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Something Good From The Panemic? Maybe A Cease Fire In Yemen

Something Good From The Panemic? Maybe A Cease Fire In Yemen

Yes, in the midst of deaths and deep recession there may be someting good that may come from this pandemic.  Saudi Arabia’s leaders have announced a cease fire in Yemen after five years of war, one also accepted by its ally, the recognized government there.  Unfortunately so far the Houthi enemies of the Saudis and the recognized government have not so far accepted this proposed cease fire, and in fact it is not the first time the Saudis have called for one, with the previous efforts having failed.

However, this time maybe it will stick.  So far there are no officially recognized cases of covid-19 in Yemen.  But tens of thousands of Yemenis are returning home from KSA, thrown out as low oil prices have strained the Saudi economy, with the numerous Yemeni guest workers taking the hit, Yemenis being the only non-Saudis allowed to come and go without getting visas, so easy come and easy go.  In KSA there are now over 3,000 recognized cases while in Yemen more than half the health infrastructure has been destroyed by the Saudis in the war.  Yemen is facing a potentially disastrous situation.

A further aspect of this on the Saudi side is that 150 members of the Saudi royal family have apparently become infected.  Most of these are in the lesser branches, with the family now ridiculously large at about 15,000, of whom about 2,000 are “core.”  But in fact some serious “senior” members have fallen ill, with perhaps the most prominent (and seriously ill) is the powerful governor of Riyadh province, which contains the capital city, Faisal bin Bandar bin Abdulaziz, a nephew of King Salman, who is reportedly hiding on an island in the Red Sea, with de factoo ruler Crown Prince MbS also in seclusion somewhere.  This seems to have spooked the Saudi leadership so that even if the Houthis do not like what is being offered, the Saudis may simply stand down.

The virus may be bringing about peace in a long-suffering nation. Let us hope so.

Barkley Rosser

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The D Word

The D Word

Yes, depression, and not the psychological type, although the economic type leads to the psychological type, whether ot not it is the other  way around (see Keynes’ “animal spirits).

I often make fun of Robert J. Samuelson in the Washington Post, but in Washington Post today he raised the possibility that we are going into a depression, not just a bad recession.  On TV this evening I heard Austen Goolsby throw it out as well.  I suspect we are going to hear it a lot more.

The problem is not just that we have seen the highest increase in joblessness ever, but the increasing prospect that there will not be a quick recovery once the virus is under control. This is partly due to the global nature of this pandemic and the economic decline that has come with it.

A sign of what may be coming is what is going on in China.  The virus seems to be under control, despite some doubts about their numbers and new cases happening due to people arriving there.  But they have been to get their economy started up again, even in Wuhan. Supposedly 98% of firms have restarted.  But there are problems.  One is that many such places are missing crucial workers still under quarantine somewhere  or other.  Then there is the other side of this, the demand side.  China expects to sell goods through exports, but other countries are not buying.  And also domestic consumers are not buying either out of fear and low income.  Apparently there are factories running machines and using power even though they are not producing anything just to please the government that is making these claims of 98% of firms operating, but this seems to be an exaggeration.

Clearly at least on the demand side getting money to people and businesses through easy credit and a large fiscal stimulus are the obvious things to try to avoud this D outcome.  But Samuelson fears that they may be insufficient to this current situation, with no obvious alternative.  I fear he might be right on this one

Barkley Rosser

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In 2020 A March Of Madness

In 2020 A March Of Madness, Econospeak

Just before the end of February, President Trump declared that there were only 15 Covid-19 cases in the US, and that “they will soon go to zero.”  Deaths from COVID 19 now passed 3,000 (March 30th) and yesterday Trump declared that because we might have had over 2 million dead if nothing had been done, it would show “we did a good job” if deaths kept to “only” 100,000 to 200,000.  To do this “good job” he has extended his “social distancing” policy to the end of April rather than Easter, April 12 (my birthday). Also yesterday Virgina Governor Northam intensified a stay-at-home policy and extended it to June 10, the longest such period of any state.  All this on the next-to-last day of a month with more dramatic changees for the world than any in a long tim, certainly more than any that I can remember in my nearly 72 years.

Probably the closest rival I can remember is Septembrr, 2011, which also changed the world, although that all happened on one day.  This has been day after day, with the US death toll now surpassing that of 9/11.  I think to match this month one has to go back to September 1939 or maybe August 1914, or maybe October 1918 when the Spanish flu epidemic reached its maximum death rate in the US just before WW I ended.  In any case, when I think of the beginning of this month it seems like another era, way more than a year ago.

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Is Pompeo The Worst Secretary Of State Ever?

“Is Pompeo The Worst Secretary Of State Ever?”, Econospeak, by Barkley Rosser

This is the title of a column in today’s Washington Post by Jackson Diehl. His answer is an unequivocal “yes,” and I must say on thinking about it I know of no others clearly worse than him, maybe not even any as bad as him.

