Sunday, February 16, 2020

Week-end Wrap – Political Economy – February 16, 2019

Week-end Wrap – Political Economy – February 16, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

“The U.S. Military Is Not Ready for a Constitutional Crisis” 
[The Atlantic, via Naked Capitalism 2-13-20] 
I spent nine years on active duty in the U.S. Navy. I served as an aircraft commander, led combat reconnaissance crews, and taught naval history. But the first thing I did upon joining the military, the act that solemnized my obligation, was swear an oath to support and defend the Constitution. How strange, then, that despite all of my training, the millions of taxpayer dollars devoted to teaching me how to fly, lead, and teach, not once did I receive meaningful instruction on the document to which I had pledged my life....
I had left the Navy and was in law school when news of the torture memo broke. This was the George W. Bush administration’s attempt to offer a legal justification for “enhanced interrogation.” I had been through Survival, Evasion, Resistance, and Escape (SERE) school, the military’s interrogation training program, from which these techniques had been adopted. I understood the “enhanced” methods described by the Bush-administration lawyers for what they were: torture.
At the time, I found it unconscionable that legal scholars would be complicit in underwriting our government’s disregard for the Geneva Conventions. But with the benefit of hindsight, though I still find the torture memo appalling, I can at least acknowledge that the Bush administration cared enough about the law to offer the pretense of legality. 
The current administration is not even trying. President Donald Trump openly flouts laws at home, while threatening to destroy cultural sites abroad (a blatant violation of the Geneva Conventions).
How State Capacity Drives Industrialization
[Palladium, 2-12-20, via reader of RealEconomics]
These “tools that make the tools” are a crucial piece of modern supply chains, and most advanced manufacturing would be impossible without them. The ability to produce machine tools domestically is one of the foundations of a deep industrial base. Recognizing this, the South Korean state encouraged Hyundai, a chaebol which built the first all-Korean automobile in 1975, to begin making machine tools for the growing domestic market. Since then, the South Korean machine tool industry has grown steadily alongside the Korean economy as a whole. Production today is slightly larger than the machine tool industry of the United States, a country more than six times as populous....
Korea’s story may be more extreme than most, but this type of state-led economic development is how every wealthy country on Earth has industrialized. The sole exception is Britain during the original Industrial Revolution.... Only the state can coordinate many different industries to produce a transformation at the scale of industrialization. 
Interesting: even some leading libertarians are beginning to admit society needs government to actively promote the general welfare, though of course, they won't use such terms. Probably, the spectre of China building a 1,000 bed hospital in ten days has scared the living crap out of them. The USA, by contrast, and thanks in no small part to the popularization of libertarian ideology, can't even maintain the infrastructure it already has. 

Thy Neighbor’s Solar Panels: When our peers take actions to preserve the planet, we’re more likely to follow suit. How the human instinct to conform could help us address the climate crisis.
[The Atlantic, via The Big Picture 2-12-20]

Predatory Finance 

In wake of Brexit, EU to put Cayman Islands on tax haven blacklist 
[Guardian, via Naked Capitalism 2-14-20]
Credit-Card Debt in U.S. Rises to Record $930 Billion 
[WSJ, via Naked Capitalism 2-13-20]

[Business Insider 2-12-20]
  • Credit-card debt in America has reached a record high of $930 billion, according to new Fed Reserve data first reported by the Wall Street Journal.
  • Serious credit-card delinquency rates — payments made 90 days or more past due — have also increased, particularly among those ages 18 to 29.
  • Millennials' difficulty in paying off their credit-card debt reflects their financial reality: an increasing cost of living that outpaces their income growth.
[Wolfstreet, via Naked Capitalism 2-14-20]

How America’s 1% came to dominate equity ownership
[FT, via Naked Capitalism 2-11-20]

The Carnage of Establishment Neoliberal Economics

It’s Kochs vs. Mercers in the Right’s Big Tech Brawl
[Businessweek, via The Big Picture 2-12-20]

White House budget doubles down on reorgs and benefit cuts
[Federal Times, via Naked Capitalism 2-11-20]
[CNBC, via Naked Capitalism 2-13-20]
[Business Insider, via Naked Capitalism 2-13-20]
The hidden design failure that’s costing consumers trillions 
[Fast Company, via Naked Capitalism 2-14-20]
The USA is a service economy, without the service

Restoring balance to the economy

California Considers Tax on Companies With Large CEO-Worker Pay Gaps
[Capital & Main, via Naked Capitalism 2-13-20]

The Survival of the ILWU at Stake! 
[Counterpunch, via Naked Capitalism 2-13-20]
A recent federal court decision in Portland, Oregon poses an immediate existential threat to the strongest union in the U.S. today, the ILWU, and ultimately to the labor movement as a whole. The International Longshore and Warehouse Union (ILWU), arguably one of the most militant unions in the U.S., has been hit with a union-busting $93.6 million dollar court-imposed fine for a secondary boycott deemed illegal under the 1947 Taft-Hartley Act. The plaintiff, International Container Terminal Services, Inc. (ICTSI) is owned by the third richest man in the Philippines, billionaire Enrique Razon Jr. and operates in 27 ports worldwide, mainly in poor, developing countries.
North Carolina AFL-CIO  picket in support of EPA employees on Febuary 18
North Carolina AFL-CIO  2-14-20
Click here to sign on support to the EPA Workers’ Bill of Rights.We’ll be taking this petition into the bargaining room – and the more names we have, the better our position for negotiations. 
Even if you ARE joining the rally, please sign the EPA Workers’ Bill of Rights. And then, share it with your friends and family! The more names we can get – from EPA workers and their families to environmental enthusiasts to local elected officials and advocacy organizations – the better! 
The EPA Workers’ Bill of Rights is a common-sense 10-point list of demands, including:
  • The right to full staffing levels
  • The right to conduct climate change research
  • The right to protect human health and the environment without fear of reprisal.

