Saturday, January 20, 2018

Transcript of Remarks by James Mattis on the National Defense Strategy


For the record.

Summation: The strategy of the US is founded not on geographical defense but rather on protecting and extending "Enlightenment values," that is, liberalism.
Ladies and gentlemen, we have no room for complacency, and history makes clear that America has no preordained right to victory on the battlefield. Simply, we must be the best if the values that grew out of the Enlightenment are to survive....
Under Christendom it was "saving souls."

United States Department of Defense
Remarks by James Mattis on the National Defense Strategy
James Mattis | US Secretary of Defense
Delivered on January 19, 2018

Ulson Gunnar — Continuity of Agenda: US Encirclement of China Continues Under Trump

The United States has pursued a decades-long policy of encircling, containing and if possible, undermining China as part of a larger strategy of achieving and maintaining what US policy papers call “primacy” over Asia.
US policy has led to deeply-rooted networks operating within China’s borders and along China’s geopolitical peripheries to divide and destabilize the immense and increasingly powerful Asian state. These networks are funded and supported regardless of who occupies the White House. While the rhetoric shifts from president to president regarding “why” the US is providing so-called “activists” and “opposition” fronts aid, the aid and the agenda it serves continues....
Longish, with a lot of detail. Backgrounder for those who want to understand what is happening in on the Grand Chessboard in the Great Game for dominance of the World Island through control of the Eurasian landmass.
It is clear enough that China is being systematically targeted and undermined within its own borders by US foreign policy stretching from the end of World War II and continuing to present day. However, just as important, are US efforts to encircle, contain and undermine China along its peripheries.
This includes Southeast Asia where the US has spent decades attempting to influence and control the region. This included the outright invasion of Vietnam, proxies wars fought in neighboring Laos and Cambodia and political upheaval the US has sponsored everywhere from Myanmar to Malaysia and Thailand to Indonesia....
NEO
Continuity of Agenda: US Encirclement of China Continues Under Trump
Ulson Gunnar

Moon of Alabama — Sundry - Shutdown, Ukraine, Omidyar And Syria


News synopsis. Short.

Moon of Alabama
Sundry - Shutdown, Ukraine, Omidyar And Syria
b

Scott Adams — How to Make Your Opponents Try (and fail) to Prove a Negative


Addressing Trumpgate, Russiagate, the Steele dossier and other "evidence" without actual evidence using reverse "logic" to persuade, in this case, cast shade.

Dilbert Blog
How to Make Your Opponents Try (and fail) to Prove a Negative
Scott Adams

Robert Vienneau — Labor Values Taken As Given


Robert Vienneau has a question for Marxists/Marxians/Marx scholars.

Thoughts On Economics
Labor Values Taken As Given
Robert Vienneau

Friday, January 19, 2018

Mike Gonzalez — How Donald Trump will Reverse Obama's Failed Foreign Policy Strategy

We do not look to bolster America’s adversaries overseas; we look to pressure, compete with, and outmaneuver them. For this reason, we should consider human rights as an important issue in regard to U.S. relations with China, Russia, North Korea and Iran. And this is not only because of moral concern for practices inside those countries. It is also because pressing those regimes on human rights is one way to impose costs, apply counter-pressure, and regain the initiative from them strategically....
Human rights violations by "our guys"? Meh.

How to get the reputation of being hypocritical about liberalism and trash soft power.

It's pretty obvious that these types could care less about humans rights as principles. To them everything is instrumental.
Stopping all our embassies from promoting a progressive agenda that often alienates the most conservative—and traditional pro-American—members of society will be harder, however. Often times such support involves official aid to foreign NGOs that also receive aid from George Soros’s progressive network that operates in 140 countries around the world....
The National Interest
How Donald Trump will Reverse Obama's Failed Foreign Policy Strategy
Mike Gonzalez | senior fellow in The Heritage Foundation’s Davis Institute for International Studies

Pepe Escobar — Rome: A Eulogy


If you are a fan of Pepe Escobar.

Counterpunch
Rome: A Eulogy
Pepe Escobar

Michael Hudson – Charles Goodhart — Could/Should Jubilee Debt Cancellations be Reintroduced Today?


Michael Hudson and Charles Goodhart team up.

Longish and detailed but an easy read.

