Sunday, August 30, 2020

Week-end Wrap – Political Economy – August 30, 2020

Week-end Wrap – Political Economy – August 30, 2020
by Tony Wikrent

Strategic Political Economy

Articles of impeachment drawn up against Gov. Mike DeWine over coronavirus orders
[, via Naked Capitalism 8-26-20]
A key principle of republicanism is public virtue: if your self-interests conflicts with the general welfare, you have a duty to not oppose the general welfare. Clearly, the principle of republicanism is dead in this country, hence, it is no longer a republic. Some of the most discomfiting passages from the speeches and writings of the foundering era of USA dealt with the issue of a people becoming unfit to govern themselves.

Another key principle of republicanism is that citizens must not be dependent on anyone else if they are to be able to judge public affairs with sufficient disinterestedness to make the general welfare their major concern. This principle created major problems, however, as it was used to justify restricting the vote on "men of means" only. This created an opening for ruling elites to establish oligarchy, especially in the South. In practice, it meant white supremacy. As Dayen writes below: "The way you control labor is that you don’t pay enough to ever have workers be comfortable."

The Logic of the Boss
David Dayen, August 27, 2020 [American Prospect]
The absolute last person you should ever ask about a labor action connected to racial justice is Jared Kushner. So of course CNBC did just that this morning. Kushner told Andrew Ross Sorkin: "The NBA players are very fortunate that they have the financial position where they’re able to take a night off from work without having to have the consequences to themselves financially." 
There’s an implicit logic of the boss embedded in here. The way you control labor is that you don’t pay enough to ever have workers be comfortable. You keep people reliant on the boss so they never get crazy ideas in their head like using their power for positive change, for themselves or the society at large. 
In the 1960s, cheap college tuition and a lower cost of living gave space to young antiwar radicals to devote themselves to sustained protest. The diminishing of higher-education support and the rise of student loans weren’t exactly responses, but it was a nice side benefit. The cleaving away of labor from productivity, the skyrocketing of inequality, the breaking of the labor movement, a federal minimum wage that hasn’t increased since the second Bush administration—this all snuffs out personal agency and the ability to speak out. Keep someone dependent on their paycheck, and their health insurance too, and you’ve put a lid on mass action. 
The NBA is leading the way together, and Jared Kushner wants to keep people afraid and alone.

Sunday, August 23, 2020

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

Week-end Wrap – Political Economy – August 23, 2020
by Tony Wikrent

The Pandemic

[Twitter, via Naked Capitalism Water Cooler 8-20-20]
Estimated cost of recent epidemics/pandemics:
SARS (2003) - $40 billion
H5N1 (2006) - $40 billion
H1N1 (2009) - $45 billion
Ebola (2014) - $55 billion
COVID-19 (2020) - $8.8 TRILLION
Investing in public health preparedness is FAR cheaper than the economic impact of a pandemic.
3:57 PM · Aug 19, 2020
Something Remarkable Just Happened This August: How the Pandemic Has Sped Up the Passage to Postcapitalism
Yanis Varoufakis, August 22, 2020 [Lannan Foundation, via Naked Capitalism]
Following the crash of 2008, capitalism changed drastically. In their attempt to re-float the crashed financial system, central banks channelled rivers of cheap debt-money to the financial sector, in exchange for universal fiscal austerity that limited the middle and lower classes’ demand for goods and services. Unable to profit from austerity-hit consumers, corporations and financiers were hooked up to the central banks’ constant drip-feed of fictitious debt. 
Every time the Fed or the European Central Bank or the Bank of England pumped more money into the commercial banks, in the hope that these monies would be lent to companies which would in turn create new jobs and product lines, the birth of the strange world we now live in came a little closer. How? 
As an example, consider the following chain reaction: The European Central Bank extended new liquidity to Deutsche Bank. Deutsche Bank could only profit from it if it found someone to borrow this money. Dedicated to the banker’s mantra “never lend to someone who needs the money”, Deutsche Bank would never lend it to the “little people”, whose circumstances were increasingly diminished (along with their ability to repay any substantial loans), it preferred to lend it to, say, Volkswagen. But, in turn, Volkswagen executives looked at the “little people” out there and thought to themselves: “Their circumstances are diminishing, they won’t be able to afford new, high quality electric cars.” And so Volkswagen postponed crucial investments in new technologies and in new high quality jobs. 
But, Volkswagen executives would have been remiss not to take the dirt-cheap loans offered by Deutsche Bank. So, they took it. And what did they do with the freshly minted ECB-monies? They used it to buy Volkswagen shares in the stock exchange. The more of those shares they bought the higher Volkswagen’s share value. And since the Volkswagen executives’ salary bonuses were linked to the company’s share value, they profited personally – while, at once, the ECB’s firepower was well and truly wasted from society’s, and indeed from industrial capitalism’s, point of view....
My difference with fellow lefties is that I do not believe there is any guarantee that what follows capitalism – let’s call it, for want of a better term, postcapitalism – will be better. It may well be utterly dystopic, judging by present phenomena. In the short term, to avoid the worst, the minimum necessary change that we need is an International Green New Deal that, beginning with a massive restructuring of public and private debts, uses public financial tools to press the oodles of existing liquidity (e.g. funds driving up money markets) into public service (e.g. a green energy revolution).

