Sunday, July 21, 2019

Week-end Wrap - Political Economy - July 20, 2019

Week-end Wrap - Political Economy - July 20, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

"Can the Left Even Understand Why the Right is winning?" 

Philip Mirowski, who has detailed the history of the "neoliberal thought collective," the Mont Pelerin Society, posted the first draft of a new paper,  "Can the Left Even Understand Why the Right is winning?" It can be viewed if you register with www.academia.edu and Mirowski grants you permission. Explaining the rise of Trump and a conservatism that is increasingly open about its bigotry,  Mirowski rejects the "bromidic term ‘populism’" and points instead to
the recent bounty of exceptional work on the history of neoliberalism [including] Quinn Slobodian, Globalists (Harvard, 2018); Wendy Brown, Undoing the Demos (Zone, 2015); Thomas Biebricher, The Political Theory of Neoliberalism (Stanford, 2018); Nancy MacLean, Democracy in Chains, (Viking, 2017); Melinda Cooper, Family Values (Zone, 2017); and Jessica Whyte, The Morals of the Market, (Verso, 2019). 
Mirowski observes:
...it seems many activists on the left hold out few ambitions for any sort of ‘fusionist’ project themselves, and instinctively shy away from an explicit political economy, and therefore have not been capable of understanding the relative unity of the forces arrayed against them. If someone suggests otherwise, the tendency has been to disparage such thinking as tainted by ‘conspiracy theories’....
The biggest intellectual failure of the left is its demonstrated incapacity to theorize the role and significance of markets. Curiously, unlike the most sophisticated neoliberals, much of the left still buys into the myth of the government vs. the market. That is, they imagine a separate entity called government existing outside of something called ‘the market’, with the former possessing the wisdom to identify ‘market failures’ and rectify them with judicious ‘regulation’.
After discussing how neoliberals themselves have not agreed on any exact definition of "markets" -- perhaps intentionally ("to render political action by the masses so difficult as to be permanently stymied, both by restricting the franchise but also by the strategic production of ignorance, which renders political understanding inchoate") -- Mirowski gets to his key critique of the left's ignorance concerning neoliberalism:
There are two very important facts about neoliberals that the left needs to take to heart: [1] They do not believe in laissez faire, but are unrepentantly constructivist about government—that is, they acknowledge the tenet that their minions must occupy the government at whatever level (local, national, transnational) and in whatever ways are deemed effective to bring about the sort of ‘reforms’ they believe are urgent; and [2] They take seriously the epistemic premise that people are generally imperfect cognitive beings, and that (their definition of) The Market knows more than any human being ever could about the world. Both principles may seem rather paradoxical given their publicly stated doctrines, something that numerous writers have explored in detail.  But those on the Left seem especially incapable of taking either one seriously, and thus to attain understanding how these two principles interact. 
Ever since Hillary Clinton lost a presidential election that was uniquely hers to lose, I have thought it almost comical that we have Democratic Party elites and liberal leaders who, on one hand, have repeatedly rejected the argument that the creation and promotion of movement conservatism amounts to a dedicated conspiracy by wealthy reactionaries with manifold ties to Wall Street, and on the other hand, have been almost hysterical in their insistence that the election was stolen from Hillary by a conspiracy run by Vladimir Putin and his Russian minions. Why they reject the one conspiracy theory but embrace the other, is not too difficult to understand, in the context of the USA political system's utter dependency on the rich for campaign contributions.

During my community organizing days in the 1980s, when I was with a radical group within the Democratic Party trying to stop NAFTA, I repeatedly encountered an unwillingness among leftists to even consider direct political action targeting specific individuals responsible for political atrocities. This unwillingness to "name names" approached hysteria when facts were presented that much of the USA industrial base was being bought and looted by "leverage buyout" corporate raiders with significant financial backing from organized crime. I remain of the opinion that this unwillingness to face these facts was a reflection of personal and institutional cowardice to confront the immense political power of Wall Street, and the potentially violent retribution of organized crime. Especially by the late 1980s, when it was clear to those willing to see that Wall Street and organized crime had pretty much merged. (See for example the conclusion by Catherine Austin Fitts, managing director of Dillon, Read & Co. at the time, that the $25 billion buyout of  RJR Nabisco in 1989 only made sense if Kohlberg Kravis and Roberts -- and whoever KKR actually was acting on behalf of -- needed to launder billions of dollars of dirty money).

My group was also tracking a number of different economic metrics that by the mid-1990s clearly indicated that we had lost -- and lost big. The significant ones I remember was that the dollar amount of mergers and acquisitions had eclipsed measures such as private expenditures on new plant and equipment, total national research and development spending, and total national capital expenditures.

Today, I think the same type of unwillingness to "name names" is reflected in the insistence that there are no solutions because the real problem is overpopulation. My three decades of political fighting is informed by my apparently unusual historical reading on the USA Whig Party that gave way to the Republican Party in the 1850s, and the "American School" political economy of that now forgotten faction in USA political history. (It is highly instructive that the Wikipedia entry on the American School is flagged for possible violation of "neutral point of view.") One of the key tenets of American School economists was their explicit and often fierce rejection of the "overpopulation" doctrine of British East India Company apologist Thomas Malthus.


To make my point clear: I firmly believe that almost all the problems we face are easily solved, usually using technologies already developed or in development, and the real obstacles are political and economic arguments against the solutions, which usually come down to "how do we pay for it?" or "it costs too much" or some other "scarcity" argument grounded in the classical economic school descended from Malthus, Smith, and Ricardo. Thorstein Veblen shredded the "scarcity" argument in his various discussions of how modern industrial economies are beset by "sabotage" by business managers seeking to artificially maintain higher prices by limiting actual industrial output.

