Week-end Wrap – Political Economy – December 22, 2019
by Tony WikrentEconomics Action Group, North Carolina Democratic Party Progressive Caucus
Strategic Political Economy
Canada’s infrastructure was once cheap and effective to build. Now, it’s a titanic transfer from taxpayers to the world’s biggest businesses and investors
[boing boing, via Naked Capitalism 12-16-19]
Why GDP is increasingly problematic as a metric:
However, a vital fact that Saxe and virtually everyone else either don’t know or won’t mention is that from 1938 to 1974 Canada and other western countries did in fact get very good infrastructure for very cheap. As documented by journalist Murray Dobbin, during those four decades the Bank of Canada loaned massive amounts of money, virtually interest-free, to all levels of government. This same central-bank function was exercised in the U.S. and the other G7 countries.
That’s how we got massive projects like the war effort, the Trans-Canada Highway and the St. Lawrence Seaway -- as well as pools, schools, government buildings, roads, subways, etc. – all without significantly increasing government deficits or debts.
Then in 1974 under then-Prime Minister Pierre Trudeau the central bank’s issuance of very-low-interest bonds to fund federal and provincial governments slowed to a trickle.
That’s because private lenders in Canada and abroad took over that function. The result was a significant slow-down in the building and maintenance of infrastructure. (A Charter of Rights and Freedoms challenge to reverse this went all the way to the Supreme Court; however, in mid-2017 the Supremes declined to hear the case.)
And governments had to pay much higher interest for the money they needed. Canada’s national debt leapt from just over $20 billion in 1971 to more than three-quarters of a trillion today. This is accompanied by very high provincial debts, such as Ontario’s $325 billion (the largest sub-national-level debt in the world). Servicing the debt consumes the biggest single chunk of both provincial and federal budgets.
Why GDP is increasingly problematic as a metric:
[Twitter, via Naked Capitalism 12-16-19]
U.S. economic activity is becoming increasingly concentrated in large cities and by the coasts—and less so in rural counties
bloom.bg/2POPJXx
The Carnage of Establishment Neoliberal Economics
Brexit Won’t Deliver Sovereignty — And Neither Will Far-Right Movements Anywhere
[Foreign Policy in Focus, via Naked Capitalism 12-16-19]
Neoliberal globalization has fueled the rise of right-wing nationalist leaders around the world — from Donald Trump and Jair Bolsonaro in the Western hemisphere, through Viktor Orbán and Boris Johnson in Europe, to Recep Tayyip Erdoğan and Narendra Modi in Asia.
Despite their differences, each has thrived on popular disenchantment with traditional parties of government that have failed to defend the interests and living standards of ordinary people against the social dislocations associated with the transnational mobility of capital. But what the UK election shows most clearly is that despite its nationalist rhetoric, the new right is not in the business of rebalancing the scales between their national polity and the global system.
The victorious incumbent Prime Minister Boris Johnson wagered the Conservative Party’s election campaign on the relentless repetition of two slogans: “get Brexit done” and “take back control.” However, scrutiny of Johnson’s program shows that it is not interested in a contest between the rootless forces of globalization and the political and economic shelter offered by democratic decision-making within the nation-state....
....As historian Quinn Slobodian writes, neoliberalism’s global vision has always sought a world “with rules set by supranational bodies operating beyond the reach of any electorate.”
This “world of rules” — most clearly embodied in the World Trade Organization (WTO) — removes the operations of the market from the decision-making of any particular population. Corporations and investors shape the lives of ordinary people — directing (or withdrawing) resources and employment, setting wages and conditions, influencing environmental and safety standards, and determining access to health, education, and social services. Yet their decisions are presented as market outcomes and so as lying outside of democratic control or accountability....
The key to Powell’s account was his exclusion of economic activity from political decision-making, so that “national sovereignty” was paradoxically redefined as compliance with the dictates of the world market. Despite the fact that transnational economic forces play an often determining role in the actions of national governments and the lives of ordinary people, Powell insisted that globalization “has no relevance to political independence and self-government.”
Trump's trade war
Unpacking The No Deal Not a Trade War Trade War Deal
“Revealed: the 20 firms behind a third of all carbon emissions”
[Asia Times, via Naked Capitalism 12-16-19]
How Trump Lost His Trade War: On speaking loudly and carrying a small stick.