Counterpunch
Could/Should Jubilee Debt Cancellations be Reintroduced Today?
Michael Hudson – Charles Goodhart

also
Irrespective of what we may think of Syria, this is little but a full-scale assault on international law and the normative system embedded in the UN Charter that has taken decades of hard work to build, a fundamental cornerstone of the management and civilizational development of the world order system.
Seen in comparison with the other attempts at undermining the UN – which began in the 1990s in Bosnia-Herzegovina – this should be a cause of deep concern among people in the truly civilizational corners of our world.
And it can’t be sold to the world under the headline of a Responsibility to Protect.…
Naked power grab.

The New US Syria “Strategy”, a Recipe For Continued Disaster
Jan Oberg

Mike Whitney — Trump’s Plan B for Syria: Occupation and Intimidation

Tillerson’s comments underscore the fact that recent setbacks in the 7-year-long conflict, have not dampened Washington’s determination to topple the elected government of Syria and to impose its own political vision on the country. They also confirm that the United States intends to occupy parts of Syria for the foreseeable future....
As we have noted before, Washington is determined to throw up an iron curtain along the Euphrates consistent with its plan to split Syria into smaller parts, support the central government’s enemies, and create a safe haven for launching attacks on the government in Damascus....
Good strategic analysis. Whitney puts his finger on it. The whole article is worth reading.

Counterpunch
Trump’s Plan B for Syria: Occupation and Intimidation
Mike Whitney

Also
Irrespective of what we may think of Syria, this is little but a full-scale assault on international law and the normative system embedded in the UN Charter that has taken decades of hard work to build, a fundamental cornerstone of the management and civilizational development of the world order system.
Seen in comparison with the other attempts at undermining the UN – which began in the 1990s in Bosnia-Herzegovina – this should be a cause of deep concern among people in the truly civilizational corners of our world.
And it can’t be sold to the world under the headline of a Responsibility to Protect....

We’ve of course seen it all before. It’s about bases (like, say, Kosovo), about control of resources (like, say, Iraq), about regime change (like, say Saddam Hussein and Moamar Khadafi) and it’s about the exceptionalist belief that God’s own country has God’s mandate to create US Imperial peace everywhere – no matter how many times it has already gone madly wrong and no matter how many innocent people are killed and wounded in the process....
The New US Syria “Strategy”, a Recipe For Continued Disaster
Jan Oberg

Reuters — Trump administration says U.S. mistakenly backed China WTO accession in 2001

The United States mistakenly supported China’s membership of the World Trade Organization in 2001 on terms that have failed to force Beijing to open its economy, the Trump administration said on Friday as it prepares to clamp down on Chinese trade.
“It seems clear that the United States erred in supporting China’s entry into the WTO on terms that have proven to be ineffective in securing China’s embrace of an open, market-orientated trade regime,” the administration said in an annual report to Congress on China’s compliance with WTO commitments.

“It is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior,” the report said.... 
The report also points at Russia’s behavior, saying Moscow had no intention of complying with its WTO obligations, a trend the administration said was “very troubling.”
Getting ready to ramp up economic warfare.

Reuters
Trump administration says U.S. mistakenly backed China WTO accession in 2001
Lesley Wroughton

See also
The Communist party believes that, "Russia has obtained no preferences, benefits or even stimuli for economic development" as a result of its WTO membership.
TASS
Communist party again prepares bill on Russia's exit from WTO


Marshall Auerback & Franklin C. Spinney — Boss Tweet’s Generals Already Run the Sho


Marshall Auerback partners with Chuck Spinney on this article. Interesting.

Counterpunch
Boss Tweet’s Generals Already Run the Sho
Marshall Auerback – Franklin C. Spinney

Indrees Ali — U.S. military puts 'great power competition' at heart of strategy: Mattis

The U.S. military has put countering China and Russia at the center of a new national defense strategy unveiled on Friday, the latest sign of shifting American priorities after more than a decade and a half of focusing on the fight against Islamist militants....
“We will continue to prosecute the campaign against terrorists that we are engaged in today, but great power competition, not terrorism, is now the primary focus of U.S. national security,” Mattis said in a speech presenting the strategy document, the first of its kind since at least 2014.
It sets priorities for the U.S. Defense Department that are expected to be reflected in future defense spending requests. The Pentagon on Friday released an unclassified, 11-page version of the document, which did not provide details on how the shift toward countering China and Russia would be carried out. 
Unipolar world no longer. Back to the great powers, the great game, and the grand chessboard.

Actually, the US just now admitting the containment and destabilization strategy it has been pursuing for some time by surrounding Russia and China with allies and bases and attempting to foment regime change internally through covert operations.

