Tag Archives: Economics

Economics, Finance, U.S. Congress, U.S. Politics

New Age Heroes: Financial Opportunists, Lobbyists, and Rogue Crusaders………

Shuwaikh-school1 RattleSnakeRidge Sharqeya-Baneen-15

KuwaitCox2

“Haym Salomon funded not only the Revolutionary War but several leading politicians, yet passed on claiming huge debts. On January 6, 1785, Haym Salomon, the Polish-born immigrant to colonial New York who is revered in American history as the financier of the Revolutionary War, died. He was all of 44 years old — and he was bankrupt………….”

They have a picture of a 10 cent U.S. stamp from 1975 calling Haym (Haim) Salomon a “financial hero”. It says somewhere that he ran a “brokerage business” as well, but apparently he had nothing to do with Salomon Brothers firm that came later. Mr. Salomon died bankrupt, but only because he lived in a different era.

Speaking of financial heroes, I fully expect the new U.S. Congress (both houses) to start creating new “financial” heroes. I expect some top lobbyists to be named, as well as CEOs of Citigroup and JP Morgan Chase and Mr. Blankfein of Goldman Sachs. For their role in the crash of 2008 that required government funds to bail all these geniuses out. The Koch Brothers and Sheldon Adelson of Las Vegas gambling, financial godfather of the New New Republican Party, will surely be on the list. Not to ignore some other likely candidates: famous anti-tax, anti-affordable universal healthcare, anti-affordable higher education, and anti-welfare ‘crusaders’.

The New New Democrats, led by you-know-who-she-is, should they win the White House in 2016, will likely not only follow the same path, but revert to their old habit of appointing top bankers as top financial officers of the U.S. government.
As for myself, I would suggest an economist like Paul Krugman or even Robert Reich for treasury secretary. But that would limit the New New Democrat president to one term. Unless she or he is impeached and convicted first by an uncharacteristically outraged Congress.

Cheers
Mohammed Haider Ghuloum                          Follow ArabiaDeserta on Twitter

[email protected]

Economics, GCC, OPEC, Saudi Arabia

Crude Oil Price as a Two-Edged Sword for the GCC……….

Shuwaikh-school1 RattleSnakeRidge Sharqeya-Baneen-15

KuwaitCox2     ChristmasPeanuts

Have Yourself a Merry Little——-> Kenny G. Holiday 

“Additionally, the Saudis get a chance to deal Russia, Bashar al-Assad’s stalwart ally, a bloody nose, by driving down the cost of oil and hurting Moscow’s hydrocarbon revenue streams, which prop up a shaky domestic economy. As oil prices have fallen so has the value of Russia’s Rouble, plummeting 35% since June. Killing two birds with one stone would seem a smart policy, especially since it is highly unlikely to result in the sort of military escalation the Saudis wish to avoid. How long can the Saudis keep this game up? Realistically a few months, but if the price of oil keeps falling the Saudis may have to rethink their strategy……………”

Oil prices normally rise during times of economic growth in the USA and especially during periods of geopolitical turmoil as is happening in Eastern Europe and across the Middle East and Libya. But oil prices have been going down for some time now in spite of speeding US growth and turmoil in producing regions.

Some have predicted that the oil price decline may come to bite those who engineered them for political reasons, such as Saudi Arabia and the United Arab Emirates. It was also argued that the Persian Gulf Arab producers have huge sovereign funds that can cushion the domestic economic impact.
Fine and dandy, but we must consider the impact on the sovereign funds and on local GCC Gulf financial markets and on the public finances: (a) The Gulf sovereign funds are invested mainly in the world markets and are losing value as American and other markets decline with the price of crude; (b) Domestic GCC markets are now also tanking, from Saudi Arabia to Dubai, which will bring political pressure on the princes, shaikhs and potentates to support the stock markets. Many middle class families in the GCC are suffering huge market losses, estimated in many billions of dollars. In the Gulf, princes and potentates from Abu Dhabi to Riyadh rely on patronage as well as a ruthless mercenary security apparatus to keep absolute political power. Now there will be clamor for some more patronage to help market investors: you want to keep absolute political power, you gotta pay for it (from the people’s money, of course). Which in turn will create more pressure on the domestic budgets and on the value of sovereign funds.

In addition, now the oil price decline is beginning to be seen as a negative for the US economy. Odd, after decades of blaming the rise of the same variable for slow growth.
Given the shale fuel industry and the huge investments in it, as well as the importance of the major oil companies and their credit standing, the US economy now shares one thing with the Iranian and Russian economies. Some market ‘analysts’ now stress that the U.S. financial markets need oil prices to move up for the markets to rebound from recent losses. But does Main Street America need high oil prices back? That is unlikely.

