Good Points From Larry. Michael Hudson On Reindustrialization.

Larry also talks about Cold War 1.0. 

I anticipate that Russia will intensify its attacks on Ukrainian positions at key locations along the 800 mile line of contact in the next two weeks. While NATO is scrambling to provide Ukraine with actionable intelligence to try to damage the Russian capabilities, Zelensky and his Generals confront a harsh reality that first class intelligence is useless if you do not have the manpower or equipment to make a major dent in Russian defenses. Ukraine’s military grows weaker with each fruitless attack.

I agree with Andrei that the promised escalation by France and the U.K. is likely to provoke a Russian response. It is one thing to covertly provide more sophisticated lethal weaponry to Ukraine. Recall that the Soviets did it to the Americans in Vietnam and that the United States did it to the Soviets in Afghanistan. Both the Americans and the Russians quietly agreed to live with those actions without risking escalation into a direct conflict. They continued to have normal diplomatic contacts and negotiated arms control agreements in spite of the covert proxy wars. Each side knew what the other was doing but each side also took steps to try to hide their actions.

And here is the key: during the Cold War 1.0 there was an EXPLICIT understanding on both sides of consequences of nuclear exchange. Today, meaning the post-Cold War 1.0 period, both Washington and Brussels convinced themselves that that they are super-pooper powers with Russia's economy being (depending on the time period and imbeciles who have been spewing this BS) "smaller" than that of Portugal, Netherlands, Spain, Italy etc. In Cold War 1.0 the superpower club was a very exclusive one. Well, in Warm War 1.0 some chihuahuas decided that they may pretend to be in it. No, this club is still very exclusive, but now has three members: China, US and Russia. There is a pecking order in military balance and it is being enforced as I type this. Plus, neocons and Pentagon caretakers on their payroll do not know how to fight a real war. 

That brings us to Michael Hudson's brilliant summary of the combined West "economy". In his excellent interview with the ominous title Why the U.S. Economy cannot Re-Industrialize, he explains in detail this ever present real industrial factor, which IS in the foundation of the military might:

But there’s one problem, when they graduated with their PhD, there’s really only two jobs for economists in the economy: one is to drive a cab and the other is to teach. But in order to teach, you have to be hired according to how many journal articles you write for the most prestigious journals. And almost all the journal articles are controlled by the economics departments of colleges like the University of Chicago, or Berkeley, that are funded by the banks, and the large foundations. And so if you don’t publish in these journals, by saying what the neoliberals, the monetarists, the junk economists say, then you’re not going to get hired. So of course our students did get hired, but not by Harvard, or the University of Chicago, or Princeton, or Columbia. They could get hired by the New School here in New York, and by others, but there is a almost total censorship. And some students came from Asia, and they’ve gone back to Asia. Some were my colleagues in China, and Hong Kong, folks studied at UMKC. But you have the control imposing junk economics in the United States, by the media, such as The New York Times, is almost as strong as their control over reporting about the Ukraine war, as if Ukraine’s winning, and not losing.

They’re saying as if deindustrialization is helping us move into the post-industrial society of mass unemployment and homelessness, as if that’s a good thing. Well, it is a good thing for the 1%, because they get to feel, we’re really it. We’re really the new lords, the financial lords, not landlords, who are also in debt to us, to borrow. So that’s really the situation. Ultimately, if people don’t have a mental model in their mind of how the world works, and how it should work, to promote prosperity, they believe with Margaret Thatcher, as you said, that “there is no alternative.” And the function of economic education is to try to brainwash students into thinking there is no alternative.