Now the weapons are out on the table.

Back to the "good old days" of the Cold War.

Indrees Ali

John Timmer — The global state of science John Timmer

US and Europe still science superpowers, but China is rising fast.
Ars Technica
The global state of science
John Timmer

Also

Asia Times
China on track to overtake US in R&D spending

Brad DeLong — Should-Read: Peter Hall: IDEAS AND INTERESTS


Aristotle dealt with this in Nichomachean Ethics, Book One.

Aristotle asserts as evident that every agent acts for an end that the agent perceives as being a good. Aristotle went on to say that agents disagree over what is perceived to be good. Then Aristotle examines various theories based on different conceptions of the meaning of "good."

"Good" means desirable. So this reduces to desire is the chief motivator. But desire is not homogenous. The ancients distinguished between base desires, noble desire, and desire based on wisdom, corresponding to the belly (senses), heart (virtues) and head (wisdom).

Aristotle examines the different theories about this. 

Hedonism, from Greek hedone meaning "pleasure," emphasizes sense gratification. Pursuit of the good in this view involves maximizing pleasure and minimizing pain. This is essentially the view that Jeremy Bentham adopted that became the basis for the economic "calculus of utility." 

Higher than this are views that emphasize the virtues that are the basis of right action and sterling character. Heroism is its superlative. This is called sophrosyne in Greek and it is a form of wisdom

Higher still is the view that the summum bonum, or highest good, is wisdom. Wisdom is dividend into practical wisdom or prudence (phronesis), and theoretical wisdom (sophia). While sophia doesn't figure directly in achieving happiness in life since it is not practically oriented, it is the basis for being human and taking a rational approach to life, since it is based on reasoning. Homo sapiens identifies humanity as characterized by the rational element and its use.

 In the Greek vie, a primary and fundamental question with which aspiring and inquiring human beings face is what is the good for man (human being). This requires identifying and prioritizing various goods from base through noble to intellectual.

A related question is what does it mean to live a good life in a good society, since the ancient Greeks held it self-evident that civilized life is inherently social.

Approaching such questions is based on rational inquiry. Plato and Aristotle agreed that happiness results from a balanced life in which goods are prioritized in relative to the highest good.

The concept of the highest good persisted in the West until the Enlightenment, when tradition gave say to new methods of inquiry, scientific method in particular. Naturalism as a framework for doing science was taken to imply materialism. From a materialistic perspective, happiness seems to derive from maximizing pleasure and minimizing pain individuality. 

Maybe we would be well-advised to revisit the ancients?

Grasping Reality
Should-Read: Peter Hall: IDEAS AND INTERESTS
Brad DeLong | Professor of Economics, UCAL Berkeley

Ramanan — Christine Lagarde On Germany’s Balance Of Payments


Insightful post on international finance. Short.

The Case for Concerted Action
Christine Lagarde On Germany’s Balance Of Payments
V. Ramanan

SchiffGold — Global Debt Growing Three Times Faster than Global Wealth


Moronic. Whoever wrote this doesn't have any understanding of accounting and the credit-debit relationship that underlies accounting. 

All borrowing results in a debt that is a payable and corresponding saving that results in a loan that is a receivable. A debt is account payable and loan is a account receivable.  

A debt obligation is a financial liability and ownership of a loan is a financial asset.

Some credit is used to to fund capital investment, and some credit is used to fund consumption.

As long as revenue is sufficient to service repayment obligations on time, there is no liquidity (cashflow) problem, and insolvency is not an issue.

The relevant question is whether ability to pay is commensurate with obligations undertaken.

Chris Dillow — Outsourcing: a transactions cost approach


Must-read unless you are really up on transaction cost.
As Simon says, companies that win tenders by bidding low have an incentive to cut quality. The question is: is it possible to stop this happening?
It’s here that transactions cost economics enters. This perspective began with Ronald Coase’s famous essay, The Nature of the Firm (pdf). Whether we should do a job in-house or through the market depends upon the comparative costs. And, he said, “there is a cost of using the price mechanism.”
In our context, this cost is the difficulty or even impossibility of writing contracts which ensure good quality provision....
Stumbling and Mumbling
Outsourcing: a transactions cost approach
Chris Dillow | Investors Chronicle

Finian Cunningham - Washington and Allies Go Orwellian on Korea Peace Talks

Finian Cunningham is one of my favourite reporters. I have emailed him a few times and he is very pleasant indeed. It looks like Washington doesn't want peace between North and South Korea.

