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: Democrats Have Power To Play Hardball, Too 

David Sirota, September 20, 2020

‘Everyone sees the train wreck coming’: Trump reveals his November endgame
[Politico, via Naked Capitalism 9-25-20]

Steve Bannon Says War Begins on Nov. 3rd – a podcast with Col. Lawrence Wilkerson
Paul Jay, September 21, 2020 [theAnalysis.news podcast]

Steve Bannon says only in-person voting should be counted on Nov. 3rd, and there will be a "war" to "stop Biden from stealing" the election. Larry Wilkerson says Trump's forces are creating conditions for violence in the streets if he is defeated. AOC calls on people to get organized to defeat Trump as part of a larger battle.

Op-Ed: Democrats have a secret weapon to thwart a rapid Ginsburg replacement. They should use it  Erwin Chemerinsky [via Naked Capitalism 9-20-20]
Chemerinsky is touted as the most prolific and most cited liberal scholar of the Constitution.


[Twitter, via Naked Capitalism 9-20-20] 

Matt Stoller
@matthewstoller
The biggest obstacle we will face in addressing the court problem isn't Mitch McConnell, it'll be @neal_katyal and elite lawyers. It's the legal liberal elites who are trained to worship the Supreme Court and disdain Congress.
11:42 AM · Sep 19, 2020

Matt Stoller
@matthewstoller
Sep 19
There's a reason Supreme Court clerks get $400,000 signing bonuses when they go to #biglaw firms. It's outrageous but fixable. The issue is populists are up against a religion of the elites, which is what the fetish for judges is about.

How Abraham Lincoln Fought the Supreme Court
[Jacobin, via Naked Capitalism 9-20-20]

Above all, the [Lincoln] Republican assault struck at the fundamental power of the judiciary. The Supreme Court, they argued, had the authority to decide particular cases, but not to settle larger political disputes over the meaning of the Constitution. 

Today, we call this power “judicial review,” but as scholars like Keith Whittington have argued, it really amounts to something much more like to “judicial supremacy,” and its roots are not legal or constitutional but themselves political. After Dred Scott, Republicans mounted a direct challenge to this power — perhaps the most aggressive popular attack on judicial supremacy in US history. “A Court makes a decision,” argued one New York legislator, “but does not make the law.”

Socialists Have Long Fought to Disempower the Supreme Court. That’s More Urgent Than Ever Now. 

[Jacobin, via Naked Capitalism 9-21-20]

“Ruth Bader Ginsburg and the Failure of Democratic Politics” 

[The New Republic, via Naked Capitalism Water Cooler 9-23-20] 

“[There has been] a growing obsession with celebrity among Democrats, as if celebrity itself could somehow transcend the grubby business of politics. With figures like Ginsburg and Barack Obama, this thinking went, the party could win the day on the back of its leading lights. Those pleading for Ginsburg to retire were brushed off, or branded as sexists. Meanwhile, the conservative machine installed a bunch of young jurists to the Supreme Court who might not be famous but will be determining the fate of this country for years to come.”

Lambert Strether observes: "Installed with the help of Democrats, one might add. Remember when Schumer waved through a bunch of Trump’s judges so the Senate could go on vacation?"

The Pandemic
How did Vietnam bring the spread of coronavirus to a halt — again? 

[ABC Australia, via Naked Capitalism 9-24-20]

Strategic Political Economy

In a US-China war, whose side is Southeast Asia on? Philippines, Singapore and Malaysia ponder the unthinkable
[SCMP, via Naked Capitalism 9-20-20]

“American Gentry” 
[Patrick Wyman, via Naked Capitalism Water Cooler 9-21-20]