Paul Krugman [The New York Times, via The Big Picture 12-18-19]
By Manuel Perez-Rocha [Foreign Policy in Focus
How Trump Lost His Trade War: On speaking loudly and carrying a small stick.
Paul Krugman [The New York Times, via The Big Picture 12-18-19]
The reality is that the Trump administration achieved almost none of its goals; it has basically declared victory while going into headlong retreat. And the Chinese know it. As The Times reports, Chinese officials are “jubilant and even incredulous” at the success of their hard-line negotiating strategy. To understand what just went down, you need to ask what Trump and company were trying to accomplish with their tariffs, and how that compares with what really happened.We Need a Progressive Alternative on Trade — and NAFTA 2.0 Isn’t It
By Manuel Perez-Rocha [Foreign Policy in Focus
Here's what a progressive trade agenda that actually protects people and planet would actually look like.
As the right has increasingly taken up opposition to trade policies from a protectionist and often xenophobic angle, the need to distinguish a left, internationalist critique of corporate globalization has never been more urgent....
Existing trade and investment agreements, and proposals for a progressive trade agenda, must be judged against the following four principles:
- Human rights in the broadest sense — including economic, social, cultural, and environmental rights — must have primacy over corporate and investor rights, and there needs to be legally binding obligations on transnational corporations.
- Democratic governments must have the policy space to pursue and prioritize local and national economic development, good jobs for their citizens, and the preservation, promotion, and restoration of public services.
- Citizens, communities, and the environment must have the right to protection through public interest regulations.
- A climate-friendly approach should be adopted whenever pursuing trade and investment, which can no longer be allowed to outpace the carrying capacity of the planet.
[Pew Research, via The Big Picture 12-17-19]
The surveys shows a partisan divide in views, as well as a very marked divide by income. Note that nearly half of Republicans - especially at lower incomes -- agree that the economy benefits rich people unfairly. Unfortunately, in view of The Atlantic article cited below, the Pew online summary does not provide a breakdown by age, except for this one sentence: "And Americans ages 65 and older are twice as likely to say they live comfortably as those ages 18 to 29 (45% vs 22%)."
The Millennials vs. Boomers fight divides the Democratic Party.
[Attention to the unseen, originally posted at The Atlantic, via The Big Picture 12-16-19]
[Teen Vogue, via Naked Capitalism 12-19-19]
Wall Street Magic Tricks Make Banks Look Safer Than They Are.
The surveys shows a partisan divide in views, as well as a very marked divide by income. Note that nearly half of Republicans - especially at lower incomes -- agree that the economy benefits rich people unfairly. Unfortunately, in view of The Atlantic article cited below, the Pew online summary does not provide a breakdown by age, except for this one sentence: "And Americans ages 65 and older are twice as likely to say they live comfortably as those ages 18 to 29 (45% vs 22%)."
The Millennials vs. Boomers fight divides the Democratic Party.
[Attention to the unseen, originally posted at The Atlantic, via The Big Picture 12-16-19]
To many observers, it might seem like young voters have remade the Democratic Party in their image—as a claque of “woke” socialists. In May, the historian Niall Ferguson and Eyck Freymann, a research analyst, wrote in The Atlantic that the U.S. was at the brink of a great generation war, in which older conservative Republicans would do battle with Democrats, who were “rapidly becoming the party of the young.”
But upon closer examination, the Democrats aren’t really the party of the young—or, for that matter, of social-justice leftists. In the most sophisticated poll of the Iowa caucus, Joe Biden polled at 2 percent among voters under 30, within the margin of error of zero. Nationally, he is in single digits among Millennials, the generation born between 1981 and 1996. Yet Biden is the Democratic front-runner for the 2020 presidential nomination, thanks to his huge advantage among older voters—especially older black voters—who are considerably more moderate than younger Democrats.
Bernie Sanders, by contrast, leads all candidates among voters under 30 and polls just 5 percent among voters over 65. In a national Quinnipiac poll asking voters which candidate has the best ideas, Sanders crushes Biden 27 percent to 4 percent among those under 35 and receives an equal and opposite crushing at the hands of Biden among voters over 65: 28 percent to 4 percent.