Interesting: the USA, Iran, and Russia all ‘need’ higher oil and gas prices now. 
Cheers
Mohammed Haider Ghuloum                          Follow ArabiaDeserta on Twitter

[email protected]

Culture, Education, Finance, Germany, USA

Deutschland Uber Alles in Education? Wirklich, You Betcha………

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

Follow ArabiaDeserta on Twitter   KuwaitCox2

     “You know, greed is good………” Ivan Boesky, Gordon Gecko, Rick          Santelli, et al

“American students that want to attend college, but are unable to find the finances to do so, may want to look at schools in Germany as tuition fees have been eliminated country-wide after Lower Saxony became the last state to get on board. Germany universities were free in the past, but a 2006 ruling by the country’s Constitutional Court ruled that limited fees did not conflict with the Germany’s commitment to universal eduction. It didn’t take long for various states in Germany to see how unpopular the new fees were, and slowly each state dropped them, leaving Lower Saxony as the final holdout. Gabrielle Heinen-Kjajic, the minister for science and culture in Lower Saxony, said in a statement that the decision was made “because we do not want higher education which depends on the wealth of the parents.”………..”

Germany is becoming more and more like America was in the period from the 1950s through the 1970s, before the American counter-revolution that started in the 1980s against open higher education. Germany now seems to be leading the way in higher education. The target in Germany is equality and building up a well-educated society, true social mobility through an educated labor force. Educated voters are not seen as a potential enemy by any major party, not openly anyway.

That free universal education used to be the target in America as well, before the banking industry took over higher education over the past three decades. But first, in order to do that, the banking industry had to take over the U.S. Congress, both houses and both parties, which they have done admirably. And they had to get university administrators to cooperate, which they have done. Now the tuition goal is ‘whatever the market bears’, unless one is an athlete.

Change you can believe in? Yes sir, that is the small change you get after paying the tuition and the student loan payments.

Cheers
Mohammed Haider Ghuloum

[email protected]

Arab Revolutions, Caliphate, Economics, GCC, Iran, Iraq, US Foreign Policy, Wahhabi

Power of Economic Assumption: How to Defeat ISIS with Gulf Princes and Iranian Mullahs……..

_9OJik4N_normal Sharqeya-Baneen-15    DennyCreek2

Follow ArabiaDeserta on Twitter   KuwaitCox2

“Iran’s supreme leader said on Monday he had personally rejected an offer from the United States for talks to fight Islamic State, an apparent blow to Washington’s efforts to build a military coalition to fight militants in both Iraq and Syria. World powers meeting in Paris on Monday gave public backing to military action to fight Islamic State fighters in Iraq. France sent jets on a reconnaissance mission to Iraq, a step towards becoming the first ally to join the U.S.-led air campaign there. But Iran, the principal ally of Islamic State’s main foes in both Iraq and Syria, was not invited to the Paris meeting…………..”

Mr. Kerry said only last weekend that having Iran attend the Paris meeting on confronting the murderous Caliphate of ISIS was “inappropriate”. Iranian officials were reported in the media as wanting to attend, and the French seemed amenable. Mr. Kerry vetoed Iranian attendance in Paris last week mainly because two of the main sources and financers of ISIS and other Wahhabi terrorist groups, Saudi Arabia and the United Arab Emirates, reportedly objected and exercised their monetary veto.

Now Mr. Kerry wants to have Iran participate in the deliberations, but “unofficially”. He wants them to be part of the anti-Caliphate dialog, but not in the open, just behind the scenes. That is mainly because he tested the Arab waters in Paris and realized that the current Middle East equivalent of Rhett Butler was also needed for this new version of GWTW. To use a crude and possibly immoral but nevertheless succinct example: he is sort of like seeking the Saudi princes and Emirati shaikhs as legal (but polygamous) wives and courting the Iranian mullahs only as potential mistresses. As usual it will be American resources and pilots (and others) bearing the brunt, not Europeans who are the nearest target of the terrorists. Maybe with some Arab monetary support. Maybe.

So, what to do? This is the easy part: as I learned in economics, we use the power of ‘assumptions’. We make assumptions that fit our conditions and our needs: in this case we make assumptions about the Syrian opposition groups. Many in the U.S. administrations are already making certain correct assumptions. The mythical moderate Syrian opposition, those that live on the Turkish border or in Rive Gauche apartments and Persian Gulf five-star hotels. They, with the cooperation of the absolute Wahhabi tribal princes, can do the job and bring democracy and cultural tolerance to a once-very-tolerant Syria. Or, we can start by assuming that for now.
Cheers
Mohammed Haider Ghuloum

Economics, USA

A New Dickensian American Century?………..