Health Care Crisis

[Kaiser Health News, via Naked Capitalism 2-9-20]

[Guardian, via Naked Capitalism 2-9-20]

[ProPublica, via Naked Capitalism 2-11-20]

Climate and environmental crises

In Somalia, an unprecedented effort to kill massive locust swarms with biocontrol 
lScience, via Naked Capitalism 2-14-20]
Several factors caused the massive outbreak. In May 2018, a cyclone hit the desert “empty quarter” of Oman, Yemen, and Saudi Arabia. After the unusual rainfall, vegetation flourished, and the well-fed locusts increased their population 400-fold over 6 months. Normally, the populations would shrink when plants die after the desert dries out again, and timely control efforts can prevent populations from booming.
In this case, however, a second cyclone hit in October 2018 and the population continued to increase—an estimated 8000-fold by March 2019. The locusts headed to southern Iran, crossing territory that hadn’t seen the insects in 50 years, and moved east into India and Pakistan. Last summer, many flew south with prevailing winds into Yemen, where civil war prevented any spraying of pesticides. The swarms moved to Ethiopia and Somalia in October 2019.
Compounding the problem, yet another cyclone unexpectedly hit the Horn of Africa in December 2019 and more breeding ensued. By the end of that month, growing swarms had entered Kenya. They reached Uganda and Tanzania in the past few days.
Climate change policies will continue to fall short unless we hand the mic to those most hurt by it 
[Guardian, via Naked Capitalism 2-13-20]
“There Are Rivers in the Sky Drenching the U.S. Because of Climate Change”
[Bloomberg, via Naked Capitalism 2-12-20] 
“Atmospheric rivers are narrow ribbons of concentrated moisture that originate in the Pacific and can flow thousands of miles before dropping rain and snow on land. Scientists are ramping up their research into the systems this winter fearful that warmer temperatures tied to climate change will boost the moisture they carry, supercharging them moving forward…. A study released in December by Scripps and the Army Corps of Engineers found that atmospheric rivers caused 84% of the flood damage suffered in 11 western states over 40 years through 2017. The average annual cost: $1.1 billion, according to the report.”

Neoliberalism requires a police state 

A Canadian Energy Company Bought an Oregon Sheriff’s Unit
Will Parrish, Alleen Brown, Febraury 12, 2020 [The Intercept]
Pembina was the sole funding source of a sheriff’s unit that monitored opposition to the proposed Jordan Cove natural gas pipeline and export terminal.
In fact, for nearly four years, Pembina was the sole funding source of a unit in the sheriff’s office dedicated to handling security concerns related to Jordan Cove — despite the fact that there is not yet any physical infrastructure in place to keep secure. The pipeline and terminal cannot begin construction without approval from the Federal Energy Regulatory Commission, which is scheduled to vote on whether to license the project in February. Yet between 2016 and 2020, the department’s liquid natural gas division, known as a “combined services unit,” spent at least $2 million of Pembina’s money. The energy company put the funding on hold in April 2019 but left open the possibility that the arrangement could be revived in the future. Pembina and the sheriff’s department are currently discussing how they may continue to work together, and Coos County Sheriff Craig Zanni said he expects the partnership to be renewed.

Information Age Dystopia

“ICE Is Using Location Data From Games and Apps to Track and Arrest Immigrants, Report Says” [Vice, via Naked Capitalism 2-11-20] 
“The Department of Homeland Security began purchasing location data in 2017 from Venntel, a Virginia-based company which markets itself as a ‘pioneer in mobile location information,’ according to the database of federal contracts. Since then, Immigration and Customs Enforcement (ICE) has purchased $190,000 in Venntel licenses and Customs and Border Protection (CBP) has spent over $1 million on the company’s products. The data is drawn from inconspicuous cell phone apps, like games and weather apps, that ask the user’s permission to access their location. But the data has been used by DHS to ‘help identify immigrants who were later arrested,’ and by CBP to identify cell activity in places such as remote desert areas on the Mexican border, according to the Journal, which said it both reviewed documents and spoke to people ‘familiar with the matter.
Why Google Did Android
Tim Bray [via Naked Capitalism 2-10-20]
Ironic: to preempt Apple from establishing a monopoly. 

An EU judge told Google it’s landed on Monopoly’s ‘Go to Jail’ square and reportedly threatened to increase its $2.6 billion antitrust fine 
[Business Insider. via Naked Capitalism 2-16-20]
Yves Smith adds: "Sadly, you have to read the WSJ version to learn this idea came from one of five judges, and there’s only one precedent for fines being increased, and then, it was not by much."
“Inside Documents Show How Amazon Chose Speed Over Safety in Building Its Delivery Network” [Pro Publica, via Naked Capitalism 2-13-20]