Diehl focuses on some general incompetence but then focuses on two specific issues that I have posted on here previously. The most important one, which is getting more serious by the minute, involves Iran. It is increasingly clear that Pompeo is probably the lead figure in pushing for heightening sanctions on Iran and also increasing the chance of war with them. He was a key player in Trump’s initial exit from the JCPOA nuclear agreement and has argued that making it harder for Iran to get medical equipment even as they face a deepening epidemic with thousands dying will bring them to the negotiating table or even lead to regime change. There is no evidence of any of that, just an immoral making many more people die awful deaths.

He is also apparently a key figure in labeling Covid-19 “the Chinese virus” or “Wuhan virus.” Trump has said he won’t call it those things anymore, apparently being told that this has been leading to attacks on Asian Americans. But Pompeo continues to push this line for no obviously good reason.

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The Oil Price War

The Oil Price War

One consequence of the emerging global Covid-19 recession has been that it has helped push world oil prices down from the $60.77 per barrel range near the beginning of 2020 to $23.12 for West Texas Crude and $29.00 for Brent Crude, levels not seen since the end of 2008. But part of why that decline has been so sharp and deep has been thet Saudi Arabia has increased production while Russia has kept up production, despite the Saudis demanding that they cut production.  So there is an oil price war going on.

Of course this will tend to cushion the recession for oil consumers.  But the US has become a small net oil exporter, and reports have it that a subsidiary reason for the Saudis and Russians getting into this price war has been to tank the US fracking industry in oil and natural gas, which by most reports cannot survive if prices remain as low as they are now.  So while US oil products buyers may be better off, the recession in oil producing parts of the US will be made worse.  It  should be kept in mind that a non-trivial part of the US economic growh in 2017 was a major increase in fracking activity, with half the increase in capital investment coming from that sector alone.  The damage to oil production in the US will probably exceed the benefits from lower prices at the pump in the US.

A curious corollary to this is that the leaders of both Russia and Saudi Arabia have made serious moves to enhance and expand their own power.  In Russia, Putin has moved to change the constitution so that instead of having to step down as president, he can run again twice more, keeping him still in as late as 2036, by which time he will be 84.  This still needs to pass a referendum, but few doubt that it will fail to do so, despite reported declines in Putin’s popularity.

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The Coming Fiscal Crisis Of State And Local Governments

The Coming Fiscal Crisis Of State And Local Governments

Yesterday my wife Marina and I met with our personal attorney, a close friend also, to fix  some loose ends in our wills due to some recent family deaths, as well the current situation.  He also happens to sit on the Harrisonburg City Council, as well as having been Mayor for a  while and a longtime member of the city Planning Commission, someone whose competence we have great respect for.  Anyway, he noted that on April 14 the City Manager is to present a proposed budget to the City Council, and that it will have a giant hole in it given that taxes on restaurants are a significant source of revenues for the city, and while not completely shut down, restaurants are now seriously restricted in their activity, not to mention that students will not be returning this semester, and they provide a lot of business.  In short, the city will face severe budgetary problems as the now occurring recession proceeds.  It is not only Harrisonburg that faces this problem, but probably just about every state and municipality in the United States.

Obviously this is currently low on the priority list of most people, and while Congress has now voted for a stimulus bill that will help out indiviuals and businesses, and another may be on the way, so far there  has not been a whisper regarding a likely need to help out state and local governments, who, after all, contribute more to the US GDP (and employment) than does the federal government, which mostly just ransfers money, except for the DOD in substantial terms.  The problem is that unlike the federal government, nearly all state and local governments face balanced budget rules for their current activities, with most needing to pass bond referenda for specific projects in order to borrow money.  So when the revenues fall short, which they shortly will start to do for all these state governments, they will face the choice of cutting spending and laying off workers or raising taxes on populations facing sharply reduced incomes and employment.  The sooner the federal government recognizes this and starts to do something, the better, although probably for now natonal politicians are hoping this will all be over before too much damage happens to the local governments, to the extent they are thinking about this at all, which I doubt.

I note that in the Great Recession, this problem was recognized, and the 2009 fiscal stimulus plan by Obama included as about a third of its spending the distribution to state and local governments of revenue  sharing.  This did help out their  problems that arose at that time.  Doing so again I think would be wise, but again, for the moment this problem is under the radar at the national level.

Barkley Rosser

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To Slow Spread Of Coronovirus, End Iran Sanctions

To Slow Spread Of Coronovirus, End Iran Sanctions

On 3/13/20 in Foreign Policy Focus, Ariel Gold and Medea Benjamin argue that to improve the global coronavirus problem, sanctions on Iran should be lifted, quite aside from the fact they should never have been imposed in the first place as Iran was adhering to the JCPOA nuclear deal.

