Sunday, September 27, 2020

Week-end Wrap – Political Economy – September 27, 2020

Week-end Wrap – Political Economy – September 27, 2020
by Tony Wikrent

Slouching toward denouement 

Capitulation Will Not Halt Trump’s Coup
David Sirota, September 24, 2020
An important review of political events last week. Yoy may not agree with Sirota's interpretation, but his analyses has proven correct repeatedly. Remember that Sirota accurately outlined the future course of American politics in his 2008 book, The Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington
After Democrats spent the weekend signaling surrender on the Supreme Court vacancy and suggesting they have no appetite to fight over the judiciary or threaten to expand the court, Trump on Wednesday declared that he may not agree to a peaceful transfer of power, and he openly admitted that he is trying to rush through a judicial nominee so that the court can give him a second term. He suggested that he will “get rid of the ballots” and “there won't be a transfer, frankly. There'll be a continuation."
....Amid this onslaught, Democrats are behaving as if you can stop a coup merely by telling people to vote in an election where their ballots might get thrown out.  But the lesson here is the converse: Democrats’ culture of learned helplessness is no match for authoritarianism.
If opposition party [Democratic Party] lawmakers don’t stop imagining a return to normalcy and brunch — and if millions of Democratic voters don’t start immediately demanding that their party’s leaders begin fighting to stop Trump’s court pick right now — then whatever is left of American democracy is probably finished....
The Crescendo Of The GOP’s War On Democracy
What we see in this sequence of events is the simultaneous and horrifying culmination of the different kinds of “by any means necessary” pathologies that define each party. On the Republican side, this pathology is a relentless amoral quest for power that originally led the party into the realm of voter suppression and that now has resulted in a GOP president openly working to end democracy.

There is no pretense. There is no deception. This is a right-out-in-the-open attempt to destroy the system that lets voters choose their governmental leaders — and that initiative is happening not only in Washington, but in the states.

“According to sources in the Republican Party at the state and national levels, the Trump campaign is discussing contingency plans to bypass election results and appoint loyal electors in battleground states where Republicans hold the legislative majority,” The Atlantic reported yesterday....
The Democrats’ Learned Helplessness
This pathology has been long in the making. For years now, Democratic politicians have come to know that a generation of liberals raised on The West Wing and MSNBC roundtables has been inculcated to not merely tolerate selling out — but to laud it as an act of political savvy. If abandoning, say, pledges to support unions and helping the GOP grind workers into the dust theoretically helps a Democrat outmaneuver a Republican in a swing-state election, the Democratic voter is led to believe that this move must be Good, Smart and worthy of applause. Respect for institutions, bipartisanship and manners is more important than outcomes. 
Ironically, this capitulation-lauding mindset that prioritizes winning hasn’t actually won much — it has corresponded with some of the largest Democratic electoral losses in modern history, allowing the rise of the Republican fascism that now threatens to destroy our country.
David Sirota, September 20, 2020

Sunday, September 20, 2020

Week-end Wrap – Political Economy – September 20, 2020

Week-end Wrap – Political Economy – September 20, 2020
by Tony Wikrent 

  If this is the last Wrap for a while, this is the reason: “Google, nobody asked for a new Blogger interface”  [TenFourFox Development, via Naked Capitalism Water Cooler 9-17-20]  
“I’m writing this post in what Google is euphemistically referring to as an improvement. I don’t understand this. I managed to ignore New Blogger for a few weeks but Google’s ability to fark stuff up has the same air of inevitability as rotting corpses…. 
When I copy and paste an entire post, such as from RealEconomics (where I write it using Blogger) to IanWelsh or into email for distribution ALL THE LINKS ARE DESTROYED ! ! ! !  They still appear as links, but the URLs all go to the Blogger page I am writing on. HOW DID THIS MAJOR PROBLEM GET THROUGH QUALITY CONTROL? Is there any Quality Control? This is beyond crappification. This renders the new Blogger useless! 

Strategic Political Economy

Frederick Soddy’s Debt Dynamics [Economics from the Top Down, via Naked Capitalism 9-13-20]
In the field of ecological economics, Frederick Soddy looms large. Born in 1877, Soddy became a chemist and eventually won a Nobel prize for work on radioactive decay. Then he turned his attention to economics. Between 1921 and 1934, Soddy wrote four books that looked at how money relates to the physical economy. For his ground-breaking work, Soddy was rewarded with deafening silence.... Like a good natural scientist, Soddy insisted that human society is constrained by the laws of physics. Humans survive, he noted, by consuming natural resources. Exhaust these resources and we’re done for.
Think of humans (and our economy), says Soddy, like a machine. We transform energy into physical work. Like all machines, we’re bound by the laws of thermodynamics, which say that you can’t get something for nothing. Energy output requires energy input. That means humans are forever dependent on natural resources.
Now comes the problem. Our biophysical stock of resources — what Soddy called ‘wealth’ — is bound by the laws of thermodynamics. But money — which Soddy called ‘virtual wealth’ — is bound only by the laws of mathematics. Money can grow forever. Natural resource extraction cannot. This mismatch, Soddy claimed, is the root of most economic problems.

