1. Stephen Roach - Global Economics

2. Israel Shamir - The Man Higher Up

Global: All Cylinders 

Stephen Roach (New York)

Morganstanley

20040220

The latest Japanese GDP growth report - a 7% annualized surge in the
final three months of 2003 - added insult to injury for those of us who
remain skeptical of the global economy's newfound vigor. It rounds out a
rather stunning picture of accelerating growth in most major segments of
the world economy. With the important exception of Europe, the global
economy now seems to be firing on all cylinders. Is a full-blown
synchronous recovery in a long-sluggish global economy now at hand?

On the surface, the numbers are quite extraordinary. In the second half
of 2003, the US grew at a 6% annual rate, Japan surged by 4.75%, and the
Chinese economy turned in a 9.7% annualized gain. Collectively, these
countries - which account for 41% of world GDP on a
purchasing-power-parity basis - grew at an estimated 6.9% annual rate in
the second half of 2003. Folding in a sluggish European growth outcome
of slightly less than 2% in the second half but making allowance for
reasonably solid growth elsewhere in the world, a back-of-the envelope
guesstimate puts global GDP growth in the 5.0% to 5.5% range in the
second half of 2003. That's a veritable doubling of the anemic global
growth rate of 2.7% recorded over the 2001-2 interval and probably the
fastest run rate for the world economy since 1984. It's been a stunning
acceleration by any standard.

That great luxury of hindsight tells me I should have seen it coming.
The combination of a massive global policy stimulus plus a postwar sigh
of relief gave the world economy a huge lift in the second half of 2003.
As I see it, there were two main sparks to this global growth spurt -
the American consumer and the Chinese producer. The rest of the world
largely went along for the ride. On the heels of a 23% annualized surge
in real durable goods consumption in the two middle quarters of 2003 - a
32-year record - the American consumer provided a powerful uplift to the
demand side of the global economy. Halfway around the world in China,
industrial output surged at about a 17% annual rate in the final six
months of the year - an equally impressive boost to the supply side of
the global economy. The rapid growth of the Chinese production base
pushed imports up at nearly a 40% annual rate in the second half of
2003; that provided a major growth impetus to China's trading partners -
a key factor behind the impressive growth performance in Japan and an
increasingly important driver of economic growth in Korea and Taiwan, as
well.

As impressive as this burst of global growth has been, I maintain the
rather lonely view that the jury is still out on the key question of
sustainability. My reservations go back to the same two growth sparks -
the American consumer and the Chinese producer. For a jobless and
income-short recovery, the recent performance of the American consumer
is even more astonishing. With the internal dynamics of the US business
cycle failing to deliver fundamental support to household purchasing
power, the consumer has instead drawn support from more toxic sources of
growth - namely, open-ended government deficit spending, ever-rising
debt, reduced saving, and the ongoing extraction of incremental
purchasing power from overvalued assets such as homes. If job creation
and income generation continue to lag - a distinct possibility, in my
view - the sustainability of consumption will require increasing support
from these same toxic sources of growth. And the outcome in that case
will lead to ever-mounting imbalances - not just higher debt and lower
saving but the ever-increasing twin deficits of the government and the
balance of payments. This, in my view, is not a recipe for sustainable
vigor in the US recovery.

At the same time, there is almost a natural corrective element to growth
spurts driven by consumer durables. By definition, these are
long-lasting items that are purchased at infrequent intervals. The
extraordinary surge of such spending in the two middle quarters of 2003
was a classic overshoot; it was not driven by an unleashing of pent-up
demand - a normal cyclical dynamic following a recession-induced
weakness in discretionary buying. Lacking support from the pent-up
demand dynamic, there is good reason to believe that there will be a
payback as the stock of durable goods returns to its equilibrium level.
The durables growth rate already slipped to just 0.9% in 4Q03, and
historical experience, as well as standard stock-adjustment? models,
both point to an outright contraction in consumer durables in the months
ahead.

The story in China is very different, but the verdict is quite
comparable. Last year's growth surge was excessive, even by Chinese
standards. It was fueled importantly by an outsize surge in bank
lending; in the 12 months ending November 2003, the outstanding volume
of loans was up 21% - nearly double the 12% average annual growth pace
over the 1997-002 period. Fearing a new wave of nonperforming bank loans
and increasingly concerned about a property bubble in the coastal
regions of Shanghai and Beijing, the People's Bank of China moved to
tighten monetary policy late last September. The policy shift is
working. The growth in bank lending slowed to RMB 98 billion, on
average, in the final three months of 2003 - only about one-third the
RMB 275 billion average pace in the first nine months of last year.

