Week-end Wrap – Political Economy – April 11, 2021

 Week-end Wrap – Political Economy – April 11, 2021

by Tony Wikrent

The Biden Transition and the Fight for Real Hope and Change This Time

Podcast: Are We Winning A New Political Era? (Exclusive for Subscribers) Discussion with Anand Giridharadas

David Sirota [Daily Poster April 5, 2021]

Grassroots pressure has forced Joe Biden to discard parts of his past record — and may finally be ending the Reagan Era.

Beginning at 21:20: 

Having a debate about new bills, not being consumed by deficit anxiety… is a profound cultural turning point [that] augers en entirely different era…. We have to be mindful of how cultures change [and] hat it looks like when what you’ve been fighting for begins to bloom….

Four Ways of Looking at the Radicalism of Joe Biden

Ezra Klein [New York Times, April 8, 2021, via The American Prospect 4-9-2021]

Most discussions of the renewed ambitions of the Democratic Party focus on ideological trends on the left. The real starting point, however, is the institutional collapse of the right…. The long campaign against the ideological compromise that was the Affordable Care Act is central here, but so too was then-Speaker John Boehner’s inability to sell his members on the budget bargain he’d negotiated with President Barack Obama, followed by his refusal to allow so much as a vote in the House on the 2013 immigration bill. And it’s impossible to overstate the damage that Mitch McConnell’s stonewalling of Merrick Garland, followed by his swift action to replace Justice Ruth Bader Ginsburg, did to the belief among Senate Democrats that McConnell was in any way, in any context, a good-faith actor. They gave up on him completely.
The result is that Obama, Biden, the key political strategists who advise Biden and almost the entire Democratic congressional caucus simply stopped believing Republicans would ever vote for major Democratic bills….
The backdrop for this administration is the failures of the past generation of economic advice. Fifteen years of financial crises, yawning inequality and repeated debt panics that never showed up in interest rates have taken the shine off economic expertise. But the core of this story is climate. “Many mainstream economists, even in the 1980s, recognized that the market wouldn’t cover everyone’s needs so you’d need some modest amount of public support to correct for that moderate market failure,” Felicia Wong, the president of the Roosevelt Institute, said. “But they never envisioned the climate crisis. This is not a failure of the market at the margins. This is the market incentivizing destruction.”
…. Even beyond climate, political risks weigh more heavily on the Biden administration than they did on past administrations. This is another lesson learned from the Obama years. The Obama team had real policy successes: They prevented another Great Depression, they re-regulated the financial sector, they expanded health insurance to more than 20 million people. But Democrats lost the House in 2010, effectively ending Obama’s legislative agenda, and then they lost the Senate in 2014, and then Donald Trump won the White House in 2016, and then Democrats lost the Supreme Court for a generation.…
Even when Biden was running as the moderate in the Democratic primary, his agenda had moved well to the left of anything he’d supported before. But then he did something unusual: Rather than swinging to the center in the general election, he went further left. And the same happened after winning the election. He’s moved away from work requirements and complex targeting in policy design. He’s emphasizing the irresponsibility of allowing social and economic problems to fester, as opposed to the irresponsibility of spending money on social and economic problems. His administration is defined by the fear that the government isn’t doing enough, not that it’s doing too much.

Biden Can Go Bigger and Not ‘Pay for It’ the Old Way

Stephanie Kelton [New York Times, April 7, 2021]

Last week, President Biden introduced a $2.2 trillion infrastructure plan in a speech, calling it “a once-in-a-generation investment in America.” And on Wednesday, he and the Treasury Department outlined many of the package’s details, including how to “pay for” it. A close look at those so-called pay-fors, however, shows Democrats are thinking about fiscal responsibility the wrong way. They could be on the verge of sparking some unpleasant short-term overheating of the economy, in which price increases accelerate and the purchasing power of our dollars falls somewhat. If the final legislation were to grow much larger — toward the $10 trillion level many progressives in Congress are pushing — it could send such inflation soaring….

The key to responsibly spending vast sums of money lies in carefully managing the economy’s real productive limitations.… It’s easy to ramp up spending when there are millions of unemployed people who can be hired and plenty of domestic companies eager to supply the government with solar panels and electric vehicles. But what happens when it gets harder to find the idle things and people — construction workers, architects, machinery, raw materials and so on — needed to keep pace with an enormous revamp of our nation’s infrastructure? With the U.S. economy now improving, it would be irresponsible not to develop a rollout plan for those contingencies….

These mostly nontax inflation offsets could include industrial policies, like much more aggressively increasing our domestic manufacturing capacity by steering investment back to U.S. shores, using even more “carrot” incentives like direct federal procurement, grants and loans, as well as more “sticks” like levying new taxes to discourage the offshoring of plants. Reforming trade policies is another option: Repealing tariffs would make it easier and cheaper for American businesses to buy supplies manufactured abroad and easier for consumers to spend more of their income on products made outside of our borders, draining off some domestic demand pressures.

How Bidenomics Seeks to Remake the Economic Consensus 

[Wall Street Journal, via The Big Picture 4-8-2021]

Declaring end to neoliberalism, new thinkers play down constraints of deficits, inflation and incentives.

If you studied, practiced or wrote about economic policy in the past few decades you probably absorbed certain rules about how the world worked: governments should avoid deficits, liberalize trade and trust in markets. Taxes and social programs shouldn’t discourage work.

This canon came to be known globally as the “Washington consensus” and in the U.S. as neoliberalism. The latter label has always been more popular with its critics than its adherents. Nonetheless, by fusing the free-market foundations of classical liberalism with some redistribution and regulation, the term broadly described the economic policy of western leaders from Ronald Reagan and Margaret Thatcher through Bill Clinton and Tony Blair to George W. Bush, Barack Obama and David Cameron.

Neoliberalism has since fallen from grace under former President Donald Trump and now President Biden. But where Mr. Trump’s populism was never grounded in economics, Mr. Biden’s embrace of bigger government is: not the economics of the establishment but of left-wing thinkers in academia and think tanks and on Twitter.

Thank God Larry Summers was effectively frozen out by opposition from progressives. 

“Bidenomics, explained”

[Noah Smith, Noahpinion, via Naked Capitalism Water Cooler 4-5-21]

” it would be wrong to characterize his program as merely a grab bag of long-time Democratic policy priorities. Three approaches stand out above the maelstrom: 1. Cash benefits, 2. Care jobs, 3. Investment. Before I go on to discuss the justification for this new paradigm, I’d like to sum up all these “pillars” into one more-or-less cohesive vision of where I think Bidenomics is taking us. I think it’s aiming to create a two-track economy — a dynamic, internationally competitive innovation sector, and a domestically focused engine of mass employment and distributed prosperity….. I think Bidenomics, with its dual focus on research/investment/immigration and care jobs + cash benefits, is an attempt to boost both sectors of the economy at once — to make the export sector more productive while making the domestic sector better at spreading the wealth around. If there’s one unified characterization of the vision Bidenomics is creating for our future, I think that’s it.” 

