The Outlook for the New Year

Dear Readers: The conflict that Washington has initiated between the West and Russia/China is reckless and irresponsible.

Nuclear war could be the outcome. Indeed, Washington has been preparing for nuclear war since the George W. Bush regime.

Washington has revised US war doctrine in order to initiate conflict with a first strike nuclear attack.

Washington has discarded the ABM treaty in order to build and deploy anti-ballistic missiles that are intended to prevent a retaliatory strike against the US. Washington is engaged in a buildup of military forces on Russia’s borders, and Washington is demonizing Russia’s government with false charges.

As the Bush/Obama regimes dismantled the safeguards put in place in order to minimize the risk of nuclear war, no protests came from the American public or the media. Washington’s European vassal states have also been silent.

Washington’s drive for hegemony has brought nuclear insanity to the world.

Moscow and Beijing understand that they are Washington’s targets. As Larchmonter explains, Russia and China are conjoining their economic and military capabilities in order to protect against Washington’s attack. Read what Larchmonter reports. Open the URL in my column below and run your cursor over the bottom of the page and click “page fit.” Choose 50% and readable text will fill your screen.

Washington’s demonization of Saddam Hussein, Gaddafi, and Assad were preludes to military attacks on Iraq, Libya, and Syria. In view of these precedents, it is reasonable to regard Washington’s demonization of Vladimir Putin as a prelude to military action.

Russia is not Iraq, Libya, or Syria. Russian war doctrine states that Russia can use nuclear weapons in response to a nuclear or conventional attack on Russia. For the world to sit silent while Washington’s arrogance provokes armageddon telegraphs total political failure. Where are the voices in behalf of humanity?

The Outlook for the New Year

Paul Craig Roberts

December 29, 2014 @ 11:07 am


Washington has shaped 2015 to be a year of conflict. The conflict could be intense.

Washington is the cause of the conflict, which has been brewing for some time. Russia was too weak to do anything about it when the Clinton regime pushed NATO to Russia’s borders and illegally attacked Yugoslavia, breaking the country into small easily controlled pieces. Russia was also too weak to do anything about it when the George W. Bush regime withdrew from the ABM treaty and undertook to locate anti-ballistic missile bases on Russia’s borders. Washington lied to Moscow that the purpose of the ABM bases is to protect Europe from non-existent Iranian nuclear ICBMs.

However, Moscow understood that the purpose of the ABM bases is to degrade Russia’s nuclear deterrent, thereby enhancing Washington’s ability to coerce Russia into agreements that compromise Russian sovereignty.

By summer 2008 Russian power had returned. On Washington’s orders, the US and Israeli trained and equipped Georgian army attacked the breakaway republic of South Ossetia during the early hours of August 8, killing Russian peacekeepers and civilian population. Units of the Russian military instantly responded and within a few hours the American trained and equipped Georgian army was routed and defeated. Georgia was in Russia’s hands again, where the province had resided during the 19th and 20th centuries.

Putin should have hung Mikheil Saakashvili, the American puppet installed as president of Georgia by the Washington-instigated “Rose Revolution”, and reincorporated Georgia into the Russian Federation. Instead, in a strategic error, Russia withdrew its forces, leaving Washington’s puppet regime in place to cause future trouble for Russia. Washington is pushing hard to incorporate Georgia into NATO, thus adding more US military bases on Russia’s border. However, at the time, Moscow thought Europe to be more independent of Washington than it is and relied on good relations with Europe to keep American bases out of Georgia.

Today the Russian government no longer has any illusion that Europe is capable of an independent foreign policy. Russian President Vladimir Putin has stated publicly that Russia has learned that diplomacy with Europe is pointless, because European politicians represent Washington’s interest, not Europe’s. Foreign Minister Sergei Lavrov recently acknowledged that Europe’s Captive Nation status has made it clear to Russia that Russian goodwill gestures are unable to produce diplomatic results.