Age doesn’t just divide Republicans and Democrats from each other, in other words; age divides young leftists from both Republicans and Democrats. Democrats under 30 have almost no measurable interest in the party’s front-runner. Democrats over 65 have almost no measurable interest in the favored candidate of the younger generation. This is not a picture of Democrats smoothly transforming into the “party of the young.” It’s evidence that age—perhaps even more than class or race—is now the most important fault line within the Democratic Party.New Report From Bernie Sanders Details Declining Living Standards for Millennials
[Teen Vogue, via Naked Capitalism 12-19-19]
Millennials are unlike any generation that came before. According to the report, they’re more diverse (40% of millennial households are headed by someone who belongs to a racial or ethnic minority group); more educated (in 2016, an estimated 62% of millennial households had someone with at least an associate’s degree); and are marrying, cohabitating, and having children at significantly lower rates than their predecessors (in 2016, 44% of millennials were partnered and had children by age 34, compared with 54% of baby boomers). More notably, according to this report, millennials are financially worse off than their parents and may not have the opportunity to do better.GAO report requested by Sen. Bernie Sanders: Millennial Generation: Information on the Economic Status of Millennial Households Compared to Previous Generations
Predatory Finance
Ellen Brown: Paul Volcker’s long shadowPublic Banking Institute Chair Ellen Brown writes in Truthdig that the legacy of Federal Reserve Chairman Paul Volcker, who died on December 8, is controversial at best.
“At a time when the Fed’s credibility was “greatly diminished,” he restored to it the life-and-death power over the economy that it continues to exercise today. His “shock therapy” of the early 1980s broke the backs of labor and the unions, bankrupted the savings and loans, and laid the groundwork for the “liberalization” of the banking laws that allowed securitization, derivatives, and the repo market to take center stage. As noted by Jeff Spross in The Week, Volcker’s chosen strategy essentially loaded all the pain onto the working class, an approach to monetary policy that has shaped Fed policy ever since.”
Felix Rohatyn of Lazard Freres died a few days after Volcker. Like, Volcker, Rohatyn is being memorialized for the public service he did, supposedly "saving" New York City from bankruptcy in the 1970s. But, like Volcker, Rohatyn was actually the harbinger of a much more predatory and useless financial system.
[BusinessWeek, via The Big Picture 12-19-19]
The Fed Fueled Today’s Liquidity Crisis with One Key Moral Hazard Action
Pam Martens and Russ Martens, December 17, 2019 [Wall Street On Parade]
The Fed Fueled Today’s Liquidity Crisis with One Key Moral Hazard Action
Pam Martens and Russ Martens, December 17, 2019 [Wall Street On Parade]
The Federal Reserve Bank of New York (New York Fed) made the astonishing announcement last Thursday that it will be pumping a cumulative $2.93 trillion into Wall Street trading houses (primary dealers) between December 16 and January 14. That’s on top of the $360 billion of liquidity it is pumping into the markets by buying back $60 billion a month in Treasury bills from its primary dealers.
The Fed’s excuse for opening its self-created money spigots to the tune of trillions of dollars to Wall Street’s trading houses – a replay of what it did secretly during the financial crisis of 2007 to 2010 – is that this is simply a technical fix for allowing bank reserves at the Fed to shrink too far. But that is merely a symptom – not the actual disease afflicting the U.S. financial system.
The facts on the ground strongly support the argument that the Fed itself created this mess by rubber-stamping bank mergers that allowed five banks (out of 5,000 in existence in the U.S.) to now constitute the core of the U.S. financial system.
Health Care Crisis
‘It comes down to pure greed’: Insulin prices double, causing many people with diabetes to turn to extremes
[USA Today, via Naked Capitalism 12-17-19]
BlueCross BlueShield, Cigna, Optum file reverse public records suits to stop release of price
information
[Tennessee Coalition for Open Government, via Naked Capitalism 12-17-19]
BlueCross BlueShield, Cigna, Optum file reverse public records suits to stop release of price
information
[Tennessee Coalition for Open Government, via Naked Capitalism 12-17-19]
Climate and environmental crises
Report Finds Global Banks Poured $1.9 Trillion into Fossil Fuel Financing Since the Paris Agreement was Adopted, with Financing on the Rise Each Year
[Rain Forest Action Network, via Naked Capitalism 12-20-19]
[Guardian, via Naked Capitalism 12-20-19]
“The analysis, by Richard Heede at the Climate Accountability Institute in the US, the world’s leading authority on big oil’s role in the escalating climate emergency, evaluates what the global corporations have extracted from the ground, and the subsequent emissions these fossil fuels are responsible for since 1965 – the point at which experts say the environmental impact of fossil fuels was known by both industry leaders and politicians. The top 20 companies on the list have contributed to 35% of all energy-related carbon dioxide and methane worldwide, totalling 480bn tonnes of carbon dioxide equivalent (GtCO2e) since 1965.”
