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Who Is Holding Back the Russian Economy? — Strategic Culture

Posted by M. C. on September 9, 2019

But those IMF rules are there to protect the IMF making the loans to the troubled nation, not to assist the troubled nation actually recover.

https://www.strategic-culture.org/news/2019/09/08/who-is-holding-back-the-russian-economy/

Tom Luongo

 

Russia’s economy has been a sore spot for more than two years now. Since the ruble crisis of late 2014 the role of the Bank of Russia has been to apply IMF-style counter-cyclical tightening to stabilize the situation in the wake of the decision to allow the ruble to float freely on the open market.

That was the right decision then. It was the move the US did not expect President Vladimir Putin to make. It was expected Putin would hold to his natural conservatism and keep the ruble trading in the 30’s versus the US dollar as opposed to risking a collapse in exchange rate in the face of an historic drop in oil prices over the eighteen months between July 2014 and the low made in late January 2016.

Oil dropped from $120+ per barrels to around $28 during that period. And if Putin hadn’t proactively allowed the ruble to fall from RUB32 to a high of RUB85 in early 2016 Russia would have been bankrupted completely.

During that time Bank of Russia President Elvira Nabullina raised the benchmark lending rate to 17.00% and Russia began the slow, painful process of de-dollarizing its economy.

It’s been five years since those dramatic times. But a lot of damage was done, not just to the Russian people and their savings but also to the mindset of those in charge at the Bank of Russia.

Nabullina has always been a controversial figure because she is western trained and because the banking system in Russia is still staffed by those who operate along IMF prescriptions on how to deal with crises.

But those IMF rules are there to protect the IMF making the loans to the troubled nation, not to assist the troubled nation actually recover. To explain this, I have to get a bit technical, so bear with me.

The fundamental problem is a miseducation about what interest rates are, and how they interact with inflation and capital flow. Because of this, the medicine for saving an economy in trouble is, more often than not, worse than the disease itself.

If Argentina’s fourth default in twenty years doesn’t prove that to you, nothing will.

Nabullina still believes that her job is to get inflation down to 4%. Inflation targeting, as central bank policy, is a disease that needs to be placed next to smallpox at the CDC in Atlanta.

It seems I have to write this article once every few months just to remind people what the problem is.

When inflation is above the target an austerity mindset dominates at the central bank who keeps interest rates above the market rate in the vain hope they can wring the last bits of inflation out of the economy, because sufficient confidence hasn’t returned to the banking system after the crisis.

This is Russia’s problem today. Nabullina still believes there’s work to be done before allowing the economy to grow.

When inflation is below the target, like in the ECB and the US, then to the miseducated central banker growth is sluggish and demands stimulus in the form of cheap money to create a virtuous credit cycle. It hasn’t worked and it won’t work.

Because both of these theories about the effects of inflation targeting are dead wrong.

They haven’t worked in the US and Europe because there is no more capacity within their economies to take on more debt to stimulate demand and increase spending. All they are doing is, as described by Mises and others, “pushing on a string” offering money no one wants at interest rates the market cannot sustain.

That cheap money inflates asset prices like stocks and bonds while diverting capital to long time-horizon projects like fracking in Texas, and housing and car loans, but it thieves working capital from the future by mispricing the risk of those projects in the form of the interest rate.

The net effect is enriching the already obscenely rich and powerful, through wealth transfer which feeds leftist and Marxist criticisms of the ‘free market’ while they proclaim the end of capitalism.

But central bank inflation targeting and control is the height of a centrally-planned economy. Control the value and cost of money and you control the means of production. So, capitalism this ain’t folks.

Miseducation on matters economic are commonplace today from the commanding heights to the lowest barrios.

Eventually, you reach the point we’ve arrived at in the west where no amount of forcing the market, through punitive negative rates, can stimulate growth. This is simply arrogant men praying at the altar of math torturing equations which have no resemblance to reality and turning it into policy.

On the other hand, we have Nabullina trained in this world of econometrics and its econo-babble, holding back the Russian economy with interest rates set above the market. She is either overly-cautious, if I’m being generous, or a full on fifth-columnist stifling growth to support Russia’s enemies, if I’m being cynical.

I think the truth lies somewhere in the middle, if I’m being fair. Today I’ll be fair.

The Russian economy, structurally, is in excellent shape. John Hellevig at the Awara group recently published an excellent report explaining the guts of what’s going on there. And John notes, like I have been for more than a year (here and here), that the Bank of Russia has interest rates too high given what the market is telling it.

It’s not that tough really, just look at the Russian yield curve and you can see what I’m talking about.

The current benchmark rate in Russia is 7.25%, down from 7.75% just two months ago (and that I’ll get to in a minute). The entire interbank market and short-term deposit market is trading below that benchmark rate.

This means the central bank is holding back a market that wants to trade at lower rates. This is keeping liquidity low and access to loans in the domestic and commercial market low as well.

Meanwhile, the demand for Russian debt, because as a country Russia’s balance sheet is so clean, in part due to Nabullina’s stewardship of the 2014-16 crisis period, is pushing rates lower. And for the first time in close to 5 years Russia has a normal positively-sloping yield curve from 1 year to 20 years, with no humps or flat spots.

Demand for Russian debt is finally market driven in a way that is predictable and can allow banks to make money paying short and lending long. This is how banks are supposed to make their money, not speculating on stocks and currencies!