One of the footnotes in Mirowski's new paper led me to poking around in Theda Skocpol's site Research on the Shifting U.S. Political Terrain, hosted by Harvard University.

Another footnote was to this study, byAlex Hertel-Fernandez, Theda Skocpol & Jason Sklar:  WHEN POLITICAL MEGA-DONORS JOIN FORCES: How the Koch Network and the Democracy Alliance Influence Organized U.S. Politics on the Right and Left. In his new on why the left is clueless, Mirowski writes,
What sets the Kochs apart from most other billionaires infatuated with right-wing politics is that, from the very beginning, at least one of the brothers understood the imperative to build a completely integrated full-service political structure on a national scale, starting with some elite cadres to develop political ideas, some think tanks to reduce the ideas to just-in-time bite-size chunks, an intermediate set of entities to translate those ideas into local political contexts, and a further outer ring of direct action foot soldiers to either organize or astroturf grassroots mobilization on the ground. 
I hope that Democratic Party elites and liberal leaders will be forced to adjust their thinking by Mirowski's and Skocpol's work, cease their attacks on the progressives now challenging their power and status within the Democratic Party, and pivot to confrontthe real enemy: the one percent who have buried the American republic and built an oligarchy on its grave. But I'm not holding my breath.

For more on Skocpol's work, see also

Democrats are losing to Republicans at the state level, and badly. Here's why.

How the Right Trounced Liberals in the States

The Moral Vision After Neoliberalism
K. Sabeel Rahman [Democracy, Summer 2019, NO. 53]
Candidates like Elizabeth Warren and Bernie Sanders have unsurprisingly claimed a powerful narrative around the reinvention of our economic order, challenging inequality, corruption, and the rules of modern capitalism. But so too have candidates like Cory Booker and Kamala Harris highlighted the centrality of major issues including the racial wealth gap, while moderates like Amy Klobuchar have noted the problem of monopoly power as a driver of inequality. Even newer faces like Beto O’Rourke and Pete Buttigieg have centered their campaigns around important structural reforms like the abolition of the Electoral College. Nor is this renewed interest in big ideas necessarily driven by the candidates; rather the candidates are responding to a powerful push from grassroots movements—from the Movement for Black Lives to the renewed labor activism of the teacher strikes and the Fight for $15, to a bottom-up push for universal health care and democracy reform. 
This ideas primary is reflective of an exciting and long overdue moment, as these conversations highlight two important shifts in progressive politics. First, there is an increasing move away from micro-scale policies that might poll well but do little toward transformative, structural reforms that reshape the background rules of our economy, our government, and our society to tackle deep systemic inequities. Second, this policy shift is accompanied by an urgent moral shift, a deeper questioning of what democracy and equal citizenship actually require. Americans cannot be fully equal in an economy that reduces many communities to conditions of economic precariousness, or a democracy that systematically disempowers communities of color and young people. 
These ideas represent a direct challenge to the underlying neoliberal presumptions that have dominated our public political discourse for decades. While the term “neoliberalism” may feel both obscure and overused, it captures a very real configuration of values and policy prescriptions. Neoliberalism is a worldview that emphasizes the centrality of markets as a solution to public problems, and as the highest manifestation of individual freedom. This worldview is at once a set of policy prescriptions—deregulation, minimal government, “free enterprise” of the unshackled private sector—as well as a particular moral understanding of freedom as the license to engage in individualized market transactions.
“Parents’ emotional trauma may change their children’s biology. Studies in mice show how” [Science, via Naked Capitalism 7-19-19]
“Today the hypothesis that an individual’s experience might alter the cells and behavior of their children and grandchildren has become widely accepted. In animals, exposure to stress, cold, or high-fat diets has been shown to trigger metabolic changes in later generations. And small studies in humans exposed to traumatic conditions—among them the children of Holocaust survivors—suggest subtle biological and health changes in their children. The implications are profound. If our experiences can have consequences that reverberate to our children or our children’s children, that’s a powerful argument against everything from smoking to immigration policies that split families.” 
This research has enormous implications for economic policies that promote the general welfare, which should be the guiding goal in a republic. As Lambert Strether adds:
Or — follow me closely, here — deindustrializing flyover and destroying the livelihoods and communities of millions of people, ffs.* Class pops up in the oddes of places, doesn’t it? NOTE * See Chris Arnade’s Dignity.

“Rose and Eliza” 
Beto O’Rourke [Medium, via Naked Capitalism 7-16-19]
“I was recently given documents showing that both Amy and I are descended from people who owned slaves. Along with other possessions listed in their property log were two human beings, Rose and Eliza…. The way that fortune was passed through the generations from Andrew to me, misfortune was passed through the generations from Rose and Eliza to their descendants who are alive today. Rose and Eliza were denied their freedom and the benefits that their labor produced; they and their children were then denied their civil rights after the end of Reconstruction; and their descendants endured open terrorism, economic exclusion and racism in the form of Jim Crow, lynchings, convict leasing, voter suppression, red lining, predatory lending, and mass incarceration. Everything their descendants have accomplished in their lives is despite having all of these odds stacked against them. In the aggregate, slavery, its legacy and the ensuing forms of institutionalized racism have produced an America with stark differences in opportunities and outcomes, depending on race.”