Collapse of Independent News Media

Can Journalism Be Saved?
[New York Review of Books, via Naked Capitalism 2-9-20]
Nicholas Lemann is a Professor at the Columbia ­Graduate School of Journalism and a staff writer at The New Yorker. His books include Transaction Man: The Rise of the Deal and the ­Decline of the American Dream and The Big Test: The Secret ­History of the American Meritocracy.
 (February 2020)
Then there is another option, imperfect like all the others, for saving journalism: direct government subsidy. Almost all American journalists react to this idea with a strong visceral recoil, especially now. But the severity of the situation demands subjecting our automatic assumptions to more careful scrutiny. Government support can be structured in many different ways; great portions of the independent truth-seeking activity in the United States are funded by the government, reasonably successfully, despite enormous built-in potential for political interference. The Federal Reserve employs many more professional research economists than any economics department. Public libraries, almost all the time, are permitted to acquire their books and research materials freely. University research—indeed, universities generally, including private universities—are overwhelmingly supported by the government, including when their work touches on politically controversial subjects. Most of the basic research establishing global warming as a phenomenon was conducted either by government employees (like James Hansen of NASA) or by government-funded researchers, despite the powerful political opposition to this kind of science.
Such government funding systems require several layers of built-in protection from the whims of elected officials. Usually these are peer-review mechanisms that determine where funding goes specifically and ensure that it cannot be cut off capriciously without warning. The administration and Congress fund the National Science Foundation and the National Institutes of Health, but they don’t directly approve each individual grant. Of course, this system isn’t perfect, but no other funding system is either. A 2009 report by Schudson and Leonard Downie Jr., the former executive editor of The Washington Post, suggested establishing a Fund for Local News, which would distribute money to appointed state boards that would review applications from news organizations.8 These could be newspapers, radio or TV stations, websites, startups—anybody who could do good work. The boards would make irrevocable multiyear grants, based on the applicants’ specific plans about what to cover, and could renew the grants (or not) based on the quality, reach, and influence of the coverage they funded. The media reform group Free Press, in a report published last year, called for the establishment of a Public Interest Media Endowment, which could distribute its funds either to state or local entities or to the federal Corporation for Public Broadcasting, with the requirement that the funds support original local reporting.9 Victor Pickard, in Democracy Without Journalism?, calls for the creation of a government-funded or -owned, employee-controlled category of local news organizations.
Stephen Gillers, in Journalism Under Fire, endorses Downie and Schudson’s proposal and appropriately protected public funding for journalism more generally. He also explores creating some form of legal distinction between professional and citizen journalists, so that the former could achieve the longed-for, but never attained, federal protection of our relationships with confidential sources. Gillers is a law professor; it’s unsurprising that, in the conversation as it stands now, policy solutions to journalism’s crisis usually come from outsiders, because journalists are so powerfully socialized to embrace a libertarian view of our work. That would be fine if the market had any meaningful chance of fixing the problem, but, for reporting with a public mission, it doesn’t.
“McClatchy files for bankruptcy, likely ending 163 years of family control and setting up more consolidation in local news” 
[Nieman Labs, via Naked Capitalism 2-14-20] 
“Let’s assume the bankruptcy, despite its non-complete pre-packedness, goes through according to plan and with relative speed. The New McClatchy would be controlled by Chatham Asset Management, a hedge fund that is currently the company’s largest shareholder and lender. Chatham hasn’t been as prominent a player in the American newspaper industry as Alden Global Capital, Fortress, or Apollo…. Chatham, though, has some other connections to the news business that sound a bit less high-minded. It is controlling owner of American Media, Inc., the company best known as the owner of the tabloid National Enquirer — not long ago seen engaging in a hush-money scheme with Donald Trump and some sort of…questionable relationship with the Saudis and the hacking of Jeff Bezos’ phone. The National Enquirer is currently a Chatham-controlled company.”
“McClatchy files bankruptcy to shed costs of print legacy and speed shift to digital” 
[McClatchy, via Naked Capitalism 2-14-20] 
Lambert Strtether observes: "McClatchy, then Knight Ridder, was the only news organization to get the Iraq WMDs story. The Post and The Times not only got it wrong, but shamefully propagandized for it, and published false stories. And so the virtuous are punished, and the guilty are rewarded."

Democratic Party leadership insists on suicide

Buttigieg calls on Democrats to "own" deficit reduction. I'm not kidding.
Bob Johnson, February 09, 2020 [DailyKos]

[CNBC, via Naked Capitalism 2-12-20] 
“Caruso-Cabrera, who became a CNBC contributor when she left the network in September 2018, serves as a member of the board of directors for financial services firm Beneficient. She will take a leave from her role as CNBC contributor for the duration of the campaign, a CNBC spokesperson said.”

“AIPAC Must Stop Bernie Sanders – at All Costs” [Haaretz, via Naked Capitalism 2-11-20] 