[Twitter,

x

.

Biden’s tax plan is about tackling the class warfare of the US elite 

[Tax Research UK, via Naked Capitalism 4-10-21]

….tax havens have been used to mount an assault on the right of states to tax, and even if the damage has been better contained from about 2012 on it has not been reversed. When 70% of US foreign earnings are in tax havens there is something seriously wrong with corporate behaviour, which can only be explained by a desire to undermine the US tax system.

This has had a real cost, most especially on American labour, which has been asked to make up the tax shortfall…. Class warfare has taken place in the USA, and the wealth owning classes won. 20% of the overall US tax burden was shifted from the corporations largely owned by the wealthy onto working people. The tax haven assault was not only on the right of government to tax, it was also on the people of the world. As corporate profits have risen - and they have - corporate tax revenues have fallen….

It's fair to say that Biden is not the first person to notice this. The US has been well behind the curve in doing so. Trump, of course, set out to make the situation worse. What Biden is doing is seeking to reverse a trend in US policy.

In doing so he is reversing Trump's opposition to OECD plans to reform international taxation. 

As Lambert Strether added: “Big if true.”

Biden and the Democrats Are Getting Serious About Raising Corporate Taxes [Truthout, via Naked Capitalism 4-7-2021]

Schumer gets his game changer 

[The Hill, via Naked Capitalism 4-7-2021]

Yellen calls for minimum global corporate income tax 

[AP, via Naked Capitalism 4-7-2021]

The carnage of mainstream neoliberal economics

Median Worker Makes $3,250 Less Per Year Than in 1979 Due to Decline in Unions 

[TruthOut, via Naked Capitalism 4-9-21]

“Poor Rich Haiti” or How Imperialists and Local Oligarchy Have Sought to Destroy Agriculture in Haiti 

[Black Agenda Report, via Naked Capitalism 4-6-21]

“Greece Launches Sale of Crete Port Stake”

[Maritime Logistics Professional, via Naked Capitalism Water Cooler 4-6-21]

“Greece on Monday launched a tender for the sale of a majority stake in a port on the island of Crete, a popular tourist destination in Europe…. Greece is also selling majority stakes in the ports of Alexandroupolis and Igoumenitsa in northern and western Greece, as part of a privatization scheme aiming to raise 1.8 billion euros ($2.11 billion) this year.” 

“Portugal Envoy Urges US to Bid on Key Seaport as PRC Influence Grows”

[Voice of America, via Naked Capitalism Water Cooler 4-6-21]

“Analysts warn that unless the U.S. moves quickly, China will soon expand its control over a key Portuguese seaport. A month from now, the fate of a new terminal at the Port of Sines on Portugal’s southwestern coast is scheduled to be decided. Sines is ‘the first deep water port if you go from the United States to Europe, so it’s a very important infrastructure,’ Domingos Fezas Vital, Lisbon’s ambassador to the United States, said in a phone interview. In 2012, the People’s Republic of China acquired a stake in one of the four terminals at the port, drawing attention to Beijing’s strategic design. ‘We now have an international bid for a fifth terminal, which will be a second container terminal,’ Fezas Vital told VOA. ‘We would very, very, very much like to have American companies competing for this bid; I think it will be very important to have an American presence in Sines.'”

The costs of a secretive ‘wealth defense industry’ of shell companies, offshore tax havens, and empty luxury condos 

[Boston Globe, via Naked Capitalism 4-6-21]

Meet the Highest Paid CEO in S&P 500, Paycom’s $211 Million Man 

Wall Street Journal, via Naked Capitalism 4-7-2021]

Majority of World’s Flights Taken by a Small Minority of Elite Travelers 

[Treehugger, via Naked Capitalism 4-4-2021]

“If You Sell a House These Days, the Buyer Might Be a Pension Fund”

[Wall Street Journal, via Naked Capitalism Water Cooler 4-6-21]

“The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class—an encouraging debut in the business of selling entire neighborhoods to investors….. From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They are competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices.”

“Ford, GM cutting more production ahead of White House meeting on chip shortage”

[Reuters, via Naked Capitalism Water Cooler 4-9-21]

“General Motors and Ford both said on Thursday they will cut more vehicle production due to a semiconductor chip shortage that has roiled the global automotive industry…. A U.S. auto industry group this week urged the government to help and warned that a global semiconductor shortage could result in 1.28 million fewer vehicles built this year and disrupt production for another six months.”

Serious enough for a White House meeting, hmmmm? Well, I hope someone remembers to bring up this from the 1992 campaign, regarding the issue of a national industrial policy:

“computer chips, potato chips, what’s the difference?”

— George H.W. Bush Sr. economic advisor, Michael Boskin.

Boskin is STILL a professor of economics at Stanford, apparently. Why?

You can send Boskin an email and remind him….

More change in the wind?

Restaurant Chains Debunk Their Lobbyists’ Arguments Against A $15 Minimum Wage

[DailyPoster April 5, 2021]

While restaurant lobbyists tell lawmakers it’s the “wrong time” for a wage hike, companies they represent are telling investors they can afford to pay higher wages.

.

“McDonald’s, Other CEOs Tell Investors $15 Minimum Wage Won’t Hurt Business” [Newsweek, via Naked Capitalism Water Cooler 4-5-21]

“Big restaurant chains are telling investors that a national minimum wage hike wouldn’t be a big deal—even as their corporate lobbying groups in Washington fight plans for a $15 minimum wage. ‘We share your view that a national discussion on wage issues for working Americans is needed—but the Raise the Wage Act is the wrong bill at the wrong time for our nation’s restaurants,’ the National Restaurant Association wrote in a letter to congressional leaders in February. ‘The restaurant industry and our workforce will suffer from a fast-tracked wage increase and elimination of the tip credit.’ The following day, a top executive at Denny’s, one of the association’s members, told investors that gradual increases in the minimum wage haven’t been a problem for the company at all. In fact, California’s law raising the minimum wage to $15 by 2023 has actually been good for the diner chain’s business, according to Denny’s chief financial officer, Robert Verostek.”

Restoring balance to the economy

A CFPB rule that was never promulgated could help American move their money out of big banks.

[Huffington Post, via The American Prospect 4-8-2021]

Information Age Dystopia

“Google Is Testing Its Controversial New Ad Targeting Tech in Millions of Browsers. Here’s What We Know.”

