Sunday, January 19, 2020

Jamie Galbraith explains his interesting life

Watching the career path of James Galbraith has been a minor hobby of mine ever since I discovered that my interest in economics was directly related to how many of his father's books I had read. The fascination with whatever Galbraith's economics was called was based in my mind on the fact that papa John Kenneth (Ken) Galbraith grew up on a working farm in Ontario and entered the economics profession through the door of agricultural economics. He gave speeches for the Farm Bureau when starting out.

I believed this was important because:
  1. I trust the intellectual habits and practices of those really smart farm kids. Farming is an Ur profession. Providing for the community’s nourishment is a LOT harder than it looks. It is the basis of civilization itself. Out of this scramble came the people who literally built the country. And they created social structures as enlightened as any in human history.
  2. Yea, for the home team. While I envied the childhood of James and wished I could have sat in a corner as JKG discussed the affairs of the world with the best educated economic minds of his generation, I could not. Northwest North Dakota is a LONG way from Harvard. What I could do, however, was recreate the education the farm kid from Ontario got watching his parents and neighbors as they sought to invent a way to get farming to pay the bills out at the thin edge of civilization. Products of this struggle have a reality base that informs the rest of their thoughts. Done right, the resulting thinking can be quite spectacular.
And so, while I avidly read JKG’s books and articles and tried very hard to emulate his thought processes, I was really interested in Jamie’s life because, after all, he is only three years younger than I. If the economics that JKG and friends had been perfecting since the earliest days of Roosevelt’s New Deal was to survive, the next generation of economists would have to learn the institutional practices that actually pushed forward the project of eliminating grinding poverty while attempting to overcome the Great Depression. It is not beyond reasonable speculation that JKG would want at least one of his sons to follow in his intellectual footsteps. And so Jamie would become the crown prince of JKG’s explanations for how the American Industrial System actually worked.

If you read James’ memoir below, you will see that he got a training that was the product of JKGs best ideas. Harvard AND Yale. Professors with international reputations and probably a friend of the family. A “visiting scholar” appointment at Brookings when it was still relevant. And finally he wound up at University of Texas—Austin. This school had enthusiastically embraced all the neoliberal rationalizations in its school of economics so of course, young Jamie would not be welcomed there. However, UT-Austin had long been home to the best Institutionalists in the land led by the spectacular Clarence Ayres. Their wisdom was no longer welcome in the economics department either but they knew a fellow creature of the New Deal so gave him the job of Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the LBJ School of Public Affairs.

The career contrasts between JKG and James are extremely interesting. JKG was by the end of the 1960s arguably the most famous face the economics profession would ever have. His books were read in dozens of countries. He wrote for Henry Luce’s Fortune magazine. He taught at Harvard and had acolytes all over the world. His 10-part video series on economics called The Age of Uncertainty (some episodes can be found on YouTube) was co-produced by the CBC, BBC and PBS. His breed of economic thought was accepted as the rational middle because the practitioners had done a mostly excellent job of running things—post-WW II reconstruction being the best example.

By comparison, James had a modest career that was useful. The man did not waste his life. But he was not the titan like his father—mostly because he had about 1/100 the opportunities to do a good job. In my humble opinion, the factor that explains this most simply was the change in zeitgeist. The economic theories of JKG had ceased to be cool. Where I come from, the enlightened, passionate Keynesians who had run the economics department at the University of Minnesota since the glory days of Alvin Hansen in the 1920s had long since forgotten the reason why Hansen was so enthusiastic about activist government economic intervention. Where he came from (Viborg South Dakota) such economic policy was literally a matter of life and death. This passion also informed JKG.

But Jamie did not grow up on a working farm, he grew up in a splendid home large enough to entertain a steady stream of guests eager to swap ideas with the leading light of what was coming to be called Keynesianism. Jamie's childhood economic demonstrations taught him that economics was this delightfully difficult problem to be solved, not a dangerous test against arctic-like winters and you must be clever enough to still have food in the spring.

Jamie's also suffered wrong intellectual turns even (or especially) considering his gee-whiz educational paths. Economics was changing through the addition of computing power. The math geeks would pose the big questions for the high-powered mainframes to crunch and suddenly, the great mysteries would be revealed through the statistical wisdom of regression analysis. Analysis as modeling guided by machine-perfect math sure sounds like a good idea.

Personally, I was not impressed. I wasted much of my youth building model airplanes and learned a profound lesson. The reason that model airplanes don't look or fly like real airplanes is that all sorts of problems are introduced when you try to scale the outcome. There are guys who want their scale models so authentic, they even want the rivets in the right place. Unfortunately, if the rivets get too small, they no longer can work as fasteners so they are reduced to decoration. Worse, there are physics problems that cause small airplanes to fly differently than large planes. For example, the governing bodies who make the rules for judging scale models have modified those rules so that models are still considered authentic even if the tail surfaces are oversized. Why? Because a WW II fighter with accurately-sized tail surfaces will barely fly—if at all. Oh those Reynolds numbers.

Then there are the problems of predicting behavior using mathematical formulas. Try, for example, to animate the walking behavior of a small toddler in a 3D animation. Using math formulas to predict such random behavior is virtually impossible. In fact, realistic cartoon behavior is really only possible if one puts markers on a real child, let him walk across the floor, take those marker locations and attach them to the model and animate the result. And yet, there are economists from around the world who actually believe they can predict large-scale human motion like market behavior with a few elegant math formulas. I am reminded of that arrogance when I watch just how difficult it is to make a self-driving car. And this is an EASY problem. There are states in USA that issue driver's licenses to 15-year olds.

When Jamie Galbraith lists the learning experiences that were mostly a waste of time he includes learning matrix algebra. (See paragraph #4 below.) So essentially he learned the same lessons as I only in a Harvard classroom. Unfortunately, this mislearning sunk the whole econ profession for at least 50 years. Worse, because this mislearning was so difficult and time consuming, other necessary things had to be dropped. The most serious is the fact that one can now get an advanced degree in economics without knowing the history of the subject. It's no wonder that economists have gotten almost everything wrong for the past 50 years.

So here's to James K. Galbraith who devoted his life to recreating the methods employed by the economists who guided the industrialized west to the greatest prosperity in human history. Historians are important too.

Week-end Wrap – Political Economy – January 19, 2020

Week-end Wrap – Political Economy – January 19, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Seattle city council bans most political spending by ‘foreign-influenced corporations’ 
[The Hill, via Naked Capitalism 1-13-20]

We’re in an age of manufactured nihilism: How misinformation overwhelmed our democracy
(Vox, via The Big Picture 1-17-20]
The issue for many people isn’t exactly a denial of truth as such. It’s more a growing weariness over the process of finding the truth at all. And that weariness leads more and more people to abandon the idea that the truth is knowable. 
I call this “manufactured” because it’s the consequence of a deliberate strategy. It was distilled almost perfectly by Steve Bannon, the former head of Breitbart News and chief strategist for Donald Trump. “The Democrats don’t matter,” Bannon reportedly said in 2018. “The real opposition is the media. And the way to deal with them is to flood the zone with shit.” 
...The press ideally should sift fact from fiction and give the public the information it needs to make enlightened political choices. If you short-circuit that process by saturating the ecosystem with misinformation and overwhelm the media’s ability to mediate, then you can disrupt the democratic process.
Too damn bad the Vox author does not realize this is exactly the political process of demagoguery warned about by Hamilton, Madison, Adams and others at the beginning of the republic. And more - they warned that this process was likely to be initiated  by the rich, such as Leon Black (see below).

Green New Deal - An opportunity too big to miss

Can We Tackle Climate Change and Economic Inequality?
Larry Buhl, January 7, 2020 [Capital and Main, via Naked Capitalism 1-12-20]
A September United Nations report endorsed the general framework for an international green new deal as a way of lifting up poor and vulnerable communities. It concluded that “achieving human well-being and eradicating poverty for all of the Earth’s people—expected to number 8.5 billion by 2030—is still possible, but only if there is a fundamental—and urgent—change in the relationship between people and nature.”
Where the Candidates Stand
And at least one labor group is embracing, not fighting, a Green New Deal. In March, the Los Angeles County Federation of Labor touted the broad outline of a Green New Deal that would benefit the environment and the economy. “Economic inequality and threats to the environment are deeply intertwined, and a Green New Deal framework is vital to fighting both,” the statement read. “We don’t have time to pit jobs against the environment. We never did.”
A recent report on decarbonizing California’s buildings from the University of California, Los Angeles, Luskin Center for Innovation projected an increase in renewable construction activity, electricity generation and transmission until 2045. In a webinar explaining the study’s findings, author Betony Jones said these new jobs would more than offset losses in oil and gas distribution and production, but it wasn’t yet clear whether they would all be high wage jobs.
Rachel Golden, deputy director of the Sierra Club’s Building Electrification program....was the lead author in a recent Building Electrification Plan that would not only lower energy bills and reduce the cost of new housing, but also “create roughly 100,000 new jobs in construction, HVAC [heating, ventilation and air conditioning] installation, electrical work, energy efficiency and load-management services.”

