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2017: The Ukrainian economy’s dismal year

Ukrainian economy continued to weaken as inflation rose and living standards fell

Alexander Mercouris

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In an article which I wrote about Ukraine on 13th December 2017 and in which I spoke of Ukraine’s continuing downward spiral I speculated that the situation might be even worse than it appeared since conditions in Ukraine meant that Ukraine’s already dismal statistics could no longer be relied upon.

This is of course always assuming that the statistics are being collected and collated properly, which in countries such as Russia was in the 1990s and such as Ukraine is now they never are.

That Ukraine’s statistics are not reliable has in fact been confirmed by studies of its population statistics, which show massive distortions intended to conceal how bad the country’s demographic situation has become.  There is no reason to suppose that the same distortions do not affect the economic data.

This speculation has now been given weight by an article carried by the official Russian news agency TASS, which all but says that Ukraine’s already terrible inflation statistics are unreliable and are being manipulated

The year 2017 saw two basic tendencies in Ukraine, namely an economic slowdown (to two percent from 2.3% in 2016) and growing inflation. Thus, inflation stood at 14.4%, whereas the state budget had a figure of 8.1%

However, actual inflation, according to economics expert Viktor Skrashevsky, was likely to be still higher. “Most likely, it was 17-18%,” he said, adding that official statistics underreported inflation rates “by means of manipulating calculation methods” as they had been updated exactly in 2017.

According to Skrashevsky, the government is deliberately deceiving people by saying that living standards will be raised in 2018 as the state budget for 2018 provides for no indexation of pension allowances while price growth seems to be inevitable. “Social standards are showing no upward tendencies while inflation is skyrocketing. The government is not taking proper measures,” he added.

Another gap between the government’s statements and reality is situation with the living wage, said Yuri Gavrilechko, an expert from the Public Security Foundation. Whereas nominal living wage from January 1 is 3,723 hryvnias (132 US dollars under the current exchange rate), minus taxes people will actually have not more than 3,000 hryvnias (106.4 US dollars). “Inflation will be some 18%, however it is not ruled out that the government may underreport these figures through manipulation,” he said.
The claimed growth rate of 2% for an economy like Ukraine’s which experienced such a savage contraction in 2014-2015 is already extremely disappointing.
For those who doubt this bleak picture, I would point out that one of Ukraine’s staunchest supporters, the Swedish economist Anders Aslund in a recent article published by the Atlantic Council has said essentially the same thing
A year ago, I expressed my hope that “2017 should be the year when Ukraine’s economy takes off.” It should have been, but it was not. In the last quarter of 2016, Ukraine’s GDP grew by 4.8 percent. Alas, in each of the ensuing four quarters, the growth rate declined and GDP grew by only 2 percent in 2017, slightly less than the cautious official projections. Ukraine is actually growing more slowly than the EU economy, and certainly slower than the global economy. Therefore, it is difficult to be optimistic about Ukraine’s economic growth in 2018.
After a combined GDP fall of 17 percent in 2014-15, which was caused by Russian aggression, a swift recovery to 6-7 percent growth should have been natural. Instead, Ukraine is competing with Moldova for the title of Europe’s poorest country. In 2007, Ukraine’s GDP per capita in current US dollars was 160 percent larger than Moldova’s. Now it is only 8 percent larger according to IMF statistics, and Moldova is growing by 4 percent a year.
If what the article by TASS says is correct and the rate of inflation in Ukraine is actually 17-18% not 14.4% then it is doubtful that Ukraine has even achieved the 2% GDP growth in 2017 which it is claiming.
The IMF describes GDP as “the measure of the monetary value of final goods and services – that is, those that are bought by the final user – produced in a country in a given period of time”.
Obtaining an accurate measure of prices and of price growth is therefore essential if GDP and GDP growth are to be measured properly.  If the inflation figures are badly wrong then the GDP figures will be also.
That in turn begs the question of whether there was actually any GDP growth at all in Ukraine last year.
As to that, with the reliability of the statistics now being questioned, I am in no position to say.
As for the reasons for Ukraine’s economic failure, here again is what Anders Aslund has to say
The worst part is that Ukraine’s economic shortcomings in 2017 were preventable. The two dominant factors that aggravated Ukraine’s economic performance in 2017 were the trade blockade and botched judicial reform. Last February, leading politicians in Samopomich (Self-Reliance) instigated a blockade against trade with the occupied territories in the Donbas, which disrupted heavy industry leading to stagnation of industrial production. This act alone probably cost Ukraine 2 percent of its GDP in the first half of the year.