[Electronic Frontier Foundation, via Naked Capitalism Water Cooler 4-6-21]

“Today, Google launched an “origin trial” of Federated Learning of Cohorts (aka FLoC), its experimental new technology for targeting ads. A switch has silently been flipped in millions of instances of Google Chrome: those browsers will begin sorting their users into groups based on behavior, then sharing group labels with third-party trackers and advertisers around the web. A random set of users have been selected for the trial, and they can currently only opt out by disabling third-party cookies…. Right now, a site administrator has to make a conscious decision to include code from an advertiser on their page. Sites can, at least in theory, choose to partner with advertisers based on their privacy policies. But now, information about a user’s visit to that site will be wrapped up in their FLoC ID, which will be made widely available (more on that in the next section). Even if a website has a strong privacy policy and relationships with responsible advertisers, a visit there may affect how trackers see you in other contexts.”

“DoorDash Drivers Game Algorithm to Increase Pay”

[Bloomberg, via Naked Capitalism Water Cooler 4-6-21].

“Dave Levy and Nikos Kanelopoulos are trying to beat the algorithm. The two DoorDash drivers—Dashers, as the company calls them—are trying to persuade their peers to turn down the lowest-paying deliveries so the automated system for matching jobs with drivers will respond by raising pay rates. ‘Every app-based on-demand company’s objective is to constantly shift profits from the driver back to the company,’ Levy says. ‘Our objective is the reverse of that.’ Their main tool is #DeclineNow, a 40,000-person online forum that provides a view into a type of labor activism tailored for the gig economy. While there’s no reliable way to quantify its impact, #DeclineNow’s members say they’ve already increased pay for workers across the country, including in Pennsylvania’s Lehigh Valley, where Levy and Kanelopoulos live. But the effort raises difficult questions about the nature of collective action, and there are reasons to doubt whether using a company’s own software systems against it is a strategy that can prove effective for a sustained period of time.”

The Dark Side

“The Democratic Party’s Consultant Factory”

[The Intercept, April 6, 2021]

“The progress the party has made in diversifying its lower and mid-tier ranks means that it is not unrealistic to expect those operatives eventually move into the highest positions, both within the party committees and at the top-grossing firms. So far, the consulting ecosystem has absorbed these new voices with no disruption to business as usual, leaving in place a structure in which major Democratic Party firms spend part of their time working on behalf of candidates and the party, and the rest of their time working for corporate clients. Firms and operatives who reject that approach continue to be shut out, as the party’s position with working-class voters of all races continues to weaken.”

“Michael O Church’s Theory of 3 Class Ladders in America (Archive)”

[Michael Church, via Naked Capitalism Water Cooler 4-7-21]

Even better: An update from Church here, on the pathologies of corporate management.

The introduction: “Typical depictions of social class in the United States posit a linear, ordered hierarchy. I’ve actually come to the conclusion that there are 3 distinct ladders, with approximately four social classes on each. Additionally, there is an underclass of people not connected to any of the ladders, creating an unlucky 13th social class. I’ll attempt to explain how this three-ladder system works, what it means, and also why it is a source of conflict. The ladders I will assign the names Labor, Gentry, and Elite. My specific percentage estimates of each category are not derived from anything other than estimation based on what I’ve seen, and my limited understanding of the macroeconomics of income in the United States, so don’t take them for more than an approximation. I’ll assess the social role of each of these classes in order, from bottom to top. This is, one should note, an exposition of social class rather than income. Therefore, in many cases, precise income criteria cannot be defined, because there’s so much more involved. Class is more sociological in nature than wealth or income, and much harder to change. People can improve their incomes dramatically, but it’s rare for a person to move more than one or two rungs in a lifetime. Social class determines how a person is perceived, that person’s access to information, and what opportunities will be available to a person.” 

NYPD “Goon Squad” Manual Teaches Officers To Violate Protesters’ Rights 

[The Intercept, April 7, 2021]

Now a series of internal documents obtained by The Intercept shed new light on the police unit behind some of the most brutal repression of protests in the wake of George Floyd’s killing. The Intercept is publishing three of the public records with this story, including the SRG’s guidelines and manuals for its field force operations and bike squads.

Why The Republican Party Isn’t Rebranding After 2020

[FiveThirtyEight, via The Big Picture 4-10-2021]

Summary: the activists don’t want to; the base doesn’t want to; and 2020 was so very, very close, they think they can win in 2022 and 2024. 

….Trump would have won reelection had he done only about 1 percentage point better in Pennsylvania and Wisconsin and about 3 points better in Michigan. Republicans would still control the Senate had Republican David Perdue won about 60,000 more votes (out of nearly 4.5 million cast) against Democrat Jon Ossoff in Georgia’s Senate runoff. A slew of court rulings that forced the redrawing of House district lines in less favorable ways to the GOP helped the Democrats win several seats — otherwise, Republicans might have won back the House. Add all that up, and 2020 wasn’t that far from resulting in a Republican trifecta.

Also, Republicans did really well in state legislative races and gained ground among Black and Latino voters nationally (while still losing substantially among both groups)….

We should note that the Republicans are making some slight shifts. They are trying to describe their identity politics in terms of fighting “woke” people, “cancel culture” and critical race theory, instead of bashing Mexicans and Muslims as Trump did in 2016. The GOP is emphasizing the idea that it is a “working-class party,” even if its economic policy ideas don’t necessarily align with that mantra. And there is a clear effort in the party to promote other Republican politicians like Florida Gov. Ron DeSantis as presidential candidates — thereby allowing the party to move on from Trump by 2024. 

Civic republicanism - The Puritan Ethic and the American Revolution

Umm, no, I’m not talking about the damn Republican Party here: I think it’s more accurate to start labeling that cabal of cravenly corrupt clowns the "(not)Republican Party." To promote this relabeling, let us ask: What is a republic? And, what type of economy should a republic have? To that end, here is one suggested reading. 

The Puritan Ethic and the American Revolution 

Edmund S. Morgan, “The Puritan Ethic and the American Revolution,” The William and Mary Quarterly, Vol. 24, No. 1 (Jan., 1967), pp. 3-43

One note before the excerpt: the transition, under liberalism, from political economy to economics and politics as two separate bodies of intellectual pursuit involved removing the questions of morality (ethics) from economic considerations: only market forces were the acceptable means for judging economic outcomes.

“The Ethic conveyed the idea of each man’s and woman’s “calling” in life. “The emphasis of [work or labor] was on productivity for the benefit of society. In addition to working diligently at productive tasks, a man was supposed to be thrifty and frugal. It was good to produce but bad to consume any more than necessity required. A man was but a steward of the possessions he accumulated. If he indulged himself in luxurious living, he would have that much less with which to support church and society. If he needlessly consumed his substance, either from carelessness or from sensuality, he failed to honor the God who furnished him with it.”

