Sunday, September 16, 2018

Week-end Wrap - September 15, 2018

Week-end Wrap - September 15, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

“Best Ever” Economy? How much credit does Trump deserve for the current state of the economy?
by Invictus, September 10, 2018 [The Big Picture]
Conservative windbag Eric Bolling cited six economic indicators that purportedly show how great the USA economy is doing under Trump:  Unemployment Rate, GDP, Wage Growth, Number of Blacks Employed, Number of Hispanics Employed, and Number of Women Employed, but provided no graphs nor data.
Well, let’s have a look at all six of the items Eric Bolling chose to highlight — all in one handy chart. The St. Louis Fed’s FRED service let’s us do this very easily. We can index all six metrics to 100 at January 2009, when Obama took office, and see how they’ve been doing since. If there’s been a significant improvement (or even reversal of a undesirable trend) since January 2017, it should be easily visible....

Have a look at this chart — it’s un-doctored, except I hid the x-axis labels showing the years. Can you determine when Trump took office? When his policies went into place? Where the Trump economic surge is? ....
The claim that Trump Economy is all that different from the Obama economy — for Civilian Unemployment, for Employment levels of Blacks or Hispanics or Women, for Real GDP or for nominal hourly wages — is unsupported by the actual BLS and BEA data. For the budget deficit, on the other hand, CBO reportsthe deficit is noticeably wider under Trump than what he inherited from his predecessor, and likely to get even worse.

The Real Cost of the 2008 Financial Crisis
By John Cassidy [New Yorker, via Naked Capitalism 9-11-18]
In “Crashed: How a Decade of Financial Crises Changed the World,” the Columbia economic historian Adam Tooze points out that we are still living with the consequences of 2008, including the political ones. Using taxpayers’ money to bail out greedy and incompetent bankers was intrinsically political. So was quantitative easing, a tactic that other central banks also adopted, following the Fed’s lead. It worked primarily by boosting the price of financial assets that were mostly owned by rich people. 
As wages and incomes continued to languish, the rescue effort generated a populist backlash on both sides of the Atlantic. Austerity policies, especially in Europe, added another dark twist to the process of political polarization. As a result, Tooze writes, the “financial and economic crisis of 2007-2012 morphed between 2013 and 2017 into a comprehensive political and geopolitical crisis of the post–cold war order”—one that helped put Donald Trump in the White House and brought right-wing nationalist parties to positions of power in many parts of Europe.
The 2008 financial crisis upturned politics – and it’s not done yet 
by David Sirota [The Guardian, via Naked Capitalism 9-11-18]
....liberal America’s pattern of electing corporate Democrats – rather than progressives – has been a big part of the problem that led to Trump and that continues to make America’s economic and political system a neo-feudal dystopia.

Pigs Want To Feed at the Trough Again: Bernanke, Geithner and Paulson Use Crisis Anniversary to Ask for More Bailout Powers
by Yves Smith [Naked Capitalism]
After a decade of writing about the crisis, we are now subjected to an orgy of yet more chatter with not much insight. It speaks volumes that the likes of Ben Bernanke, Timothy Geithner, and Hank Paulson are deemed fit to say anything about it, let alone pitch the need for the officialdom to have more bank bailout tools in a New York Times op-e titled What We Need to Fight the Next Financial Crisis
The fact that they blandly depict crises that demand extraordinary interventions as to be expected confirms that greedy technocrats like them are a big part of the problem. Their call for more help for financiers confirms that they have things backwards. How about doing more to make sure that future crises aren’t meteor-killing-the-dinosaurs level events, and foisting more costs and punishments on the financiers who got drunk and rich on too much risk-taking? The first line of defense should be stronger regulations, including prohibition of certain activities. 
As the Financial Times’ Martin Wolf pointed out in a recent crisis retrospective, the response of central bankers and financial regulators to the crisis was to restore the status quo ante, and not engage in root and branch reform, as took place in the Great Depression. But as we’ve pointed out, the response to the crisis represented the greatest looting of the public purse in history.... 
Bernanke was a true believer in the Great Moderation, the mid-2000s self-congratulatory mainstream economist view that they had produced the best of all possible worlds. Bernanke in fact continued the so-called Greenspan put which incentivized investors and bankers to take on financial risks, since they knew if anything bad happened, the Fed would rush to their rescue. The Fed, and Bernanke in particular, were badly behind the curve. In May 2007, Bernanke said that subprime was contained, and in July 2008, gave Fannie and Freddie clean bills of health. 
Geithner, when he was head of the New York Fed, did acknowledge that the brave new world of slicing, dicing, and distributing risk might make it more difficult to manage a crisis, but then insisted that there was no way to roll the clock back. Linear projections of trends is naive but a great excuse for inaction. Geithner said nary a peep when banks who had just been bailed out gave a raised middle finger to the American public by paying their executives and staffs record bonuses in 2009 and 2010 rather than rebuilding their balance sheets.

...Recall that Paulson’s first TARP proposal was a mere 3 pages demanding $700 billion, more than the hard costs of the Iraq War, and even worse, put the Treasury beyond the rule of law with this provision:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. 
At the time, we called it a financial coup d’etat.

Hyman Minsky's May 1992 The Financial Instability Hypothesis 
[PDF from the Levy Institute, via Naked Capitalism 9-13-18]
Minsky is one of the few economists who resisted the glitzy lure of Wall Street's wealth, and insisted that almost all financial and economic modeling was fundamentally flawed because their underlying assumptions (such as rational self-interest) were just plain wrong.  Almost all the economists who foresaw the 2007-2008 Global Financial Crash, were acolytes of Minsky. Lambert Strether exhorts: "You should read this in full; it’s short [10 pages], there’s not an equation in it, and the writing is insanely lucid."

The Policymakers Saved the Financial System. And America Never Forgave Them
by Neil Irwin, September 11, 2018 [New York Times, via Naked Capitalism 9-13-18]
This article should serve as a case study of how shallow and uninformed is most coverage of economics, business, and finance. Irwin, who wrote a book on the crisis, asserts "the engineers of the American crisis response got the economics mostly correct," since they succeeded in saving the financial and banking system. 
The engineers of the response succeeded in their immediate goal, to preserve the financial system. But they — or, more precisely, they and their political leaders at the time — also left fissures that threaten to undermine the system they sought to preserve. The very underpinnings of modern capitalism are being questioned from all sides. A Republican administration has gleefully cast aside trade deals, for instance, and the energy among Democrats is around democratic socialism.
Irwin writes that "The goal was not to try to reinvent Wall Street on the fly, but to keep the flow of capital coursing through the global economy," but never does he question the social utility and economic justice of that "flow of capital."  The "very underpinnings of modern capitalism are being questioned" precisely because so little of the flow of capital no longer goes to assist to the development of new technologies, new companies, and new jobs that are economically progressive (in terms of actually creating new, generally shared economic progress). Instead, most of the flow of capital goes to speculation: over $5 trillion a day in the foreign exchange markets alonenearly $700 billion daily in USA bond markets, and about $200 billion per day in USA stock markets.  Compare these daily trading volumes to the approximately $74 billion in total USA venture financing for the entire year of 2017, or the $1,575.7 billion ($1.6 trillion) U.S. nonfarm businesses spent on new and used structures and equipment in the entire year of 2016. Just to emphasize the point: the foreign exchange markets move three times more money in one day than all USA businesses spend on new plant and equipment in an entire year, while the USA bond market by itself will move as much money in two days and two hours.

The one useful thing Irwin does is to remind us that the Tea Party was launched bwith a staged rant by CNBC "financial news" broadcaster Rick Santelli on the floor of the Chicago Mercantile Exchange.  It's absolutely amazing to me that Tea Partiers have never evinced one iota of shame that they were propelled into political motion by a talking head speaking on the floor of a futures market, where a large chunk of foreign exchange trading takes place. And, of course, Irwin neglects to mention that Santelli's rant was staged.