Monday, September 14, 2020

The People, NO—Thomas Frank's new book on anti-Populism

Thomas Frank is a brave man. He has decided to discover how the political movement of Populism has been degraded into a term of slander. This is a project long overdue because only a tiny fraction of those who use the term populism have any idea that this was once a fiercely debated set of ideas passionately believed by many people struggling to solve extremely difficult problems. In my experience, most people worldwide with a university education believe that a populist is an ignorant hick who is terrified of learning and modernity—a bad person to be shunned.

Like Frank, I believe that is a terrible, historically inaccurate, lie. Unfortunately that's the conventional "wisdom". Correcting this terrible ignorance requires far more patience than I have. When confronted with people with fancy degrees from name colleges who wrongly use the word populism to demonstrate their intellectual horsepower, I find it difficult to contain my rage. The reason is that their definitions of Populism bears almost zero relationship with the historical movement that invented the term. Frank got a Ph.D. from the University of Chicago so believes that these rotten examples of useless protoplasm can be reasoned with. The People, NO doesn't pull many punches. It is lovingly crafted—a graceful result of thousands of hours of hard work. Whether that is enough to change any minds...we'll see. But we can hope because real Populism is probably the only system of organized thought that has any chance of addressing the serious problems facing humanity these days.

Waiting for packages was a well-practiced skill of my youth. It was an unavoidable hazard of my small town life. I wanted to read Thomas Frank's latest book on the history of Populism, The People, NO, badly enough to go through the rituals of preordering and I still had a five-week wait. The reasons I wanted a first crack at this book include:
  • I have tried to read everything Frank has written ever since I got hooked by reading his The Conquest of Cool. Frank's writing is graceful, accurate, nuanced and complex without lapsing into pretentiousness. In Conquest, he tries to explain how and why the political and cultural passions of the 60s quickly faded into a costume show. As a survivor of the antiwar movement, I had seen multiple examples of exactly that phenomenon including in myself—long hair, bell-bottomed jeans, Red Wing work boots, army surplus shirts, etc. I was especially impressed when he wrote, "If I got it wrong, remember, I wasn't there." Yes, but he still got it very right. There's a lot to be said for diligent research.
  • Kansas is Frank's home. Over the years he has reminded us that historically, the Sunflower State can lay legitimate claim to having birthed the People's Party. And even though I have spent most of my life in Minnesota, Kansas has played an out-sized role in developing my own Populist inclinations. My father came from Kansas and his father farmed his whole life. My great grandfather came to Kansas from Sweden in 1873, the very year the USA would return to the gold standard after the Civil War—triggering the nasty agricultural depression that would essentially last until the outbreak of WW I. But he had two years of horticultural studies at the University of Lund so he not only survived, but had six 160 acre farms to distribute to his children after my great grandmother died during the Spanish Flu pandemic in 1918. Meanwhile, my mother's parents were struggling to keep their tiny farm alive in central Minnesota. This grandfather was a voracious reader and spent a significant fraction of his meager disposable income buying the Appeal to Reason and later, the Little Blue Books, both published in Girard Kansas.

Sunday, September 13, 2020

Week-end Wrap – Political Economy – September 13, 2020

Week-end Wrap – Political Economy – September 13, 2020
by Tony Wikrent

Strategic Political Economy

Some graphs and comments for LABOR DAY
Tony Wikrent September 7, 2020 [Real Economics]

Industrial Revolutionaries: To understand how to revitalize our economy, you only have to look back to the founders.
Ganesh Sitaraman, September 10, 2020 [The American Prospect]
As policymakers discuss what industrial policy should look like today, the four traditions in American industrial policy offer important lessons. First and foremost, any public policy that shapes or structures a sector of the economy is an industrial policy, even the Jacksonian approach, which rejects strategic planning in any coherent sense. The choice to let powerful individuals and corporations pursue the industries they want, structure them how they want, and lobby government for ad hoc policy changes is just as much of an industrial policy as anything else, albeit not a very good one. Indeed, the “return” of industrial policy is better described as a rejection of the Jacksonian tradition.
For those who advocate for a new industrial policy, the Hamiltonian tradition offers a natural starting point. But the risks inherent in the Hamiltonian approach should be particularly concerning at this moment. There is already a pervasive view that the system is rigged, captured and corrupted by the powerful. Industry concentration in sector after sector is at an apex, bringing economic and geographic inequality with it. Applying the Hamiltonian approach in narrow areas, like determining supply chain needs or the production of public-health materials in a crisis, is both inevitable and desirable. But the agenda for contemporary Hamiltonians must be more than advocating for industrial policy; it must also be designing policies to prevent regulatory capture, whether as a function of lobbying, the revolving door, or personal friendships and elite culture. Failure to do so threatens greater inequality of wealth and power, and with it, the possibility of oligarchy or another populist backlash. 
The Madisonian and Franklinian traditions, meanwhile, are in serious need of revival. Massive public spending in research and development, a public option for broadband and postal banking, and network infrastructure regulation, from tech platform rules to net neutrality, could provide a new foundation for discoveries and commerce. At the same time, antitrust enforcement and the revival of separation-of-function regimes in tech, telecom, banking, agriculture, pharmaceuticals, and other sectors will revitalize competition, enhance innovation, reduce the power of rent-seeking lobbyists, and ensure a more equitable economy through all regions of the country. These two traditions also work together as a system: Government-funded research and regulated network infrastructure provide the foundation and keep the country investing in a longer-term future; a competitive ecosystem sits atop that base, pursuing innovation in a manner that doesn’t concentrate wealth or power. 
The challenge for Madisonians and Franklinians is that their traditions have been deliberately attacked for decades by Jacksonians, so much so that they are largely forgotten, and if remembered, much maligned.

