Sunday, February 23, 2020

Week-end Wrap – Political Economy – February 23, 2020

Week-end Wrap – Political Economy – February 23, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The Oligarch Stage of the American Disease: Bloomberg Edition
[Ian Welsh, February 18, 2020]
The thing about Trump was always that he was a symptom of a disease. It’s hard to say exactly when the disease started, but serious symptoms started showing up after the elections of Reagan and Thatcher.  Rates of wage increases collapsed, stock markets and other asset prices rose much faster than inflation, regulations were gutted, people were thrown in jail at a ferocious rate and unions were smashed.
Inequality took off, and over time multiple billionaires were created. They used their money to buy politicians, and thru politicians to buy policy. Tax rates on corporations and rich people and estates and so on were slashed to the bone. Subsidies for the rich were increased, while subsidies for the poor and middle class were, in relative terms, cut.
The Federal Reserve (all of whose governors are political appointees), acted aggressively to keep wage increases at or under inflation, and targeted inflation rather than job growth. Good working class and many middle class jobs were off-shored and outsourced....
So the oligarchs, aided by the huge concentration of companies into oligopolies, have come to have or control vast amounts of wealth. They got money defined as free speech, and now that the political class has proven incapable of handling a left wing populist, an oligarch is stepping directly in because his class’s lackeys, like Biden and Buttigieg and indeed most of the field, are incompetent.
“Frederick Douglass Railed Against Economic Inequality” 
[Jacobin, via Naked Capitalism 2-21-20]
Douglass: “The Spartan lawgiver who discouraged the accumulation of wealth, because of its tendency to impair the liberties of his country, was fully justified in the extreme measures he adopted, by the universal experience of nations, and the fate of his own country; the fall of Spartan liberties dating from the introduction of wealth and consequent luxury of her citizens. His aim to exterminate wealth and refinement entirely, was, perhaps, not wise; it is not wealth of itself that produces the dreaded effects, but its accumulation in the hands of a few — creating an aristocracy of wealth, ready to be the tool of an aggressive tyranny, or to become aggressive upon its own account. With an increase of wealth comes an increase of selfishness, devotion to private affairs, and a contempt of public — unless politics can be made to minister to the all absorbing selfishness of the individual.”
Federal judges call emergency meeting to address 'deepening crisis' in the justice system
Mark Sumner, February 18, 2020 [Daily Kos]
One day after 2,000 former officials of the Department of Justice called on Attorney General William Barr to resign, an association of 1,100 federal judges has called an emergency meeting [by conference call] to address concerns about Barr’s interference in cases for political purposes and the absolute destruction of the the Justice Department’s long tradition of holding itself at a distance from the White House.... 
As USA Today reports, the politically independent Federal Judges Association has called for an “emergency meeting” to address issues generated by Barr’s interference and Donald Trump’s continued threats to the judiciary. The president of the group, a federal judge appointed by George W. Bush, said that the judges could not wait for their normal spring meeting. Instead, they feel the need to gather now to address this “deepening crisis” that threatens the system of justice.
“CargoMetrics data reveals depth of China cargo collapse”
[Freight Waves, via Naked Capitalism 2-21-20]


The Carnage of Establishment Neoliberal Economics

So Many More People Understand the Meaning of Neoliberalism Today, and That’s a Huge Thing
[Common Dreams, via Naked Capitalism 2-17-20]
What encourages me so much is the resistance of ordinary voters to the kinds of hoodwinking that used to be more fatalistically accepted in earlier times.

