Prelude: Financial Meltdown 2008 Structural Causes
Lack of Bank Regulation
Short-Term Reserves Were in Euros When Dollar Were Required
Academic Economist Under Estimated Economic Effects of Financial Market
Winners and Losers
Winners and Loses #1
Debtors Can't or Won't
Government Helped Top and Bottom Creating Middle Income Envy
Government Helped Top and Bottom Creating Middle Income EnvyCreditors Lost Real Value of Debt Up But Some Don't Pay
Winners and Loses
Return on Capital-R Greater Than Economic Growth Rate-G.
Top 1% received 90% of Income Gains
World's Very Poor Benefited
Middle Income Stagnate: Poor Get Government Help! Middle Class Ignored.
1.Neoliberal Economic Orthodoxies Wrong
A. Finance does affect real economy.
B. Finance system can falter.
C. Markets Need
2. Loans to Greece from
Germany's trade surpluses
were not the problem
to fund substantial daily borrowing needs for international commerce.
3. Almost all banks were very highly leveraged
with substantial short term $ borrowing used
as Euro collateral needed for daily operations
B. Credit stopped
2. Thatcher deregulation of London's financial system had made it the hub of dollar
denominated European bank sponsored debt which flowed into and out of the U.S.
3. The U.S. eventually deregulated to loosened housing mortgage rules and
help financing of Clinton's expand minority housing Community Reinvestment Act.
4. Credit-default swaps failed. Created to safeguard the resulting low credit rating
housing loans were exempted from regulation by the Gramm-Leach-Bliley Act
which repealed banking industry safeguards provided by the Glass-Steagall Act.5. Many banks did not have the dollar reserves to meet the needs of the banking
and corporate world.
6. Walls Street's model of an extremely leverage wholesale funding model running
out of NY and London would crash.
4. Is FED Involvement in
a Geopolitical World Appropriate?
5. Stability Needs Dollar Supremacy
A. World trade is stable because the world, through
B. Dollar investments are dependent on
C. Distribution of these profits
Return to Political Economy Book Summaries 11/21/18 view horizontally Please share!
Part 2 Democracy
Failures Caused Popularism
summarized from Francis Fukuyama: Democracy's Failure to Perform
1. Development of Illiberal Democracy
1. Foreign Policy Failures of Developed Democracy
enhanced by U.S. foreign policy failures i.e. Middle East wars
2. Non-Liberal Democracy success, especially China
3. Poor Liberal Democracy Performance i.e. economic
slowness, immigration concerns, wealth accumulation
B. Definitions, nominal
1. States: monopoly on the legitimate use of force.
from Max Weber States are about Power!
2. Rule by Law: sovereignty sets the law i.e. China
3. Rule of Law: sovereignty responsible to same laws
as the governed. Laws limit power.
4. Democratic Accountability requires free political parties
with guarantee substantive accounting and a governments
that serves the entire population, not just the rich and the poor.
Liberals missed this effect of their policies.
Everyone Got More, Some Just Got More More Than Others!
C. Modern Political System
2. Patrimonialism: rulers own political system, resources , distribute wealth Who You Know
3. Neo-Illiberal States:
look democratic, limited representation,
leaders follow the money
D. U.S. Failures
at State Building
2. Three Main Forces Are Blowing Up Global Politics
Status and Social Cultural Apprehensionseventually led to disruptions.
This caused effected groups to lash out in a tribal like response.
An End to a Post WW II U.S. Led Moderation is seen by some to be causing
1. Great power conflict returning to early Cold War levels
2 Declining world wide economic prosperity
All three disruptions could last years Axion reportedhere, here and here.
Optimistic leaders thought and even hoped Trump, Brexit, or something else
would help moderate continued disruptions.
Disruption modification related to Trump, Brexit, and immigrantswill be difficult.
1. No opposing stability force seems forthcoming
2. An aging and shrinking developed world's population reinforces disruptive forces.
3. AI is increasing worker employment anxiety.
3. Climate change is increasing leader concerns.
European Threats 8/18
Would a more Federalist Approach decrease the animosity
Summarized of Understanding Right and Left Populism by Samir Gandesha
an Associate Professor in the Department of the Humanities and the
Director of the Institute for the Humanities at Simon Fraser University.