At the same time, exports, investment, and consumption rose nicely, but then gross investment slumped from a healthy ratio of 24 percent of GDP in the second quarter to a miserable 16 percent of GDP in the third quarter. Domestic and foreign investors lost their rising confidence in Ukraine. Investors began to realize that the complex judicial reform that was underway would not cleanse the judicial system and thus reliable property rights would not materialize.

These tendencies only got worse later in the year. Businessmen often complained that the Prosecutor General’s Office and the Security Service of Ukraine (SBU) engage in aggressive corporate raiding. The only Ukrainian institution that really fights corruption, the National Anticorruption Bureau (NABU), came under heavy attack from the ruling coalition in parliament and the Prosecutor General’s Office for that very reason, further undermining the credibility of the rule of law in Ukraine.

On the subject of the economic blockade of the Donbass mounted by Maidan radicals last year, here is what I wrote about it at the time
Far right groups and people who the Ukrainian and Western media euphemistically call “activists” have initiated a blockade of coal imports from the Donbass, claiming that such imports are “treasonous”.  Since the Ukrainian energy system depends heavily on Donbass coal the result is to cause an energy emergency in Ukraine, risking another downward spiral in Ukraine’s economy.  The government however appears too weak to do anything about it.
As to the collapse of investment in the second quarter, the likeliest cause was the closure of Russian banks, not the botched judicial reform Aslund refers to.
Here is what I wrote about the bank closures just before they happened.

Gryzlov’s reference to “the Ukrainian authorities destroying their own banking system” refers to action Ukraine is now contemplating against Russian banksoperating on Ukrainian territory.  This follows protests by Ukrainian ultra right radicals who since 13th March 2017 have blocking access to the central office in Kiev of the local branch of Sberbank, Russia’s biggest bank.

Gryzlov’s claim that the action Ukraine is contemplating against Russian banks operating in Ukraine would destroy Ukraine’s banking system may be overstated.  Russian banks account for roughly 10% of Ukraine’s banking sector, supposedly holding $425 million in private customer deposits and a further $276 million in deposits held on behalf of business customers.  Though these are large sums, they do not look large enough to cripple the Ukrainian economy as a whole, even if the money in the deposits were to disappear along with the banks, which of course is unlikely.

Having said this, launching an assault on Russian banks just 3 months after Ukraine nationalised PrivatBank, its own largely bank, hardly looks like a good idea, and at a time of economic crisis it is certainly not a move best calculated to inspire confidence in Ukraine’s banking system even if talk of it triggering a cascade effect may be overstated.

Given that Russia remains the biggest investor in Ukraine’s economy it is completely understandable why action against Russian banks would have had a chilling effect on investment.

That after all is what was predicted, so it should not be surprising that it happened.

Aslund does claim some economic successes for Ukraine

These negative factors overshadowed the positive developments. Ukraine’s macroeconomic performance has been stellar. Finance Minister Oleksandr Danyliuk has kept the budget deficit below 3 percent of GDP. The National Bank’s leadership has nurtured the international gold and currency reserves that have increased to $18 billion, corresponding to four months of imports. Naftogaz won its gigantic arbitration case against Gazprom in Stockholm and made a substantial profit. The parliament adopted Acting Health Care Minister Ulana Suprun’s impressive health care reform.

Most of this however is simply wrong.