The Carnage of Establishment Neoliberal Economics

One in four countries beset by civil strife as global unrest soars
[Guardian, via Naked Capitalism 1-16-20]

College Degrees Used to Make Families Wealthier. That’s No Longer True
[Worth, via The Big Picture 1-17-20]

Disrupting mainstream economics

How Economists Tricked Us Into Thinking Capitalism Works
[AstuteNews, via Naked Capitalism 1-12-20]

James Galbraith [American Prospect, via Naked Capitalism 1-12-20] France’s Bourbons, learn nothing and forget nothing; they cast their omens in terms of parables read in textbooks many decades back. To change ideas now would call into question the very foundation of their careers.... 
The Times accurately notes that economists are coming around to the view that even under the best conditions economic growth will remain slow—a position argued at book length by yours truly five years ago, but never mind. Part of my argument in The End of Normal concerned the fourth pessimistic pillar, slow productivity growth. I argued that in our age of technological upheaval capital goods have become cheap, therefore business investment as a share of total output has declined, and so the economy relies more than ever on the strength of consumer demand, bolstered by credit cards and student and automotive debt. The evidence since then bears this out. Alas, this means that otherwise worthy calls for new spending on brick-and-mortar infrastructure and on research and development bear no relation to the supposed problem of low productivity growth.... 
Malinen is a financial economist.... Malinen has a free-market streak, and his main scenario leans toward an Andrew Mellon–style mass liquidation, followed by recovery of the survivors. He would prefer this, for all the carnage, including physical death and destruction, to a “Green-Left fascism, suppressing both individual rights and unpopular economic activities.” Even if it were true that “Nature could be saved … but at the expense of humanity reverting to slavery and oppression.”
And in the next crisis, the United States may finally be moved to free itself from the deadweight of mainstream economic thought, to retire a worn-out generation of policy advisers, and to move on with the great social, economic, and environmental project known as the Green New Deal. There is a history of radical experiment and popular mobilization in this country, from which democracy emerged stronger, not weaker, than it ever was before. And for many Americans, to escape from the debt trap and from domination by bankers and billionaires into a world of work and public purpose would be the very opposite of slavery and oppression. A better word would be liberation, along with a new freedom, and a new hope.
James Galbraith [Democracy in Europe Movement 2025, via Naked Capitalism 1-12-20]
The rise of finance and technology, disinflation, globalisation, debt peonage and the decline of industry, the rise of bicoastal inequalities, and the rusting away of the Midwest, giving rise first to Clinton and then to Trump – for all of these the course was set by Reagan and Volcker in the early 1980s. And the dogmas too morphed and lived on, shapeshifting zombies reinvented as exportable commodities in the form of the Washington Consensus, inflation targeting and neoliberalism, each eventually squeezed dry of doctrine until only the policy shells remain – tax cuts, central bank independence, fire-sale privatisations, deficit – and debt-aversion, all too useful to require the foundation of thought....

From 1993 to 1997 I was of some use as Chief Technical Adviser for Macroeconomic Reform and Strengthening Institutions to the State Planning Commission of the People’s Republic of China, my advice was largely to steer clear of Western economists and above all, not to open the capital account. Those results speak for themselves.
What Is the Point of Economics?
Matt Stoller, January 10, 2020
And this brings me to the point of economics, which has taken me a long time to understand. There are many economists who focus on trying to uncover important truths about the world, and there are many economists who seek to serve concentrated capital. There are smart ones, and dumb ones. But truth or falsehood, or empirical rigor, is besides the point. The point of economics as a discipline is to create a language and methodology for governing that hides political assumptions from the public. Truly successful economists, like Summers, spend their time winning bureaucratic turf wars and placing checks on elected officials.
Let’s start with a basic question. Is it the job of economists to understand the world accurately? The answer is far from clear. As finance professor Paul Pfleiderer notes, many economists use models that are chameleons, designed to launder political assumptions about the world through such aesthetics as “mathematical elegance, subtlety, [and] references to assumptions being “standard in the literature.” 
More broadly, prominent leading economists just get things wrong, big things, with no impact on their standing in the profession. This indifference to empirical results is mirrored in the indifference offered by economists to the claims and arguments of non-economists outside the profession, whose views are simply relevant....
There are three main problems with economics as a ‘science’ that can guide public policy choices. The first is that it is a post-mortem discipline. Economists often assert we need data before drawing conclusions... And yet, there was no data in 2000 when the U.S. changes its policies vis-a-vis China, because the consequences were in the future.... 
The second is that using economics to make judgments about the world can be extraordinarily costly and exclusionary. This may or may not be a big deal when considering macro-economic forecasting, but when economics becomes a key part of institutional legal arguments it shades who can use the law to protect their rights....
The third is that an obsession with quantifying leads to political control by those who have access to data. A well-known example is famous economist Alan Krueger, who was paid by Uber and then wrote widely circulated scholarship based on internal Uber data about the corporation’s wage setting terms. But it’s broader than just one company, most of the big tech platforms work with economists, giving these powerful corporate entities a measure of political control over lines of research....
The actual goal of economics as a discipline is to embed itself as a governing language in our institutions of power. 
There are four institutions in which this takes place domestically.
(1) The Congressional Budget Office....
(2) The Office of Information and Regulatory Affairs....
(3) Federal Trade Commission / DOJ Antitrust Division....
(4) The Federal Reserve....

Predatory Finance

Nobody Makes Money Like Apollo’s Ruthless Founder Leon Black 
[Businessweek, via The Big Picture 1-17-20]

Sarah M. Syed
Jan 16

Those with money in Apollo funds were given a disturbing reminder of this in July when Jeffrey Epstein, who’d served on the board of Black’s family foundation and been known to visit Apollo’s offices pitching personal tax strategies, was arrested on federal sex-trafficking charge

Leon Black is a central figure in the story of how finance and banking came to be dominated by organized crime. It is a story that appears unknown to most reporters. And is a story about the influence of criminality in the economy that almost all professional economists are frantically desperate to avoid -- an academic phenomena that savings and loan investigator William Black has written about many times over the past decade, since the financial crashes of 2007-2008.  

Leon Black's father, Eli M. Black was chairman of United Brands Company (formerly called United Fruit in the 1960s and earlier), which ran much of the illegal narcotics trade in the Caribbean and South America, usually with the knowledge, and sometimes assistance, of the CIA. United Fruit corporate assets were used for moving Israeli-procured arms into covert wars throughout Latin America, which blew up into the Iran-Contra scandal of 1987, nearly taking down the presidency of Ronald Reagan. It thus makes entire sense that it is now being reported that Leon Black was tied to rich pedophile pimp Epstein, who has been identified as an asset of Israeli and British intelligence. 

Eli M. Black “fell” to his death from the 44th floor of Manhattan’s Pan Am Building in 1975. Within two years later, Leon Black emerged as head of mergers and acquisitions and co-head of corporate finance at Drexel Burnham Lambert, working closely with Michael Milken to seize control of industrial companies by burdening them with their own debt. In other words, what "private equity" does today. And the rest, as they say, is history. 

Pam Martens and Russ Martens, January 16, 2020 [Wall Street On Parade]

Here’s How the Fake Unemployment Number Was Created to Subdue Anger Against Wall Street
By Pam Martens and Russ Martens: January 17, 2020 [Wall Street On Parade]
Not just under Trump -- Okun's Law

Restoring balance to the economy

California Bill Would Raise Taxes on Corporations With Large CEO-Worker Pay Gaps
Sarah Anderson [, via Truthout 1-17-20]
The California proposal is similar to legislation introduced in the U.S. Congress last November by Senators Bernie Sanders and Elizabeth Warren, Representatives Barbara Lee and Rashida Tlaib, and 18 other House members. 
Under the California bill (SB 37), the wider a company’s gap between CEO and median worker pay, the higher their state corporate tax rate. An estimated 2,000 corporations with annual profits in the state of $10 million or would be subject to the tax, with revenue projected at as much as $4 billion per year....
The California hearing foreshadowed the coming debate over a similar proposal at the federal level — the Tax Excessive CEO Pay Act (H.R. 5066/S. 2849). While the two legislative models’ objectives are the same, they have some differences in design.
Starve the Beast: CEOs now make 361 times more than the average worker.
Jen Sorensen [Truthout January 1, 2019]

“Strikes Are Hard Work”
[Labor Notes, via Naked Capitalism 1-13-20]
“Some kind of movement is developing. Perhaps, after decades of lethargy, workers across industries are ready to once again leverage our power to disrupt—by withholding our labor—and win. Certainly, workers are learning from each other, and the strikes are opening up a renewed understanding of what’s possible when we activate the full force of our power. In a recent conversation we hosted about the educators strike in Chicago, some listeners wanted to know when we would talk about a national strike. Big wins in tough times can inspire us to think bigger. But when we hear about successful strikes, we don’t always fully listen to the work it took to get there. Members of the Chicago Teachers and school employees in SEIU Local 73 developed contract action teams and community coalitions to confront a powerful mayor. It took years to build the relationships, trust, and collective power that sustained them through a difficult fight. A national strike will involve a protracted struggle. It will take serious preparation. It will take serious power. It’s something to build towards—one step at a time. One-day strikes that flex our muscles will bring new people into the struggle. That’s great. But we want more than participation; we want transformation. And what transforms us isn’t the highs of excitement and inspiration. It’s keeping on when the struggle gets tough—discovering within ourselves the reservoirs of courage, fortitude, commitment, and rock-solid solidarity. It’s sharing the work of organizing each day, and the next day, and the next.” 
Lambert Strether: "So, we are far away from being able to do what France has done?"