"Ownership of the real, core assets is where the region’s wealth comes from, and it doesn’t extend down the social hierarchy… This class of people exists all over the United States, not just in Yakima. So do mid-sized metropolitan areas, the places where huge numbers of Americans live but which don’t figure prominently in the country’s popular imagination or its political narratives: San Luis Obispo, California; Odessa, Texas; Bloomington, Illinois; Medford, Oregon; Hilo, Dothan, Alabama; Green Bay, Wisconsin. … This kind of elite’s wealth derives not from their salary – this is what separates them from even extremely prosperous members of the professional-managerial class, like doctors and lawyers – but from their ownership of assets. Those assets vary depending on where in the country we’re talking about; they could be a bunch of McDonald’s franchises in Jackson, Mississippi, a beef-processing plant in Lubbock, Texas, a construction company in Billings, Montana, commercial properties in Portland, Maine, or a car dealership in western North Carolina. Even the less prosperous parts of the United States generate enough surplus to produce a class of wealthy people. Depending on the political culture and institutions of a locality or region, this elite class might wield more or less political power. In some places, they have an effective stranglehold over what gets done; in others, they’re important but not all-powerful. Wherever they live, their wealth and connections make them influential forces within local society. In the aggregate, through their political donations and positions within their localities and regions, they wield a great deal of political influence. They’re the local gentry of the United States.”

Predatory Finance

FinCEN Files Show Criminals Moved Billions As Banks Watched
[Buzzfeed, via Naked Capitalism 9-22-20]

A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it. 

Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries. 

These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees....

But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.

3-Count Felon, JPMorgan Chase, Caught Laundering More Dirty Money
Pam Martens and Russ Martens, September 21, 2020 [Wall Street on Parade]

ICIJ dropped a bombshell investigative report yesterday about money laundering for criminals at some of the biggest banks on Wall Street, but you won’t find a peep about it on the front page of today’s Wall Street Journal or New York Times’ print editions. In fact, the New York Times, as of 6:44 a.m. this morning, hasn’t reported the story at all. The Wall Street Journal carries an innocuous headline, “HSBC Stock Hits 25-Year Low,” putting the focus on the British bank, HSBC, when its focus should be on the largest bank in the U.S., JPMorgan Chase, a serial felon.

There’s a Pattern of Corporate Media Censoring News About Wall Street Banks’ Crimes
Pam Martens and Russ Martens, September 22, 2020 [Wall Street on Parade]

Wall Street On Parade has repeatedly written about critical reports showing serial corruption at these banks that have been censored by those Pulitzer prize winning media outlets. Yesterday provided another example: the New York Times refused to cover the International Consortium of Investigative Journalists’ stunning report on how five of the biggest banks on Wall Street have continued to launder dirty money for fugitives and suspected criminals. The Wall Street Journal, whose name suggests that perhaps its focus should be Wall Street, failed to put the story on its front page, opting instead to bury it under an innocuous headline about HSBC’s stock hitting a new low.

The same news blackout occurred last year when the public interest group, Better Markets, published an in-depth report on “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” Three days after the report came out, major news outlets were still refusing to cover the report.

Note that none of these reports on the filthy money of modern finance capitalism mention what I consider perhaps the most important point: these financial institutions are directed top-down by the highest elites of the Anglo-American establishment, including the "intelligence community."  As I wrote in February 2015, HSBC's board of directors included: 

Jonathan Evans, Lord Evans of Weardale, former Director-General of the British Security Service [MI5], the United Kingdom's domestic security and counter-intelligence service. You really think this guy does not know what HSBC is doing under his very nose while he's a director? Evans' presence on the board points to the intimate links between intelligence, drugs, and dirty banking that you're not supposed to talk about openly.

Even Matt Taibbi, Revenge of the Money Launderers, September 25, 2020, does mention this angle.  The connection between the illegal narcotics trade, the illegal arms, "respectable" financial institutions, and powerful intelligence agencies has been well documented in books by Celerino Castillo III and Dave Harmon; Alexander Cockburn and Jeffrey St. Clair; Michael Ruppert; Gary Webb, and others, but any mention of this criminality by ruling elites is very rarely mentioned or discussed.

The Carnage of Establishment Neoliberal Economics

Jamie Dimon and JPMorgan’s PAC Are Financially Supporting Mitch McConnell’s Reelection Bid
Pam Martens and Russ Martens, September 23, 2020 [Wall Street on Parade]

Nonetheless, Jamie Dimon’s public records at the Federal Election Commission (FEC) show that he has contributed $2800 to McConnell’s political campaign for this election cycle; another $2800 to WinRed, a political committee supporting Republicans; $5,000 to JPMorgan Chase & Co.’s PAC, which has, in turn, provided $5,000 to the McConnell Senate Committee, $30,000 combined to the National Republican Senatorial Committee and the National Republican Congressional Committee.

