Bulletin N° 757





June 16, 2017

Grenoble, France

Dear Colleagues and Friends of CEIMSA,
You’ve probably heard the old joke about the young boy sitting on the sidewalk one hot summer day killing ants. He called out each time, as he crushed an ant with his thumb:  “Damn piss ant! . . .  Damn piss ant! . . . . ” A Jesuit priest happened to walk by and looking down at the boy he asked: “My son, why are you killing those damn piss ants?”

Even the best logicians are caught up in habits of thought that sometimes defy reason. The banking industry is a case in point, and the controversial role played by the Federal Reserve in regulating economic inequalities in the US is instructive, to say the least. The seven members of the Board of Governors of the Federal Reserve System are nominated by the President of the United States and confirmed by the US Senate for a term of 14 years, and a replacement appointment is made every two years. No member can be reappointed.

Henry Wallich (1914-1988), a German American Economist with a Ph.D. from Harvard, was appointed as governor of the Federal Reserve System in 1974, by President Nixon.  He served until 1986, when he resigned due to poor health. He was atypical in his open contempt toward the Monetarist theory of finance which was aggressively promoted by neo-liberal economist Milton Friedman and the so-called ‘Chicago School’. Wallich wrote:

Milton Friedman implies that there are no fluctuations in the real economy that need affect monetary policy – no investment boom, no housing boom, no oil shocks. We should simply supply a steady growth of money. The Fed feels it has to smooth out reserves, adjust for seasonal influences. Monetarists say that none of this is necessary. Monetarists say, ‘the markets will learn to adjust to this – those who were right will prosper, those who were wrong will be punished.’ I say, ‘If you accept that, eventually you will have only those left who are wise and prosperous and everyone else will be ruined.’(pp.93-94)

Despite the general contempt that members of the Federal Reserve held toward Friedman and his scathing attacks on any regulation of the money market, the Fed eventually acquiesced, and allowed inflationary policy to prevail. The forces of the market prvailed, and society became subservient.

We stand forewarned by economic historian and journalist William Greider (former Assistant Managing Editor of The Washington Post, and a contributing editor for Rolling Stone magazine) that a herd instinct operates the stock market and that this determines our education, our jobs - including salaries and benefits, such as healthcare and retirement - in short, the structure of our entire lives!

Financial traders . . . gathered literally in ‘crowds’ on the trading-room floors of the stock market and in the commodity exchanges. They milled and gossiped, watched what others watched, calculated where the ‘crowd’ was headed. In credit markets, the ‘crowds’ were assembled electronically – all watching their video screens, reading the same bid/ask quotations, gossiping by telephone(p.124).

“Financial markets,” observed Albert M. Wojnilower, chief economist at First Boston, “are like a collection of overlapping crowds.”

Traders . . . must and do therefore respond literally instantly to all news to which they think other traders might respond. Whether the news is considered economically significant or even true is immaterial. Moreover, it is well known that crowds generate, transmit, and respond to messages (rumors included) very differently from individuals.(p.124)

What are the protections against this mindless conformity? What chances do ordinary people have of actually gaining control over their lives and rationally planning a rewarding life for themselves and their community?


William Greider in his 1987 book, Secrets of the Temple: How The Federal Reserve Runs The Country, concludes his history of the Federal Reserve System rather pessimistically with the observation :

The mystery was necessary, therefore, to sustain social faith. Knowledge was disturbing. Not knowing the secrets was reassuring. If Americans were afraid to look inside the temple, perhaps it was because they feared to see the truth about themselves(p.717).

One recurring theme in Greider’s 700-page book is the incompatibility of democracy and capitalism. Mayer Amschel Rothschild (1744-1812), founder of the Rothschild banking dynasty and often referred to as the "founding father of international finance," drove this point home in a statement he is reported to have once made to a journalist more than two-hundred years ago :  "Give me control of a nation's money and I care not who makes its laws." Greider expounds briefly on this same theme toward the end of his study.

   For most of 200 years, America had successfully evaded the contradiction between democracy and capitalism. The nation was able to honor both, so long as it managed to maintain the constant of healthy economic growth. If the broad landscape of work and incomes was expanding generously, distributing new rewards broadly, questions of who owned wealth and other disparities seemed irrelevant to the general prosperity. Economic growth, as many politicians understood intuitively, was the safety valve that relieved the tension between wealth and wage earners, the inherent conflict in democratic capitalism.

   The American contradiction was joined, however, when the economy failed to grow robustly. Gradually, but inevitably, the disappointed expectations would feed the conflict between classes, as larger and larger groups of people were compelled to accept smaller shares of prosperity or were left out altogether. Many citizens of influence, led by the wealth holders, were quite content with an economy that grew but slowly. Their own lives went forward prosperously, oblivious to the social deterioration that was underway around them. In time, however, if stagnation persisted long enough, they too would find themselves engulfed by the consequences – bitter social divisions and a vengeful politics aimed at wealth itself. The unanswered question posed by the 1980s was whether the United States has already entered into such an era.(pp.714-715)

Perhaps only l’histoire de longue durée can ultimately confirm : The dogs bark and the caravan goes by (and in this case it is followed into the abyss by the dogs, off the face of the earth) . . . .

What seems to be certain is that the Fed. eventually caved in to the Monetarist agenda, to allow market forces to drive inflation. Philip Coldwell (1922-2008), President of the Federal Reserve Bank of Dallas from 1968 to 1974, put it this way:

We’re not that tolerant of governors in our society. You build a governor in an automobile to limit the speed and someone’s going to find a way to wire around it because he wants to go faster. No President is going to be satisfied with 3 percent growth in the economy, even when you explain to him that over the long term things will be fine for everyone with 3 percent growth. He says: ‘I’ll go for 5 percent growth and let the next guy settle for 3 percent.’(p.95)

Under the Carter Administration (1976-1980), the Fed acquired, for all practical purposes, complete autonomy.

The physiology and anatomy of the entire body of our political economy is in urgent need of analysis and strategic intervention. Careful understanding, before it is too late, is the true safeguard of a healthy society; it is the only defense against the boldfaced lies, the poisonous deceptions, and the deliberate distractions that serve to perpetuate military/police violence, climate catastrophes, and general misery. Public disillusionment is easily manipulated by the amoral managers of this system, who work in the interest of the class of owners by obfuscating the operations within the structure and neutralizing popular awareness of what has to be done to affect meaningful change.

We see today the beginnings of a genuinely popular movement that is demanding democratic controls over and authentic accountability of our so-called “representatives” in government. This has emerged into broad daylight, and it is the bitter fruit of real crises, at the origins of which lies our malfunctioning political economy. Exclusive sectarian identities are increasingly seen for what they have always been: namely, a tried-and-proven tactic to divide and rule the masses . . . .  Breaking out of our isolation - the ‘silos’ to which we have been consigned to dwell and to think - is sometimes contagious and can spread beyond national borders. We discover through social interactions that class relationships define people more pertinently than do kinship and other accidents of birth. Class consciousness (a people aware of their self-interests and behaving as a class, “for itself”; instead of as members of a social club, “in itself”) has necessarily become the designated target, the metaphysical enemy of all guardians of the status quo.

We live in a time when powerfully financed ideologies such as Zionism, Wahhabism, and Neoconservatism have been largely discredited by ordinary people. Only a relatively small, self-appointed elite keep these imperialist visions of identity politics alive at high financial cost, and they seek to preserve them forever with ugly accusations which cynically conflate their reactionary ideologies with charges of anti-Semitism, or Islamophobia, or with patriotic disloyalties of one stripe or another. Thus, ideologically fragmented and politically neutralized, the public remains paralyzed under the influence of its rulers, unwilling to accept the reactionary visions of the self-appointed “elites” and unable to produce their own progressive vision for their collective well-being.


The system and structure of capitalism.