Sunday, August 16, 2020

Week-end Wrap – Political Economy – August 16, 2020

Week-end Wrap – Political Economy – August 16, 2020
by Tony Wikrent 

The pandemic

Do Masks Work Or Not?? Proving Whether Masks Stop Covid-19 Transmission with Uncle Rob [YouTube, via Naked Capitalism Water Cooler 8-11-20] 
If you know someone who insists wearing masks does not work, or COVID is a hoax, get them to watch this, And remind them they have responsibilities, not just free-dumbs.   

Lee Nackman, August 13, 2020
Lee Nackman is president of the Progressive Caucus of the North Carolina Democratic Party
This is a two-step proposal to save America: (1) Defeat the virus by a serious lockdown and (2) help people through it by giving them plenty of money to meet their needs (and possibly more) during the lockdown.

It gives money directly to the people and it gives every working-age person the same amount regardless of whether or not they “need” it. This keeps the program simple, free of excessive bureaucracy, and fair. It costs a lot but delivers a lot. It puts decision-making about what businesses to support in the hands of the people who know best, not in the hands of lobbyists and campaign contributors. Both Democrats and Republicans should like parts of it.

[Reuters, via Naked Capitalism Water Cooler 8-12-20] 
“Farmers routinely make changes to their acreage intentions as the calendar advances, substituting in different crops if the weather mucks up their original plans. But leaving the ground bare is new territory for U.S. farmers who typically plant fencerow to fencerow, trying to squeeze profit out of every available acre. The most recent acreage data from the government showed corn and cotton plantings in particular were far below initial expectations, with corn seedings in June dropping the most from March in 37 years. The coronavirus pandemic caused many farmers to give up on their corn crop before it was even in the ground.”

“How The Pandemic Humiliated Critics Of Medicare for All” 
[Walker Bragman, Too Much Information, via Naked Capitalism Water Cooler 8-14-20] 
 “When the novel coronavirus first arrived in the United States, it spurred on remarkable message discipline among America’s political class. The consensus that emerged on both sides of the aisle dictated that no matter what happened, Americans ought to be glad they do not live in a country with socialized medicine…. [N]ow, just a few months later, these arguments completely and utterly fail. New infections are still surging in the U.S. while countries with national health care programs have long since gotten a handle on the virus. On Tuesday, the U.S. reported more new COVID cases in a single day than Italy, France, and the U.K. reported last month combined, and roughly 45 percent of their total deaths.”

Sunday, August 9, 2020

Week-end Wrap – Political Economy – August 9, 2020

Week-end Wrap – Political Economy – August 9, 2020
by Tony Wikrent

Kansas Should Go F— Itself 
Matt Taibbi, August 2, 2020
Review of Thomas Frank’s new book The People, No: A Brief History of Anti-Populism 
Frank published What’s the Matter with Kansas? in 2004, at the height of the George W. Bush presidency. The Iraq War was already looking like a disaster, but the Democratic Party was helpless to take advantage, a fact the opinion-shaping class on the coasts found puzzling. Blue-staters felt sure they’d conquered the electoral failure problem in the nineties, when a combination of Bill Clinton’s Arkansas twang, policy pandering (a middle-class tax cut!) and a heavy dose of unsubtle race politics (e.g. ending welfare “as we know it”) appeared to cut the heart out of the Republican “Southern strategy.”