With Moscow’s delusion shattered that diplomacy with the West can produce peaceful solutions, reality has set in, reinforced by the demonization of Vladimir Putin by Washington and its vassal states. Hillary Clinton called Putin the new Hitler. While Washington incorporates former constituent parts of the Russian and Soviet empires into its own empire and bombs seven countries, Washington claims that Putin is militarily aggressive and intends to reconstitute the Soviet empire. Washington arms the neo-nazi regime Obama established in Ukraine, while erroneously claiming that Putin has invaded and annexed Ukrainian provinces. All of these blatant lies are echoed repeatedly by the Western presstitutes. Not even Hitler had such a compliant media as Washington has.

Every diplomatic effort by Russia has been blocked by Washington and has come to naught. So now Russia has been forced by reality to update its military doctrine. The new doctrine approved on December 26 states that the US and NATO comprise a major military threat to the existence of Russia as a sovereign independent country.
 
The Russian document cites Washington’s war doctrine of pre-emptive nuclear attack, deployment of anti-ballistic missiles, buildup of NATO forces, and intent to deploy weapons in space as clear indications that Washington is preparing to attack Russia.

Washington is also conducting economic and political warfare against Russia, attempting to destabilize the economy with economic sanctions and attacks on the ruble. The Russian document acknowledges that Russia faces Western threats of regime change achieved through “actions aimed at violent change of the Russian constitutional order, destabilization of the political and social environment, and disorganization of the functioning of governmental bodies, crucial civilian and military facilities and informational infrastructure of Russia.” Foreign financed NGOs and foreign owned Russian media are tools in Washington’s hands for destabilizing Russia.

Washington’s reckless aggressive policy against Russia has resurrected the nuclear arms race. Russia is developing two new ICBM systems and in 2016 will deploy a weapons system designed to negate the US anti-ballistic missile system. In short, the evil warmongers that rule in Washington have set the world on the path to nuclear armageddon.
 
The Russian and Chinese governments both understand that their existence is threatened by Washington’s hegemonic ambitions. Larchmonter reports that in order to defeat Washington’s plans to marginalize both countries, the Russian and Chinese governments have decided to unify their economies into one and to conjoin their military commands. Henceforth, Russia and China move together on the economic and military fronts.   http://www.mediafire.com/view/08rzue8ffism94t/China-
Russia_Double_Helix.docx 


The unity of the Bear and the Dragon reduces the crazed neoconservatives’ dream of “an American century” to dangerous nonsense. As Larchmonter puts it, “The US and NATO would need Michael the Archangel to defeat China-Russia, and from all signs Michael the Archangel is aligned with the Bear and its Orthodox culture. There is no weapon, no strategy, no tactic conceivable in the near future to damage either of these rising economies now that they are ‘base pairs.’”

Larchmonter sees hope in the new geopolitics created by the conjoining of Russia and China. I don’t dispute this, but if the arrogant neoconservatives realize that their hegemonic policy has created a foe over which Washington cannot prevail, they will push for a pre-emptive nuclear strike before the Russian-Chinese unified command is fully operational. To forestall a sneak attack, Russia and China should operate on full nuclear alert.

The US economy–indeed the entire Western orientated economy from Japan to Europe–is a house of cards. Since the economic downturn began seven years ago, the entirety of Western economic policy has been diverted to the support of a few over-sized banks, sovereign debt, and the US dollar. Consequently, the economies themselves and the ability of populations to cope have deteriorated.

The financial markets are based on manipulation, not on fundamentals. The manipulation is untenable. With debt exploding, negative real interest rates make no sense. With real consumer incomes, real consumer credit, and real retail sales stagnant or falling, the stock market is a bubble.

With Russia, China, and other countries moving away from the use of the dollar to settle international accounts, with Russia developing an alternative to the SWIFT financial network, the BRICS developing alternatives to the IMF and World Bank, and with other parts of the world developing their own credit card and Internet systems, the US dollar, along with the Japanese and European currencies that are being printed in order to support the dollar’s exchange value, could experience a dramatic drop in exchange value, which would make the import-dependent Western world dysfunctional.

