Week-end Wrap – Political Economy – September 28, 2019

Week-end Wrap – Political Economy – September 28, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

DC Court: State Secrets Privilege Trumps Any Citizens’ Right To Know Whether Or Not Their Own Gov’t Is Trying To Kill Them

[TechDirt, via Naked Capitalism 9-27-19]

The Culmination of Republican Decay
Sean Wilentz [New York Review of Books, October 10, 2019 issue]

Book review of American Carnage: On the Front Lines of the Republican Civil War and the Rise of President Trump, by Tim Albert

....After Barack Obama was elected president, the Koch brothers and the Donors Trust of dark money funders (to which the Kochs were leading contributors) would mobilize and subsidize the Republican base in the so-called populist revolt they named the Tea Party.... when Trump seized control of the GOP in 2016, he reaped the populist whirlwind that Richard Nixon began sowing nearly half a century earlier and that the Bush administration—their administration—had whipped to hurricane force.... 

By the time Alberta’s account gets underway, most of the political dynamics behind the events he describes were long established and extremely powerful. Some of the book’s major figures, like former House Speaker John Boehner (who was also one of its principal sources), were remnants from earlier phases of the party’s strife, and developments like the growth of the Tea Party or the uprisings of the House Freedom Caucus make sense only as outgrowths of previous internecine battles. Most importantly, by 2008, the Republican Party had already become what the political scientists Thomas E. Mann and Norman J. Ornstein would call “an insurgent outlier” in American politics: “ideologically extreme… scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.” Alberta has written, in short, a book that is more denouement than drama, detailing the fall of a hollow GOP establishment that, having abandoned normal party politics in favor of relentless polarization, was already teetering. While American Carnage describes the outcome of the party’s radicalization, it completely misses—indeed, fundamentally misunderstands—a major impetus behind Trump’s ascendancy: the destructive presidency of George W. Bush.... 

[Alberta’s account] cannot explain how Trump could so swiftly capture virtually an entire political party. A plausible answer to that puzzle is hiding in plain sight in Alberta’s book. Although Trump came into office with majorities in both houses of Congress, and although, as Alberta notes, the White House ceded control over domestic legislation to Senate Majority Leader McConnell and Speaker Paul Ryan, the Republicans had terrible difficulty scoring legislative wins. Most galling to Trump as well as the party’s congressional leadership was the failure to repeal Obamacare, one of the GOP’s core campaign pledges since the program began. On two fronts, though, Republicans moved with absolute assurance: the approval by the Senate of right-wing nominees to the federal bench, including Supreme Court justices Neil Gorsuch and, after a brutal, unexpected fight, Brett Kavanaugh; and the rapid approval of a fiercely regressive tax bill in 2017. Control of the courts for the Christian right and the Federalist Society, tax windfalls and deregulation for the donor class: these were the causes that truly stirred the GOP majorities in Congress. It’s not simply that the recumbent Republicans are intimidated by the party base that Trump has captured; they are motivated chiefly by right-wing dogma and their own baseness, which Trump understands and manipulates.

The Problem With Impeachment 

Chris Hedges [Truthdig, via Naked Capitalism 9-28-19]

Impeaching Donald Trump would do nothing to halt the deep decay that has beset the American republic. It would not magically restore democratic institutions. It would not return us to the rule of law. It would not curb the predatory appetites of the big banks, the war industry and corporations. It would not get corporate money out of politics or end our system of legalized bribery. It would not halt the wholesale surveillance and monitoring of the public by the security services. It would not end the reigns of terror practiced by paramilitary police in impoverished neighborhoods or the mass incarceration of 2.3 million citizens. It would not impede ICE from hunting down the undocumented and ripping children from their arms to pen them in cages. It would not halt the extraction of fossil fuels and the looming ecocide. It would not give us a press freed from the corporate mandate to turn news into burlesque for profit. It would not end our endless and futile wars. It would not ameliorate the hatred between the nation’s warring tribes—indeed would only exacerbate these hatreds. 