The budget deficit may in reality be greater than 3% of GDP if GDP in reality is smaller than is being reported (see above).

The $18 billion of foreign currency reserves is less than the $20 billion Ukraine must pay to its creditors between 2017 and 2020, and with reserves only sufficient to cover four months imports and with Ukraine’s trade deficit widening the margin of safety is dangerously small.

To the $20 billion Ukraine must pay its creditors between 2017 and 2020 must now be added the $3 billion the High Court has recently ordered Ukraine to pay to Russia and the $2 billion the Stockholm Arbitration Tribunal has ordered Ukraine’s Naftogaz to pay to Gazprom.

As to Naftogaz supposedly “winning” the case against Gazprom in the Stockholm Arbitration Tribunal, Aslund’s extreme antipathy to President Putin, Gazprom and to Russia blinds him to the reality that it was Ukraine which lost the case (see my discussion of the Stockholm Arbitration Court’s award and this discussion of the award by Gazprom’s Vice President Alexander Medvedev and by Paul Goncharoff on RT).

Even the sum of $18 billion Ukraine has managed to put away in its reserves is less impressive than it looks.

The reserves have been boosted this year by a payment of $1 billion from the IMF, and a further $3 billion Ukraine borrowed in the international money markets at very high interest.

However the $1 billion payment from the IMF was supposed to be just one tranche out of $4 billion which the IMF was supposed to give to Ukraine over the course of the year.

Here is what Anders Aslund has to say about why the extra $3 billion was not paid

Thanks to its improved macroeconomic situation, Ukraine’s government sold $3 billion of Eurobonds in September. Unfortunately, this sign of economic health tipped the political balance against reform. The International Monetary Fund (IMF) was supposed to give Ukraine credits of $4 billion in 2017. But since the government did not fulfill the IMF conditions, the country received only $1 billion, while it had to pay back $1.3 billion. The European Union canceled its last tranche of €600 million after Ukraine failed to fulfill four conditions.

At present, it looks doubtful whether either of these institutions will provide Ukraine with any funding in 2018, as their compassion has been replaced with distrust. The IMF is currently demanding five prior actions for further funding, namely the establishment of an independent anticorruption court, the legalization of private sales of agricultural land, the adoption of a privatization law, an improved pension reform, and adjustment of gas prices to market prices. The focal demand of all international creditors is an independent anticorruption court, since the court system has proved incapable of sentencing corrupt senior officials.

In reality the IMF almost certainly refused to provide Ukraine with the additional $3 billion not because Ukraine failed to perform its ‘reform’ obligations but because of the chilling effect of the High Court Judgment in London.

That threatens to declare Ukraine in a state of formal default, placing institutions like the IMF and the European Commission in unknown and potentially highly dangerous legal territory if they continue lending to Ukraine despite it.  I have discussed this previously at length for example here.

Since admitting this would be politically highly embarrassing given how much the IMF and the European Commission have loaned to Ukraine already, the IMF and the European Commission are hiding behind the fiction that it is Ukraine’s supposed failure to carry out its ‘reform’ programme which is causing them to stop lending.

The years 2016 and 2017 ought to have been economically favourable for Ukraine.

The weather was good, allowing for good harvests, the worst of the fighting in the Donbass was over, the country had restructured its debts and was obtaining support from the IMF and the European Union, and – most important of all – the oil price had more than halved, drastically reducing the country’s import bill and taking pressure off its budget.

Anders Aslund was not completely misguided when he predicted on 3rd January 2017 that 2017 would be Ukraine’s breakthrough year.

In truth 2016 and 2017 were for Ukraine as good as it is ever likely to get.

The favourable conditions of those years are now ending.

The situation in the Donbass is unresolved, the weight of debt repayment is once again increasing, and $5 billion of payments to Russia will shortly fall due.  Meanwhile IMF and EU lending has stopped.  Most serious of all, the oil price is rising again, and has now reached $70 a barrel.