In my opinion, it took the Russians and Chinese too long to comprehend the evil that has control in Washington. Therefore, both countries risk nuclear attack prior to the full operational capability of their conjoined defense. As the Western economy is a house of cards, Russia and China could collapse the Western economy before the neoconservatives can drive the world to war. As Washington’s aggression against both countries is crystal clear, Russia and China have every right to the following defensive measures.

As the US and EU are conducting economic warfare against Russia, Russia could claim that by wrecking the Russian economy the West has deprived Russia of the ability to repay loans to the European banks. If this does not bring down the thinly capitalized EU banks, Russia can announce that as NATO countries are now officially recognized by Russian war doctrine as an enemy of the Russian state, Russia can no longer support NATO’s aggression against Russia by selling natural gas to NATO members. If the shutdown of much of European industry, rapidly rising rates of unemployment, and bank failures do not result in the dissolution of NATO and thus the end of the threat, the Chinese can act.

The Chinese hold a very large amount of dollar-denominated financial assets. Just as the Federal Reserve’s agents, the bullion banks, dump massive shorts onto the bullion futures markets during periods of little activity in order to drive down the bullion price, China can dump the equivalent in US Treasuries of years of Quantitative Easing in a few minutes. If the Federal Reserve quickly creates dollars with which to purchase the enormous quantity of Treasuries so that the financial house of cards does not implode, the Chinese can then dump the dollars that they are paid for the bonds in the currency market. Whereas the Federal Reserve can print dollars with which to purchase the Treasuries, the Fed cannot print foreign currencies with which to buy the dollars.
 
The dollar would collapse, and with it the power of the Hegemon. The war would be over without a shot or missile fired.

In my view, Russia and China owe it to the world to prevent the nuclear war intended by the neoconservatives simply by replying in kind to Washington’s economic warfare. Russia and China hold all the cards. Not Washington.

Russia and China should give no warning. They should just act. Indeed, instead of step by step, Russia and China could simultaneously use the counter-measures. With four US banks holding derivatives totaling many times world GDP, the financial explosion would be the equivalent to a nuclear one. The US and Europe would be finished, and the world would be saved.

Larchmonter possibly is correct. 2015 could be a very good year, but pre-emptive economic moves by Moscow and Beijing could be required. Putin’s current plan seems to be to turn away from the West, ignore the provocations, and mesh Russia’s strategic and economic interests with those of Asia.

This is a humane and reasonable course of action, but it leaves the West untroubled and undistracted by its economic vulnerabilities. An untroubled West remains a grave danger not only to Russia and China but also to Americans and the entire world.

Contributing Op-Ed Writer

The Year in Charts

Steven Rattner

DEC. 30, 2014                                 



Although developments on the political front were certainly dispiriting, for the first time in years, the economic news was not all gloomy. But with the economy improving, there was less focus on the continuing need to address flagging incomes, rising inequality and unbalanced government spending. Below are 10 charts to illustrate the crosscurrents of the past year in economics and politics:
 
 
The Economy Picks Up Speed       



TOTAL U.S. JOBS
IN MILLIONS
REAL G.D.P.
IN TRILLIONS
OBAMA
ADMIN.
OBAMA
ADMIN.
$16.0
140
138
15.5
136
15.0
134
14.5
132
130
14.0
’05
’06
’08
’10
’12
’14
’05
’06
’08
’10
’12
’14

By the end of 2014, even the most hardened cynics had to concede that the darkness that had pervaded the American economy since 2008 had lifted a bit. Most visibly, the rate of job growth accelerated, from 194,000 per month in 2013 to 241,000 per month in 2014. By May 2014, the total number of jobs had run past its previous peak in early 2008. Meanwhile, the overall economy began to expand at faster annual rates — 4.6 percent in the second quarter and a remarkable 5.0 percent in the third quarter.
 
