Sunday, June 28, 2020

Week-end Wrap – Political Economy – June 28, 2020

Week-end Wrap – Political Economy – June 28, 2020
by Tony Wikrent

The Epidemic

What To Look For In A Face Mask, According To Science
[, via Naked Capitalism 6-25-20]
Different researchers have set up devices that spray tiny droplets at fabric and then measured how much of it comes through the other side, while also measuring air flow to determine breathability. What they’ve found is that it’s less about the type of fabric — cotton, linen, silk — and more about the quality of fabric, according to Segal. Higher quality fabrics have a tighter weave and thicker thread that do a better job of blocking droplets from passing through.
But you also want the fabric to be breathable, according to Taher Saif, a mechanical engineer at the University of Illinois who has been researching face mask material. Saif said if breath can’t get through the mask, it will find another way out, allowing respiratory droplets to spread.
.... Segal offered a rule of thumb: hold the material up to a bright light. “Look at the light coming through the fabric,” Segal said. “If it outlines individual fibers and you can see the light through fabric, it’s probably not as effective. The less of that you can see, the better the filter.”
“Data map reveals the 23% of US counties that are currently seeing an uncontrollable growth in COVID-19 – as new model predicts Phoenix alone could see 28,000 new infections a DAY by July 18” [Daily Mail, via Naked Capitalism Water Cooler 6-26-20]
“Twenty three percent of counties across the United States are now seeing an uncontrollable growth in new COVID-19 infections, according to a data map... Phoenix could see 28,000 new cases a day by July 18.... large parts of the South and Southwest are showing an ‘epidemic trend’ or ‘spreading trend’ for new coronavirus infections…. Of the 3,141 counties across the country, 745 are currently experiencing an epidemic outbreak and 1,232 are seeing spreading trends, according to the data map. Nearly 670 counties are currently seeing a controlled trend in new coronavirus cases. According to the map, the entire state of Arizona is seeing either epidemic or spreading trends. ”  
A link to the map

The unintended impact of COVID-19 on cancer
[The Hill, via Naked Capitalism 6-21-20]
In April 2020, the IQVIA Institute for Human Data Science published a report that shined a light on the unintended impact of our response to the treat of COVID-19. According to the report, it is estimated that the delay in 22 million cancer screening tests will result in an increased risk of delayed or missed diagnoses for 80,000 patients.

Friday, June 26, 2020

Prod the Federal Reserve to save state and local governments

Many state and local governments have a fiscal year ending this month AND are required to have balanced budgets. This means that a tsunami of government layoffs is about to hit, and drive the entire economy deep into an economic depression. (The layoffs have already started – 1.5 million state and local government employees have been let go in the past two months).
This economic catastrophe will strike in the next few weeks as state and local governments struggle to balance budgets while experiencing an unprecedented collapse in revenues. Many states are reporting an expected drop in tax receipts of as much as 25 percent. County governments are also reporting the same size negative impact on their revenues. With state and local governments accounting for 14 percent of US GDP, we are about to see three to four percent of the national economy wiped out.
The Federal Reserve has the power and authority to head off this catastrophe in one 8 hour workday, as David Dayen explained in “The Federal Reserve Can End the State Fiscal Crisis Today.”  In the CARES Act, Congress authorized the Fed to establish a $500 billion Municipal Lending Fund (MLF). The Fed has used that MLF authority only once – to provide a $1.2 billion loan to the state of Illinois.
Moreover, the Fed can structure the MLF in any way it wants. It can effectively turn all loans to state and local governments into grants by eliminating the interest rate, indefinitely rolling over principal payments, or make them optional; or extend the maturities to 100 or 200 years, or any period selected.
On June 16, 2020  in “Growing Pressure on the Fed to Save State and Local Governments,”  David Dayen described a campaign now underway to create grassroots pressure on the Fed to provide large-scale emergency funding to state and local governments to avert this looming budget catastrophe. This campaign invokes the Federal Reserve’s legal mandate to maximize employment.
“Letters are being distributed among city and state officials right now urging the Fed to either fix the MLF or move to a 14(2) swap line with indefinite rollovers. This is an active and extremely worthy fight. The Fed is designed to protect employment and prevent recessions. State and local funding is the biggest threat out there. The Fed needs to do its job, not trifle with asset inflation.”
The full text of the letter was written by Cornell University Law School professor Robert Hockett, who has served as an adviser to Congresswomen Alexandria Ocasio-Cortez. Hockett’s six-page letter is addressed to Federal Reserve chairman Jerome Powell, and goes into minute detail about the Fed’s authority, how it has structured the Municipal Lending Fund (MLF) so far, and what changes the Fed can make to immediately solve the looming catastrophe to state and local government budgets. Hockett’s letter was printed in full in Forbes magazine on June 14, 2020, as “Optimize Community QE – An Open Letter to Fed Chairman Powell.”