As the TASS article I quoted at the beginning of this article says, Ukraine’s already very high inflation rate is likely to increase still further in 2018, putting even greater pressure on living standards and on the country’s economy and budget.

Even Anders Aslund is no longer optimistic about the future.

For once Anders Aslund puts his finger on the problem: Ukraine’s hopelessly dysfunctional political system, which makes rational decision making impossible

Sadly, the ruling coalition does not seem to be interested in a real independent anticorruption court or electoral reform even if legislation is under way. Absurdly, Ukraine’s politicians seem to be absorbed by the presidential election scheduled for May 2019. Instead, they should focus on securing real property rights so that Ukraine can boost its investment ratio to 25-30 percent of GDP and grow by 6-8 percent a year.

To which all I can say is that given Ukraine’s realities it is baffling Aslund ever expected otherwise.

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Denmark As A Model For American Socialists?

In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high.

The Duran

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Authored by Lars Hedegard via The Gatestone Institute:


Here are some facts to consider before American “democratic socialists” look to Denmark for guidance, as Senator Bernie Sanders did during the 2016 presidential campaign.

First of all, Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy enough to work, the state will require that you look for a job or it will force a job on you.

The willingness of all the Danes to pay high taxes is predicated on the country’s high degree of homogeneity and level of citizens’ trust in each other, what sociologists call “social capital.” By and large, Danes do not mind paying into the welfare state because they know that the money will go to other Danes like themselves, who share their values and because they can easily imagine themselves to be in need of help — as most of them, from time to time, will be.

Whenever politicians propose tax cuts, they are met with vehement opposition: So, you want to cut taxes? What part of the welfare state are you willing to amputate? And that ends the debate.

Danes, in contrast to American socialists gaining ground in the Democratic Party, are increasingly aware that the welfare state cannot be sustained in conditions of open immigration. A political party agitating for “no borders” could never win a Danish election. Danes do not suffer from historical guilt: they have not attacked any other country for more than two centuries and have never committed a genocide.

Moreover, there is an even deeper truth to ponder: Denmark is not really socialist but constitutes a sui generis fusion of free-market capitalism and some socialist elements. Denmark has no minimum wage mandated by law. Wages, benefits and working conditions are determined through negotiations between employers and trade unions. 67% of Danish wage-earners are members of a union, compared to 19% in Germany and 8% in France. Strikes and lockouts are common, and the government will usually stay out of labor conflicts unless the parties are unable to agree.

It is uncomplicated for enterprises to fire workers, which gives them great flexibility to adapt to shifting market conditions. To alleviate the pain, the state has in place a number of arrangements such as generous unemployment benefits and programs to retrain and upgrade redundant workers.

Danish companies must make ends meet or perish. They generally will not get handouts from the government.

Denmark is more free-market oriented than the US. According to the Heritage Foundation’s 2018 Index of Economic Freedom, Denmark is number 12, ahead of the United States (number 18). Venezuela is at the bottom, one place ahead of number 180, North Korea.

Mads Lundby Hansen, chief economist of Denmark’s respected pro-free-market think tank CEPOS, comments:

“Very high taxes and the vast public sector clearly detract in the capitalism index and reduce economic freedom. But Denmark compensates by protecting property rights, by low corruption, relatively little regulation of private enterprise, open foreign trade, healthy public finances and more. This high degree of economic freedom is among the reasons for Denmark’s relatively high affluence.”
Trish Regan recently claimed on Fox Business that Danes pay a “federal tax rate” of 56% on their income. This is misleading. The 55.8% is the levied on the marginaltax for the top income bracket, only on the part of their income above DKK 498,900 ($76,500). Any income under DKK 498,900 is taxed at lower rates. And the 55.8% marginal rate does not represent a “federal” or “national” rate. It represents the total of all taxes on income: national tax, regional tax, municipal tax and labor market tax. It does not, however, include Denmark’s 25% value-added tax (VAT), paid on all purchases.