The creation and function of the central bank in the United States, misleadingly called “The Federal Reserve” since 1913, is one chapter in this story of social control on a massive scale. Economic science differentiates between four types of money, each with its peculiar viscosity when it is injected as hydraulic fluid into the tanks and plumbing of the financial system. The category known as M-1 is the money in immediate circulation - like cash on hand and checking accounts - and in August 1979, it totaled only $362 billion for the entire US economy, which at the time had a Gross National Product of $2.4 trillion - the annual total value of goods and services produced in the US. This modest M-1 monetary aggregate was adequate because in the course of a year this money turned over many times, as people exchanged it. A second category of money is known by specialists as M-2; it includes money in savings accounts, which move more slowly, as it would have to be first withdrawn from a savings account; then deposited in a checking account; then only after the check was written and cleared would the money enter circulation. Thus, the money moved more slowly into economic transactions. This second, broader economic aggregate, included all small savings accounts and time deposits at banks, credit unions or Savings & Loans, plus whatever people had invested in money-market mutual funds, when added to M-1 totaled about $1.5 trillion. A third type of money, M-3, is a still larger category – larger and less liquid than the other two – and includes high interest deposits for extended periods of time (from 3 to 6 months or more), which only corporations and wealthy individuals can usually afford. Thus, this third aggregate of money moves still more slowly and is not rapidly available for spending. M-3, combined with M-1 and M-2, accounted for a little more than $1.7 trillion. Finally, a fourth measure of money made by economists is known a L, for total liquidity. It is an attempt “to count all the financial assets that could be sold and converted into spending money”, like Treasury bills, commercial paper, U.S. savings bonds and a few others. With type L money added, the total money available rose to $2.1 trillion.

The three main blends of money described, in a sense, the fluid that the Federal Reserve attempted to regulate inside the tanks and plumbing of the financial system. Each blend of money had a different viscosity, like three different grades of oil. The spending money called M-1 was light and freely glowing. M-2 and M-3 were more dense and flowed more slowly, like heavier oils that settled to the bottom of a tank. Any businessman or family could shift its money from one blend to another, simply by moving it from one kind of liquid asset to another, and this interaction between the three monetary aggregates was under way constantly in millions of financial transactions. These shifts did not alter the overall size of the money supply, but they were an important element in the money dynamics that the Federal Reserve monitored a source of continuing uncertainty and occasional error.

America’s money, however, did not stop at the national borders. “Our money is the world’s money,” as Paul Volcker has said. The dollar was the dominant currency of world trade so its value affected global transactions far beyond U.S. commerce.(p.58)

William Greider’s book helps us to understand more deeply the cultural and political workings of monopoly capitalism and the role the finance industry has played over the past century.  I recently picked up my old copy of his 1987 book, and re-read it with supplementary visits to Google. It was a revelation. Could there be a more efficient (less wasteful) and more democratic (less discriminatory) method of governing our economy? The hidden history of the Federal Reserve central banking system since 1913 goes a long way in demystifying the finance industry and explaining how violent inequalities have been produced over and over again by its highly secretive operations. Among other authors, Michael Albert of ZNet has actively promoted the model for a democratic alternative to the old fashion Federal Reserve elites working with the corporate oligarchy. (See discussions of Parecon, Life After Capitalism  at : https://zcomm.org/category/topic/parecon/.)

Meanwhile, the pseudo-scientific pretensions of traditional economic actors, according to Greider and other critics, were deliberately cultivated, as part of a mystification to diffuse political accountability.

As any hydraulic engineer could explain, the impact from the Federal Reserve’s actions – injecting or withdrawing money – depended entirely on what was already going on inside the plumbing. When the gauges on the boiler show that pressure is dangerously high, then the slightest hydraulic change can send a strong pulse throughout the system, a displacement that spreads like the ripples on a pond. The financial system was similar. If, for instance, the market demand for credit already exceeded supply and interest rates were rising, then a substantial withdrawal by the Fed would send rates soaring. On the other hand, if credit pressures were slack and interest rates were already falling, the same action might hardly be noticed.

Day by day, the Federal Reserve exerted a powerful influence over Wall Street, but it was not all-powerful. It influenced everything, but it did not control everything. It could set the dials and turn valves, but it could not repeal the fundamentals of economics anymore than an engineer could suspend the laws of physics. Sometimes, despite the Fed, markets pursued their own direction, driven by contrary perceptions or real economic forces that overpowered the desires of the Federal Reserve Board. Sometimes, trying to change the flow, the Fed turned the wrong valve and produced unintended results. Sometimes, it turned the valve and nothing seemed to happen.

In Wall Street, therefore, everyone watched the Fed. Every bank and brokerage of any size had full-time economists – ‘Fed watchers’ . . . who did nothing else.(pp.32-33)

Enshrouded in a mystique of its own making, the Fed, Greider tells us, has over the years drawn many criticisms – sometimes quite bizarre - all of which were ineffective, no matter how scholarly the attempts were to expose the autocratic prejudices of this key institution.

Neither the hot Populist rhetoric nor careful scholarly critiques made any difference. For all its peculiar features, the Federal Reserve System was remarkably stable among America’s political institutions. Over seventy years, its basic design probably changed less than any other important operating arm of the federal government, from the Pentagon to the Postal Service. Most major federal agencies and departments have undergone repeated reorganizations and restructuring, but the Federal Reserve System was ‘reformed’ only once – during the 1930s when control over its decision making was centralized in the Board of Governors in Washington, just as other New Deal reforms consolidated power in the national capital. Regardless of the peculiarities, the Fed’s enduring stability as a political institution was evidence that it somehow ‘worked’ – that is, the Federal Reserve seemed to provide what the American system wanted. Otherwise, surely, it would have been changed.(pp.51-52)

Due in part to its policy of secrecy, the Federal Reserve invited speculation on possible conspiracies on the part of major bankers. Greider writes :

. . .  From the beginning, the Federal Reserve was implicated in nativist conspiracy theories. Homespun tracts and polemical books described it as the secret nexus for sinister forces in the world. The Fed was agent for the ‘Powers,’ usually identified as the ‘International Bankers’ and sometimes the ‘Illuminati’ or the ‘Zionist Conspiracy,’ echoing the febrile anti-Semitism associated with money since medieval Christianity. The Fed, it was said, was the operating center for a mysterious network of unseen but awesome powerful people who were manipulating the society for their own purposes – world domination. In the 1970s, as inflation accelerated, the dark theories about the Fed thrived anew, disseminated in scores of homeland newsletters and privately published books. When Paul Volcker was confirmed by the Senate Banking Committee in August 1979, a citizens’ group from Virginia had testified against him, noting his connections with the ‘top secret’ Bilderberg Conference, David Rockefeller’s Chase Manhattan Bank, the Council on Foreign Relations and the Trilateral Commission – all of them staples in the popular theories of ‘one world’ conspiracy.

The conspiracy theories were inconsequential in political terms, but in cultural terms, most relevant. The theories contained a revealing message – an expression of spiritual anxiety. Like all conspiracy theories, the ones aimed at the Fed were confused attempts to confront larger mysteries of life, to explain the awesome powers that were shielded from the scrutiny of ordinary mortals yet seemed to govern their lives, like the temple incantations of ancient priests who interpreted divine messages and decreed the course of social destiny. In a twisted sense, belief in a grand conspiracy was an act of religious deference, an acknowledgement by people that someone or something held distant and unexplainable power over them. The believers collected scattered facts and stitched them together to construe a cosmology that explained good and evil, and, like most cosmologies, this one seemed logical to believers and utterly bizarre to everyone else. Somewhere, in a hidden place, there were mortal men who conspired to rule over all – to usurp powers that belonged only to God.