Plunging Oil Prices       




$107.26
JUNE 20
$3.70
APRIL 25
$100
$3.50
3.00
80
GASOLINE
CRUDE OIL
PER BARREL
PER GALLON
$2.38
DEC. 22
60
2.00
$55.26
DEC. 22
40
1.00
20
2014:
J
F
M
A
M
J
J
A
S
O
N
D
2014:
J
F
M
A
M
J
J
A
S
O
N
D

 
An autumn collapse in oil prices brought more good news. A barrel of oil that fetched $107 in June commanded only $55 by Dec. 22. For consumers, that meant gasoline prices that fell to an average $2.38 per gallon, compared with their peak of $3.70 in April. All told, the drop in oil prices was equivalent to an annual tax cut of about $750 per American family. And with the United States still importing an estimated 26 percent of its petroleum, lower prices raise the economy’s growth rate and reduce the balance of payments déficit.
 
Wages Still Lag       
Year-over-year percentage change in hourly earnings of all U.S. private workers.




+1.0
’11
+0.5
2010
’12
0
’13
’14
–0.5
–1.0
The best gain over the last five years was an anemic 1.3% rise in October 2013.
–1.5

Economic news was not all positive. Most important, there were only hints that stagnating wages might finally be turning upward. November figures showed that the cash pay of hourly workers rose by a slender 0.8 percent after adjustment for inflation over the previous year. The picture is modestly better when cash benefits are added to the equation. In the past two years, median family incomes, including items such as pensions, Social Security and unemployment insurance, edged up to about $53,500 from $52,600 in 2012. But they have remained well below their previous peak of $57,500 in January 2008. The decline between 2009 and 2012 was the first time this inflation-adjusted measure had dropped during an economic recovery.

Inequality Gets Even Worse       
Percent change in median family income, 2010-2013.




INCOME GROUPS
Top 10 percent
Next 10 percent
60th–80th percentiles
40th–60th percentiles
20th–40th percentiles
Bottom 20 percent
+2%
–3%
–2
–6
–7
–4
–5
All U.S. families

 
Not surprisingly, stagnant wages contributed to rising inequality. In September 2014, the Federal Reserve released a study showing that between 2010 and 2013, only the top 10 percent of Americans saw their incomes increase. Depressingly, incomes for lower- and middle-class Americans fell the most. The news by occupation was similarly discouraging: Wages for manufacturing workers fell by 2.2 percent from January 2010 to November 2014, with those for autoworkers dropping by 11.7 percent. Lower-wage jobs in leisure and hospitality also saw pay fall. Perhaps not surprisingly, higher incomes accrued to those in finance, education and health, and other professions.
 
It’s Very Good at the Very Top       
Percent of all income received by the top 1 percent and 0.01 percent of U.S. households.
      




1928:
19.6%
2012:
THE TOP
1 PERCENT
20%
19.3%
Its income share is nearly 20 times its share of households.
15
10
1916:
4.4%
THE TOP
0.01 PERCENT
2012:
1928:
5
4.1%
3.2%
Income share
is 410 times its share of households.
1913
’20
’30
’40
’50
’60
’70
’80
’90
’00
’10

 
 
Happily, the problem of income inequality was brought front and center by the publication of the economist Thomas Piketty’s landmark book, “Capital in the 21st Century.” Originally written in French, weighing in at 696 pages and laden with incomprehensible equations, the book nonetheless spent 22 weeks on the New York Times best-seller list, including three weeks at the top. While Mr. Piketty’s solutions, such as a global wealth tax, were mostly impractical or ill advised, his meticulous identification of the problem was unassailable. By 2012, a mere 0.01 percent of American households — earning an average of $21.5 million annually — commanded a near-record 4.1 percent of all income, compared with 0.5 percent when income inequality hit its trough in 1973.
The U.S. ranks favorably in the Gini coefficient, a measure of inequality — until taxes and government transfers are factored in. Then, among these countries, it is the worst.
      