Understanding France’s General Strike in the Context of the Yellow Vests and Global Class Warfare
[Counterpunch, via Naked Capitalism 1-13-20]

“The Teamster Revolt Against the Hoffa Era” 
[Jacobin, via Naked Capitalism 1-16-20]  
“Willie Ford listened to the conference call in disbelief from the cab of his tractor trailer on I-95 as the Teamster election monitor announced the results of the contract vote covering 250,000 workers at UPS. Ford, a leader of Teamsters for a Democratic Union (TDU), and rank-and-file activists like him, had spent months organizing the UPS Teamster United campaign to win contract improvements. But UPS management and top Teamster officials agreed to givebacks, including a two-tier wage scale for drivers, and spent millions on a coordinated campaign to promote and push through their concessionary deal. Now was the moment of truth. In a monotone voice, the election official announced the results. By a 54 percent majority, UPS workers rejected the givebacks. Dissident Teamster activists had done the impossible. Their Vote No campaign had won. But it wasn’t over yet. The very next speaker on the conference call reversed the rank-and-file victory. Citing an obscure loophole in the Teamster Constitution, Denis Taylor, the union’s chief negotiator at UPS, declared the contract ratified. Just like that, two-tier concessions at the largest union contract in the United States were imposed over the no vote by the members.”

The Carnage of Establishment Neoliberal Economics - Boeing

Boeing’s tough challenges as civilian aircraft maker 
Marshall Auerback, January 11, 2020 [Asia Times, via Naked Capitalism 1-12-20]
Boeing’s new CEO, David Calhoun, is unlikely to solve these multifold problems. Having spent 26 years at General Electric, stripping aviation talent out and replacing real engineering with financial engineering, Calhoun eventually became a director at Boeing in 2009. In 2014, he joined the Blackstone Group, a private equity firm that, as Matt Stoller points out, “is a vector for financializing corporations” as well as being a company well versed in creative accounting shenanigans that enable corporate entities like Boeing to mask their extensive cash-flow problems. 
During his tenure as a Boeing board member, Calhoun has been a party to a series of decisions whereby financial machinations of the company’s managerial class have taken precedence over safety culture. Despite many years of affiliation to the aviation industry, then, Calhoun himself is merely another financial “Master of the Universe,” representative of a caste that specializes in outsourcing and stripping out talent, all the while championing practices such as dressing up the balance sheet in a manner that is legal, but has distorted the underlying profits position of the company....
At this point, no one can credibly promise anyone anything, whether we’re talking about Boeing, the FAA or the overall system itself. There is zero empathy in the system, and zero empathy translates into total entropy. Wall Street does not understand this because Wall Street does not understand how to quantify empathy and trust other than in the crude human instrument of goodwill.
“Boeing posts negative commercial airplane orders in 2019 for first time in decades” 
[CNBC, via Naked Capitalism 1-14-20]  
“For all of 2019, Boeing lost orders for 87 commercial airplanes, meaning it had more cancellations than new purchases, the company said Tuesday. The final tally included the cancellation of three orders in December when customers changed plans to buy 787 Dreamliners. A Boeing spokesman said he wasn’t sure when the company last lost commercial plane orders for the year, but ‘it definitely has not happened in the last 30 years.’ The negative number is especially painful when compared with European rival Airbus, which logged orders for 768 new planes for 2019.”
How Boeing Lost Its Way: Shareholder value eclipsed safety as a top priority, with catastrophic consequences. 
[Bloomberg, via The Big Picture 1-17-20]
For decades now I've read so many articles by apologists for free trade and neoliberalism in which the writer pointed proudly to Boeing as an example of an industry USA was unsurpassed in. Aerospace was the "crown jewel" of American industry. But, like everything else touched by these idiot savants, it's turned to shit.

The Carnage of Establishment Neoliberal Economics

Their makeshift neighborhood of tarps and tents is built on one of thousands of public spaces across California where people have set up camp. The state’s homeless population has ballooned in recent years; in 2019, there were more than 150,000 homeless people in California, according to the U.S. Department of Housing and Urban Development, and 72% of them did not have shelter. A range of health concerns has spread among homeless communities. A few years ago, hepatitis A, spread primarily through feces, infected more than 700 people in California, most of them homeless. Ancient diseases such as typhus have resurged. Homeless people are dying in record numbers on the streets of Los Angeles. 
Communities up and down California, increasingly frustrated with the growing number of homeless people living on public property, have tasked police and sanitation workers with dismantling encampments that they say pollute public areas and pose serious risk of fire, violence and disease. The roustings and cleanups have become a daily occurrence around the state, involving an array of state and local agencies. 
But the response from officials has prompted a public health crisis all its own, according to interviews with dozens of homeless people and their advocates. Personal possessions, including medicines and necessary medical devices, are routinely thrown away. It’s a quotidian event that Leilani Farha, the United Nations special rapporteur on adequate housing, described as a “cruelty” that she hadn’t seen in other impoverished corners of the world.... 
Chris Herring, a doctoral student in sociology at the University of California-Berkeley, has embedded himself in San Francisco’s homeless community on and off for years, including spending nine months in 2014 and 2015 living on the street and a year studying the police, public health and sanitation workers tasked with cleaning encampments.... 
Others have lost ID cards and prescriptions, a setback for making appointments or receiving benefits, according to one of the lawyers on the case, Osha Neumann.
Caltrans workers say they hate doing the cleanups. “It’s like 100 times worse than it was just a few years ago,” said Steve Crouch, director of public employees for Local 39 of the International Union of Operating Engineers, which represents Caltrans workers. “One of the biggest gripes they have is having to clean up the homeless encampments. It’s a nasty job.” 
The sweeps also cause psychological damage. Ciha and his neighbors talk about how horrible it is when people driving by throw garbage at them. Herring said the trauma of living on the streets is so intense he hasn’t yet figured out how to write about it in his academic work. “[The city will] say we’re just asking people to move, but if you’re being asked that over and over and you have nowhere to go, and people are acting like you’re worthless or they’re scared of you, that affects you fast,” he said.

Health Care Crisis

California considers selling its own generic prescription drugs 
[Ars Technica, via Naked Capitalism 1-12-20] 

“Taiwan’s single-payer success story — and its lessons for America” 
[Vox, via Naked Capitalism 1-14-20] 
“In Taiwan, everybody is covered. The Taiwanese health care system is built on the belief that everyone deserves health care, in Xiulin just as much as anywhere else. The costs to patients are minimal. In the 1990s, Taiwan did what has long been considered impossible in the US: The island of 24 million people took a fractured and inequitable health care system and transformed it into something as close to Sen. Bernie Sanders’s vision of Medicare-for-all as anything in the world.” 

“A Healing Place” 
Nathan J. Robinson [Current Affairs, via Naked Capitalism 1-14-20] 
“Bad experiences at hospitals are incredibly common. A close relative of mine called me today having just been released from the hospital, and having had to fill out papers while in horrible pain, then sitting for hours in a harshly lit room being ignored. What’s strange to me about the bad experiences people have is that they are some of the easiest possible things we could change about medicine. You can’t cure cancer, but you can certainly cure paperwork. You can cure depressing architecture. You can cure indifference and bureaucracy and discomfort. The problems with hospitals are strange, because they violate the first principles we would use to design a ‘healing place.’ The first thing you should do when designing a place to make people feel better is to make sure they suffer no unnecessary stress or confusion or unpleasantness there. In fact, there is apparently hard evidence that this can make a difference to patient outcomes, which is why sensible hospitals have gardens. I’d like to suggest, though, that ‘first person experience’ needs to be put at the center of every single discussion of healthcare.” 
Michael Mann, Newsweek, via Naked Capitalism 1-16-20]  
“There was a full court press by the Murdoch media machine, including The Australian, described by Sourcewatch as a paper that “promotes climate change denial in a way that is sometimes…so astonishing as to be entertaining”, The Herald Sun, and Sky News television network in Australia, and Fox News in the U.S., to promote the false claim that the massive bushfires engulfing Australia were primarily a result of “arson”. The distortions were so egregious that a whistleblower from within Newscorp, named Emily Townsend, came forward, condemning the organization for waging a ‘misinformation campaign’ consisting of ‘irresponsible’ and ‘dangerous’ coverage of the current unprecedented bushfire crisis. And in a late-breaking development, Rupert Murdoch’s son James Murdoch is now blasting his father’s media empire, indicating that he is ‘particularly disappointed with the ongoing denial among the news outlets in Australia given obvious evidence to the contrary.'”
I don't know about you, but when I look at the visualizations of an entire continent on fire and see footage of children fleeing into the ocean to escape encroaching flames, I think to myself, how could both parties have let the national debt get so out of hand in my lifetime?