Sunday, June 21, 2020

Week-end Wrap – Political Economy – June 21, 2020

Week-end Wrap – Political Economy – June 21, 2020
by Tony Wikrent

Countering the surveillance state 

IF YOU’RE TAKING to the streets to demand justice for the victims of police brutality and homicide, you may want to leave your phone at home. No matter how peaceful your behavior, you are at risk of getting arrested or assaulted by police. Cops might confiscate your phone and search it regardless of whether or not they’re legally allowed to, or they might try to break it, especially if it contains photos or video of their violent or illegal actions.\ 
At the same time, it’s a good idea to bring a phone to a protest so you can record what’s happening and get the message out on social media. Filming police is completely legal and within your rights, and it’s one of the few tools citizens have against police brutality. It’s also important to be able to communicate with others in real time or to find your friends in case you get separated....
If this is too expensive for you, you may have other options: If you have an old phone collecting dust in a drawer, as long as it still works and the battery still holds a charge, you can use this as your burner phone rather than buying a new one. You just need a new SIM card, like one that comes with prepaid cell service. Make sure to factory reset the phone before getting ready to protest....
The Markup published some good steps to take before bringing your primary phone into a protest, and the Electronic Frontier Foundation has a good guide as well.
How Police Infiltrate, Create Violence and Target Journalists 
Lee Camp [via Naked Capitalism 6-20-20]

Where most of the world's people live...

After Violent Clash, China Claims Sovereignty Over Galwan Valley for First Time in Decades 
[The Diplomat, via Naked Capitalism 6-17-20]

The writer of the New York Times article on this clash (which I do not link to) made no attempt to explain why this remote area with hardly any inhabitants would be disputed by the India and China. First, the glaciers of the Tibetan Plateau are the source of Asia's major rivers: Indus and Satluj of Indus river water system, Arun, Ghaghra and Gandak of Ganges river water system, Manas and Brahmaputra of Brahmaputra river water system, Yellow River, Yangtze, Mekong and Salween rivers.

Sunday, June 14, 2020

Week-end Wrap – Political Economy – June 14, 2020

Week-end Wrap – Political Economy – June 14, 2020
by Tony Wikrent

Strategic Political Economy

“Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.” -- Frederick Douglass
[via WallStreetonParade, June 1, 2020]