1. Growth of PopulismRight-wing populist parties
Erdogan's Turkey 2003, Modi's India 2014, Trump's American 2016,
Batten's United Kingdom 2016, also in
Austria, Hungary, and Poland
Right and left populism affected neoliberal globalization.
2. Causes of Populism
Empirical study by Norris and Inglehart (2016)
of different demands from democratic, horizontal and egalitarian discourse.
3. Populism:Economic Insecurity or Cultural Backlash?
Three distinct elements
3) nativism vs. 3)osmopolitanism
Two distinct axes: economic and cultural
Norris and Inglehart argue that the latter is the most convincing
One wonders whether the authors don’t seriously underestimate the threat
4. Neoliberal globalization is comprised of four processes:
accumulation by dispossession
Together they have increased
Anxiety from neoliberal globalization has ammunition from right and left populists.
Neither Norris and Inglehart nor Laclau adequately account for
“the people” are differentially deployed by right and left and they
defines "the people"
as those confronting an
Left populism defines “the people”
defines the enemy
in personalized terms.
Part Four Populism is the Reset Mechanism
Populism is not
an economic distribution complaint,
It is not just about wage stagnation and loss of jobs
It is about disempowerment, social exclusion, unfairness, and humiliation.
Many Trump Populists seek recognition, having a meaning,
from M. Sandel: Populism, Trump, and the Future of Democracy
George McGovern the populist who lost, Trump Won, Why, was it the man, the media, why were people unhappy
Kantian Morality Enough for the Public Sector,
Should public discussion go beyond safe and delimiting morality
Should respect for work and be part of the discourse?
Should competing conceptions of the "good life" be on the table of public discussion?
Update from Ian Bremmer
Populism in Europe & America 1/24/19
Editor's Note: Michael wants more that Kant. Kant is enough.
Michael Aandel is a lot like Charles Murray who is basically correct,
Extreme conservatives want too much control, extreme liberals want no control.
Left wing populism is economic, the main stream view feels this is the starting point
Right wing populism is about the cultural loss caused by immigration, not prejudice
Summary of Summary
Insecurity may need more attention by populist theory.
These are key to understanding the difference between right and left forms of populism
Nazism And Neoliberal Mythmaking
Part 5 Crisis Through the 2020's
1. Development theory centered on financing growth with exports.
2. Excess world capacity grew.
3. Exporters were dependent on markets, dependent and hostage to buyers.
4. 2008 Financial Crisis lower world demand, exports fell, growth slowed.
5. China's lowered her demand growth for industrial goods and natural resources.
Recent Geopolitical Positions
1. United States is back to normal.
2. Europe economy still stalled.
3. China export growth was permanently slowed by increased Vietnam, Columbia ... lower cost competition.
4. Russia budget hindered by low export prices and was again forced to delay modernization.
5. Saudi Arabia lost export revenue and with it, Middle East dominance.
6. Iran has begun dominating "Iraq and Lebanon", has a "presence in Syria" and "operates in Yeoman."
7. North Korea's
bomb development is for bargain with US and she also wants less US
8. Middle East franking means not as strategic, chaos continues, Iran is the problem.
1. 3rd world debt crisis caused easily managed geopolitical ripples.
2. Nations are now even more economically interdependent.
3. Financial crisis led to a trade crisis making for increased, more persistent ripples.
4. Europe succeeded during her one reason to
5. World Leaders have many credibility problems.
1. Brussels wants Nationalism to cease, but it will not.
2. China can not quickly slow her export mercantilism.
3. Putin needs pseudo geopolitical power to exist.
4. United States must act as world leader, but she will not.
Recent Unstable Geopolitical Eras
Maturation of Core Technologies Intensify Problems.
1. Core Technologies spawn other
2. Maturing Lower Productivity
3. Technology Based Productivity Decline Not Recognized.
4. Coming Replacement Core Technology is Unknown
5. 2020's Will be a Classic Period of Geopolitical Dysfunction
Problems Have No Easy Fix1. China: facing slower growth allowed Xi to extend his power.
He strengthened the Communist Party and attacked corruption,
but can't decide who takes the pain from nonperforming loan. Think Euro!
2.Russia: Putin allowed to increase his strong man act
while looking over his shoulder. He has directed attention from a slow economy
and Russia's loss of geopolitical clout with local geopolitical interventions.
Rise of Nationalism Most Serious
4.United States has an import problem
as workers, displaced by cheap imports, revolt.
History will continue out-of rhythm until the US takes control.