“History’s Greatest Sea Is Dying”
[The Atlantic, via Naked Capitalism 12-18-19]
“The Med is warming at one of the fastest paces in the world (up to 0.12 degrees Celsius, or 0.216 Fahrenheit a year, on the surface), and it is choked with plastic. Though the Mediterranean constitutes less than 1 percent of the world’s oceans, it holds 7 percent of its microplastics. The coastal states continue to sully the sea with tons of everything from shipping oil to untreated sewage, meaning there’s scarcely an untarnished ecosystem left. (It’s a similar story on land: Naval bases sit alongside garbage-strewn beaches and coastal dump sites—relatively high military budgets juxtaposed with penniless environment ministries.) ….
But there might be an even more important subtext to the eastern Med’s decline. For millennia, those who lived near it thrived off one another, always trading and frequently cooperating from coast to coast, creating some of the greatest civilizations in world history. Yet that was long ago, and the region’s intellectual slump mirrors its environmental decay. Stifled by unilateralism, greed, and chronic short-termism, antiquity’s greatest sea resembles the contemporary world in miniature—and with this year’s United Nations climate talks having concluded in Madrid with little tangible progress, the lessons the eastern Med offers are not particularly hopeful.”“Newly Identified Jet-Stream Pattern Could Imperil Global Food Supplies, Says Study”
[State of the Planet], via Naked Capitalism 12-20-19]
“Scientists have identified systematic meanders [“Rossby Waves”] in the globe-circling northern jet stream that have caused simultaneous crop-damaging heat waves in widely separated breadbasket regions—a previously unquantified threat to global food production that, they say, could worsen with global warming. The research shows that certain kinds of waves in the atmospheric circulation can become amplified and then lock in place for extended periods, triggering the concurrent heat waves.”
“It’s a Vast, Invisible Climate Menace. We Made It Visible.”
[New York Times, via Naked Capitalism 12-15-19]
Lambert Strether: "Photos of methane emissions in Texas. Impressive."
[Bloomberg, via Naked Capitalism 12-19-19]
Information Age Dystopia
How to Avoid Amazon This Holiday Season
[Truthout, via Naked Capitalism 12-15-19]
[Gizmodo, via Naked Capitalism 12-18-19]
Finland Is Making Its Online AI Crash Course Free To the World
Finland Is Making Its Online AI Crash Course Free To the World
[Wired, via Naked Capitalism 12-20-19]
New York Times series: Your Apps Know Where You Were Last Night, and They’re Not Keeping It Secret.
[New York Times via Naked Capitalism 12-20-19]
Restoring balance to the economy
Samsung chair imprisoned and 24 others found guilty in union-busting case
[Ars Technica, via Naked Capitalism 12-19-19]
“3 French Executives Convicted in Suicides of 35 Workers”
[New York Times, via Naked Capitalism 12-20-19]
“The former chief executive of one of France’s biggest companies and two subordinates were convicted on Friday of “institutional moral harassment” in the suicides of 35 employees in the mid-2000s, in a landmark ruling that represents the first time a French company has been held responsible for such a crime…. The criminal court in Paris found that the three men were responsible for creating an atmosphere of fear during a desperate company restructuring that led directly to the suicides and attempted suicides of numerous employees.”
Disrupting mainstream politics
“We have Mortally Wounded Jim Crow Program”
[Greg Palast, via Naked Capitalism 12-17-19]
“It took us six years of investigating and reporting on the nationwide Jim Crow Interstate Crosscheck purge operation that cost more than 1.1 million voters of color their registrations and elected Donald Trump. But, finally, Kansas, which generates the Crosscheck secret scrub lists for other states, has agreed to kill the program. This effectively ends the entire national purge operation.”[The Intercept, via Naked Capitalism 12-17-19]
Enemy Actions
How the 1% Scrubs Its Image Online[Wall Street Journal, via The Big Picture 12-15-19]
Prominent figures from Jacob Gottlieb to Betsy DeVos got help from a reputation management firm that can bury image-sensitive Google results by placing flattering content on websites that masquerade as news outlets. ...despite Google’s promises to police misinformation, sites can still masquerade as news outlets and avoid Google’s detection. Google removed five websites from Google News after The Wall Street Journal inquired about them.