“About that Democratic Primary …”
James Kwak [Baseline Scenario, via Naked Capitalism 2-12-20]
...the national Democratic Party of the past thirty years has been a failure, both as policy and as politics...  Both Presidents Clinton and Obama turned their backs on redistribution and social solidarity, preferring the soaring rhetoric of growth and opportunity: maximizing overall economic growth while giving everyone the “opportunity” to participate in prosperity. But what we got was modest growth whose benefits were monopolized by the 1%, soaring inequality, and widespread economic insecurity. (For the numbers, see Chapter 2 of Take Back Our Party.) As a society, we have to recognize that growth is not the answer. What we should care about is the actual welfare of ordinary families: whether they can afford health care, whether they can afford a place to live, whether they can go to college, whether they can retire, and so on. Those are the things our economic platform should focus on—not the myth that a rising tide lifts all boats....
“Now, the issue on everyone’s minds is electability. Sure, we may want Medicare for All—but what most people want more than anything else is to defeat President Trump. And many people think that the most electable candidate is the most right-wing candidate. This is based on the theory of the median voter. The idea is that you can line up all voters on an ideological spectrum, and they will vote for the candidate who is closest to them—which means that we want to nominate someone in the middle (or, more accurately, someone just to the left of Trump). The median voter theory is nonsense. If it were true, Donald Trump would not be president today. Nor would the Republicans have a majority of the Senate, and a majority of governorships, and a majority of state legislatures. They have achieved this electoral success despite running far to the right of where most Americans stand on just about every issue—immigration, abortion, gay rights, taxes, you name it. We have to give people a reason to vote for us. The problem is, for decades, Democrats have not given people a reason to vote for them.”
The American Prospects is posting a chapter a day from Take Back Our Party: Restoring the Democratic Legacy by James Kwak. 
The rising tide was the theoretical basis for the “trickle-down economics” of President Ronald Reagan and the conservative revolution. In their view, the postwar American economy already suffered from too much redistribution; cutting taxes for the rich would encourage them to work, save, and invest, accelerating growth and therefore benefiting all people. But it was also the justification for the opposition’s New Democrat narrative of growth and opportunity. “This isn’t the time to get caught up in distributional politics,” Democratic Leadership Council Chair Charles Robb said in 1986—“it’s time to make the economic pie grow.”
Bill Clinton agreed. “The Democratic Party’s fundamental mission,” he wrote, is “to expand opportunity, not government; to recognize that economic growth is a prerequisite for expanding opportunity; to invest in the skills and ingenuity of our people in order to build shared prosperity.” In short, the key to making everyone better off is to encourage private-sector growth, while “expanding opportunity” to ensure that no one is left behind. Clinton’s primary domestic policy achievements included lower deficits, welfare reform, and financial deregulation, all traditional Republican goals; yet as long as economic growth was good for rich and poor alike, he could still claim that he was a champion of ordinary men and women.
[Chicago Reader, via Naked Capitalism 2-14-20] 
 “The chaos of recent weeks might give Sanders supporters their most potent argument yet. The Democratic Party has become so corrupt and dysfunctional that it can’t even perform the most basic function of a democracy: counting the votes. It is time to turn to new leadership. Or we can stick with the corporate Democrats and blame the Russians again when we lose to Trump.”
“Here They Come Again: The Kind of Neoliberal Democrats Who Prefer Trump to Sanders” 
[Adolph Reed, Common Dreams, via Naked Capitalism 2-12-20] 
 “I have no doubt that the Democratic liberals who fear that Sanders is ‘unelectable’ are genuine in their belief. They also want and need for him to be unelectable because for them the really significant divisions in the society must not be those between economic classes…. From the standpoint of those liberals tied to investor-class interests, a Trump victory in 2020, even if it were to raise a serious threat of authoritarianism, could be less disturbing than a Sanders-led, left-tacking political realignment. And, much as the Clinton administration’s liberal architects of welfare reform dismissed their left critics as tendentious and naïve—until those critics were proven right—liberals’ insistence that Sanders can’t win preempts, at least for now, questions about what they would do if he were to win the nomination. Would they support him? Would they follow Bloomberg, or someone else, on a third-party ticket? ‘From the standpoint of those liberals tied to investor-class interests, a Trump victory in 2020, even if it were to raise a serious threat of authoritarianism, could be less disturbing than a Sanders-led, left-tacking political realignment. We don’t know the answers to those questions, but I have my suspicions.”
“One of Klobuchar’s Biggest Backers Is ‘the Worst Company in the World'” 
[Daily Beast, via Naked Capitalism 2-13-20] 
 “But while the Minnesota senator has successfully parlayed her grandfather’s work in an Iron Range mine into working-class bona fides, some of Klobuchar’s most important longtime backers are billionaires and billion-dollar corporations. Chief among them: Cargill, the agriculture behemoth and the largest privately held company in the United States, which has donated a small fortune in campaign contributions over the course of Klobuchar’s political career.” • Cargill is a busy company. They’re also helping to burn down the Amazon rain forest (no matter what their PR says).

Blake Zeff's Twitter thread on Bloomberg buying democracy
February 13, 2020 [via Naked Capitalism 2-14-20]

“The Price of a Bloomberg Nomination Is Too Damn High” 
[Eric Levitz, New York Magazine, via Naked Capitalism 2-14-20] 
“Mike Bloomberg has offered blue America a Faustian bargain: Forfeit all credibility on the issues of money in politics and democratic reform, and he will spend whatever it takes to make the bad man in the White House go away. The market for what Bloomberg is selling is large and growing, thanks in no small part to the $300 million he’s already spent advertising it. Many rank-and-file Democrats — like so many disillusioned voters in democracies the world over — like the idea of hiring a no-nonsense, post-political businessman to fix their broken government (just, you know, a less ostentatiously racist one than America’s current CEO). Meanwhile, many Democratic elites see Bloomberg as a (slightly unsavory) savior who can single-handedly stop the party from nominating a supposedly unelectable socialist, provide its vulnerable first-term suburban House members with an ideal standard-bearer, and liberate the party from all resource constraints and fundraising headaches as it rides a rising tide of billionaire bucks back into power.”

Zack Beauchamp

· Feb 13, 2020

Replying to @zackbeauchamp
I genuinely don't understand how you could call yourself a progressive or liberal and conclude an authoritarian Republican is a better candidate than a social democrat with a long track record of progressive votes in Congress
10,599 Corporate Lawyers Have Donated to Buttigieg’s Campaign: Here Are the Dirty Little Secrets
Pam Martens and Russ Martens, February 10, 2020 [Wall Street on Parade]
Supporting the scenario that Buttigieg is a strawman for the diabolical Mike Bloomberg (who bought himself a third term as Mayor of New York City by financing the repeal of term limits and has now likely managed to insert himself onto the Democratic debate stage through a convenient rule change) is the fact that the Global Head of Public Policy at Bloomberg LP, the Wall Street data terminal and news outlet that is majority owned by Mike Bloomberg, is a bundler for Pete Buttigieg. The bundler is Didem Nisanci, who conveniently served as Chief of Staff at the Securities and Exchange Commission (SEC) from March 2009 to January 2013, the period after the financial crisis when the SEC failed to bring charges against any of the CEOs of the mega Wall Street banks that had brought on the greatest financial collapse since the Great Depression. As of September 14 of last year, Nisanci had contributed $2800, the maximum allowed by an individual to Buttigieg’s primary race. Prior to Mike Bloomberg throwing his own hat in the ring in November, Buttigieg had received additional contributions from other Bloomberg employees. 
Bloomberg’s wealth of $61.5 billion and ongoing income derives from the data terminals he leases to the Wall Street trading floors around the globe. He showed his fealty to the hands that feed him on Wall Street as Mayor of New York City, using his police force to brutalize and bloody Wall Street protestors and coming down like the Gestapo during the eviction of Occupy Wall Street from Zuccotti Park in Lower Manhattan. 
And now for the third scenario – knock Senator Elizabeth Warren out of the race. Around the same time last spring that Warren penned her scorching opinion piece at Medium on why it was critical to break up the giant tech firms Amazon, Google, and Facebook, bundlers connected to the three tech giants got busy pumping money into Buttigieg’s campaign. Ironically, this was the very thing Senator Warren was warning about in her Medium message.