The Failure of Establishment Neoliberal Economics

Nobel Economist Says Inequality is Destroying Democratic Capitalism
[Evonomics, vis Mike Norman Economics 7-20-19]
In Clement Attlee’s 1945 cabinet—the cabinet that implemented the Beveridge Report and built the first modern welfare state—there were seven men who had begun their working lives at the coal face. When labor MPs from Glasgow set off to London, local bands and choirs came to the station to see them off as if they were going to war, which indeed they were. Only three percent of MPs elected in 2015 were ever manual workers, compared with sixteen percent as recently as 1979. The union movement, which once produced talents like those in Attlee’s cabinet, has been gutted by the success of postwar meritocracy. Attlee’s warriors would today have gone to university and become professionals; they would never have been down the pit, nor in a union hall. Meritocracy has many virtues, but, as predicted by Michael Young in 1958, it has deprived those who didn’t pass the exams, not only of social status and of the higher incomes that degrees bring, but even of the kind of political representation that comes from having people like themselves in parliament. Young wrote, “The bargaining over the distribution of national expenditure is a battle of wits, and defeat is bound to go to those who lost their clever children to the enemy.” He referred to the less educated group as “the populists” who, in turn, refer to the elite as “the hypocrisy.”
Montana, North Dakota push against Washington state rail law
[Tacoma News, via Naked Capitalism 7-19-19] 
I like this article as a very specific example of how unregulated capitalism too often creates less than optimal solutions for society. "We may have blown up an entire town in Canada, but moving these volatile petrochemical through your state is completely safe. Trust us."

See also Why Doing Harm Is Profitable
[Current Affairs, via Naked Capitalism 7-17-19]

“China’s economy just posted its lowest growth rate in 27 years”
[Business Insider, via Naked Capitalism 7-15-19] 
“China’s economy has grown at its slowest pace in the past 27 years after the effects of President Donald Trump’s trade war outweighed the Chinese government’s efforts to stimulate the economy…. Most of the decline came from weakening exports because of the additional tariffs places upon Chinese goods.”
Lambert Strether: Not sure how this affects the social contract in China. I guess we’ll find out!

“Central Bankers Are Sick of Rescuing the World Economy Alone”
[Bloomberg, via Naked Capitalism 7-16-19]
“Amid slowing global growth, the Federal Reserve, European Central Bank and perhaps even the Bank of Japan are all set to ease monetary policy in coming months. But with less room to act than in the past, their leaders are telling politicians they will need to assist if a downturn takes hold… ‘For most advanced industrial countries, the monetary policy space is extremely limited,’ said Willem Buiter, a former Bank of England policy maker now special economic adviser to Citigroup. ‘We need the fiscal tools to safeguard ourselves against a possible slide into a global recession.'”
Federal Reserve's review of its monetary policy strategy, tools, and communication practices
[via Mike Norman Economics 7-16-19]
Richard H Clarida: The Federal Reserve's review of its monetary policy strategy, tools, and communication practices
Richard H Clarida, Vice Chairman of the Board of Governors of the Federal Reserve System, at "The Bank of Finland Conference on Monetary Policy and Future of EMU (Economic and Monetary Union)", Helsinki, 1 July 2019
Could the Apollo 11 moon landing be duplicated today? ‘Lots of luck with that’
[Recode, via Naked Capitalism 7-15-19]  
“Currently, the US ranks 40th in the world for mean mobile download speeds — up a mere three spots from last year, according to a new report from internet speed measurement company Ookla. More dismally, the country ranked 94th in mean mobile upload speeds, falling 21 spots from 2018…. If the US is behind — or even just in the middle of the pack — on 5G rollout compared to everybody else, it could significantly interfere with the country’s technological and economic progress. Remember that the move to 4G initiated technologies and companies that we hadn’t dreamed of with 3G — Uber and instant ride-hailing, for example. 5G is supposed to be exponentially faster. We don’t know yet what we might miss if we’re not ready.”
Australia now has the highest minimum wage in the world 
[The Big Picture 7-15-19]
This is an animated chart that shows USA minimum wage being highest in the world in 1960s to dropping off the list of ten highest by 2008 or so. 

“Your Boss Might Be Ripping You Off: How To Protect Yourself From Wage Theft” 
[Teen Vogue, via Naked Capitalism 7-15-19]   
“Wage theft is a general term for paying workers less than what they’ve rightfully earned. Nobody knows exactly how much is stolen, but some experts estimate wage theft costs U.S. workers $50 billion a year. To put that number in perspective, all robberies, burglaries, and car thefts combined cost victims $14 billion, in 2012, according to FBI statistics. Wage theft affects millions of people, particularly women, people of color, and immigrants. Low-wage workers are acutely vulnerable to wage theft, and when wages are low to begin with, any amount the employer withholds can have dire consequences for the worker. The average low-wage worker loses $3,300 a year to wage theft, according to a survey by the Economic Policy Institute.”
“Disney heiress ‘livid’ after going to one of her family’s theme parks undercover” 
[MarketWatch, via Naked Capitalism 7-16-19] 
 “‘Every single one of these people I talked to were saying, ‘I don’t know how I can maintain this face of joy and warmth when I have to go home and forage for food in other people’s garbage,’ Disney, 59, told Yahoo News host and human rights activist Zainab Salbi in an interview posted Monday.”