….

“The calling of a ruler, as the colonists and their Puritan forebearers saw it, was like any other calling: it must serve the common good; it must be useful, productive; and it must be assiduously pursued.”

….

The Puritan Ethic whether enjoined by God, by history, or by philosophy, called for diligence in a productive calling, beneficial both to society and to the individual. It encouraged frugality and frowned on extravagance. It viewed the merchant with suspicion and speculation with horror. It distrusted prosperity and gathered strength from adversity…. The merchants actually had more than a short-range interest at stake in their reluctance to undertake nonimportation. The movement, as we have seen, was not simply a means of securing repeal of the taxes to which merchants along with other colonists were opposed. The movement was in fact anticommercial, a repudiation of the merchant’s calling. Merchants, it was said, encouraged men to go into debt. Merchants pandered to luxury. Since they made more on the sale of superfluous baubles than on necessities, they therefore pressed the sale of them to a weak and gullible public. What the advocates of nonimportation demanded was not merely an interruption of commerce but a permanent reduction, not to say elimination, of it. In its place they called for manufacturing, a palpably productive, useful calling.

Is there a path here by which the evangelical christianists might be saved by prompting them to engage in an opposition to consumer culture and in favor of a more responsible stewardship of resources? 

Week-end Wrap – Political Economy – April 4, 2021

Week-end Wrap – Political Economy – April 4, 2021

by Tony Wikrent

Strategic Political Economy

The Biden Stimulus: If You Think Inflation is the Problem, Just Wait

[YouTube, March 1, 2021]

Very informative part is Blyth’s reply beginning at 4:06.

x

x

So essentially what we're doing is a 2 trillion dollar experiment in different theories of inflation. Why does that matter? The progressive side of the Democrats think of the world in this way: the fundamental problem [is that] wages for 60% of Americans haven't moved almost since the 1970s.  And up to the 50th percentile of the income distribution Americans earn $20 an hour or less. You can't run this country with that degree of working poverty.  That's what's behind the anger; that’s what’s behind the populism. We need to spend a lot of money to make the economy run hot. We don't need to worry about inflation because interest rates are low for a lot of reasons and there's been no inflation for 40 years. We can boost wages—and if we do, we stabilize the situation, and a lot of the bad shit we've been dealing with for the past several years will not come back.

On the other hand you have the deficit hawks, the Republicans, the centrist economists saying, no no , you'll have terrible inflation. They're essentially saying things are okay, and the reason you have populism is: yeah, there’s been some people who have been left behind, but there's a lot of racism there, and this is a cultural struggle. Really the economy is doing fine and this is far too much stimulus.

Now what you see there are basically people using economic arguments to bolster their priors. So if you think populism and the ills of the US is about low wages, you will say inflation is not a problem. If you don't think that then you don't say that it is a problem. I doubt that it’s really about people worried about inflation. But I worry because I buy the argument that wages matter. And I worry that if we don't try this in this moment you're not going to get wage growth—and if you don't get consistent wage growth over the next couple years the Democrats are dead when it comes around to the mid terms.

The minimum wage would be $44 per hour if it had grown at the same rate as Wall Street bonuses 

[Business Insider, via Naked Capitalism 3-30-21]

Abolitionists, Political Economists, and Capitalism

Abolitionists, Political Economists, and Capitalism 

James L. Huston

Journal of the Early Republic , Autumn, 2000, Vol. 20, No. 3 (Autumn, 2000), pp. 487-521

(resides on JSTOR)

The relationship between abolitionism and capitalism in the United States remains for historians a contentious subject. At the moment four general interpretations dominate. Neomarxists argue that abolitionism was the key movement that legitimated market social relations in the United States, in particular the supremacy of wage labor as the institutional means of fixing the economic position of manual labor. In this interpretation, the abolitionists wittingly or not paved the road for the conquest of industrial capitalism and oppression of the working class. Thomas Haskell offers a second approach, ideologically opposite the neomarxists, that found human sensitivity to others originating in market transactions: because individuals in a commercial economy learned to obey their promises when written down in legal contracts, they learned to deal with others without resorting to physical coercion, thereby inculcating a humanitarian sensibility. A third rendition emphasizes republicanism in abolitionist thought. Abolitionists were heirs of the American Revolution and republican thinking; their attack on slavery was based on denial of selfishness and an advocacy of public virtue. From this perspective, the abolitionists were anticapitalists because they denied the role of self-interest that lay at the core of capitalist thought and behavior. Finally, the evangelical interpretation insists that the abolitionists were Christian zealots and moralists, opposed to capitalism either because morality superceded the economic process or because they would not place the worship of mammon above worship of the deity. [1]

The main contenders at the present seem to be the neomarxist and evangelical renditions. In 1998 the publication of two important works showed how vividly these two interpretations clashed. Amy Dru Stanley insisted that abolitionists trumpeted the key doctrines of liberal capitalist doctrine: self- ownership, voluntary economic arrangements, social relations governed by contract, and the correctness of wage labor. "Legitimating wage labor was a central part of the abolitionist project, but never its sum total," she argued; "for most abolitionists, the autonomy expressed in wage labor was but an offshoot of the underlying right of property in the self that constituted the taproot of contract freedom." At the same time, the late Paul Goodman portrayed abolitionism as a reaction against capitalism (or the market transformation). "Abolition," he wrote, "was a struggle to impose on social and economic relations the moral principles that were rooted in Christian teachings." [2] This article seeks to refine historical understanding of the ties between abolitionism to the emerging capitalism of the United States in the nineteenth century and generally sides with Goodman's perspective. Abolitionists possessed a biblical political economy, not a classical liberal one....

[1] For the emphasis upon abolitionists' role in legitimizing wage labor in capitalism, see John Ashworth, Slavery, Capitalism, and Politics in the Antebellum Republic: Vol. I: Commerce and Compromise, 1820-1850 (New York, 1995), 82-84,131-81; David Brion Davis, The Problem of Slavery in the Age of Revolution, 1770-1823 (Ithaca, 1975), 45-47; and Davis, "Reflections on Abolitionism and Ideological Hegemony," American Historical Review, 92 (Oct. 1987), 797-812. For Thomas Haskell, see Haskell, "Capitalism and the Origins of the Humanitarian Sensibility," parts 1 and 2, American Historical Review, 90 (Apr. 1985) 339-61 and (June 1985), 547-66. For a treatment of abolitionism utilizing the republican synthesis, see Daniel J. Mclnerney, The Fortunate Heirs of Freedom: Abolition and Republican Thought (Lincoln, 1994). On the abolitionists and religion, consult John R. McKivigan, The War Against Proslavery Religion: Abolitionism and the Northern Churches, 1830-1865 (Ithaca, 1984); also, James Brewer Stewart, Holy Warriors: The Abolitionists and American Slavery (New York, 1976; 2d ed., 1996). A recent synthesis of work on reformers has reduced the stress on modernization that filled earlier works: Steven Mintz, Moralists and Modernizers: America's Pre-Civil War Reformers (Baltimore, 1995), xiv-xx, 9-10. 