Yet Clinton’s chosen successor Al Gore flopped, the party’s latest Kennedy wannabe, John Kerry, did worse, and by the mid-2000s, Bushian conservatism was culturally ascendant, despite obvious failures. Every gathering of self-described liberals back then devolved into the same sad-faced anthropological speculation about Republicans: “Why do they vote against their own interests?”

Frank, a Midwesterner and one of the last exemplars of a media tradition that saw staying in touch with the thinking of the general population as a virtue, was not puzzled....

Frank ripped the political strategy of Clinton Democrats, who removed economic issues from their platform as they commenced accepting gobs of Wall Street money in a post-Mondale effort to compete with Republicans on fundraising. Gambling that working-class voters would keep voting blue because “Democrats will always be marginally better on economic issues,” New Democrats stopped targeting blue-collar voters and switched rhetorical emphasis to “affluent, white collar professionals who are liberal on social issues.”.... Perceiving correctly that there would be no natural brake on this phenomenon, since the executive set was able to pay itself more and more as the country grew more divided, Frank wondered, “Why shouldn’t our culture just get worse and worse, if making it worse will only cause the people who worsen it to grow wealthier and wealthier?”

When I was first sent out to cover the Donald Trump campaign years later, I assumed the editorial concept would be simple: mockery. New York’s infamous “short-fingered vulgarian” had taken over national headlines in the summer of 2015 with a foul-mouthed stream-of-consciousness rap, organized around an impossible Pharaonic wall project and scare tales about rape-happy Mexicans – the Diceman doing Pat Buchanan. If this was taking over the Republican Party, there wasn’t much to report. The enterprise was doomed, and journalism’s only mission was to make sure the silliest bits were captured before being buried under the sands of history.

Twenty minutes into my first Trump campaign event, I knew this was wrong, and was seized by a sinking feeling that really hasn’t left since. Trump in person sounded like he’d been convinced to run for president after reading What’s the Matter with Kansas? His stump act seemed tailored to take advantage of the gigantic market opportunity Democrats had created, and which Frank described. He ranted about immigrants, women, the disabled, and other groups, sure, but also about NAFTA, NATO, the TPP, big Pharma, military contracting, and a long list of other issues.

America Is About To Feel Like A 3rd World Nation 
Ian Welsh, August 7, 2020
America’s about to make a double digit percentage of its population homeless. Something like 20 to 30%, or more of American small businesses have or will shut down by the end of the pandemic. The jobs won’t all come back and those that do will pay worse and feature worse treatment than the ones before (which were mostly not well paid and featured routine meanness.) We’re talking about 30 million to 60 million homeless.... 

America is “undeveloping.” It is moving from being a developed nation to being an undeveloped nation.

“A Historian of Economic Crisis on the World After COVID-19” (interview with Adam Tooze)
[New York Magazine, via Naked Capitalism Water Cooler 8-7-20]

Why has the balance of power between governments and bondholders shifted so dramatically? Or was the figure of the “bond-market vigilante” — who would punish states for excessive spending by dumping their debt — always a bogeyman in the developed world? 

To be honest, I think we’re all still struggling to figure this out. To offer a definitive answer would not only be conceited on my part; it would fail to capture the slightly shocking historical novelty of the situation. I feel like we’ve all just stumbled out of a cave into this wide-open space and are still blinking in the sun.

