Pro-Fund or Profound Revolution?

Summary

• Developments in China continue to confound market optimists, with new talk of a "profound revolution" towards a new target of "Common Prosperity"
• Rather than simply react to these events, we analyze the history of Marxist-Leninist-Maoist Thought to try to put current moves under Xi Jinping Thought in a larger context
• This also provides a framework of a hypothetical Marxist policy path forwards
• We briefly discuss the meaning of Common Prosperity over time, and how it is a bellwether
• We conclude with likely market reactions to an economy not saying "because markets"

"Profound Revolution"?

Political developments in China have been front page news in the financial press over the past few months. Beijing's crackdown on Ant Financial, largely dismissed by Wall Street, then spread to Didi and on to the broader sectors these championed, fin- and transport-tech; then it grew to encompass swathes of the economy, from tech to health to education to property to private equity to gaming.

In terms of tech, there are now sharp limits on IPOs in the US (mirrored from the US side) and new algo/pricing and data regulations that require Beijing to hold on to it; the private tuition field was made non-profit; there has been a sharp reduction in credit to property developers along with the official message that "houses are for living in, not speculation", and rental increase caps of 5% annually; under-18s have been limited to just 3 hours of computer gaming a week, in allotted slots; and private equity has been cut off from residential investment.

Beijing has also called for curbs on "excessive" income, and for the wealthy and profitable firms "to give back more to society." (Tencent already pledged $15bn.) This is also matched by: a social campaign against excessive business drinking, "unpatriotic" karaoke songs, and celebrity culture; 'Xi Jinping Thought' made obligatory at all schools and universities; and, as Bloomberg puts it, controls on social media financial commentary - "China to Cleanse Online Content that 'Bad Mouths' its Economy".

This has all taken place under the slogan of "Common Prosperity". (And for those who need the market-facing implications of this first, please see What is to be done?)

Arizona Attorney General Mark Brnovich filed a lawsuit against the Biden administration on Tuesday in response to its new policy that will require private employers with 100 or more employees to mandate vaccines or weekly testing.

Brnovich, who is currently waging a bid for the U.S. Senate, said in a statement:

"The federal government cannot force people to get the COVID-19 vaccine. The Biden Administration is once again flouting our laws and precedents to push their radical agenda."

The new policy, which President Biden unveiled last week, will be issued by the Department of Labor's Occupational Safety and Health Administration "in the coming weeks."

It could impact nearly 80 million workers.

The Bill and Melinda Gates Foundation, whose advice guided much of the global response to the Covid pandemic, has seemingly washed its hands of one virus while warning the world isn't prepared to deal with the next big pandemic.

The foundation's annual report, released on Tuesday, bemoaned the poverty increases wrought "by Covid-19" - omitting that much of the damage linked to the virus stemmed from economic shutdowns imposed by governments which were often taking their advice from the Gates Foundation and associated entities.

However, the report ultimately put an optimistic spin on the damage, noting things could have been much worse. Childhood vaccinations had only dropped half as much as predicted, and some wealthy countries' economies were already on the rebound, it noted. The mRNA vaccine companies were seeing the light and investing in Africa and other impoverished areas of the world, the report added, after presumably realizing how much economic opportunity awaited them there.

US Secretary of State Antony Blinken's attempt to evade questions about a drone strike that allegedly killed a Kabul aid worker backfired, as Senator Rand Paul pointed out that the target should have been known before the attack.

Pressed by Paul (R-Kentucky) on whether the August 29 strike killed an aid worker or an ISIS-K operative, Blinken testified in a Senate hearing on Tuesday that the Biden administration is reviewing the incident, and "a full assessment will be forthcoming."

"So you don't know if it was an aid worker or an ISIS-K operative?" Paul asked.
"I can't speak to that and I can't speak to that in this setting, in any event," Blinken replied.
"So you don't know or won't tell us?" Paul continued.
"Uh, I don't know because we're reviewing it," Blinken said.

Paul then stung Blinken with the obvious, saying, "Well, see, you'd think you'd kind of know before you off somebody with a Predator drone whether he's an aid worker or he's an ISIS-K." He added that the US has a recent history of drone strikes with unintended casualties, including "hundreds and hundreds of people" who were killed remotely by the Obama administration, and civilian casualties lead to "blowback."

Of reports that seven children and three other people were also killed in the drone strike, Paul said:

"I don't know if it's true, but I see these pictures of these beautiful children that were killed in the attack. If that's true, and not propaganda, guess what, maybe you've created hundreds or thousands of new potential terrorists from bombing the wrong people. We can't sort of have an investigation after we kill people. We have an investigation before we kill people."

An upcoming book by two Washington Post writers, just leaked to the corporate press, seeks to paint General Mark Milley as a hero of the resistance to President Donald Trump. If any of it is true, it amounts to an actual coup.