Impeachment is about cosmetics. It is about replacing the public face of empire with a political mandarin such as Joe Biden, himself steeped in corruption and obsequious service to the rich and corporate power, who will carry out the same suicidal policies with appropriate regal decorum.

GND - A problem too big to solve, or an opportunity too big to miss?

The Green New Deal: A Fight for Our Lives
Naomi Klein [New York Review of Books, 9-21-2019]
Adapted from the introduction and epilogue to On Fire: The (Burning) Case for a Green New Deal, by Naomi Klein, published by Simon and Schuster.

In scale if not specifics, the Green New Deal proposal takes its inspiration from Franklin Delano Roosevelt’s original New Deal, which responded to the misery and breakdown of the Great Depression with a flurry of policies and public investments, from introducing Social Security and minimum wage laws, to breaking up the banks, to electrifying rural America and building a wave of low-cost housing in cities, to planting trees and establishing soil protection programs in regions ravaged by the Dust Bowl.

Week-end Wrap – Political Economy – September 21, 2019

Week-end Wrap – Political Economy – September 21, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

How Powerful Ideas Can Shape Society: Aaron Director and the Triumph of Nihilism 

Matt Stoller [Pro-Market, via Naked Capitalism 9-18-19] 

Director is the key founder of what is now known as the Chicago School of law and economics, which reshaped the American approach to corporate power and political economy.... Director’s life was dedicated to setting free the power of concentrated capital, eliminating the power of labor, and undoing the New Deal. His success is so profound it is hard to describe, so embedded are we today in the world and rhetoric Director shaped.

Brahmin Left vs Merchant Right: Rising Inequality and the Changing Structure of Political Conflict (Evidence from France, Britain and the US, 1948-2017) (PDF)

Thomas Piketty [via Naked Capitalism 9-15-19]

...changing political cleavages in FR-US-UK 1948-2017 documenting the shift from class-based political conflict to multiple-elite (intellectual vs business elite) and identity-based political conflict. 

Main empirical finding: the rise of multiple-elite politics

• • In the 1950s-60s, the vote for left-wing (labour-socialist-democratic) parties in France-UK-US used to be associated with lower education & lower income voters: class-based political conflict (→ redistributive policies)
• • It has gradually become associated since 1970s-80s with higher education voters, giving rise since 1990s-2000s to a multiple-elite party system: high- education elites vote left, while high-ncome/high-wealth elites vote right. I.e. intellectual elite (Brahmin left) vs business elite (Merchant right). 

Keynes Was Really a Conservative
Bruce Bartlett [via Naked Capitalism 9-16-19]

Peter Drucker, a conservative admirer of Keynes, viewed him as not merely conservative, but ultraconservative. “He had two basic motivations,” Drucker explained in a 1991 interview with Forbes. “One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than [economist F.A.] Hayek!”

Week-end Wrap – Political Economy – September 14, 2019

Week-end Wrap – Political Economy – September 14, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The Oligarch Threat
Tamsin Shaw, August 27, 2019 [New York Review of Books]

The bigger picture... was the way in which the Cambridge Analytica story opened a window onto a new constellation of international billionaires, corrupt politicians, and war profiteers who were apparently amassing enormous power. That story isn’t only about technology, data, and psychographic profiling; it’s also, at root, a story about the consequences of entrenched economic inequality, the privatization of essential public assets and government functions, including even national security, and the challenge to conventional foreign policy posed by the bargains being struck between international kleptocrats…. 

In both Britain and America, there exists a class of billionaires who seek to become oligarchs and a corresponding class of government officials who want to become billionaires. Since 2008, when the financial markets’ development of complex and ill-regulated derivatives led to a credit crisis and crash that erased huge sums from the fortunes of the global ultra-rich—with Western tycoons like Rupert Murdoch and Sheldon Adelson, and Russian oligarchs like Oleg Deripaska among the biggest losers—the world’s billionaires have been moving away from a commitment to free markets. Learning from the banking bailouts and the socialization of moral hazard, they have instead embraced an ambition to build lasting monopolies that enjoy both official and unofficial forms of state support.
….
The United States has its own versions of the oligarchs, albeit ones who made their money legally rather than through the criminal enterprises for which many Russians have been indicted by American prosecutors or sanctioned by the federal government. As I’ve previously written, the oligarchs of Silicon Valley managed to establish their extraordinary monopolies—viewed by the state as a form of soft power as well as an essential national security asset in a world of cyber-conflict—only because that entire sector received huge injections of venture-capital funding from the military and intelligence agencies. In this case, too, the astronomical profits are largely untaxed and held off-shore.... 