Reflecting this marked slowdown in Chinese bank lending, I think there
is good reason to believe that there will be a concomitant cooling off
of both property building activity and excessive infrastructure
spending. In addition, the export dynamic is also set to slow,
reflecting the reduction in the tax rebate to Chinese exporters that
went into effect on January 1. Moreover, to the extent that China's
slowdown is also manifested in the form of reduced domestic demand and
import growth - a highly likely possibility, in my view - there will
undoubtedly be a good deal of collateral damage to countries such as
Taiwan, Korea, and yes, even Japan.

Consequently, the two major sparks to global growth in the second half
of 2003 - the American consumer and the Chinese producer - are likely to
play a sharply diminished role in the global economy in 2004. But why
can't another source of growth come into play? Who is to say it couldn't
even be Japan - especially in the aftermath of the stunning 7%
annualized gain in the final three months of 2003. Our Japan team has
its doubts, citing a series of one-off factors that temporarily boosted
growth last quarter - namely, home refurbishment outlays, a quirk in the
capex deflator, and a China-driven surge in exports. These factors
should work the other way in the months ahead. Moreover, the government
itself continues to have great doubts about the sustainability of
recovery in the Japanese economy; why else would it be continuing its
massive yen intervention campaign?

All this leaves the global economy pretty much in the same place it was
a year ago - overly dependent on the US growth engine and biased toward
ever-widening disparities in external, or current-account, imbalances.
The powerful global growth spurt that occurred in the second half of
last year hasn't altered the lay of the land, in my view. Nevertheless,
as weæS3e learned over the past few years, unbalanced growth can persist
for a lot longer than you think. But the greater the imbalances, the
tougher the eventual endgame. That continues to be the biggest risk of
all for this unbalanced world. Far from firing on all cylinders, I
continue to believe the global economy remains in very precarious shape.

----- Original Message -----
To: readers
Sent: Tuesday, February 24, 2004 6:17 PM
Subject: [shamireaders] The Man Higher Up, by Israel Shamir

 

The Man Higher Up

By Israel Shamir

(A Chapter from the Pardes)

 

Three thieves, lucky enough to escape their pursuers but broke and despondent, find their ways crossed in a small Midwest town - opens a droll short story The Man Higher Up by the American virtuoso of the genre, O.Henry. They represent three kinds of graft: Bill is a burglar, Jeff is a cheat, while Alfred sells junk shares. Eventually, Bill robbed a bank and opened a poker room. Jeff spiked cards and cleaned out Bill, ‘leaving him a black cat and wanderlust’. But Jeff’s joy was short-lived: he invested the profits of his ‘business’ operations in gold mine shares, only to discover too late that the shares are signed by the CEO A.L. Fredericks, who is nobody but his fellow felon Alfred E. Ricks. Thus, the profits of the burglary went to a businessman and ended up with a speculator, at which point Jeff the cheat exclaimed: Wall Street speculation and burglary ought to be wiped out by law!

This story could be read as a parable of the American fortunes. Bill the Burglar symbolizes the primary acquisition. The original pioneers killed off the natives and robbed the new continent. They dug for gold and oil, turned prairies into corn fields and remained on the Marlboro billboards as intrepid cowboys. Jeff the Yankee, a typical American businessman, skinned Bill, opened shops and banks, marketed Coca Cola, created oil companies, carpet-bagged the South, turned Latin America into his banana-producing backyard, only to find his money invested with A.L. Fredericks a.k.a. Goldman Sachs, Marc Rich, Michael Milken, Andrew Fastow et al.

In real life as in the short story, A.L. Fredericks had cheated Jeff the Cheat. He took his real dollar and turned it into ‘funny money’, ‘unredeemable, non-interest-bearing promissory notes of the Fed, that are not backed by anything other than the confidence of the credulous’, in the words of one Internet wit. For 650 billion dollars issued, the Fed has just 17 billion dollars worth of equity, ‘the real cover’. The US has now $38 trillion of aggregate debt incurred by Alfred in relation to a GDP of $10 trillion produced by Bill and Jeff. The greatest pyramid of all is built on the same principles as the Albanian pyramid that ruined this small Balkan country a few years ago. Sooner rather than later, Jeff, the American middle class, will feel the pinch of AN approaching crisis that threatens to dwarf 1929. Bill, the American worker, feels it already. The ruination of the American working class and even its middle class is unavoidable, for the incredible riches of the US have disappeared into Alfred’s black hole.