Virginia Supreme Court Upholds Ruling that George Mason University Foundation Is Not Subject to State FOIA Statute, Leaving Koch Funding Details Undisclosed
[Naked Capitalism 12-16-19]
Virginia Supreme Court allows Koch influence to remain undisclosed; the decision has yet to attract much media attention.
[Los Angeles Times, via Naked Capitalism 12-19-19]
[Bloomberg, via Naked Capitalism 12-19-19]
“Businesses can ban workers from using company email for union and other organizing purposes, the National Labor Relations Board decided in a Dec. 17 decision. The 3-1 ruling in favor of Caesars Entertainment effectively revokes a right granted in 2014 to workers who have access to employers’ email systems for other reasons, and overturns the 5-year-old Purple Communications Inc. ruling issued under a Democratic-majority board. The Board’s decision allows employers to restrict use of their email and other information technology systems to certain purposes so long as they don’t target union-related communications and activity. It also creates an exception for situations where there aren’t other reasonable means to communicate on non-working time. The decision is a blow to worker advocacy groups and unions, who urged the NLRB to maintain the 2014 policy on the basis that email has become a central and natural way for co-workers to organize and communicate.”
David Neiwert, December 20, 2019 [DailyKos]
The state legislature of Washington has released its report on Rep. Matt Shea’s activities promoting the far right, leading up to the January 2016 armed standoff at the Malheur National Wildlife Refuge in Oregon. Shea, the report found, engaged in domestic terrorism against the United States as part of his activities.... Shea had encouraged running “background checks” on liberal activists, and he loved to organize paramilitary “Christian” training in rural areas for boys and young men. More recently, he has compiled dossiers on his political opponents and even conducted a blacklist of people within his own network he suspected of being informants.
Shea’s online chats discussing this surveillance included exchanges about violent attacks on his critics and other “nonbelievers.” Shea also authored a text calling for a “biblical war” in order to create a “Christian” state in which anyone resisting their rule could be put to death.
Shea has been deeply involved with a radical Christian nationalist sect based in the tiny northeastern Washington town of Marble, whose members practice paramilitary techniques in the deep woods there, partially in preparation for the formation of their new state, part of a longer-term “American Redoubt” plan to form a “Patriot”-run homeland.
....most Republicans support Trump not despite, but because of his all-out assault on our democratic system.... It's painful to admit this, but Republicans have flat-out rejected democracy. As a group, they are pushing towards replacing democracy with a system where a powerful minority holds disproportionate and borderline tyrannical control over government and blocks the majority of Americans from having meaningful say over the direction of the country.
Republicans are not cowering in fear of Trump. On the contrary, they are exalting in his shamelessness. Watching Republicans at impeachment hearings, where they performed outrage for the cameras, lied with obvious glee and gloried in sharing conspiracy theories, it did not appear that they were intimidated by their president or anyone else....
No, the darker truth is that Republican voters, like Republican politicians, see clearly what Trump did — use the power of his office in an overt attempt to cheat in the 2020 election — and they love it. Like their leaders, Republican voters are feeling done with democracy and eager to follow Trump into a new world, where the majority of Americans who vote for Democrats are kept out of power, by any means necessary....
That is why there's such deep division in the U.S. over impeachment. It's not that conservatives can't see what Trump did when he used the power of his office to cheat in the 2020 election. They just don't care. If anything, they're glad he did it. This is the same party that repeatedly tried to shut down the government during Barack Obama's presidency and was hugely successful in blocking his judicial appointments. This is the party that suppresses votes and gerrymanders districts into meaninglessness. They feel entitled to run the country and do not care if the voters disagree. Voters are just one more obstacle to be overcome in the Republican power grab.