This international billionaire class is also establishing and using private intelligence and influence agencies like Cambridge Analytica to help them manipulate national and international politics. It’s well known that the Koch brothers have their own such agency (called i360), but other billionaires have firms whose names we don’t even know. That’s not to say there’s a grand conspiracy of global elites or coordinated centralization of power for mutual advantage. But what these messy conflicting interests do have in common is that they are all working against liberal-democratic institutions. The free-market dream of being liberated from government authority, once an article of faith for the billionaire class, has turned into the oligarchs’ dream of coopting, or even usurping, government authority in pursuit of profit. 

....one of the most ambitious of America’s would-be oligarchs, Erik Prince. He is a private military contractor, formerly of Blackwater; his present company, the Frontier Services Group, has backing from the Chinese government and a Hong Kong billionaire named Johnson Ko, the company’s executive director. Prince’s meetings on behalf of the Trump team were arranged by a former Blackwater colleague who is now an adviser to Crown Prince Mohammed bin Zayed al-Nahyan of the United Arab Emirates, George Nader. Nader, who is currently in federal custody in Virginia as an accused child sex trafficker, claims that Prince was sent as an emissary for Trump’s chief strategist, Steve Bannon, to the notorious Seychelles meeting with Dmitriev and Bin Zayed.  

  .... Mueller’s main finding, a “sweeping and systematic” campaign of interference by Russia in the 2016 election, has simply reinforced the idea that the United States and Russia are combatants in a fairly traditional form of political warfare. Mueller’s report and testimony had no impact in exposing the multilateral business deals—here involving American, Russian, Saudi, Israeli, Qatari, and Emirati actors—that bypass national interests, official foreign policy, international regulations, electoral laws, and even ordinary market pressures.

How the UK Security Services neutralised the country’s leading liberal newspaper 

[Daily Maverick, via Naked Capitalism 9-12-19]

The UK security services targeted The Guardian after the newspaper started publishing the contents of secret US government documents leaked by National Security Agency contractor Edward Snowden in June 2013.

Snowden’s bombshell revelations continued for months and were the largest-ever leak of classified material covering the NSA and its UK equivalent, the Government Communications Headquarters. They revealed programmes of mass surveillanceoperated by both agencies. 

According to minutes of meetings of the UK’s Defence and Security Media Advisory Committee, the revelations caused alarm in the British security services and Ministry of Defence.

Boeing continues its downward spiral

The plight of Boeing continues to fascinate me. Dad's cousin was a machinist / toolmaker for them from the 1940s to the early 1970s—from the B-29 to the 727. One Sunday afternoon I listened to him explain the problems of producing the tooling for the 727's tail section. Not only did the tail carry important control surfaces, the designers had run a third jet engine through the middle. Not surprisingly, making all this work required fabricating some complex shapes out of high-strength aluminum alloys. This was before computerized milling machines so these tools were built with slide rules, micrometers, Bridgeport mills, and a whole lot of skills. The resulting aircraft exceeded every important performance projection by at least 5%, thousands were made, and there are still people who argue it was the fastest subsonic airliner to ever fly.

My brother-in law was the guy who specified for Boeing which welding method would be used for every part that would be joined using heat. For every potential operation, he would test several welding methods, X-ray the results, and then break the weld to see how much load it would take. His results became part of Boeing's institutional memory. Any time folks needed to weld up a landing gear, or whatever, they could check to see what methods had been certified. My brother-in-law had not gone to engineering school but he was so good at what he did, he was given a "field promotion" to engineer by the company (along with the increased pay grade.) Such was the "old" Boeing.