Lake Chad: A War Fueled By Global Warming 
[Der Spiegel, via Naked Capitalism 1-18-20]

“Europe Could Lead Way in $10 Trillion Fossil Fuel Capex Ban, UBS Says”
[Bloomberg, via Naked Capitalism 1-14-20] 
“A $10 trillion ban on fossil fuel capital spending could hold the key to net-zero emissions by 2050, according to UBS Group AG. To achieve such a freeze on emissions, there would need to be enough global restrictions to reduce cumulative fossil capex by two-thirds of the current amount, or about $10 trillion, UBS analysts led by Sam Arie wrote in a note assessing the outlook on energy and climate change. Europe will likely be the starting point for such a move, according to them. ‘We expect to see increasing legal and financing restrictions on fossil capex — taking effect more quickly than any moves towards a global carbon tax, and inevitably accelerating convergence of the energy and utilities sectors,’ the analysts wrote.”
For the first time, the Alarmed are now the largest of Global Warming’s Six Americas 
[Yale Program on Climate Change Communication, via The Big Picture 1-17-20]
Our prior research has categorized Americans into six groups – Global Warming’s Six Americas – based on their climate change beliefs, attitudes, and behaviors. The “Alarmed” are the most worried about global warming and the most supportive of strong action to reduce carbon pollution. In contrast, the “Dismissive” do not think global warming is happening or human-caused and strongly oppose climate action. [A short “Six Americas” quiz is publicly available online.] 
Our latest survey (November 2019) finds that the Alarmed segment is at an all-time high (31%). The Alarmed segment has nearly tripled in size since October 2014.

[The Intercept, via Naked Capitalism 1-14-20] 
“Imperial Oil, Exxon’s Canadian subsidiary, is a household name in Canada thanks to its ubiquitous Esso gas stations. Exxon owns 70 percent of the company… The cache of documents shows that as far back as the 1960s, Imperial had begun hiring consultants to help them manage a future public backlash over its environmental record, as well as conducting surveillance on its public critics. The documents also show that, as the company began to accept the implications of a warming planet, instead of acting decisively to change its business model, it began considering how a melting Arctic might open up new business opportunities.”

Information Age Dystopia

[Slate, via The Big Picture 1-16-20]
Slate sent ballots to a wide range of journalists, scholars, advocates, and others who have been thinking critically about technology for years. We asked them to tell us which tech companies they are most concerned about, and we let them decide for themselves what counts as “concerning.” We told them to define the category of technology companies as narrowly or broadly as they liked, which is how, say, Exxon Mobil made the list. Each respondent ranked as many as 10 companies—subsidiaries counted as part of parent corporations—with more points going to the choices they placed at the top. Then we added up their votes and got this. 
What did we find? While the major U.S. tech companies topped the vote—read on to find out which came in at No. 1—our respondents are deeply concerned about foreign companies dabbling in surveillance and A.I., as well as the domestic gunners that power the data-broker business. No one thinks Twitter is the worst thing that could happen to a planet, but a lot of people worry about it a little. Companies with the potential to do harm can be as distressing as those with long records of producing it. Privacy people care a lot about misinformation, but misinformation people might not be so worried about privacy. Almost everyone distrusts Peter Thiel. And some people don’t have a problem with Amazon or Apple or even Facebook at all—which is why we included dissents for many of the top companies on our list.
Amazon topped the list -- "It’s everything" -- followed by Facebook, Alphabet (formerly Google), Palantir Technologies, Uber, Apple, and Twitter.  More on Amazon: 
“While other companies may be guilty of some of these, Amazon has: 1) contributed to the death of local stores, services, journalism, music, community, etc. around the world; 2) focused on precarious and deskilled labor, with reportedly terrible working conditions; 3) supported police surveillance with its Ring doorbells and surveillance more generally with Alexa devices; 4) racked up a massive carbon footprint with rapid shipping as well as AWS cloud-based computing; 5) contributed tech to military and intelligence agencies with dubious human rights records, including U.S. Customs and Border Protection operations separating families at our own border; 5) failed to moderate what is on its platform, resulting in a glut of dangerous fakes such as easily broken counterfeit car seats for children; 6) has a famously hostile workplace culture, which has been shown to contribute to harassment of women and minorities; and 7) evaded taxation with shady categorization of assets and offshore tax havens.”
‘Techlash’ Hits College Campuses
[NYT, via Naked Capitalism 1-13-20]
The share of Americans who believe that technology companies have a positive impact on society has dropped from 71 percent in 2015 to 50 percent in 2019, according to a 2019 Pew Research Center survey....

... a 19-year-old sophomore at Yale, which sends about 10 percent of each graduating class into tech, said that taking a job in Silicon Valley is seen as “selling out,” no different from the economics majors going into consulting who are “lovingly and not-so-lovingly called ‘snakes.’”
Blackout Bug: Boeing 737 cockpit screens go blank if pilots land on specific runways
[The Register, via Naked Capitalism 1-13-20]
Although full technical details were not given in the airworthiness directive, the FAA said that the seven runways had "latitude and longitude values" that "triggered the blanking behaviour", suggesting some kind of memory interaction between onboard computers causing the screens to stop displaying any information until a different runway was selected in the flight plan. 
The bug affects 737-600, -700, -700C, -800, -900 and -900ER model aircraft, which are running Common Display System Block Point 15 (CDS BP 15) software for their display electronic units (DEUs) together with flight management computer (FMC) software version U12 or later.... 
Commercial jet airliners are far from immune to software bugs. Infamously, Boeing's 787 Dreamliner needed power cycling every 248 days to prevent the aircraft's electronics from powering down in flight, while Airbus' A350 was struck by a similar bug requiring a power cycle every 149 hours to prevent avionics systems from partially or even totally failing to work. 
Human error with electronics can also cause problems for commercial aviation: a typo in GPS co-ordinates left an Air Asia Airbus A330's navigational system thinking it was 11,000km away from its true position, while the captain of another airline's A330 found out the hard way that hot coffee and electronic hardware really do not mix.
Silicon Valley Abandons the Culture That Made It the Envy of the World 
[The Atlantic, via The Big Picture 1-16-20]

The case for … making low-tech ‘dumb’ cities instead of ‘smart’ ones Guardian. Important and interesting, via Naked Capitalism 1-16-20]

Creating new economic potential - science and technology

Team builds the first living robots 
[Techxplore, via Naked Capitalism 1-14-20]
Now a team of scientists has repurposed living cells—scraped from frog embryos—and assembled them into entirely new life-forms. These millimeter-wide "xenobots" can move toward a target, perhaps pick up a payload (like a medicine that needs to be carried to a specific place inside a patient)—and heal themselves after being cut.
"These are novel living machines," says Joshua Bongard, a computer scientist and robotics expert at the University of Vermont who co-led the new research. "They're neither a traditional robot nor a known species of animal. It's a new class of artifact: a living, programmable organism." The new creatures were designed on a supercomputer at UVM—and then assembled and tested by biologists at Tufts University.

Chinese to build and operate first Bogota LRT line
[Railway Age 1-14-20]
China Civil Engineering Construction Corporation (CECC) has won a Pesos 3600bn (US$1.1 billion) contract to design, build, operate and maintain a 39.5km commuter light rail line linking Bogotรก with Sabana de Occidente....

CECC, which was the only bidder, submitted a bid which was Pesos 166bn below the budget set for the RegioTram West project. CECC will be responsible for financing the project, studies and design, and environmental management, construction, operation, and maintenance of the entire project including the rolling stock and rail systems. The operation and maintenance element of the contract is for 21 years.
A progressive foreign policy for USA would focus on helping countries around the world build $100 trillion worth of new industries, and energy and transportation systems for a Global Green New Deal. One big problem, though, is that USA has simply lost the ability to build a lot of stuff. Note that no USA companies submitted a bid. The sad fact is that there are no USA companies left that can design and build urban passenger rail systems (see page 8). 

Disrupting mainstream politics

I flipped my Aunt from voting for Biden to Bernie by asking her to read this article by @ninaturner. 