When Pete Buttigieg suggests that people can keep their private health insurance and choose Medicare if they want it, voters understand that this is neoliberal subterfuge for a false choice: nobody wants to pay high deductibles and premiums, instead of guaranteed care, even if Mayor Pete wants you to be scared by the trillions of extra dollars he thinks it will cost. In fact, universal government programs are always cheaper and fairer than private alternatives, even if neoliberalism, particularly under Ronald Reagan and Margaret Thatcher, successfully propagated the contrary myth. Buttigieg’s recent advocacy of mandatory public service and his anxiety about deficit spending align with the perennial neoliberal themes of discipline and austerity. 
When Elizabeth Warren hesitates to endorse a Medicare for All program that immediately starts making the transition from the patchwork Obamacare, voters understand that this is right out of the playbook of making us settle for half a loaf by creating the impression that swallowing a full loaf will cause indigestion. In fact, what is administratively and psychologically difficult to manage is a quintessential neoliberal program like Obamacare, with legions of exceptions, qualifications, and exclusions.
Most of the early entrants in the Democratic nomination race, like Kamala Harris, Julián Castro, and Cory Booker, who at first endorsed Medicare for All but backed off when pressed for details or timelines, paid the price in voter disapproval. Amy Klobuchar is yet to undergo her trial by fire on this issue, but as she continues advancing in the polls, it will come soon enough. To base your whole candidacy on standing pat, because nothing is legislatively possible, even if this fatalism is cloaked in folksy Midwestern pragmatism, is exactly the kind of subservience to unchecked corporate power that has voters disillusioned. 
Joe Biden’s career encapsulates the transition of a Democrat who came to power after the end of Lyndon Johnson’s war on poverty and the idealism of the 1960s, and who smoothly transitioned to an overt neoliberal disciplinary stance, reflected in his vigorous advocacy of the war on drugs, mass incarceration, civil liberties abridgment, and tougher bankruptcy exemptions. That subtle white supremacy easily shades over into an economic repression that cuts across all races is something much better understood than just a few years ago, when the Clintons were expertly propagandized as natural allies of African Americans. 
Not long ago, identity politics would have canceled the clarity that has resulted from the focus on neoliberal inequality. Voters don’t seem interested in voting for Warren or Harris as a woman per se, if they see their policies as hurting all people, including women. The same dynamic applies to Buttigieg, whose gay identity is not the overruling factor as was blackness in the case of Barack Obama; rather, whether Buttigieg’s neoliberal accommodation actually hurts all people, including people in the LGBTQ community, seems to be the overriding consideration—as it should be. 
The cover of meritocracy—which simply means that the aspirant successfully met neoliberalism’s criteria for professional competition—is increasingly of little value in electoral politics.

Predatory Finance

We’re In A Golden Age Of White Collar Crime 
[Huffington Post, via The Big Picture 2-17-20]
The criminal justice system has given up all pretense that the crimes of the wealthy are worth taking seriously. In January 2019, white-collar prosecutions fell to their lowest level since researchers started tracking them in 1998. Even within the dwindling number of prosecutions, most are cases against low-level con artists and small-fry financial schemes. Since 2015, criminal penalties levied by the Justice Department have fallen from $3.6 billion to roughly $110 million. Illicit profits seized by the Securities and Exchange Commission have reportedly dropped by more than half. In 2018, a year when nearly 19,000 people were sentenced in federal court for drug crimes alone, prosecutors convicted just 37 corporate criminals who worked at firms with more than 50 employees.
....the rich are enjoying a golden age of impunity unprecedented in modern history. “American elites have become more brazen than they were even five years ago,” said Matthew Robinson, a professor at Appalachian State University and the author of several books on “elite deviance”— all the legal and illegal social harms caused by the wealthy....
Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004. That’s roughly two decades’ worth of street crime every single year.
....solving financial crimes is not a cat-and-mouse game between cunning investigators and slippery con artists. Most of the time it is simply the blunt application of resources to a series of unimaginably tedious tasks. “Investigators can already crack almost any offshore account if they have enough time and money,” he said. “The problem is that they only get that for a few cases a year.”