Irwin ends with a section entitled, "How the crisis broke our politics," in which he paraphrases former Federal Reserve chairman Ben Bernanke whining that
longer-term trends — like stagnation in middle-class wages, social dysfunctions, rising mistrust in government and hostility to immigration — were a bigger explanation for the rise in a politics of extremes.
The point is, Irwin completely fails to explore the connection between the "flow of capital" and "stagnation in middle-class wages" and "social dysfunctions." See, for example, Jacobin's recent article on financialization as The Latest Incarnation of Capitalism.

Ten Years After the Crash, We’ve Learned Nothing 
Matt Taibbi [Rolling Stone, via Naked Capitalism 9-14-18]
New Study Confirms Offshore Earnings are Flowing into Stock Buybacks, Not Jobs and Investments
[Just Taxes, via Naked Capitalism 9-11-18]

For Over a Century, the New York Times Has Praised Big Bank Consolidation
By Pam Martens and Russ Martens: September 13, 2018 [Wall Street on Parade]

A Proposed Alternative to Corporate Governance and the Theory of Shareholder Primacy
by John R. Ellerman and Ira T. Kay, September 12, 2018 [Harvard Law School Forum on Corporate Governance and Financial Regulation, via Naked Capitalism 9-13-18]
On Senator Elizabeth Warren’s proposed Accountable Capitalism Act.
What is shareholder primacy? For the past 30 years, shareholder primacy has been the most fundamental concept practiced in U.S. corporate law and governance. Shareholder primacy asserts that shareholders have the priority interest in their corporation’s economics and governance: shareholders are the principals on whose behalf the agents (management) of the corporate enterprise serve. Shareholder primacy instructs the Board of Directors to manage the corporation to maximize shareholder wealth.... The proposed Accountable Capitalism Act is a dramatic departure from the corporate governance model currently practiced by U.S. corporations.

Nancy Pelosi Promises That Democrats Will Handcuff the Democratic Agenda If They Retake The House
By David Dayen, September 4 2018 [The Intercept]

Meta: “We’re Measuring the Economy All Wrong” 
[by David Leonhardt, New York Times, via Naked Capitalism 9-13-18]. 
“A team of academic economists — Gabriel Zucman, Emmanuel Saez and Thomas Piketty (the best-selling author on inequality) — has begun publishing a version of G.D.P. that separates out the share of national income flowing to rich, middle class and poor. For now, its data is published with a lag; the most recent available year is 2014. But the work is starting to receive attention from other academics and policy experts [including Senators Chuck Schumer and Martin Heinrich]…. ‘As someone who advises policymakers, I can tell you there is often this shock: ‘The economy is growing. Why aren’t people feeling it,” [Heather Boushey, who runs the Washington Center for Equitable Growth] says. ‘The answer is: Because they literally aren’t feeling it.’ ….. It’s worth remembering that the current indicators are not a naturally occurring phenomenon. They are political creations, with the flaws, limitations and choices that politics usually involves.”

“Since dark money changed politics as we know it in the post-Citizens United era, the top 15 dark money groups have spent more than $600 million in secret money in our elections”
[Issue One, via Naked Capitalism 9-12-18]] (report).

NY Senate: “Six of eight ex-IDC senators lose primary bids” 
[Times-Union, via Naked Capitalism 9-14-18]
“Progressive activists successfully wrested the Democratic nominations away from six former members of the Senate Independent Democratic Conference in primaries on Thursday, including the conference’s former leader, Jeff Klein…. The outcome marked a stunning epilogue to the rogue group formed by Klein in 2011, after Democrats lost the chamber, and the initial four members worked, with the tepid support of Gov. Andrew M. Cuomo, in conjunction with the Senate Republicans. In 2013, when Democrats made up a numerical majority, the renegade Democrats enabled Republicans to maintain control of the Senate.”

Do Higher Wages For Restaurant Workers Kill Jobs? A New Study Says No. 
[WAMU, via Naked Capitalism 9-13-18]

Population race: India to overtake China ‘in 3 to 5 years’
Asia Times staff, September 11, 2018 [Asia Times]
According to a report by the National Health and Family Planning Commission, the nation’s net population growth for the first eight months of this year was only 4.1 million. This puts the largest nation in the world close to being overtaken by India.

India’s population expanded by some 14 million during the same period, to a size that is closer than ever to its rival: India’s 1.336 billion versus China’s 1.339 billion as of September 9, 2018, according to estimates by the United States Census Bureau’s World Population Clock.

High Price Of Insulin Leads Patients To Ration The Drug. That Can Be Lethal
[NPR, via Naked Capitalism 9-11-18]
My first vial of insulin cost $24.56 in 2011, after insurance. Seven years later, I pay more than $80. That's nothing compared with what Alec was up against when he turned 26 and aged off his mother's insurance plan. 
Smith-Holt says she and Alec started reviewing his options in February 2017, three months before his birthday on May 20. Alec's pharmacist told him his diabetes supplies would cost $1,300 a month without insurance — most of that for insulin. His options with insurance weren't much better. 
Alec's yearly salary as a restaurant manager was about $35,000. Too high to qualify for Medicaid and, Smith-Holt says, too high to qualify for subsidies in Minnesota's health insurance marketplace. The plan they found had a $450 premium each month and an annual deductible of $7,600. 
"At first, he didn't realize what a deductible was," Smith-Holt says. She says Alec figured he could pick up a part-time job to help cover the $450 per month.
Then Smith-Holt explained it. "You have to pay the $7,600 out of pocket before your insurance is even going to kick in," she remembers telling him. Alec decided going uninsured would be more manageable. Although there might have been cheaper alternatives for his insulin supply that Alec could have worked out with his doctor, he never made it that far. 
He died less than one month after going off of his mother's insurance....
Before the early 1920s, Type 1 diabetes was a death sentence for patients. Then, researchers at the University of Toronto — notably Frederick Banting, Charles Best and J.J.R. Macleod — discovered a method of extracting and purifying insulin that could be used to treat the condition. Banting and Macleod were awarded a Nobel Prizefor the discovery in 1923. 
For patients, it was nothing short of a miracle. The patent for the discovery was sold to the University of Toronto for only $1 so that live-saving insulin would be available to everyone who needed it. 
Today, however, the list price for a single vial of insulin is more than $250. Most patients use two to four vials per month (I personally use two). Without insurance or other forms of medical assistance, those prices can get out of hand quickly, as they did for Alec.
Depending on whom you ask, you'll get a different response for why insulin prices have risen so high. Some blame middlemen — such as pharmacy benefit managers, like Express Scripts and CVS Health — for negotiating lower prices with pharmaceutical companies without passing savings on to customers. Others say patents on incremental changes to insulin have kept cheaper generic versions out of the market.
For Nicole Holt-Smith, as well as a growing number of online activists who tweet under the hashtag #insulin4all, much of the blame should fall on the three main manufacturers of insulin today: Sanofi of France, Novo Nordisk of Denmark and Eli Lilly and Co. in the U.S.

The Secret Drug Pricing System Middlemen Use to Rake in Millions
By Robert Langreth, David Ingold and Jackie Gu, September 11, 2018 [Bloomberg, via Naked Capitalism 9-11-18] 
To probe what middlemen make, Bloomberg examined the prices of 90 of the best-selling generic drugs used by Medicaid managed-care plans. In 2016, the drugs made up a large portion of Medicaid’s spending on generics. 
Markups on these commonly prescribed generic drugs are growing, with huge markups on some well-known medicines, Bloomberg found. For the 90 drugs analyzed, which includes more than 500 dosages and formulations, PBMs and pharmacies siphoned off $1.3 billion of the $4.2 billion Medicaid insurers spent on the drugs in 2017.

