Monday , July 15 2019
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Yves Smith

Yves Smith



Articles by Yves Smith

Links 7/13/19

2 days ago

A New Study Uses Camera Footage To Track the Frequency of Bystander Intervention CityLab
A Feud Between Japan and South Korea Is Threatening Global Supplies of Memory Chips CNN
Carbon Nanotube Device Channels Heat Into Light PhysOrg
A Massive Hunk Of Ice Will Reshape The World’s Coastlines Sooner Than We Thought Forbes (David L)
Streaming Online Pornography Produces as Much CO2 as Belgium New Scientist
Explainer: What is post-quantum cryptography? PhysOrg
B vitamin content of rice declines with rising CO2 Harvard Magazine (furzy)
Billions of Air Pollution Particles Found in Hearts of City Dwellers Guardian
The trouble with fruit juice Mayo Clinic (Chuck L)
Blossom’s Fake Video Exposed by food scientist | How To Cook That Ann Reardon YouTube. UserFriendly:
Even if people haven’t seen the

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Is There a Global Future for Unions?

3 days ago

Yves here. This personal account of the rise and fall (and hopeful rebirth) of unions correctly gives prominent play to the right-wing anti-labor effort whose strategy was set forth in the 1971 Powell Memo.
By Leo W. Gerard, the international president of the United Steelworkers Union (USW). Produced by the Independent Media Institute

In March 2010, a rally by thousands of striking USW workers at the Vale mine and smelter in Sudbury, Canada, was joined by allies from Brazil, Australia and countries around the world. Photo courtesy of United Steelworkers
I was raised in a company house in a company town where the miners had to buy their own oilers—that is, rubber coveralls—drill bits and other tools at the company store.
That company, Inco Limited, the world’s leading producer of nickel

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A World Without Ice

3 days ago

By Thomas Neuburger. Originally published at DownWithTyranny!
In a new book, The End of Ice: Bearing Witness and Finding Meaning in the Path of Climate Disruption, author Dahr Jamail writes about the coming world without any standing glacial ice anywhere on earth. He capsulizes his thoughts in this interview with Dharna Noor at the Real News Network:
DHARNA NOOR: These indicators of the climate crisis are often presented as just statistics— sometimes ones that have implications maybe for the ecosystems around ice melting, rarely ones that are wreaking havoc on all life on Earth. But in this book, in The End of Ice, you write, “The reporting in this book has turned out to be far more difficult to deal with than the years I spent reporting from war torn Iraq.” And later you even say that,

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Deutsche Bank Highlights a Society at Risk

3 days ago

Yves here. This article broaches a very large issue, and it pains me to be able to offer only a few additional thoughts.  I don’t think risk aversion is quite the right frame for why destructive conduct has become so pervasive. For instance, as we’ve documented, casual lying is pervasive at CalPERS even though nearly everyone below the CEO is a civil service employee. Generally speaking, that means they are hard to fire. At CalPERS, the motivation seems to be that a lot of people find lying to be much easier than doing things well.
Some of the factors that I believe have contributed to the increase in the propensity to bury problems under rugs, even when everyone can see the rug is lumpy and moving, are:
Diffusion of responsibility. Some of that is not accidental, but you have a great

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Michael Hudson: De-Dollarizing the American Financial Empire

3 days ago

Yves here. Another meaty Michael Hudson interview on Guns and Butter. However, I have to vehemently disagree with the claim made by Bonnie Faulkner at the top of the discussion. No one holds guns to other countries’ heads to make them hold dollars. The reason the dollar is the reserve currency is the US is willing to export jobs via running persistent trade deficits.  The US moved away from  having rising worker wages as the key metric of sound economic policy in the 1970s, when labor was blamed for stagflation (too powerful unions supposedly hobbling US manufactures, when the performance of Toyota at the famed NUMMI joint venture showed that to be false; formal or informal cost of living adjustments to pay credited with institutionalizing inflation). Recall also that the Democrats had

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Brexit: Will Boris or Won’t He?