Last year CEOs pledged to serve stakeholders, not shareholders: You were right not to buy it

[Los Angeles Times, via The Big Picture 9-22-20]

In the year since the Roundtable statement, there have been few signs that major corporations have taken real steps to serve nonshareholders that they wouldn’t have taken without outside pressure, whether from public opinion or government regulation. 

Stakeholder Capitalism Gets a Report Card. It’s Not Good. 

[New York Times, via The Big Picture 9-22-20]

The pandemic and the movement for racial justice have tested corporate pledges to elevate social concerns alongside shareholder interests. A new study finds companies are failing to follow through. 

Milton Friedman’s Vision Has Failed. Let’s Bury It and Move On. 

[Barrons, via The Big Picture 9-21-20]

A half-century of promoting small government, efficiency, and corresponding “free” markets above all else hasn’t even succeeded on its own, far too narrow, terms. It has failed to generate higher growth or dynamism.

What Happened to Milwaukee’s Black Middle Class?

[The American Prospect, via Naked Capitalism Water Cooler 9-25-20]  

“The story we tell ourselves about the decline of American cities, especially in the Rust Belt, places the blame on deindustrialization and globalization. Yet, says Michael Rosen, retired Milwaukee Area Technical College (MATC) economics professor and former president of MATC’s faculty union, Milwaukee’s decline—and that of many cities across the country—was hardly inevitable. Business, he says ‘[broke] the social contract’ between management and labor and began a strategy of both union avoidance and outright union busting. ‘Capital declared war on labor in this town,’ he says, and it ‘decimated the Black community.’ Racist redlining kept Black families segregated, while many jobs moved into the suburbs—where public transit was not designed to reach.” • Surely globalization and breaking the social contract are both parts of capital having declared war on labor, and redlining is another tool in the war?

Amazon Employee Warns Internal Groups They’re Being Monitored For Labor Organizing

[Vice, via Naked Capitalism Water Cooler 9-25-20] 

 “An Amazon Web Services employee emailed a series of internal Amazon listservs and told them that their communications were being monitored for labor organizing efforts and processed in a data farming project by the company’s Global Security Operations, according to an internal email obtained by Motherboard. The emails were sent—at least—to the employee listservs “Indigenous@amazon.com” and “transgender@amazon.com,” and mentioned a handful of other listservs the employee believed were being watched…. The Amazon Web Services employee notes that this data was being used to track “Whole Foods Market Activism/Unionization Efforts, Internal Communications-Social Listening, Presence of Local Union Chapters and Alt Labor Groups, Presence of Community Organizations, Union Officials and Social Influencers.” Motherboard was unable to specifically verify this.”

Why Do Americans Give Away So Much Control to Corporations? Counterpunch. , 

Ralph Nader [via Naked Capitalism 9-21-20] 

Economic Armageddon: The COVID Collapsed Economy

Nearly 9 million people didn’t get stimulus payments. A GAO report asks why the IRS isn’t doing more to help.

WaPo, via Naked Capitalism 9-23-20]

Unsanitized: How the Muni Bond Market Is Preventing Economic Recovery
David Dayen, September 25, 2020 [American Prospect]

More important, if the Fed filled the gap, that $500 billion would be out of the muni markets, meaning those financiers would be denied the fees that go along with them. And this mentality has carried through to the government, through former muni traders now placed there.\ 

That includes Kent Hiteshew, who is running the MLF for the Fed. Prior to his stints at the Fed and at the Treasury Department he had a “30-year career in public finance on Wall Street,” another way of saying muni trader. The announcement of the Fed hiring described Hiteshew as a “veteran muni banker.” (while at Treasury, he also worked on the junta, the financial oversight commission, in Puerto Rico.) 

Hiteshew, in testimony before the COC last week, said that the MLF must not “replace private capital” and that the success of the MLF is based on “the condition of the municipal securities market.” During questioning, Hiteshew noted that his phone was ringing off the hook for the first time, alluding to his pals in the muni market. It was a moment where the mask slipped, and top officials revealed the influence peddling at work to deny the public sector needed relief. 

“It’s a very clubby sector of the financial services industry, they have a kind of oligopoly status,” said Hockett. “That in turn stays with people who leave to go to work in government.”