Can we try and identify ‘Alfred’, the Man Higher Up, with greater precision than as simply a ‘bad rich man’? Who are the net gainers of the pyramid? A new national study (http://www.osu.edu/researchnews/archive/relgwlth.htm) by Lisa Keister, associate professor of sociology at Ohio State University , says that ‘the wealth (or median net worth) of Jewish people in the US is $150,890, more than three times the average wealth of Americans ($48,200). (In comparison, in 1956 the median net worth of a Jew was just below average). The wealth of conservative Protestants (Bill of the story) IS $26,200, or about half the overall average. The wealth of mainstream Protestants and Catholics (Jeff of the story) is about the average for the whole sample. Thus, the Jew has three times more wealth than the much-maligned Jeff the WASP, and six times more wealth than even more despised Bill the Redneck.

‘What parcels out the world is the fact of belonging or not belonging to a given species. The cause is the consequence; you are rich because you are a Jew, you are a Jew because you are rich’, in the ringing words of a prominent Marxist scholar of colonialism, Frantz Fanon (mutatis mutandis: he spoke of ‘whites’ in the colonial reality of Africa ).

Lenni Brenner, the Trotskyite author of the book Jews in America wrote recently: “Why then is the Zionist lobby so powerful when their own scholars write endlessly about the alienation of their youth from the movement? The answer is simple: the Jews are the richest ethnic or religious stratum in the US . Because their standard of living is so high, they are the most educated. Because they are the most educated, they are the most scientifically oriented, hence most inclined towards atheism or religious scepticism. But the true believer minority still has an unbelievable amount of money to throw at the politicians.”

Keister found that full “one-third of the Jews invest in high-risk, high-return assets such as stocks and bonds, compared with none of the conservative Protestants, and 4 percent of Catholics.” While the Jews have no monopoly on Wall Street speculation, they do constitute the hard core of  the collective A.L. Fredericks. It is a part of their tradition: Jay Gould and Joseph Seligman caused the "Black Friday" stock market crash in the late 19th century, while Jacob Schiff caused the notorious 'Black Thursday' panic that led to a nationwide economic depression. Seligman was also the mover behind the Panama affair, a stock market swindle that became proverbial in France .

“During Prohibition," notes Robert Rockaway, the author of an apologetic book on Jewish gangsters, "fifty per cent of the leading bootleggers were Jewish, and Jewish criminals financed and directed much of the nation's narcotics traffic”. The present leadership of American Jewry are to a large extent the sons of Jewish gangsters, killers, smugglers and fraudsters; for instance, the Bronfmans, sons of Bronfman the Bootlegger, or Michael Steinhardt, the son of a mafioso “Red Steinhardt”, one of Democratic presidential hopeful Joseph Lieberman's key backers.

Dr. William Pierce wrote an interesting piece on Jewish crooks. Oh yes, Dr Pierce is a far-right racialist, but this does not invalidate his observations. Half of the antizionist discourse was build upon books of Benny Morris, an Israeli Nazi, who extolled ethnic cleansing of Palestinians and regretted that Palestine is not Goy-free. If we use the works of Morris, we have no reason to disregard Dr Pierce, who wrote: 

“It's not that Jews are the only crooks who steal from the American people. George Bush is a crook, and he's not a Jew. Bill and Hillary Clinton are crooks, and they're not Jews either. There probably are more Gentile swindlers in America than Jewish swindlers, simply because Gentiles outnumber Jews 40 to one in the overall population. 

“No, Jews aren't the only crooks, but they're certainly the biggest crooks. If you hear about a 100-thousand-dollar swindle, it could be anybody. If you hear about a 100-million-dollar swindle, then you know that it has to be a Jew.”

It will be a mistake to see these data as ‘racist’. The ideologists of Jewry indignantly deny any connection between the ‘religion’ or ‘ethnicity’ or ‘origins’ of the crooks, and their crooked deeds. This is to be expected – that is what they are paid for. But as a matter of fact, A.L. Fredericks is devoted to the Jews, whether he is a Jew or not. Enron's chief financial officer was Andrew Fastow, described by the rabbi of his synagogue as ‘a mentsh, a very committed member of the community. He's active in supporting Jewish causes, is a devoted supporter of Israel ’, while his wife Lea (now plea bargaining) Weingarten, who ‘hails from a prominent and well-respected philanthropic family’, did not miss a lesson in the synagogue.