Disrupting mainstream politics

Moderate Democrats have a duty to consider Sanders. He has a clear path to beating Trump. 
[USA Today, via Naked Capitalism 2-10-20]

“New Hampshire 2020: In Supreme Irony, the Horse Race Favors Bernie Sanders”
Matt Taibbi [Rolling Stone, via Naked Capitalism 2-12-20] 
“For Sanders supporters, the calculation has always been simpler: Are you bought off, or not? Just by keeping to the right side of that one principle, Sanders will hold his 20-to-30 percent and keep grinding toward victory, “narrow” wins or not. It’s a classic tortoise-and-hare story. When you know where you’re going, you tend to get there.”

Sunday, February 9, 2020

Week-end Wrap – Political Economy – February 9, 2019

Week-end Wrap – Political Economy – February 9, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Altruistic food sharing behavior by human infants after a hunger manipulation
[Science, via Naked Capitalism 2-5-20]
From the abstract: “In a nonverbal test, 19-month-old human infants repeatedly and spontaneously transferred high-value, nutritious natural food to a stranger (Experiment 1) and more critically, did so after an experimental manipulation that imposed a feeding delay (Experiment 2), which increased their own motivation to eat the food. Social experience variables moderated the expression of this infant altruistic behavior, suggesting malleability.” dk asks: “But were the test subjects the babies of elites? At 19 months, some patterns may have already been acquired…”

The Carnage of Establishment Neoliberal Economics

WEALTH INEQUALITY: The richest 1% controls more wealth now than at any time in more than 50 years
[Twitter and Yourtube below, via Naked Capitalism 2-2-20]
WEALTH INEQUALITY: The richest 1% controls more wealth now than at any time in more than 50 years. But what does wealth inequality really look like?
turned America’s economic pie into a real one and asked people a simple question: Who gets what?

Higher social class predicts increased unethical behavior
[PNAS, via Naked Capitalism 2-4-20]
Seven studies using experimental and naturalistic methods reveal that upper-class individuals behave more unethically than lower-class individuals. In studies 1 and 2, upper-class individuals were more likely to break the law while driving, relative to lower-class individuals. In follow-up laboratory studies, upper-class individuals were more likely to exhibit unethical decision-making tendencies (study 3), take valued goods from others (study 4), lie in a negotiation (study 5), cheat to increase their chances of winning a prize (study 6), and endorse unethical behavior at work (study 7) than were lower-class individuals. Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed.
The Biggest Lie in Personal Finance: Why Cutting Spending Isn’t the Key to Financial Independence
Nick Maggiulli, February 4, 2020 [, via The Big Picture 2-5-20]
... if you look at the percentage of after-tax income that the poorest 20% of U.S. households spend on Food, Housing, Healthcare, and Transportation, it becomes quite clear that low income is the problem here:
 ....the next 20% of U.S. households aren’t that much better off than the bottom 20%.  For example, even though the next 20% of U.S. households has an annual after-tax income ~3x higher than the lowest 20% (at $31,200), they still spend most of their income on the necessities:

....This is an unfortunate reality, but one that more clearly demonstrates why so many U.S. households find it difficult to save money.  They end up spending most of their pay on just the basics!
The Verdict Is In: Farm Bankruptcies Up in 2019 
[Farm Bureau, The Big Picture 2-3-20]

New U.S.-Canada-Mexico trade accord fails farmers again
Darvin Bentlage [St. Louis Post Dispatch 2-6-20]
The U.S. Senate and House approved the United States-Mexico-Canada Agreement, effectively replacing the North American Free Trade Agreement.
Milk giants Dean Foods and Borden Dairy have declared bankruptcy. Wisconsin has lost 818 dairy farms, or 10% of its dairy farms. In the last decade, the state has lost 44% of the farms.
Cattlemen are not faring much better. We have lost a quarter of our American cattle producers since NAFTA was adopted. America’s herd has lost almost 7 million cattle, and the country eliminated 25% of livestock auction barns, 48 meatpacking plants and 75% of all cattle feedlots. The U.S. also has a $1.4 billion annual deficit in the trade of cattle and beef with Canada and Mexico.
Beef exports to Canada, the fourth-largest U.S. export market, are down 11.3% this year, while imports of beef from Canada are up 8%. Canada, the No. 1 foreign supplier of beef to the U.S., stands at 27.7% of America’s total beef imports.
Mexico is the third-largest foreign supplier of beef to the United States. U.S. beef exports to Mexico are down 3.5% while imports of beef from Mexico are up 14%. Mexico exported 1.3 million feeder cattle to the U.S. — the largest number in 14 years. Mexican feeders sold for $200 less than U.S.-sourced feeders. This is especially important to Missouri cattle producers as Missouri is the No. 2 state for cow/calf production. The profit per pair was $438 in 2015, and this year, profit is projected to drop below $138.
Because the new North American free trade agreement involves the two countries that caused Congress to repeal country-of-origin labeling, American negotiators should have taken the opportunity to raise that subject anew. Mandatory country-of-origin labeling was implemented in 2009 and led to a steady increase in feedlot cattle until its repeal in 2015. The repeal saw a 34% drop in feedlot cattle prices in one year.
Urban Institute: Thirty percent of student debtors are enrolled in Income-driven repayment plans [Condemned to Debt, via Naked Capitalism 2-4-20]
A recent report from the Urban Institute (authored by Kristin Blagg, Laurie Goodman, and Kelia Washington) noted that 8 million student-loan debtors are in income-driven repayment plans (IDRs).  According to this report, that amounts to about 30 percent of all college borrowers.
That's really scary because almost no one among those IDR participants is paying down the principal on his or her debt.  Instead, just about all of these 8 million people are making very small monthly payments based on their income--not the amount that they borrowed.
Homeless US student population ‘highest in more than a decade’ 
[BBC, via Naked Capitalism 2-5-20]