The supposed sacrilege or men who created money was a constant theme in the most virulent tracts attacking the Fed. One of them, The Federal Reserve Hoax, written in the early 1960s by Wickliffe B. Vennard, Sr., explained, for instance, a dizzy series of historical connections, between money and democracy and Christian faith, the death of Christ, the assassination of Lincoln, and the Federal Open Market Committee :

          When our lord and Master defied them by upsetting the tables and casting the money changers from
His temple with a whip, He knew full well that within a week He would be nailed to a cross on Calvary . . . .
Abraham Lincoln, whose rash defiance [of bankers] cost him his life, saved this country billions in interest,
because the money was not issued against debt as is that issued by the Federal Reserve System . . . . Since the
Babylonian Captivity, there has existed a determined behind-the-scenes, under-the-table, atheistic, satanic,
anti-Christian force – worshippers of Mammon – whose underlying purpose is World Control through the
Control of Money . . . . This book is aimed at the Sanhedrin of today – the 12 men who control the country
from behind the scenes.

To modern minds, it seemed bizarre to think of the Federal Reserve as a religious institution. Yet the conspiracy theorists, in their own demented way, were on to something real and significant. Economics was the essence of scientific rationalism; the Fed’s analytical techniques were the opposite of metaphysical speculation. But the Federal Reserve did also function in the realm of religion. Its mysterious powers of money creation, inherited from priestly forebears, shielded a complex bundle of social and psychological meaning. With its own form of secret incantation, the Federal Reserve presided over awesome social ritual, transactions so powerful and frightening they seemed to lie beyond common understanding.

Feverish polemics that portrayed the Fed as the ‘Sanhedrin of today’ were ludicrous in their particulars, but they were based on an ancient cultural reality about money that was still valid in the age of enlightenment and computers. Above all, money was a function of faith. It required an implicit and universal social consent that was indeed mysterious. To create money and use it, each one must believe and everyone must believe. Only then did worthless pieces of paper take on value. When a society lost faith in money, it was implicitly losing faith in itself. In the advanced economies of Western capitalist nations, this fundamental social bond had been managed for several centuries by ordinary mortals, working in institutions devoid of religious trappings (though religion still exercised direct influence over money in some less-advanced cultures). The money process, nonetheless, still required a deep, unacknowledged act of faith, so mysterious that it could easily be confused with divine powers.

‘It is a truism that public confidence is important to banks,’ an editorial in The Wall Street Journal observed. ‘That’s why early Hebrews did their banking in temples and the later Americans and Europeans built banks that looked like temples.’ Officials of the Federal Reserve were themselves the ultimate rationalists – economists who analyzed numbers, constructed scientific theories to explain economic behavior and tested the theories against reality – yet they too unconsciously invoked the sacred aura of their institution. Federal Reserve governors spoke enthusiastically about ‘the mystique of central banking,’ without being able to explain it very succinctly. A former officer of the Federal Reserve Board, describing the confidential fraternity that economists entered into when they joined the Fed staff, called it ‘taking the veil,’ the expression that describes nuns entering a convent. A chairman of the House Banking Committee sometimes referred derisively to the Fed’s senior economists as ‘the monks.’

Richard Syron, a vice president of the Boston Fed who served for a time as special assistant to Volcker, suggested that the institutional temperament and structure of the Federal Reserve System most resembled the Catholic Church, in which he had been raised.

   The System is just like the Church. That’s probably why I feel so comfortable with it. It’s got a pope, the
chairman; and a college of cardinals, the governors and bank presidents; and a curia, the senior staff. The
equivalent of the laity is the commercial banks. If you’re a naughty parishioner in the Catholic Church, you
come to confession. In this system, if you’re naughty, you come to the Discount window for a loan. We even
have different orders of religious thought like Jesuits and Franciscans and Dominicans only we call them
pragmatists and monetarists and neo-Keynesians.

The institution’s official secrecy naturally enhanced the mystique. The Federal Open Market Committee met to deliberate on the money supply eight to ten times a year, but its decisions were made in secrecy. Only six or eight weeks later, after the FOMC had held its next meeting, would the Fed release a brief report on what the previous meeting had decided. Internal reports and memos, the economic analysis that supported the decisions, were kept confidential for five years. A full transcript of the committee deliberations was never available, because it was no longer kept. The FOMC used to make a transcript of its deliberations available to the public after the five-year waiting period, but even that historical record was discontinued in the mid-1970s. When Congress was enacting the Freedom of Information Act, Federal Reserve Chairman Arthur Bruns decided to abolish the full transcript, lest litigation force it into public view prematurely and embarrass Fed officials. No other agency of government, not even the Central Intelligence Agency, enjoyed such privacy.

The Fed would explain itself, but only up to a point and long after the fact. Ostensibly, this was meant to avoid market manipulations and ‘insider trading’ on the Fed’s own decisions, but it also provided political cover. The secrecy spawned an infantile anger among the Fed’s critics, even from some distinguished scholars whose commentaries on Fed performance frequently seemed harsh and petulant. Not knowing was a form of impotence, and the critics’ anger often sounded like the frustrated tantrums of a small child who has been excluded from the family secrets.  What is going on behind the closed door? Father does not answer. It must be something important. Mother will not tell. The secret behind the bronze doors was not, of course, sex, but nearly as mysterious.

The anti-Fed polemics liked to quote Henry Ford, Sr., on the mysteries of money and the Federal Reserve: ‘It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning.’

The American public, not unlike its political leaders, depended on familiar clichés for its limited understanding of money. The Federal Reserve controls the money supply. The Fed sets interest rates. When the government spends too much money, the Fed turns on the printing press and then we have inflation. All these crude generalities were either mistaken or too simplistic to describe the reality, and unless one was willing to move beyond them; it was impossible to understand the awesome powers of the Federal Reserve or its frailties.

The public’s confusion over money and its ignorance of money politics were heightened by the scientific pretensions of economics. Average citizens simply could not understand the language, and most economists made no effort to translate for them. The dominant mode of modern economic analysis mimicked the methods of Newtonian physics by presuming that economic behavior followed its own self-contained logic, rules and patterns as capable of replication as the natural laws that physicists discovered in the physical world. Most economists, regardless of their particular ideological biases, dwelt rigidly within that narrow definition of their discipline. They cloaked their observations in dense, neutral-sounding terminology that was opaque to nonscientists. The neutral language masked the political content of economics and the social rituals of capitalism – as if all economic players were simply molecules destined to behave according to the same natural order, regardless of their political values or wealth. All economic decisions were made not to reward one group or to punish another but simply to advance the universal objective of ‘sound economies.’ Johan Kenneth Galbraith, an economist with a more supple understanding of human society, drolly observed: ‘What is called sound economics is very often what mirrors the needs of the respectably affluent.’

Economics also tried to ignore the psychological impulses that lay beneath all human behavior. Individually or in large groups, people did sometimes defy the tangible dictates of supply and demand. They behaved in ways that seemed perverse to economics, driven by their own beliefs and emotions, nonquantifiable fears or hopes that existed only in their heads, not in economic data for the marketplace.

. . .

The ultimate test of soundness for any science was the ability of its rules and theories to predict outcomes, and by that standard, economics was a crude and underdeveloped discipline. When its models failed, as they often did, economists grudgingly acknowledged that political impulses or human psychology had somehow disrupted the equations. These events were usually dismissed as ‘random shocks’ – war or political interventions or social upheavals – that need not be explained since they were nonrecurring aberrations. War and politics were not abnormal events in human society, only in economics.(pp.53-56)


The 26 items below should bring home to our full consciousness the importance of financial relationships in today’s world. ‘Applied economics’ is indeed a powerful force shaping our lives, and when we are excluded from the economic decision-making process . . .  well, as is said in France: ‘Les absents ont toujours tort !’ 