Labour's defeat in Britain
The Problem with the Labour Party
[Benjamin Studebaker, via Naked Capitalism 12-17-19]
[Benjamin Studebaker, via Naked Capitalism 12-17-19]
...the Labour Party contains three core elements.... No Labour leader can enjoy the support of all three parts. To lead the Labour Party, you need to get two of them to gang up on the third.
[London Review of Books, via Naked Capitalism 12-17-19]
Anyone who claims that Labour’s leftward shift was the product of a cultish devotion to one man, and will disappear on his departure, doesn’t understand its origins or its implications. The party now has a campaigning left-wing membership that’s serious about climate change, public ownership and defending migration; no successor to Corbyn will be able to abstain on welfare bills, or promise to cut ‘harder and deeper than Thatcher’. Many who have always opposed such politics will declare it toxic, and inimical to victory ‘from the centre’. But the electoral wasteland confronting the avowed centrist parties in this election suggests that wasn’t where Labour’s lost vote went.Don’t Blame Corbyn or Brexit: Labour Failed To Rage Against the Hated Political System
Adam Ramsay, co-editor of openDemocracyUK [via Naked Capitalism 12-16-19]
Corbynism was the English expression of a phenomenon which swept the Western world after the financial crisis. His victory in Labour’s leadership election was a response to the blatant failures of the free market, post-imperial wars and the staid ideology that had infected the whole ruling class. It was a response to deep feelings of alienation and immiseration.
Brexit was also an English response to this multi-headed crisis. Specifically, it was a rage against the alienation produced by the Blair and Cameron years, by the ‘leave it to us’ politics of technocracy.
It was a demand for empowerment and it came from the region of Europe with the most centralised government and most privatised economies: that is, as Anthony Barnett has argued, England without London.Why Labour Lost In Britain
[IanWelsh 12-16-19]
Labour lost for two main reasons:
What urban liberals don’t seem to understand is that there was a genuine split in traditional Labour voters over Brexit. Progressives in London were Remain; working and middle class voters in Labour’s northern strongholds were for Leave. There was no way to split the difference, though Labour tried. Going Leave alienates London voters and gives the LibDems a chance to eat Labour’s lunch in greater London. Going Remain means losing the northern strongholds....
- Their base was split by Brexit, and in a real way, no “positioning” could avoid this.
- There was a vast propaganda campaign against Corbyn in particular and Labour in general.
Young people voted Labour, old people voted Conservative. Only 18% of over 65 voters went for Labour. There is a trope that young people get more conservative as they get older, but that only happens if the system works for them. Since it doesn’t, and won’t, they will stay left wing. This isn’t the end. But a lot of people will suffer and die because of this.
“Anyone to my left is an antisemite”
[Immigrants as a Weapon, via Naked Capitalism 12-15-19]
I don’t have any special insight into UK politics, but one thing that really shocked me about the election is the way that Jewish identity and fabricated charges of antisemitism were weaponized in a smear campaign against Jeremy Corbyn and the mild leftwing shift of his Labour Party....
Those who tried to trace these wild allegations quickly found out that the supposed antisemitic takeover of Labour under Corbyn was a massive media fabrication. The actual real-life incidents boiled down to some trolls on Twitter and a few racist comments by real-life rando Labour members — a tiny set in a big national party. (If you want to get deep into the lack evidence and the media campaign surrounding it, read this free book by Verso.) And as far as Corbyn’s personal antisemitism? Well, that was really about his leftwing politics on the Palestine-Israel question, which had actually gotten a lot softer after he became leader of the party. It’s that old conflation of anti-semitism with anti-zionism that I’ve been writing about this week.
Kenneth Stern [The Guardian, via Naked Capitalism 12-15-19]
Fifteen years ago, as the American Jewish Committee’s antisemitism expert, I was the lead drafter of what was then called the “working definition of antisemitism”. It was created primarily so that European data collectors could know what to include and exclude. That way antisemitism could be monitored better over time and across borders.
It was never intended to be a campus hate speech code, but that’s what Donald Trump’s executive order accomplished this week. This order is an attack on academic freedom and free speech, and will harm not only pro-Palestinian advocates, but also Jewish students and faculty, and the academy itself....
If you think this isn’t about suppressing political speech, contemplate a parallel. There’s no definition of anti-black racism that has the force of law when evaluating a title VI case. If you were to craft one, would you include opposition to affirmative action? Opposing removal of Confederate statues?
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