But if you ask me to put my finger on it, I would point to three elements. One is the political economy of inflation: the notion that democratic politics tend toward inflation. That was at the core of the entire complex of thinking around both central-bank independence and this idea of aggressive capital markets that defend the interests of wealth-holders against publics that are always trying to take that wealth away, whether through taxes or inflation. But the engine of this political economy was class antagonism. And that’s gone now because — as Warren Buffett has said — the class war is over, and his side won. And that changes the entire game.
The sense of flux is quite something. And I think it’s characteristic of this moment. The single thing that is most different from the ’90s is that orthodoxy just doesn’t seem very strong right now. We’re in a state of ferment. Much more so than in 2009, when people were just so panicked; they’d never seen quantitative easing before, and it was all a bit strange and weird. And then we kind of regressed to sadly conventional fiscal policy by 2010. Which could happen again. But at least in intellectual terms, the current moment is quite different from what it was in 2008.

Sunday, August 2, 2020

Week-end Wrap – Political Economy – August 2, 2020

Week-end Wrap – Political Economy – August 2, 2020
by Tony Wikrent

How to hide from a drone – the subtle art of ‘ghosting’ in the age of surveillance
[Tech Explore, via Naked Capitalism 7-29-20]

Strategic Political Economy

Chinese Banks Urged To Switch From SWIFT And Drop USD In Anticipation Of US Sanctions
[Reuters, via Mike Norman Economics 7-29-20]
China should prepare for potential U.S. sanctions by increasing use of its own financial messaging network for cross-border transactions in the mainland, Hong Kong and Macau, according to a report from the investment banking unit of Bank of China...

Foreign Affairs — It Is Time to Abandon Dollar Hegemony–Issuing the World’s Reserve Currency Comes at Too High a Price
[Foreign Affairs, via Mike Norman Economics 7-29-20]
Time to resurrect Keynes (and E. F. Schumacher's) bancor proposal made at Bretton Woods but rejected in favor of using the US dollar as the global reserve currency? President Nixon famously ended the Bretton Woods agreement when he closed the gold window, ending dollar convertibility into gold at a fixed rate. This set the world on a floating rate monetary system with the USD remaining the reserve currency.
The War Nerd: Amateurs Talk Cancel, Pros Talk Silence
[Exiled, The War Nerd, via Naked Capitalism 7-27-20]
Victorian Britain carried out several of the biggest genocides in human history. It was also a high point of virtuous literature.
Because they were smart about language. They didn’t rant about the evil of their victims or gloat about massacring them, at least not in their public writings. They wrote virtuous novels, virtuous poems. And left a body count which may well end up the biggest in world history.
Open genocidal ranting is small-time stuff compared to the rhetorical nuke perfected by Victoria’s genocidaires: silence. The Victorian Empire was the high point of this technology, which is why it still gets a pass most of the time. Even when someone takes it on and scores a direct hit, as Mike Davis did in his book Late Victorian Holocausts, the cone of Anglosphere silence contains and muffles the explosion. Which is why Late Victorian Holocausts is Davis’s only book that didn’t become a best-seller. 
Davis was among the first historians with the guts and originality to look hard at some of the Victorian creeps who killed tens of millions — yes, tens of millions — of people from the conquered tropics: 
The total human toll of these three waves of drought, famine, and disease could not have been less than 30 million victims. Fifty million dead might not be unrealistic.” 
An English radical of the Victorian Era, William Digby, saw the scope of the horror: “When the part played by the British Empire in the nineteenth century is regarded by the historian fifty years hence, the unnecessary deaths of millions of Indians would be its principal and most notorious monument.”
....Let’s take a far more serious case: Eric Hobsbawm, still revered as canonical Marxist historian of the UK. As Davis notes, Hobsbawm does “mention” the Irish Famine, but — and if any phrase ever deserves to be written in all-caps, this phrase from Late Victorian Holocausts does: “Hobsbawm…makes no allusion in his famous trilogy on nineteenth-century history to the worst famines in perhaps 500 years in India and China.” 
There are no excuses for this. There are reasons, but as the song says, “It doesn’t make it all right.” Still, once the rage passes and you stop clenching your jaw ’til it aches, there are reasons. Most of all, there’s a deep Imperial skill in the trope of silence. The stupid Nazis ranted and raved and lasted 13 years, then got completely destroyed. The Empire kept its rants for private letters, passed on to a guild of coopted historians, pundits, and publishers—and has never been called to account.