While Bernie Sanders has always stood up for African Americans, Joe Biden has repeatedly let us down
Nina Turner, January 12, 2020 [The State (Columbia SC), via Naked Capitalism 1-16-20] 

“A Guide to the 2020 Democratic Candidates You Should Not Vote For” 
[Medium, via Naked Capitalism 1-16-20]
This is from June 2019, but the documentation is devastating. Harris and ORourke are already out, but this is great oppo to use against Biden and Buttigieg.

A Progressive’s Guide to Choosing Between Bernie and Warren
[Medium 12-31-19]
Sure seems to me that if Democrats really want to win back voters who went for Trump, Sanders is the obviously the candidate with the most electibility.
Bernie receives far more donations from the working class, Trump’s key demographic, than Warren, whose numbers are more in line with Pete Buttigieg’s. This is further illustrated by Bernie out-raising Trump in five states, including battleground state Wisconsin, while Warren only out-raises Trump in her home state of Massachusetts. Bernie leads amongst the 206 counties that flipped from Obama to Trump as well, earning over 3x the donations in them as Warren.
AOC Is Actually Serious About Building Progressive Power
Ian Welsh, January 13, 2020
The Democratic party is a conservative centrist party (centrist in American terms, conservative in its ideology.) Independents are more left-wing than Democrats are, which is why Sanders did better with them than with Democrats in 2016. Those Democrats who whined about this are right: Sanders isn’t a Democrat, because he’s a left-winger and Democrats aren’t.
So for years, Democrats have constantly put their muscle and money behind centrist candidates and attacked left-wingers. The cry of the old Netroots was “More and better Democrats!” By this we meant, “more left-wing Democrats,” but the party was fanatically hostile to that and eventually crushed the insurgency–with a great deal of help from Obama.
Now another generation is taking their shot, and I’m glad to see they aren’t playing nice. The fight for the Democratic party is a fight, and to the victors goes the policy. People like Pelosi want to sell that policy to Wall Street and so on, people like Sanders and AOC want to use it to help ordinary people. It isn’t more complicated than that, and while tactical alliances can be made against Republicans, Pelosi and Biden have nothing in common with AOC or Sanders. They aren’t friends, they’re enemies.
Ocasio-Cortez creates PAC to push back on the Democratic Party’s ‘blacklisting’ rule”
[Washington Post, via Naked Capitalism 1-17-20]
“Rep. Alexandria Ocasio-Cortez (D-N.Y.) announced she had formed a political action committee on Saturday to help raise funds for progressive primary candidates. The congresswoman has been a vocal opponent of the Democratic Congressional Campaign Committee’s policy to “blacklist” vendors and firms that work with candidates mounting primary challenges against Democratic incumbents. Ocasio-Cortez has also not paid her dues to the DCCC during this campaign cycle and said she did not plan to pay. The funds are traditionally provided to the DCCC by House members to redistribute among other important races.”
“Alexandria Ocasio-Cortez’s New PAC Is Already Raising Big Money”
[Huffington Post, via Naked Capitalism 1-17-20]
“Ocasio-Cortez launched Courage to Change to support both progressive incumbent Democrats and primary challengers whose positions are close to her own. (She has thus far endorsed progressives taking on conservative Democratic Reps. Henry Cuellar of Texas and Dan Lipinski of Illinois.)…. In two fundraising emails and a tweet, Ocasio-Cortez and her campaign framed the PAC explicitly as an alternative to the Democratic Congressional Campaign Committee, which is House Democrats’ official campaign fundraising arm.”
[Electronic Intifada, via Naked Capitalism 1-16-20]

Wow. Just wow.

This is a brilliant, nuanced answer from @BernieSanders on how tens of millions of people who sincerely feel abandoned by the political establishment were then easy prey for Donald Trump.
Click here to view Bernie Sanders schooling the staff of the New York Times.

CNN’s Debate Performance Was Villainous and Shameful Matt Taibbi, Rolling Stone, via Naked Capitalism 1-16-20]

“Bernie Sanders Believes in Mass Politics — Something the New York Times Can’t Wrap Their Minds Around”
In this era of resurgent left electoral activity, the conflation of left and right populism is one of the preferred tactics of the elite political center.

Enemy Actions

“Trumpism After Trump”
[Harpers, via Naked Capitalism 1-16-20]
A long and very informative report on the National Conservatism Conference.
“They were here because of one undeniable fact: Donald Trump was going to die. Trump might be ejected from office or lose the election or win the election—but he was, also, definitely going to die. And Trumpism needed to survive. It was just getting started. If Trumpism were snuffed out with Trump, Republicans would fall back into march with the party lemmings in hock to their donors (hardly any Republican voters agreed with the donors about anything, as Trump had intuited), who would connive with liberals to contaminate the country with more immigration, more Big Tech treason, more “free” trade, more endless wars, more slouching toward nihilism. The ancien rรฉgime was threatening to reconstitute itself. Someone had to stand up for Trumpism in the noble abstract.”
....Fox News might well fall into conniptions at the notion, but what was needed was “class warfare”—or perhaps more precisely, a war within the elites—to ensure that the future remained Trumpian and did not revert to the globalist highway to nowhere.
This is a long article, but extremely useful for providing details of what important conservatives and neoconservatives, such as Peter Thiel and Christopher DeMuth, are doing to promote and exploit Trump's political success for their own benefit. 
....the war to win was within the elite. It was a question of who would exploit the amour propre of the professional-managerial class and enlist it in a battle against the top 1 percent—or top .1 percent. Up until this point, the billionaire class had operated in near perfect conditions, with a Democratic Party that swooned over them and a Republican Party that was so conveniently repulsive to the top 10 percent that it drew their energy away from revolutionary rumbles. Much as the Bernie Sanders strategists wondered about how many Warrenites they could attract to socialism before she embarked on an inevitable voyage back to the center, so Krein and his cadre wanted to make National Conservatism a viable alternative for a new, more politically responsible elite that would not shy from war with the globalists.
“‘You’re a bunch of dopes and babies’: Inside Trump’s stunning tirade against generals”
[WaPo, via Naked Capitalism 1-17-20]
This article is adapted from “A Very Stable Genius: Donald J. Trump’s Testing of America,” which will be published on Jan. 21 by Penguin Press.
[During a meeting in "The Tank" of the Joint Chiefs of Staff in the Pentagon]
Trump’s first complaint was to repeat what he had vented about to his national security adviser months earlier: South Korea should pay for a $10 billion missile defense system that the United States built for it. The system was designed to shoot down any short- and medium-range ballistic missiles from North Korea to protect South Korea and American troops stationed there. But Trump argued that the South Koreans should pay for it, proposing that the administration pull U.S. troops out of the region or bill the South Koreans for their protection. 
“We should charge them rent,” Trump said of South Korea. “We should make them pay for our soldiers. We should make money off of everything.”
[A few weeks later, at a meeting in the Situation Room in the White House]
But there Trump was, struggling to come up with a new Afghanistan policy and frustrated that so many U.S. forces were deployed in so many places around the world. The conversation began to tilt in the same direction as it had in the Tank back in July. 
“All these countries need to start paying us for the troops we are sending to their countries. We need to be making a profit,” Trump said. “We could turn a profit on this.”

Sunday, January 12, 2020

Week-end Wrap – Political Economy – January 12, 2020

Week-end Wrap – Political Economy – January 12, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The End of Economic Growth? Unintended Consequences of a Declining Population (PDF)
Charles I. Jones, [Empty Planet, via Naked Capitalism 1-8-20]
To sustain a constant population requires a total fertility rate slightly greater than 2
in order to compensate for mortality. The graph shows that high income countries
as a whole, as well as the U.S. and China individually, have been substantially below
2 in recent years. According to the U.N.’s World Population Prospects 2019, the total
fertility rate in the most recent data is 1.8 for the United States, 1.7 for China and for
High Income Countries on average, 1.6 for Germany, 1.4 for Japan, and 1.3 for Italy
and Spain. In other words, fertility rates in the rich countries of the world are already
consistent with negative long-run population growth: women are having fewer than
two children throughout much of the developed world.

“Americans’ happiness is correlated with spending on public goods”
[Boing Boing, via Naked Capitalism 1-9-20]
“Baylor University political scientist Patrick Flavin’s forthcoming study in Social Science Research finds that people in states with higher public goods spending (on ‘libraries, parks, highways, natural resources and police protection’) report higher levels of happiness. It’s not clear whether they are happier because they have better services, or whether people who choose to live in places where they don’t have to pay for their neighbors’ kids’ education, parks, etc, are selfish, miserable f*cks.”

The Carnage of Establishment Neoliberal Economics

Afternoon of the Pawnbrokers: Home again in post-crash, subprime Indiana
[The Baffler, via Naked Capitalism 1-9-20]
....the pawnbroker is not much of an appraiser. Mostly he is conditioned by his market: he knows strictly about the goods pawned by certain clients in a given area. Even the pawnbroker’s infamous haggle has little to do with the value of the good in question; it is much more about gauging the client’s intentions. Above all else, the broker needs to decide, on sight or by consulting his ledger, whether the client will return to collect his property. If he does not, the pawnbroker does not get the loan back with that usurious fee; maybe the item will later sell, but that’s not nearly as profitable as if the client redeems it and then somewhere down the road pawns it again. So instead of a storehouse of knowledge about the history of goods, the pawnbroker carries a mental index of the local poor: their problems, complaints, justifications, excuses, and the way they make their money. With this index, he tries to predict a poor person’s rate of redemption.