This is precisely why I do not treat West's "economic" statistics seriously and do not read propaganda outlets such as WSJ or Economist, among many others, only on rare occasions, because those who write and are published there are not real academicians, despite numerous Ph.Ds. Neither does SVR, General Staff, FSB and other serious Russian government analytical outlets who made a precise forecast of West's "capabilities" or, rather lack thereof, on the eve of issuing ultimatum in December 2021 by both clandestine and open deconstruction of the US economic "data". Hudson also makes a superb observation of the role of anti-labor policies which effectively destroyed American industry. And here is a control shot to the head by Hudson:

The other day I was asked, how are you going to get China, and Saudi Arabia, and African, and South American countries all to work together? They all have such different religions, and ethnicities, and social status. Well, the common denominator is, they’re all wage earners. And they all have a common objective in making enough money, by working for a living, so that they can increase their living standards, have a home of their own, and have a shorter working day, and a less intensive, less exploitative, working conditions. That’s all the common denominator that you need for these countries to work together, and it should be all the common denominator that you need in the United States, but as long as people think there are only two alternatives, the Republicans or the Democrats, well, that’s the same thing as saying there’s no alternative to the 1%, the FIRE sector, ruling society.

Exactly.  Now think why Comrade Xi received Valentina Matvienko. She is a big parliamentary honcho--a Chair of the Federation Council (Senate), but still. 

Chinese President Xi Jinping hosted a top Russian senator, Valentina Matvienko, for talks in Beijing on Monday. The high-profile negotiations revolved around strengthening ties between the two nations, as well as their joint multinational projects. “China is ready to continue to work with Russia to develop a new era of comprehensive strategic cooperative partnership that is mutually supportive, deeply integrated, pioneering and innovative, and mutually beneficial to help rejuvenate the two countries and promote a prosperous, stable, fair and just world,” Xi said during the meeting, which involved multiple senior officials from the two countries. Moscow and Beijing should “lead the correct direction of global governance reform,” Xi stressed, underlining that the development of the bilateral ties has become “a strategic choice made by both countries based on their own national and people’s fundamental interests.” Xi added that the importance of developing ties within such multinational groups as the Shanghai Cooperation Organization (SCO) and BRICS.

You all know now that Iran is a full member of SCO, right?

Just Yesterday I Posted About It.

Bang, today--another iteration by Tucker and Glenn Greewald of this simple idea, which so much has been written and talked about, especially by Michael Hudson, that "financial capitalism" and system it produces is basically a BS which not only does not produce anything but metastasizes into political instability both internally and abroad. 

The only thing I disagree with is this "Silicon Valley" products, much of them being as virtual as any "financial engineering". Enough to take a look at this news.

SEOUL (Reuters) - Samsung Electronics on Thursday commented for the first time on Intel's decision to outsource more of its chipmaking, but declined to talk about any possible partnership with one its key rivals. Intel, one of the few remaining firms that both designs and makes its own chips, said last week it would lean more heavily on outside factories, or foundry manufacturers, and could even licence technology from outside firms.

It is clear the United States is being demolished as an industrial country and, if to follow a rather convincing, albeit not perfect, theory that the United States is merely a vehicle for global finance then it inevitably leads us to a conclusion that the life of the United States as a useful economic vehicle is over and the demolition is in progress. This view, certainly, has its merits. I am sitting here with a bucket of pop-corn waiting to see the sequence of the largest cognitive dissonances in the camp of fanatic libertarians and laissez-faire enthusiasts, primarily from GOP--I do not count Democratic Party as sane political organization--who will have to now try to defend a real economy's demolition by the ideology which is in the foundation of their MO--making money, anyway they can. Again, let's recall that day in 2000. 

This is the start of the US industry being shipped in earnest to China. Do you see those red colors enthusiastically voting "Yea", in fact, they voted it with "fuck, yes". Those are all GOPers, and while outsourcing chipmaking is not China-related, it makes little difference for average Joe or Jane since, in the long run, they are screwed all the same. Right, the idea was: let's remove all those industries elsewhere, while we, in America, will strategize, conceptualize, interface and prioritize(c). 

In other words, do nothing but steal. I know it is almost unfair to use Russia as an example but here is how real economy looks like. This is a gigantic shipyard being built in Murmansk Region by energy giant NOVATEK. The shipyard will produce floating natural gas liquification plants, aka GBS LNG platforms. The scale is massive. 