Restoring balance to the economy

Public Banking Institute Youtube: The Fed vs. the States with Prof. Robert Hockett, Michael Brennan, and Ellen Brown

In the wake of COVID-19, a mere 5% of the nearly $3 trillion CARES relief package was allocated to the 50 states, which remain desperately short of funds. Meanwhile, the Federal Reserve money helicopter flew directly to Wall Street and hovered. Banks can now borrow money virtually interest-free with no strings attached. States, on the other hand, can access the Fed only by selling bonds to it at more expensive market rates, plus penalty fees. What is behind this discrimination? What does it mean for the people? PBI Chair Ellen Brown talks with Cornell Prof. Robert Hockett and Michael Brennan, Democratizing Capital Policy Organizer for the Democracy Policy Network.

Popular Radicalism in the 1930S: The Forgotten History of the Workers’ Unemployment Insurance Bill 

[The Hampton Institute, via Naked Capitalism 9-24-20]

Health Care Crisis

“‘I Only Need To Stick Around 4 Or 5 More Years’: Doctor Shows How Horrific The US Healthcare System Is” 

[Bored Panda, via Naked Capitalism Water Cooler 9-22-20] 

Creating new economic potential - science and technology

The story of cheaper batteries, from smartphones to Teslas

[Ars Technica, via The Big Picture 9-23-20] 

In 2010, a lithium-ion battery pack with 1 kWh of capacity—enough to power an electric car for three or four miles—cost more than $1,000. By 2019, the figure had fallen to $156. The average cost of a kilowatt-hour of lithium-ion battery capacity should fall below $100 by the mid-2020s. 

Eating "only" half a bowl of shit

You’re Not Being Loyal By Staying Silent As Biden Depresses Voters

David Sirota, September 15, 2020

You’ll notice that Democratic vote-shamers rarely complain the other way. Typically, they lament progressive pressure, but don’t lament big donors constantly demanding ideological fealty to an incrementalist corporate agenda that makes sure nothing fundamentally changes — which inevitably leads to voter disillusionment.

They celebrate efforts to policy pander to affluent conservatives, but scoff at the notion of having to do any work to secure support from disaffected lower income Americans who might consider sitting the election out or voting third party because they are so completely disgusted with both parties.

In this world view, Democrats promising tax breaks to wealthy suburbanites is seen as laudable pragmatism and shrewd politics to attract affluent Republicans. By contrast, the idea of having to promise a Green New Deal to young people who see a lifetime of climate dystopia and think about voting third party — that’s seen as uncouth behavior and detestable pandering to petulant serfs who supposedly don’t deserve even minimal respect or attention. The political class tells us to pay them no mind — they are the electoral arena’s “no real person involved.” 

As an election strategy, this attitude presumes that Chuck Schumer was right in 2016 when he insisted that “for every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs in Philadelphia, and you can repeat that in Ohio and Illinois and Wisconsin.”

Of course, that theory has been electorally shellacked for a decade. And yet, these Democratic elites adhere to it — and vote-shame anyone who questions it — not because it has been successful and is the best strategy to win back Congress, expand health care or save the planet from climate change. They cling to the hypothesis because it at least provides a rationale — however absurd — to continue running campaigns whose number one directive is comforting the donor class.

We’ve Got Reasons to Elect Joe — He Isn’t One of Them

LA Progressive, September 25, 2020

What are progressives to make of this truly dire situation—and, most importantly, what are we to do? Right now. At this potentially cataclysmic moment, I haven’t seen better answers anywhere than on the new website NotHimUs.org, where a basic precept is laid out in big letters on the first screen: “We’ve got our own reasons to vote for Biden, and Joe ain’t one.” 

The next words are from Cornel West: “A vote for Joe Biden is . . . a way of preserving the condition for the possibility of any kind of democratic practice in the United States.”
The “Not Him Us” site goes on to ask a central question: “We wanted a political revolution. Now what?” The answers begin by reframing the current realities to include not just clear and present dangers but also great possibilities: 

• “It might not feel like it right now, but our movements are starting to win. In the streets: one of the most massive uprisings in our nation’s history is unfolding, demanding racial justice and systemic change. And in the halls of power: from Alexandria Ocasio-Cortez and Rashida Tlaib, to Jamaal Bowman and Cori Bush, more and more people’s champions are challenging a failed status quo — and winning.”
• “To continue to gain ground, we need to keep building our movements and elect more people’s candidates. But right now our forward trajectory depends on stopping Trump in his tracks. Our organizations, movements, and people’s candidates are engaged in an incredibly consequential contest for the future. If history is any guide, we cannot allow an authoritarian demagogue like Trump to continue to consolidate power.”