“America’s Moment of Reckoning”: Cornel West Says Nationwide Uprising Is Sign of “Empire Imploding”
[DemocracyNow, June 1, 2020]
The catalyst was certainly Brother George Floyd’s public lynching, but the failures of the predatory capitalist economy to provide the satisfaction of the basic needs of food and healthcare and quality education, jobs with a decent wage, at the same time the collapse of your political class, the collapse of your professional class. Their legitimacy has been radically called into question, and that’s multiracial. It’s the neofascist dimension in Trump. It’s the neoliberal dimension in Biden and Obama and the Clintons and so forth. And it includes much of the media. It includes many of the professors in universities. The young people are saying, “You all have been hypocritical. You haven’t been concerned about our suffering, our misery. And we no longer believe in your legitimacy.” And it spills over into violent explosion.
And it’s here. I won’t go on, but, I mean, it’s here, where I think Ella Baker and Fannie Lou Hamer and Rabbi Heschel and Edward Said, and especially Brother Martin and Malcolm, their legacies, I think, become more central, because they provide the kind of truth telling. They provide the connection between justice and compassion in their example, in their organizing. And that’s what is needed right now. Rebellion is not the same thing in any way as revolution. And what we need is a nonviolent revolutionary project of full-scale democratic sharing — power, wealth, resources, respect, organizing — and a fundamental transformation of this American Empire
“A Left Critique of the Current Protests” 
[Benjamin Studebaker, via Naked Capitalism Water Cooler 6-9-20] 
 “As long as we have millions of alienated, armed Americans, the police will never be abolished. Calls for their abolishment will instead result in privatisation. The Democratic mayors who run our cities want to avoid responsibility for the killings that are the result of decades of their own negligent policy. Privatising the police divests them of culpability. Privatised police will be even less accountable than publicly run departments. They’ll probably kill even more people. But when it happens, the cities can blame it on the contractors. They can simply fire one outfit and hire another. The anarcho-capitalists have wanted this for ages. They are chomping at the bit to use these protests to make it happen… Sadly, our organizations are inferior to the organizations of the anarchists and the woke neoliberals, and for this reason they will continue to hasten the victory of the right nationalists, much to our chagrin.”
An excerpt of an excerpt form Thomas Frank's new book on elites' opposition to populism
“The Pessimistic Style in American Politics” 
Thomas Frank [Harpers, via Naked Capitalism Water Cooler 6-11-20] 
This essay is excerpted from The People, No: A Brief History of Anti-Populism, which will be published next month by Metropolitan Books. 
“Populism” is the word that comes to the lips of the respectable and the highly educated when they perceive the global system going haywire. Populism is the name they give to the avalanche crashing down on the Alpine wonderland of Davos. Populism is what they call the mutiny that may well turn the supercarrier America into a foundering wreck. Populism, for them, is a one-word evocation of the logic of the mob: it is the people as a great rampaging beast....
So goes the wail of the American leadership class as they endure another year of panic. They know on some level that what has happened in Washington isn’t due to majority rule at all, but to money and gerrymandering and the Electoral College and decades of TV programming decisions. But the anxiety cannot be dislodged; it is beyond the reach of reason. The people are out of control....
This is the core assumption of what I call the Democracy Scare: if the people have lost faith in the ones in charge, it can only be because something has gone wrong with the people themselves. As Jonathan Rauch, a senior fellow at the Brookings Institution and a contributing writer at The Atlantic, put it in the summer of 2016: “Our most pressing political problem today is that the country abandoned the establishment, not the other way around.”
In basing our civilization on the consent of the plain people, it suddenly seemed, our ancestors had built on a foundation of sand. "Democracies end when they are too democratic," blared the title of a much-discussed essay by Andrew Sullivan in which the author applied his grad school reading of Plato to the 2016 campaign. Around the same time, an article in Foreign Policy expressed it more archly: it’s time for the elites to rise up against the ignorant masses....
In the 1880s.... something profound took place. The farmers—men and women of society’s commonest rank—figured out that being exploited was not the natural order of things. So they began taking matters into their own hands. In Kansas and a few other Western states, members of the group went into politics directly, and the People’s Party was born.
The Populists were the ones who blasted those smug assumptions to pieces, forcing the country to acknowledge that ordinary Americans were being ruined by an economic system that in fact answered to no moral laws.
From the very beginning, then, “populism” had two meanings. There was Populism as its proponents understood it: a movement in which ordinary working people demanded democratic economic reforms. And there was Populism as its enemies characterized it: a dangerous movement of groundless resentment in which demagogues led the disreputable.
Stephanie Kelton [New York Times, via Naked Capitalism 6-10-20] 
Prime Minister Margaret Thatcher of Britain — President Ronald Reagan’s partner in the conservative revolution of the late 20th century — captured these sentiments in a seminal speech in 1983, declaring that “the state has no source of money other than the money people earn themselves. If the state wishes to spend more, it can only do so by borrowing your savings or by taxing you more.” 
That thinking sounds reasonable to people, including me when I first absorbed it. But Mrs. Thatcher’s articulation of the deficit myth concealed a crucial reality: the monetary power of a currency-issuing government. Governments in nations that maintain control of their own currencies — like Japan, Britain and the United States, and unlike Greece, Spain and Italy — can increase spending without needing to raise taxes or borrow currency from other countries or investors. That doesn’t mean they can spend without limit, but it does mean they don’t need to worry about “finding the money,” as many politicians state, when they wish to spend more. Politics aside, the only economic constraints currency-issuing states face are inflation and the availability of labor and other material resources in the real economy. 
It is true that in a bygone era, the U.S. government didn’t have full control of its currency. That’s because the U.S. dollar was convertible into gold, which forced the federal government to constrain its spending to protect the stock of its gold reserves.
"Politics aside..." Well, the politics can be crucial. As in the political power of the intellectual zombies, including on the left (see below) who cling to their belief that there are finite limits to financial resources for monetarily sovereign governments. The gold standard is an interesting point, because some of the most prominent deniers of MMT are proponents of Austrian economics and neoliberalism. The gold standard constrained the USA because it was largely an instrument controlled by the British Empire through the City of London: a form of monetary empire intrinsically hostile to the American experiment in republican self-government. As Quinn Slobidian details in his book, Globalists: The End of Empire and the Birth of Neoliberalism, what the Austrian economists want to do is basically restore the economic hierarchy of the Austro-Hungarian Empire, another empire intrinsically hostile to the American experiment in republican self-government. 

But another part of the politics is this: while there are no finite limits to financial resources for monetarily sovereign governments, there are limits to what public opinion will let you do. Alexander Hamilton clearly understood this, when you read his plans for having the new national government assume all the Revolutionary War debt and monetize it: money is money only so long as people think it is money and accept it as such. Allow a bunch of economic reactionaries like the Austrians to infect a large enough part of the body politic with their beliefs, and you will get hard political limits. like the  bipartisan group of 60 members of the U.S. House of Representatives who issued a letter lasy week fretting about the trillions of dollars of new debt piled up in the response to COVID19. 