3 days ago

ConservativeHome declared yesterday that their survey of Tory Party members finds that Boris Johnson has already won the leadership contest. He’s also embraced the proud UK leadership practice of promoting Brexit unicorns. A few examples:
The EU will blink with him when it didn’t with Theresa May because Johnson serious about being willing to exit, declaring the odds of no deal as “a million to one”.
The EU will give the UK what Johnson’s allies call a standstill, as in a transition period, just because the UK needs one. The UK has asked and has been firmly told no, that the only way to get a transition period is to approve the Withdrawal Agreement.
The cost of a crash out is “vanishingly inexpensive if you prepare”
As the campaign has progressed, Johnson has become firmer in his

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Hospitals Block ‘Surprise Billing’ Measure In California

4 days ago

Yves here. This article demonstrates the power of health care industry incumbents. “Surprise billing” is pure and simple price gouging, particularly since hospitals routinely game the system, such as by scheduling doctors who are not in a patient’s network on his operation, even when the patient has gone to considerable lengths to try to prevent that.
All these hospitals did was the equivalent of yelling “Boo” at the legislature, and the legislation to combat surprise billing was yanked, even though there has been a great deal of deservedly critical press coverage of this abuse.
By Ana B. Ibarra, a Sacramento-based for California Healthline, who previously covered at the Merced Sun-Star. Originally published at California Healthline
Citing fierce pushback from hospitals, California

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A Way Out from Rock Bottom: Economic Policies Can Reduce Deaths of Despair

4 days ago

By William H. Dow, Professor of Health Economics, University of California, Berkeley; Anna Godøy, Research Economist, University of California, Berkeley; Chris Lowenstein, PhD student in Health Economics, University of California, Berkeley; and Michael Reich,Professor of Economics, University of California, Berkeley. Originally published at VoxEU
Policymakers and researchers have sought to understand the causes of and effective policy responses to recent increases in mortality due to alcohol, drugs, and suicide in the US. This column examines the role of the minimum wage and the earned income tax credit – the two most important policy levers for raising incomes for low-wage workers – as tools to combat these trends. It finds that both policies significantly reduce non-drug suicides among

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Links 7/11/19

4 days ago

Holland covers hundreds of bus stops with plants as gift to honeybees Independent (David L)
Japan’s famous Nara deer dying from eating plastic bags Guardian (resilc)
Ross Perot’s Lasting Legacy Atlantic
UserFriendly: “LOL, he gave Bernie a sword for sticking up for vets dealing with Gulf War syndrome.”

Ross Perot was a champion for veterans’ rights and ahead of his time on disastrous trade policies. During his campaign, he explained, in depth, how he would address our national problems and spurred serious discussion. Ross Perot was a one-of-a kind American. He will be missed. pic.twitter.com/qXukirfwcL
— Bernie Sanders (@SenSanders) July 9, 2019

Moons That Escape Their Planets Could Become ‘Ploonets’ ScienceNews
Glacial Melting In Antarctica May Become Irreversible, NASA-Funded Study

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It Is Time To Start Forgiving Student Loans – And Here Is What It Will Cost

4 days ago

Yves here. Reader Bob Hertz sent his proposal for a multi-pronged student debt forgiveness program. One of his motivations was his belief that forgiving all loans isn’t affordable. The Federal government in fact does not need to raise taxes to fund this expenditure, but you’d need to give a harder look to see how much inflation it might generate.
However, there are other reasons to favor a more targeted plan. One is perceived fairness. A surprising number of our readers objected to the Sanders student debt forgiveness proposal because they had dutifully repaid their student loan. A few were offended on general principle.
By contrast, a more tailored program with a smaller price tag should alienate fewer people and thus have greater odds of getting done.
A second issue is that cancelling

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Transfer (Mis)pricing, the Jewel in Every Multinational Enterprise’s Crown

4 days ago

By Tanya Rawal-Jindia, a researcher at Tricontinental: Institute for Social Research. Originally published at openDemocracy as part of ourEconomy’s ‘Decolonising the economy’ series.
Amazon.com Inc. was brought to court by the U.S. Internal Revenue Service (IRS) in 2017 for transfer pricing discrepancies. In 2005 and 2006, the multinational tech company had transferred $255 million in royalty payments to its tax haven in Luxembourg, but according to the IRS these royalty payments should have amounted to $3.5 billion. This transfer pricing adjustment would have increased Amazon’s federal tax payments by more than $1 billion.
Even for the U.S., a country with decent (although waning) infrastructure, the loss of this much cash in federal tax revenue is substantial. Take for instance the water

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PG&E Neglected Maintenance for Years Despite Known Fire Risk; Judge Demands Prompt and Clear Answers to WSJ Expose

5 days ago

Even though one of our regular lines is that “Everything is like CalPERS,” sometimes “Everything is like Boeing” is more apt. PG&E has become a prime, if not the number one, case study in the human cost of corporate penny pinching. But not only have more people died and been injured at the hands of PG&E than at Boeing, the utility also had a much longer history of regulators choosing to ignore its corners-cuttting. And again unlike Boeing, it’s not as if PG&E was an admired institution in recent memory and could therefore run on brand fumes.
Yesterday, the Wall Street Journal published a major story based on extensive Freedom of Information Act disclosures, providing evidence of PG&E’s systematic, willful neglect not just of maintenance but even of inspections of its transmission lines,