Moreover, domestic savings rates at all maturities in the CD and money markets are below the benchmark rate, so Russian banks are under zero stress. High savings offer rates indicate a need to shore up reserves by attracting savings. It’s a bad sign.

Non-performing mortgage loans stand at less than 1%…. 1% !!

The only worry is the outstanding dollar-denominated debt, but that makes up around 1% of the total Russian mortgage market. It’s literally chump change.

I mean, for pity’s sake, what on god’s green earth is Nabullina waiting for? An engraved invitation from the Fed to the next convocation at Jackson Hole? She’s done her job, now let the Russian people do theirs.

Nabullina has kept rates high out of fear of inflation returning due to a rising US dollar and falling oil prices which is putting upward pressure on the ruble. She made an egregious policy error hiking rates in response to Trump’s crazy aluminum tariffs last year. And then held that level until June.

She’s only now just beginning to lower rates after the policy became ludicrous and Russian GDP growth has stalled. Again, incompetence and treason look very similar from a distance.

She keeps jumping at the shadows of a dollar-induced crisis. But the Russian economy of 2019 is not the Russian economy of 2015. Dollar lending has all but evaporated and the major source of demand for dollars domestically are legacy corporate loans not converted to rubles or euros.

So, the Russian economy is so much more insulated from a rise in the dollar than it was before.

The fundamental flaw in the thinking behind most central bankers, especially those trained by the IMF, is that lowering the cost of money stimulates growth and raising it reins it in. It’s an overly simplistic model to explain why we need philosopher kings like Nabullina, Mario Draghi and Jerome Powell to tinker with the economy and engineer growth and stability.

The reality is it’s more complicated than that, because access to capital means different things at different parts of the business cycle to different economies. And Russia’s role in the global economy is changing.

Russia is becoming an independent node in the global economy. Shut out of the US dollar markets, Russia now has to lead the part of the world it dominates – the EAEU, Turkey, Iran, the CSTO states – and show confidence by making the ruble more accessible to foreign investment.

Projecting confidence comes in the form of lowering rates to reflect a healthy domestic market, not keeping rates high because you’re afraid of the US

That yield curve I posted above is a picture of a central bank scared of the future, like Jerome Powell at the Fed, and not one sanguine about Russia’s future prospects. Powell has problems Nabullina doesn’t have, like hundreds of trillions in unfunded future liabilities that require much higher rates to stabilize.

Lowering interest rates in Russia from 7.25% to 6.5% or even 6% is likely all she needs to do and then let the markets take care of things from there. That’s what the market’s actually telling her.

And I believe Vladimir Putin has had enough of Nabullina’s fears. He’s getting more and more impatient with his central bank president. He sees the lack of growth of the Russian economy and wonders why capital formation is locked up behind a wall of overly-high interest rates.

Recently Putin sat down with Nabullina and right after that interest rates dropped 0.25%. The same thing happened in 2015 when she had rates stuck at 10% and Putin had to finally forced her to justify herself.

It’s clear that there is something wrong at the Bank of Russia; whether it’s Nabullina herself, her staff or the legacy of insipid and dangerous Western economic theories refusing to die, is beyond my knowledge.

The cynic in me says the foot-dragging by the Bank of Russia is the final vestige of US infiltration in Russia’s institutions rearing its ugly head. That fight is ongoing, but the recent drops in the benchmark rate are a good start.

Be seeing you

 

 

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“Hands Off Hong Kong” – The Cry That Seldom Is Heard, by John V. Walsh – The Unz Review

Posted by M. C. on September 9, 2019

http://www.unz.com/article/hands-off-hong-kong-the-cry-that-seldom-is-heard/

Through the summer the world has watched as protests shook Hong Kong. As early as April they began as peaceful demonstrations which peaked in early June, with hundreds of thousands, in protest of an extradition bill. That bill would have allowed Hong Kong, a Special Administrative Region of China, to return criminals to Taiwan, mainland China or Macau for crimes committed there – after approval by multiple layers of the Hong Kong judiciary. In the wake of those enormous nonviolent demonstrations, Carrie Lam, CEO of Hong Kong, “suspended” consideration of the extradition bill, a face-saving ploy. To make sure she was understood, she declared it “dead.” The large rallies, an undeniable expression of the peaceful will of a large segment of the Hong Kong population had won an impressive victory. The unpopular extradition bill was slain.

But that was not the end of the story. A smaller segment continued the protests. (The Hong Kong police at one point estimated 4,000 hard core protesters.) pressed on with other demands, beginning with a demand that the bill be “withdrawn,” not simply “suspended.” To this writer death by “suspension” is every bit as terminal as death by “withdrawal.” As this piece is sent to press, news comes that Corrie Lam has now formally withdrawn the bill.

As the summer passed, two iconic photos presented us with two human faces that captured two crucial features of the ongoing protests; they were not shown widely in the West.

First, Fu Guohao, a reporter for the Chinese mainland newspaper, Global Times, was attacked, bound and beaten by protesters during their takeover of the Hong Kong International Airport. When police and rescuers tried to free him, the protesters blocked them and also attempted to block the ambulance that eventually bore him off to the hospital. The photos and videos of this ugly sequence were seen by netizens across the globe even though given scant attention in Western media. Where were the stalwart defenders of the press in the US as this happened? As one example, DemocracyNow! (DN!) was completely silent as was the rest of the U.S. mainstream media.

