like the one that we witnessed back in 1980.

We live at a time when global seismic activity is going to continue to increase, and North America is going to get hit particularly hard because the entire west coast sits directly along the Ring of Fire.

And if you have been a regular reader of my work for a long time, than you already know that I am even more concerned about Mount Rainier than I am about Mount St. Helens.  But that is a topic for another article.

I know that there are a lot of people out there that plan to leave the west coast once things start getting really crazy, but when it comes to major seismic events, you might not get any warning.

Hopefully there will not be a major seismic event in the U.S. in the very near future, but without a doubt global seismic activity is on the rise, and all of this shaking on the west coast has a lot of people very, very nervous right now.

via ZeroHedge News http://bit.ly/2DmnHMT Tyler Durden

It’s that time of year again. With Pelosi perched on his shoulder, President Trump will deliver his 2nd State of The Union address tonight (after last year’s marathon 80-minute oration). However, Trump’s call for cooperation did little to change the atmosphere of bitter partisan acrimony that has only intensified in Washington over the past year.

After a divisive year that featured partisan battles over the confirmation of SCOTUS Justice Brett Kavanaugh, Trump’s zero-tolerance border policies and – most recently – the government shutdown, according to Conway, Trump is once again planning to strike a conciliatory tone to try and silence critics who joke that his speech would be more aptly referred to as “the State of Disunion”.

“This president is going to call for an end to the politics of resistance, retribution and call for more comity,” Conway said, spelling out the last word.

Many of President Trump’s recent decisions have been controversial among both Republicans (the trade war, his decision to pull troops from Syria and Afghanistan) and Democrats (immigration, the wall, the shutdown). And as the president seeks to rally support as the 2020 campaign season gets underway, previews of the speech published by the Hill, the New York Times and NBC News suggest that Trump will spend the bulk of his time touting his victories and selling his policies to the public, while calling for Democrats and Republicans to find common ground on issues like passing a sweeping infrastructure bill. The “optimistic” tone will go a long way toward setting out Trump’s goals for the coming year.

Some key highlights include:

• *TRUMP TO SAY HIS AGENDA IS AGENDA OF AMERICAN PEOPLE

• *TRUMP TO ANNOUNCE 2-DAY MEET WITH KIM IN SOTU SPEECH

• *TRUMP TO SAY IMMIGRATION SYSTEM NEEDS TO PROTECT LIVES, JOBS

• *TRUMP: ILLEGAL IMMIGRATION DIVIDES WORKING, POLITICAL CLASSES

• *TRUMP TO SAY GREAT NATIONS DON’T FIGHT ENDLESS WARS

• *TRUMP TO REITERATE CALL FOR CHEAPER DRUGS

• *TRUMP TO URGE BOTH PARTIES TO UNITE FOR INFRASTRUCTURE PLAN

Watch Live, starting at 2100ET…

*  *  *

But, if you find yourself drifting off – like during the Super Bowl – here are some prop bets (courtesy of ActionNetwork.com)

Will Trump say “thanks” or “thank you” first?

• Thanks +300 (25% chance)

• Thank You -500 (83.8% chance)

What will be the length of Trump’s speech?

• One hour or longer -250 (71.4% chance)

• Less than one hour +140 (37% chance)

What color will Trump’s tie be?

• Red -120 (54.5% chance)

• Blue +110 (52.4% chance)

• Other +450 (18.2% chance)

Will Trump say Caravans?

• Yes +275 (26.7% chance)

• No -450 (81.8% chance)

Will Trump say Fake News?

• Yes +800 (11.1% chance)

• No -2500 (96.2% chance)

Will Trump say Make America Great Again?

• Yes -550 (84.6% chance)

• No +325 (23.5% chance)

Will Trump say National Emergency?

• Yes +275 (26.7% chance)

• No -450 (81.8% chance)

Will Trump say Witch Hunt?

• Yes +1200 (7.7% chance)

• No -5000 (98% chance)

Which will be said more times during Trump’s Speech?

• Wall -600 (85.7% chance)

• Huge +400 (20% chance)

How many times will “Kavanaugh” be mentioned?

• Over 1.5  -115 (53.5% chance)

• Under 1.5  -115 (53.5% chance)

Will Chuck Schumer or Nancy Pelosi stand and clap for Trump?

• Yes +200 (33.3% chance)

• No -300 (75% chance)

Will Alexandria Ocasio Cortez stand at any point during Trump’s speech?