“CBS News reports that 3 million Americans over the age of 60 still have student debt. And the Wall Street Journal reports that in 2017, their average debt was $33,800, up 44 percent from 2010. And more than 40,000 people over 65 are having their Social Security payments, tax refunds, or other government payments garnished because they aren’t paying their student loans. That number has more than tripled in the last decade.”
10 Things You Need To Know About Automation And The Future Of Work 
[Basis Point, via The Big Picture 7-18-19]
THERE ISN’T A NATIONAL ECONOMY
According to McKinsey, the U.S. economy is actually just a series of regional economies based around “megacities.” The top 25 cities in the country have contributed 2/3 of the job growth of the post-2008 recession economy, and everywhere else is trailing these elite urban centers.... 
NICHE CITIES OWN THE YOUNG AND THE OLDSmaller, off-beat cities like Bend, Oregon and Provo, Utah are hot for retirees, but also have huge inflows of young people due to their top-tier research colleges. Small niche cities like these have the second-highest rate of net migration, according to McKinsey. 
THE MIDDLE CLASS IS EVAPORATINGThe 2010s are a world away from the heyday of the 90’s. In 1997, middle-class jobs counted for 49% of the economy, but only 41 percent in 2017. Some 2.9 million middle-wage jobs disappeared between 2007 and 2012, and the recovery hasn’t come close to replacing them.
[Washington Post, via Naked Capitalism 7-17-19]  
“In a recently published study, my co-author and I find that trade-related job losses are closely related to spikes in opioid-related overdose deaths. Less-educated males in Appalachia bear the brunt of free trade as well as the opioid epidemic. And as young people look for ways out of communities hurt by trade, enlistment in the U.S. Army also surges. It’s not just that youth are more willing to enlist after trade shocks — the military tends to send more recruiters to these communities…. In a recently published paper, Simeon Kimmel and I explored the nationwide relationship between free trade and the opioid epidemic. We found that 1,000 trade-related job losses in a given locality were associated with a 2.7 percent increase in opioid-related overdose deaths.”
See also Free Trade Is Elites Betraying Their Own Populations
[Ian Welsh, October 5, 2015]

“Failing to Plan: How Ayn Rand Destroyed Sears” 
[Verso, via Naked Capitalism 7-19-19]
This is useful in showing the real world consequences of economic ideology.
“While companies like Walmart operate within the market, internally, as in any other firm, everything is planned. There is no internal market. The different departments, stores, trucks and suppliers do not compete against each other in a market; everything is coordinated. It is no small irony then, that one of Walmart’s main competitors, the venerable, 120-plus-year-old Sears, Roebuck and Company, destroyed itself by embracing the exact opposite of Walmart ‘s galloping socialization of production and distribution: by instituting an internal market.”

Restoring balance to the economy

“House votes to raise minimum wage, uniting Dems after months-long struggle” 
[Politico, via Naked Capitalism 7-19-19]  
The House on Thursday passed legislation to gradually raise the federal minimum wage to $15 per hour, following through on a key Democratic campaign promise and ending a six-month struggle within the caucus…. Democratic leaders only secured the necessary 218 votes days earlier by agreeing to phase in the wage increase over six years rather than five.” 
Lambert Strether: "By 2025? Lol. Remember when Nancy Pelosi vowed to “take up a $15 minimum wage in the first 100 hours of the next Congress“? (Not 100 days, 100 hours.) "