Francis Feeley

Professor emeritus of American Studies

University Grenoble-Alpes

Director of Research

University of Paris-Nanterre

Center for the Advanced Study of American Institutions and Social Movements

The University of California-San Diego







Why China no longer fears the Fed


by Tom Mitchell

In early 2016, turmoil on China’s equity and currency markets dented confidence in the country’s economic policymakers. Foreign currency reserves were falling at an unprecedented rate and Beijing worried that any increase in US rates would further accelerate capital flight from China.
But the US Federal Reserve did not follow through on expected rate rises, in part because of the situation in China. The reprieve gave the People’s Bank of China time to implement capital controls, which slowed capital flight, while a credit surge in early 2016 stabilised economic growth. As Jeremy Stevens, China economist for Standard Bank, puts it: “Last year the PBoC got an assist from the Fed.” 
This year the PBoC needs no such help. At its meeting on Wednesday, the Federal Open Market Committee is expected to raise its benchmark rate for the second time since March — and third since December — further narrowing interest rate and bond yield differentials between the world’s two largest economies. 
Most analysts expect the PBoC and State Council, which must approve adjustments in China’s benchmark rate, to stand firm. “For now China needs to keep rates stable,” says Yu Yongding, a prominent Chinese economist and former PBoC adviser. “There is no need to follow the Fed.” 
The PBoC’s one-year deposit rate was cut six times in 2014 and 2015, from 3 per cent to 1.5 per cent, and has not been adjusted since. The US Fed Funds Rate, meanwhile, has been raised from 0.25 per cent to 1 per cent since December 2015, with a further quarter-point increase expected this week. The spread on Chinese 10-year sovereign bonds over their US counterparts fell from 150 basis points in December 2014 to less than 80bp after the Fed’s March rate rise, although it has since widened.
In addition to the effectiveness of China’s capital controls and strong year-on-year gross domestic product growth — up 6.9 per cent in the first quarter — the PBoC has proved that it can tighten monetary conditions through short-term open-market operations.


A day after the Fed’s March rate increase, the PBoC raised rates on short-term reverse repurchase agreements, or repos, and loans from its medium-term lending facility by 10bp.
In announcing the reasons for its moves at the time, the PBoC cited lower real interest rates, improved corporate profitability and the Fed rate rise. Surging producer prices, which only turned positive in September after years of deflation, have made it easier for companies to service their debts.
“China has been able to use other tools,” says Mr Yu, who adds that the expected Fed rate rise has been well telegraphed. “It won’t have much of a market impact.” 
Repo and MLF rates have proven more effective than expected in the eyes of PBoC officials, as the yield curve on five and 10-year Chinese government bonds inverted in April for the first time and corporate bond issuance fell to a record low in May. Net corporate bond financing was negative Rmb217bn last month, as the amount of maturing debt dwarfed new issuances. 
“PBoC officials are very concerned that the fall-off in bond issuance will affect economic growth,” says one person familiar with internal PBoC deliberations. 


“Short-term interest rates have already come up a lot in China and [tougher] financial regulation has meant a de facto tightening of financial conditions,” Andrew Batson, head of China research at Gavekal Dragonomics, wrote in a recent note. “The central bank is unlikely to desire to see rates rise further.” 
The effectiveness of China’s capital controls, which tightened checks on foreign exchange purchases and overseas remittances by companies and individuals, has given the PBoC another reason to worry less about rising US interest rates. After holding at about 6.9 to the dollar for most of the year, the renminbi has risen 1.4 per cent since late last month — an unusual surge for the carefully managed currency. 

As a result, says Andrew Polk at Trivium, a Beijing consultancy, “the PBoC has blown up expectations around the renminbi”. Late last year, many analysts were expecting the renminbi to fall to 7.3 against the dollar if not lower. 
Renminbi strength has had the added benefit of lowering trade frictions with the US. Presidents Donald Trump and Xi Jinping agreed at their first meeting in April to a 100-day timetable for a series of trade and economic negotiations
A weaker renminbi would have added to bilateral trade tensions. Renminbi strength has also been bolstered by Mr Trump’s turbulent first months in office. Lower expectations about his administration’s ability to deliver on tax reform and infrastructure stimulus have weakened the dollar, which has fallen almost 8 per cent against the euro since January. 





Things To Come

The Unraveling Financialization Of The U.S. Economy
by Howard Kunstler





Exposing the Secrets of the Temple: How the Federal Reserve Makes Money Out of Thin Air




by Terrence McNally / AlterNet


Author Bill Greider argues that a more democratic money creation system could have saved the country from the brink of financial collapse.





Coming Economic Crisis - The Fed, Student Loans






“Secrets of the Federal Reserve”

Image result for 100 us dollars


by Eustace Mullins


Eustace Mullins "The Secrets of the Federal Reserve" Recorded during a visit to Hawaii around the year 1989, this lecture presents a unique opportunity for you to see and hear this remarkable man lay out the shocking truth about the privately-owned corporation known as the Federal Reserve System.
" The Federal Reserve System is not Federal; it has no reserves; and it is not a system, but rather, a criminal syndicate. It is the product of criminal syndicalist activity of an international consortium of dynastic families comprising what the author terms "The World Order". The Federal Reserve system is a central bank operating in the United States. Although the student will find no such definition of a central bank in the textbooks of any university, the author has defined a central bank as follows: It is the dominant financial power of the country which harbors it. It is entirely private-owned, although it seeks to give the appearance of a governmental institution. It has the right to print and issue money, the traditional prerogative of monarchs. It is set up to provide financing for wars. It functions as a money monopoly having total power over all the money and credit of the people. "
-Eustace Mullins





Another Conspiracy Theory? “They vs. We” –

If This Doesn't Open Your Eyes, Nothing Will!

Image result for mass culture


by Anonymous





Secrets of the Federal Reserve: U.S. Economy, Finance and Wealth




The Federal Reserve Act, which began the Fed, was a hotly debated issue in its own right.
Some economists, such as John Taylor, have asserted that the Fed was responsible, or at least partially responsible, for the United States housing bubble which occurred prior to the 2007 recession. They claim that the Fed kept interest rates too low following the 2001 recession, The housing bubble then led to the credit crunch. Then-Chairman Alan Greenspan disputes this interpretation. He points out that the Fed's control over the long-term interest rates critics have in mind is only indirect. The Fed did raise the short term interest rate over which it has control (i.e. the federal funds rate), but the long term interest rate (which usually follows the former) did not increase.
The Federal Reserve's role as a supervisor and regulator has been criticized as being ineffective. Former U.S. Senator Chris Dodd, then-chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, remarked about the Fed's role in the present economic crisis, "We saw over the last number of years when they took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure."
In the 2010 midterm elections, the Tea Party movement, comprising conservatives, made the Federal Reserve a major point of attack; it was picked up by Republican candidates across the country. In Utah, GOP Senate candidate Mike Lee accused the Fed of trying to "monetize the debt" by printing money to buy government bonds. Fed officials have hotly denied that. GOP Senate candidate Ken Buck in Colorado said Congress should be "shining a light on the Federal Reserve" because it is too cozy with private interests. GOP Senate candidate Rand Paul in Kentucky, whose father Congressman Ron Paul has long attacked the Fed, argues that the Fed is hurting the economy by lowering the dollar and by its easy money policies that cause booms and busts.
One criticism of the Fed, typified by the non-mainstream Austrian School, is that the Federal Reserve's control of interest rates is an unnecessary and counterproductive interference in the economy.
The individual Federal Reserve Banks "are the operating arms of the central banking system, and they combine both public and private elements in their makeup and organization." Each bank has a nine member board of directors: three elected by the commercial banks in the Bank's region, and six chosen—three each by the member banks and the Board of Governors--"to represent the public with due consideration to the interests of agriculture, commerce, industry, services, labor and consumers." These regional banks are in turn controlled by the Federal Reserve Board, whose members are appointed by the President of the United States.
Another objection is the Fed's lack of transparency. In particular, many believe that the public has a right to know what goes on in the Federal Open Market Committee (FOMC) meetings.





Want to Stop Terrorism? Get out of the Middle East



by Dr Geoff Davies


The tragic loss of innocent lives to terrorist acts will not stop until we admit to the folly of current policies.





Without Glass-Steagall America Will Fail



by Paul Craig Roberts

For 66 years the Glass-Steagall act reduced the risks in the banking system. Eight years after the act was repealed, the banking system blew up threatening the international economy. US taxpayers were forced to come up with $750 billion dollars, a sum much larger than the Pentagon’s budget, in order to bail out the banks. This huge sum was insufficient to do the job. The Federal Reserve had to step in and expand its balance sheet by $4 trillion in order to protect the solvency of banks declared “too big to fail.”