....Tweeting in support of the Not Him Us project last week, Naomi Klein wrote: “Vote for a more favorable terrain. Our struggle goes way beyond elections. We’re in the streets. We’re talking to our neighbors and co-workers. But who controls the presidency changes what’s politically possible for our struggles.”

In response to the launch of #NotHimUs, former Bernie Sanders senior advisor and speechwriter David Sirota tweeted: “This is good. This is the right message. It’s honest. It doesn’t try to pretend Biden is awesome. It doesn’t insult voters’ intelligence. It doesn’t try to insult or vote shame people into voting to defeat Trump. It makes a positive case.

Even the New Deal had to be forced on Roosevelt, Sam Pizzigatti explains in his great 2012 book, The Rich Don't Always Win: The Forgotten Triumph Over Plutocracy that Created the American Middle Class, 1900-1970. It is a mistake to focus only on the presidency. The ground work to provide a foundation for real change has always been at the state and Congressional level, and has always involved radicals winning seats in local and state governments, and in Congress. As I wrote in December 2013: 

....hoping to elevate one good progressive to the White House is a dangerous diversion from the job we need to do. The federal structure of government designed by the Founders – with political power diffused at the local, state, and national levels, overlaid with an institutional superstructure of three branches of government intended to check and balance each other – offers fissures and pressure points in the political system in which dominance by the rich is not complete and total. This reality is what progressives need to understand thoroughly, and use ruthlessly, to leverage political power where it can do the most good.

The Dark Side

“The Onion’s Guide To QAnon” 

[The Onion, via Naked Capitalism Water Cooler 9-22-20] 

“Q: What is QAnon? A: A conspiracy theory that posits world leaders are secretly evil rather than openly so.”

“Wall Street is shunning Trump. Campaign donations to Biden are five times larger”
[CNN, via Naked Capitalism Water Cooler 9-25-20] 

“Biden has raised $156,584 from individuals at Goldman Sachs (GS), according to OpenSecrets. With just $11,943 in contributions, Trump ranks a staggering 45th among federal campaign recipients — well behind House Speaker Nancy Pelosi, US Senator Lindsey Graham, Graham’s opponent Jaime Harrison and Andrew Yang, a CNN political commentator who has called for universal basic income. But it’s not just Goldman Sachs, whose employees have historically supported Democrats. (Former Goldman Sachs CEO Jon Corzine later served as the Democratic governor and US senator from New Jersey.) At Citigroup (C), Trump has been outraised by Biden as well as Pete Buttigieg, Bernie Sanders, Yang, vice presidential nominee Kamala Harris and US Senator Doug Jones. Trump has raised just $86,083 from JPMorgan Chase (JPM), the largest US bank. At $379,057, Biden has raised three times as much as Trump from JPMorgan. Trump was also behind Buttigieg and Sanders at JPMorgan.

Biden has raised more than twice as much ($257,821) from Morgan Stanley (MS) as Trump has ($96,010), according to OpenSecrets.” 

“Trump vows to reverse ‘blue-collar carnage’ in Ohio” 

[Washington Examiner, via Naked Capitalism Water Cooler 9-24-20]

“In a speech in Dayton on “Fighting for the American Worker,” his first of two events in Ohio on Monday, Trump accused Biden of being ‘a die-hard globalist’ who inflicted ‘terrible damage’ on Ohio’s economy during his years in Washington…. The North American Free Trade Agreement, which Biden supported when it was approved in 1993, caused the loss of tens of thousands of jobs in the Dayton area, Trump said. Biden, he added, ‘should be begging for your forgiveness.’ Trump pointed to China’s entry into the World Trade Organization as ‘a total catastrophe.’ ‘That’s when China started going up like a rocket,’ he added.” 

As Lamber Strether noted: "And he’s not wrong, is he? Turns out that “I alone can fix it” was a little off…." Once again, the Democrats' remain mesmerized by the neoliberalism of the donor class, while Trump outlanks on the economic left.