According to his account, old Boeing began to die with the merger of Boeing and McDonnell Douglas on Aug. 1, 1997. The value of the transaction was $16.3 billion. McDonnell Douglas had been on the ropes for awhile and their senior management had turned to the Wall Street sharpies for "help"—the kind of help that stressed share prices and political connections to the Defense Department over the real work of building quality airplanes. These folks came to Boeing in the merger and began an assault on the company's engineering culture. On February 9, 2000, Boeing's engineers actually went out on strike—egged on, no doubt by the designated management fool / Wall Street darling named Debbie Hopkins who wondered aloud, "Just why does Boeing need engineers anyway?" I don't know Debbie, maybe it's because punching a hole through the air at nearly 600 mph is really hard to do. Maybe it's because without engineers, Boeing does not exist.

Anyway, shortly after the SPEEA strike was settled, my brother-in-law quit in disgust and found a peaceful job teaching non-ferrous welding at a Tacoma community college where he worked into his late 70s. Debbie was soon fired but her work was done. The rot at Boeing soon showed up in airplanes that had serious quality issues. I did a post in 2013 about the troubled Dreamliner and now the 737max fleet is grounded.

Wednesday, January 30, 2013

The Dreamliner is grounded

If anyone ever needs a lesson in what happens when Predators take over a Producer company, Boeing will do perfectly.  In it's glory days, Boeing pretty much defined a Producer company.  Engineers ran the show.  The company would occasionally bet the farm on a breakthrough product.  There was a sense of pride you could feel the moment you passed through the plant gates.  And people who knew aircraft were often fanatically loyal to their output (It's Boeing or I'm not going.)  Yes, there were other companies that made large aircraft but sensible people would often ask "Why?"  Boeing was so sure about its products that for decades, it only had one salesman.  One was plenty because everyone knew what buying from Boeing meant.

And then it started to unravel.  In 1997, Boeing merged with McDonnell Douglas, a company that had lost its airplane-making chops and had become just another cost-plus supplier hanging off the big Defense Department teat.  Boeing also had significant ties to the defense industry but were babes in the woods compared to the sharpies from McDonnell Douglas.  Soon the sharpies were ensconced in senior management at Boeing and the rot began to set in.  The open assault on Boeing's engineering culture came out into the open during the SPEEA (Society of Professional Engineering Employees in Aerospace) strike of 2000.  The cordial atmosphere between the engineers that designed Boeing's products and the engineers that managed the company was broken.  Management even moved the headquarters to Chicago from Seattle to show the divorce was final.

Once the Boeing Producer / engineering culture had been trashed, the chance for breakthrough, industry-defining projects was trashed as well.  The Dreamliner, which was not even that revolutionary to start with, became an expensive, ongoing fiasco that demonstrated the truth of the most famous sign carried during the SPEEA strike "No nerds, No Birds."  And so now, after several years of delays and $Billions of cost over-runs, the few Dreamliners that have been delivered are grounded.  The problem isn't even an aerospace problem but rather faulty lithium batteries.  If the Predators of the "new" Boeing management were actually capable of feeling shame, they would be resigning en mass. Yeah, that's going to happen (NOT)!

Running on empty

DW looks at the institutional impediments to change in the all-powerful automobile industry. And OMG are the car folks all powerful—for some very good reasons. Germans invented the internal combustion engine—both gasoline and diesel. The nation's driver associations have even managed to keep parts of the autobahn speed-limit free. And should a driver do something seriously stupid and crash, the authorities have access to rescue crews on hair-trigger alert. This is not to say the rest of the country always approves of these James-Dean wannabees setting transportation policies. Environmental activists recently managed to ban automobile traffic in central Stuttgart—the home of Porsche and Mercedes Benz.