Just as North and South Korea achieve important peaceful exchanges, Washington and its NATO allies appear to be moving with determination to sabotage the initiative for averting war on the East Asian peninsula.
The Vancouver summit also called for proactive interdiction of international ships suspected of breaching UN sanctions on North Korea. That raises the danger of the US and its allies interfering with Russian and Chinese vessels – which would further escalate tensions.
These reprehensible developments are a reflection of the increasingly Orwellian worldview held by Washington and its partners, whereby “war is presented as peace” and “peace is perceived as war”.
Just this week, North and South Korea held a third round of peace negotiations in as many weeks. Even Western news media hailed “Olympic breakthrough” after the two adversaries agreed to participate in the opening ceremony of the forthcoming winter games next month as a unified nation under a neutral flag.
After two years of no inter-Korean talks and mounting war tensions on the peninsula, surely the quickening pace of peace overtures this month should be welcomed and encouraged. Russia, China and the UN have indeed endorsed the bilateral Korean exchange. Even President Trump said he welcomed it.
Nevertheless, as the Vancouver summit this week shows, the US and its NATO allies appear to be doing everything to torpedo the inter-Korean dialogue. Issuing ultimatums and warning of “military options” seems intended to blow up the delicate dynamic towards confidence and trust.
Strategic Cultures

Strategic Cultures Editorial - Cold War Mentality Belies Fear of Democratic World Order

I liked this as I thought this sounded optimist.

How can we break the power of the corporate media and get messages like this out? A multi-polar world where we trade to each other to improve our lives and tackle the world's problems, like climate change, diseases, and slowing down the population growth, etc. The wonderful world we could have rather than this, but now the Western elite are starting another war in the Ukraine. These warmongers need to be arrested and put on trail for crimes against humanity.

This past week saw a spate of international security alarms which underlines the danger of the world stumbling into catastrophic war. Those alarms, which were either false or hyped up, stem from a Cold War mentality.
Such a mentality is not only dangerous, it is also unacceptable in today’s world.
First, we saw the US territory of Hawaii being put on full-scale alert over a supposed incoming ballistic missile. The alarm turned out to be false. There was no such incoming missile, but the entire population on the Pacific island were put through 38 minutes of sheer torment.
A day after that incident, Japan’s air-raid system also put a similar false alert.
In both cases, it was assumed that the non-existent missiles had been fired from North Korea.
Meanwhile in Europe, fighter jets from Belgium, the Netherlands and Britain – all members of the US-led NATO alliance – were scrambled to intercept two Russian warplanes. The Russian Ministry of Defense rejected claims that its aircraft were acting “provocatively”, saying that the pair of Russian Tu-160 bombers had at all times been flying in international airspace on a routine exercise.
The latter type of incident appears to be an increasing occurrence. Over the past two months, British navy frigates have made a point of “escorting” Russian warships navigating “near British territorial waters”. Again, as with the air intercept incident this week, the Russian Ministry said that its warships have at all times adhered to international waters.
It is not Russian aircraft or vessels that are being provocative. It is British and other NATO states who are in effect trying to interdict Russia’s legal right to use international airspace and maritime territory.
Britain in particular seems to be hamming up claims of “defending” its territory from non-existing Russian threat. The irony here is that Russia has had to contend in recent years with an increasing number of NATO aircraft and naval vessels entering the Baltic and Black Sea regions. But the Western news media say little about that, while flagging up headlines about alleged Russian “provocations”.
This alarmist situation whether in regard to Asia-Pacific or Europe is deplorable. The volatile atmosphere leads to fear-mongering and runs the risk of false alarms being raised. That, in turn, runs the risk of misunderstandings and the very grave danger of a military response escalating into conflict, or worse.
It is incumbent on all to heed the concern expressed by former US Defense Secretary William Perry, who served in the President Clinton administration. Perry said recently that the world is now at greater risk of a nuclear catastrophe than at any time during the former Cold War.
This fiendish predicament arises from a Cold War mentality maintained by Washington and its NATO allies. That mentality perceives and portrays the world in ideological terms of “us and them”, “free nations and unfree nations”, “allies and enemies”. This antagonistic worldview is essential for Washington upholding ambitions of a “unipolar world” under its “leadership” or, more bluntly, dominance and hegemony.
Such a worldview is essentially about one power and its NATO acolytes trying to exert geopolitical control over others, rather than embracing the reality and more viable arrangement of multilateralism. For unipolar ambition, it is necessary to present the world as an adversarial scenario. Russia, China, Iran, North Korea and other “non-conforming” nations must be cast as “rivals”, “opponents”, “rogue nations”.
That, in turn, leads to international relations becoming fraught with adversarial agendas and belligerence. The relentless Russophobia in Western official discourse based on groundless claims of Russian interference in Western politics is typical of the inevitable hostility.
In short, the US and its NATO subordinates persist in a Cold War mindset in order to fulfill ambitions of unipolar control.
But as Russian Foreign Minister Sergei Lavrov pointed out this week the notion of a unipolar world is negated by the growing reality of a multipolar international order. The rise of China’s economic power is perhaps the clearest testimony.
As long as Washington pursues this unacceptable ambition of dominance, then the world will continue to be frustrated by antagonistic tensions.
International relations must instead be conducted on the basis of equality under the universal protection of law and sovereign rights. And diplomacy must be the currency of relations.
There can be no place for threats, ultimatums and unilateral use of military power. The US-NATO summit in Vancouver this week where a small group of nations assume the prerogative of issuing ultimatums to North Korea to disarm unilaterally, rather than these nations embracing diplomacy to resolve that crisis is typical of an anachronistic Cold War mentality. It is counterproductive, futile and totally unacceptable.
That mentality is putting the world on a dangerous threshold where tensions and alarms are recklessly risking a catastrophe.