The effect of the sanctions has been to tank the Iranian economy, including its health care sector, much worsening the coronavirus epidemic in Iran, thus making it more likely to spread to the global pandemic. The Iranian rial has fallen by 80 percent, making it far harder to purchase medical equipment from abroad.  This has not only aggravated the coronavirus situation but also that of many other diseases as well. As of March 13, there were 11,362 reported cases and 514 deaths.

Of course this is aggravated by the Iranian regime imitating those of China (initially) and the US (until very recently) in denying the conditions in their country and being slow to act with testing and other measures. But the bad behavior of the regime does not justify the US and others acting to worsen the health crisis in Iran, which makes it more likely to spread its problems elsewhere as well.

Barkley Rosser

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Who Wins Prairie du Chien Wins the White House

Who Wins Prairie du Chien Wins the White House

That would be Prairie du Chien, Wisconsin, whose French name means “prairie dog,” and which is located where the Wisconsin River empties into the Mississippi River, third oldest town in the state founded by Europeans (the French) after Green Baay (originallly Fort Nicolet) and Portage, also located at crucial spots long used by the Native Indians for river transport.  It is also the county seat for Crawford County, with Grant County just across the Wisconsin River.

Many argue that Wisconsin is the ultimate swing state, based on that if all the states go as they did in 2016, Trump would stilll win if he loses PA and MI, but wins in WI.  It might be that Bernie in particular could swing AZ because of his strong support among non-Foridian Latinos, but even with that, Wisconsin is clearly about as crucial and swingy as any state in the Union.  How it goes is likely to align with the ultimate outcome in the electoral collage, at least as things stand now.

So why is Prairie du Chien so crucial?  Well, aside from several industrial cities, notably Erie, PA and Yongstown, OH, the parts of the nation that did the largest amount of changing their votes between 2012 and 2016, with then at least partly moving back towars Dems happen to be southwestern Wisconsin and noetheastern Iowa across the Miisissippi from SW WI.  While much of WI is now pretty rigidly partidsanly fixed, not so true in the past, this area is up for grabs and swinging back and forth at lot.  What matters in the rest of the state has more to do with base turnout issues, such as African Americans in Milwaukee and some other stories turning out a lot more in 2012 than in 2016.  But as of now, it looks like what goes on in SW WI looks to indicate how the state will go and thus how the national outome will go.

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Who “Got” Iraqi Oil?

Who “Got” Iraqi Oil?

Not the US.

Dick Cheney collaborated with US major oil companies in a plot to at least take over operating the oil production in Iraq, OPEC’s second largest producer and exporter, if not get to own the oil itself outright (which has not happened as oil in the ground was and remains owned by the Iraqi government, which is the way it is in pretty much all OPEC members).  Of all people, Juan Cole and many other progressives agreed that the war was all about controlling Iraq’s oil.  So the US overthrew Saddam Hussein, but then what followed was civil war and discombobulation, and oil production was seriously disrupted for a long time, with those US oil companies not getting any business for a long time.

Of course, Donald Trump has repeatedly argued that the worst thing about the Iraq war was that “we did not get thee oil.”  Of course, the only reason he has left any troops in northeastern Syria is that somwbody told him there is oil there and he should leave troops there to keep terrorists from getting at the oil.  So there we have US troops occupying some of these wells, although there is basically no way they will ever be operated by US companies, much less owned by them.  Trump is deluded if he thinks “we have got” that oil.

So what about now?  According to the Iraqi Oil Ministry, there are 23 foreign corporations operating in the Iraqi oil sector.  Four of these are Chinese, three are Russian, and one is American: Exxon Mobil.  Last year Exxon Mobil reduced its workforce in Iraq due to security issues.

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What Is “Democratic Socialism”?

What Is “Democratic Socialism”?

Probably the best answer is whatever Bernie Sanders says it is as he is by far the most famous person ever to adopt this term as a label for his beliefs.  There is a group  in the US bearing that name, the Democratic Socialists of America (DSA), which has been in existence since 1983.  But while its membership has since then generally fluctuated between 4,000 and a bit over 6,000 through 2016, its membership had surged to over 45,000 by 2019, clearly responding to Bernie’s identification with the term, even though as near as I can tell, he has not been a member of the DSA.

If one goes to the Wikipedia entry  on “democratic socialism,” one finds claims that it originated with the utopian socialists and chartists in the early and mid-1800s.  Certainly many of these groups supported democracy and also some sort of socialism.  For that matter, Karl Marx also in many writings supported democracy and socialism, although in other places Marx sneered at what he called “bourgeois democracy,” and we know many regimes claiming to be inspired by Marx have not been democratic, unless one wants to call Leninist “democratic centralism” to be democratic, something most of us would not go along with, and current DSA types would not go along with.

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