But the serious power is still held by the manufacturers and their conventional wisdom which says—the automakers are the most important element of the German economy and you tamper with them at great risk. In that nearly rules-free environment, they twiddled their thumbs and made fat profits from ICE cars. Now their biggest market, China, is demanding that they get serious about selling electric cars. This is proving much harder than it looks—and WAY more expensive. Here DW has captured a fascinating look at smug auto executives spouting the conventional wisdom / Institutional Inertia.

Week-end Wrap – Political Economy – September 7, 2019

Week-end Wrap – Political Economy – September 7, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Economics as Cultural Warfare 

A number of articles, stories, and commentaries have begun appearing the past month which indicate a growing understanding the murderous effects of conservative a.k.a. neoliberal economic ideology. Last week, I especially liked the direct, confrontational title of “Why Libertarianism Will Kill Us All”
by Nathan J. Robinson, in Current Affairs. In May, even Bloomberg was forced to acknowledge “Former Boeing Engineers Say Relentless Cost-Cutting Sacrificed Safety” in the 737 Max.

This week the number of articles along these lines merited a new topic subtitle, which I also used to link to an article I posted in March 2019 about the economic ideas of Adam Smith. As the title of a March 2019 article co-authored by Suresh Naidu -- author of the post below about Robert Bork --states plainly: Ideas Have Consequences: The Impact of Law and Economics on American Justice. 

While I welcome this emerging new clarity about the bloody costs of conservative a.k.a. neoliberal economic ideology, I am troubled that the ideology of republicanism continues to be overlooked as the obvious answer. As I wrote in March 2019 (Liberals and the Left Fail to Notice – and Celebrate – the Intellectual Death of Conservatism), "The actual conception of civic virtue in a republic is by its very nature fundamentally contrary to the basic tenets of capitalism...republicanism will never be in harmony with market capitalism." Almost all the proposals for reforming the USA economy --including by Senators Elizabeth Warren and Bernie Sanders -- amount to the imposition of state regulation without fundamentally addressing the economic beliefs and ideology of elites. This is why I place such importance on the work of Ian Welsh, and why the Business Roundtable's recent critique of the theory of shareholder value is an important indicator of elites' thinking. Will elites actually change their thinking? Or are they merely beginning to formulate a response to the growing resistance to the economic ideology they have promoted for the past three quarters of a century to roll back the New Deal? Is it even possible for a leopard to change its spots? 

How Economic Decisions Are Made
Ian Welsh, September 5, 2019 [IanWelsh.com]

....money is a social construction, and price signals are not given by God and nature: they are choices. Political choices. That isn’t to deny some physical reality behind them, but that reality has obviously been elided, when in America, the life spans of some demographic groups are dropping while super-yachts and luxury condos are hot to trot. 

All systems have to do only one thing: whatever is required to keep the system in power.
That’s all they have to do. Whether or not human welfare is advanced or not; whether or not we care about animals or nature is irrelevant to the raw calculus of power and staying in power, until it effect staying in power. 

If the hoi polloi can be kept from revolting or demanding (remember demands are based on “or else,” they are not requests) well then, the powerful will not do anything that does not increase their power or money. They will only care about human welfare outside of their own group if they feel they must, or if, as happens occasionally, they see their group as being something other than the elite group. 

Right now elites don’t care about other humans enough to reshape the money and political systems (the same thing, ultimately) to prioritize human welfare, avoid a great-die-off, or stop climate change. This is clear. It is not arguable, it is a fact, based simply on their actions.

THE SCALE OF WHAT WE’RE UP AGAINST: A giant amount of money will be spent trying to convince you to disbelieve obvious truths…

[Current Affairs, via Naked Capitalism 9-6-19]

The Koch version of free-market capitalism, which is the one pushed at the American Enterprise Institute, the Cato Institute, the Heritage Foundation, the Foundation for Economic Education, FreedomWorks, the Hoover Institution, and the Heartland Institute, is a simple creed, one that goes as follows: 

I believe that freedom is good and that people should be left to pursue their own ends as they see fit. The market knows best, and government regulation is a misguided attempt to second-guess people’s decisions about their own interest. People and corporations should pursue their self-interest under conditions of freedom, because in a marketplace of voluntary transactions, everyone’s interests will end up being served.