Gini coefficient before
taxes and transfers*
After taxes
and transfers*
LESS EQUALITY
LESS EQUALITY
0
0.2
0.4
0.6
0
0.2
0.4
Ireland
Britain
Germany
Greece
Finland
Netherlands
Sweden
Norway
Spain
United States
Denmark
Canada
Japan
Switzerland
United States
Britain
Canada
Greece
Spain
Norway
Germany
Finland
Ireland
Japan
Netherlands
Denmark
Sweden
Switzerland

The federal government does far less to ameliorate the disparities than the governments of other developed countries. As measured by the Gini coefficient (the higher the number, the more unequal), inequality in the United States is no worse than in most developed countries when calculated without regard to taxes and transfer payments such as Social Security, unemployment benefits, food stamps and the like. But because social programs in European countries are so much more expansive, inequality in the United States tops the list. The rush to cut government programs will only exacerbate this disparity.     
 
Obamacare Succeeds       
Total who gained health insurance via Obamacare in 2014, in millions.




Medicaid/
CHIP
Under age 26
/other
Via exchanges
(total paid)
Off-exchange
(via insurers)
0.4
0.5
TOTALS
Newly
insured
6.5
4.0
11.4
Previously
insured
4.2
1.6
2.7
7.5
16.0
2014 grand total: 27.4

After a website meltdown in late 2013, this year brought proof that the Affordable Care Act was delivering on its promises: More than 11 million previously uninsured Americans are now covered by a health care plan, about half of them Medicaid recipients at the bottom of the economic ladder.
 
Another 16 million Americans who were previously insured also signed up — many of them had substandard plans that were upgraded as a result of the A.C.A. In late 2014, Americans had their second opportunity to enroll in health care plans under the auspices of the new law. The process went off smoothly, a stark contrast to the chaos of the previous year.     
 
A Bad Election for Democrats       
The fates of ten key Democratic Senate candidates hewed closely to the results that would be expected, statistically, by the president’s low job approval.
      




Only New Hampshire and Virginia Democrats outperformed expectations, based on the president’s numbers, enough to eke out victories.
DEMOCRAT WIN
DEMOCRAT LOSS
N.H.
lower
Democratic
vote
50%
VA.
N.C.
ALASKA
GA.
COLO.
45
LA.
IOWA
KY.
40
ARK.
35
34%
36
38
40
42
43
lower presidential job approval

It’s hard to view the results of the 2014 midterm election as anything other than a referendum on President Obama. In fact, a statistical analysis of 10 key Senate races shows that the president’s low popularity ratings explain about 65 percent of the vote shares achieved by these individual Democratic candidates. In Arkansas, where President Obama’s approval rating was only 34 percent, the incumbent, Mark Pryor, received less than 40 percent of the vote. Weak candidates in states like Kentucky and Louisiana underperformed their predicted vote share.
 
Jeanne Shaheen in New Hampshire and Mark Warner in Virginia benefited from the president’s relatively high popularity (40 percent!) but still had to outperform their expected shares to win re-election.
 
Polarization Vortex       
The public is more ideologically divided now than it was two decades ago.




Percent of Democrats to the left of the typical Republican:
Percent of Republicans to the right of the typical Democrat:
70
94
64
92
1994
2014

 
 
Not surprisingly, a new Pew study found that the American public continued to grow more polarized, with both Democrats and Republicans moving further into their ideological corners.
 
Today, 94 percent of Democrats are to the left of the median Republican, compared with 70 percent back in 1994. Similarly, 92 percent of Republicans are to the right of the typical Democrat, compared with 64 percent 20 years earlier. This is reflected in a Congress that is also more polarized than it has been in at least 100 years, as measured by the voting records of individual legislators.
 
 
Congress of Little Consequence       
The 112th and 113th Congresses were the least productive in many decades.




PUBLIC BILLS PASSED
1,000
“Do-nothing” Congress of 1947-48: 906 bills passed
800
600
400
186
200
CONGRESS

DECADE
80th
90th
100th
110th
113th
1950s
’60s
’70s
’80s
’90s
’00s
’10s

 
Greater polarization is at least one of the reasons for gridlock on Capitol Hill that remained at least as bad in this Congress as in the prior one. As of Nov. 30, the Congress that will depart at the end of this month succeeded in passing only 186 public laws, many of them minor or simply ceremonial. When the books are finally closed, the 113th Congress may have hauled its legislative total up to that of its predecessor, the current record holder for inaction.