The anachronistic Cold War mindset must be decommissioned for a new political paradigm of democratic internationalism.

PCR - The Twitter President

I love this guy, even if he does get it wrong sometimes, like he defends the white working class bigoted male, but hey, these people elected Trump and may have saved us from a nuclear war that Hilary - the warmonger who was always up for for another war - could have caused. No wonder PCR defends them. 
If Trump is real, he will arrest Mueller, Comey, Brennan, Hillary, Obama, the DNC, and break the presstitute media monoplies into a thousand pieces. In my opinion he should also arrest Senators John McCain and Lindsey Graham and a number of US Representatives, all of whom are engaged in a campaign to ovethrow the eleced government of the United States. Abe Lincoln provided the precedent by exiling a US Representative and arresting 300 northern newspaper editors.
If President Trump failes to clear the agenda of those driving the world to nuclear war with Russia (and China), he will be the US President who failed humanity and snufed out life on earth.

Thursday, January 18, 2018

Moon of Alabama — Syria - Tillerson Announces Occupation Goals - Erdogan Makes Empty Threats

I have yet to read one analyst who believes that the U.S. administration can achieve any of the wishes it announced. It is a hapless policy of "doing something" which will fail when resistance on the ground will ramp up and the political costs of the occupation will become apparent. The YPK Kurds in the north-east, who agreed to their occupation, will be the ones who will have to to bear the wrath. All other parties involved in Syria will hold them responsible.
Moon of Alabama
Syria - Tillerson Announces Occupation Goals - Erdogan Makes Empty Threats
b

Israel Rafalovich — Israel: On the Way to a Theocratic State


Liberal democracy, or theocratic apartheid state?
Until today the state of Israel has not decided whether it is a theocracy for Jews or a democratic sovereign state. The ultra-orthodox appear to be on the road to winning this fundamental battle of principles. Ultra-orthodox radicals are increasingly occupying key positions, thereby imposing their stamp on the secular majority. Israeli’s secular democrats are growing increasingly worried that Israel’s future may resemble Saudi Arabia and Iran more than Europe.
Israeli Jews increasingly interpret the identity of the state in religious terms, asserting the priority of Jewish over democratic values. Israel’s shift toward orthodoxy is not merely a religious one. Since the vast majority of Orthodox Jews are also against any agreement with the Palestinians, the chances of reaching a peace deal diminish with each passing day. Nor is time on the side of those who want a democratic Israel.
Israel defines itself as a “Jewish and democratic state.” However, because Israel has never created a system of checks and balances between these two sources of authority, they are closer than ever to a terrible clash.
LobeLog
Israel: On the Way to a Theocratic State
Israel Rafalovich, journalist and analyst based in Brussels, Belgium who covers European and international relations

Lenta — US Embassy caught funding Russian opposition

The Russian Foreign Ministry has accused the US Embassy in Moscow of concealing the transfer of money to opposition groups, to destabilize the political situation in Russia. This was stated by the Department of Information and Press of the Foreign Ministry.
"We urge the United States to stop this practice, return to decent behavior, renew responsible and orderly inter-state communication. We demand that the US authorities finally begin to follow their own national legislation and international obligations," it was reported.
Fort Russ
US Embassy caught funding Russian opposition
Lenta - translated by Inessa Sinchougova