....It’s only when you think for a bit, and work out the implications, that you realize something that sounds perfectly innocuous actually has horrifying implications. What about child labor laws? Oh, well, that’s just the state stepping in to prevent a beneficial transaction between the child and the employer. We’re “taking away opportunity from children,” as libertarian economist Jeffrey Tucker put it in a Foundation for Economics Education article called “Let The Kids Work.” Oh, what about price gouging? Well, you’ll read in the Wall Street Journal that price gouging is Actually Good, because it’s a Mutually Beneficial Transaction between someone in desperate need of a thing and someone willing to part with it.

One of my favorite books for understanding the real nature of free-market capitalism is Walter Block’s Defending the Undefendable. Block, a right-wing libertarian, goes through various different categories of unpopular people, and shows how they are actually heroes performing a public service. Slumlords? They provide houses! Blackmailers? They’re merely offering the service of not disclosing information—would you rather they just released the damaging information? Drug dealers? It’s a product—you don’t have to buy it! Ebenezer Scrooge? He was investing his money and building the economy! Block concludes that these people “do not violate anyone’s rights, so they do not violate basic morality.”

For Block, “respecting property rights” and “basic morality” are identical, meaning that I can be as nasty to you as I want so long as I don’t steal your furniture, and still be an upstanding person. Employers can mistreat employees—by sexually harassing them, belittling them, working them to exhaustion, and they haven’t done anything wrong, because it’s a Free Market Transaction that the employee could theoretically walk away from....

“Monopolist’s Worst Nightmare: The Elizabeth Warren Interview”
David Dayen [The American Prospect, via Naked Capitalism WC 9-3-19]

Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, it’s got a lot of different directions, but that’s the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. We’ve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And that’s started to change. And I think—So here’s my thinking: it’s because we’re focusing more on what’s wrong in this country. It’s not like somebody woke up and just said “antitrust”—we’re not that nerdy—but it’s about what’s wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that won’t get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.

Greta Thunberg comes to New York

The Fridays for Futures movement inspired by the frankly incredible Greta Thunberg has been fun to follow since it started only a year ago. She was a disgusted child who decided to skip school to camp out in front of the Swedish Parliament. The goal was to remind the politicians that they were not doing enough to arrest the climate crises. Her logic was absolutely impeccable:

• The scientific consensus is that unless there are significant changes in how societies operate, we only have twelve years before the CO2 tipping points have been breached and all hell is going to break loose.
• The most commonly reported tipping point was 1.5°C (2.7°F) We are almost there.
• 2018 broke records for high temperatures and widespread forest fires in Sweden. Anyone who wasn't frightened to death by these developments was probably clinically unconscious. It was an amazing demonstration of what environmental collapse could look like.
• Greta did the math. She was 15. 12 years and she would be only 27. This is a very grim future.
• "Why educate yourself to be a useful and productive citizen when the future is so hopeless?" reasoned Greta. Besides, she was extremely studious so missing a little school to make a political point seemed a logical path. Her grades weren't going to suffer.

A typical angry teenager, she distilled her beef with the world in the perfect summation, "You adults are shitting on my future." It is almost impossible to imagine a more powerful battle cry if the goal is to unite the world's young into a vast protest movement. But I am almost certain that not even Greta had any idea of the firestorm she was igniting.

She has spoken to the European, British, and French Parliaments. She went to Davos to scold the filthy rich for their role in the crimes against the climate. She has been nominated for the Nobel Peace Prize. And her latest was her decision to address the UN General Assembly which meant a transatlantic trip. Since she doesn't fly, this left her with few options. The one she chose was to sail on an environmentally-friendly racing yacht.