[2] Amy Dru Stanley, From Bondage to Contract: Wage Labor, Marriage, and the Market in the Age of Slave Emancipation (New York, 1998), 20; see also 105, 160; Paul Goodman, Of One Blood: Abolitionism and the Origins of Racial Equality (Berkeley, 1998), xiv, 140.

Read entire article on JSTOR (Requires a subscription, which your local library might have. Most college and university libraries have subscriptions--you can go there and download it through their wireless internet connection.)

Week-end Wrap – Political Economy – March 28, 2021

 Week-end Wrap – Political Economy – March 28, 2021

by Tony Wikrent

Strategic Political Economy

Genocide. 

[Brasilwire, via Naked Capitalism 3-22-21]

In January of this year, a study published by the Center for Research and Studies on Health Law at the University of São Paulo, and NGO Conectas, proved that the spread of the coronavirus in Brazil was a government strategy. The same researchers now insist the president should be investigated for genocide.

In May 2020, the far-right president insisted that “only the weak, the sick and the elderly should be worried” about Covid-19. What sounded like denialism a year ago now reads like a candid admission…. No other country on earth had a head of state actively preventing their population from being vaccinated, whilst leaving the poorest unable to protect themselves through isolation.

A recent study in Brazil’s largest city São Paulo shows that those living in its poorest neighbourhoods are 3 times more likely to die of Covid-19 than those in its wealthiest.

A Better Path to Tech Reform? Felony Charges 

[Wired, via Naked Capitalism 3-24-21]

...there are two options to buy time, neither of which requires congressional action. It merely requires the government to apply regulatory tools that do not get used frequently, namely subjecting business executives to felony prosecution.

The first option is an antitrust case against Google led by the attorney general of Texas that alleges a price fixing conspiracy in digital advertising. The complaint names Facebook as a co-conspirator. Price fixing falls under Section 1 of the Sherman Act, significant because it does not require proof of harm. The attempt itself is a crime. And if, as has been alleged, there is evidence of an agreement for mutual legal defense, there may be a second count. When appropriate, executives can be subject to felony prosecution, punishable by up to three years in prison. Google denies any wrongdoing.

The Biden Justice Department has an opportunity to join the Texas case or to pursue its own case as a felony. DOJ can adds Google and Facebook executives to its criminal antitrust indictments. The situation warrants it, as the harms in question are the result of deliberate business choices. The threat of imprisonment might change the calculus for internet CEOs, creating for the first time an incentive to make the changes to their business model necessary to stop harm to public health, democracy, privacy, and competition….

The events of the past year have exposed structural flaws in the economy, the health care system, the electrical grid, and American politics. Some of these problems may appear to be less acute than the pandemic, but all require attention now. This poses a huge challenge for the Biden administration, which is hamstrung by 40 years of deregulation and underfunding of government institutions. They have to use every available tool.

Week-end Wrap – Political Economy – March 21, 2021

 Week-end Wrap – Political Economy – March 21, 2021

by Tony Wikrent

Strategic Political Economy

[Twitter, via Naked Capitalism 3-15-21]

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The Dark Money “Ring” of Charles Koch and Leonard Leo Gets an Airing Before the U.S. Senate – Followed by a Mainstream Media News Blackout

Pam Martens and Russ Martens, March 15, 2021 [Wall Street on Parade]

Last Wednesday, March 10, a Subcommittee of the Senate Judiciary Committee held a hearing of critical importance to every American on the growing tsunami of dark money that is corrupting the U.S court system, up to, and including, the U.S. Supreme Court. Senator Sheldon Whitehouse (D-RI), who has written extensively on the corrupting influence of dark money on American democracy, chairs that Subcommittee on Federal Courts, Oversight, Agency Action and Federal Rights….

Had a truly objective Editorial Board at the Wall Street Journal taken the time to read the full written testimony of Lisa Graves, President of the Center for Media and Democracy, that was presented at this hearing, there would be no doubt in their minds that the Federal court system in the United States has been obscenely corrupted by dark money, coming predominantly from fossil fuels billionaire Charles Koch and his dark money network….

Graves’ courageous testimony named names and backed up her charges with hard facts. Graves explained the campaign to seat Amy Coney Barrett on the Supreme Court…. Graves writes that Leonard Leo, the Co-Chairman of the Koch-funded Federalist Society “sits at the hub of a secretive scheme to capture the courts and remake our laws, with a cadre of his confidantes and groups.” Graves says that “more than $400 million” was received by this dark money network between 2014 and 2018…. 

Graves explains the motive behind the involvement of the Federalist Society as follows:

“The Federalist Society is also stacked with corporate attorneys whose day jobs are to defend some of the biggest corporations in the world. Through its publications and events, the Federalist Society advances a pro-corporate agenda to limit the ability of Congress and federal agencies to regulate corporations and to thwart the mitigation of climate change under the guise of a merely neutral philosophy.”

Graves also provided written testimony on a memo that was sent by the Koch network to tout its success in getting the Trump administration to enact its agenda. Charles Koch’s late brother and long-time ally, David, had written in the memo: “Our efforts have been aligned with the Trump administration’s efforts to use Executive Orders to direct agencies and departments to dismantle regulatory overreach.”

Week-end Wrap – Political Economy – March 14, 2021

Week-end Wrap – Political Economy – March 14, 2021

by Tony Wikrent

Strategic Political Economy

Russia turns away from NASA, says it will work with China on a Moon base 

[Ars Technica, via Naked Capitalism 3-10-21]

Brazil's High Court Invalidates Lula's Convictions, Leaving Him Eligible to Run Against Bolsonaro

[greenwald.substack.com, via Naked Capitalism 3-10-21]

….this is increasingly becoming the playbook for neoliberal elites who are angry that the population has defied them by voting for those they oppose. Thwarted by the democratic process, elites now resort instead to subversions of democracy in the name of upholding it. The employ frivolous impeachments to remove the leader whose legitimacy they never accepted, lawfare designed to make governance impossible through endless investigations or even the unjust imprisonment of their political opponents, and a full-scale union with the corporate media which openly and shamelessly ceases to report and instead engages in tawdry political activism to destroy the leaders chosen by the disobedient population. Indeed, the oligarchical Brazilian media so openly and overwhelmingly favored Dilma’s impeachment that the steadfastly apolitical press freedom group Reporters Without Borders dropped Brazil to 104th in its annual press freedom rankings and warned that the Brazilian press’ abandonment of the journalistic function while agitating for Dilma’s removal was so severe that the Brazilian press itself endangered press freedom.