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Martin Wolf v. Trumponomics Whiffs Due to Fealty to Orthodoxy

6 days ago

There’s a lot not to like about what passes for Trump’s economic policy. But theFinancial Times Martin Wolf’s critique of it, in Donald Trump’s boom will prove to be hot air, leaves a lot to be desired. The fact that “boom” appears in the headline is a big tell.
It’s a reasonable surmise that Trump will be re-elected unless the economy falls out of bed. Despite his long and ever-growing list of offenses and crappy policies, Trump is a master at keeping the spotlight turned on him.
Democratic Party leaders, by contrast, seem to think that Trump is so obviously odious that Being Not Trump and other forms of virtue signaling will prove sufficient for them to retake the White House. Never mind that the party is doing as little as it possibly can to address issues that affect ordinary

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Is Industrial Policy Finally Legitimate?

6 days ago

Yves here. It’s become more and more respectable in development economic circles to acknowledge that formerly taboo ideas like trade barriers and other forms of support to emerging industries are sound policy. The reversal by the IMF on the value of industrial policy is nevertheless significant. And that’s before you get to the fact that countries that lack explicit industrial policy wind up having ones by defaul
By Jomo Kwame Sundaram, a former economics professor, was Assistant Director-General for Economic and Social Development, Food and Agriculture Organization, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007. Originally published by Inter Press Service
For decades, the two Bretton Woods institutions have rejected the contribution of

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Liquidity Fears Hit Other UK “Equity Funds” as Investors Remain Trapped in Woodford Fund

6 days ago

Yves here. I have a soft spot for stories about financial train wrecks, even though I suspect Americans will snigger at UK investors who didn’t read the fine print on their “equity funds.” However, the overwhelming majority of retail investors rely on sales pitches and are lucky enough that US securities laws are so strong that even our pathetic SEC has not yet made them a dead letter.
But consider: those short and leveraged ETFs that remain popular with small traders were a cause of concern before the crisis, since in many cases their liquidity backstops were coming from hedge funds (usually in the form of options). I knew several small fund managers who were sitting on very nice paper ETF profits who were worried the funds might not perform when they were ready to close out their

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Links 7/9/19

6 days ago

Snowball the dancing parrot stuns scientists with 14 separate moves to Eighties classic hits Telegraph. Snowball may be more accomplished, but I like this cockatoo for his enthusiasm.
Thousands of dead fish litter Kentucky River after Jim Beam warehouse fire CBS 🙁
As NASA Aims For The Moon, An Aging Space Station Faces An Uncertain Future NPR. Kevin W: ” Maybe they can relocate those Hydrogen Fluoride plants here.”
It’s the End of the World as They Know It Mother Jones (UserFriendly)
A Ferocious Heat in Delhi New York Review of Books (Anthony L)
Earth’s Ancient Life Forms Are Awakening After 40,000 Years in Permafrost ScienceAlert (Kevin W). Um, sounds like the plot of a lot of horror movies.
Today’s Deep Learning Is Like Magic – In All The Wrong Ways Forbes (David L)
E-scooters: a

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Why Busy-Ness Is So Damaging

6 days ago

Yves here. While the “busy-ness” trope is cute, it also has the effect of trivializing the problem it discusses.
We’re in the midst of major changes in our social order due to the information revolution, as significant as the ones that Karl Polanyi described in his classic The Great Transformation. It appears to be an unfortunate accident of history that this technology change really got going as neoliberal values became firmly entrenched, particularly in the work place. It isn’t just that meanie employers who have way too much bargaining power demand that their staff be on call 24/7. Many if not most Americans have internalized that this is a reasonable expectation.
It’s also become normal to prioritize interruptions. A properly-brought-up friend pointed out many many years ago that call

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Trump’s Version of the Iran Accord: Heads I Win, Tails You Lose

6 days ago

By Prabir Purkayastha, the founder and editor in chief of Newsclick. He is the president of the Free Software Movement of India and is an engineer and a science activist. Produced in partnership by Newsclick and Globetrotter, a project of the Independent Media Institute
Trump’s Iran policy is akin to that of a schoolyard bully. More worrying is the passivity of the rest of the world and the dangerous drift to another devastating war in the region.
The U.S., after walking out of the Iran accord, is now shouting foul as Iran has breached the 300 kg enriched-uranium stockpile limit of the accord. Does the U.S. expect Iran to be bound by the accord while it happily reneges on it? Or is its concept of international accords the playground bully’s version of a coin toss, “Heads I win, tails you