Foreign Exchange Swaps: Hidden Debt, Lurking Vulnerability
[Naked Capitalism, February 16, 2020]
When someone tells you "there's no money" for a progressive economics program, remind them of these daily trading numbers.
Foreign exchange (FX) swaps and their close cousins, FX forwards, are an important and growing segment of global financial markets.1 The latest BIS Triennial Survey indicates that, at $4.3 trillion, they accounted for some 65% of the average daily turnover in global FX trading in April 2019. In fact, they have been its fastest-growing component, accounting for roughly 75% of the increase in aggregate turnover since April 2016, the date of the previous survey (BIS 2019a, Schrimpf and Sushko 2019a). The amount outstanding at end-June 2019 was as high as $72 trillion, with FX swaps an estimated three-quarters of this total.2 For perspective, this figure was equivalent to 84% of global GDP, exceeded that of global cross-border portfolio stocks ($59 trillion) and international bank claims ($35 trillion), and was almost triple the value of global trade ($25 trillion).
These massive daily trading volumes is a primary mechanism of looting by the financial predators. 
“Five Hedge Fund Heads Made More Than $1 Billion Each Last Year” 
[Bloomberg, via Naked Capitalism 2-18-20]
“Twelve billion dollars. It’s more than JPMorgan Chase & Co. paid all 56,000 of its investment bank employees, and almost twice as much as gamblers lost in Las Vegas last year. It’s also what 15 hedge fund managers collectively earned in 2019. Five of them—Chris Hohn, Jim Simons, Ken Griffin, Steve Cohen and Chase Coleman—reaped more than $1 billion each, according to estimates by the Bloomberg Billionaires Index.The rewards for the men—and they’re all men—are notable, especially given only a third of the 15 managers on the list beat the S&P 500 Index’s 29% gain last year. It also comes as the hedge fund industry has been grappling with closures and mediocre returns.”

The Carnage of Establishment Neoliberal Economics

Harvard's president intervened to deny tenure to a rising-star economist because he publicly supports a wealth tax is an important data point for a lot of things.
[New York Times quoted on Twitter, via Naked Capitalism 2-22-20]
Last year, the faculty at Harvard’s Kennedy School of Government voted to offer Mr. Zucman, 33, a tenured position. But Harvard’s president and provost nixed the offer, partly over fears that Mr. Zucman’s research could not support the arguments he was making in the political arena, according to people involved in the process. He has since been awarded tenure alongside Mr. Saez, 47, at the University of California, Berkeley.
This is an example of how the economics profession attempts to drive out heterodox ideas. Harvard's president is Lawrence Seldon Bacow, "majored in economics as an undergraduate at MIT, then earned a law degree and a PhD in public policy at Harvard."

Playing Scrooge in “The Best Economy Ever”
[The Big Picture 2-16-20]




Invictus
@TBPInvictus
In the "greatest economy ever," Trump is limiting Federal pay raises because of "national emergency or serious economic conditions affecting the general welfare." You literally cannot make this stuff up.

Image
5:12 AM · Feb 11, 2020
[Forbes, via The Big Picture 2-16-20]


Health Care Crises

Here’s what coronavirus does to the body
[National Geographic, via Naked Capitalism 2-17-20]

[Current Affairs, via Naked Capitalism 2-17-20]

Improving the prognosis of health care in the USA 
[The Lancet, via Naked Capitalism 2-16-20]
Coming from one of the leading medical professional journals in the world, the endorsement of “Medicare for All” is significant. Lancet has made the article free of charge if you are will to register.

Although health care expenditure per capita is higher in the USA than in any other country, more than 37 million Americans do not have health insurance, and 41 million more have inadequate access to care. Efforts are ongoing to repeal the Affordable Care Act which would exacerbate health-care inequities. By contrast, a universal system, such as that proposed in the Medicare for All Act, has the potential to transform the availability and efficiency of American health-care services. Taking into account both the costs of coverage expansion and the savings that would be achieved through the Medicare for All Act, we calculate that a single-payer, universal health-care system is likely to lead to a 13% savings in national health-care expenditure, equivalent to more than US$450 billion annually (based on the value of the US$ in 2017). The entire system could be funded with less financial outlay than is incurred by employers and households paying for health-care premiums combined with existing government allocations. This shift to single-payer health care would provide the greatest relief to lower-income households. Furthermore, we estimate that ensuring health-care access for all Americans would save more than 68 000 lives and 1·73 million life-years every year compared with the status quo.
Fed Chair Jerome Powell calls out massive US health spending, says Americans are ‘getting nothing’ in return 
[Business Insider, via Naked Capitalism 2-18-20]
One study published in the Journal of the American Medical Association last year estimated that nearly a quarter of that spending — up to $935 billion a year— was wasteful, with failures of care delivery and coordination eating up most of the nation's mismanaged health expenditures.
The American Health Care System Costs Four Times More Than Canada’s Single-Payer System (and the Public Option Won’t Help)
Lambert Strether [Naked Capitalism 2-19-20]
Labor’s civil war over ‘Medicare for All’ threatens its 2020 clout 
[Politico, via Naked Capitalism 2-19-20]