And one other limit, which depends on WHAT you do with that debt. I'm a bit uneasy with the trillions in COVID19 response because almost all of it is going to prop up already inflated financial assets that have little to do with real physical economic production. Debt should be issued and directed to building new productive economic capacity, so you end up with more goods being chased by more money, instead of the same amount of goods being chased by more money. 

“The scale of this crisis is unprecedented: now we need the radical thinking to address it” 
[Tax Research UK, via Naked Capitalism Water Cooler 6-12-20]  
“In that case we are not going to get a V-shaped recovery, with a quick bounceback. We are, instead, going to see a fundamental change in the level of economic activity for some time to come. That is precisely why I do think radical thinking, including a Green New Deal and the processes of change implicit within it, is necessary now. It is why I also think we need to radically rethink our relationship with what is supposedly called government debt, which is why I have issued a myth buster on that issue this morning. And yet many on the left seem to have no understanding on this. For them affordability is constrained. And debt repayment remains paramount. One of the reasons why I felt down in the last week was the consequence of exchanges with supposed progressive economists a week or so ago. They were vehemently anti-MMT. This now appears to be a necessary sign of virility or acceptability in the left of centre think tank world. John Weeks appeared quite without shame in calling MMT a cult on Twitter yesterday. The economists in question suggested that the public were right to be worried about debt, and that the goal should be to constrain it. There were issues of ‘sound finance’ involved, one said. Another described the ‘moral dimension‘ to debt and suggested it a sign of failure. These narratives play straight into the hands of the right. It is as if they wished for austerity. My belief that their comprehension of what debt really is, what it does, what its benefits are, and what it can do to deliver the economic transformation we require are exceptionally limited. But, I stress, these are people from the left, and I see the same attitudes in just about every left of centre think tank right now.”

Economic Armageddon

20 percent of US firms have debt service costs greater than profits
[Twitter, via Naked Capitalism 6-13-20] 
Adam Tooze @adam_tooze
Almost 20 percent of US firms now have debt service costs greater than their profits. @DeutscheBank via @SoberLook