A pawnbroker’s mental index of the poor is also his burden. It’s a state of misery wherein the technics of usury persistently butt against the vicissitudes of poverty. The truth was, even if most of our clients knew the rules of the game, they were too desperate to play it... Too many times a day, a client would pop up to the desk, addled and for all the world alone, grasping a half-dozen Blu-ray discs, seeking a loan for “gas money to get home.”

....Ten years later, I can hardly see through my rage: rage at the unpunished hubris of those heisters, crapulous with greed, who hijacked the zeppelin of the economy and crashed it into those of us living below, whether we were in a hedge-fund-owned trailer park or a McMansional subdivision or, in my case, a rent-stabilized Brooklyn apartment building. Still, I found the same subprime manipulations, the same moral hazard disguised as honorable lending, carried out by a family of pawnbrokers who professed to hate the bankers most of all. There is no cultural divide between the coastal financial elite and the petty usurers in flyover states; there is only the capitalism of small differences, the scalability of exploitation. The operations are the same.
US Households: Half Spend More Than They Earn
by Barry Ritholtz, January 10, 2020 [Torsten Slรธk, Deutsche Bank Securities, via The Big Picture]

“Increasing the minimum wage can reduce suicide rates, study finds” 
[Global News, via Naked Capitalism 1-10-20]
“A study published Tuesday in the Journal of Epidemiology & Community Health examined the link between minimum wage increases and suicide rates among various groups across the U.S., between 1990 and 2015. For every dollar added to the minimum wage, suicide rates among people with a high school education or less dropped by 3.4 to 5.9 per cent, the authors found. The effects were more pronounced during periods of high unemployment.”
What is private equity, and why is it killing everything you love?
[Vox, via The Big Picture 1-7-20]
Even an industry-friendly study out of the University of Chicago found that employment shrinks by 4.4 percent two years after companies are bought by private equity, and worker wages fall by 1.7 percent. The type of company matters as well — employment shrinks by 13 percent when a publicly traded company is bought by private equity, but it increases by the same percentage if the company is already private.
Private Equity: “Dairy Giant Borden Files for Bankruptcy Protection” 
[New York Times, via Naked Capitalism 1-9-20] 
“‘The biggest cause, if you dial it back, is a circumstance where we have debt that is inappropriately sized for the company,’ [Borden’s chief executive, Tony Sarsam] said… After making a number of acquisitions in the late 1980s, the company entered a turbulent period resulting in its 1995 sale, for $2 billion, to the private-equity giant KKR [Kohlberg Kravis and Roberts]. Over the next decade, the company was slowly whittled down, with many of its divisions and brands sold off, Borden said in the filing.”
Lambert Strether adds, "I’m sure KKR made out just fine, though. As they do."
[ProPublica, via Naked Capitalism 1-11-20]

[The Conversation, via Naked Capitalism 1-7-20]

Two Years Later: What Has Trump’s Tax Law Delivered?
[Capital & Main, via Naked Capitalism 1-7-20]

[Atlantic, via The Big Picture 1-9-20]
One study found that college graduates earn nearly twice as much as their peers without a college degree. But what if those earnings are no longer translating into financial security and long-term prosperity? A new study by researchers at the Federal Reserve Bank of St. Louis suggests that might be the case. College still boosts graduates’ earnings, but it does little for their wealth... And, as a general point, the college earnings and wealth premiums—meaning how much more a person with a college diploma makes and owns than an otherwise similar person—are large. But upon close examination, terrifying generational and demographic trends emerge....

The second potential factor involves Wall Street’s financial engineering. Younger folks have come of age during an era of consumer debt, with banks more than happy to load customers up with credit cards, car loans, and so on. Those debts then get subtracted from the value of families’ assets when determining their net worth, helping to explain the Millennials’ crummy wealth accumulation. “The leveraging of college-graduate balance sheets over time is entirely consistent with the progressive weakening of their overall financial positions that we identified—even while the college and postgraduate income premiums remained intact,” the authors write. 
Finally—most obvious, and perhaps most important—is the cost of college and graduate school itself. The price of consumer goods has increased by a factor of four since the late 1970s. College costs have increased by a factor of 14, the study notes.
‘The People With the Least Resources Are Now Shouldering the Greatest Burden’
[FAIR, via Naked Capitalism 1-8-20]

New Year in Los Angeles
[Immigrants as a weapon 1-2-20]
Kinda weird for a Soviet immigrant like me to realize that you fled one failing society only to end up in a society that was also entering an accelerated phase of decline and degradation.... 
Just across the 101, the infamous MacArthur Park looks like a refugee camp that itself had been destroyed in a hurricane. There’s debris and trash and human waste spread around everywhere. Walking on Sunset Boulevard last night, it seemed like five out of four people on were homeless — wandering around in a haze, begging, sleeping on the sidewalks. 
It’s sad and brutal. There are camps everywhere. Under underpasses, onramps, off-ramps, sidewalks, and unclaimed suburban corners....  Everyone here agrees it’s bad and everyone is embarrassed by it. But nothing’s really being done. LA’s been throwing hundreds of millions of dollars at the problem, only to see homelessness grow by something like 15 or 20 percent a year here. Donald Trump’s people have been talking up his plans to resettle California’s homeless into camps far outside of Los Angeles. He wants deal with the issue by criminalizing rockbottom poverty and hiding it. My guess is that his plan will be received warmly here in liberal, anti-Trump California — even if people will be too embarrassed to admit it. Even the “progressive” cities like Berkeley have been out front in waging a legal war to push homelessness out of sight.... 
Looking around, I gotta say that these decades have not been kind to the America Way of Life. In the time that we’ve been here, just about everything’s gotten worse — more billionaires, more pollution and environmental collapse, more inequality, more wage theft, more energy consumption, more garbage production, more wars, more privatization, more school shootings, more poverty, and of course much much more homelessness. With every year the pitch of the decline has gotten steeper and steeper and it feels like we’re now in free fall. There’s systemic failure and stagnation on every level, papered-over with lies and self-deception. Hell, even basic things like recycling turned out to be a failure and a petro-industry consumerist scam. 
It’s strange for a Soviet immigrant like me to realize how rotten everything is around here. My Cold War immigrant story should have been about a bright young man being saved from a grim fate under Soviet authoritarianism, living out his life in a dynamic and prosperous free society. There should have been a classic Hollywood ending. But the script is different under late stage American neoliberalism. Turns out that my family fled one failed society only to once again end up in a society that was just beginning to enter an accelerated phase of stagnation and collapse. We had escaped the tail end of one disaster only to be caught up in the start of an even bigger unfolding catastrophe.

Predatory Finance

Federal Reserve Admits It Pumped More than $6 Trillion to Wall Street in Recent Six Week Period
Pam Martens and Russ Martens, January 6, 2020 [Wall Street On Parade]

Stock Exposure Has Exploded at JPMorgan’s Federally-Insured Bank to $2.4 Trillion
Pam Martens and Russ Martens, January 7, 2020 [Wall Street On Parade]

Should banks expect cyberattacks from Iran? 
[American Banker, via Naked Capitalism 1-9-20]

Restoring balance to the economy

Making Stakeholder Capitalism a Reality
Laura Tyson, Lenny Mendonca [Project Syndicate, via Naked Capitalism 1-8-20]

History of the two-day weekend offers lessons for today’s calls for a four-day week 
[The Conversation, via Naked Capitalism 1-7-20]

‘Say No to Stealing Our Social Security Benefits’ 
[FAIR, via Naked Capitalism 1-7-20]

Economics in the real world

A look inside the factory around which the modern world turns
[The Economy, via Naked Capitalism 1-6-20]
A brief description of the production process at Taiwan Semiconductor Manufacturing Company, with no mention whatsoever that semiconductors and semiconductor manufacturing were invented in the USA by government funded programs in the 1950s and 1960s. 
With up to 90% of the market for the third-party manufacture of advanced chips, tsmc dominates the production of the infrastructure on which the modern world relies by manipulating matter with a precision no other company can match. 
That unique capability makes tsmc important in a way that goes far beyond the commercial. Vital to the advanced industries of both the United States and China, its unmatched capabilities in the realm of the nanoscule have implications at the highest levels of geopolitics....\ 
And then you need the machinery with which to impose the digital expression of that final design—the core—onto the silicon of the wafer. Fab 18 does this with light, as the industry has for decades. But to get that light it requires bus-sized machines built by a Dutch company called asml. 
In each machine a microscopic fleck of molten tin is dropped in front of a laser beam powerful enough to cut metal 50m times a second. The atoms of tin are instantaneously heated to 1mยบC, which smashes their outer electrons from their nuclei. Interactions between the newly free electrons and the atomic nuclei pump out what is called “extreme ultraviolet” light with wavelengths of just 13.5nm. 
Mirrors made by Zeiss, a German company, focus that light onto the waiting silicon wafer. Just before it arrives at the wafer the light hits a mask which protects some parts of the wafer and leaves others exposed. The exposed sections are eaten away, leaving the structure of the transistors beneath the masked areas.