• Yes -220 (68.8% chance)

• No +180 (35.7% chance)

How many times will Trump say “Democrats”?

• Over 2.5  -300 (75% chance)

• Under 2.5  +200 (33.3% chance)

How many times will Trump say “Crisis”?

• Over 3.5  -105 (51.2% chance)

• Under 3.5  -135 (57.4% chance)

And finally – though we implore responsibility – here is the SOTU drinking game (source)…

*  *  *

And because we are fair and balanced – here is The Democratic Party’s response by Stacey Abrams…

• *ABRAMS TO HIGHLIGHT FREE, FAIR ELECTIONS IN RESPONSE TO TRUMP

• *ABRAMS SAYS SHUTDOWN WAS A `STUNT’ ENGINEERED BY TRUMP

via ZeroHedge News http://bit.ly/2DmmaX9 Tyler Durden

Authored by Alasdair Macleod via The Mises Institute,

The issuance of debt is normally subject to a contract that it will be repaid at the end of its term, along with the coupon interest. The exception is undated bonds, when only the interest contract must be fulfilled. In practice, governments and many corporations roll over debt into new bond obligations at the end of their terms, but at least bondholders have the opportunity to be repaid their capital. Therefore, the credibility of government debt is based on the assumption the issuer can afford to continue to roll it over rather than repay it.

However, the rolling over of old debts and the continual addition of new ones will almost certainly become a problem for governments everywhere. It is less of a problem when the debt is put to productive use, but that is rarely, if ever, the case with government finances. To judge whether the rolling over of debt is sustainable and at what cost, we need to rely on other metrics. The traditional method is to compare outstanding debt with GDP, and by using this approach two economists (Carmen Reinhart and Ken Rogoff) came up with a rule of thumb, that once a government’s debt to GDP ratio exceeded approximately 90%, economic growth becomes progressively impaired.

The Reinhart-Rogoff paper was empirically based, and loosely impresses upon us that the current situation for the US and other nations with higher debt to GDP ratios is unsustainable. Key to this reasoning is that rising debt levels divert savings from financing economic growth, and therefore a government’s ability to service it from rising taxes is undermined. At the Rubicon level of 90% and over, median growth rates in the countries sampled fell by 1%, and their average growth rates by “considerably more.” It is entirely logical that a government forced to tax its private sector excessively in order to pay debt interest will restrict economic potential overall.

This analysis was published in the wake of the Lehman crisis, when an unbudgeted acceleration in the rate of increase of government debt everywhere was a pressing concern. The signals from financial markets today indicate that we could be on the verge of a new credit crisis, in which case tax revenues will again fall below existing estimates, and welfare costs rise above them. Therefore, government debt will increase unexpectedly, as was the case that caused the Reinhart-Rogoff paper to be published in 2010.

To look at the increase of government debt between 2007 and 2009, as Reinhart-Rogoff did, was not, as it turned out, a long enough time-frame to fully reflect the consequences of the Lehman crisis on government debt. The increase recorded over 2007-09 was 32%, yet economists and others were still talking of austerity until only recently. The whole period between the Lehman crisis and the election of President Trump is perhaps a better time-frame, and we see that US Government debt between 2007 and 2016 increased by an astonishing 217%.

It turns out that the Reinhart-Rogoff report severely understated the problem by reporting early. Their 90% debt to GDP Rubicon has been left behind anyway, with government debt to GDP ratios around the world in excess of 100% becoming common. In the case of the US, total Federal debt, including intragovernmental holdings, is currently over 105% and rising. The Congressional Budget Office is forecasting substantial budget deficits out to 2028, adding an estimated further $4.776 trillion in deficits between fiscal 2019-23, or $9.446 trillion between fiscal 2019-28.

This assumes there is no credit crisis, so for those of us who know there will be one during the next ten years, these numbers are far too optimistic. Accordingly, we should look at two possible outcomes: first, a best case where price inflation continues to be successfully managed with a target rate of two per cent, and a second base case incorporating an estimate of the effects of the next credit cycle on government finances.

Best- and Base-Case Outcomes

Our best-case outcome of controlled price inflation is essentially that forecast by the Congressional Budget Office. Working from the CBO’s own figures, by 2023 we can estimate accumulated debt including intragovernmental holdings will be $26.3 trillion3  including our estimated interest cost totalling $1.3 trillion. 