Regan also claimed that Danes pay a 180% tax on cars. While it is true that there was once a maximum tax of 180% on care in Denmark, the vehicle tax rates have been lowered in recent years. Today, the first DKK 185,100 ($28,400) of the price of a gas- or diesel-powered car is taxed at 85%, and if the car’s price is above DKK 185,100, the remaining amount is taxed at 150% — which is of course bad enough.

Denmark’s total tax burden amounts to 45.9% of GDP, the highest of all countries in the Organisation for Economic Co-operation and Development (OECD).

As pointed out in the Fox Business segment, all education for Danes is tuition-free, all the way through to a Ph.D. Not only that; the state will, within certain time constraints, pay students to study. For students at university level no longer living with their parents, the monthly cash grant comes to almost $1,000 per month. No fewer than 325,000 students out of a total population of 5.6 million benefit from this generous arrangement setting the state back to the tune of DKK 20.9 billion or 1% of GDP (latest 2018 figures just in and supplied by Mads Lundby Hansen). Denmark even pays student support to 20,000 foreign students.

Attempts by fiscal conservatives to cut down on payments to students have been successfully resisted by the vociferous and influential student organizations; at present it would appear impossible to muster anything like a parliamentary majority to limit the student handouts.

Fox Business is right that a great many Danes are on public transfer payments. Government figures from 2017 indicate that 712,300 Danes of working age (16-64) — not including recipients of student benefits — get public financial support. But Regan’s claim that most Danes do not work is ludicrous. According to Statistics Denmark, 69.9% of Danes aged 16-64 are active in the labor market.

How can Denmark pay for its comprehensive welfare state, which includes free medical care regardless of the severity of your condition? Regan claims that Denmark is “heavily in debt.” Not so. As it turns out, Denmark is among the least indebted countries in the world, even when compared to other Western countries. The Danish government’s gross debt stands at 35.9% of GDP. Compare that to, e.g., The United Kingdom (86.3 %), The United States (108%), Belgium (101%), Canada (86.6%), France (96.3%), Germany (59.8%), The Netherlands (53.5%), Italy (129.7%), Spain (96.7%) and even Switzerland (41.9%).

Comparing Denmark to the US, Madsen notes that the latter has a problem with fiscal sustainability that may necessitate tax increases. Denmark enjoys what he labels fiscal “oversustainability” (“overholdbarhed”).

At a time when socialism appears to be popular among certain sections of the American population, its proponents would do well not to cite Denmark as a model. The Danish fusion of free-market capitalism and a comprehensive welfare state has worked because Denmark is a small country with a very homogeneous population. This economic and social model rests on more than 150 years of political, social and economic compromises between peasants and landowners, business-owners and workers, and right- and left-leaning political parties. This has led to a measure of social and political stability that would be hard to emulate in much larger and more diverse counties such as the United States.


Lars Hedegaard, President of the Danish Free Speech Society, is based in Denmark.

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Ron Paul: Protectionism Abroad and Socialism at Home

One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity:


One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians. For example, government interference in health care increased health care costs, making it difficult or even impossible for many to obtain affordable, quality care. The effects of these prior interventions were used to justify Obamacare.

Now, the failures of Obamacare are being used to justify further government intervention in health care. This does not just include the renewed push for socialized medicine. It also includes supporting new laws mandating price transparency. The lack of transparency in health care pricing is a direct result of government policies encouraging overreliance on third-party payers.

This phenomenon is also observed in foreign policy. American military interventions result in blowback that is used to justify more military intervention. The result is an ever-expanding warfare state and curtailments on our liberty in the name of security.

Another example of this is related to the reaction to President Trump’s tariffs. Many of America’s leading trading partners have imposed “retaliatory” tariffs on US goods. Many of these tariffs target agriculture exports. These tariffs could be devastating for American farmers, since exports compose as much as 20 percent of the average farmer’s income.