How Minneapolis Freed Itself From the Stranglehold of Single-Family Homes
[Politico, via The Big Picture 7-20-19]
Minneapolis just did away with the rules that gave single-family homes a stranglehold on nearly three-quarters of the city. In December, Neighbors for More Neighbors, the group co-founded by Flisrand and Edwards about two years ago to address Minneapolis’ affordable housing crisis, won a victory unseen in any other major American city. The city council approved the Minneapolis 2040 comprehensive plan, which declares the city’s intent to abolish single-family-home zoning and allow duplexes and triplexes to be built anywhere in the city.
Cities across the country are booming, but their growth is exacerbating an already critical lack of affordable housing for the middle class and poor alike. The solutions being proposed in many cities run the gamut from rent control to federal subsidies, but Minneapolis has landed on something even bolder that strikes at the heart of how cities have grown and defined themselves over the past century. Single-family-only neighborhoods, a staple of city and suburban planning, are woven into the DNA of the American dream: the leafy, peaceful street lined with stand-alone houses, green lawns and plenty of elbow room. Minneapolis’ new vision of itself would essentially rewrite that code—reshaping the urban streetscape around walking and mass transit and rebooting the American dream to be more racially and economically inclusive....
How did Minneapolis do it? In other cities, NIMBYs—conservative “Not In My Back Yard” defenders of suburban-style living—often make alliances with left-wing critics of gentrification to choke off new supply. But in Minneapolis, a progressive city council persuaded a broad coalition of racial-justice activists and nonprofit affordable-housing advocates to align with zoning-reform supporters behind a package of housing efforts meant to help both the middle class and the poor. Along with Minneapolis 2040’s vision of a denser city, the city council also approved $40 million in affordable-housing funds and requirements that some developers include lower-cost units in their projects. New protections for tenants are coming next.
The Economist Who Would Fix the American Dream: No one has done more to dispel the myth of social mobility than Raj Chetty. But he has a plan to make equality of opportunity a reality. 
[The Atlantic, via The Big Picture 7-20-19]
The work that has brought Chetty such fame is an echo of his family’s history. He has pioneered an approach that uses newly available sources of government data to show how American families fare across generations, revealing striking patterns of upward mobility and stagnation. In one early study, he showed that children born in 1940 had a 90 percent chance of earning more than their parents, but for children born four decades later, that chance had fallen to 50 percent, a toss of a coin. 
....each of his studies has become a front-page media event (“Chetty bombs,” one collaborator calls them) that combines awe—millions of data points, vivid infographics, a countrywide lens—with shock. This may not be the America you’d like to imagine, the statistics testify, but it’s what we’ve allowed America to become. Dozens of the nation’s elite colleges have more children of the 1 percent than from families in the bottom 60 percent of family income. A black boy born to a wealthy family is more than twice as likely to end up poor as a white boy from a wealthy family. Chetty has established Big Data as a moral force in the American debate.
Wealth Distribution Analysis
Barry Ritholtz, July 18, 2019 [The Big Picture]
The Fed developed a data set that throws wealth disparities into high relief.... 
Supply-side economics doesn’t make everyone richer: There’s probably something for incumbents and challengers here, and it might also help settle a debate that has preoccupied economic wonks for years. We can now show data for the three decades following the adoption of Reaganomics, aka supply-side economics; that reducing the tax burden on the wealthy would lead to a burst of economic growth that would make everyone richer, and that wealth would trickle down from the top. The new data make it clear that the opposite has happened, and wealth inequality and income inequality have each increased. 
This data helps us see that supply-side economics was always about shifting wealth from the low and middle ends of the wealth distribution toward the top. In other words, much of our wealth inequality is by design, the result of public policies. Whether this was done out of good faith or bad is up to you to decide.
“Kicked Off the Land” 
[The New Yorker, via Naked Capitalism 7-17-19] 
“In the United States today, seventy-six per cent of African-Americans do not have a will, more than twice the percentage of white Americans. Many assume that not having a will keeps land in the family. In reality, it jeopardizes ownership. David Dietrich, a former co-chair of the American Bar Association’s Property Preservation Task Force, has called heirs’ property ‘the worst problem you never heard of.’ The U.S. Department of Agriculture has recognized it as ‘the leading cause of Black involuntary land loss.’ Heirs’ property is estimated to make up more than a third of Southern black-owned land—3.5 million acres, worth more than twenty-eight billion dollars. These landowners are vulnerable to laws and loopholes that allow speculators and developers to acquire their property. Black families watch as their land is auctioned on courthouse steps or forced into a sale against their will.” 
Lambert Strether adds: 
Holy moley, land title issues?! In the First World? (I just finished Eric Foner’s Reconstruction: America’s Unfinished Revolution, 1863-1877, and my amateur opinion is that land reform in the former Confederate states — that is, breaking up the plantations and given the land to the former slaves — was the only real way forward (besides hanging enough traitors to get the elite’s attention). Generalize Sherman’s Special Field Order #15, in other words. Whether that was ever a possible future is dubious; certainly it would never have happened after a vengeful Slave Power whacked Lincoln, and the ideological dominance of Wage Labor in the victorious North also worked against it (see the fate of the Port Royal experiment).
[Los Angeles Times, via Naked Capitalism 7-19-19]
“Warren’s plan, the latest in a series of policy ideas that have propelled the Massachusetts senator to the top tier of the 2020 Democratic presidential primary, would hold private equity firms liable for debts and pension promises made by the companies they buy up. It would restrict the firms’ ability to pay dividends as well as high fees that shift money out of acquired companies… Warren’s private equity proposals also include new rules that would require worker pay to take precedence over other obligations when companies declare bankruptcy as well as more open disclosure of investment firms’ fees, both of which are included in private legislation she’s set to introduce later Thursday alongside Senate and House Democratic colleagues. Her platform further calls for the restoration of dividing lines between commercial and investment banking that were repealed in 1999, a change that was part of both the Republican and the Democratic platforms during the 2016 presidential election despite Trump’s lack of emphasis on it during his campaign.”
Elizabeth Warren [Medium, via Naked Capitalism 7-19-19]
“The purpose of the financial sector is to connect savers with borrowers as efficiently as possible and to spread risk. A growing financial sector can help the rest of the economy if it helps connect more people more efficiently and spreads risk more effectively. But, as several studies have shown, past a certain point, the growth of the financial sector undermines the rest of the economy by extracting money from it without producing any real value. America is well past that point…. Despite its breathtaking profits, America’s financial sector isn’t succeeding at its core purpose of connecting savers with borrowers quickly and efficiently. My plan would help push it in a better direction.” 
[graph below via The Big Picture 7-19-19]

[Intercept, via Naked Capitalism 7-19-19]

GND - An opportunity too big to miss


“Blue-Collar Workers: Let’s All Support the Green New Deal” 
[Labor Notes, via Naked Capitalism 7-15-19] 
“Fellow workers in the trades and other blue-collar workers, do not front for them! If we do their dirty work, who will support us when they attack us even more directly?… At present, workers will continue performing fossil fuel-based work, but we and our unions should not promote that work. Instead, we should advocate for a just transition through the Green New Deal. We can protect union members while also protecting our children’s and grandchildren’s future.”





“Political Scenarios for Climate Disaster”
[Dissent, via Naked Capitalism 7-15-19] . 
[H]ere in the Global North we often act as if our future will be a warmer version of today: liberal capitalism, plus flood insurance, minus coral reefs. That future is a fantasy. It already has a probability close to zero….At the heart of these problems is the capitalist nation-state that structures our world....