Fu’s beating came after many weeks when the protesters threw up barriers to stop traffic; blocked closure of subway doors, in defiance of commuters and police, to shut down mass transit; sacked and vandalized the HK legislature building; assaulted bystanders who disagreed with them; attacked the police with Molotov cocktails; and stormed and defaced police stations. Fu’s ordeal and all these actions shown in photos on Hong Kong’s South China Morning Post, a paper leaning to the side of protesters, gave the lie to the image of these “democracy activists” as young Ghandis of East Asia. (The South China Morning Post is based in Hong Kong and its readership is concentrated there so it has to have some reasonable fidelity in reporting events; otherwise it loses credibility – and circulation. Similarly, much as the New York Times abhorred Occupy Wall Street, it could not fail to report on it.)

Which brings us to the second photo, much more important to U.S. citizens, that of a “Political Counselor” at the U.S. Consulate General in Hong Kong who in August was pictured meeting with, Joshua Long and Nathan Law, at a hotel there. The official was formerly a State Dept functionary in the Middle East – in Jerusalem, Riyadh, Beirut, Baghdad and Doha, certainly not an area lacking in imperial intrigues and regime change ops. That photo graphically contradicted the contention that there is no US “black hand,” as China calls it, in the Hong Kong riots. In fact, here the “black hand” was caught red-handed, leading Chen Weihua, a very perceptive China Daily columnist, to tweet the picture with the comment: “This is very very embarrassing. … a US diplomat in Hong Kong, was caught meeting HK protest leaders. It would be hard to imagine the US reaction if a Chinese diplomat were meeting leaders of Occupy Wall Street, Black Lives Matter or Never Trump protesters.”

And that photo with the protest leaders is just a snap shot of the ample evidence of the hand of the U.S. government and its subsidiaries in the Hong Kong events. Perhaps the best documentation of the U.S. “black hand” is to be found in Dan Cohen’s superb article of August 17 in The Greyzone entitled, “Behind a made-for-TV Hong Kong protest narrative, Washington is backing nativism and mob violence.” The article by Cohen deserves careful reading; it leaves little doubt that there is a very deep involvement of the US in the Hong Kong riots. Of special interest is the detailed role and funding, amounting to over $1.3 million, in Hong Kong alone in recent years, of the U.S. National Endowment for Democracy (NED), ever on the prowl for new regime change opportunities. Perhaps most important, the leaders of the “leaderless” protests have met with major US political figures such as John Bolton, Vice President Pence, Secretary Pompeo, Senator Marco Rubio, Democratic Rep. Eliot Engel, Nancy Pelosi and others, all of whom have heartily endorsed their efforts. This is not to deny that the protests were home grown at the outset in response to what was widely perceived as a legitimate grievance. But it would be equally absurd to deny that the U.S. is fishing in troubled Hong Kong waters to advance its anti-China crusade and regime change ambitions.

That said, where is the U.S. peace movement on the question of Hong Kong?…

Let’s take DemocracyNow! (DN!) as one example, a prominent one on the “progressive” end of the spectrum. From April through August 28, there have been 25 brief accounts (“headlines” as DN! calls them, each amounting to a few paragraphs) of the events in Hong Kong and 4 features, longer supposedly analytic pieces, on the same topic. Transcripts of the four features are here, here, here and here. There is not a single mention of possible US involvement or the meetings of the various leaders of the protest movement with Pompeo, Bolton, Pence, or the “Political Counselor” of the US Hong Kong consulate.

And this silence on US meddling is true not only of most progressive commentators but also most conservatives.

On the Left when someone cries “Democracy,” many forget all their pro-peace sentiment. And similarly on the Right when someone cries “Communism,” anti-interventionism too often goes down the tubes. Forgotten is John Quincy Adams’s 1823 dictum, endlessly quoted but little honored, “We do not go abroad in search of monsters to destroy.” Where does this lapse on the part of activists come from? Is it a deep-seated loyalty to Empire, the result of endless indoctrination? Is it U.S. Exceptionalism, ingrained to the point of unconsciousness? Or is it at bottom a question of who the paymasters are?…

Fortunately, there are a handful of exceptions to this New Cold War attitude. For example, on the left Popular Resistance has provided a view of the events in Hong Kong and a superb interview with K.J. Noh that go beyond the line of the State Department, the mainstream media and DN! And on the libertarian Right there is the Ron Paul Institute for Peace and Prosperity and the work of its Executive Director Dan McAdams.

We would all do well to follow the example of these organizations in rejecting a New Cold War mentality which is extremely dangerous, perhaps fatally so. A good beginning for us in the U.S. is to demand of our government, “Hands Off Hong Kong.”

Be seeing you

Going Too Far: The American Public's Attitudes Toward ...

 

 

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The High Price of a “Free Lunch” | Mises Wire

Posted by M. C. on September 7, 2019

Two of the greatest periods of GDP growth in the US, 1820 to 1850 and 1865 to 1900, had deflations of 50%. Deflation should be hailed instead of being scorned as it is currently by most professional economists and central bankers.

https://mises.org/wire/high-price-free-lunch

One of the Ten Commandments is “thou shalt not steal,” and theft is generally condemned in most religions, yet our religious leaders and followers have essentially turned a blind eye to government theft.