That is our best case. Now let us assume the more likely outcome, our base case, which is where the effects of a credit cycle play a part. This will lead to a fall in Federal Government receipts and an increase in total expenditures. Taking the last two cycles (2000-07 and 2007-18) these led to increases in government debt of 59% and 239% respectively. Therefore, it is clear that borrowing has already been accelerating rapidly for a considerable time due in large measure to the destabilising effect of increasingly violent credit cycles. If the next credit cycle only matches the effects on government finances of the 2007-18 credit cycle, government debt including intragovernmental holdings can be expected to rise to $51.4 trillion by 2028. This compares with the CBO’s implied forecast of only $34 trillion of government debt over the same time-frame and makes no allowance for the cyclical effect on interest rates. More on interest rates later.

Because the underlying trend is for successive credit cycles to worsen, the $51.4 trillion figure for federal Government debt becomes a base figure from which to work. But there are still considerable uncertainties, particularly over the form it will take. 

The character of the next credit cycle is unlikely to replicate the last one, which was a sudden financial and systemic shock. Today, the US banking system is better capitalized and off-balance sheet securitization has been brought largely under control. There are however, uncertainties concerning the euro zone banking system. There are also risks in global derivatives markets and the potential knock-on effects of counter-party failures on the US banks. Furthermore, there can be little doubt the sudden systemic shock of Lehman afforded a degree of protection for the purchasing power of the dollar, and therefore of the other mainstream currencies, despite the unprecedented monetary expansion. 

However, it would be complacent to expect an outcome of relatively low price-inflation to be simply repeated at a time when government finances are even more dramatically spiraling out of control. Last time the threat was systemic to the banks, but next time the inflationary consequences of government finances is likely to be the dominant problem. 

The explosion in the quantity of government debt that our analysis implies has many economic consequences. In the context of our rough analysis we should comment on the point made in the original Reinhart-Rogoff paper, which is that the reduction in GDP potential that results from an increase in the ratio of government debt to GDP is likely to be significant. The growth in Federal debt that replicates the post-Lehman experience will leave the US Government with a debt to GDP ratio of over 170%. The CBO assumes GDP will increase by 48% by 2028 to $29.803 trillion, whereas our cyclical case is for debt to rise to $51.4 trillion. While both these figures should be taken as purely indicative, clearly, US Government debt will increase at a faster pace than the growth in GDP and will strangle economic activity.

If the purchasing power of the dollar declines more rapidly than implied by the CBO’s assumed 2% price inflation target, interest payable on Federal debt will in turn be sharply higher than expected, compounding the debt problem. The Federal Government will face a potentially terminal debt trap from which there can be no escape.

via ZeroHedge News http://bit.ly/2GbRv2y Tyler Durden

The homelessness problem in San Francisco has been one of the most well documented and written-about problems in the United States of late, likely due to the paradoxical nature of how much the state spends to help get these people off the street and how it doesn’t seem to have any impact.

According to Bloomberg, the city approved a measure last year to raise an additional $300 million to tackle the issue by taxing local companies. By estimates, there’s about 7500 homeless people in the city that are a result of higher rent, substance-abuse and other health concerns, including mental illness.

Now, one company is betting that streamlining this information could be the answer to the issue.

Officials in the city have spent a couple of years building a digital program called ONE System that can track and monitor every homeless person in San Francisco. The goal is to collect and sort information about these people more effectively in order to determine who is in need and assess risk factors. So far, after five months of the system being in place, it has helped get 70 people off the streets.

One of the main reasons it hasn’t worked better? It’s difficult to persuade the homeless to sign into a program that, to them, feels like big brother.

The program was designed by BitFocus to collect data from state and city agencies. Homeless participants are asked 17 questions in order to help evaluate their time spent on the street, health and vulnerability. That information is then used to create a database, which acts as a digital profile; in may ways it is similar to China’s recently unveiled app which warns users if they are walking near someone in debt.

Jeff Kositsky, the director of the city’s department of homelessness and supportive housing, told Bloomberg:

“We’re trying to build what I think of as an air traffic control system”, only instead of airplanes, the system tracks homeless people.

The program kicked off in August and the 50 employee, $5 million effort was trying to assess more than 2000 people over 90 days. The company has already spoken to double the amount of people it anticipated, which gave them “a pretty good baseline of who’s the most vulnerable in order to determine housing,” according to Chris Block, the director of coordinated entry for Episcopal Community Services of San Francisco.