These two questions—of sovereignty and of capitalism—point toward four rough paths. We call these Climate Leviathan, Climate Mao, Climate Behemoth, and Climate X. Climate Leviathan describes an emergent global order committed to the consolidation of capitalism via the organization of a form of planetary sovereignty that can overcome the collective action problem. Climate Mao would represent a similarly planetary-scale “solution,” but one dedicated to an anti-capitalist order. Climate Behemoth describes a global arrangement animated by a chauvinistic capitalist and nationalist politics that denies—until it can only denounce—the threat climate change poses to national capitals. Climate X is the name we give the collection of movements that pursue global climate justice: movements that build non-capitalist political economies, and construct solidarities at multiple scales that reject the political logic of sovereignty.
“Arctic science at risk as University of Alaska braces for draconian budget cuts” 
[Science, via Naked Capitalism 7-17-19]
“Paul Layer, UA’s vice president for academics, students, and research in Fairbanks, says one of his highest priorities ‘is to maintain our status in Arctic research. It’s the one thing we do better than anybody.’ UAF’s International Arctic Research Center, which partners with scientists across the United States and Japan to study weather, ocean acidification, and other topics, is funded largely by grants from nonstate sources. But it relies on state funding to pay for support staff and operations, as well as work requested by state agencies. And at UAF’s Center for Alaska Native Health Research, state funds often pay for sending researchers to remote villages, says Deputy Director Diane O’Brien. ‘Even when we are bringing in millions of dollars of [nonstate] support, these are research services that we depend on the university to provide from their state allocation,’ she says.”





“Sand Mafia” (a continuing series)
[National Geographic, via Naked Capitalism 7-15-19]
“Our modern civilization is built on sand: concrete, paved roads, ceramics, metallurgy, petroleum fracking—even the glass on smart phones—all require the humble substance. River sand is best: grains of desert sand are often too rounded to serve as industrial binding agents, and marine sand is corrosive. A United Nations study calculates, however, that humankind’s total consumption of sand—more than 40 billion tons a year—is now double the amount of sediments being replenished naturally on the Earth by the sum of the world’s rivers. Today, sand has become so valuable that it is shipped enormous distances: Australia sends boatloads of sand to Arabia for land reclamation projects. China, the world’s builder, is also the planet’s sand glutton. Between 2011 and 2014 alone, the Chinese poured more concrete—made up largely of sand—than the United States used during the whole of the 20th century. With its exploding megacities, India ranks second in the world’s sand consumption.”

Health Care Crisis

Democratic lawmakers accuse their own party of proposing ‘deep’ cuts to health centers for poor [Washington Post, via Naked Capitalism 7-19-19]

Health spending and life expectancy
Barry Ritholtz, July 18, 2019 [The Big Picture]
...America’s health-care system is woefully dysfunctional: the country spends about twice as much on health care as other rich countries but has the highest infant-mortality rate and the lowest life expectancy...


“Why A ‘Public Option’ Isn’t Enough” 
[Current Affairs, via Naked Capitalism 7-15-19]  
“Not only will a public option fail to cover everyone, it will do nothing to restrain the growth of healthcare costs. Single payer systems control costs by giving the health service a monopoly on access to patients, preventing providers from exploiting desperate patients for profit. If instead there are a large number of insurance companies, providers can play those insurance companies off each other. Right now, we have a two-tier system, in which the best doctors and hospitals refuse to provide coverage unless your insurer offers them exorbitantly high rents. To support that cost while still making a profit, your insurer has to subject you to higher premiums, higher co-pays, and higher deductibles. Poor Americans with poor-quality insurance are stuck with providers who don’t provide high enough quality care to make these demands. The best providers keep charging ever higher rents, and the gap between the care they offer and the care the poor receive just keeps growing. Poor Americans are now seeing a decline in life expectancy, in part because they cannot afford to buy insurance that would give them access to the best doctors and hospitals.”

Information Age Dystopia

I-Team: Florida DMV sells your personal information to private companies, marketing firms 
[WFTS, via Naked Capitalism 7-18-19]

Facebook As Your Debt Collector, and the Prospects for Libra
[Big by Matt Stoller, via Naked Capitalism 7-14-19]

“To Break Google’s Monopoly on Search, Make Its Index Public” 
[Bloomberg , via Naked Capitalism 7-16-19] 
“Fortunately, there is a simple way to end the company’s monopoly without breaking up its search engine, and that is to turn its “index”—the mammoth and ever-growing database it maintains of internet content—into a kind of public commons. There is precedent for this both in law and in Google’s business practices. When private ownership of essential resources and services—water, electricity, telecommunications, and so on—no longer serves the public interest, governments often step in to control them…. Doesn’t Google already share its index with everyone in the world? Yes, but only for single searches. I’m talking about requiring Google to share its entire index with outside entities—businesses, nonprofit organizations, even individuals—through what programmers call an application programming interface, or API.” 
“Disgruntled Amazon Pilots Will Use Prime Day as a Pulpit for Their Concerns” 
[Bloomberg, via Naked Capitalism 7-16-19] 
 “As Amazon readies for what will likely be two of its busiest days of the year, the pilots who transport its cargo are releasing a digital ad campaign on Facebook to highlight “concerns about how they are being overworked, underpaid and disrespected by their carriers. It’s the latest move in an increasingly bitter logistics saga as Amazon appeals to customers with faster and faster delivery options. In addition, he said the pilots are standing in solidarity with the Amazon warehouse workers in Minnesota who are planning a Prime Day strike. A representative from the pilots’ union will be on the ground to show striking workers they have the support of Teamsters Local 1224.”