Based on a policy of envy, Bernie Sanders, for example, has bluntly stated he intends to tax the rich to fund his programs, as though the word rich itself justifies theft. The current crop of other democratic candidates is offering a beehive of free programs without any real discussion on how to pay for them.

Three Ways to Pay for the State

Governments can finance these programs in only three ways: (1) direct taxation of its citizens, (2) borrowing money, and/or (3) printing money. Few citizens understand the nefarious effects these methods can have on their own well-being. None of them provide “free” money.

The first and most obvious way to raise money is by direct taxation. When you pay your income tax or sales tax, you are brutally aware of how much money is being taken out of your own pocket. If the government only uses these taxes to fund itself, it would quickly run into serious taxpayer opposition; would we still be in Afghanistan today if the government took your flat-screen TV or cell phone to pay for soldiers half a world away?

The second way to raise money is by government borrowing. When the government borrows, it takes money from people who are trying to save, promising a seemingly riskless asset: a government bond. The government has displaced money that would normally have been used to invest in a new computer or machines or buildings, or even a consumption good as a new car. When the government borrows, there are real sacrifices today, not in some distant never existing future when the debt is repaid. There are real resources that are extracted from the economy in the now and present. This is a good example of what is seen, what is not seen and what should be foreseen. Government borrowing finances government consumption which crowds out investment spending that would normally have created a more prosperous economy.

Government Crowds Out Other Borrowers

Now, government borrowing is normally also constrained. The more the government borrows, the greater the demand for loanable funds and the higher the rate of interest. Here again, taxpayers who are also trying to borrow to buy a car or a house would soon realize that it’s the government borrowing that is crowding them out of the loan market. Of course, there is a point of no return for government debt, when the markets doubt a country’s ability to repay this debt — as Greece discovered in 2010.

Now, the obvious question is, how can the US or any other country run record budget deficits and have rock-bottom interest rates at the same time? The answer is the third way by printing money, or often called “quantitative easing.” This way also impacts the government’s ability to borrow.

A simple example will make this path of funding clearer. Suppose an economy has $10 to purchase 10 pencils. The price of the pencils will be $1 each. If the price increases (inflates) to $2 each while the supply remains constant, there would be 5 pencils that can’t be purchased, but if the cost of the pencils were reduced (deflated) to only 50¢ each, there would be people holding $5 looking to purchase nonexistent pencils. Supply and demand in the marketplace give us a price of $1 per pencil. Now suppose the economy is growing and is now producing 20 pencils. Because there are now more pencils in the supply pipeline, the price of pencils will drop to 50¢, a deflation rate of 50%. Deflation here reflects society pushing back the constraint of scarcity. It cannot eliminate scarcity or all prices would be zero, but this deflation shows an increase in the standard of living for everyone.

Two of the greatest periods of GDP growth in the US, 1820 to 1850 and 1865 to 1900, had deflations of 50%. Deflation should be hailed instead of being scorned as it is currently by most professional economists and central bankers.

Now, returning to our initial example of $10 and 10 pencils. Suppose the government prints another $10 to buy pencils but our supply of pencils has not changed. The money supply has doubled so we now have $20 chasing 10 pencils. The price for each pencil will inflate to $2, and the government will be able to buy 5 pencils by cutting the purchasing power of money in half. In other words, you have been robbed or taxed 5 pencils because your cash can now purchase less than before.

If at the same time the economy is growing, then we would have $20 chasing 20 pencils and the price of pencils would have remained at $1. There is no inflation but the rise in real income, exemplified by the 10 pencils that would normally have gone to the citizenry, has been siphoned off or stolen by the government. To a large degree, this is what has been happening since we moved to a fiat currency system in 1933. The central bank has been keeping the CPI in check but has created massive asset inflation, a massive redistribution of income from the poor to the rich and has been a major contributor to financing ever-growing government expenditures.

As Lord Keynes said,

By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but at confidence in the equity of the existing distribution of wealth.

Many in the lower rungs of the economic ladder blame their declining real incomes, and other inequities, on capitalism. They should, instead, be blaming the central bank.

When the government borrows, it increases the demand for loanable funds, and with a fixed supply, interest rates should normally rise. If at the same time the central bank is increasing the supply of loanable funds by printing money to buy government bonds, then interest rates will decline if the increase in supply is greater than the increase in demand. Here, we are basically monetizing the debt. Worldwide, this printing has currently driven interest rates to zero or into negative territory. Using the economy as an excuse, central banks have been monetizing government debt, alleviating any pressure on governments to control their spending.

Continuing from Keynes,

As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

Many economists are currently predicting we will experience another devastating recession in the US. Will we repeat the errors of the past by trying to fix a credit crisis with more debt? Or will we find a permanent solution by ending central banking, fractional reserve banking, and the government’s ability to borrow and print money? If we do, any future government spending would require an immediate and clear sacrifice on the part of the citizenry: unlike what politicians would have you believe; there is no free lunch.

 

 

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Voters-From Cafe Hayek

Posted by M. C. on September 7, 2019

Quotation of the Day…

by DON BOUDREAUX on SEPTEMBER 5, 2019

in VIRGINIA POLITICAL ECONOMY

… is from page 120 of Thomas Sowell’s monumental 1980 volume, Knowledge and Decisions (original emphasis):

Voters can only choose process characteristics and hope for results. Consumers buy results and leave the process to those with specialized knowledge of such things.