Comey Hearing: Little New, More Doubt About 'RussiaGate'



Journalist, best-selling author Max Blumenthal and former FBI special agent Coleen Rowley say that while former FBI Director James Comey's testimony offered almost nothing new, that won't slow the fixation on Trump's alleged Russia ties, not his actual policies.







Corporate Democrats Persecute Whistleblowers - RAI with Norman Solomon



(part 4)


On Reality Asserts Itself, Norman Solomon of the Bernie Delegates Network tells Paul Jay that when it comes to defending the deep state, there's really no difference between the two parties





Progressive Resistance to Trump Must Also Challenge Corporate Democrats

Image result for obama and clinton laughing


At the 2017 People's Summit, activists Josh Fox, Erika Andiola, Linda Sarsour-and Jim Hightower tell The Real News the resistance must also challenge the oligarchy within the Democratic party





Why Did the Union Movement Split Over Supporting Bernie Sanders?



Larry Cohen, Board Chair of Our Revolution and former President of CWA, and Paul Jay discuss whether the big unions that endorsed Clinton have learned any lessons from the 2016 Trump victory





Hung Parliament a Stunning Victory for Corbyn's Labour Party in UK Elections



Election produces a breakthrough for left socialist Jeremy Corbyn, something only weeks ago was considered impossible - with Thomas Barlow and Kam Sandhu of Real Media and Aaron Bastani of Novara Media





What BBC won't tell you about Brexit:

Decline of Britain since 1973

Why leave EU?


with Tony Gosling






Amazing Interview on Brexit & E.U


with John Pilger






What can the Left Learn from Corbyn's Stunning Election Performance?



Former Sanders Campaign digital organizer Claire Sandberg speaks to the Real News after spending the past month working in the UK to defeat Theresa May






How Far Will US & Saudis Go to Remake the Middle East?




Junaid Ahmad of the Center for Global Dialogue says the U.S.-backed Gulf campaign against Qatar is part of a broader strategy to crush the remnants of the Arab Spring and spark a confrontation with Iran.





The Crisis in Qatar




Yet another clumsy attempt by the Three Rogue States to weaken Iran

by The Saker


We will probably never find out what truly was discussed between Trump, the Saudis and the Israelis, but there is little doubt that the recent Saudi move against Qatar is the direct results of these negotiations. How do I know that? Because Trump himself said so! As I mentioned in a recent column, Trump’s catastrophic submission to the Neocons and their policies have left him stuck with the KSA and Israel, another two rogue states whose power and, frankly, mental sanity, are

dwindling away by the minute.





Top Climate Scientist, Journalist & Activists Blast Trump's Withdrawal from Paris Accord

Climate roundtable 3






FromRichard Greeman
Sent: Friday, 9 June, 2017
SubjectLes Législatives vues de loin



Chers ami/es francophones,


A la demande de quelques lecteurs en France, je me permets de vous envoyer la traduction française d’un article sur les Législatives françaises que je venais d’envoyer (en anglais) aux Etats-Unis. Il s’agissait d’initier mes camarades ‘anglo-saxons’ aux complexités de la politique française – si toutefois j’y comprends quelque chose (!) Mais un regard d’ailleurs est parfois utile pour mieux comprendre sa propre culture politique, comme j’ai moi-même compris en tant qu’étudiant américain à Paris en 1959.



Montpellier, 8 juin 2017


La bonne nouvelle du mois de mai ici c’est que les deux tiers des électeurs français ont rejeté Marine Le Pen au second tour de l’élection présidentielle. « Au moins les Français ne sont pas si cons que ça ! » ont été les premiers mots à sortir de la douce bouche de ma compagne provençale Elyane quand la radio a annoncé la défaite de Madame Le Pen. Comme a titré le site satirique américain Borowitz Report : « Les Français conservent de manière agaçante leur droit à proclamer leur supériorité intellectuelle sur les Américains ». Au-delà de cette victoire morale, les pauvres Français ont très peu de raisons de se réjouir.


Car la mauvaise nouvelle du mois de mai c’est que la France a élu Emmanuel Macron, un technocrate efficace qui incarne sciemment le besoin du capital français d’éliminer « l’exception française » et de baisser les salaires, droits et prestations sociales des Français pour les aligner avec ceux de l’Union Européenne (qui comptent la Roumanie et la Bulgarie dans la « moyenne »).


Face à l’agenda de lutte des classes de Macron – exprimé de manière calme et raisonnable, et délibérément transparent – il devrait être évident que les Français d’en bas ont besoin d’une gauche unie rassemblant partis, syndicats, mouvements sociaux et associations locales pour s’y opposer – aujourd’hui pour les élections législatives et demain dans la rue. On se souvient qu’une telle coalition puissante émergeant de la base s’est unie spontanément durant le « chaud » été 2016 contre la loi travail favorable aux entreprises de Macron/Hollande. Elle a mené à des grèves, blocages et à la naissance de « Nuit Debout » et de ses débats citoyens nocturnes.



La gauche divisée.


Hélas, autre mauvaise nouvelle : la gauche française est aujourd’hui totalement divisée, éclatée comme jamais. Comme je l’écrivais le mois dernier après le 1er mai, les syndicats n’ont même pas été capables de s’entendre pour défiler ensemble. http://divergences.be/spip.php?article3274 Ce dimanche 11 juin, les électeurs français se rendent aux urnes pour le premier tour des élections législatives. Elections qui détermineront si le président Macron bénéficiera d’une majorité parlementaire grâce à laquelle il pourra gouverner sans opposition, et les partis d’opposition semblent désespérément divisés.


Je regardais la semaine dernière un candidat du Parti Communiste, jeune et apparrement idéaliste, fondre pratiquement en larmes lors d’une table ronde organisée par Mediapart alors qu’il décrivait comment au moins quatre candidats de partis de gauche s’affrontaient pour le premier tour dans sa populaire circonscription parisienne. Ce candidat communiste s’attristait que, avec son parti, il avait soutenu de toutes ses forces la coalition de Jean-Luc Mélenchon, les Insoumis, pour l’élection présidentielle et, désormais, Mélenchon investissait pour les législatives un candidat des Insoumis pour l’affronter dans sa propre circonscription. Un coup de poignard dans le dos fratricide ! Pourquoi ?


Si je comprends bien, historiquement, dans les systèmes multipartites, les partis de gauche négocient des alliances et coalitions afin de désigner un candidat unique, a priori fort, dans chaque circonscription pour avoir une chance de gagner. Chaque parti qui forme l’alliance se voit accorder un certain nombre de sièges parlementaires potentiels en fonction de sa taille – sièges sujets à un intense marchandage politique. Mélenchon et les Communistes ont négocié le mois dernier mais les discussions ont été apparemment vite abandonnées. Et ce malgré le fait que Mélenchon ait auparavant dirigé le Front de Gauche, une coalition rassemblant les Communistes et son propre Parti de Gauche (né de sa scission de gauche avec les Socialistes en 2008).


Comme trop souvent dans la politique des partis, le besoin de contrôle éclipse celui d’objectif. Les Communistes, encore présents à l’Assemblée Nationale et dans de nombreuses circonscriptions, veulent protéger leur territoire. Mélenchon veut dominer la gauche à l’aide de son mouvement des Insoumis.


La stratégie de Mélenchon, basée sur le poids des 20% d’électeurs qui ont voté pour lui à la présidentielle, est apparemment de présenter des candidats dans le plus de circonscriptions possibles dans le but d’obtenir une (peu probable) majorité parlementaire. Ceci obligerait Macron de nommer Mélenchon Premier Ministre (un arrangement connu sous le nom de « cohabitation ») et de partager le pouvoir. Les candidats Insoumis qui obtiendraient 20% des votes dans l’élection de dimanche seraient théoriquement au second tour dans un contexte où la droite est également éclatée. Aux côtés des « nouvelles têtes » personnellement choisies par Macron pour représenter En Marche, on retrouve les partis conservateurs traditionnels et, bien sûr, le Front National, parti d’extrême droite proto fasciste, qui a obtenu un tiers des votes à l’élection présidentielle de mai.  