Bible Lobbyist: We Can't Print Bibles in America Anymore
Matt Stoller [Big, via Naked Capitalism 1-8-20]
Last week I wrote about how the Trump administration, spurred by Senator Marco Rubio, has begun to organize an industrial policy, which is to say government officials financing specific industries explicitly and directly. There’s a lot to say about industrial policy both positive and negative, and I will be saying a lot more. But today I’m going to make a very simple point about the main political problem in America, and across the West. We don’t value making things, and so increasingly we’ve lost the ability to make things.... I wrote about this last year.

The list of products and commodities companies say they can no longer make in America is long. Nylon products, optical scanners, consumer robotics, electronics, all types of clothing, specialty chemicals…

And the arguments were always the same, which is that we can’t do things in the U.S., and if we try, consumer prices will go up and prevent Americans from getting the [insert important thing] they depend on. The head of the American Bridal & Prom Industry Association said, “we can't make wedding gowns and prom dresses in the United States.” The entire labor force for doing so, and even things like beads for hand-sown adjustments, are now in China. “It’s impossible… We can't even get the materials in this country to make this clothing.” 
As I noted, “from prom dresses to point of sale terminals, the argument from American distributors is pretty much always the same. The ecosystem of production doesn’t exist in the U.S. anymore and it would be too expensive to bring it back.”

...the point here is ... whether we as a society value the ability to produce things. We certainly used to. We could make fantastic airplanes and invent a host of wonderful technologically sophisticated products to improve our lives. And yet today, our book distributors tell us we can’t even print books. There are a lot of reason for that, but the main one is that we have elevated the rights of financiers over the rights of workers, engineers, farmers, artists and businesspeople.
For tech-weary Midwest farmers, 40-year-old tractors now a hot commodity
[Star Tribune, January 5, 2020]
Tractors manufactured in the late 1970s and 1980s are some of the hottest items in farm auctions across the Midwest these days — and it’s not because they’re antiques. Cost-conscious farmers are looking for bargains, and tractors from that era are well-built and totally functional, and aren’t as complicated or expensive to repair as more recent models that run on sophisticated software.... 
The cheaper repairs for an older tractor mean their life cycle can be extended. A new motor or transmission may cost $10,000 to $15,000, and then a tractor could be good for another 10 or 15 years. 
Folland has two Versatile 875s manufactured in the early 1980s in Winnipeg and bought a John Deere 4440 last year with 9,000 hours on it, expecting to get another 5,000 hours out of it before he has to make a major repair. 
“An expensive repair would be $15,000 to $20,000, but you’re still well below the cost of buying a new tractor that’s $150,000 to $250,000. It’s still a fraction of the cost,” Folland said. “That’s why these models are so popular. They’ve stood the test of time, well built, easy to fix, and it’s easy to get parts.” 
He also said the modifications to newer diesel engines on tractors can cause mechanical problems, and the carbon footprint of an older tractor can be mitigated by using biodiesel, which is produced from soybeans grown in Minnesota and extends the life of an engine because it includes better lubricants than conventional diesel fuel.

Climate and environmental crises

Australia’s leaders unmoved on climate action after devastating bushfires
[Reuters, via Naked Capitalism 1-8-20]

An ‘absolutely seminal moment’: climate change opinion shifting in face of fires
Sydney Morning Herald, via Naked Capitalism 1-11-20]
Kevin W on Naked Capitalism: “You only needed half the country to burn down to get people to think about changing their minds.”

Worst Drought in 40 Years Looms Over the Struggling Thai Economy
[Bloomberg, via Naked Capitalism 1-10-20] 
[New England Journal of Medicine, via Naked Capitalism 1-9-20] 
“Climate-change–driven hurricanes tend to inflict two types of environmental injustice. One is that socioeconomically disadvantaged and racial or ethnic minority populations experience disproportionate harm, loss, and life changes. The increased severity of climate-change–related storms portends a worsening impact on marginalized people that can exacerbate preexisting health gaps and social inequities. As Dorian moved over the northwest Bahamas, for instance, the most severe destruction affected thousands dwelling in shantytowns on Great Abaco Island. Many of those affected were undocumented migrants…. [A]fter Hurricane Maria, many rural, disadvantaged Puerto Rican municipalities struggled without electricity for as long as a year. The death toll rose steadily into the thousands, as frail, elderly, and chronically ill people died preventable deaths. Disparities in health, as measured by multiple indicators, were magnified. At a more fundamental level of environmental injustice, the contribution of island-based populations to global carbon emissions is negligible.”
 Going 100% Green Will Pay For Itself in Seven Years, Study Finds
[Bloomberg, via Mike Norman Economics 1-8-20]
A Stanford University professor whose research helped underpin the U.S. Democrats’ Green New Deal says phasing out fossil fuels and running the entire world on clean energy would pay for itself in under seven years. 
It would cost $73 trillion to revamp power grids, transportation, manufacturing and other systems to run on wind, solar and hydro power, including enough storage capacity to keep the lights on overnight, Mark Jacobson said in a study published Friday in the journal One Earth. But that would be offset by annual savings of almost $11 trillion, the report found.

“Seaweed ‘forests’ can help fight climate change” 
[National Geographic, via Naked Capitalism 1-9-20] 
“[A] new study that for the first time quantifies the global capacity of large-scale seaweed farming to offset terrestrial carbon emissions and maps areas of the ocean suitable for macroalgae cultivation…. Farming seaweed in just 3.8 percent of the federal waters off the California coast—that’s 0.065 percent of the global ocean suitable for growing macroalgae—could neutralize emissions from the state’s $50 billion agriculture industry, according to the paper published Thursday in the journal Current Biology.”

Health Care Crisis

“US Healthcare Industry Creating an Endless Shitstorm of Money-Grubbing Bureaucracy and Paperwork, Study Finds” 
[Vice, via Naked Capitalism 1-9-20] 
“Capitalist though [(?)] it may be, the U.S. healthcare industry is a bureaucratic, inefficient and unnecessarily complicated mess, which has created a highly lucrative paper-pushing industry that is unnecessarily costing already-broke Americans hundreds of billions of dollars a year, according to a new study published this week in the Annals of Internal Medicine.

The healthcare industry’s bureaucratic administrative costs set Americans back $812 billion in 2017, or just under $2,500 per person. Another way to think about those numbers:  34 percent of all U.S. costs related to ‘doctor visits, hospitals, long-term care and health insurance’ essentially came from paperwork, according to the analysis, which was performed by researchers at Harvard Medical School, the City University of New York at Hunter College, and the University of Ottawa.”
“Woman Finds A Genius Way To Reduce ER Bills By Itemizing Them And People Are Saying That It Works” 
[Bored Panda, via Naked Capitalism 1-8-20] 
“While those who have insurance are not always made to pay full price, the uninsured people suffer the most. This prompts people to look for a way to reduce their bills. After TikTok user shaunnaburns3 told people to ask hospitals for itemized bills once they are faced with a hefty charge for a trip to the ER, people decided to put that to the test. Luckily, for some people, this tip actually worked and helped save them hundreds of dollars.”
“Congress’ health agenda barrels toward 2020 buzz saw” 
[Politico, via Naked Capitalism 1-8-20] 
“Doctor Patient Unity — a dark money group largely funded by two private equity-backed physician staffing companies — was the most prominent of the outside groups to spend heavily to influence the surprise billing debate, dropping more than $53 million on ads over the last half of 2019 to attack a leading surprise billing fix, according to Advertising Analytics.”