DBx: This important point is so obvious when stated, yet it is ignored almost completely in discussions of democratic decision-making.

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EconomicPolicyJournal.com: Larry Summers As An Economic Fascist

Posted by M. C. on September 7, 2019

Yes, Summers is now an economic fascist. Yes, he is calling for an American Hermann Göring.

https://www.economicpolicyjournal.com/2019/09/larry-summers-becomes-economic-fascist.html

Former Treasury Secretary Larry Summers is out with an op-ed in the Washingon Post.

In his essay, he appears to give full support to the Business Roundtable declaration that corporations should no longer solely be seeking profit but have “a fundamental commitment to all stakeholders.”

This declaration on its own reveals the lack of understanding of the nature of free markets and the profit and loss system. See: Should the ‘Business Roundtable’ Change Its Name To ‘The Profit-Haters Roundtable’?

But Summers takes things even further down the halls of economic distortion mirrors.

He writes:

If the Business Roundtable is serious about stakeholder capitalism, and if responsible firms are to flourish and spread their benefits, it will not just decree principles according to which its firms will operate but will also push for laws and regulations that support firms’ ability to stand up for their stakeholders. These might include minimum-wage and benefits requirements and broader mandates to protect companies that want to do right by their workers from those competing companies that are ruthlessly pursuing shareholder interests. Or they might include rigorous restrictions on advertising and promotion practices, so firms who are honest and transparent are not placed at a competitive disadvantage. Or universally high capital standards on financial institutions, so that imprudent willingness to take on risk cannot be a competitive advantage.

I am careful about throwing the term fascist around but his call is for economic regulation of corporations in an across the board fashion for the “better of the nation” that can not be labeled anything else.

Under his proposed policy scheme, it would mean that corporations are private in name only and that the true ruler becomes the state. It would be a massive step in the direction of the destruction of free markets and result in the accompanying inefficiencies, suffocation of creativity and cronyism that are inherent in the middle to late stages of a centrally planned economy.

As Murray Rothbard put it:

 [P]rivate ownership, subject to comprehensive government control and planning. This [is], of course, fascism.

And:

 … since ownership is, de facto, the control of a resource, a Nazi, Fascist, or other “centrally planned” system is as much “socialism” as a Communist regime that officially nationalizes property.

Yes, Summers is now an economic fascist. Yes, he is calling for an American Hermann Göring.

–RW

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EconomicPolicyJournal.com: Why Cats Pay a Lower Price for CAT Scans

Posted by M. C. on September 7, 2019

https://www.economicpolicyjournal.com/2019/09/why-cats-pay-lower-price-for-cat-scans.html

By Ross Marchand

Once a year, I bring my ill-tempered three-legged tabby cat (named Hopper) to the veterinarian. No one ever has a good time or particularly enjoys the cacophony of hisses, growls, and whiny meows. All the same, I can’t help but feel an “Alice in Wonderland” sort of feeling while talking to my feline’s healthcare providers. Most procedures and medical tests for our furry friends are the same as ours. But unlike the human healthcare system, prices are transparent and upfront in pet care. While no one likes hearing that Fifi’s surgery will cost $600, having costs out in the open keeps prices tethered to reality and under control.

When most owners bring their furry nincompoops to the veterinarian, insurance simply isn’t a part of the conversation because nearly 2 million cats and dogs are covered by insurance policies in the U.S., compared to more than 180 million cats and dogs owned in total.
Compare this less-than-2 percent coverage rate for our pets to the predominance of human health insurance. Around 90 percent of Americans have health insurance, with most plans covering at least some routine doctors’ visits and predictable expenses such as medications. Americans pay even less money out-of-pocket for medical care (as a percentage of expenditures) than most of their Canadian and European (i.e. Germany, United Kingdom, Sweden) counterparts.
When the government and/or insurers are footing the bill, providers have little reason to disclose prices. Patients asking a doctor’s office or hospital for the price of, say, a CAT scan or an appendectomy will probably be stonewalled. With no price transparency and other people paying the bills, costs skyrocket out of control and healthcare expenditures climb far in excess of the rate of inflation. From 2008 to 2018, healthcare prices in the U.S. climbed 21.6 percent while prices for goods and services overall grew by 17.3 percent (measured by GDP deflator).
But not so in the pet healthcare sector, where consumers are exposed to price and veterinarians have a real incentive to keep costs low. Because pet insurance accounts for such a tiny sliver of the veterinary healthcare market, the prices that they pay for claims reflects prices that consumers are willing to pay rather than the third-party driven “prices” of the human healthcare market. For the past several years, Nationwide’s pet health insurance division has partnered with Purdue University researchers to track trends in pet insurance payouts. The researchers track a “basket” of the most commonly-utilized procedures to see how the typical veterinary visit has changed in price over time. According to their research, these ordinary expenses declined by 6 percent from January 2009 to December 2017 after adjusting for inflation.
This decrease is corroborated by less reliable sources, such as the American Pet Products Association (APPA) annual consumer spending surveys. For virtually every year tracked (accessible via web archive), cat and dog owners reported spending less money on average routine and surgical visits. The data is jumpier than the Nationwide and Purdue rigorous analysis of 30 million insurance claims but confirms an interesting – and counterintuitive – trend.  In a system where consumers and patients’ “representatives” have enough skin in the game, healthcare prices behave like they would in most other markets.
There are, of course, differences between pet and human healthcare. Owners are far less likely to spend money treating Fluffy for cancer than they would for their own chemotherapy treatments. All the same, prices continue to decline in real terms as a rapidly growing percentage of pet owners regard their companions as members of the family and worthy of medical care.
The above originally appeared at the Independent Institute.