Missing wages, grueling shifts, and bottles of urine: The disturbing accounts of Amazon delivery drivers may reveal the true human cost of ‘free’ shipping
[Business Insider, via Naked Capitalism 9-11-18]

Does ‘right to work’ imperil the right to health? The effect of labour unions on workplace fatalities. National Bureau of Economic Research., via Naked Capitalism 9-13-18]
In total, [right to work (RTW) laws have led to a 14.2% increase in occupational mortality through decreased unionisation.

About a quarter of rural Americans say access to high-speed internet is a major problem
[Pew, via Naked Capitalism 9-11-18]

Tech: “Congress Is Clueless About Google’s Biggest Problem” 
[Bloombergvia Naked Capitalism 9-10-18]
“Lanier’s insightful point is that this [free service for data] model may also be a natural route to disaster, for a disconcertingly simple reason. Facebook, for example, makes money by helping advertisers target messages — including lies and conspiracies — to the people most likely to be persuaded. The algorithms looking for the best ways to engage users have no conscience, and will simply exploit anything that works. Lanier believes that  the algos have learned that we’re more energized if we’re made to feel negative emotions, such as hatred, suspicion or rage. ‘Social media is biased not to the left or the right,’ as he puts it, ‘but downward,’ toward an explosive amplification of negativity in human affairs. In learning how to best to manipulate people, tech algorithms may inadvertently be causing mass violence and progressive social degradation.” 

Here’s How Your Unique Behavioral Psychological Profile Is Being Used to Manipulate You 
[Alternet, via Naked Capitalism 9-15-18].
Another reason, if you must use Facebook, to muddy your profile.

Joint Russia-China military maneuvers in Pacific showcase Chinese military technology
By Stephen Bryen September  7, 2018 [Asia Times, via Naked Capitalism 9-11-18]
While Russia could long count on selling China key aerospace equipment, complete fighter planes – including the powerful Su-35 – and jet engines, China is now introducing types of weapons, especially stealth aircraft, that Russia cannot afford to produce or even support technologically.

Chinese industry is advertising that it has perfected a jet engine, the Xian WS-15, for its Chengdu J-20 Stealth fighter that previously was using a stopgap Russian-made NPO Saturn AL-31F power plant. The WS-15 in pre-production testing in China makes use of single crystal fan blade technology for the hot section of the engine. 
Single crystal castings are made from powdered metal alloys that are cast into shapes and treated in special furnaces and form the core technology for high powered turbine engines – the technology is closely guarded as a secret in the United States

The Northern Sea Route and its Impact on World Trade
[Valdai Club, via Naked Capitalism 9-13-18]

16 of UK’s largest van fleets to go electric: 18,000 electric vans by 2028
by Sami Grover, September 7, 2018 [Treehugger, via Naked Capitalism 9-10-18]

California Mandate for 100% Clean Energy by 2045 Signed Into Law
[Courthouse News, via Naked Capitalism 9-11-18]
“The climate change mandate forces utilities to incrementally ditch fossil fuels in favor of renewable electricity and joins the Golden State with Hawaii as the only states wholly committed to a zero-carbon energy sector. [Governor Jerrry] Brown says Senate Bill 100 puts California in line with the goals of the United Nations Paris Agreement and prepares the state for the “existential threat” of climate change.” ª Kevin DeLeón, the author of the bill, is running for Senate (he supports Medicare for All).
[New Food Economy, via Naked Capitalism 9-11-18]
 “People think of beekeeping as a rural pursuit, but honeybees can thrive in urban areas. Comprehensive studies on urban beekeeping are limited, but data in specific geographies from Boston to London suggest that bees actually do better in cities than in rural areas…. ‘The levels of pesticides and fertilizers is much higher in a rural setting because of people treating their crops or in suburban areas,’ Peterson-Roest says. ‘Everybody has to have the best-looking lawn, and they spray for those dandelions and want to make sure that their yard is weed-free. But nobody is spraying the abandoned lots and the organic gardens.’… Urban environments also provide diversity in food sources for bees,

The Bezzle: “Why Tesla’s Autopilot Can’t See a Stopped Firetruck”
[Wired, via Naked Capitalism 9-10-18]
“These systems are designed to ignore static obstacles because otherwise, they couldn’t work at all…. This unsettling compromise may be better than nothing, given evidence that these systems prevent other kinds of crashes and save lives. And it’s not much of a problem if every human in a semi-autonomous vehicle followed the automakers’ explicit, insistent instructions to pay attention at all times, and take back control if they see a stationary vehicle up ahead.” [Lamber Strether comments: If I have to pay attention at all times, why don’t I just drive?]
People have been told for over a decade now not to use their cell phones and drive at the same time. And the results? I can just imagine the public reaction to not being able to snooze or smooch while your "semi-autonomous vehicle" drives you to your next accident scene. This is classic IT-think: nothing can be done about the software, so the users will have to adjust and adapt.

It’s Now Possible To Telepathically Communicate with a Drone Swarm
by Patrick Tucker, September 6, 2018 [Defense One, via Naked Capitalism 9-12-18]
The work builds on research from 2015, which allowed a paralyzed woman to steer a virtual F-35 Joint Strike Fighter with only a small, surgically-implantable microchip. On Thursday, agency officials announced that they had scaled up the technology to allow a user to steer multiple jets at once. 
“As of today, signals from the brain can be used to command and control … not just one aircraft but three simultaneous types of aircraft,” said Justin Sanchez, who directs DARPA’s biological technology office, at the Agency’s 60th-anniversary event in Maryland. 
More importantly, DARPA was able to improve the interaction between pilot and the simulated jet to allow the operator, a paralyzed man named Nathan, to not just send but receive signals from the craft....
It’s another breakthrough in the rapidly advancing field of brain-computer interfaces, or BCIs, for a variety of purposes. The military has been leading interesting research in the field since at least 2007,. And in 2012, DARPA issued a $4 million grant to build a non-invasive “synthetic telepathy” interface by placing sensors close to the brain’s motor centers to pick up electrical signals — non-invasively, over the skin. 
But the science has advanced rapidly in recent years, allowing for breakthroughs in brain-based communicationcontrol of prosthetic limbs, and even memory repair.

The divide between mainstream macro and MMT is irreconcilable – Part 1
by Billy Mitchell,  September 10, 2018 [Billy Mitchell, via Naked Capitalism 9-12-18]
These accounting frameworks and fiscal rules are designed to give the (false) impression that the government is financially constrained like a household – that is, in context, has to either raise taxes to spend or issue debt to spend more than it raises in taxes. 
MMT strips way these veils of neo-liberal ideology that mainstream macroeconomists use to restrict government spending. 
We learn that these constraints are purely voluntary and have no intrinsic status. This allows us to understand that governments lie when they claim they have run out of money and therefore are justified in cutting programs that advance the well-being of the general population. 
By exposing the voluntary nature of these constraints, MMT pushes these austerity-type statements back into the ideological and political level and rejects them as financial verities. 
Mainstream macroeconomics does no such thing. It holds these voluntary institutional structures out as intrinsic financial constraints. 
1. Governments are financially constrained.
2. That means to spend the government must tax, which have negative consequences on work and investment incentives.
3. Spending more than it taxes (deficits) leads to a new ‘funding’ decision.
4. They recognise that the deficit could be funded by ‘money printing’ but claim this would be inflationary.
5. So the best option (among the two evils) is to issue debt, which pushes up interest rates and crowds out private spending.
6. There is a very real possibility that any stimulus from the deficit spending will be wiped out by the crowding out. 
That is mainstream macroeconomics and it is not possible to spin it any other way.
To give you are guide, the best-selling macroeconomics textbook is Macroeconomics (currently 9th edition) by Greg Mankiw [George W. Bush's chief economic adviser].
4. “Some economists believe that to pay for these commitments, we will need to raise taxes substantially as a percentage of GDP … Other economists believe that such high tax rates would impose too great a cost on younger workers. They believe that policymakers should reduce the promises now being made to the elderly of the future and that, at the same time, people should be encouraged to take a greater role in providing for themselves as they age.”
9. Unemployment is not due to real wage rigidity but rather arises from a systemic failure to provide enough jobs. That failure arises due to inadequate spending in the economy. When the non-government sector’s spending and saving decisions are made and executed, if there is a deficiency then it means the fiscal deficit is too low. Entrenched mass unemployment is a political choice made by governments. 
10. “unemployment results when the real wage remains above the level that equilibrates labor supply and labor demand. Minimum-wage legislation is one cause of wage rigidity. Unions and the threat of unionization are another.” 
This is core mainstream macroeconomics and is fed into the policy-making process on a daily basis. 
It drives narratives, policy choices, how government departments and central banks are run (at least at the political level) and it is fed continuously, albeit in different (more simpler) language to the general population on a daily basis. 