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Mr. Market and the Press Diss Deutsche Bank’s Turnaround Plan

7 days ago

The beached financial whale known as Deutsche Bank is going to find it awfully hard to get itself back into the drink, let alone find good feeding grounds. After a pop over the news that Deutsche was Doing Something Big, the stock skittered as the CEO Christian Sewing presented more details of the turnaround plan. As we’ll discuss, it didn’t help that the press was unusually skeptical, reflecting the lack of confidence in Deutsche’s scheme among investors and experts.
The Wall Street Journal worked up this helpful chart:

Stock prices matter more for sick concerns than for healthy ones1 since their access to credit is usually risky or costly, and if they need more capital or need to fund losses, they have nowhere to go but sell assets or sell new equity. In 2008, leveraged financial firms

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Deutsche Bank Throws in the Towel, Announces Restructuring into Bad Bank/Good Bank, Firing of 18,000

8 days ago

Deutsche Bank has been the poster child for how long a sick but ginormous bank can be allowed to limp along.As we wrote in March:
That does not excuse Deutsche Bank having long been spectacularly mismanaged. It’s been operating under what amounts to regulatory forbearance since the crisis, with capital levels way way below any other big international bank. But Deutsche is the classic “too big to fail” bank. Whether it is too big to bail is debatable, but the EU’s new Banking Recovery and Resolution Directive, which banking experts almost to a person declared to be a horrorshow, was supposed to end bailouts and force bail ins….refusing to recognize that that’s a prescription for bank runs. And even though Deutsche is very much the German government’s problem, as readers no doubt have

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The Myth of Expansionary Austerity

8 days ago

By Christian Breuer, Junior Professor, Chemnitz University of Technology and Head of Wirtschaftsdienst and Intereconomics, zbw – the Leibniz Information Centre for Economics. Originally published at the Institute for New Economic Thinking website
Many critics have sharply attacked orthodox economics, the International Monetary Fund, the European Central Bank, and policymakers for their emphasis on austerity as a cure for lagging economic growth. A group of prominent economists responded by claiming to vindicate the traditional point of view (e.g., Alesina and Ardagna, 2010). They claimed that fiscal consolidations on the spending side can have positive effects on economic growth in the short run – the very opposite of what Keynesian economics would suggest.
Their arguments in favor of

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Links 7/4/19

11 days ago

Dear patient readers,
Your humble blogger found a local place that said they had sparklers (yeah!) but when I went there and hour and a half after my phone query, they were sold out (:-(). So I hope you were more successful than me with July 4th amusements!
And are you old enough to remember this device? It’s supposedly a Halloween toy but we used them at the 4th because sparks and red, white, and blue. Wish I had kept one:

A Jim Beam warehouse filled with 45,000 barrels of bourbon caught fire CNN (Robert H)
Tennessee’s Walking Horse ‘tradition’ should get back on track: The “Big Lick” pain-based gait created by soring is a “tradition” Tennesseans and U.S. Sens. Lamar Alexander and Marsha Blackburn shouldn’t be working to protect. KnoxNews (Marty) :-(. See here for details.
The Quantum

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Michael Hudson Discusses the IMF and World Bank: Partners In Backwardness

11 days ago

Yves here. Get a cup of coffee. This interview with Michael Hudson on the role of the IMF and World Bank has lots of juicy detail.
From Guns and Butter, produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango. Visit them at gunsandbutter.orgto listen to past programs, comment on shows, or join their email list to receive a newsletter that includes recent shows and updates. Email us at [email protected] Follow us on Twitter at #gandbradio
This is Guns and Butter, June 26, 2019. [*Edited and annotated version.]
The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it’s not necessary to occupy a country in order to impose tribute, or to take over its industry,

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U.N. Report: ‘Human Rights Might Not Survive’ Climate Crisis

12 days ago

Yves here. I have trouble understanding how U.N. officials chose to present what they clearly view as an urgent message. Rights don’t matter much to people who are starving or suffering from debilitating diseases. Why is the U.N. not willing to say, “The survival of large numbers of the poor and even one-time middle class is at stake, and climate migrants won’t be well received unless they are rich”? The language used to describe the severity of what faces populations who will be hit early and hard by climate change is bloodless. Perhaps the text comes off as forceful to consumer of NGO-speak, but to mere mortals, it reads as anodyne.
By Justine Calma, a staff writer for Grist. Originally published at Grist
A United Nations watchdog on poverty and human rights is the latest to call