See also

Irrussianality
Backtracking on Russian information warfare
Paul Robinson | Professor, Graduate School of Public and International Affairs at the University of Ottawa

TF Metals Report — The New Cold War in 2018 -- A Discussion With Professor Stephen F. Cohen


Partial transcript and link to podcast.
A few days ago, we had the opportunity to visit with Professor Stephen F. Cohen. As regular readers know, we've been featuring his weekly podcasts with John Batchelor for the past four years so it was a real honor to speak with him directly regarding The New Cold War.
As mentioned at the beginning of this podcast, we are all indebted to John and Steve for their regular, weekly discussions. Their podcasts offer the only fair and balanced coverage of The New Cold War that you will find anywhere in the western media. Rather than a simple regurgitation of the War Party line, John and Steve consider the conflict from the historical perspective of each side. Thus, in listening to them over the past four years, I almost feel as if I have participated in a graduate-level Russian Studies class.
To be certain that this discussion is as widely-heard as possible, I've taken the additional step of transcribing portions of the audio. We begin with Professor Cohen providing some historical background regarding Ukraine, Russia and the run-up of this New Cold War.
TF Metals Report
The New Cold War in 2018 -- A Discussion With Professor Stephen F. Cohen
Turd Ferguson

Alexander Dugin — Globalisation and its Enemies


This is a longish and heavily intellectual analysis in the dialectical mode. However, it is a significant strand in thinking about geopolitics and geostrategy from a long term historical perspective and from a particular point of view.

Worth a look if you are into this sort of thing and think Dugin has something to say.

It's not necessary to agree with people to make them worth reading. A lot of people that one may not agree with exert an influence.

Dugin's influence over Putin is greatly exaggerated and even he says that it is nonexistent since his views and Putin's are quite different, Dugin being a Russian nationalist and Putin being a centrist in governing that personally leans liberal.

Geopolitika
Globalisation and its Enemies
Main factors in the development of global processes: results and prognoses
Alexander Dugin

Ukraine heating up.

Fort RussWar is looking imminent.

Thomas Piketty's — 2018, the year of Europe


Piketty's view on what the EU needs to do in order to seize the opportunity that is presented by the withdrawal of US leadership under the Trump administration that is creating a vacuum.

Thomas Piketty's Blog at Le Monde
2018, the year of Europe
Thomas Piketty | Professor at EHESS and at the Paris School of Economics

Robert Skidelsky — How [Conventional] Economics Survived the Economic Crisis


How did conventional economics survive the crisis? Handwaving.

Criticism of Paul Krugman and New Keynesian economics, which is based on "rational behavior and market equilibrium as a baseline" (Krugman).

Skidelsky concludes, "Macroeconomics still needs to come up with a big new idea." 

I would rephrase that as "a new big idea." Theories are based on a "big idea" that constitutes the architecture of the framework. Rationality and equilibrium isn't it.

Project Syndicate
How [Conventional] Economics Survived the Economic CrisisRobert Skidelsky | Professor Emeritus of Political Economy at Warwick University, fellow of the British Academy in history and economics, member of the British House of Lords, and author of a three-volume biography of John Maynard Keynes

Tony Wikrent — The decline and fall of neoliberalism in the Democratic Party


Useful commentary and links.

Dean Baker — Apple Transfers $252 Billion in Citigroup Account from Irish Subsidiary to Parent Company


Dean Baker explains how international capital flow (capital flight and repatriation) is just a matter of switching account balances. There is no "cross-border" transfer of funds in "bringing back" dollars earned abroad.
This is what bringing money back to the United States means. Under the old tax law companies often attributed legal control of profits to foreign subsidiaries, so that they could defer paying taxes on this money. However the money was often actually held in the United States, since Apple could tell the subsidiary to keep the money wherever it wanted.
For this reason the economic significance of bringing the money back to the United States is almost zero. The legal change of ownership is leading to the collection of taxes, but this is in lieu of the considerably larger tax liability that Apple faced under the old law.
It would have been helpful if these points were made more clearly in this NYT piece. It does usefully point out that we don't know the extent to which the expansion plans announced by Apple would have occurred even without the tax cut.
Beat the Press
Apple Transfers $252 Billion in Citigroup Account from Irish Subsidiary to Parent Company
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C