Why Did The New Yorker Want Steve Bannon To Headline Their Festival?
by Ian Welsh, September 4, 2018 []
So, Bannon was due to headline a New Yorker festival. People became upset and now he isn’t. 
Why was he invited in the first place? 
I’m not one of those who’ll argue that Bannon isn’t smart. He is. Very much so. But there are plenty of very smart, and indeed smarter people on the left. Chomsky has never headlined for the New Yorker, and he’s a straight up genius. 
Bannon was invited because what the alt-right/fascists want is something centrists can live with. Fascists are big believers in corporations. Under the Nazis executive wages soared. They crushed unions and depressed wages. They managed unemployment by choosing entire classes of people to make non-people, and the rest of the population mostly got a job. 
All of this is stuff that centrists can live with. High executive compensation, pro-corporate policies, keeping unions and the left down. 
Remember, always, that Jews weren’t killed first. Socialists and anarchists were.
So the bottom line is that centrists are OK with fascists because fascists are pro-corporate and executive wealth.... 
On the other hand, the left wing is hostile to large corporations and high executive compensation. At the least the left would highly regulate corporations and break many of them up, while slapping on c.90% marginal tax rates and punitive estate taxes.
At the most, some left wingers would nationalize corporations whole sale and redistribute wealth, or they might force employee ownership of corporations or some version of that. 
All actual left-wingers would end the obscene over-pay part in corporate America.
Left-wingers are an existential threat to centrists because centrists are, substantially, supporters of the status quo. How America and the world is (or was before Trump) is essentially good to them. The parts of the status quo that right wingers want to overthrow don’t hurt centrists. The parts of the status quo that left wingers want to overthrow do. 
....The center prefers the center. But they’ll always choose the right over the left on anything that even slightly smells of economics, because they want to retain their wealth and the right will allow that and the left won’t.
And I add this table to emphasize Welsh's point:
Source for table: Crimes Were Committed, by Barry Ritholtz, September 12, 2018 [The Big Picture]
This is the introduction to Ritholtz's reflections on the 2007-2006 GFC, and is well worth reading. In this first part, Ritholtz discusses why no executives were ever prosecuted. 

Tuesday, September 11, 2018

Elevator Speech econ #3—Producer vs Predators

I have been reviewing my old posts based on number of pageviews. The readers of this blog are exceedingly perceptive. I also found a potential post that never got the publish button. Interesting because the "elevator speeches" got significant hits. In fact, they will be included in a minor page redesign.

If you are of the mind that the study of economics should concentrate on the actions within a society that provide for the material needs in life, eventually it becomes clear that the most important distinction in life is that there is an enormous difference between talking about a problem and solving one.  Understand this, and the rest of life is details.

(note about this illustration) I came across Thorstein Veblen's famous distinction between business and industry in 1982 and was just dazzled by the implications.  I was living in the American Midwest where the examples of the difference between industrial genius and financial maneuver were just everywhere.  While collecting all these examples, I discovered that this blinding flash of insight wasn't even Veblen's—it belonged to the agrarian radicals who were trying to solve the problems of settling previously untilled lands.  Veblen's father was a particularly fine example of one of those pioneer agrarian problem-solvers so he came by understanding as a child.  (Sure am glad I discovered this idea via Veblen, however!) For a more detailed explanation of the history of Producer-Predator thought, see Chapter Three of Elegant Technology.

But dividing the world into the problem-solving Producers and the Predators who make things worse by talking things to death while cornering the community's resources is much more than a cute parlor trick.  Turns out that the biggie problems facing the planet such as peak oil and climate change exist because of former problem-solving efforts gone wrong.  ANY meaningful plan to address these enormous dilemmas must understand HOW the Producer Classes solve problems so that our next attempts can yield a better outcome.

This idea that only a more enlightened breed of Producers could ever solve the BIG problems would drive the writing of Elegant Technology.  That's what Elegant Technology is—the social and economic support necessary to train and employ the Producers who can solve things like the end of the Age of Petroleum.

Sunday, September 9, 2018

Week-end Wrap - September 8, 2018

Week-end Wrap - September 8, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

How the City of London created Eurobonds, destroyed the Bretton Woods world financial system and saved crooks, criminals, and dictators from the rule of law
by Oliver Bullough, September 7, 2018 [The Guardian, via Naked Capitalism 9-8-18]

Bullough is the author of an interesting new book, Moneyland: Why Thieves And Crooks Now Rule The World And How To Take It Back. It appears that Bullough confirms that it was, once again, the British empire, that imposed massive pain on millions of people worldwide. It is always important to recall that in the 19th century, the political economy of Britain was seen to be a hostile competitor to to the political economy of the United States.

Note also that the British have historically specialized in the banking, hiding, and use of dirty money, with the role of the Hong Kong and Shanghai Bank in the 19th century opium trade particularly notorious. The Hong Shang is today HSBC, which has been fined a number of times by USA and other authorities for assisting and directing the laundering of dirty money for a seemingly endless list of shady clients. Among the directors of HSBC is Jonathan Evans, Lord Evans of Weardale, former Director-General of the British Security Service, the United Kingdom's domestic security and counter-intelligence service, proving that the domination of the world's financial system by criminal means is a matter of state policy for the Brits.

The article is an excerpt from the book, and may be a bit of a slog at first, but this is really crucial information for anyone who wants to know who really runs the world, and how.

Wednesday, September 5, 2018

Are the Saudis

In the fall of 1974, I took what was easily my most interesting course at the University of Minnesota. It was named Energy and Public Policy and was taught by the infinitely curious, snoose-using, balding Minnesota-Swede named Dean Abrahamson. He was a Physics Ph.D., medical doctor, and had also collected a degree in public policy from the soon-to-be Humphrey Institute. He had been pursuing the question "just how dangerous are nuclear power plants?" He thought at first it was a physics question, then a medical question, and finally came to the conclusion that it was a collective public policy question. Along the way, he realized that if nuclear power really was too dangerous to use, he would have to know about the competing energy alternatives. Acid rain dominated the environmental news those days and he judged coal burning as a close second to the dangers of fission. But since the Oil Shock of 1973 was fresh in everyone's memory, Dr. Dean spent a lot of time lecturing on middle east oil.

If that wasn't enough, we had a genuine Saudi student in the class. I paid special attention to his remarks. He rigorously defended the Saudi oil embargo and had a pretty legitimate list of grievances against the oil imperialists. He wasn't overly happy about the cultural imperialism that resulted in young Saudi men imitating the pickups, belt buckles, and boots of the Texas / Oklahoma oil guys. And he thought that oil prices were far too low.

Oops. NOW we are talking. Since the Industrial Revolution had produced a million clever things that needed petroleum to run, folks could get really desperate if they got cut off from their sources of energy. In some applications, such as the fuels needed to run the machinery of a harvest, diesel fuel is extremely time-critical. In real-world terms, that fuel is priceless. Before oil shock #1, such diesel fetched about $0.25 at the pump. Because while this fuel is priceless, the farmer wants to pay as little as possible. Our Saudi student may have had no inkling just how valuable oil is to folks who live in cultures where nearly everything has become powered. But he did know that Saudi Arabia deserved a bigger slice of the pie.