But Kenneth Lay, the Goy top man of Enron scandal, was equally devoted to the Jewish cause. He and his equally Gentile wife Linda chipped in $850,000 at a fund-raising event last year for the Holocaust Museum in Houston, Texas, informed the Jerusalem Report, and concluded: “in all, Enron was connected with about a third of the $3.5 million raised at the event, which honoured former Texas senator Lloyd Bentsen and Holocaust chronicler Ruth Gruber.»

We see again this uncanny, mind-boggling, closely-knit connection of crooks and – not Jews, but Jewish causes, be it the Holocaust cult or the Zionist cause. Lay and Fastow stole billions of dollars from Jeff the Investor; they stole even more from Bill the Worker while Lea Fastow-Weingarten siphoned their money into tax shelters on the Cayman Islands. But when it came to charity, they did not care for poor Americans, or starving Africans. They gave their tithe to the Jewish cause.

Kenneth Lay is not alone. ‘Sir’ Conrad Black, a Goy media baron, (admittedly married to a nasty Jewish supremacy columnist) is totally devoted to the Jewish and Zionist cause. He owns the Jerusalem Post, an extreme Zionist paper which criticizes Sharon for his lack of fervour. Expectedly, he turned out to be a crook. He stripped the assets of companies he chaired and stole hundreds millions of dollars. But a wealthy man who likes the Jews and spends so much on the Jewish causes is invariably a crook, whether he is a Jew like Fastow or a Goy like Lay.

A Jewish crook is pushed by society-enforced feeling of victimhood, for as perennial victim, the Jew feels the need to correct ‘injustice’ by some extra-legal action. Theft of Palestinian lands was explained (by Rabbi Lerner, among others) by the need to correct the ‘injustice’ of the Roman occupation of Palestine 2000 years ago. Establishment of the Jewish state is explained by the ‘injustice’ of Arabs having 22 states, while the Jews had none. Daylight robbery of Swiss banks corrected the ‘injustice’ of Nazi confiscations, though the banks never held Jewish deposits. In a way, the Holocaust museums are an important factor in the growth of Jewish criminality, for they enforce the feeling of Jewish victimhood.

Extreme combativeness, the state of war with [Gentile] society, a constant feature of the Jewish tendency, provides another explanation of Jewish criminality. The state of war which allowed the Jews to charge interest, collect exorbitant taxes, deal with slums accommodation and stolen property, has became to an extent the norm of neo-liberal ‘open society’, where everyone is at war with everybody else.

These features of the Jewish setup appeal to certain non-Jews whom we call ‘Mammonites’; they prefer the somewhat Luciferian paradigm of an outsider, at war with the society, free from the moral constraints imposed by the majority, and yet still chosen by a higher entity. These ‘copycat Jews’ rightly feel that they will prosper in the Jewish-arranged world. That is why they support the Jewish cause and admire the State of Israel, the country of no moral restraints, a wholesale assassin and nature destroyer, black money launderer, mass killer, and a leading exporter of weapons and torture equipment.

Jacob Ben Efrat, an Israeli pro-democracy activist, calls us to “look at Tel Aviv, a fourth of whose population now consists of migrant workers from East Asia , Eastern Europe and Africa . Capitalist globalisers want a flexible labour force, which they can transport at will from country to country. As the result, the gap between haves and have-nots increases. Israel is a shining example. Here the topmost fifth of the population earn 21 times more than the bottommost fifth (compared with 11 times more in the US )”. This quality makes Israel much loved by the Gentile Mammonites.

Thus, for an American, European or Russian the conclusion is clear: their pro-Israel, pro-Jewish politicians are the worst for the people and the best for the crooks. A potential investor in Enron, equipped with this short essay, could just check Enron’s contributions to the Holocaust museum and he would know enough to carry his money elsewhere, unless he wants to lose it for tax purposes. A California voter could just ask for Diane Feinstein’s opinion about the Jewish state, and vote for her, if he likes the War in Iraq , expensive privatised electricity and a flood of illegal workers.