But the obstacles continue to pile up.

City employees must gain the trust of the homeless person, learn their information and persuade them to join the monitoring system, which many don’t want to. For permanent housing, some members need to pass a background check, which can take 45 days and requires an ID – which many people on the street don’t have.

And the fact of the matter is that there isn’t only one answer for homelessness, due to the fact that people wind up on the street for a multitude of reasons. Other questions have also been raised: what happens if authorities find drug users or violent crime in the tracking system? While now nobody claims that they want to use the system for law-enforcement purposes, privacy concerns continue to grow.

Block said:

“There’s a lot of privacy concerns. So far those issues haven’t been significant, but that doesn’t mean they won’t come up in the future.”

The system will be fully rolled out over the next few months and already almost half of the city’s homeless are part of it. As of January, 20 people have been placed in permanent housing and 50 more have been helped off the streets. The task in front of the city and the ONE System, despite the small wins, is still massive. The goal is to try and halve the city’s homeless population by 2022.

via ZeroHedge News http://bit.ly/2WKu3OX Tyler Durden

Authored by Ryan McMaken via The Mises Institute,

One of the central issues in the current international furor over Venezuela are claims by some foreign governments that the results of the May 2018 elections do not reflect the true preferences of the voters.

For example, although Italy vetoed the proposal, the EU had been preparing to recognize the opposition party’s leader as Venezuela’s interim leader if a new election were not held immediately.

Meanwhile, Nicolas Maduro, the current president, has insisted that there is no need for presidential elections until 2025. (The usual presidential term in Venezuela is six years.)

But both sides’ positions just come down to making empirical claims about the level of democratic support each has, and outside the elections results, we don’t have much actual empirical data to go on. What’s more, the longer the period until the next election, the higher are the stakes for winners and losers both.

The Venezuela situation illustrates how the frequency of elections for elected officials is no mere academic question. It can have profound effects on the ability of elected governments to push through their agendas.

Americans Used to Vote Much More Often

In the US, the extant country with the longest history of electoral politics, this issue is routinely ignored. This is in large part because so many Americans adhere to a panglossian view of domestic politics in which it is assumed that the current institutional status quo is the best possible way of doing things. The fact that the US Constitution has enshrined four-year presidential terms and six-year terms for US Senators for more than two centuries has led many to believe that there really is no other reasonable way of doing things.

Federal elections, however, are not the only elections in the United States. Historically, state-level elected officials have served terms considerably shorter than those of federal legislators. Moreover, US states (as British colonies) were employing annual — and even semi-annual — elections before the United States existed.

For example, were we to just list a smattering of state-level election policies, we would find something quite different from what we’ve now grown accustomed to:

• In Connecticut, members of the upper house served a one-yer term from colonial days until 1876, at which time it was increased to a two-year term. Up until 1819, members of the lower house served terms that were six months long. This was increased to one year after 1819, and extended further to two years in 1874.

• In New Jersey, after 1776, members of the Council, which later became the Senate, were elected for a term of one year. New Jersey was the last state to have a one-year legislative term, which was abolished in 1947.

• Pennsylvania’s new constitution in 1776 created a unicameral legislature in which members served one year. The term was increased to two years in 1874.

• The 1777 Constitution of the Vermont Republic was based heavily on the Pennsylvania constitution and also employed annual elections.

• In Ohio, Senators had two-year terms until 1956 (when expanded to four years). The House originally employed one year terms until increased to two years in 1850.

• Georgia representatives served a one-year term until 1843.

We can also see a preference for regular elections in the term length of state governors.

As noted by Anthony Gierzynski, “Since 1780, gubernatorial term lengths in the United States have gradually evolved from an average term length of one year to two years, to today’s common term length of four years.”

In 1780, nearly all states used gubernatorial terms of one year, and none had term lengths of four years. Today, one-year terms are long gone, and two-year terms have been all but completely abandoned.

Fig 1: Total US States by Length of Governor’s Term

In their book State Legislatures Today: Politics Under the Domes Peverill Squire and Gary Moncrief note that state government has typically moved from more frequent elections to less frequent elections since the early nineteenth century. The authors summarize the current situation:

Today, thirty states have two-year terms in the lower house and four-year terms in the upper house. Members of both houses are given two-year terms in twelve states, and in five states both houses get four-year terms. Nebraska legislators are given four-year terms.