Detroit’s Land Bank Holds More Trouble for City’s Remaining Homeowners
[Real News Network 2-3-20]
What happens to the remaining homeowners, their properties, and their neighborhoods in Detroit after the foreclosure crisis created a glut of abandoned, city-owned houses?
....a lot of property wasn’t initially given to the Detroit Land Bank Authority. The authority was revamped after the bankruptcy and a lot of property, we’re talking it went from about 1500 to over 90,000 in around 2014, that sort of huge transfer was an effort to consolidate the ownership with the authority because land banks have special powers to clear title, and at the time that’s what the city thought was best.
So, as far as what happens with the vacant property, there are a slew of reasons why it could face delays, but what we hear from residents is basically not much. That if they are living next to it, we hear from folks who have boarded up the vacant properties next to them, in part because even if it is boarded up by the city, maybe it isn’t reboarded, whether because of the weather, or because of squatters, or someone who is coming in to strip the property. There are a whole bunch of reasons why the boards might come off, and the city might not necessarily reboard it.
Limited Liability Is Causing Unlimited Harm
Katharina Pistor (Professor of Comparative Law at Columbia Law School, is the author of The Code of Capital: How the Law Creates Wealth and Inequality) [Project Syndicate, via Naked Capitalism 2-6-20]
 The original purpose of limited-liability protection was to encourage investment in – and risk-taking by – corporations, whose resulting innovations would benefit society. Yet by allowing shareholders to profit from the harms caused by corporations, limited liability has evolved into a source of systemic market failure.
Cincinnati students expose how privatization corrupts public universities
David Akadjian [DailyKos 2-7-20] 

Restoring balance to the economy

Painters’ union calls for consumers to boycott PPG brands including Glidden, Olympic
[Pittsburgh Post-Gazette, via Naked Capitalism 2-2-20]

Video Spotlight: Ellen Brown and Walt McRee discuss a public bank's ability to fund a Green New Deal
[Public Bank Institute 2-6-20]
PBI Chair Ellen Brown and Senior Advisor Walt McRee discuss how public banks and the central bank can fund investments such as those proposed in a Green New Deal without inflating consumer prices.
The Public Banking Solution, 6.19 from Princeton TV on Vimeo.

Climate and environmental crises

How the Lawyer Who Beat Chevron Lost Everything
[The Intercept, via Naked Capitalism 2-2-20]
The developments that led to Donziger’s confinement were, like much of the epic legal battle he’s been engaged in for decades, highly unusual. The home confinement is his punishment for refusing a request to hand over his cellphone and computer, something that’s been asked of few other attorneys. To Donziger, who had already endured 19 days of depositions and given Chevron large portions of his case file, the request was beyond the pale, and he appealed it on the grounds that it would require him to violate his commitments to his clients. Still, Donziger said he’d turn over the devices if he lost the appeal. But even though the underlying case was civil, the federal court judge who has presided over the litigation between Chevron and Donziger since 2011, Lewis A. Kaplan, drafted criminal contempt charges against him.
In another legal peculiarity, in July, Kaplan appointed a private law firm to prosecute Donziger, after the Southern District of New York declined to do so — a move that is virtually unprecedented. And, as Donziger’s lawyer has pointed out, the firm Kaplan chose, Seward & Kissel, likely has ties to Chevron.
Making the case even more extraordinary, Kaplan bypassed the standard random assignment process and handpicked someone he knew well, U.S. District Judge Loretta Preska, to oversee the case being prosecuted by the firm he chose. It was Preska who sentenced Donziger to home detention and ordered the seizure of his passport, even though Donziger had appeared in court on hundreds of previous occasions.

Shale pioneer John Hess says key U.S. fields starting to plateau
[Reuters, via Naked Capitalism 2-5-20]

Climate Change Predictions Have Suddenly Gone Catastrophic. This Is Why
[Vice, via Naked Capitalism 2-8-20]

“Arctic sinkholes open in a flash after permafrost melt”
[Live Science, via Naked Capitalism 2-6-20]
“Arctic permafrost can thaw so quickly that it triggers landslides, drowns forests and opens gaping sinkholes. This rapid melt, described in a new study, can dramatically reshape the Arctic landscape in just a few months. Fast-melting permafrost is also more widespread than once thought. About 20% of the Arctic’s permafrost — a blend of frozen sand, soil and rocks — also has a high volume of ground ice, making it vulnerable to rapid thawing. When the ice that binds the rocky material melts away, it leaves behind a marshy, eroded land surface known as thermokarst. Previous climate models overlooked this kind of surface in estimating Arctic permafrost loss, researchers reported. That oversight likely skewed predictions of how much sequestered carbon could be released by melting permafrost, and new estimates suggest that permafrost could pump twice as much carbon into the atmosphere as scientists formerly estimated, the study found.”
Health Care Crisis
How CVS Became A Health Care Tyrant
Matt Stoller, [BIG, via Naked Capitalism 2-2-20]
Followup to yesterday’s NYT story.
In 2018, the Capitol Forum reported how CVS leverages its various lines of business to roll up power. Five weeks before CVS announced it was buying Aetna, its Caremark PBM subsidiary began telling independent pharmacies that their reimbursement rates for key medicines was going to go down.
As an example, “one pharmacy went from earning $41.63 for selling Metronidazole—an antibiotic used to treat bacterial infections—to losing $72.27 per sale of the treatment." Immediately after announcing price cuts, CVS began sending out letters offering to buy independent pharmacies who had just had their revenue slashed. In one solicitation letter, CVS’s head of acquisitions wrote that, as a pharmacist himself he knew “what independents are experiencing right now: declining reimbursements, increasing costs, a more complex regulatory environment.”
When confronted with it by independent pharmacists in front of Maryland state regulators, CVS lobbyists said the reimbursement cuts were simply the result of a 'computer glitch'.