[American Journal of Medicine, via Naked Capitalism 2-19-20]
At year+2, 42.4% depleted their entire life's assets, with higher adjusted odds associated with worsening cancer, requirement of continued treatment, demographic and socioeconomic factors (ie, female, Medicaid, uninsured, retired, increasing age, income, and household size), and clinical characteristics (ie, current smoker, worse self-reported health, hypertension, diabetes, lung disease) (P<.05); average losses were $92,098. At year+4, financial insolvency extended to 38.2%, with several consistent socioeconomic, cancer-related, and clinical characteristics remaining significant predictors of complete asset depletion.
“Election 2020: State Health Care Snapshots” 
[Kaiser Family Foundation, via Naked Capitalism 2-20-20]
“To understand the health care landscape in which the 2020 election policy debates will unfold, these state health care snapshots provide data across a variety of health policy subjects, including health care costs, health coverage—Medicaid, Medicare, private insurance—and the uninsured, women’s health, health status, and access to care. They also describe each state’s political environment.”
Private Equity’s War to Preserve Surprise Billing
[Naked Capitalism 2-21-20]

Matt Stoller [via Naked Capitalism 2-21-20]

Restoring balance to the economy

Giving money to residents, no strings attached 
[Politico, via Naked Capitalism 2-17-20]
“Local leaders across the United States are turning to private donors to fund an out-of-the-box policy experiment they think could go mainstream: Giving cash to residents, no strings attached.”

Information Age Dystopia

Proposed Ethos Capital purchase of .ORG operator Public Interest Registry 
[Americans for Financial Reform and Electronic Frontier Foundation, via Naked Capitalism 2-22-20] 
Letter to various FTC honchos opposing planned private equity looting.
The financial structure of the proposed $1.135 billion transaction would impose a significant $360 million debt service load on the new company that would create an incentive for PIR LLC to exercise its monopoly power to the detriment of its consumers and the millions more people who visit their websites, access their services through the Internet, or participate as supporters, donors, members, or civic participants.... 
 The transaction’s private equity-imposed debt load would likely prevent PIR LLC from relying solely on PIR’s existing business model of charging modest annual fees to non-profit organizations for .ORG domain registrations. The attached correspondence to the Internet Corporation for Assigned Names and Numbers, which coordinates the operation and maintenance of the internet’s domain name system, describes how the financial terms of the transaction are likely to force PIR LLC to take advantage of its monopoly position to pursue new revenue streams and business models that harm its consumers. 

Creating new economic potential - science and technology

[New Atlas, February 21, 2020, via Mike Norman Economics 2-21-20]
....the design is "a largely empty metal sphere, where a modestly sized HB11 fuel pellet is held in the center, with apertures on different sides for the two lasers. One laser establishes the magnetic containment field for the plasma and the second laser triggers the ‘avalanche’ fusion chain reaction. The alpha particles generated by the reaction would create an electrical flow that can be channeled almost directly into an existing power grid with no need for a heat exchanger or steam turbine generator."
HB11's Managing Director Dr. Warren McKenzie clarifies over the phone: "A lot of fusion experiments are using the lasers to heat things up to crazy temperatures – we're not. We're using the laser to massively accelerate the hydrogen through the boron sample using non-linear forced. You could say we're using the hydrogen as a dart, and hoping to hit a boron , and if we hit one, we can start a fusion reaction. That's the essence of it. If you've got a scientific appreciation of temperature, it's essentially the speed of atoms moving around. Creating fusion using temperature is essentially randomly moving atoms around, and hoping they'll hit one another, our approach is much more precise."