Many advocates for the status quo contend that states moved toward more infrequent elections because “we learned it works better” or some variation of the claim that “experience showed that the status quo is better.” The question we might then pose is: “better for whom?”

Politicians Prefer Longer Terms

Not insignificantly, perhaps, elected officials themselves have long pressed for longer terms and have claimed that shorter terms too excessively restrained their ability to govern. Frequent elections have required more campaigning, and more time spent with voters, which cuts into a legislator’s ability to propose and pass legislation.

Elected officials, of course, have long despised the need to stand for frequent elections and to submit to voter approval of their agendas.

There is no doubt that longer terms are better for the elected officials. They can spend more time doing what they want, and less time worrying about what voters think. Moreover, the longer a political term is, the more likely it is that voters will forget about what the elected official had done earlier in this term.

In the early days of the United States, voters appeared to be well aware of these considerations, and they were not especially sympathetic toward the complaints of politicians who no doubt would have preferred longer terms. Little has changed in the current environment, as summarized by Gierzynski:

Political Scientist Larry Sabato … argued that historically two year terms were “considered more democratic, because [they] subjected the governor to the judgment of the people at more frequent intervals.” Conversely, two year terms leave the governor “in the situation where, in the first term, he must spend the first year getting acquainted with his position and the second year in campaigning for reelection.” University of North Carolina at Chapel Hill Political Scientist Thad Beyle … concurred, saying that “The one message that I repeatedly heard about four year terms is that in the first year you learn how to be governor, in the second and third year you can do what you had hoped to do, then in the fourth year you are running for reelection. With two year terms, you do not get those productive second and third years.”

But what are we to make of phrases like “those productive second and third years.” Productive for whom? And what is meant by “productive”? The fact that politicians say they need longer terms in office so they can do more while in office should itself be regarded as an argument for shorter terms and more frequent elections.

More naïve observers might insist that longer terms allow elected officials to do “the people’s business,” but such fanciful views of democracy ignore the fact that “the people” have never agreed on what business an elected official ought to be ramming through the legislature. If an elective official spends two years doing what’s “productive” for the 51 percent of the voters who elected him, he may  be spending that time doing what’s destructive to the well-being and interests of the 49 percent of voters who want him out.

Thus, earlier Americans may have been the far savvier group in recognizing it was better to have elected officials who felt they had very little time to or leeway do much of anything between elections.

We also often encounter advocates for longer terms who claim frequent elections are unacceptable because they don’t want to see so many campaign ads on television or so much campaign coverage in mass media. Given that these people could easily solve their problem by just consuming less mass media, its hard to see why this objection ought to be taken seriously. This “argument” is little more than a demand to lessen oversight of politicians because some people regard themselves as too emotionally fragile to deal with the realities of frequent political debate.

After all, if the politicians themselves complain their terms are too short, that suggests shortening the length of terms is exactly the correct thing to do.

It’s for good reason that “term length is thought to influence member behavior, with longer terms giving legislators greater freedom from electoral pressures and shorter terms providing less freedom.”2 Who can doubt that US senators have more freedom to act than a House member in a competitive district? Moreover, if US presidents were required to stand for election every two years instead of every four years, it’s unlikely he or she would have as much time to formulate an agenda beyond a small handful of issues.

And then there is the problem of infrequent elections as now seen in Venezuela. When an elected official claims a mandate for six years, what are we to think if the voters change their minds one year or three years into that six-year term? Are the voters to be expected to simply accept that the elected official has free rein during this period no matter what?

While we know that the “will of the people” is a fiction, elections can nonetheless have value by acting to disrupt efforts by politicians to consolidate power and carry out grandiose plans unmolested by the voters. Granting an elected official the freedom to “be productive” for years at a time between elections is a risky endeavor, to say the least.

Admittedly, the Venezuelan problem can be partly addressed by limiting what prerogatives a government has overall. Were the Venezuelan government’s power tightly circumscribed by a high degree of decentralization or by constitutional limitations — assuming a sizable proportion of the population demanded such things also — the situation would be quite different. But it’s worth noting that, under certain conditions, the freedom of politicians to act can also be limited by frequent elections. In eighteenth century America, this was often regarded as common sense. It might be a bit of wisdom we’d be wise to revisit.

via ZeroHedge News http://bit.ly/2RJnc4u Tyler Durden