The following story tells the tale that the Saudis are still trying to come to grips with their big but dwindling oil deposits. Those who wanted to take Aramco public still thought it was a good idea to trade oil for paper or reprogrammed computer chips. Those who block this move obviously have different thoughts about the value of oil. Personally, I think it would have been insane for the Saudis to take Aramco public.

Sunday, September 2, 2018

Week-end Wrap - September 1, 2018

Week-end Wrap - September 1, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The trans-Atlantic elites appear to have settled, in the past few weeks, on their response to Trump's simple minded trade protectionism. The elites' core argument is that protectionist measures threaten the "global value chains" -- the complex web of world suppliers that provide parts and components for almost all manufactured products.

Conspicuously missing from this core argument is the question, "value for whom?". The USA working class did quite well, thank you very much, when USA industrial companies made everything "in house." The most famous example was Ford's River Rouge plant, which old Henry designed and built to swallow ship loads of taconite, coal, limestone and other raw materials at one end, and spew forth each day a gusher of fully assembled automobiles out the other end.

Of course, it was not a bed or roses for the working class. But making everything "in house" gave organized labor a single -- hence very vulnerable -- pressure point to lean on and threaten. Break up the assembly process into a "global value chain" of four or five hundred or more suppliers scattered about the globe, and the United Auto Workers can only make semi- informed guesses as to where is the best place to picket and strike.

Lambert Strether, in his "Water Cooler" each weekday at Naked Capitalism, has done a great job of rounding up news and articles about Trump's trade war. LS's Sept. 1 front page report on the Council of Foreign Relations report was especially excellent, with some pointed comments.

Trade wars won’t fix globalization. Here’s why 
[Council on Foreign Relations, via Naked Capitalism 9-1-18] 

Saturday, September 1, 2018

And a child shall lead them

The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them.
Isaiah 11:6 King James Version (KJV)

Most of the scientists I rely on for climate change news are old codgers like myself. They are folks who have devoted their lives to finding the most accurate information their precision instruments can reveal. Great people but there is a bit of "whew, we aren't going to have to deal with the end game ourselves—but folks, it will be really ugly" in their approach. So to read about the young Swedish activist who believes that she has most of her life ahead of her and doesn't want fools to screw up her possibilities, is like breath of fresh air.

I have boldfaced the parts I believe are especially perceptive. There may be hope for the next generation, after all. It is the job of us old codgers to give the young the best roadmap possible for what has, and has not, worked in the past when it comes to social change. And yes, I take this as a mandate. Go Greta!

Thursday, August 30, 2018

Sweden's waste to energy, and other advanced problem-solving

The various schemes to make societies less carbon intensive fall into two categories—conservation of resources, and capture of alternative energy sources. When I wrote Elegant Technology, I was quite enchanted by Sweden's waste disposal system that provided most of the heat necessary to warm their homes during those long dark winters. So it is interesting to see how things have turned out—as seen through the eyes of an Australian documentarian. I am not so enchanted by this waste-to-heat solution as I was 30 years ago—I am pretty much down on fire these days. OTOH, I have not seen a better scheme anywhere else.

Aug 20, 2018

This documentary was done during the run-up to the Copenhagen Climate Change Conference. The most interesting part of this doc is probably the claim that Denmark did not decide to reduce their need for fossil fuels as a reaction to climate change, but as a response to the 1973 oil embargo. This means they have a 45-year head start on most countries—esp.USA.


This is from PBS. It concentrates on Samsø island in Denmark—which has nearly reached the target of complete sustainable energy generation. You will notice there are  tractors in use so they are still importing some petroleum.

Dec 12, 2015

Tuesday, August 28, 2018

Going up the Country

Spent time in Edgar Wisconsin seeing Tony in action. I really like his customers. The majority are probably working farmers or were when they retired. These are the people of my childhood and it is fun to get back into that long-unused social milieu. Since I only interact with these folks rarely, I usually haul out the practices of the Non-Partisan League organizers. They were attempting to politically organize farmers who had a lot of other demands on their time. They were strangers selling a farmer agenda to people who generally agreed that all politicians were crooks. So these were the "rules" of engagement:

1) Realize the farmer you have just met has a bundle of problems—almost all economic. Prices for their products are too low, the cost of their inputs are too high, and the railroads are cleaning up on the traffic both ways. Ect. Discover his story and modify accordingly. Show some empathy.

2) Make sure you cover the social importance of farmers. They are most certainly NOT stupid peasants. If you can grow grain in North Dakota or run a dairy farm in Wisconsin, you can certainly run your own government. A government run by farmers in their own interests is not only possible, but highly desirable. Show genuine interest in how the farmer attempts to solve his particular set of production problems and file them away for future reference.

3) Have a well-thought-out agenda. Explain what a farmer-run government could do to better his economic lot. NPL had a laundry list of things they intended to accomplish including, most importantly, a state-run bank. Amazing how much farmers know about credit problems so this was always an idea that demonstrated daring. And since that bank is still being touted as the runaway success that it is by Ellen Brown to the point where California and LA among a host of others is considering one, the NPL can rightly be considered as this country's most successful progressive movement ever. EVAH!

To anyone who despairs at the rotten state of USA politics, these methods still work. My favorite encounter was with a soon-to-be-retired dairy farmer. He milked 80 cows and sold to, yes, a cheese factory. When I was a child, dairy herds were considered substantial at 40. So he has a lot of work twice a day. His wife is over being a dairy farmer's spouse and wants him to quit. But he claimed that both he and his father plowed back everything in upgrading his farm—lots more than money invested here like pride, effort, planning. This is what we imagine when we hear of the virtues of "family farming." Not many of these folks left. And they are getting old. And if there were still 40% of people farming instead of 2%, I could get elected to high office using the NPL methods exactly the way they used them 100 years ago.

Of course, these methods DO work outside of agriculture. Ask any student about the importance of debt reform. Ask anyone who was left to rot when some Wall Street scam artists bought the town's main factory, looted the pensions, and shipped the machinery to China. Ask someone who got a heart attack and for-profit medicine handed him a $100,000 bill to ensure his heart problems got worse. Ask anyone who despairs at meaningful progress on climate change. And have an agenda that makes sense.

Sunday, August 26, 2018

Week-end Wrap - August 25, 2018

Week-end Wrap - August 25, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

We can still avert climate disaster with a “wartime footing” of switching to renewable energy, but neoliberal economics stands in the way 
by Kate Aronoff, August 14 2018 [The Intercept, via Naked Capitalism 8-19-18]
BY SHIFTING TO a “wartime footing” to drive a rapid shift toward renewable energy and electrification, humanity can still avoid the apocalyptic future laid out in the much-discussed “hothouse earth” paper, a lead author of the paper told The Intercept. One of the biggest barriers to averting catastrophe, he said, has more to do with economics than science.... (The actual title of the paper, a commentary published in the Proceedings of the Natural Academy of Sciences, is “Trajectories of the Earth System in the Anthropocene.”)
....Asked what could be done to prevent a hothouse earth scenario, co-author Will Steffen told The Intercept that the “obvious thing we have to do is to get greenhouse gas emissions down as fast as we can. That means that has to be the primary target of policy and economics. You have got to get away from the so-called neoliberal economics.” Instead, he suggests something “more like wartime footing” to roll out renewable energy and dramatically reimagine sectors like transportation and agriculture “at very fast rates.” 
....Contra much of the apocalyptic coverage around “Trajectories,” runaway climate change of the kind described in Steffen and his co-authors’ paper is very likely preventable. The ways to prevent it just happen to go against the economic logic that has dominated the world economy for the last half-decade, to scale back regulations and give major industries free reign. 
....The paper itself put it in fairly direct terms. “The present dominant socioeconomic system,” the authors wrote, “is based on high-carbon economic growth and exploitative resource use. Attempts to modify this system have met with some success locally but little success globally in reducing greenhouse gas emissions or building more effective stewardship of the biosphere. Incremental linear changes to the present socioeconomic system are not enough to stabilize the Earth system; these include changes in behavior, technology and innovation, governance, and values.”

Exclusive: Some Arctic Ground No Longer Freezing—Even in Winter
[National Geographic via Naked Capitalism 8-23-18]

Germany Has Proven the Modern Automobile Must Die
by Emily Atkin, Augiust 21, 2018 [Wired, via Naked Capitalism 8-22-18]
In 2007, the German government set a goal of reducing Germany's greenhouse gas emissions by 40 percent by the year 2020. So far, Germany has reduced its emissions by 27.7 percent. That is one of the most significant reductions in the world, but it now appears Germany will not achieve the goal set in 2007 in the next two years. The major obstacle that has emerged is the reliance on automobiles for transportation and mobility.

Monday, August 20, 2018

Climate Grief

Below is a pretty good description of what the author calls "climate grief"—the crushing realization that everything at all lovely about this world of ours is dying. I can certainly empathize with his feelings although for myself, grief would be a vast improvement over the the feelings that wash over me whenever I allow myself to think deeply about our rapidly changing climate. In no particular order they are:

Naked Terror. When a person grows up on the high prairie, the idea that mother nature is this incredibly beautiful, benevolent, life-sustaining force is tempered by the reality that mom can easily kill you with tornadoes, howling blizzards, sleet, brutal heatwaves, or tennis-ball-sized hail. When I was 16, I nearly froze to death changing a flat tire less than a half mile from our house in North Dakota. Add a few experiences like this together, and the idea that this will all get a lot worse very soon because humanity conducted an arrogant chemistry experiment in the atmosphere is enough to make me very, very afraid.

The wrath of natural laws. Science teaches a bunch of natural laws that work every time, all the time. Raise the temperature of water to 100°C and it will turn to steam. Step off a cliff, and you will fall to the bottom. This is a world where there is no appeal. This is the world of climate science. Pump excessive CO2 into the atmosphere and the planet will get hotter—of this there is no rational debate.

Head-pounding frustration. I have been writing about environmental matters since the 1980s. Almost all of it can still stand close scrutiny. When I think about the vast possibilities of the sustainable society, I can have feelings close to elation. When I consider that very little has been accomplished compared to the problems, the frustration can be overwhelming.

Disgust at useless symbolism. Nothing upsets me quite like a climate change enthusiast who outlines the sordid tales of woe followed by some lame suggestions of raising consciousness and political organizing, or more conferences followed by targets and carbon taxes. This is the biggest calamity ever faced by humans. Most of us in the "developed" world live in societies powered by fossil fuels at every turn. Without them, we have no drinking water, weather-sheltered housing, food, medicine, or mostly anything else. This infrastructure must be redesigned and rebuilt. Since it required hundreds of years to build what we have—building the new world will take a least a few decades. And that's if we immediately embark on an organized crash program.

The builder's perspective. I have been building things since I can remember. Some of my favorite memories are of industrial tours. I can hardly look at at anything without speculating how it was constructed. And what this has taught me is that everything, and I mean everything, is more difficult to build than anyone can possibly imagine without actually doing it. And even if one has carefully planned out all the relevant operations, it always goes much more quickly in one's head than in the real world where real-world problems show up on a daily basis. Of all the reasons for my despair over not accomplishing anything meaningful about climate change, the saddest fact for me that even those with the necessary credentials to build the new sustainable world will take more time than their worst guesses.

Sunday, August 19, 2018

Week-end Wrap - August 18, 2018

Week-end Wrap - August 18, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

USA Conservatives Calling for New Constitutional Convention to Kill Off the "Welfare State"
by Jamiles Lartey, August 11, 2018 [The Guardian, via Naked Capitalism 8-12-18]
This should be taken very seriously, despite the usual conservative idiocy of equating socialism with a lack of "free dumb." If conservatives, libertarians, and Republicans actually get a convention, they are sure to target the General Welfare mandate for elimination, though they dare not openly talk about it now. Randall G. Holcombe, who served on Governor Jeb Bush's Council of Economic Advisors. in the 2016 campaign, wrote a 1992 article arguing that the major improvement of the Confederate Civil War constitution was the elimination of the General Welfare mandate. They will also enshrine their doctrine of enumerated powers, which has been repeatedly rejected by the Supreme Court until now. They could then proceed at leisure to have the courts, packed with their Federalist Society ideologues, declare programs such as Social Security unconstitutional.
It’s been more than 230 years since America’s last constitutional convention, but there is growing confidence in some conservative circles that the next one is right around the corner – and could spell disaster for entitlement programs like medicare and social security, as well court decisions like Roe v Wade. 
“I think we’re three or four years away,” said the former Oklahoma Senator Tom Coburn on Friday, speaking at the annual convention for American Legislative Exchange Council (Alec) – a powerful rightwing organization that links corporate lobbyists with state lawmakers from across the country. 
Coburn, a veteran Republican lawmaker, now works as a senior adviser for the advocacy group Convention of States, which seeks to use a little known clause in article V of the US constitution to call a constitutional convention for new amendments to dramatically restrict the power of the federal government. 
“We’re in a battle for the future of our country,” Coburn told the assembly of mostly conservative state lawmakers meeting in New Orleans. “We’re either going to become a socialist, Marxist country like western Europe, or we’re going to be free. As far as me and my family and my guns, I’m going to be free."

What you probably don’t know about Social Security
by Alessandra Malito, August 17, 2018 [MarketWatch, via Naked Capitalism]
Social Security works. In fact, in works really well. 
Nancy Altman: The truth about Social Security today is that it works extremely well. It is completely consistent with the founder’s vision and in fact, although some revisionist historians today say the founders wouldn’t recognize it, not only would FDR recognize it today but they’d be shocked that it wasn’t larger and didn’t include Medicare for All, or paid parental leave, or medical leave, because those are all aspects they envisioned. They were very pragmatic, so they wanted to start there. FDR said he didn’t want to start extravagantly because he wanted it to be a success but it was a cornerstone on which to build.

Friday, August 17, 2018

What happens with the new round of sanctions aimed at Russia

Regular readers already know the party line around here is that sanctions have proved very beneficial to the Russian economy because they cut off the country from the worst of the neoliberal economic advice that shows up with integration into the global Washington Consensus institutions. The economics of self-sufficiency has again produced superior results.

One of the details about Russia I learned in 1972 on a tour of Leningrad was that she had within her borders commercial supplies of every element on the periodic table. When I heard that, the thought crossed my mind "if this country could get rid of their economic crackpots, it would be easily the richest country on earth."

Alexander Mercouris presents an informed argument for why Russia is well-prepared for another round of USA sanctions.

Wednesday, August 15, 2018

Is climate change finally going to get proper news coverage?

About ten years ago, I was conversing with a friend whose most interesting characteristic was, IMHO, that he was the only person who had been granted a PH.D in electrical engineering in 1943 from the Massachusetts Institute of Technology. USA was geared up for a major war effort but they also wanted breakthroughs in EE. That he was allowed to finish a degree put him roughly in the same company as the guys who got military deferments to work at Los Alamos. Smartest guy I ever met. Early on that evening, he leaned over and said very seriously, "There is one subject that is so important that every day there should be headlines in 144 pt type in every newspaper in the land. What do you think I am talking about?"

My response of "the only thing I can even think of is climate change" seemed to make him happier. The man is now dead for seven years. And only now do I see that there are a few glimmerings of wider serious interest in the subject. But the conversation, such as it is, is still pretty superficial. This morning I watched Chris Hedges interview none other than James Hansen on climate change. Hedges, ever the divinity student, kept searching for the bad guys, while Hansen pitched carbon taxes and a lawsuit filed in the name of the children who are inheriting our screwed-up atmosphere. While both had somewhat compelling arguments, neither seemed to understand that none of their suggestions would actually move the needle on atmospheric CO2. This was a conversation between a Harvard-educated, Pulitzer-prize-winning former NYT writer and one of USA's great astrophysicists. Too bad they never met my friend.

Below are two samples of what I consider the new awareness spawned by this crazy-hot summer with multiple wildfires including arctic Sweden. We will see what happens. The subject of climate change is just scientific enough so that if someone slept through basic high school chemistry, their judgment must be second-hand—your expert against my expert. In my experience, every climate change denier shows obvious signs of goofing off in science classes—or skipping them entirely. Which means you cannot convince that person with a scientific argument.

Tuesday, August 14, 2018

It's harder than it looks (part...)

Amid the soap opera of Tesla, Musk, and whether the stock market is "properly" valuing the EV car market, it is easy to lose sight of the fact that what Tesla is attempting to accomplish is nothing short of miraculous. Because an electric car can be built by a hard-working shade-tree mechanic, the idea that any established car company should be able to build an EV if they just put their mind to it tends to become a sort of conventional wisdom. Tesla shorts repeat this mantra until big money is involved.

It turns out that an EV is a dramatically different sort of animal because many of the skills required to make an ICE car are simply not relevant. Literally millions of hours have been spent over the years to make a smooth-shifting, reliable, transmission. An EV usually doesn't even need a transmission—or a fuel pump, or a bunch of other things that make cars so complex. But what they do need are reliable batteries—LOTS of them. And the problem of buying enough batteries for a backyard EV conversion do not scale up to the problem of producing thousands of battery packs for long-range vehicles every week.

So all the issues surrounding Tesla's driven, grumpy, charismatic leader are way less important than whether the company can produce enough batteries. And that makes Tesla's boring Nevada gigafactory important enough to (almost) justify its market capitalization—which is higher than GM which makes and sells more than 2.6 million vehicles per year compared to Tesla's goal of 250,000.

Sunday, August 12, 2018

Week-end Wrap - August 11, 2018

Week-end Wrap - August 11, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Trump Tax Cuts Having Significant Impact - On Corporate Profits
August 6, 2018 [Yuxing Sun, via Mike Norman Economics]
Latest financial results from Warren Buffet's Berkshire Hathaway:
Net income rose to $12.01 billion, or $7,301 per Class A share, from $4.26 billion, or $2,592 per share, a year earlier. 
Results also reflected a decline in Berkshire's effective income tax rate to 20 percent from 28.9 percent, following last year's cut in the federal corporate tax rate.

Zero Hedge — Ten Bombshell Revelations From Seymour Hersh's New Autobiography
[Zero Hedge, via Mike Norman Economics 8-8-18]
From a recent The Intercept interview and book review — If Hersh were a superhero, this would be his origin story. Two hundred and seventy-four pages after the Chicago anecdote, he describes his coverage of a massive slaughter of Iraqi troops and civilians by the U.S. in 1991 after a ceasefire had ended the Persian Gulf War. America’s indifference to this massacre was, Hersh writes, “a reminder of the Vietnam War’s MGR, for Mere Gook Rule: If it’s a murdered or raped gook, there is no crime.” It was also, he adds, a reminder of something else: “I had learned a domestic version of that rule decades earlier” in Chicago.
“Reporter” demonstrates that Hersh has derived three simple lessons from that rule:
  • The powerful prey mercilessly upon the powerless, up to and including mass murder.
  • The powerful lie constantly about their predations.
  • The natural instinct of the media is to let the powerful get away with it....

Monsanto ordered to pay $289m damages in Roundup cancer trial 
[Newsy, via Naked Capitalism 8-11-18]

Wells Fargo says hundreds of customers lost homes because of computer glitch
[CNN, via Naked Capitalism 8-5-18]

Trump Is Giving Protectionism a Bad Name
by  William G. Moseley, August 9, 2018 [TripleCrisis , via Naked Capitalism 8-9-18].
As a development geographer and an Africanist scholar, I have long been critical of unfettered free trade because of its deleterious economic impacts on African countries. At the behest of the World Bank and the International Monetary Fund, the majority of African countries were essentially forced, because of conditional loan and debt-refinancing requirements, to undergo free market–oriented economic reforms from the early 1980s through the mid-2000s. One by one, these countries reduced tariff barriers, eliminated subsidies, cut back on government expenditures, and emphasized commodity exports. With the possible exception of Ghana, the economy of nearly every African country undertaking these reforms was devastated.

Producer v Predator—a battle of Titans

The news that Elon Musk wants to take Tesla private has provided us with a further confirmation of Veblen's class theories. Musk is such an excellent example of a Producer Class Superstar, we should probably be selling a Musk bobble-head doll around here. And he has just pulled off a production miracle. And honestly, he looks terrible—120 hour workweeks will do this to a now middle-aged man. And so he looks up from that effort and discovers that a bunch of Predators are trying to suck out the energy from Tesla by shorting the stock.

My pioneer forebears discovered this grim reality while trying to farm in Minnesota. It was like going on a camping trip to hell. With small children in tow. Winters featuring -30° temps, summers with incredible heat and swarms of biting insects, the problems of breeding animals and sowing crops, and 100 other similar annoyances. And when you had survived that, you had to deal with crazy shipping fees by a railroad monopoly, crooked grain grading systems, usurious money-lenders, and the corrupt politicians bought by those thieves. The producing classes had to organize politically. In Wisconsin it was LaFollette and the Progressive Republicans, in North Dakota is was the Non-Partisan League, and here in Minnesota, it was the Farmer-Labor Party. In fact, nearly all the prairie farm states had  political movements to protect the interests of the Producing classes.

Musk vs the Wall Street crooks will be a titanic showdown. Wall Street is on at least a 45-year winning streak. Musk has been taunting the shorts for several years. Musk does not have a political movement backing him—in fact what he does know about the Producer-Predator conflicts seem to be self-taught. But Musk has a LOT going for him. He has that ultimate Producer skill—vision and the organizational abilities to turn his visions into reality. That skill is so rare that people who possess it attract followers. And Musk has a bunch of them. Does he have enough to take Tesla private at $420 per share? We will see.

Wednesday, August 8, 2018

Julian Assange to testify before Congress?

Well certainly not in person unless there is an immunity deal.

Assange is to the internet what Luther was to the printing press. These are folks who grasp the implications of spreading the light and are willing to risk some serious privation to do it. Not many of those folks in history.

If congress wants to know the role Assange played in the 2016 US election, a few minutes on YouTube should give plenty information of his position on this question. (It's not like no one has thought to ask him about this before.)

Tuesday, August 7, 2018

Thoughts on the trials of Elon Musk

These days, the most uplifting story concerns the Tesla automotive project. I find it interesting because I have been something of a car nut since grade school. Our next-door neighbor was the local Ford dealer just when Edsel Ford decided to make his company dominant in racing. This was a no-holds-barred land-based space race—the first use of aluminum honeycomb outside of NASA went into Ford's LeMans enduro racers. My neighbor, who was mostly selling trucks and tractors to his farmer customers, would give me the chest-pounding literature of Ford Racing because he found it irrelevant to his business. Then I added to that knowledge base in college working for an auto parts store where I first became aware of the incredible size and complexity of the USA on wheels.

My initial reaction to Musk entering that world was, "Elon baby. Stick to software. Cars are an amazingly difficult and expensive proposition. This a world that eats upstart competition for breakfast." And yet, Tesla still stands as an ongoing concern and its most recent brush with death—the mass production of an affordable EV—seems to be most significant for how much money the "shorts" lost the other day. So what have we learned?

1) There seems to be sufficient expertise in bleeding-edge production techniques so that an upstart can be world-class on its first try. I was pretty sure this could not be done but it was. Tesla has some amazing millwrights.

2) Building electric cars apparently is a lot harder that it looks. The Model S has now been out for 7 years and there is still no realistic competition. Those who were warning, "just wait until Volkswagen (Toyota, the Koreans, etc.) gets serious about EVs, then Musk will fail" have been given a pretty strong demonstration that it was easier for Tesla to solve its production problems than for traditional car makers to overcome their own internal bias towards continuing to make what they already make.

3) Tesla is proving that the switch to EVs is a complex cultural change that relies on software development, direct to customer retailing, and supercharging networks as much as innovative production expertise. The legacy car makers are notoriously deficient in these areas. On the other hand, Tesla's leads on this cultural arena are still quite susceptible to technological diffusion (what they know will soon be common knowledge.)

In other words, stay tuned.

(update 9 AUG 2018)

The shitstorm that Musk created by announcing his desire to take Tesla private is a sight to behold. Musk is hardly the first high-end Producer Class figure to discover that the world of finance is filled with bloodthirsty Predators who do NOT have his, or his company's best interests in mind. To them, he is a cipher whose only interest to them is how much money does he have to rip off.

Here in Minnesota, we had a guy named William Norris who ran a significant computer company called Control Data. During the 60s and 70s, he would get into constant fights with the shareholders. Trust me, Musk is hardly the first to notice that shareholders often get in the way of successful business operations. In fact, Henry Ford once replied to questions about taking Ford public, I would rather take down Rouge brick by brick with my bare hands than let a gang of speculators get their hands on Ford Motor. (or similar) In fact, old Henry had been dead for 9 years before Ford finally went public.

I see the shorts are threatening to sue.

Sunday, August 5, 2018

“He Fears For His Life”: President Trump Trying His Best to Not End Up Assassinated Like Kennedy

The following is a excerpt from Russia's most popular political program. They are discussing the Trump-Putin summit in Helsinki. The main character holding forth is a film / theater director who see the world as huge dramas. And to him, Helsinki is where Trump exposed himself as someone who like most Americans, is sick to death of the Empire. No wonder nearly everyone in DC was screeching treason.
Karen Shakhnazarov, director, People's Artist of Russia: "The most striking thing about that meeting is that it was organized not for the sake of Syria, Ukraine or Crimea, but for Mr. Putin to tell the American electorate: "Trump isn't our agent, trust me, you have my word." That's what Trump actually wanted from the meeting because the press conference revealed this underpinning."

Week-end Wrap - August 4, 2018

Week-end Wrap - August 4, 2018
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

by Tony Wikrent, July 25, 2018 [Real Economics]
The irony, of course, is that many of the rich people who are jetting around the world using aerodynamic design principles developed and introduced by the government, are conservative and libertarian ideologues who insist that government can't do anything right!
Capitalism Killed Our Climate Momentum, Not “Human Nature”
by Naomi Klein, August 3, 2018 [Intercept, via Naked Capitalism 8-4-18]
Klein is responding to the full-magazine article, "Losing Earth," by Nathaniel Rich, in the Aug. 5, 2018, issue of the New York Times Magazine
According to Rich, between the years of 1979 and 1989, the basic science of climate change was understood and accepted, the partisan divide over the issue had yet to cleave, the fossil fuel companies hadn’t started their misinformation campaign in earnest, and there was a great deal of global political momentum toward a bold and binding international emissions-reduction agreement. Writing of the key period at the end of the 1980s, Rich says, “The conditions for success could not have been more favorable.” 
....My focus is the central premise of the piece: that the end of the 1980s presented conditions that “could not have been more favorable” to bold climate action. On the contrary, one could scarcely imagine a more inopportune moment in human evolution for our species to come face to face with the hard truth that the conveniences of modern consumer capitalism were steadily eroding the habitability of the planet. Why? Because the late ’80s was the absolute zenith of the neoliberal crusade, a moment of peak ideological ascendency for the economic and social project that deliberately set out to vilify collective action in the name of liberating “free markets” in every aspect of life. Yet Rich makes no mention of this parallel upheaval in economic and political thought. 
....what becomes clear when you look back at this juncture is that just as governments were getting together to get serious about reining in the fossil fuel sector, the global neoliberal revolution went supernova, and that project of economic and social reengineering clashed with the imperatives of both climate science and corporate regulation at every turn.
This is exactly the point I tried to make in response to another New York Times story, in my Facebook feed, The Democratic Party Picked an Odd Time to Have an Identity Crisis. This is also why I disagree with those on the left who argue that the present bigotry and inequality of USA was "baked in" from the start because of the intent by the founders was to create a new nation based on the rule of wealthy elites such as themselves:
What is maddening about most MSM articles and opinion pieces like this is that they completely ignore the 3/4 century effort by concentrated wealth to change the ruling philosophy of political economy in USA. Did the Foundation for Economic Education accomplish nothing? Has there been no effect from the billions of dollars poured into the Heritage Foundation, the American Enterprise Institute, the Reason Foundation and other conservative / libertarian apparatus? Was the Mont Pelerin Society a mere debating club? Accept the view that the reactionary rich have engaged in a war of ideas - in cultural warfare, to put it bluntly - to destroy the ideas of good government and collective action, and our current condition of soaring wealth inequality and collapsing social investment begins to look much different.

Alliance for Economic Justice holding three workshops in Charlotte to train activists
A year ago, Democratic progressives in the Wilmington area joined with local labor unions to host three presentations by labor activist, Les Leopold, author of Runaway Inequality: An Activist's Guide to Economic Justice (the first chapter is available in pdf here). State caucus member George Vlasist writes,

Friday, August 3, 2018

Hudson on the current economy

Watching the business news these days is truly to look into advanced irrationality. Apple worth a $1 Trillion? I have been a reasonably loyal Apple customer since 1985 and think some of their offerings a have redefined genius but even I believe this is absurd. Elon Musk should be having songs written about him for the accomplishment of making electric cars cool and desirable but a car company that is still not profitable should probably not be valued in the same territory as GM.

On the other hand, the tattered remnants of the once robust USA middle class is hanging on by their fingernails. They cannot afford houses, they are still paying off student loans in their 40s, energy prices are up, they are a small medical step away from bankruptcy, agriculture hasn't seen a profit in four years, etc. And the businesses that would otherwise rely on their spending are wondering where their customers went.

Meanwhile, the financial sector has abandoned any pretense of honesty or responsibility. You can hardly blame them—with the real economy staggering along, there is hardly any reason to even try honest banking. So they don't. And so economic conditions seem even more hazardous than they were in 2007. Why would anything else be true? After all, none of the problems of 2007 were meaningfully addressed.

So here we have Michael Hudson, who seems to have the stomach to look at the bankster community, explaining where we stand.

The “Next” Financial Crisis


In this episode of The Hudson Report, we speak with Michael Hudson about the implications of the flattening yield curve, the possibility of another global financial crisis, and public banking as an alternative to the current system.

‘The Hudson Report’ is a Left Out weekly series with the legendary economist Michael Hudson. Every week, we look at an economic issue that is either being ignored—or hotly debated—in the press that week.

Paul Sliker: Michael Hudson welcome back to another episode of The Hudson Report.

Michael Hudson:It’s good to be here again.

Paul Sliker: So, Michael, over the past few months the IMF has been sending warning signals about the state of the global economy. There are a bunch of different macroeconomic developments that signal we could be entering into another crisis or recession in the near future. One of those elements is the yield curve, which shows the difference between short-term and long-term borrowing rates. Investors and financial pundits of all sorts are concerned about this, because since 1950 every time the yield curve has flattened, the economy has tanked shortly thereafter.