Selon la stratégie de Mélenchon, les candidats Insoumis pourraient donc mathématiquement battre les Macronistes et Lepénistes et se retrouver dans la majorité, avec Mélenchon comme Premier Ministre. Invraisemblables, mais comme le prouve des résultats d’hier en Grand Bretagne, à cette époque d’instabilité politique, les élections sont imprévisibles. Côté passif de cette stragégie, plus les représentants de la gauche sont nombreux, plus grande est la chance de voir se répéter la présidentielle : En Marche affrontant le Front National au second tour, conférant à Macron une large majorité et marginalisant la gauche pour les cinq prochaines années. Ce serait la tragique conséquence d’une désunion de la gauche basée sur des guerres de territoire et une politique des partis où le contrôle l’emporte sur l’objectif.


En revanche, le groupe des Insoumis de Mélenchon, même s’il est minoritaire, pourrait émerger comme organisation hégémonique de la gauche pour les cinq prochaines années, très bien placée pour les prochaines élections de 2022. Il ne reste guère de compétition. Même si le Parti Communiste a toujours des élus et maintient ses liens avec la CGT, son électorat s’est réduit et n’est guère plus important que celui du Nouveau parti Anticapitaliste (NPA) « Trotskyste » (dont certains membres ont rejoint le PC dans la coalition Ensemble, qui soutient Mélenchon).


Le Parti Socialiste aussi a régressé, s’étant lui-même disgracié alors qu’il était au pouvoir. Le président Hollande, avec seulement 4% des Français approuvant son action, ne s’est même pas risqué à se présenter aux primaires, une première historique pour un président sortant. L’aile droite du PS a suivi Macron en désertant le navire en perdition. Le candidat du PS à la présidentielle, le jeune gauchiste Hamon qui a remporté la primaire, a l’apparence d’une sincérité rafraîchissante et se présente comme un social-démocrate honnête.


Haman était attrayant pour les électeurs de gauche qui considéraient Mélenchon comme un dangereux démagogue et qui étaient suspicieux de son soutien apparent à l’annexion de la Crimée par Poutine et son flirt avec l’idée d’un Frexit. Depuis, selon le Monde diplômatique[1]la « Gauche » des médias (y compris des intellectuels comme Michel Onfray et Edwy Plenel) dénigrent en choeur Mélenchon suite à son refus de rejoindre leur front uni anti-fascist en faveur de Macron au deuxième tour des Présidentielles. Cette meute macronite met Mélenchon au même niveau que Le Pen, les renvoyant dos à dos comme de dangereux populistes. Quand même.


Il y a un autre point essentiel sur lequel je voulais insister, mais qui n’a pas sa place dans un article sur les élections: celui-ci : les Arabes et autres Africains résidant en France ne sont presque jamais mentionnés dans les médias ou dans le discours politique des candidats. Ce sont les éléphants au milieu du magasin de porcelaine que tout le monde ici fait prétend ne pas voir. Du point de vue d’un étranger, ils sont clairement victimes de discrimination et exclus de cette société. Ils n’existent pas politiquement (sauf dans la tête des racistes en tant que menace).

On n’a pas parlé des violences policières dans ces débats, non plus. La police française viole analement un jeune nommé “Théo” avec une matraque, mais il manque ici un mouvement “BlackLivesMatter.” Et sans parti politique ou mouvement réclamant la « liberté maintenant » pour ces minorités musulmanes historiques, les réactionnaires wahhabites ont inévitablement le champ libre pour recruter ces personnes désenchantées au service du terrorisme.


L’incapacité historique de la gauche française à confronter ce problème est une des causes historiques sous-jacentes de sa débâcle. En 1945 les partis communiste et socialiste ont soutenu l’impérialisme français en Indochine et la répression des Arabes et Berbères dans l’Algérie française. Ce sont les socialistes au pouvoir qui ont mené la guerre d’Algérie et les étudiants et intellectuels qui ont lancé le mouvement anti-guerre ici. Le manquement de la CGT au devoir de défendre les droits des travailleurs nord africains qui, comme les noirs à Détroit, occupaient les emplois pénibles et mal rémunérés dans les usines, a entrainé la division de la classe ouvrière française selon des critères raciaux. Il ne faut pas s’étonner qu’autant d’électeurs blancs de l’ancienne ceinture rouge des banlieues ouvrières autour de Paris, auparavant fermement communistes, aient rejoint le Front National. Mélenchon, dans son célèbre discours de Marseille, les a appellé à voter pour lui. Au moins, il les voit, ces invisibles.


Voilà pour la gauche !



Qui donc est Macron ?


Jeune et brillant diplômé des grandes écoles françaises (fondées par Napoléon pour diriger son empire), une carrière à succès dans la finance, Macron est calé sur presque tous les sujets et complètement confiant dans sa capacité et son droit à gouverner. Il s’est affiché en homme d’Etat la semaine dernière, fustigeant le retrait de Trump des accords de Paris sur le climat. S’exprimant dans un anglais à l’accent charmeur (une première pour un président français), sa conclusion, désormais connue de tous, a été : « Rendons sa grandeur à la planète ». Le gouvernement de Macron est composé de technocrates néolibéraux, la moitié d’entre eux sont des femmes. A l’inverse de la vieille garde politique, ses ministres sont plus jeunes, plus dynamiques, plus diversifiés – de nouvelles têtes politiques recrutées directement au sein de l’établissement économique, comme Macron lui-même. C’est un nouveau balai avide de faire le ménage, méfiez-vous. 


Macron le candidat n’a pas cherché à dissimuler son programme, au contraire. Il s’est engagé à retirer aux travailleurs français ce qu’il leur reste de droit du travail et de protection sociale en étendant davantage la Loi Travail en faveur des entreprises – « réforme » qu’il a aidé à imposer alors qu’il était ministre de l’Economie dans le gouvernement néolibéral de son prédécesseur, l’impopulaire socialiste Hollande. Cependant, même si Macron ne remporte pas la majorité au second tour des législatives du 18 juin, il s’est engagé à imposer ce programme néolibéral de lutte des classes par ordonnances. C’est ainsi que le gouvernement socialiste de Hollande a « passé » l’été dernier sa réforme du travail favorable aux employeurs après un très chaud printemps de grèves, blocages, manifestations massives et l’opposition massive de la part de nombreux parlementaires socialistes .


Macron a également promis une autre « réforme » anti travailleurs : la dégradation du merveilleux système de sécurité sociale français qui inclut les services de santé, le chômage, la retraite, le salaire minimum, les aides au logement et l’assistance aux pauvres. La Sécu, comme on la nomme, a été créée après la Seconde Guerre Mondiale par des organisations de travailleurs issus de la Résistance alors que le gouvernement de De Gaulle dépendait du soutien des communistes pour conserver le pouvoir et que les industrialistes français étaient tombés en disgrâce après leur vile collaboration avec les Nazis pendant l’Occupation. L’idée d’un « salaire social » – en plus du salaire – fut gravée dans la Constitution française d’après-guerre.


La Sécu est encore une institution nationale non étatique, auto-gouvernée, même si De Gaulle y avait placé des représentants des entreprises afin de la déstabiliser. Quant à l’assurance chômage, administrée par une commission bipartite de syndicats et d’employeurs, Macron propose d’en transférer les responsabilités à l’Etat, qui aurait le pouvoir budgétaire. L’impact de ces « réformes » sera de démanteler la semi autonome Sécu. Ces « réformes » sont censées rationaliser le système et réduire les dépenses, mais elles sont en réalité conçues pour progressivement réduire le filet de protection sociale qui a rendu « l’exception française » si populaire. Une sombre perspective pour les Français moyens et les amoureux de la qualité de vie française (pour plus de détails voir l’appendice : « Comment tuer la Sécurité Sociale ? »).