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From mind control to murder? How a deadly fall revealed the CIA’s darkest secrets | US news | The Guardian

Posted by M. C. on September 7, 2019

Frank Olson died in 1953, but, because of clandestine US government experiments, it took decades for his family to get closer to the truth

CIA 101

What is it doing to  now?

https://www.theguardian.com/us-news/2019/sep/06/from-mind-control-to-murder-how-a-deadly-fall-revealed-the-cias-darkest-secrets

By

Frank Olson died in 1953, but, because of clandestine US government experiments, it took decades for his family to get closer to the truth. By

Glass shattered high above Seventh Avenue in Manhattan before dawn on a cold November morning in 1953. Seconds later, a body hit the sidewalk. Jimmy, the doorman at the Statler hotel, was momentarily stunned. Then he turned and ran into the hotel lobby. “We got a jumper!” he shouted. “We got a jumper!”

The night manager peered up through the darkness at his hulking hotel. After a few moments, he picked out a curtain flapping through an open window. It turned out to be room 1018A. Two names were on the registration card: Frank Olson and Robert Lashbrook.

 

Police officers entered room 1018A with guns drawn. They saw no one. The window was open. They pushed open the door to the bathroom and found Lashbrook sitting on the toilet, head in hands. He had been sleeping, he said, and “I heard a noise and then I woke up.”

“The man that went out the window, what is his name?” one officer asked.

“Olson,” came the reply. “Frank Olson.”

“In all my years in the hotel business,” the night manager later reflected, “I never encountered a case where someone got up in the middle of the night, ran across a dark room in his underwear, avoiding two beds, and dove through a closed window with the shade and curtains drawn.”

The Statler Hotel in Manhattan
The Statler Hotel in Manhattan. Photograph: Bettmann Archive

Leaving the police officers, the night manager returned to the lobby and, on a hunch, asked the telephone operator if any calls had recently been made from room 1018A. “Yes,” she replied – and she had eavesdropped, not an uncommon practice in an era when hotel phone calls were routed through a switchboard. Someone in the room had called a number on Long Island, which was listed as belonging to Dr Harold Abramson, a distinguished physician, less well known as an LSD expert and one of the CIA’s medical collaborators.

“Well, he’s gone,” the caller had said. Abramson replied: “Well, that’s too bad.”

To the first police officers on the scene, this seemed like another of the human tragedies they saw too often: a distressed or distraught man had taken his own life. They could not have known that the dead man and the survivor were scientists who helped direct one of the US government’s most highly classified intelligence programmes.

Early the next morning, one of Olson’s close colleagues drove to Maryland to break the terrible news to the dead man’s family. He told Alice Olson and her three children that Frank “fell or jumped” to his death from a hotel window. Naturally, they were shocked, but they had no choice other than to accept what they were told. Alice did not object when told that, given the condition of her husband’s body, family members should not view it. The funeral was held with a closed casket. There the case might have ended.

Decades later, however, spectacular revelations cast Olson’s death in a completely new light. First, the CIA admitted that, shortly before he died, Olson’s colleagues had lured him to a retreat and fed him LSD without his knowledge. Then it turned out that Olson had talked about leaving the CIA – and told his wife that he had made “a terrible mistake”. Slowly, a counter-narrative emerged: Olson was disturbed about his work and wanted to quit, leading his comrades to consider him a security risk. All of this led him to room 1018A.

Frank Olson had been one of the first scientists assigned to the secret US biological warfare laboratories at Fort Detrick in Frederick, Maryland during the second world war. There Olson began working with the handful of colleagues who would accompany him throughout his clandestine career. One was Harold Abramson. Others included ex-Nazi scientists who had been brought to work on secret missions in the US. For a time they worked on aerosol technologies – ways to spray germs or toxins on enemies and to defend against such attacks. Later, Olson met with American intelligence officers who had experimented with “truth drugs” in Europe.

Olson was discharged from the army in 1944, but remained at Fort Detrick on a civilian contract and continued his research into aerobiology. Several times he visited the secluded Dugway Proving Ground in Utah, which was used for testing “living biological agents, munitions and aerosol cloud production”. He co-authored a 220-page study entitled Experimental Airborne Infections, which described experiments with “airborne clouds of highly infectious agents”.

In 1949, he travelled to the Caribbean for Operation Harness, which tested the vulnerability of animals to toxic clouds. The next year, he was part of Operation Sea Spray, in which dust engineered to float like anthrax was released near San Francisco. He regularly travelled to Fort Terry, a secret army base on Plum Island, off the eastern tip of Long Island, which was used to test toxins too deadly to be brought on to the US mainland.

This was the period when senior army and CIA officers were becoming deeply alarmed at what they feared was Soviet progress toward mastering forms of warfare based on microbes. Their alarm led to the creation of the special operations division. Rumours about its work spread through offices and laboratories. Olson learned of it over an evening game of cards with a colleague, John Schwab, who unbeknown to him, had been named the division’s first chief. Schwab invited him to join. Olson accepted immediately.