President Trump has responded to the hardships imposed on farmers by these retaliatory tariffs with a 12 billion dollars farm bailout program. The program has three elements: direct payments to farmers, use of federal funds to buy surplus crops and distribute them to food banks and nutrition programs, and a new federal effort to promote American agriculture overseas.

This program will not fix the problems caused by Tramp’s tariffs. For one thing, the payments are unlikely to equal the money farmers will lose from this trade war. Also, government marketing programs benefit large agribusiness but do nothing to help small farmers. In fact, by giving another advantage to large agribusiness, the program may make it more difficult for small farmers to compete in the global marketplace.

Distributing surplus food to programs serving the needy may seem like a worthwhile use of government funds. However, the federal government has neither constitutional nor moral authority to use money taken by force from taxpayers for charitable purposes. Government-funded welfare programs also crowd out much more effective and compassionate private efforts. Of course, if government regulations such as the minimum wage and occupational licensing did not destroy job opportunities, government farm programs did not increase food prices, and the Federal Reserve’s inflationary policies did not continuously erode purchasing power, the demand for food aid would be much less. By increasing spending and debt, the agriculture bailout will do much more to create poverty than to help the needy.

Agriculture is hardly the only industry suffering from the new trade war. Industries — such as automobile manufacturing — that depend on imports for affordable materials are suffering along with American exporters. AFL-CIO President Richard Trumka (who supports tariffs) has called for bailouts of industries negatively impacted by tariffs. He is likely to be joined in his advocacy by crony capitalists seeking another government handout.

More bailouts will only add to the trade war’s economic damage by increasing government spending and hastening the welfare–warfare state’s collapse and the rejection of the dollar’s world reserve currency status. Instead of trying to fix tariffs-caused damage through more corporate welfare, President Trump and Congress should pursue a policy of free markets and free trade for all and bailouts for none.

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In Monsters We Trust: US Mainstream Media No Friend of the American People

Over 300 US newspapers ran editorials on the same day denouncing Trump, an event in itself that points to some high degree of collusion and groupthink.

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Authored by Robert Bridge via The Strategic Culture Foundation:


Over the course of his turbulent presidency, Donald Trump has accused various media companies, with special attention reserved for CNN, as being purveyors of ‘fake news.’ In one early-morning Tweet last year, he slammed the “FAKE NEWS media” as the “enemy of the people.”

This week, over 300 US newspapers ran editorials on the same day – an event in itself that points to some high degree of collusion and groupthink – denouncing Trump’s insensitive portrayal of them, as if the notion that journalists were not in the same sleaze league as lawyers, politicians and professional con artists never crossed anyone’s mind before. Even the peace-loving Mahatma Gandhi recommended “equality for everyone except reporters and photographers.”

But is the MSM really an “enemy of the people?”

First, it cannot be denied that the US media, taken in all its wholesomeness, has been overwhelmingly consistent in its ‘style’ of reporting on Donald Trump, the 45th POTUS. And by consistent I mean unprecedentedly critical, misleading and outright aggressive in its guerilla coverage of him. If one is not convinced by the gloom-and-doom Trump stories featured daily in the Yahoo News feed, then a study by the Media Research Center (MRC) should do the job. From January 1 through April 30, evening news coverage of the US leader – courtesy of ABC, CBS and NBC – were 90 percent negative, which is pretty much the same incredible average revealed by MRC one year earlier.

The study looked at every one of the 1,065 network evening news stories about Trump and his administration during the first four months of 2018. Total negative news time devoted to Trump: 1,774 minutes, or about one-third of all evening news airtime. That’s pretty much the definition of a circle jerk.

“Nearly two-fifths (39%) of the TV coverage we examined focused on Trump scandals and controversies, while 45 percent was devoted to various policy issues,” MRC wrote in its report.

Meanwhile, the farcical Russia ‘collusion’ story was consistently the main grabber — clocking in at 321 minutes, or nearly one-fifth of all Trump coverage. Of the 598 statements MRC calculated about Trump’s personal scandals, virtually all of them (579, or 97%) came out of the media wash cycle tarred and feathered.