As neoliberalism destroys more and more lives around the world, leaving an endless array of social pathologies in its wake, power centers will seek out tactics to subvert the democratic will. The increasing insistence on censoring the internet and controlling the flow of information is one symptom of elite fear of popular rage and desperation. So, too, is the related attempt by corporate media outlets to regain their monopoly over news and discourse by discrediting anyone or anything which sits in opposition to them. And the playbook that resulted in Dilma’s removal from office less than eighteen months after Brazil elected her, followed by the unjust imprisonment of Lula to ensure he could not run and win again, is reflective of a pattern already emerging in the west: abusing the force of law, propaganda and state processes to destroy those whom the population was not supposed to elect.

The same ruling class fears motivate increasing attacks on anyone who effectively exposes the rot and deceit of their conduct. Just as the U.S. Government has imprisoned Julian Assange and exiled Edward Snowden, the Brazilian government is intent on imprisoning my source, Walter Delgatti, for the crime of exposing the truth (they also tried, unsuccessfully, to criminally prosecute me for the crime of doing the reporting that exposed the fraud of Lula’s prosecution).

The guardians of the ruling neoliberal order know their days are numbered and will become increasingly desperate to cling to power for as long as it can. The playbook used and just exposed in Brazil will be seen with greater frequency as a hated elite seek to weaken that which most threatens their interests: a discourse and a democracy they can no longer manipulate and control.

NYT Fails to Examine Its Participation in Brazil’s ‘Biggest Judicial Scandal’ 

[FAIR, via Naked Capitalism 3-10-21]

Week-end Wrap – Political Economy – March 7, 2021

Week-end Wrap – Political Economy – March 7, 2021

by Tony Wikrent

Strategic Political Economy

All futurism is Afrofuturism 

Noah Smith [Noahpinion, via Naked Capitalism 3-4-21]

A recent paper in The Lancet attempts to model how African population will change as women’s education and access to contraception (the two biggest things other than GDP that we know affect fertility) increase. They predict a population for Sub-Saharan Africa of about 3.4 billion by century’s end — only 0.8 billion lower than the UN median projection. That’s still an absolutely enormous fraction of humanity, and an even larger chunk of the young population.

Thus, the future of Africa is the future of humanity, despite the fact that Africa will experience a normal fertility transition and its population will eventually stabilize rather than explode. I don’t think people in the U.S. (or, probably, other regions) have come to grips with the full import of this.

But what happens to Africa is even more important, relative to the rest of the world, than these population numbers suggest! This is because Africa is still a mostly poor region. Economics teaches us that marginal utility — i.e. the amount life gets better when you get a little richer — is much higher for poor people. And with China and (to some degree) India industrializing successfully and seeing population growth slow, soon most of the extremely poor people in the world will probably reside in Africa.

Chinese vaccines sweep much of the world, despite concerns 

[AP, via The Big Picture 3-3-21]

China’s vaccine diplomacy campaign has been a surprising success: It has pledged half a billion doses of its vaccines to more than 45 countries. With just four of China’s many vaccine makers claiming they are able to produce at least 2.6 billion doses this year, a large part of the world’s population will end up inoculated not with the fancy Western vaccines boasting headline-grabbing efficacy rates, but with China’s humble, traditionally made shots.

Trends in Income From 1975 to 2018 

[Rand Corporation, via Naked Capitalism 2-28-21]

 We document the cumulative effect of four decades of income growth below the growth of per capita gross national income and estimate that aggregate income for the population below the 90th percentile over this time period would have been $2.5 trillion (67 percent) higher in 2018 had income growth since 1975 remained as equitable as it was in the first two post-War decades. From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion. 

Week-end Wrap – Political Economy – February 28, 2021

Week-end Wrap – Political Economy – February 28, 2021

by Tony Wikrent

Strategic Political Economy

Austerity and the Rise of the Nazi Party

Gregori Galofré-Vilà, Christopher M. Meissner, Martin McKee, and
David Stuckler
Economic History Association, published online by Cambridge University Press, 11 January 2021

We study the link between fiscal austerity and Nazi electoral success. Voting data from a thousand districts and a hundred cities for four elections between 1930 and 1933 show that areas more affected by austerity (spending cuts and tax increases) had relatively higher vote shares for the Nazi Party. We also find that the localities with relatively high austerity experienced relatively high suffering (measured by mortality rates) and these areas’ electorates were more likely to vote for the Nazi Party. Our findings are robust to a range of specifications including an instrumental variable strategy and a border-pair policy discontinuity design….

In this paper, we investigate the association between the austerity measures implemented by the German government between 1930 and 1932 and voters’ increased support for the Nazi Party. A growing literature studies the interactions between political preferences and fiscal policy with evidence that austerity packages are correlated with rising extremism (Alesina, Favero, and Giavazzi 2019; Bor 2017; Eichengreen 2015, 2018; Fetzer 2019; Ponticelli and Voth 2020)….

We also provide some novel quantitative estimates concerning the channels by which austerity mattered. To do so, we study the relationship between mortality rates and austerity. We find a plausible link, since where public spending on health care dropped more, mortality was higher. These places also saw a relatively large increase in Nazi support at the polls. Finally, looking at archival documents of Nazi propaganda, we document how Nazi leaders invoked austerity to attack Brüning and the Weimar Republic and how Brüning’s tax rises were seen as inefficient and unfair by the German masses. 

Eviction Moratorium Deemed Unconstitutional by Federal Judge in Texas

[Naked Capitalism 2-26-21]

Business Licensing and Constitutional Liberty
Amanda Shanor [The Yale Law Journal 314 (2016)]

….the Constitution is increasingly being invoked as a trump against certain types of economic regulation. My thesis is that the central arguments currently marshaled in favor of extending stringent judicial review to business licensing regulations are untenable. These lines of reasoning have no logical endpoint. Individual rights, on this view, could trump any manner of governmental regulation in favor of free-market ordering.

These business licensing cases raise deep and pressing questions about the purpose and scope of rights and constitutional judicial review more broadly today. Underlying these debates are competing conceptions of constitutional liberty. One view, perhaps the ascendant one, reflects free-market libertarian values, whereas others understand the First and Fourteenth Amendments to reflect ideals such as democratic self-governance, anti-subordination, or civic republicanism. Resolving disputes about the constitutional status of business licensing requires that we grapple with those deeper questions.