Less than a year later, Olson succeeded Schwab as chief of the special operations division. His job description was vague but tantalising: collect data “of interest to the division, with particular emphasis on the medico-biological aspects”, and coordinate his work with “other agencies conducting work of a similar or related nature”. That meant the CIA.

Olson’s speciality was “the airborne distribution of biological germs”, according to one study. “Dr Olson had developed a range of lethal aerosols in handy sized containers. They were disguised as shaving cream and insect repellants. They contained, among other agents, staph enteroxin, a crippling food poison; the even more deadly Venezuelan equine encephalomyelitis; and most deadly of all, anthrax … Further weapons he was working on included a cigarette lighter which gave out an almost instant lethal gas, a lipstick that would kill on contact with skin and a neat pocket spray for asthma sufferers that induced pneumonia.”

Frank Olson in 1952.

Pinterest
Frank Olson in 1952. Photograph: AP

By the time Olson stepped down as chief of the special operations division in early 1953, complaining that the pressures of the job aggravated his ulcers, he had joined the CIA. He stayed with the division, which was officially part of the army but functioned as a CIA research station hidden within a military base. There he came to know Sidney Gottlieb and his deputy, Robert Lashbrook, the two scientists who would soon be running a top-secret CIA project codenamed MK-Ultra.

Gottlieb was the CIA’s chief poison-maker. Over two decades, he oversaw medical experiments and “special interrogation” projects in which hundreds of people were tormented and many minds were permanently shattered. During this period, there was an obsession at the CIA: there is a way to control the human mind, and if it can be found, the prize will be nothing less than global mastery. MK-Ultra was a top secret programme of experiments in mind control that used, as its basic formula, doses of LSD given to “expendables”. Gottlieb wanted to discover how much LSD a human being could take. Could there be a breaking point, he wondered – a dose so massive that it would shatter the mind and blast away consciousness, leaving a void into which new impulses or even a new personality could be implanted?…

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A Structural Reevaluation of the Collapse of World Trade Center 7 – LewRockwell

Posted by M. C. on September 7, 2019

https://www.lewrockwell.com/2019/09/no_author/a-structural-reevaluation-of-the-collapse-of-world-trade-center-7/

Institute of Northern Engineering
University of Alaska

Project Summary

This is a study of the collapse of the 47-story World Trade Center Building 7 (WTC7) at 5:20 P.M. on September 11, 2001.

The objective of the study was threefold: (1) Examine the structural response of WTC 7 to fire loads that may have occurred on September 11, 2001; (2) Rule out scenarios that could not have caused the observed collapse; and (3) Identify types of failures and their locations that may have caused the total collapse to occur as observed.

The UAF research team utilized three approaches for examining the structural response of WTC 7 to the conditions that may have occurred on September 11, 2001. First, we simulated the local structural response to fire loading that may have occurred below Floor 13, where most of the fires in WTC 7 are reported to have occurred. Second, we supplemented our own simulation by examining the collapse initiation hypothesis developed by the National Institute of Standards and Technology (NIST). Third, we simulated a number of scenarios within the overall structural system in order to determine what types of local failures and their locations may have caused the total collapse to occur as observed.

The principal conclusion of our study is that fire did not cause the collapse of WTC 7 on 9/11, contrary to the conclusions of NIST and private engineering firms that studied the collapse. The secondary conclusion of our study is that the collapse of WTC 7 was a global failure involving the near-simultaneous failure of every column in the building.

The research team is currently organizing and uploading all of its data into a format that can be readily downloaded and used. We expect to post the data sometime between September 16 and September 30, 2019.

There will be a two-month public comment period from September 3 to November 1, 2019, with the final report will be released later this year. During this period, we welcome any and all members of the public to submit constructive comments intended to further the analyses and presentation of findings contained in the report. Designated reviewers external to UAF and Architects & Engineers for 9/11 Truth will also review the report during this period. Commenters are asked to send their comments in an attached PDF or Word document to publiccomment@AE911Truth.org.

WTC7 Progress Report (September 2017)

WTC7 Progress Statement (March 27, 2018)

___
http://ine.uaf.edu/wtc7

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You’re in Good Hands With Elon – EPautos – Libertarian Car Talk

Posted by M. C. on September 7, 2019

And here comes the bill, custom-tailored just for you.

“The data is there,” smacked the lips of Matthew Edmonds – who is Teslian Head of Insurance, Elon’s new Underboss. “It’s all there; cameras in and all around your car; all of the data points are there.”

https://www.ericpetersautos.com/2019/09/06/youre-in-good-hands-with-elon/

By

eric

Imagine if your insurance company knew about it immediately every time you drove faster than any speed limit, anywhere. That you failed to come to a complete dead stop at every stop sign before proceeding – regardless of the need to come to a complete dead stop.

Every instance of seatbelt scofflawism.

That you drove eight hours straight to visit friends in another state; that last Thursday, you “accelerated aggressively” while trying to merge with traffic. That you turned off the traction control the other day – and squealed the tires.

And here comes the bill, custom-tailored just for you.

This is what Elon Musk has in mind next. The King of Mandated Business is getting into the insurance business – a logical thing since car insurance is the original mandated business that set the precedent for the rest of them. It’s an even better business than the electric car business because everyone has to buy car insurance, if they own a car – even if it’s not an electric car.   

But Elon’s got a a new take on the business. Or rather, a new way to take.