“Electric bacteria create currents out of thin—and thick—air” 
[Science, via Naked Capitalism 2-18-20]
“Generating electricity from thin air may sound like science fiction, but a new technology based on nanowire-sprouting bacteria does just that—as long as there’s moisture in the air. A new study shows that when fashioned into a film, these wires—protein filaments that ferry electrons away from the bacteria—can produce enough power to light a light-emitting diode. The film works by simply by absorbing humidity from the surrounding air. Though researchers aren’t sure exactly how these wires work, the tiny power plants pack a punch: 17 devices linked together can generate 10 volts, which is enough electricity to power a cellphone…. Researchers are also just starting to learn how electron-conducting bacteria function.” 
‘We are literally making electricity out of thin air;’ UMass develop groundbreaking technology that will change the way we power electronics
[MassLive, via Naked Capitalism 2-22-20]
“Has the wooden skyscraper revolution finally arrived?” 
[CNN, via Naked Capitalism 2-19-20]
“Soaring above the neighboring Mjøsa lake, more than 100 kilometers (62 miles) north of Oslo, the 280-foot-tall Mjøstårnet tower became the world’s tallest timber building when it opened last year. The 18-story structure contains apartments, office space and the aptly named Wood Hotel. And beyond putting a small town on the world map, it has added to a growing body of evidence that timber can provide a sustainable alternative to concrete and steel… The record-breaking feat was realized thanks to a type of engineered wood called cross-laminated timber, or CLT. Part of a larger group of materials known as mass timber, it is produced by gluing strips of laminated wood together at 90-degree angles to one another, before they’re compressed into huge beams or panels under extreme pressure…. The construction and operation of buildings accounts for 40% of the world’s energy consumption, and approximately one-third of greenhouse gas emissions. But while concrete emits a huge amount of carbon, trees instead absorb it throughout their lifetime.” 



Wind Industry Experiences Third Strongest Year on Record With 9,143 MW of Wind Power Added to U.S. Grid
[American Wind Energy Association, 29 January 2020]
The wind industry experienced its third strongest year on record in 2019 as project developers added 9,143 megawatts (MW) of wind power capacity to the grid—enough to power over three million American homes. On the heels of this activity, another 44,000 MW of wind projects – representing over $62 billion in investment – are either under construction or in advanced development. Utilities and businesses also set a new record in 2019, announcing 8,726 MW in new Power Purchase Agreements (PPAs). And East Coast states continue to drive demand for offshore wind energy with 16 GW in new offshore wind targets pledged in 2019—more than doubling previous state targets. These findings and the latest industry data are highlighted in the newly released U.S. Wind Industry Fourth Quarter 2019 Market Report by the American Wind Energy Association (AWEA). 
“The demand and growth of U.S. wind energy can’t be understated,” said AWEA CEO Tom Kiernan. “Today, there are nearly 60,000 wind turbines spinning across 41 states powering the equivalent of over 32 million American homes.
Put it in the books: Final 2019 numbers show wind power on the rise
[American Wind Energy Association, 30 January 2020]
It was hard to keep up with all the big offshore wind announcements in 2019—six states up and down the East Coast announced 16,300 MW of new offshore wind targets. That more than doubled previous offshore wind commitments, which now stand at more than 25,000 MW. 


As electric car sales soar, the industry faces a cobalt crisis 
[Wired, via Naked Capitalism 2-22-20]

Disrupting mainstream politics

Trump edges out all top 2020 Democratic candidates except Sanders 
[The Hill, via Naked Capitalism 2-21-20]

"We're almost about 2 million more voters than we had four years ago during the presidential race," Wallace says. "It's almost like we added Connecticut – all of their voters in the state of Texas in the middle of a presidential cycle."
Noam Chomsky: Trump Is Consolidating Far-Right Power Globally 
(interview) Noam Chomsky [Truthout, via Naked Capitalism 2-17-20]
It is quite remarkable to see how effectively alternative reality is created. Iran is typical, but the successes are far broader. Consider the charge that “China is killing us,” stealing our jobs, joined by “Mexican robbers.” How is China killing us? Did China have a gun to the head of CEO Tim Cook of Apple, ordering him to end the last vestige of production of Apple computers in the U.S.? Or Boeing, or GM, or Microsoft, or any of the others who have shifted production to China? Or were the decisions made by bankers and investors in corporate boardrooms in New York and Chicago? And if the latter, is the solution to wave a fist at China or to change the mode of decision-making in the U.S. — by shifting it to the hands of stakeholders, workers and communities, or at least giving them a substantial role, as democratic theory would suggest? It seems a fairly obvious question. Oddly, it isn’t raised, while the official mantra persists unperturbed.





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