The Carnage of Establishment Neoliberal Economics

Investors Were Being Blocked from Fund Withdrawals Months Before the Pandemic
Pam Martens and Russ Martens, June 8, 2020 [Wall Street on Parade]
Wall Street On Parade has previously written that a financial crisis was already well under way before the first case of COVID-19 was reported anywhere in the world. This should matter greatly to Americans because the Federal Reserve is attempting to blame the financial crisis on the virus to avoid Congressional investigations of its second epic failure in a dozen years at regulating the behemoth Wall Street banks.
America needs a comprehensive investigation of what really triggered this financial crisis in order to restructure the U.S. financial system away from a casino culture into one that doesn’t regularly need massive Federal Reserve and government bailouts....
This is the timeline of events suggesting that a financial crisis was in the works months before December 31, 2019....
[just one event excerpted here] 
September 17, 2019: The New York Fed announces it is intervening in the repo loan market for the first time since the financial crisis of 2007-2010. The Fed says it will provide a maximum of $75 billion per day to 24 Wall Street trading houses (primary dealers) with a cap of $40 billion going to any one firm. (This large cap suggests the New York Fed knows that one or more specific firms are in trouble.) There had been no news reports of coronavirus COVID-19 anywhere in the world at this point.
The Great American Housing Bubble
[Credit Slips, via Naked Capitalism 6-8-20]
Adam Levitin’s new book, The Great American Housing Bubble: What Went Wrong and How We Can Protect Ourselves in the Future. Yves Smith: “Levitin was Special Counsel to the Congressional Oversight Panel, so he had an insider vantage, and also worked a great deal behind the scenes with anti-foreclosure activists.”
The book is also a whodunnit regarding the housing bubble. It marshals a wealth of existing evidence plus some original hand-collected data to show definitively that this was a supply-driven bubble, and that the surfeit of underpriced mortgage finance was the product of the shift in financing from Fannie Mae and Freddie Mac to Wall Street securitization. The book explains why this shift happened and why the market wasn't able to detect and move against the deterioration in mortgage underwriting until it was already too late. In Clue parlance words, it was Mr. Moneybags, on the bond desk, with the CDO....
The 30-year fixed is a product we take for granted in America, but it is a uniquely American product. Long-term, fixed-rate, fully-prepayable mortgages are simply not standard products anywhere else in the world (except Denmark). The American mortgage is the product of substantial government interventions in the mortgage market, and it has been a bedrock of systemic stability and of financial security for the American middle class. The housing bubble was marked by the abandonment of the American mortgage for a set of products that resembled the high-risk bullet loans that characterized the pre-New Deal market.
‘Speaking of Looting…’: Trump Admin. Refuses to Disclose Corporate Recipients of $500 Billion in Coronavirus Bailout Funds 
[Journal of Economic Growth, via Naked Capitalism 6-11-20]
Abstract: Recent studies have examined the effect of political conflict and domestic terrorism on economic and political outcomes. This paper uses the rise in mass violence between 1870 and 1940 as an historical experiment for determining the impact of ethnic and political violence on economic activity, namely patenting. I find that violent acts account for more than 1,100 missing patents compared to 726 actual patents among African American inventors over this period. Valuable patents decline in response to major riots and segregation laws. Absence of the rule of law covaries with declines in patent productivity for white and black inventors, but this decline is significant only for African American inventors. Patenting responds positively to declines in violence. These findings imply that ethnic and political conflict may affect the level, direction, and quality of invention and economic growth over time.
America’s Big China Mistake
Clyde Prestowitz [Washington Monthly, via Naked Capitalism 6-8-20]
Not much of a mea culpa, but at least he recognizes he was wrong. Unlike the Obama Alumnus Club. And, Prestowitz continues to believe and promote the neoliberal animus against State-Owned Enterprises (SOEs).
Since President Nixon’s historic “opening to China” in 1972 and President Carter’s formal recognition of the communist regime in Beijing, U.S. policy has been to promote trade and investment with China. I myself was a leader of the first U.S. trade mission to Beijing in 1982. Our strategy then and thereafter was founded on the notion that free global trade and investment would stimulate not only economic growth but also the spread of democracy and peace....
But from early on, it should have been clear that this policy was misguided. The Clinton administration’s argument for bringing China into the WTO, widely supported by the economics and foreign policy establishment, was that doing so would liberalize China while dramatically reducing the U.S. trade deficit with Beijing. None of this took place. China became more authoritarian. The deficit mushroomed from about $80 billion annually to $500 billion. Many U.S. companies moved their factories to China to take advantage of cheap labor, the absence of unions, and the lack of safety and environmental regulations. Chinese State-Owned Enterprises (SOEs), meanwhile, began to raise billions of dollars of new capital by listing their shares on the New York Stock Exchange without meeting the same accounting standards as U.S. corporations.
George W. Bush and Barack Obama adopted similar policies, with similarly dangerous consequences. 
Why corporations buy woke insurance
[Twitter, via Naked Capitalism 6-10-20]
Zaid Jilani @ZaidJilani
Is it possible to convince corporate America that our lack of universal health care, guaranteed paid leave, or free community college is problematic and offensive so that every firm in America rushes to declare its support for these causes?
11:30 PM · Jun 9, 2020·Twitter Web App

Carlos Mucha @mucha_carlos
Replying to @ZaidJilani  and @jessesingal
Ha, my sides! Preventing any of that from happening is why corporations buy woke insurance. Companies publicly & financially support social liberal policy (racial justice, climate change, gay marriage) to buy allies against economic liberal policy.

Carlos Mucha @mucha_carlos  · Jun 5
Replying to @carney and @BreitbartNews
Swell, so they’re starting their own Ford Foundation. Raising starting wage to $15/hr (it’s $12/hr now) would cost Walmart billions. Spending $100M on social justice warrior projects buys them some “woke insurance” in case workers start demanding raises or, God forbid, a union.