La semaine dernière, en faisant des recherches pour cet article, j’ai demandé à ma voisine, une jeune mère de famille ??, éduquée et issue d’une bonne famille locale, de m’expliquer les subtilités du système électoral français. Quand j’ai enfin réalisé qu’avec une gauche divisée, il restait très peu d’espoir pour la sécurité sociale et un droit du travail équitable, je lui ai demandé : «Mais que feront les français ? ». Elle m’a répondu «  Et bien nous descendrons dans la rue et les foutrons dehors. On est bons pour ça ! »


Puisque les vacances d’été sont le vrai Dieu vénéré des Français, cette lutte ne se produira pas avant septembre prochain. S’il se passe quoi que ce soit d’intéressant, je vous en informerai.  




Appendice : Comment tuer la Sécurité Sociale.


La proposition de Macron pour « réformer » la Sécu, une vache sacrée en France, est un plan diaboliquement intelligent pour exploiter un conflit opposant les deux classes les plus nombreuses et productives en France : la classe ouvrière organisée composée historiquement de travailleurs salariés majoritairement à gauche et les indépendants : un large groupe composé d’une petite bourgeoisie travailleuse d’artisans, de commerçants et de paysans, dont les organisations sont traditionnellement très à droite.


Macron propose de s’attaquer à un problème réel et longtemps négligé dans le système de protection sociale français à payeur unique : il n’est ni universel ni égalitaire. Les travailleurs indépendants ne sont pas couverts par l’assurance médicale de la Sécu et sont obligés de payer leurs cotisations à divers fonds pour obtenir des retraites et bénéfices sociaux inferieurs. En 1945, les paysans indépendants et commerçants qui s’étaient enrichis pendant la guerre ont voté pour ne pas rejoindre les salariés et leur système de santé à payeur unique et ont mis en place leurs propres fonds privés.



Mais leurs secteurs ont décliné et ils se sont faits avoir. Aujourd’hui certains indépendants sont même obligés de payer leurs cotisations en début d’année fiscale, avant même que leur entreprise n’ait démarré ! Naturellement, ils envient les salariés et sont hostiles aux syndicats, particulièrement envers les cheminots qui ont de biens meilleurs bénéfices. Cette petite bourgeoisie représente une part nombreuse, industrielle et hautement productive de la population française qui a longtemps été maltraitée par le gouvernement et ignorée par la gauche. Sa colère justifiée a été récupérée par l’extrême droite : le mouvement poujadiste dans les années 50 et le Front National aujourd’hui.


La solution évidente serait d’intégrer ces indépendants à la Sécu et de la rendre vraiment universelle. Autrement, de s’assurer que les cotisations et bénéfices des artisans soient comparables. En d’autres termes, de niveler par le haut. La solution de Macron : son gouvernement prend le contrôle et nivelle les bénéfices des différents groupes par le bas, au niveau du dénominateur commun le plus bas. L’institution qu’il propose pour succéder à la Sécu ne sera pas auto-suffisante et auto-gouvernée. Elle sera financée par le gouvernement via les finances publiques et son budget alloué baissera de façon prévisible d’année en année alors que Macron « rationnalise » et réduit les coûts sous prétexte de « rendre à la France sa compétitivité ». 


[1] Pierre Rimbert, « Un barrage peut en cacher un autre, » Monde DiplôJuin 2017 p. 28.





Is a National Progressive Broad Front Possible?




Charles Lenchner of People For Bernie and Paul Jay discuss the Peoples Summit and what comes next





From:  Alan Haber
Sent: Sunday, 11 June, 2017
Subject:  Sunday’s French Election


grim prospects.   




Sunday’s French Election


Richard Greeman
June 9, 2017
The Bullet


Macron is also pledged to another anti-worker ‘reform’: the downgrading of France's wonderful post-WWII Social Security system which includes healthcare, unemployment insurance, retirement, minimum survival income, housing subsidies and welfare for the poor.



, , 



The good news this May was that French voters rejected far-right Marine Le Pen by a two-to-one margin in the second round of the Presidential election. “At least the French are not schmucks as the Americans!” were the first words that passed the sweet lips of my Provençal partner Elyane when the radio announced Le Pen's defeat. As the headlined: “French Annoyingly Retain Right to Claim Intellectual Superiority over Americans.” Aside from this moral victory, the French people have little to be happy about.

The bad news was that France ended up electing Emmanuel Macron, an efficient technocrat who consciously incarnates French capital's need to eliminate the ‘French exception’ and level the wages, rights and benefits of the French common people down to the average of the European Union (which includes Romania and Bulgaria).

Faced with Macron's calmly-worded, reasonable, deliberately transparent class war agenda, it should be obvious that France needs a united Left of parties, unions, social movements and local associations to oppose it – the June during the legislative elections and later in the streets. Such a powerful coalition from below came together spontaneously against Macron/Hollande's pro-business Labour Law during the “hot” Spring of 2016, which included strikes, blockades, occupations and all-night discussions. Where is it now?

The Divided Left

Alas, more bad news: the French Left today is totally divided, splintered as never before. After May Day, the labour unions couldn't even agree to march together. This Sunday, June 11, French voters will face the first round in the legislative elections to the 577 seat National Assembly. These elections will decide whether President Macron will have a legislative majority with which to govern unopposed, a distinct possibility with the opposition parties so hopelessly divided.

Last week I watched a young, idealistic Parti communiste français (PCF) candidate practically in tears at a Médiapart round-table as he told how at least four left parties were competing against each other in the first round in his popular Paris district. This Communist candidate was heartbroken because during the Presidential election, his Party had supported Jean-Luc Mélenchon's (Unbowed) coalition with all its strength, and now Mélenchon had sent an Insoumise candidate into his district to compete with him in the legislative election. Why?

Historically, in multi-party systems, Left parties negotiate alliances and coalitions so as to agree on a single candidate, presumably a strong one, in each local district so as to maximise the chance of winning nationally. Each party in the alliance gets assigned a certain number of prospective seats in the National Assembly in proportion to its size – subject to much haggling and horse-trading. Some negotiations between Mélenchon and the Communists were held last month, but apparently they broke down early. This, in spite of the fact that Mélenchon had previously headed La front de gauche, a coalition including the Communists and his own Parti de gauche (a 2008 left split from the Socialists). As so often happens in party politics, control trumped goal. The Communists still have representatives in the Chamber and control local offices in many districts, and wanted to protect their turf. Mélenchon wants to dominate the Left through his Insoumise movement.

Mélenchon's strategy is based on strength of the 20 per cent of the electorate that voted for him in the Presidential rounds, and is to run candidates in every possible district with the goal of winning an (unlikely) parliamentary majority. Under the Constitution of the Gaullist 5th French Republic, this would oblige President Macron to appoint Mélenchon Prime Minister (an arrangement known as “cohabitation”) and share power. In Sunday's first round Insoumise candidates who get 20 per cent of the votes would theoretically place into the second round in a field where the Right is also splintered. Along with Macron's handpicked “new faces” running for En Marche, there are also several traditional conservative parties and of course the far-right Front national that won a third of the votes in May's Presidential election.

In one version of Mélenchon's strategy, the Insoumise candidates could conceivably beat the Macronistas and the Le Penites and end up with a majority in the second round, automatically making him Prime Minister. But the more the Left field is crowded, the greater the chance of a repeat of the Presidential voting: Macron's En Marche faces off against the Front national in the second round, giving Macron an easy majority and marginalizing the Left for the next five years. This would be the tragic consequence of Left disunity based on turf wars and the party politics of sustaining small groups.

In another view, even in the minority, Mélenchon's Insoumise would emerge as the hegemonic organization of the Left for the next five years, well-placed for the next elections in 2022. There is not much competition left. The electorate of PCF, despite its hold on office and ties to the CGT labour union, has shrunk to not much bigger than the ‘Trotskyist’ Nouveau parti anti-capitaliste (part of which has joined the PCF in a coalition called Ensemble).