[Twitter below, via Naked Capitalism 1-6-20]
Cost of tooth removal with anesthesia in SF: $1k (w/ no insurance)
Cost in Paris: $80 (in certain hospitals)
Round trip SF <> Paris: $300 (Norwegian Air)
Average cost / night in Paris: $100

So, spend $1k in SF, or $580 in France, including a weekend in Paris :)

[Ars Technica, via Naked Capitalism 1-6-20]

Information Age Dystopia

CES Gadget Show: Surveillance is in – and in a big way 
[Portland Press-Herald, via Naked Capitalism 1-8-20]
Disinformation For Hire: How A New Breed Of PR Firms Is Selling Lies Online 
[Buzzfeed, via Naked Capitalism 1-8-20]

Disrupting mainstream politics

Bernie, Donald, and the Promise of Populism
William Greider, September 21, 2015 [The Nation, via Real Economics 9-24-15]
But Goodwyn insisted that ordinary people, though discouraged from active citizenship, have essential knowledge—knowledge they haven’t learned from books or newspapers. Their knowledge is crucial for balanced self-government. Because ordinary Americans, regardless of status or education, know things the authorities did not teach them. They frequently know things that contradict the governing experts, and they learn them before elected representatives do. 
Where do people get this distinctive knowledge? From life itself, as Goodwyn explained. Of course, people are fallible and prone to error, false enthusiasm, and fears. But so are elected politicians. So are the corporate CEOs and investment bankers, including the ones who led the country over a cliff in 2008 and crashed the middle class. 
The popular anger exploding in the run-up to 2016 baffled press and political leaders. They would not have been surprised if they had listened more respectfully to the broad ranks of citizens during the past three decades. Working people knew the “American dream” was falling apart. They knew because it was happening to them. They told their stories in great detail to anyone who would listen (as a young reporter I heard those stories from auto workers, steel workers, machinists, debt-burdened families, and other victims, trying to hang on and losing the struggle). 
With brave exceptions, politicians in both parties turned their backs on the cries of distress. Learned economists assured political leaders that what working people saw happening in their neighborhoods wasn’t the real story. Over time, they predicted, prosperity would reach everyone and people would agree that deindustrialization was a good thing, a necessary evolution in the economy. It didn’t happen, and neither party has come clean on its failure. 
I think that’s where the anger comes from. There is widespread feeling across ideological and partisan divides not only that government failed to ensure economic prosperity and security but also that both political parties denied or ignored what average working stiffs knew and were trying to tell the politicians. Many believe they were betrayed, that the politicians lied. 
Modern government lost its sense of balance and credibility for many reasons, but partly because authorities distanced themselves from the common-sense and popular knowledge of ordinary Americans. This disconnect permeates government and politics, and it’s not always due to corporate greed or corruption. Sometimes, it is due to plain ignorance.
“Sanders’ Proposals Are The Largest Middle Class Tax-Cuts in US History” 
[Medium, via Naked Capitalism 1-7-20] 
“Medicare for All can be phrased as a tax cut that saves the average American family at least $10,000 a year. Not to mention the compound gains that families will enjoy if they no longer need to assist their children with college tuition. And for those of you wondering whether these tax cuts will be completely offset by the tax hikes needed to pay for the programs themselves, fear not. Free college tuition costs less than half a percent of US GDP, that’s a mere $80 Billion a year and is paid for in its entirety by taxing Wall Street day trading and speculation. The working and middle class will pay zero in taxes for making public college tuition free.
None of the Above
Barry Ritholtz, January 7, 2020 [The Big Picture]
The chart nearby shows this on a county-by-county basis. Looking only at vote totals, the final percentages of votes are something like this:
2016 Presidential Elections: Vote Percentages (total)
  • 44.0% Eligible But Did Not Vote
  • 28.6% Clinton
  • 27.4% Trump 
If we look at the election on that basis, the electoral college would look very different:
2016 Presidential Elections: Electoral College, including None of the Above
  • Nobody: 445 Electoral votes
  • Clinton: 72 Electoral votes
  • Trump: 21 Electoral votes

Polarization in Media / Twittersphere
Barry Ritholtz, January 5, 2020 [The Big Picture]
What is most intriguing about this is not the Left/Right divide, but the differentials within the Left and the Right:
The Left is dominated by Center Left, with the Far Left a single digit fringe.
The Right is different, it is dominated by the Far Right, ranging 17% to 50%. The Center Right is far smaller and less influential, ranging from 11% to 14.

Adam Levitin [American Prospect, via Naked Capitalism 1-11-20]

Bonfire of Vanities: How the Left’s Gave Up on it’s Great, Timeless Projects for Political Correctness, Twitter Wars, and Narcissism (and That Cost it a Future) 
[Washington Post, via The Big Picture 1-5-20]
But in truth, the stew of “alternative facts” has been simmering for more than half a century on the right fringe. The GOP had endless opportunities across the decades to banish these theories — about scheming bureaucrats, Jews, the Federal Reserve, the United Nations — and its leaders often saw them as absurd. But they were also useful, helping to rally support from an aggrieved government-hating base. So the party’s mandarins allowed them to fester and grow until they spread from the toxic fringe to the mainstream, which they have finally overtaken. It’s no wonder someone who embraced those ideas would become successful; Trump validates notions that his voters have long believed, ideas that the party refused to condemn and failed to repudiate. 
Trump, then, isn’t what caused these conspiracy theories. He’s what happens when nobody stands in their way.


A New Middle East “made in Iran” is about to be born 
[Elijah Magnier, via Naked Capitalism January 10, 2020]
Targeting a base with thousands of officers and soldiers from hundreds of kilometres away and deliberately avoiding human casualties shows incredible self-confidence in Iran’s manufacture of their own missiles. Iran has shown the strength and technical ability to bomb the most powerful US base in Iraq with precision missiles and has now twice shown mercy by not killing US servicemen....

The Iranian hit on the Ayn al-Assad military base exposed the weakness of the most sophisticated radar and interception missiles in the US arsenal. President Trump has long bragged about these tools like the “best in the world”. But the US defence system at the Iraqi-US base in al-Anbar (west of Iraq) was incapable of intercepting one of the 13 ballistic missiles launched. The consequences of this single act are devastating both to the US armament industry and to US foreign policy in the Middle East. 
This strike has shown US allies in the region that the hundreds of billions of dollars they have invested in US weapons are an insufficient defence against Iran. These countries now recognize they have no real deterrence against an Iranian attack. This realisation will push the traditional enemies of Iran in the Middle East to bypass their differences and take the road to Tehran to regain good ties with the “Islamic Republic”. It should not be excluded that many countries would be tempted to buy Iranian precision missiles that must be much cheaper than the expensive US manufactured ones.
....The lesson learned from the Iranian bombing is that Iran is ready to bomb and hit back US targets with great accuracy. Therefore, bombing Iran is off the table.
A Guide to Getting Real on Iran
[War on the Rocks, January 10, 2020]
To respond to a crisis, any crisis, whether it be a civil war in Syria or Russia’s invasion of Ukraine, there is a tendency to default to three recent staples of American power: cruise missiles, special operations forces, and economic sanctions. This policy default comes about precisely because these three entail minimal risk to American forces, or because military deployments can be hidden and not directly sanctioned by vote in Congress. Absent being able to stomach true risk — sanctioning the use of force that may get large numbers of Americans killed — the United States confines itself to a carefully scripted set of tools that just aren’t that scary, and politicians can escape blame for any outcome — as recent tensions with Iran have demonstrated. It is a neat trick to pretend to be serious and thoughtful without actually being either.... 
Iran took care to minimize the chance of killing Americans, but still chose to launch the most ballistic missiles at American forces since Saddam Hussein in the two Gulf Wars, lofting on a ballistic trajectory tons of high explosive that fell into the center of a military base in Iraq famous for its American contingent. This was a demonstration of Iran’s stand-off capabilities. It could have been much worse than a demonstration, but it is still an undesired outcome — and requires thinking about how to convince Iran, politically, not to fire them again. Iran will not give up these assets, and has instead indicated that it will use them to coerce the United States and its regional allies if threatened.... 
The Trump administration removed Iran’s assurance that its behavior would be rewarded and resorted to a policy of all sticks and no carrots. This, in turn, has incentivized Iranian escalatory actions to impose a cost on the United States, focused first on its regional allies, and now extended to include strikes on American forces with ballistic missiles. This is the definition of escalation, if one stops and thinks about how things have shifted over the past 612 days since the United States withdrew from the multi-lateral nuclear deal. The U.S. military has been hit with ballistic missiles, troops are in lockdown, and the effort to defeat Islamic State has deteriorated because of it. The National Security Strategy remains unimplemented, as finite assets have had to be sent to a region where there is no great power, only Iran. And, inside the Middle East, the United States has firmly established through action and deed that it will not respond if Iran attacks its partners and will only take limited action if an American is killed. 
The United States does not need more sanctions. It needs a roadmap to remove them, and to stick to that roadmap to engage Iran on comprehensive security talks. These talks would be iterative, painful, and prone to failure, with ups and downs and only incremental progress. They would also break the status quo and require political courage to begin, largely because the likelihood of failure is so high. However, this would place the risk for failure on the civilians who make policy, and not the military personnel who are tasked with carrying it out. As of now, that risk calculus is inverted, with the military being asked to shelter in place for hours on end, without adequate defenses, for a policy choice made during an election campaign. 
There is little hope the Trump administration will make these calculations. It will likely instead default to sanctions and missile threats, not realizing that these tools are not working, and in a few months — when faced with the same deadlock — both sides will have an incentive to escalate again. 
[New Republic, via Naked Capitalism 1-10-20]
Christians United for Israel, and a couple of its allies: Mike Pence and Mike Pompeo, who just happen to hold high positions in the Trump administration.