The Pandemic

Convalescent Plasma: A COVID-19 Treatment Speeds to Clinical Trials 
[Public Health (from Johns Hopkins), via Naked Capitalism 6-10-20] 
“As soon as you have survivors, you have convalescent plasma,” Casadevall says. 
The development of antibiotics largely made convalescent plasma obsolete, but when new infectious diseases popped up that no one could treat, the treatment was dusted off and hauled out. Desperate physicians used the plasma to treat Ebola, SARS, and MERS, and a variety of anecdotes showed both safety and efficacy. So when COVID-19 came knocking, Casadevall knew immediately that the strategy would be worth trying—and testing. (In fact, researchers in China had begun piloting use of convalescent plasma in patients in late January.).... 
 “For the last decade, [Arturo] Casadevall [(Johns Hopkins)], [Michael] Joyner [(Mayo Clinic)], and a small cadre of like-minded colleagues had been pushing for the U.S. to spend more money on broad, one-size-fits-all public health measures rather than investing so much in personalized medicine. Convalescent plasma fit right in with this ethos. It was cheap and low tech, and it didn’t require months of innovation that the world simply didn’t have.”
“In Japan and France, Riding Transit Looks Surprisingly Safe” 
[CityLab, via Naked Capitalism Water Cooler 6-10-20]
Between May 9 and June 3, 150 clusters of new coronavirus cases emerged in France, according to the country’s national public health body. Defined as three cases or more of Covid-19 linked by contact, these clusters occurred largely in the sort of places you might predict they would: healthcare facilities, workplaces and homeless shelters — all sites where people mix in enclosed spaces for long periods of time and, in the case of hospitals, where people who are already infected are likely to congregate.
What was striking however, was the number of clusters associated with public transit: There weren’t any. For almost a month, not a single Covid-19 cluster had emerged on France’s six metro systems, 26 tram and light rail networks or numerous urban bus routes.
Given the enclosed, ill-ventilated nature of subways and buses and the ease with which they can crowd even during lockdown periods, this apparent lack of clustered cases might come as a surprise. But the results from France closely parallel reports from Japan, whose coronavirus containment strategy focused intently on finding these Covid-19 clusters rather than strict lockdowns, social distancing regulations and mass testing. As Science reported when Japan lifted its state of emergency in late May, most infection clusters there were connected to gyms, bars, music clubs and karaoke rooms; none were traced to the country’s famously crowded commuter trains.
A detailed timeline of all the ways Trump failed to respond to the coronavirus 
[The Hill, via Naked Capitalism Water Cooler 6-9-20] 
“‘Kentucky Gov. Andy Beshear (D) on Monday announced a plan to provide health coverage to 100 percent of African Americans in his state as part of an effort to address racial inequalities in health care. The governor made the announcement during his daily press briefing, saying he believes that health care is a ‘basic human right’ and vowed to use a multi-faceted campaign to prioritize black communities…. In Beshear’s plan, state-paid ‘health insurance connectors’ will be used to reach out to African American Kentucky residents and assist them in applying for insurance through Medicaid expansion, private plans or federal plans.”

Climate and environmental crises

“Decline and Fall: The Size and Vulnerability of the Fossil Fuel System” 
[Carbon Tracker, via Naked Capitalism Water Cooler 6-9-20] 
“The fossil fuel system is being disrupted by the forces of cheaper renewable technologies and more aggressive government policies. In one sector after another these are driving peak demand, which leads to lower prices, less profit, and stranded assets. The COVID-19 crisis is now accelerating this…. Our analysis finds falling demand, lower prices and rising investment risk is likely to slash the value of oil, gas and coal reserves by nearly two thirds, increasing the risk and likelihood of stranded assets.”
“Global Insect Collapse Driven By Industrial Farming, Says New ‘Insect Atlas'” 
[Common Dreams, via Naked Capitalism Water Cooler 6-9-20] 
“Insects keep the planet’s ecological system running, and ensure our food supply – 75% of our most important crops depend on pollination by insects. Insects also improve soil quality and reduce plant pests by decomposing manure and dead plant matter. The Insect Atlas shows that insect species and pollinators are in severe decline because of pesticide-dependent industrial farming.”
Earth’s carbon dioxide levels hit record high, despite coronavirus-related emissions drop 
[WaPo, via Naked Capitalism 6-7-20]

Information Age Dystopia

How to Spot Police Surveillance Tools 
[The Verge, via Naked Capitalism Water Cooler 6-11-20]   
“‘IBM firmly opposes and will not condone uses of any [facial recognition] technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and Principles of Trust and Transparency,’ [IBM CEO Arvind Krishna said in a letter to Congress today]. “We believe now is the time to begin a national dialogue on whether and how facial recognition technology should be employed by domestic law enforcement agencies.'”
[MIT News, via Naked Capitalism Water Cooler 6-11-20]    
“Standing by its commitment to provide equitable and open access to scholarship, MIT has ended negotiations with Elsevier for a new journals contract. Elsevier was not able to present a proposal that aligned with the principles of the MIT Framework for Publisher Contracts. … More than 100 institutions, ranging from multi-institution consortia to large research universities to liberal arts colleges, decided to endorse the MIT Framework in recognition of its potential to advance open scholarship and the public good. ”
How The Antifa Fantasy Spread In Small Towns Across The U.S. 
[Nieman Labs, via Naked Capitalism 6-11-20]

Creating new economic potential - science and technology

ISS astronauts create FIFTH STATE OF MATTER in space for first time ever
[RT, via Naked Capitalism 6-13-20]
A new study published in the magazine Nature suggests that scientists have used a small facility called the Cold Atom Lab (CAL) to create rare Bose-Einstein condensates (BECs), also known as the fifth state of matter. The CAL is capable of chilling atoms in a vacuum down to temperatures one 10-billionth of a degree above absolute zero – lower than in interstellar space. That’s why CAL – the size of a bedside table – has a reputation for being one of the coldest spots in the known universe. BECs occur when the temperature of an ensemble of atoms almost reaches zero. These gaseous clouds of atoms then act collectively, rather than individually. First predicted by Albert Einstein and Indian mathematician and physicist Satyendra Nath Bose 95 years ago, they weren’t observed in a lab until 1995.