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Mobility and the Desire for Sovereignity in Europe

12 days ago

By Gianmarco Ottaviano, Professor of Economics, Bocconi University. Originally published at VoxEU
Economic geography strikes back. After a couple of decades of easy talk about the ‘death of distance’ in the age of globalisation, the promise of a world of rising living standards for all is increasingly challenged by the resilience of regional disparities within countries. As long as many people and firms are not geographically mobile – and those who are tend to be the most skilled and productive – easier distant interactions can actually strengthen rather than weaken agglomeration economies. Recent electoral trends in Europe can be understood to a surprisingly large extent from this angle.
Econometric analysis reveals that the Leave vote in the British referendum on EU membership can be

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Links 7/3/19

12 days ago

30 Of The Funniest Cat Jokes Vet Clinics Put Up On Their Signs Bored Panda
The Man Who Walked His Life Away Deadspin (foghorn longhorn)
Everything You Need To Know About The Future Of Pesticides And Bees Forbes (David L)
Committed emissions from existing energy infrastructure jeopardize 1.5 °C climate target Nature. Shorter: “We already have too much carbon-emitting stuff to have any hope of arresting climate change.” Even shorter: “We’re fucked.”
The latest consideration for would-be parents: Climate change Grist
Nuclear is less costly than you think Financial Times. UserFriendly: “From January, still relevant.”
Austrian parliament votes for ban on weed killer glyphosate Associated Press (David L)
Obesity is now a bigger cause of deadly bowel, kidney, liver and ovarian cancer than

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Congress Sniffing Around Botched McKinsey Studies Depicted as Impairing Intelligence Agencies

13 days ago

After a series of scandals, yet more of McKinsey’s dirty laundry is getting aired. It’s bad enough that, to name a few of the rash of well-deserved critical stories, that the storied consulting firm is implicated in criminal fraud in South Africa, or that its work for the Saudi government resulted in the persecution of Twitter dissidents that McKinsey identified, or that a contract in Mongolia served as a vehicle for three officials to take illegal payments.
But with the US intelligence apparatus, McKinsey looks to have committed a cardinal sin: doing work that was so shoddy that not only is the client complaining about it, but it can actually show that the engagement did harm.
Mind you, it’s not as if poor quality consulting studies are unusual. Consulting often winds up being a lot like

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Charter Schools Unleashed “Educational Hunger Games” in California. Now It’s Fighting Back.

13 days ago

By Andrea Gabor, Bloomberg Professor, Baruch College. Originally published at the Institute for New Economic Thinking website
California has the highest concentration of charter schools in the U.S., with one in 10 students in the state educated in one of them. Since the legislature passed a charter law in 1992, these schools have enjoyed the “unqualified support” of every governor. No one was more gung-ho than Jerry Brown, California’s last chief executive, who founded two charter schools when he was mayor of Oakland.
Both that unwavering support in Sacramento and the torrid pace of charter expansion — there are more than 1,300 charter schools in California today — are now likely to change. In one of his first acts as California’s new governor, Gavin Newsom convened a task force to

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”Maximum Pressure” Campaign Fails To Kill Off Iran’s Oil Exports

13 days ago

By Nick Cunningham, a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. Originally published at OilPrice
U.S.-Iran tensions are once again heating up, even as Iran has so far managed to stabilize oil exports at lower levels.
Iran has officially breached the limits of low-enriched uranium as part of the 2015 nuclear deal, according to inspectors with the International Atomic Energy Agency. A few weeks ago Iran announced its intention to increase uranium stockpiles, stating that it no longer made sense to remain in an agreement that the U.S. has already pulled out of. There is also little to gain for Iran to continue to adhere to the nuclear deal if it nonetheless faces crippling U.S. sanctions.
As a result, the Trump administration’s stated

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One Hundred Years After World War I, Are We Heading Back to the Abyss?

13 days ago

Yves here. While the author of this article focuses on the rise of authoritarian leader as a cause for concern, that is arguably too personal a focus. Economic shocks like the financial crisis and the aftermath of the fall of the USSR typically move the political center of gravity to the right. The runup to World War I was also a period of globalization but the piece does not consider why the old political and economic order came under so much stress.
By Saladdin Ahmed, the author of Totalitarian Space and the Destruction of Aura, published by SUNY Press in March 2019. He is a visiting assistant professor at Union College in New York. He specializes in Critical Theory and political philosophy. Follow him on Twitter @SaladdinAhme. Originally published at openDemocracy

Cloth Hall, Ypres,

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