Or this:

You can see the video (in Russian) here. 15,000 people are building this monster with a dry dock of 415 meters. Considering that the whole thing is also needed for "other" projects which may or may not be of pure LNG nature (wink, wink). Having said all that, here is another picture which gives the impression of an immense scale of the construction.

So, Russia taking the third place in global shipbuilding is not just inevitable but merely a matter of a relatively short time. This also is a cushion, of sorts, if Europe succumbs to US pressure and rejects Nord Stream-2, Russia's LNG will still be much cheaper than any alternative. Rostislav Ishenko recently stated that NS-2 for Russia is now primarily a political matter, rather than economic one, because Russia will do just fine without NS-2, which I happen to agree with, but she shouldn't give up on it for geopolitical reasons. Maybe, but in the end, Russia is not responsible for Europe and if the US manages to shut down NS-2, let Europe live with the consequences. European intransigence is Europe's problem, Russia's future in any case is NOT with Europe in general. But as they say, we'll see about NS-2. Maybe Germany will find a spine at some point of time. If not, to hell with them all in EU. But this was my position for years now, for all my OK awareness of the geopolitical factor, but at some point of time one has to consider pure economic sense.

Strange It Took So Long.

In one of those "Duh" moments, Vladimir Putin signed new "About the Strategy of National Security of Russian Federation" on New Year's eve.

Putin names United States among threats in new Russian security strategy 

In it, the United States and NATO are officially identified as threats to Russia. Well, it finally hit home. In general, calling things their own names is a very healthy habit. As an example, calling Maidan "revolution" a fascist violent coup (financed and supported by the US) is a very healthy and right thing to do. There are times and circumstances when speaking in broadsides is absolutely necessary. Correct definitions also, usually, lead to correct actions. 

The new document may have a serious ramifications for Russia's domestic policies. We'll see how the situation with Igor Kudrin develops. Bloomberg was spreading rumors about the return of this shill to the post of Russia's Finance Minister for some time now. It is obvious, however, that with threats like US and NATO identified, the questions of competence and loyalty of Medvedev's economic block should be asked. It all still comes down to Putin's world-view or, rather, to its evolution. Not for once he proclaimed himself being an economic liberal but, granted his background and management style, it is very difficult to believe that he is not seeing that the model he publicly associates himself with failed miserably in Russia, as did "elites" who promoted it. Seeing this failure is a crucial issue of Russian contemporary history. It is also a major geopolitical issue, because Russia's choice of model will have a global resonance, especially when one considers real, not Wall Street la-la-la, economy.

To put it in laymen lingo: Russia has an unrivaled experience with mobilizational types of economy and with technological leaps. It absolutely doesn't mean that it has to be Stalin type planned economy with all other, not really nice, things which follow. But calls for massive re-industrialization continue to dominate Russia's political landscape. Some signs of that happening are already visible and it is Medvedev's government which is a major impediment to what is the only way out of Russia's economic slump, but then again, introduction of the new industrial plant continues at the same rate as 1 year ago. Remember Huntington's "States respond primarily to perceived threats"? I never encountered, nor know of, the state which responded to kinetic threats, be it massive hostile army on its borders or Carrier Battle Groups ready to attack, with low inflation rates, capitalization and stocks' growth. Usually, the response is a development of the "heavy" industries, science, education and...ahem...some sort of autarky. Autarky has another definition--it is called being SELF-SUFFICIENT. In today's Russia it has a new name--importozameshenie (Import-substitution). 

In the long run, Putin signing this new national security strategy is not even so much a reaction to the external and very real threats (what's new?), as it is another step in responding to what overwhelming majority of Russians were calling on for a decade--to end the reign of incompetent, arrogant and detached from the reality economic block. New strategy adds weight to a case of all those good ol' boys and girls from economic block  leaving Russia and seeking employment at the Wall Street or teaching some "economics" BS in Ivy League--that is where they belong. Meanwhile............

New Manufacturing (In Russian)

One fights the war with weapons, not with stock options.