Week-end Wrap – Political Economy – February 21, 2021

Week-end Wrap – Political Economy – February 21, 2021

by Tony Wikrent

Strategic Political Economy

Nietzsche’s Marginal Children: On Friedrich Hayek.

Corey Robin [The Nation, May 7, 2013]

Why have marxists and socialists failed so spectacularly in opposing movement conservatism and neoliberalism?  I think one major factor is an intellectual infatuation with Nietzsche, which blinds them to Nietzsche’s oligarchical pedigree and mindset. This is why I believe we need a revival of the ideas and ideals of civic republicanism, because the issues always come down to republicanism versus oligarchical elites. 

The Nobel Prize–winning economist Friedrich Hayek is the leading theoretician of this movement, formulating the most genuinely political theory of capitalism on the right we’ve ever seen. The theory does not imagine a shift from government to the individual, as is often claimed by conservatives; nor does it imagine a simple shift from the state to the market or from society to the atomized self, as is sometimes claimed by the left. Rather, it recasts our understanding of politics and where it might be found. This may explain why the University of Chicago chose to reissue Hayek’s The Constitution of Liberty two years ago after the fiftieth anniversary of its publication. Like The Road to Serfdom (1944), which a swooning Glenn Beck catapulted to the bestseller list in 2010, The Constitution of Liberty is a text, as its publisher says, of “our present moment.”

But to understand that text and its influence, it’s necessary to turn away from contemporary America to fin de siècle Vienna. The seedbed of Hayek’s arguments is the half-century between the “marginal revolution,” which changed the field of economics in the late nineteenth century, and the collapse of the Habsburg monarchy in 1918. It is by now a commonplace of European cultural history that a dying Austro-Hungarian Empire gave birth to modernism, psychoanalysis and fascism. Yet from the vortex of Vienna came not only Wittgenstein, Freud and Hitler but also Hayek, who was born and educated in the city, and the Austrian school of economics….

Throughout his writing life, Nietzsche was plagued by the vision of workers massing on the public stage—whether in trade unions, socialist parties or communist leagues. Almost immediately upon his arrival in Basel, the First International descended on the city to hold its fourth congress. Nietzsche was petrified. “There is nothing more terrible,” he wrote in The Birth of Tragedy, “than a class of barbaric slaves who have learned to regard their existence as an injustice, and now prepare to avenge, not only themselves, but all generations.” Several years after the International had left Basel, Nietzsche convinced himself that it was slouching toward Bayreuth in order to ruin Wagner’s festival there. And just weeks before he went mad in 1888 and disappeared forever into his own head, he wrote, “The cause of every stupidity today…lies in the existence of a labour question at all. About certain things one does not ask questions.”

Beware Economists Warning Against “Too Much Stimulus” (Again)
Barry Ritholtz, February 18, 2021 [The Big Picture]

If you want to blame a specific school of thought for why the post-financial crisis recovery was so weak, start with the group who opposed a trillion dollar fiscal response to the GFC.

The Anti-Stimulus, Anti-Rescue crew have not learned anything from their prior mistakes. Not everyone who signed onto the full page advertisement taken on in the New York Times on January 9th, 2009 remain n the anti-stimulus camp. But there is a substantial overlap between those on the list below who opposed a more robust response to the GFC and a current group opposed a more robust response to the pandemic…. Here is the CATO Institute’s full page NYT ad from January 9, 2009:

Week-end Wrap – Political Economy – February 14, 2021

Week-end Wrap – Political Economy – February 14, 2021

by Tony Wikrent

Strategic Political Economy

“How The US Legalized Corruption”

[Indi Samarajiva, via Naked Capitalism Water Cooler 2-8-21]

“Americans have this thing called a fundraiser where you put a pile of bribes on a table, wave a wand of asparagus over it, and it just disappears. Access is still bought, but somehow because people ate food, it’s not corruption anymore. The press will literally report on the food. “In New York last weekend, $100,000 got donors a plate of grilled chicken and asparagus, a posed picture with President Trump in a palatial, 60-foot-long entryway, and a 20-minute group chat with the president. WTF is this? In any other country you wouldn’t report on the chicken, you’d report on the corruption.” (Details of a fund raiser dinner from the Washington Post).

Because this is all legal, Americans ignore how fucking insane it is. It’s just daylight bribery. This is what I mean when I say that America has legalized corruption. It’s not that your system is corrupt. Your system is corruption.

Property, Liberty, and the Rights of the Community: Lessons from Munn v. Illinois
Paul Kens [Buffalo Public Interest Law Journal, Volume 30 (2011)]

Abstract: When considering the extent to which the United States Constitution places a limit on government regulation of business, today's historians and constitutional theorists treat the question as a matter of balancing economic liberty or property rights against government power. Moreover, modem scholars commonly maintain that this balancing formula represents the predominant tradition in constitutional history. Tracing it back to the tenants of Jacksonian democracy that emphasized distrust of government, they imply that constitutional history has developed as a straight line: always with an emphasis on individual liberty and always with a presumption that entrepreneurial liberty should be favored over governments' power to regulate.

This paper will use the 1877 case Munn v. Illinois to demonstrate that prior to the late 1880s the paradigm for determining the constitution's limits on government regulation of business was actually quite different. There is no doubt that the Court has always emphatically recognized the importance of property rights. Nevertheless, during the first century under the Constitution, it treated business regulation as a matter of balancing entrepreneurial liberty against the rights of the community. Furthermore, it consistently held that, because state economic regulations were an expression of popular sovereignty and rights of the community, they should be presumed to be valid.

Munn is significant because in the conventional narrative it is portrayed as a steppingstone in the straight line evolution of constitutional doctrine that emphasizes individual liberty. A closer look at the case and the events surrounding it will demonstrate, however, that the majority in Munn actually based its opinion on the traditional emphasis on rights of the community. It will further demonstrate that for more than a decade after the opinion the Supreme Court steadfastly clung to that traditional view. Even under persistent pressure to change.

Fear of the Few: John Adams and the Power Elite
Luke Mayville [Polity, Volume 47, Number 1, January 2015]

Abstract:The political thought that informed the design of the United States Constitution largely neglected the danger posed by socioeconomic elites. The writings of John Adams, I contend, are exceptional in this regard. Using Adams’s writings as a vantage point, this article exposes two important blind spots in mainstream Founding-era thought and the Constitution it informed. Whereas the likes of Hamilton and Madison insisted that majorities held the clear preponderance of power in republican America, Adams maintained that an elite of wealth, birth, and beauty retained overwhelming power even after the abolition of formal distinctions. And whereas Federalists sought security against the threat of majority tyranny, Adams’s principal fear was of aristocratic tyranny—specifically, the tendency of the elite few to undermine both popular representation and effective government.