Democratic Party leadership insists on suicide

“How ‘Never Trumpers’ Crashed The Democratic Party” 
[FiveThirtyEight, via Naked Capitalism Water Cooler 6-11-20]  
“But ‘Never Trumpers’ are increasingly involved in the Democratic Party and have gradually shifted their tactics in that direction — effectively becoming a ‘Never Trump’ and ‘Never Bernie Sanders’ coalition. And they appear to be having more success shaping their new party than the one that many of them had been associated with for much of their lives.” However, Lambert Strether observes: Republicans most definitely did not crash the Democrat Party; they were invited, starting at least with the changes Obama made to the 2008 platform preamble, which (relying on memory here, I’m clear on the concept but I’m too lazy to find the wording) argued strongly that two parties were important. That’s why Obama treated the Republicans as good faith bargainers on the ACA! That message morphed into “Leave the cray cray and join us!” from 2016 (replacing the “coalition of the ascendant” strategy that had previously been ascendant).
“Rush to Vote-by-Mail could cost Dems the Election” 
[Greg Palast, via Naked Capitalism Water Cooler 6-9-20]  
“In 2016, 512,696 mail-in ballots—over half a million—were simply rejected, not counted. That’s official, from the federal Elections Assistance Commission (EAC). But that’s just the tip of the ballot-berg of uncounted mail-in votes. A study by MIT, Losing Votes by Mail, puts the total loss of mail-in votes at a breathtaking 22%. Move to 80% mail-in voting and 25 million will lose their vote. And not just anyone’s mail-in ballots are dumped in the electoral trashcan. Overwhelmingly, those junked are ballots mailed by poorer, younger, non-white Americans.”
“The Consultant Class Ran the Bernie Campaign to the Ground & Disenfranchised the Grassroots” 
[Bernie 2020 Autopsy CA, via Naked Capitalism Water Cooler 6-10-20]

Neoliberalism requires a police state 

“Researchers on Atrocity Prevention Warn: US on Path to Widespread Political Violence” [JustSecurity, via Naked Capitalism Water Cooler 6-11-20]  
There is a voluminous literature on the main risk factors indicating an increased likelihood of state-sponsored mass atrocities against civilians (see e.g. here and here). We are worried that key indicators are now evident, and in fact increasing, in the United States. Prime examples include:
Pentagon War Game Includes Scenario for Military Response to Domestic Gen Z Rebellion 
[Intercept, via Naked Capitalism 6-13-20]
Documents obtained by The Intercept via the Freedom of Information Act reveal that a Pentagon war game, called the 2018 Joint Land, Air and Sea Strategic Special Program, or JLASS, offered a scenario in which members of Generation Z, driven by malaise and discontent, launch a “Zbellion” in America in the mid-2020s....
According to the scenario, many members of Gen Z — psychologically scarred in their youth by 9/11 and the Great Recession, crushed by college debt, and disenchanted with their employment options — have given up on their hopes for a good life and believe the system is rigged against them.... 
During face-to-face recruitment, would-be members of Zbellion are given instructions for going to sites on the dark web that allow them to access sophisticated malware to siphon funds from corporations, financial institutions, and nonprofits that support “the establishment.” ....In the world of JLASS 2018, Gen Z’s most militant members have essentially taken to privately taxing large corporations and other institutions to combat income inequality.... 