Creating new economic potential - science and technology

California moving toward awarding $1.65 billion hi-speed rail contract
[Railway Age 7-18-19]
Although the California hi-speed rail project has had a bumpy ride so far, state officials are on track to award a $1.65 billion contract to design and construct the tracks and system for the first segment of the line.
Pacific Northwest high-speed study completed
[Railway Age 7-18-19]
The one-year study was carried out by WSP along with Steer Davies Gleave, EnviroIssues, Paladin Partners and Transportation Solutions, and overseen by Washington State Department of Transportation, in partnership with Oregon Department of Transportation, the Canadian province of British Columbia and Microsoft, which shared the costs of the analysis. 
The study examined the case for building a dedicated 350km/h line which would reduce Seattle – Vancouver and Seattle – Portland journey times to around an hour.
The analysis is based on construction between 2027 and 2034 followed by the first 40 years of operation. It confirms that the 500km line could be built within the $US 24-42bn in upfront construction cost estimated in the previous study, which was completed in 2017. 
Initial annual revenues are forecast to range from $US 160m and $US 250m, with a “conservative” ridership estimate indicating the line could carry between 1.7 million and 3.4 million passengers in the first year of operation. Farebox revenues are forecast to cover all operating costs in the longer-term.

Skunk Works Building Bigger Fusion Reactor
Guy Norris | Aerospace Daily & Defense Report, via Aviation Week & Space Technology 7-19-19]
Lockheed Martin’s ambitious plans to develop a compact fusion reactor (CFR) to provide clean nuclear energy remain on track according to the company and are set to move to the next stage with the completion this year of a scaled up, more powerful test reactor at the Skunk Works in Palmdale, California. 
Updating progress on the CFR project to Aviation Week which first broke news of the initiative in 2014, Lockheed Martin Skunk Works vice president and general manager Jeff Babione says “the work we have done today verifies our models and shows that the physics we are talking about – the basis of what we are trying to do - is sound. We continue to progress that capability.” 
Unlike current nuclear power plants which utilize fission power, a process which involves the splitting of atoms to release energy for electricity, nuclear fusion is aimed at fusing together two hydrogen isotopes; deuterium and tritium. Not only would the subsequent reaction create abundant carbon-free energy (deuterium is produced from sea water and tritium from lithium), but it would theoretically do so with no major environmental impact, shorter-lived residual radiation and no meltdown risk.... 
With the ultimate goal of achieving reactor conditions, the Skunk Works plan is based on a series of progressively larger test reactors culminating in a TX prototype capable of demonstrate ignition conditions and the ability to run for upwards of 10 seconds in steady-state after the injectors, which will be used to ignite the plasma, are turned off. This will pave the way for development of an initial 100-megawatt production version capable of powering a ship or around 80,000 homes. Lockheed also envisages versions capable of powering large cargo and transport aircraft. 
To-date the company has been working on the second iteration of its fourth test unit, T4B. “This year we are constructing another reactor – T5 – which will be a significantly larger and more powerful reactor than our T4,” says Babione.
Extreme Fast Charging: Revving Up the Electric Vehicle Era
[Machine Design Today 7-15-19]
Recent advances in producing and fabricating a range of nanostructured carbons and ionic liquid-based electrolytes have shown the feasibility of combining the power density of supercapacitors and the energy density of rechargeable batteries. The resulting cells work in a very similar way to electrostatic double-layer capacitors but use different carbon and electrolyte materials that are not only safer and easier to recycle at the end of life, but also enable the devices to operate at higher voltages, resulting in higher energy densities.

Why Space Exploration Is Worth the Effort
Ellen Stofan [Aviation Week & Space Technology 7-15-19]
Leaders such as President John F. Kennedy inspire by pointing out that humans push for exploration not because they are easy, but because they are hard.

Disrupting mainstream politics

[below via Naked Capitalism 7-18-19]


Stephanie Kelton
✔@StephanieKelton

Remember when Dems put PAYGO in the rules package and people like me (who raised hell) were told not to worry because it would be waived off as necessary to pass important legislation? https://twitter.com/gunnelswarren/status/1151682151630479360 …

Warren Gunnels@GunnelsWarren
Why would the House consider cutting community health centers by 20% in real dollars? Because there's not enough money to pay for it & increasing funding would violate #PayGo. Funny, I don't remember hearing those concerns when they passed a massive increase for the Pentagon.

647
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Sanders and Warren voters have astonishingly little in common
[Politico, via Naked Capitalism 7-14-19]
“Democratic leaders like Pelosi, Joe Biden, Steny Hoyer and Chuck Schumer were shaped by their traumatic political coming-of-age during the breakup of the New Deal coalition and the rise of Ronald Reagan,” writes Ryan Grim for The Washington Post, “and the backlash that swept Democrats so thoroughly from power nearly 40 years ago. They’ve spent the rest of their lives flinching at the sight of voters. The Ocasio-Cortezes of the world have witnessed the opposite: The way they see it, Democratic attempts to moderate and compromise have led to nothing but ruin.”
Ross Perot Had the Last Laugh
Matt Taibbi [Rolling Stone, via Naked Capitalism 7-14-19]
Early in the 1992 campaign, Perot was leading the three-way race. At one point in June of that year, a Gallup Poll showed him with 39% support, with Bush at 31% and young Bill Clinton at 25%. A Time poll a few days later had him at 37%, with Bush and Clinton both at 24%. These were stunning numbers. 
It can’t be an accident that a third-party candidate rose to prominence at precisely the moment when the two parties came together on economic issues, particularly trade. 
Perot ran before it became historical fact that both parties supported NAFTA – Bill Clinton hedged a lot in that race, saying things like “on balance it does more good than harm” – but the Texan routinely hammered the theme that the two parties coddled financial interests above ordinary people.... If Perot’s infomercial ratings were a harbinger of future anger toward the “fake news” media, the success of this campaign against NAFTA foretold the anti-globalism movement. Much as Perot in his business life capitalized on inefficiencies he’d spotted in corporate bureaucracies like that of IBM (where he’d worked as a salesman in his youth), he rose in public life because he was early to see cracks in our political foundation that later burst wide open.
Voters Don’t Want Democrats to Be Moderates. Pelosi Should Take the Hint.
[TruthOut, via Naked Capitalism 7-14-19]
Good summary, though nothing really pertains to the title
[below via Naked Capitalism 7-19-19]