Indeed, Diane Feinstein, a nominal Democrat, contributed to the War in Iraq more than the average Republican: “Within minutes of Powell's war speech, leading Senate Democrats such as Joseph Biden of Delaware and Diane Feinstein of California were proclaiming it an unanswerable indictment of Iraq, preparing the way for their party to line up behind the war that is now only days or weeks away”, noted The World Socialist Web Site in February 2003. The present competition for the Jewish and Mammonite vote in the US Presidency elections is a bad sign for Bill and Jeff, for they are competing who will skin them better.

In Sweden , their unique welfare state entrenched by the antizionist Prime Minister Olof Palme is being undone by Göran Larsson, their present Prime Minister, perennial organiser of holocaust conferences.

When voting or investing, a prudent American, European or Russian should pick the company or the candidate that does not support the Jewish or the Zionist cause. For sure, it can be a vote for a politician of Jewish origin, like Minnesota Senator Paul Wellstone, who was killed in a well-timed plane crash in October 2002. Wellstone was the strongest voice against the war in Iraq , and supported Palestinian struggle. Michael Howard, the new leader of the Conservative Party, is another good example. Indeed, a non-Jew who likes the Jewish cause – like Tony Blair or Condoleezza Rice, Bill Clinton or George Bush – is much more dangerous than a Jew who keeps clear of the Jewish causes.

Immanuel Wallerstein compares the events of 1968 to a ‘ship-wreck’, in aftermath of which the talented A.L. Fredericks scrambled to shore, ‘undeterred by the thought of drowning companions’, but (to continue Wallerstein’s parable in our terms) the drowning Bill and Jeff came to interpret the ability of the talented to swim to shore as evidence of hope for them. Wallerstein missed the point: this interpretation was not made by Bill and Jeff, but by the wholly-owned subsidiary of A.L. Fredericks, the Jewish-owned media with its Jewish pundits. Without this tool, Fredericks would have been tarred and feathered, if not lynched in the best American tradition.

The financial capital of speculators and banks exceeded the industrial and agricultural capacities and created the giant dollar bubble soon to burst. This explains the hysterical campaign against ‘antisemites’: A.L. Fredericks does not want his name and address to be known to Bill and Jeff; he prefers to hide behind an anonymous ‘rich white man’ front. To be on the safe side, ‘antisemites’ are always lumped with ‘racists’ and Jews - with Blacks or other immigrant minorities, as if struggle against Alfred has anything to do with the racial or other qualities of Jim, the Black half-brother of Bill, or Ahmed, a powerless outsider.

Why should we care who pocketed Bill’s cash – an all-American Jeff the Cheat, or cosmopolitan Alfred the Swindler? However, Alfred the Jew is in a class by himself, and not because of his cruelty. The Sultan of Brunei builds a palace and gives a Boeing to his daughter. Paul Getty locks himself up in a far away place. Wealthy Jews buy media, and media is a mind-altering tool. Thus, their influence goes way beyond market dominance into previously uncharted waters of mind control. 

This pattern is seen all over the world. Sulzberger and Zuckerman own a string of newspapers in the US from the NY Times to the USA Today, while their brethren have monopolised editorial and other prominent positions in the discourse. Connecting wealth and media influence, Benjamin Ginsberg, Professor of Political Science at John Hopkins University wrote in 1993:

“Today, though barely 2% of the nation's population is Jewish, close to half its billionaires are Jews. The chief executive officers of the three major television networks and the four largest film studios are Jews, as are the owners of the nation's largest newspaper chain and most influential newspaper, the New York Times.”

 

This makes supreme sense, for otherwise, the free media would point its accusing finger in their direction. The people of America would demand from Alfred that he pull out his pockets and fully refund the stolen goods. However, such a remedy does not even occur to them today. The reason is the Jewish involvement in the discourse. Thus, we can complete the first level of our analysis on a purely materialistic note, so dear to the hearts of vulgar Marxists. The rich Jews buy media so it will cover up their (and their brethren’s) misdeeds. The Jews in the media are giving protection to the rich Jews: in the right-wing media, they protect all rich and powerful men; in the left-wing media, they blur the distinction between Jeff and Alfred.

Is that what the Jews want?

 

 

{This question is answered in the following chapters of the PARDES. The Full text is available to donors or active contributors of this list just for asking. Send an email to Shamir@home.se with subject ‘pardes’ to receive the PDF file}.

 

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