The Parti socialiste has also shrunk, having disgraced itself in power. President Hollande, with only 4 per cent approval rating, didn't even dare run in the primaries, an historical first for an outgoing president. The Socialists’ right-wing has followed Macron in deserting the sinking ship. The SP's Presidential candidate, the young leftist Benoit Hamon who won the presidential primary, seems a refreshingly sincere and honest social-democrat. He is attractive to voters who consider Mélenchon a dangerous demagogue and are suspicious of his apparent support of Putin's annexation of the Crimea and his flirtation with the idea of a ‘Frexit’. A divided Left, indeed!


A brilliant young graduate of France's elite state graduate schools (founded by Napoleon to run his Empire) with a successful career in banking and public administration, Emmanuel Macron is well read on nearly every subject and totally confident of his competence and right to rule. He coolly showed himself a statesman last week castigating Trump's withdrawal from the Paris Climate Accords. Speaking in elegant, charmingly accented English (a first for a French President), he famously concluded: “Make our planet great again.” Macron's government is made of neoliberal technocrats, half of them women. Unlike the usual political hacks, his ministers are younger, more dynamic, more diverse – fresh political faces recruited directly out of the economic establishment like Macron himself. This is a new broom eager to sweep clean, so watch out.

As a candidate Macron had made his program absolutely clear. He is pledged to strip French workers of what remains of their on-the-job rights and protections by further expanding the pro-business Labour Law – a “reform” he helped impose while Economics Minister in the neoliberal government of his predecessor, the unpopular Socialist Hollande. However, even if Macron does not win a majority on June 18 in the second round of the Legislatives, he is pledged to impose his neoliberal, class-war program by Decree. That's how Hollande's Socialist government ‘passed’ its pro-employer labour reform last summer after a very hot spring of strikes, blockades, mammoth demonstrations and opposition from many Socialists in the Chamber. (See my “The French Stand up.”)

Macron is also pledged to another anti-worker ‘reform’: the downgrading of France's wonderful post-WWII Social Security system which includes healthcare, unemployment insurance, retirement, minimum survival income, housing subsidies and welfare for the poor. The Sécu, as it is known, was created after WWII by workers’ organizations coming out of the Resistance, when the de Gaulle government depended on Communist support to stay in power and the French industrialists were in disgrace for their vile collaboration with the Nazis during the Occupation. The idea of the ‘social wage’ – in addition to the salary – was enshrined in France's post-war constitution.

The Sécu remained a self-governing non-state national institution even after de Gaulle placed business representatives on the board to undermine it. Today, the government votes on its budget. As for unemployment insurance, which is governed, by a bi-part commission of unions and employers, Macron would put the state in charge, with budgetary powers. The impact of these “reforms” will be to break up the semi-autonmous Sécu and turn its functions over to the state. These “reforms” will allegedly rationalize the system and reduce costs, but in fact they are designed to progressively shrink the social safety net that has made ‘the French exception’ so popular. A grim prospect for average French people and lovers of France's quality of life.

Last week, in researching for this article, I asked my neighbour, a poised, well-educated young mother from a good local family, to explain the intricacies of the French electoral system to me. When the truth finally dawned on me that with the Left divided there is very little hope left for Social Security and fair labour laws, I blurted out: “Then what will the French people do?” She calmly replied: “We go down into the streets and throw the bastards out! We're good at that.” Since Summer Vacation is the true God worshipped by the French, this battle may not take place until next September.


Macron's proposal to ‘reform’ the Sécu is a devilishly clever plan to exploit a conflict between France's two most numerous and productive classes: the organized working class of historically left-wing waged and salaried workers and the independents: a large hard-working, petty-bourgeoisie of artisans, shop keepers, and farmers, whose organizations have historically leaned to the far-right.

Macron proposes to attack a very real and long neglected problem in the French ‘single-payer’ social welfare system: it is not universal or equal. Independent workers are not covered by the Sécu medical insurance and are forced to pay their dues into a variety of different funds in return for inferior retirements and benefits. In 1945, the independent farmers and shop-keepers who had made money during the war voted not to join the salaried workers in the single-payer health insurance system and set up their own private funds.

When their sector declined, they ended up screwed. Today some independents are even forced to pay into their funds at the beginning of the fiscal year, before they even get their business off the ground! They are jealous of salaried workers and hostile to unions, especially the railroad workers who get extra benefits. This petite bourgeoisie is a numerous, industrious and highly productive part of the French population. It has often been mistreated by the government and neglected by the Left. Its political anger has often been channeled into the far right – the Poujade movement in the 1950s and today Le Pens’ Front national.

The obvious solution would be to try to pull all these independents into the Sécu and make it truly universal; or, alternately, to insure that the dues and benefits of artisans are comparable. In other words, leveling up the program. Macron's solution seems to be that his government takes over and levels down the benefits of the different groups to the lowest common denominator. His proposed successor institutions to the Sécu will not be self-sustaining or self-governing. They will be funded by the government out of the general fund and the amount available will predictably decline from year to year as Macron ‘rationalizes’ and reduces costs in the name of ‘making France competitive again’. •


Richard Greeman has been active since 1957 in civil rights, anti-war, anti-nuke, environmental and labour struggles in the U.S., Latin America, France (where he has been a longtime resident) and Russia (where he helped found the Praxis Research and Education Center in 1997). He maintains a blog at richardgreeman.org.





Frompierre saccoman
Sent: Tuesday, 13 June, 2017
Subjectdébat sur les soviets en Russie 1917


Ainsi, nos assistons à un petit "miracle" à la Macron : avec 15,39 % des inscrits, un parti "nouveau" va

gouverner avec sans doute les 3/4 des députés....Vive la démocratie !

Les commentateurs, les journalistes, les grands dirigeants de ce monde applaudissent  et s'extasient

devant notre nouveau président.

Tout cela pour cacher la crise majeure de la V éme république, le rejet  par le pays profond des

partis et institutions d'un système né quand même d'un coup d'Etat en 1958....

Tout ce beau monde attends les "réformes" qui vont "moderniser" la France : en finir avec le programme

du CNR de 1945, en finir avec le code du travail, faciliter la "mobilité"des exploités....

Rappelons les textes de Karl Marx de 1848 contre le "crétinisme parlementaire", rappelons et citons

Lénine dans "L'Etat et la Révolution" en 1917 :

" Décider périodiquement, pour un certain nombre d'années, quel membre de la classe dirigeante 

foulera aux pieds, écrasera le peuple au Parlement, telle est l'essence véritable du parlementarisme


Un siècle après la révolution russe de 1917, on peut se poser la question :pourquoi une minorité de possédants, 
grâce à son fric, ses banques, ses grandes entreprises multi-nationales, sa presse aux ordre, peut encore 
imposer son système à 80% de la population composés de travailleurs, de salariés, d'exploités qui produisent
et créent la véritable richesse. Comment cette caste mène au désastre économique et écologique (destruction
des emplois, des usines, de la terre,de l'eau, de l'air ) tout en jouissant de privilèges énormes, de prébendes, de retraites dorées,
des revenus des actions ....
Comment les ouvriers ,les paysans et les soldats russes ont mis à bas le régime tsariste et le soi disant régime
démocratique qui lui a succédé ?
Les Conseils (soviets) ont été un système qui répondait aux aspirations des exploités et des rejetés.
Nés en 1905, lors de la première révolution,écrasé par la police tsariste en décembre 1905, les conseils renaissent
en février 1917, se développent sur tout le territoire, s'imposent comme un double pouvoir de plus en plus puisant
jusqu'à la révolution d'octobre.
La guerre  civile, les millions de victimes de l'intervention impérialiste qui arme les "blancs", la destruction de toutes
les infrastructures économique et industrielles entrainent une crise sévère, avec l'insurrection de Kronstadt en 1921
suivie par la mise en sommeil des soviets.

Nous discuterons de tout cela le

Jeudi 22 juin à 19 heures au STEP ADAEP. 


Débat introduit par Pierre Saccoman

Apporter de quoi boire et manger....





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