Information Age Dystopia

Hiding in plain sight: activists don camouflage to beat Met surveillance
[Guardian, via Naked Capitalism 2-2-20]

Paper Masks Are Fooling Facial Recognition Software
[Entrepreneur, via Naked Capitalism 2-8-20]

German TV Exposes the Lies That Entrapped Julian Assange
[Consortium News, via Naked Capitalism 2-8-20]

«A murderous system is being created before our very eyes»
[Republik, via Naked Capitalism 2-8-20]
For the first time, the UN Special Rapporteur on Torture, Nils Melzer, speaks in detail about the explosive findings of his investigation into the case of Wikileaks founder Julian Assange....
The case falls into my mandate in three different ways: First, Assange published proof of systematic torture. But instead of those responsible for the torture, it is Assange who is being persecuted. Second, he himself has been ill-treated to the point that he is now exhibiting symptoms of psychological torture. And third, he is to be extradited to a country that holds people like him in prison conditions that Amnesty International has described as torture. In summary: Julian Assange uncovered torture, has been tortured himself and could be tortured to death in the United States. And a case like that isn’t supposed to be part of my area of responsibility?
....It quickly became clear to me that something was wrong. That there was a contradiction that made no sense to me with my extensive legal experience: Why would a person be subject to nine years of a preliminary investigation for rape without charges ever having been filed? ...I have never seen a comparable case.
Tesla Remotely Disables Autopilot On Used Model S After It Was Sold
[The Verge, via Naked Capitalism 2-8-20]

Imperiled information: Students find website data leaks pose greater risks than most people realize [Harvard School of Engineering, via Naked Capitalism 2-5-20]
[I]n less than 10 seconds she produced a dataset with more than 1,000 people who have high net worth, are married, have children, and also have a username or password on a cheating website. Another query pulled up a list of senior-level politicians, revealing the credit scores, phone numbers, and addresses of three U.S. senators, three U.S. representatives, the mayor of Washington, D.C., and a Cabinet member.

[Twitter below, via Naked Capitalism 2-5-20]
I had to get a background check for my job, and it turns out the report is a 300+ page pdf of every single tweet I’ve ever liked with the work “fuck” in it.
Enjoy your dystopian bs! *waves*

Anatomy of a rental phishing scam
[Jeffrey Ladish, via Naked Capitalism 2-5-20]

Welfare Surveillance System Violates Human Rights, Dutch Court Rules
[Guardian, via Naked Capitalism 2-6-20]

Google Releases a Tool To Spot Faked and Doctored Images
[MIT Technology Review, via Naked Capitalism 2-6-20]

Creating new economic potential - science and technology

The Battery Supply Problems Faced by Electric Air Taxis
[Avionics, via Naked Capitalism 2-5-20]

The limits of high speed rail
[ 1-22-20, via Naked Capitalism 2-7-20]

On April 3, 2007, the French TGV V150 (150 meters per second) train broke the world rail speed record, reaching 574.8 km/h. The feat required a period of careful technical preparations undertaken by RFF (Network Ferré de France), Alstom and SNCF. The train was heavily instrumented to acquire data on very high speed rail operations:

Disrupting mainstream politics

Bernie Sanders Leads the Popular Vote in Iowa; Wall Street-Friendly Bloomberg Has a Plan
Pam Martens and Russ Martens: February 5, 2020 [Wall Street On Parade]
Bloomberg is a multi-billionaire whose wealth derives from leasing financial data terminals to Wall Street’s trading floors around the globe. Bloomberg’s police force bloodied, brutalized, pepper-sprayed and engaged in mass arrests of peaceful protesters during the Occupy Wall Street protests in 2012. (See the video below that was submitted in a court case as an indication of what kind of President Bloomberg would make.)
Mike Bloomberg is also the majority owner of Bloomberg News, which announced in November that it would not be allowing investigative reports on Mike Bloomberg or any other Democratic candidate. That policy, however, did not extend to its OpEd columnists. At 6:30 a.m. on Monday, the very day of the Iowa Caucuses, Bloomberg News published an opinion column by Michael R. Strain, the Director of Economic Policy Studies and a resident scholar at the Koch-funded, right wing, climate change skeptic think tank, the American Enterprise Institute (AEI). The bold headline screamed: “Trump Hurts the Economy. Sanders Would Be Worse.” The article mapped out a preposterous doomsday scenario of what would happen economically to the U.S. if Sanders were elected, ignoring the legitimate threat of what would happen if Wall Street is not reined in and needs another $29 trillion bailout.
Love the billionaire bucks flooding the 2020 elections? Thank Charles Koch
[Guardian, via Naked Capitalism 2-8-20]

Why Democrats share the blame for the rise of Donald Trump
Robert Reich [Guardian, via Naked Capitalism 2-3-20]
In the fall of 2015, I visited Michigan, Wisconsin, Ohio, Pennsylvania, Kentucky, Missouri and North Carolina, for a research project on the changing nature of work. I spoke with many of the people I had met 20 years before when I was secretary of labor, as well as with some of their grown children.
What I heard surprised me. Twenty years before, many said they’d been working hard and were frustrated they weren’t doing better. Now they were angry – angry at their employers, the government, Wall Street. Many had lost jobs, savings, or homes in the Great Recession following the financial crisis of 2008, or knew others who had. Most were back in jobs but the jobs paid no more than they had two decades before, in terms of purchasing power.
I heard the term “rigged system” so often I began asking people what they meant. They spoke about flat wages, shrinking benefits, growing job insecurity. They talked about the bailout of Wall Street, political payoffs, insider deals, soaring CEO pay, and “crony capitalism”. These complaints came from people who identified themselves as Republicans, Democrats and independents. A few had joined the Tea Party. A few had briefly been involved in the Occupy movement.
The 2016 rebellion is ongoing
With the 2016 political primaries looming, I asked which candidates they found most attractive. At the time, the leaders of the Democratic party favored Hillary Clinton and Republican leaders favored Jeb Bush. Yet no one I spoke with mentioned Clinton or Bush.
They talked instead about Bernie Sanders and Donald Trump. When I asked why, they said Sanders or Trump would “shake things up” or “make the system work again” or “stop the corruption” or “end the rigging”.... it wasn’t due to Sanders’ magnetism or Trump’s likeability. It was a rebellion against the establishment. That rebellion is still going on, although much of the establishment still denies it. They prefer to attribute Trump’s rise solely to racism.