Excerpts from Peril, due to be published in a week, appeared on Tuesday on CNN and in the Washington Post, which employs its two authors - Robert Costa and Bob Woodward, of Watergate fame. It claims to be based on more than 200 interviews with "firsthand participants and witnesses" of the last three months of Trump's presidency.

Concerns over anti-Semitism and immigration were on the agenda as Pope Francis made a seven-hour visit to Hungary portrayed as frosty by liberal media. But he should be more worried about the decline of Christianity in the West.

During a 40-minute meeting with Viktor Orban, the much-maligned Hungarian prime minister, the Pope was presented with a 13th century letter from Hungarian King Bela IV to Pope Innocent IV, which asked the then-pontiff for help in resisting the Mongol invasion of Hungary and Europe. Of course, this was perceived by media outlets, such as CNN, as having anti-immigrant undertones.

Although the issue of Hungary's hard-line stance on immigration was not broached during the meeting, the Pope later told a crowd in Budapest to "open your arms to everyone," which was seen as a veiled slight at Hungary's determination to not see a repeat of 2015's refugee fiasco. Indeed, Orban later wrote on Facebook that he had asked Pope Francis "not to let Christian Hungary perish."

Following his meeting with Orban, the Pope addressed Christian and Jewish leaders and warned that "the threat of anti-Semitism [is] still lurking in Europe and elsewhere" and that "this is a fuse that must not be allowed to burn." I wholeheartedly agree with the Pope that an undercurrent of foul anti-Semitism still exists, but I am not sure why he chose Hungary to make such a statement.

The former US president also claimed Joe Biden is 'worse than Obama'

Former president Donald Trump on Tuesday claimed that the United States would come to an end in the next three years, without explaining what that might mean in practice.

The US "has gone really downhill in the last eight months like nobody has ever seen before", Mr Trump said during an appearance on Sean Spicer's show on conservative news channel Newsmax.

"[If we] go to these elections coming up in '22 and '24, we are not going to have a country left," he said, falsely claiming that the 2020 election "was rigged" and "we are not gonna have a country left in three years".

Retired Lieutenant General Michael Flynn, who was head of the Defense Intelligence Agency (DIA), thinks evil communists are out to destroy America and your freedom. General Flynn explains,

"Transitioning to all the noise that is bombarding the American psyche, it's all intentional. Don't think this is all a bunch of haphazard things that are happening within our country. The bigger 60,000 foot strategic view is that the country is being taken over by a very small minority of people that we call the Left, which are really a group of Marxists and communists who have decided over decades, and this is not just about Trump, have decided now is the time to do it . . . and they did. They outmaneuvered the Republican establishment during this last November election. . . .Let's talk about what's coming out of Arizona. Everybody knows this election was stolen. No way in the world 80 million people voted for the administration occupying the White House — no way. . . .This is no longer a conspiracy theory about election fraud. This is a conspiracy alright, but it is a conspiracy within a group of people that stole the U.S. Presidential Election and also stole parts of the down ballot votes, meaning the Senators and Congressmen."

We will either be remembered as a country that took freedom and liberty for all seriously or we will be remembered as a nation of cowards who, driven by fear, were willing to deprive this group, then that group, of their freedom — before losing that freedom entire

The 20th anniversary of September 11, 2001 is a particularly somber one, not just because of the horrific nature of events of that day reaching its second-decade milestone, but because of how little we seem to have learned in that amount of time.

The fear and trauma generated by the events of 9/11 were used by the U.S. national security state and its civilian allies to great effect to divide the American population, to attack independent reporting as well as independent thought, to gut the anti-war movement, and to normalize the U.S. government's overt and persistent degradation of the country's Constitution. This, of course, is in addition to the illegal U.S. occupations and drone wars in the Middle East and elsewhere that were also born out of this event.

The true beneficiaries of 9/11

As a nation, the U.S. populace has failed to grapple with these realities, and many others, in the two decades since the Twin Towers and WTC Building 7 fell. Far from bringing any benefit to the alleged masterminds of the event, the results of 9/11 instead overwhelmingly favored the ambitions of a powerful faction within the U.S. national security state that had long sought to bring the dissident-elimination efforts it spent decades implementing abroad - from the Phoenix Program in Vietnam to Operation Condor in South America - home to roost.

The new Chinese ambassador to the UK has been barred from parliament by the Speakers in the Commons and Lords after the imposition of sanctions on British MPs by Beijing.

The new ambassador, Zheng Zeguang, was due to attend a meeting of the broadly pro-Chinese all-party group on China, but after a letter from MPs who were subjected to sanctions by China, including the former Conservative party leader Iain Duncan Smith, the Commons Speaker, Lindsay Hoyle, has said the meeting is not appropriate.

A similar decision has been endorsed by the Lords Speaker, John McFall.