Week-end Wrap – Political Economy – February 7, 2021

Week-end Wrap – Political Economy – February 7, 2021

by Tony Wikrent

Strategic Political Economy

If There’s No Fear of Inflation, Why is GOP Against More Stimulus? – Rana Foroohar and Mark Blyth — Transcript here

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​​​​​​​Mark Blyth. ….arguing about deficits is just a footnote on the wider agenda of power for the sake of power. Why do they do this? Because they know that existentially Republicanism has run its course. As Rana just said, there’s only so much you can give to business before they’ve got everything, which is pretty much where we are now. There’s nothing more to give. We need huge amounts of infrastructure repair. We need huge amounts of social investment in the economy and elsewhere. And this is anathema to everything the Republicans have stood for and delivered on for the past 30 years, which is simply more money for me and to hell with the rest of you. So they’re not going to turn this around….

Rana Foroohar. I completely agree with that. And I think it actually brings up something I’m quite worried about, which is the fine line that the Biden administration has to walk right now in executing even part of their Build Back Better, Reward Work Not Wealth strategy, without creating such a bumpy ride from here to there that the Republicans can say, well, look, look what Joe Biden did. Now the markets have crashed... because if you think about what we’re trying to do, if we pull way back, this administration is trying to shift the American economy structurally from being an economy that is based on debt and asset price bubbles to one that is based on income and wage growth. And that’s a laudable goal. But it’s also like turning the Titanic.

….you might actually know when the markets crash that things are getting better in the U.S. economy because certain things have to be done. Raising taxes on companies, the labor share rising, some of the push for union labor that’s coming with the Defense Production Act. All of that is going to dampen profits. It’s going to frighten investors and the hot money is going to run.

Mark Blyth. ….the weird thing is there’s $18 trillion in negative yield and long-term government debt in the world today. Right. The existence of this is a bit like the existence of dark matter. It’s what binds the universe together. And if it exists, it means that all those other stories about hyperinflation, they simply can’t be true…. Because what it means is investors are willing to buy government debt at a loss. And if they’re willing to buy government debt at a loss simply because they want to purchase security, because they’re uncertain about the future, then by definition they cannot be expecting an inflation. Because if they were, they would insist on a higher interest rate, not a negative one….

….So let’s think about some of the models, that constrain us here. And I don’t mean sort of the fancy formal ones. I mean the informal ones in our heads. Most people do not understand that governments are not like households. Most people do not spend their time thinking about the difference between money and high-powered money, bank reserves, and all the rest of the stuff that makes government’s ability to finance itself qualitatively different from households, we’ve definitely love the household analogy… you’ve got to deal with the folk models in people’s heads. And the vast majority of Americans do not think that running up extra 15 trillion dollars in debt just because there’s a virus that’s taking out one in a hundred people is a good idea. And if you do that when it comes to the midterms, you’re going to pay an awful electoral price even if it is the right thing to do. 

Severe Dysfunction in Washington and Wall Street Puts the U.S. at Risk of Capital Flight

Pam Martens and Russ Martens: February 3, 2021 [Wall Street on Parade]

There is recent evidence that the U.S. is already seeing capital flight. According to a January 24 report from the United Nations Conference on Trade and Development, China beat out the U.S. in foreign direct investment inflows last year, receiving $163 billion versus $134 billion for the U.S. That was a radical change from 2019 when the U.S. received $251 billion in foreign direct investment versus $140 billion for China.

Capital flight could accelerate this year if the craziness in Congress and Wall Street continues. Just ask yourself this, would you want to invest in a country that had scenes of a bloody attempted coup of the government featured on the front pages of newspapers around the world? Would you want to risk your savings in a stock market that has ceased to perform its two key functions: a pricing mechanism for the value of companies and efficient allocation of capital to worthy businesses and industries.

Elon Musk Interview: 1-on-1 with Sandy Munro

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Elon Musk Discusses Build Quality Problems With Engineer Who Compared Model 3 To ‘A Kia In The ’90s’ 

[Jalopnik, via The Big Picture 2-4-21]

Progressives and leftists using a Marxian type of class analysis have failed to notice that Musk has accomplished something no one else has done in just over a century: achieve mass production of a new automobile in USA. While Musk’s relations with his employees leaves much to be desired, and his political views are anything but progressive, the fact is that Muck is providing a rare example of new technologies being implemented to create an economic phase shift. Those critics who point out that Musk’s companies depend on government support miss the point that government support is exactly what is needed to push the economy in new directions — in this case, ending our dependence on burning fossil fuels.  In their conversation, Musk and Munro discussed a number of topics that illustrate the analytical power of Veblen’s business versus industry paradigm: design of seats for passenger vehicles; wire harnesses; modern road design; and why getting an MBA prevents you from managing an industrial corporation competently. 

What happens when you take a manufacturing expert with decades of automotive engineering experience and put him in a room with a science nerd like Elon Musk? ….He recently sat down with one of Tesla’s biggest build-quality critics, manufacturing expert Sandy Munro, founder of the benchmarking consultancy Munro & Associates. Here’s what Musk had to say about large panel gaps and poorly designed body structures in what has to be one of the most epic technical interviews I’ve seen in a while…. 

Tesla’s CEO then fesses up to his company’s build-related mistakes and dives into why they’ve been happening….  “The organizational structure errors, they manifest themselves in the product,” he begins. “We’ve got probably the best material science team in the world at Tesla. Engineers would ask what’s the best material for this purpose...and they got like 50 different answers. And they’re all true individually, but they were not true collectively,” he admits.

“When you try to join all these dissimilar alloys...you’ve got gaps that you’ve got to seal, and you’ve got to join these things, and some of them need to be joined with rivets, some of them need to be joined with spot welds, some of them need to be joined with resin or resin and spot welds,” he continues. “Frankly, it looks like a bit of a Frankenstein situation when you look at it all together.” 

….The rest of the interview remains thoroughly nerdy. There’s discussion about cars’ natural frequencies, about how reducing polar moment of inertia by bringing mass toward the car’s center of mass yields better handling. There’s discussion about tolerance stack-up and how that leads Tesla to almost always err toward fewer pieces and Lego-like parts precision.

Munro mentions his company’s BMW i3 findings, lauding the German automaker’s excellent build quality for the carbon-fiber body. Musk replies that one of his major concerns about use of carbon fiber is that it has a vastly different coefficient of thermal expansion than aluminum or steel, and this can cause fitment issues when the vehicle is subjected to certain thermal environments.