The most powerful force in American politics today continues to be anti-establishment fury at a rigged system. There is no longer a left or right. There’s no longer a moderate “center”. There’s either Trump’s authoritarian populism or democratic – small “d” – populism.
Charities steered $65M to Trump lawyer Sekulow and family
[AP, via Naked Capitalism 2-2-20]

Sunday, February 2, 2020

Week-end Wrap – Political Economy – February 2, 2019

Week-end Wrap – Political Economy – February 2, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

“Minimum wage would be $33 today if it grew like Wall Street bonuses have” 
[CBS, via Naked Capitalism 1-30-20]
“Wall Street employees saw their typical annual bonus slip by 17 percent last year to $153,700, according to new data from the New York State Comptroller. But don’t feel sorry for the banking set just yet — even including down years like 2018, bankers’ bonuses have jumped by 1,000 percent since 1985. By comparison, the federal minimum wage has increased about 116 percent during the same period, according to an analysis from the Institute for Policy Studies, a left-leaning research center that used the comptroller’s latest data. If the minimum wage had grown at the same pace as Wall Street bonuses, fast-food workers and other low-wage workers would earn a baseline wage of $33.51 an hour, the group said.”

The Carnage of Establishment Neoliberal Economics

[Twitter below, via Naked Capitalism  -20]
Oh, look.

More enormous anti-government protests in , , today.

But still barely a word from the corporate media.

Sunday, January 26, 2020

Week-end Wrap – Political Economy – January 26, 2020

Week-end Wrap – Political Economy – January 26, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Why the New Silk Roads are a ‘threat’ to US bloc
Pepe Escobar [Asia Times, via The Big Picture 1-23-20]
Asia and Europe have been trading goods and ideas since at least 3,500 BC. Historically, the flux may have suffered some occasional bumps – for instance, with the irruption of 5th-century nomad horsemen in the Eurasian plains. But it was essentially steady up to the end of the 15th century. We can essentially describe it as a millennium-old axis – from Greece to Persia, from the Roman empire to China.
A land route with myriad ramifications, through Central Asia, Afghanistan, Iran and Turkey, linking India and China to the Eastern Mediterranean and the Black Sea, ended up coalescing into what we came to know as the Ancient Silk Roads....
Rationalist hegemony in Europe progressively led to an incapacity to understand diversity – or The Other, as in Asia. Real Euro-Asia dialogue – the de facto true engine of history – had been dwindling for most of the past two centuries.
Europe owes its DNA not only to much-hailed Athens and Rome – but to Byzantium as well. But for too long not only the East but also the European East, heir to Byzantium, became incomprehensible, quasi incommunicado with Western Europe, or submerged by pathetic clichés.
The Belt and Road Initiative (BRI), as in the Chinese-led New Silk Roads, are a historical game-changer in infinite ways. Slowly and surely, we are evolving towards the configuration of an economically interlinked group of top Eurasian land powers, from Shanghai to the Ruhr valley, profiting in a coordinated manner from the huge technological know-how of Germany and China and the enormous energy resources of Russia. The Raging 2020s may signify the historical juncture when this bloc surpasses the current, hegemonic Atlanticist bloc.
Now compare it with the prime US strategic objective at all times, for decades: to establish, via myriad forms of divide and rule, that relations between Germany, Russia and China must be the worst possible.
No wonder strategic fear was glaringly visible at the NATO summit in London last month, which called for ratcheting up pressure on Russia-China. Call it the late Zbigniew “Grand Chessboard” Brzezinski’s ultimate, recurrent nightmare....
Moscow and Beijing have come to the conclusion that the  US trans-oceanic strategic ring can only be broken through the actions of a concerted block: BRI, Eurasia Economic Union (EAEU), Shanghai Cooperation Organization (SCO), BRICS+ and the BRICS’ New Development Bank (NDB), the Asia Infrastructure Investment Bank (AIIB).
The Lords and Ladies of Discipline: An Interview with Matt Stoller
 [Naked Capitalism, January 21, 2020]
...Matt Stoller is referring to the contemporary incarnation of mainstream economics, which is neoclassical economics. It is worth remembering that neoclassical economics started being formalized in the late 19th century by thinkers like Leon Walras, Carl Menger, and William Jevons. One of the reasons their ideas took hold was first, that they aspired to establish that economics was a science that could be described in mathematical terms. Second, to do so, they had to assume ergodicity, which in layperson terms means that the system has a propensity to achieve a stable equilibrium. This typically hidden assumption produced results that were very useful in beating back idea promoted by Marx and other pro-labor forces, that modern economies were unjust and needed reforming. The counter-story was that if left alone, as in in the hands of businessmen, they were naturally self-correcting....
Stoller’s insight here brings Thomas Frank’s now standard analysis of the Democrats as the party of America’s smug anti-populist liberal/creative/professional class into an even more exquisite focus. For, as Stoller observes, this class is, increasingly, a disciplinary class, defining itself by both its adherence to and its enforcement of certain articles of faith — certain indisputable narratives — certain collective delusions. And currently chief among these are, first, the delusional narrative that the unprecedentedly evil boogeyman Donald Trump was illegitimately injected into the presidency by the dastardly and all-powerful Russians; second, the delusional narrative that our neo-liberal economic orthodoxy has irrefutably proven that any and all public policies on the scale of what was once achieved during the New Deal are now and forever unworkable and, worse than that, uncool; and, third, the delusional narrative that strategically-placed Intersectionalist Inclusivity bureaucrats are at this very moment reversing many many millennia of nonstop human social injustice by means of pure moral superiority. To dare challenge any of these cherished class narratives is to be smeared with extreme prejudice by the disciplinary class for thoughtcrimes like parroting Russian talking points or waging tacky class warfare or acquiescing to structural racism-misogyny-transphobia. Or for just being a deplorable.

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.