If this represents an orchestrated attack on the Commander-in-Chief, and in light of those numbers it would be difficult to argue it isn’t, the strategy appears to be falling flat. Despite, or precisely because of, the avalanche of negative media coverage, Trump’s popularity rating smashed the 50 percent ceiling in early August and continues to remain high.

In Monsters We Trust

Although it can be safely stated that the MSM is an entrenched and relentless enemy of Donald Trump, that doesn’t necessarily mean it’s an “enemy of the American people,” as Trump argues it is. Let’s be a bit more diplomatic and say it isn’t our friend.

One yard stick for proving the claim is to consider the steadily mounting concentration of media holdings. In 1983, 90 percent of US media were controlled by 50 companies; today, 90 percent is controlled by the Big Six (AT&TComcastThe Walt Disney Company21st Century FoxCBS and Viacom control the spoken and printed word from sea to shining sea).Although many people are aware of the monopolistic tendencies of the US mainstream media, it’s important to understand the level of concentration. It means the vast majority of everything you see and hear on any electronic device or printed publication is ‘democratically’ controlled by six average white guys and their shareholders.

However, keeping track of who owns what these days is practically impossible since the dozens of subsidiary companies that fall under each main company are themselves fiefdoms, each with their own separate holdings. In fact, the already short ‘Big Six’ list is already dated, since National Amusements, Inc. has gobbled up both Viacom and CBS, while 21st Century Fox merged with Disney this year. As for the 350 US newspapers that penned tortured editorials decrying Trump’s critical opinion of them, many of those ‘local’ publications get their marching orders from either the Hearst Communications or the Gannett Company on the East Coast.

Now, with this sort of massive power and influence lying around like dynamite, it stands to reason, or unreason, that the corporate and political worlds will succumb to the law of attraction and gravitation, forging powerful and impregnable relationships. It’s no secret that the politicians, our so-called ‘public servants,’ are mostly in the game to make a fast buck, while the corporations, desperate for ‘democratic representation’ to control regulation and market share, have an inexhaustible source of funds to secure it. Naturally, this oligarchical system precludes any sort of democratic participation from the average person on the street, who thinks just because he remembers to yank a lever once every several years he is somehow invested in the multibillion-dollar franchise.

As far as media corporations being ‘private enterprises’ and therefore free to demolish the freedom of speech (even censoring major media players, like Infowars, simply because they whistle to a different political tune), that is quickly becoming revealed as nothing more than corporate cover for state-sponsored machinations.

“In a corporatist system of government, wherein there is no meaningful separation between corporate power and state power, corporate censorship is state censorship,” writes Caitlin Johnstone. “Because legalized bribery in the form of corporate lobbying and campaign donations has given wealthy Americans the ability to control the US government’s policy and behavior while ordinary Americans have no effective influence whatsoever, the US unquestionably has a corporatist system of government.”

Meanwhile, it cannot be denied, from the perspective of an impartial observer, that the mainstream media is nearly always positioned to promote the government narrative on any number of significant issues. From the media’s unanimous and uncritical clamoring that Osama bin Laden was responsible for 9/11 (even the FBI has admitted it has no “hard evidence” that bin Laden carried out the attacks on the World Trade Center and the Pentagon), to its gung-ho enthusiasm for the 2003 Iraq War, to the sycophantic cheerleading for a war in Syria, the examples of media toeing the government line are legion. And if US intel is in bed with Hollywood you can be damn sure they’re spending time in the MSM whorehouse as well.

Is it any surprise, then, that public trust in the US media is reaching all-time lows, while news consumers are increasingly looking to alternative news sites – themselves under relentless attack – to get some semblance of the elusive truth, which is the God-given right of any man? Truth is our due, and we should demand nothing less.

As Thomas Paine reminded the world in the face of a different foe: “Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value.”

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