_9OJik4N_normal Sharqeya-Baneen-15
Follow ArabiaDeserta on Twitter


“From early in its history, the United States rested on the notion of a large class of small proprietors and owners. “The small landholders,” Jefferson wrote to his fellow Virginian James Madison, “are the most precious part of a state.” To both Jefferson and Madison, both the widespread dispersion of property and limits on its concentration—“the possession of different degrees and kinds of property”—were necessary in a functioning republic. Jefferson, admitting that the “equal division of property” was “impractical,” also believed “the consequences of this enormous inequality producing so much misery to the bulk of mankind” that “legislators cannot invent too many devices for subdividing property.” ………. For this group, the rest of society, he suggested, exists only “as images and stereotypes.” Progressive theorists, such as Ruy Texerira, have suggested that, in the evolving class structure, the traditional middle and working class is of little importance compared to the rise of a mass “upper middle class” consisting largely of professionals, tech workers, academics, and high-end government bureaucrats……………This trend has continued even in the recovery. Between 2010 and 2012, the middle sixty percent of households, did worse not only than the wealthy, but even the poorest quintile between 2010 and 2012. In the years of the recovery from the Great Recession the middle quintiles income dropped by 1.2 percent while those of the top five percent grew by over five percent.………..….”

Cheers

Mohammed Haider Ghuloum

[email protected]

Arab Counterrevoltion, Economics, Egypt, GCC

Will Tony Blair get The Prize for Advising Sisi on the Economics of Counter-Revolution?……..

Follow ArabiaDeserta on Twitter

“Tony Blair has agreed to advise the Egyptian president, Abdel Fattah el-Sisi, who came to power in a military coup last year, as part of a programme funded by the United Arab Emirates that has promised to deliver huge “business opportunities” to those involved, the Guardian has learned. The former prime minister, now Middle East peace envoy, who supported the coup against Egypt’s elected president Mohamed Morsi, is to give Sisi advice on “economic reform” in collaboration with a UAE-financed taskforce in Cairo – a decision criticised by one former ally. The UAE taskforce is being run by the management consultancy Strategy&, formerly Booz and Co, now part of PricewaterhouseCoopers, to attract investment into Egypt’s crisis-ridden economy at a forthcoming Egypt donors’ conference sponsored by the oil-rich UAE, Kuwait and Saudi Arabia…………..”

Mr. Blair, the Old New Labor Neoconservative leader, has a knack for attracting dictatorial and oligarchy talent. Not only does he find them, but he can also press the right buttons on them. You can say if you were rude and crude, which I am not, that he knows how to find their G-spot. From the Persian Gulf to Central Asia and North Africa, he has been advising them and lobbying on their behalf. Remember his famous squashing of British Serious Frauds Office (SFO) investigation into the $2 billion bribe paid by BAE Systems to Saudi Prince Bandar for a weapons deal? Remember his dealings with the Lat Colonel Gaddafi on behalf of J P Morgan? All these and more were IOUs that he collected from the potentates.

All that and his saying the right words, his incessant warmongering in the Middle East, from Syria through to Iran and beyond. The kind of talk that makes the Wahhabi princes and their Salafi allies salivate at the prospect of American boys and girls going to war on their behalf.

Well, like yet another bad dream he is back in the Middle East, after years of pretending to be looking into the Palestinian-Israeli issue but achieving nothing. He has been selected by the Saudi and Emirati and other Gulf overlords of Egypt to advise the newest strongman of Egypt on the ‘economy’. Who knows, maybe Tony will get a Nobel Prize in Economics: anyone who can solve or reduce or ease Egypt’s economic problems would deserve the prize. And if he doesn’t, there is always the King Whatishisface and Shaikh Whatishisass prize as consolation.

And you know what I think? I think we will see riots back on the streets of Cairo, once the people realize that they have been robbed of ll what they thought they had gained in 2011. That they have been led by their political leaders and opinion-makers on a circle back to where they started in January 2011. That what they experienced has not been a revolution but a cruel hoax.

(FYI: Here is what I tweeted when I read about it last night: ” Oh sh-t, oh sh-t, oh sh-t…………. hired to advise Generalisimo Al on economic matters. Poor Egypt………” )

 

Cheers

Mohammed Haider Ghuloum

[email protected]