Week-end Wrap – Political Economy – August 31, 2019

Week-end Wrap – Political Economy – August 31, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

How meritocracy became oligarchy

How Life Became an Endless, Terrible Competition
[The Atlantic, September 2019 issue]

Harvard, Princeton, Stanford, and Yale collectively enroll more students from households in the top 1 percent of the income distribution than from households in the bottom 60 percent. Legacy preferences, nepotism, and outright fraud continue to give rich applicants corrupt advantages. But the dominant causes of this skew toward wealth can be traced to meritocracy. On average, children whose parents make more than $200,000 a year score about 250 points higher on the SAT than children whose parents make $40,000 to $60,000. Only about one in 200 children from the poorest third of households achieves SAT scores at Yale’s median. Meanwhile, the top banks and law firms, along with other high-paying employers, recruit almost exclusively from a few elite colleges.

Strategic Political Economy

“Boeing’s Crashes Expose Systemic Failings”

[Der Spiegel, via Naked Capitalism 8-26-19]

Lambert Strether notes "This is brutal, a must-read." 

"It is impossible to tell the story of the 737 Max -- indeed, the story of Boeing's entire recent history -- without taking a closer look at Airbus. The self-confident Americans underestimated their European competitor's strength, not wanting to believe that Airbus's ascent to become the world's second-largest aircraft manufacturer was the kind of economic miracle that changed the entire game. Founded in 1970, massively subsidized by European governments and heavily promoted by an industry that was deeply invested in its success, Airbus was able to revolutionize the global passenger jet market in the course of just three decades. And then came the wonder of 1999, when Airbus received significantly more orders for its aircraft than did its American rival, despite the fact that Boeing had just merged with erstwhile competitor McDonnel Douglas a few years before.... 

“And this all comes at a time when the Airbus-Boeing duopoly has been developing cracks. The two may still be the world’s undisputed aerospace leaders, but companies in China, Russia and Japan are in the process of grabbing a bigger piece of the pie. Furthermore, it has become easier to build airplanes because a highly specialized global market of suppliers has developed that can deliver almost any part in the desired quality at the desired moment in time. The times when airplane construction was a calling card of unattainable technological excellence are coming to an end. Things are becoming more difficult, especially for Boeing.”

Outsourcing comes back to bite you in the ass. Every time. USA has "free traded" away the family jewels. 

“The Cherokee Nation Nominated a Delegate to Congress as Stipulated in Treaties” 

[Teen Vogue, via Naked Capitalism 8-26-19] 

“The Cherokee Nation announced last week that it has, for the first time in its history, nominated a delegate to the United States Congress in accordance with provisions in treaties the tribe has with the federal government. In a Thursday press release, Principal Chief Chuck Hoskin Jr. nominated the Cherokee Nation’s vice president of government relations, Kim Teehee, for the job.”

The Failure of Establishment Neoliberal Economics

Business Roundtable Has A Lot to Prove
Barry Ritholtz, The Big Picture 8-26-19

For 47 years, the Business Roundtable has lobbied on behalf of corporate America. Much of that time, it maintained the fiction that the sole purpose of a corporation was to maximize profits on behalf of shareholders. This philosophy has been under assault for several years now, and this week the Business Roundtable announced it wants to put it to rest.In a widely circulated memo, the 200-member organization reversed itself, writing that “shareholder primacy” is no longer the sole purpose of a corporation. Instead, corporations must include a commitment to “all stakeholders,” which includes customers, employees, suppliers and local communities....But turning this aircraft carrier around won’t be easy, in large part because of the group’s own history. Indeed, the Roundtable has spent most of the past four decades advocating against the interests of those exact stakeholders. To cite some of the more notable examples:
— It fought the rise of labor unions and pro-union legislation;
— Helped to defeat antitrust bills;
— Prevented the formation of the Consumer Protection Agency;
— Opposed corporate governance changes to make boards of directors and CEOs more accountable to stockholders;
— Fought proper accounting of stock options given as compensation to executives and insiders;
— Opposed increases in the national minimum wage (it now favors increases);
— Lobbied to prevent restrictions on executive compensation;
— Fought legislation that would create cleaner energy and address climate change;
— Pushed for corporate income-tax cuts;
— Supported anti-consumer Supreme Court decisions, including the fiction that corporations are legal people, and that campaign donations equal speech.