Monday, September 7, 2020

Some graphs and comments for LABOR DAY

For Labor Day today, David Sirota wrote:
if we hope to ever rebuild an economy that works for everyone, we’re going to need many more workers in unions and a much stronger labor movement.
and posted this graph:

Sirota continued:
This graph comes from the Economic Policy Institute — it shows the relationship between union density and the percentage of national income going to the richest 10 percent of Americans. As you can see, the larger the share of the American workforce that’s unionized, the lower the share of national income goes to the super-rich — and vice versa.
I would like to reinforce Sirota's point by adding a graph from Thomas Piketty's Capital in the Twenty-First Century, page 24.

Clearly, there are four shifts that occur:
  • Around 1928, when income inequality stops rising;
  • Around 1940, when income inequality begins to be overcome; 
  • Around 1945, when this improvement ends and income inequality remains about the same for the next three decades; and
  • Around 1980, when income inequality suddenly begins to worsen.

Sunday, September 6, 2020

Week-end Wrap – Political Economy – September 6, 2020

Week-end Wrap – Political Economy – September 6, 2020
by Tony Wikrent

RIP David Graeber

David Graeber, Caustic Critic of Inequality, Is Dead at 59
[New York Times 9-4-20]

Anthropologist David Graeber, the man behind ‘We are the 99%’ slogan, dead at 59
[RT, via Mike Norman Economics 9-3-20]

Graeber's 2001 book, Debt: The First 5000 Years, ruthlessly slaughtered one of the most sacred cows of mainstream economic orthodoxy -- that barter was the first means of economic transactions. Graeber conclusively marshaled the archaeological and anthropological evidence that debt older than both barter and cash. Unsurprisingly, orthodox economists have ignored Graeber's work to this day. 

R.I.P. David Graeber
Ian Welsh, September 5, 2020
At age 59, he had probably another 10 years and two or three books, possibly important, in him. 
De Gaulle quipped that “the graveyards are full of indispensable (people)” and mostly he’s right, most people’s deaths don’t matter much to anyone who didn’t know them. Someone will replace them who will do about as good a job. But an intellectual or artist worthy of the name is, in some sense, indispensable. There are works they will not do, and if they don’t do them no one will. 
I didn’t know Graeber, and I can’t claim to be personally sad. But he had important work still to be done, and no one will do it now. And without him to defend Debt from its attackers, it will lose luster and importance (because it’s the sort of book which must be destroyed by status-quo defenders, as it suggests capitalism is not what it claims to be.)
Manners, Deference, and Private Property: Or, Elements for a General Theory of Hierarchy
pdf, by David Graeber, 2007

Strategic Political Economy

Oligarchy and Democracy From the Civil War to the Present
Bill Moyers interview of Heather Cox Richardson, August 3, 2020 [CommonDreams]
Yes, the Civil War brought an end to the slave order of the South and the rule of the plantation oligarchs who embodied white supremacy. But the Northern victory was short lived — Southern ideals spread quickly to the West.
HEATHER COX RICHARDSON: And in that West, they discover a land that is already susceptible to the idea of racial and gendered hierarchies, because it has its own history of them. And it’s a place out there where the new American system happens to be a really fertile ground for the Confederate ideology to rise again. And that’s exactly what happens with the extractive industries in the West that encouraged the heavily capitalized cattle markets, for example, or mining industries, or later oil, or even agribusiness. You have in the West a development of an economy and, later on, a society that looks very much like the pre-Civil War South. And over the course of the late 19th century, that becomes part of the American mythology, with the idea that you have the cowboy in the West who really stands against what Southerners and Northern Democrats believe is happening in Eastern society, that a newly active government is using its powers to protect African Americans and this is a redistribution of wealth from taxpayers to populations that are simply looking for a government handout. That’s language that rises in 1871, and that is still obviously important in our political discourse.... 
But the image that has obtained in our textbooks and in our popular culture is the American cowboy, who is beginning to dominate American popular culture by 1866. And that cowboy — a single man, because women are in the cowboy image only as wives and mothers, or as women above the saloons in their striped stockings serving liquor and other things — is a male image of single white men. Although, again, historically a third of cowboys were people of color. It’s a single white man working hard on their own, who don’t want anything from the government. Again, historically inaccurate. The government puts more energy into the American plains than it does any other region of the country. But–