He wants to base premiums not on your record – of accidents and claims – but on data about your driving, mined in real-time as you drive. Which, just by happy coincidence, his cars are fully equipped to provide…

Already do provide.

“The data is there,” smacked the lips of Matthew Edmonds – who is Teslian Head of Insurance, Elon’s new Underboss. “It’s all there; cameras in and all around your car; all of the data points are there.”

Elon knows all. He just hasn’t been able to monetize it, yet.

Wait…

Elon could – and has – reduced the range of the cars under his control to zero. So far, temporarily – while an “app” updated. But the point should be taken. Elon has the power to prevent any Tesla owner from driving at all…

For any reason.

Think about this a bit.

What if you offend Elon? Or the Big Tech Panopticon? Can there be any doubt in anyone’s mind that the same electronic oligarchs – and Elon’s one of them – who summarily “de-platform” and “de-monetize” people whose views transgress the orthodoxies of our era will refrain from using the same power to de-wheel people?

Depressingly, it’s not just Teslas.

They are currently the most “connected” cars on the road but not the only “connected” cars on the road. Every new car has some degree of connected tech baked into it.

What do you suppose all the 5G Connectedness being hurriedly erected and Internet of Things is all about?…

Resistance will be futile. Or at least, driving will be…

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GPS Devices Are Being Used to Track Cars and Errant ...

GPS

 

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The violent consequences of being branded ‘hateful’ – spiked

Posted by M. C. on September 7, 2019

A gunman attacked a Christian charity after it appeared on an SPLC ‘hate map’.

The SPLC’s main motive is money. Historically the term ‘hate group’ was well understood. It meant groups that engaged in or incited violent actions against certain people. But the SPLC has expanded the definition of ‘hate’ to now include people and groups who merely disagree with the SPLC’s far-left agenda

https://www.spiked-online.com/2019/09/06/the-violent-consequences-of-being-branded-hateful/

The Southern Poverty Law Center is America’s premier ‘hate watch’ organisation. It is treated by many as an impartial arbiter of extremism. It designates certain organisations as ‘hate groups’ and produces a ‘hate map’ of the US. But the concept of hate – as with hate speech and hate crime – is entirely subjective and elastic. It can be applied to groups that genuinely promote hate and violence, or simply to groups promoting a message that is at odds with progressive orthodoxy. In 2012, Jessica Prol Smith worked for the Family Research Council (FRC), a Christian organisation. She discovered firsthand the potentially violent consequences of being labelled as hateful – and being lumped in with racists and fascists.

Prol Smith currently works for the Alliance Defending Freedom (ADF), another Christian organisation promoting religious liberty. spiked caught up with Prol Smith and her colleague, Jeremy Tedesco, ADF’s vice president of US advocacy, to find out more.

spiked: Can you describe the attack on your offices in 2012?

Jessica Prol Smith: It was 15 August, 2012 – so, seven years ago. It ended up being one of the worst days of my life. I was working as an editor for the Family Research Council. I was just about to go to lunch when we were put on lockdown. A man with a gun entered my office with a plan to kill as many of us as possible. He had brought in a dozen Chick-fil-A sandwiches in his backpack and rounds of ammunition. He later testified that he wanted ‘to smear the chicken sandwiches in victims faces as a statement’.

My co-worker, Leo, managed to interrupt his attempt to shoot the place up. He really saved the day. It was later that we learned from the gunman’s testimony to law enforcement that he had got the idea to target our office by looking at the SPLC’s hate map. The map lumps together mainstream conservative organisations right next to the KKK and other racists. It was appalling and offensive to see the SPLC compare peaceful, Christian organisations like the ones I’ve worked for to the KKK.

spiked: Are the Family Research Council or Alliance Defending Freedom hateful organisations by any stretch?

Prol Smith: The FRC focuses on protecting freedoms of religion, protecting the rights of the unborn and protecting the value of the family. The ADF is one of the nation’s most respected and successful Supreme Court advocates. We’ve won nine cases at the Supreme Court since 2011, and we work so that all Americans can peacefully live out their faith. But the SPLC has decided that they disagree with both organisations on some policy stances and so it slapped a ‘hate’ label on them. It has slandered them, simply because it disagrees with them.

spiked: What motivates the SPLC?

Jeremy Tedesco: The SPLC’s main motive is money. Historically the term ‘hate group’ was well understood. It meant groups that engaged in or incited violent actions against certain people. But the SPLC has expanded the definition of ‘hate’ to now include people and groups who merely disagree with the SPLC’s far-left agenda.

Right now, the SPLC has $500,000,000 unused donor dollars sitting in domestic and off-shore accounts. Even sympathetic voices, like Nathan J Robinson, editor in chief of Current Affairs, has described the SPLC’s hate map as an ‘outright fraud’ and a ‘willful deception designed to scare older liberals into writing checks to the SPLC’. In order to raise more money, they expand the kind of groups that fit into that category of ‘hate group’ to meet their and their donors’ political goals.

spiked: Why are normal political disagreements so often described as hateful?

Tedesco: The left uses that word as a hammer to push people out of society, out of public life. The idea of hate speech is incredibly relevant here. The problem is that it is an inherently vague term, but it’s always used by those in power or those who wield it, to silence or censor or defund people they disagree with…

 

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Profit$ of Hate: The Southern Poverty Law Center SPECIAL ...

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