Alexandria Ocasio-Cortez
✔@AOC

Reminder of what people are calling the “radical, extreme-left agenda”:

✅ Medicare for All
✅ A Living Wage & Labor Rights
✅ K-16 schooling, aka Public Colleges
✅ 100% Renewable Energy
✅ Fixing the pipes in Flint
✅ Not Hurting Immigrants
✅ Holding Wall Street Accountable

239K
10:57 AM - Jul 18, 2019
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Nancy Pelosi Emerges As Unexpected Villain At Netroots Nation 
[Huffington Post, via Naked Capitalism 7-15-19]

[Caitlin Johnstone, via Naked Capitalism 7-15-19]

“They’re Not Just Mad at AOC — They’re Scared of Her” 
[Jacobin, via Naked Capitalism 7-16-19]
“Mainstream outlets have characterized the conflict as driven by generational tensions, or (on Pelosi’s side) simply a desire to protect Democratic incumbents from criticism. But the feud in fact speaks to something much deeper: Ocasio-Cortez and her allies are pushing for bold, transformational policies that would upend the current economic and political system. That campaign is coming into open conflict with a Democratic establishment that would prefer to just keep things as they are.
“What Americans Do Now Will Define Us Forever”

Adam Serwer [The Atlantic, via Naked Capitalism 7-19-19]
“To attack Omar is to attack a symbol of the demographic change that is eroding white cultural and political hegemony, the defense of which is Trumpism’s only sincere political purpose.”
“Nancy Pelosi Has Lost Control”
[Zach Carter, HuffPo, via Naked Capitalism 7-16-19]
This is a good timeline of the Pelosi v. AOC fight.
“One of Pelosi’s top lieutenants, Rep. Hakeem Jeffries (D-N.Y.), the caucus chair, effectively declared war on Ocasio-Cortez and her chief of staff Saikat Chakrabarti on Friday night. Nobody in leadership has apologized for it, recanted or publicly rebuked anyone. The tweet is still live. Not since Anthony Weiner’s sexual misconduct scandal in 2011 had the Democratic Party leadership targeted one of its own with such ferocity. Divided over how to oppose Trump and his agenda, party leadership attempted to purge its own ranks, and only eased up when the president himself attacked the same members that leadership had been blasting for weeks….  
The divide between Ocasio-Cortez and Pelosi represents just about every split in the modern Democratic coalition ― generational, ideological, race, class, strategy, values, all of it. But beneath it all is a simple struggle for power. House Democrats and their agenda [if any] have been hijacked by the corrupt machine politics of New York state…. Ocasio-Cortez represents a greater threat to this machine than Trump, which is why Democratic leadership in Congress is now diverting time, attention and resources to defend the machine’s turf, instead of focusing on the president…. A competent House speaker wouldn’t allow party energy to be squandered this way. But a speaker in firm control also wouldn’t set caucus-wide rules of conduct ― stop criticizing other Democrats on Twitter, say ― only to see them flagrantly violated by the chair of the caucus itself. Nancy Pelosi may look like she’s in charge of the House majority, but the New York machine is running its own show.”
“The Koch Brothers Want to Prevent Future AOCs” 
[GQ, via Naked Capitalism 7-16-19]
“In a memo obtained by CNBC, Emily Seidel, CEO of the Koch-affiliated political-action committee Americans for Prosperity, announced that the organization would be backing incumbent Democrats against progressive primary challenges in the upcoming congressional primaries.”
System Capture 2020: The Role of the Upper-Class in Shaping Democratic Primary Politics
[CounterPunch, via Mike Norman Economics 7-20-19]
Numerous social scientists, including Benjamin Page, Martin Gilens, Nicholas Carnes, and others have identified how the top 10 percent of American income earners (and white collar professionals more generally) dominate the policy process. Sociologist Rachel Sherman documents how the top one percent of earners construct notions of “hard work” and “worthiness” to justify their extreme wealth in an era of growing inequality.

The Dark Side

“The Epstein case is laying bare America’s morally bankrupt ruling class” 
[The Week, via Naked Capitalism 7-19-19]  
“What do they all have in common? (Beside the fact that they are all incredibly rich, I mean.) Alan Dershowitz, David Boies, Bill Clinton, and Donald Trump are only a few of the names caught up in the alleged Jeffrey Epstein pedophilia scandal. This isn’t six degrees of Kevin Bacon. These people all know each other well and have for decades. They go to one another’s weddings, ride on the same airplanes, and do business together… Is any living American actually okay with the fact two of our last four presidents were allegedly good pals with the guy whose private airplane was referred to openly in the press as, wink-wink, the “Lolita Express”? … Surveying the decadence of the Trump-Epstein-Boies cabal leaves me with a lot of feelings. One is that we have by far the least glamorous ruling class in the history of the world. Say what you want about the Ancien Régime, but at least they gave us Versailles and Boucher and opéra comique…. It has never been easier to renounce evil and all its works and all its pomps than it is today, when instead of powder-faced bewigged vicomtes tittering in perfectly composed alexandrines in front of rococo mirrors they are goatish hedge fund managers, mercenary lawyers, professional speech-givers, and the founders of fake online colleges suing one another out of boredom.”
[Independent, via Naked Capitalism 7-16-19]

Posted by Tony Wikrent at 12:24 PM

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