The Dark Side

Ransacking the Republic
[New York Review of Books, via Naked Capitalism 6-10-20]
Walter M. Shaub Jr. is a Senior Adviser to Citizens for Responsibility and Ethics in Washington, a nonprofit watchdog group promoting integrity in government. He resigned in protest as Director of the US Office of Government Ethics and a member of the Council of the Inspectors General on Integrity and Efficiency. 
These recent moves against inspectors general were not Trump’s first against law enforcement officials. When he came into office, he initially attempted to court Preet Bharara, US attorney for the Southern District of New York, by assuring him that his position was safe. Then he tried to telephone Bharara, who declined to speak with him because Justice Department policy restricts direct communication between US attorneys and the White House. After that, Trump included Bharara in a demand that dozens of Obama-appointed US attorneys resign. Bharara refused to do so, and Trump fired him. Although presidents have generally stayed out of the selection process for US attorneys to avoid appearing to politicize law enforcement, Trump then personally interviewed replacements for the Southern and Eastern Districts of New York and the District of Columbia. He also took a special interest in the search for a US attorney for the Southern District of Florida. What these four districts had in common was that their jurisdictions covered important business interests of the Trump family and that of Trump’s son-in-law, Jared Kushner.... 
Trump fired Attorney General Jeff Sessions the day after the 2018 midterm elections. The months Trump had spent berating Sessions for not ending the investigation of him and his campaign left no doubt as to the reason for the firing. Having also ousted Comey from his post as FBI director, Trump got away with decapitating the nation’s two top law enforcement agencies in retaliation for their investigating him....
Trump appears to recognize no line between his political career and the government’s administration of criminal justice.... 
Inside the White House, an obscure office may be laying the groundwork for a broader purge. Trump has packed the Presidential Personnel Office (PPO), which vets candidates for top political positions, with twenty-somethings—including three college seniors. The head of the PPO, Johnny McEntee, who recently turned thirty, is on his second tour of duty in the White House. During his first, he served as Trump’s “body man,” a kind of personal assistant. That job ended when he was reportedly escorted from the White House after failing to obtain a security clearance.... 
Now the Trump administration ignores congressional requests at will. Written demands for records and answers go without response. Administration officials have simply refused to testify before Congress. What has caused the breakdown is the dereliction of members of the president’s political party. The check on Trump should have been Congress. But there was no meaningful scrutiny of his administration during the first two years of his presidency, when Republicans controlled both chambers. Congressional Republicans did not hold a hearing on his decision not to divest his financial interests, unlike every president elected after the enactment of the Ethics in Government Act of 1978. They did not investigate Trump’s violation of the Foreign and Domestic Emoluments Clauses of the Constitution.... 
 Rather than investigating Trump’s conflicts of interest, congressional Republicans have seemed to revel in them. Since his inauguration, 128 members of Congress have visited his properties. Representative Jim Jordan, Republican of Ohio, spent campaign money at Trump’s hotel in Washington’s Old Post Office building, posed for giddy photos in its atrium, and let Trump’s eldest son host a fundraiser for him there. But House Minority Leader Kevin McCarthy, Republican of California, has Jordan beat in total billings: according to a 2019 news report, “McCarthy’s campaign, leadership PAC, and joint fundraising committees have spent a combined $245,884.44 at Trump properties.”

Sunday, June 7, 2020

Week-end Wrap – Political Economy – June 7, 2020

Week-end Wrap – Political Economy – June 7, 2020
by Tony Wikrent

Countering the surveillance state 

How to Cop-Proof Your Phone Before Heading to a Protest 
[Gizmodo, via Naked Capitalism 6-2-20]

How to protect yourself from rubber bullets—and why these ‘nonlethal’ weapons are so dangerous [Popular Science via Naked Capitalism 6-4-20]

Protest Safety: How to Protest During the Coronavirus Pandemic
[Teen Vogue via Naked Capitalism 6-4-20]

Strategic Political Economy

“What Trait Affects Income the Most?” 
[Economics from the Top Down, via Naked Capitalism Water Cooler 6-5-20] 
Why is it so difficult to abandon old myths? One reason is that these myths are used to rationalize social order. Take, as an example, the Earth’s orbit. It took the Catholic church nearly 400 years to admit that the Earth revolves around the sun.... After convicting the heliocentric proponent Galileo of heresy in 1633, the church banned heliocentric teachings for another two centuries (until 1822). It took another 170 years for the church to formally admit (in 1992) that Galileo was right. Think about that. Almost four centuries of denial for an idea that had no effect on daily life. All because it threatened the authority of those with power. The lesson here is simple. When ideas challenge authority, evidence will be ignored, denied and suppressed.
That brings me to economics.
The discipline of economics is the modern equivalent of the church. To legitimize authority, neoclassical economists preach dogmas that are manifestly false. But unlike the ethereal debate about the Earth’s place in the cosmos, economic dogmas have a huge impact on day-to-day life. They make the difference between tolerating inequality versus being enraged by it.
Neoclassical economics preaches that all is fair with the distribution of income. Income differences, the theory claims, stem from differences in productivity. As long as markets are competitive, people earn their ‘marginal product’. And so there’s no reason to redistribute income.
The reality is quite different. Income, I believe, is determined not by productivity, but instead largely by rank within a hierarchy. In other words, power begets income. The role of economics is to deny this uncomfortable reality. Economists reinforce hierarchies by denying their existence. Long and worth a read. Handy chart: