Week-end Wrap - Political Economy - June 29, 2019

Week-end Wrap - Political Economy - June 29, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

These Three Firms Own Corporate America

Jan Fichtner, Eelke Heemskerk, Javier Garcia-Bernardo, May 11, 2017 [The Conversation, via Alternet]

Disrupting mainstream economics

The new left economics: how a network of thinkers is transforming capitalism
[The Guardian, via Naked Capitalism 6-27-19]

There is a dawning recognition that a new kind of economy is needed: fairer, more inclusive, less exploitative, less destructive of society and the planet. “We’re in a time when people are much more open to radical economic ideas,” says Michael Jacobs, a former prime ministerial adviser to Gordon Brown. “The voters have revolted against neoliberalism. 

Climate and environmental crises

It's the hottest day ever recorded in Europe, as Earth hurtles deeper into the climate crisis

Mark Sumner, June 28, 2019 [DailyKos]

The five hottest European summers in the last 600 years have all come in the last twenty years. And 2019 is looking like it may provide not just the hottest day, but the hottest week, month, and year as the radically destabilized weather system continues to draw scalding air farther and farther north. Germany is experiencing it’s hottest June ever. Temperatures in Italy have turned deadly. And records have been shattered across at least six nations. The wave of hot air is also bringing up dust from the Sahara, prompting health warnings because of both temperatures and air quality.

Week-end Wrap - Political Economy - June 22, 2019

Week-end Wrap - Political Economy - June 22, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

I apologize for the absence from last week. My computer crashed last Saturday night, and blew away a chunk of the operating system, so could not be rebooted until placed in the hands of a skilled PC doctor. I have begun searching for a feasible alternative PC at a low budget, and welcome any contributions to PayPal using my email address 2nbbooks@gmail.com. Thank you for your patience and understanding. 

Strategic Political Economy

Facebook's plan to create a global currency are insane and must be resisted. Ten good reasons: (
[Twitter by Nicholas Shaxson, author of Treasure Islands: Tax Havens and the Men Who Stole the World, via Naked Capitalism 6-21-19]

The way we structure money and payments is a question for democratic institutions, not technology companies.
By Matt Stoller [New York Times, via Twitter 6-20-19]

There are four core problems with Facebook’s new currency. The first, and perhaps the simplest, is that organizing a payments system is a complicated and difficult task, one that requires enormous investment in compliance systems.... 

The second problem is that, since the Civil War, the United States has had a general prohibition on the intersection between banking and commerce. Such a barrier has been reinforced many times, such as in 1956 with the Bank Holding Company Act and in 1970 with an amendment to that law during the conglomerate craze. Both times, Congress blocked banks from going into nonbanking businesses through holding companies, because Americans historically didn’t want banks competing with their own customers. Banking and payments is a special business, where a bank gets access to intimate business secrets of its customers. As one travel agent told Congress in 1970 when opposing the right of banks to enter his business, “Any time I deposited checks from my customers,” he said, “I was providing the banks with the names of my best clients.” 

Imagine Facebook’s subsidiary Calibra knowing your account balance and your spending, and offering to sell a retailer an algorithm that will maximize the price for what you can afford to pay for a product. Imagine this cartel having this kind of financial visibility into not only many consumers, but into businesses across the economy. Such conflicts of interest are why payments and banking are separated from the rest of the economy in the United States.... 

The third problem is that the Libra system — or really any private currency system — introduces systemic risk into our economy... 

We should not be setting up a private international payments network that would need to be backed by taxpayers because it’s too big to fail. 

And the fourth problem is that of national security and sovereignty....

Years ago, Mark Zuckerberg made it clear that he doesn’t think Facebook is a business. “In a lot of ways, Facebook is more like a government than a traditional company,” said Mr. Zuckerberg. “We’re really setting policies.” ...The way we structure money and payments is a question for democratic institutions. Any company big enough to start its own currency is just too big.

Restoring balance to the economy

“Poor People’s Moral Budget: Everybody Has the Right to Live” (PDF)

[Rev. Dr. William J. Barber II and Rev. Dr. Liz Theoharis, Poor People’s Campaign, via Naked Capitalism 6-19-19] 

From the “Findings”:

The United States has abundant resources for an economic revival that will move towards establishing a moral economy. This report identifies:

• $350 billion in annual military spending cuts that would make the nation and the world more secure;
• $886 billion in estimated annual revenue from fair taxes on the wealthy, corporations, and Wall Street;
• and Billions more in savings from ending mass incarceration, addressing climate change, and meeting other key campaign demands.

The below comparisons demonstrate that policymakers have always found resources for their true priorities. It is critical that policymakers redirect these resources to establish justice and to prioritize the general welfare instead. The abundant wealth of this nation is produced by millions of people, workers, and families in this country and around the world. The fruits of their labor should be devoted to securing their basic needs and creating the conditions for them to thrive. At the same time, policymakers should not tie their hands with “pay-as-you-go” restrictions that require every dime of new spending to be offset with expenditure cuts or new revenue, especially given the enormous long-term benefits of most of our proposals. The cost of inaction is simply too great.

Lambert Strether notes: "This is, if not MMT, at least MMT-adjacent. It focuses on resources, not money, and it wants to drive a stake into PayGo’s heart-equivalent-if-any. The report is also a useful baseline for Democrat presidential candidates."


Ellen Brown: The American Dream is alive and well — in China
[Public Banking Institute 6-22-19]

Tony needs a new computer

And selling books isn't as lucrative as it once was.

So...

Anyone who feels generous can contribute to the "get Tony back online" fund. Contributions can be sent to his gmail address where he takes Paypal.

Thanks!

Week-end Wrap - Political Economy - June 8, 2019

Week-end Wrap - Political Economy - June 8, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

You read it here first

The Green New Deal has forced into public discourse the fact that solving the crisis of climate change is going to require trillions of dollars of new investment. A recent example: 

Ocasio-Cortez: $10 trillion needed for effective climate plan
[The Hill, via Naked Capitalism 6-6-19]

Freshman Rep. Alexandria Ocasio-Cortez (D-N.Y.) said Wednesday that any plan to sufficiently address the climate crisis will need to cost at least $10 trillion. 

“I think we really need to get to $10 trillion to have a shot,” the progressive firebrand said in response to a question from The Hill in the Capitol. 

“I know it’s a ton," she added. "I don’t think anyone wants to spend that amount of money, it’s not a fun number to say, I’m not excited to say we need to spend $10 trillion on climate, but ... it’s just the fact of the scenario.”

If you had been reading this blog, Real Economics, in December 2014:
Dear Dems: Give me $100 trillion and I'll save your sorry ass

"$100 trillion to build a new economy" will be another test, but one that we need to impose over the coming two years. It can completely transform what issues are defined, and how, for the 2016 election. We need to get general public awareness of the need for "$100 trillion to build a new economy" - and how doable it actually is. Once we do that, it will be a relatively simple matter to determine if someone is serious about solving the problems we face. The next time we meet someone who is a leader in the Democratic Party, mention the fact that we need "$100 trillion to build a new economy" and watch carefully how they react. If they are hopeless neo-liberal water carriers for our would-be corporatist overlords, they will recoil in horror, or try to argue that such a huge amount is simply preposterous. Anyone who is stuck talking about programs of a few billion, or even a few hundred billion dollars, is simply completely uninformed about the problems we face - or just not willing to face reality - because reality is that we can no longer afford to let Wall Street play funny money games. We must figure out how to impose new laws and regulations that force banking and finance to serve the general welfare, not just private gain.

And about Trump and USA politics: if you had been reading this blog, Real Economics, in June 2014:
The best of times. The worst of times.

....what is needed to survive, we have already at hand. We have the science, and we have the technology. What we do not have is the political will to create crash programs to apply that science and technology, because that would require crushing our present rulers and leaders. Indeed, one half the formal political system in the USA has devoted itself to opposing science. And much of the other half has devoted itself to opposing technology. 

But what we lack most of all, is VISION. We do not have a coherent, plausible, positive vision. And without vision, the people will perish - another hard-learned lesson of human history the world's major religions warn us about. 

The 2008 Obama campaign showed us how powerful a vision of hope can be, no matter how much of a charade it might be. What do you think would be the electoral results if Democratic candidates starting telling people we are actually on the verge of a massive new economic boom? Because there is $100 trillion of work we need to do to solve the problem of climate change. This new boom will last for decades, just like the boom unleashed after World War 2 by meeting pent-up consumer demand and rebuilding Europe and Japan. I believe, in a few years or decades, the harshest and most important historical judgement of President Obama will be that he took office at a point where he could have led the nation and the world into a new golden age of capitalism, but instead chose to defend the status quo, and as a result the populist upsurge against the status quo veered right instead of left. (Bolding not in original 2014 posting.)

The possible routes to sustainability

Once in awhile, it's good to see what thoughtful grownups sound like when they discuss how exactly folks go about building a world that doesn't need to run on fossil fuels. Here Deutsche Welle follows some of the more promising strategies—e-mobility in Norway, the hydrogen strategy in Japan, etc. It's remarkably well done.

Week-end Wrap - Political Economy - June 1, 2019

Week-end Wrap - Political Economy - June 1, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The West and Russian-Chinese Relations: Stages of Denial 

[Valdai Discussion Club, via Naked Capitalism 5-26-19]

When analyzing the place that Russia and China occupy in each other’s bilateral trade, there is an imbalance arising from the difference in the size of the two economies. But it is hard to think of a way China could use it to blackmail or pressure Russia. Fuel and energy resources dominate Russia’s exports to China as well as Russian exports in general – fossil fuels accounted for 73 percent of its 2018 supplies. Russia is one of the main suppliers of oil to China, competing for first place with Saudi Arabia.
This does not speak well of the structure of the modern Russian economy. But, from a political standpoint, all prior experience tells us that trade in energy products creates a strong interdependence between supplier and buyer. Unlike other types of goods, any pressure on energy exporters is always associated with immediate and significant losses for the importing country, so it is only used as a last resort in rare cases. 

Tech cold war: how Trump’s assault on Huawei is forcing the world to contemplate a digital iron curtain

[South China Morning Post, via Naked Capitalism 5-26-19]

I distinctly remember 20 and more years ago repeatedly arguing with conservatives in AOL message boards that utilizing cheap Chinese labor for manufacturing was going to cause long-term strategic shifts and problems that would greatly afflict USA interests. Their responses were unequivocal and never varied: an ideological recitation of the benefits of free trade, most especially how trade with USA would sneakily introduce changes into China and force adoption of "democracy." The only variation from this line was the occasional addition of complaining that American workers were paid too much, and expected too much. 

How secure is the intelligence community’s IT supply chain? 

[FifthDomain, via Naked Capitalism 5-26-19]

China claims to have 'cracked' low cost production of lithium, political implications could be huge

Mark Sumner, June 1, 2019 [DailyKos]

China’s Plan To Influence Global Commodity Pricing 

[SafeHaven, via Naked Capitalism 6-1-19]

The Electric Vehicle Revolution Will Come from China — not the US
by Lambert Strether [Naked Capitalism 5-26-19]

The conflict to come in the South China Sea 

[Asia Times, via Naked Capitalism 5-27-19]

The Failure of Establishment Neoliberal Economics

After Neoliberalism
Joseph Stiglitz [Project Syndicate, via Naked Capitalism 5-31-19]

The neoliberal experiment – lower taxes on the rich, deregulation of labor and product markets, financialization, and globalization – has been a spectacular failure. Growth is lower than it was in the quarter-century after World War II, and most of it has accrued to the very top of the income scale. After decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried.

Vying to succeed it are at least three major political alternatives: far-right nationalism, center-left reformism, and the progressive left (with the center-right representing the neoliberal failure). 

Three decades of neoliberal policies have decimated the middle class, our economy, and our democracy 

Joseph Stiglitz [MarketWatch, via Naked Capitalism 6-1-19]