Week-end Wrap – Political Economy – April 18, 2021
by Tony Wikrent
Strategic Political Economy
Michael Hudson: America’s Neoliberal Financialization Policy vs. China’s Industrial Socialism
Michael Hudson, April 15, 2021 [Naked Capitalism]
US West prepares for possible 1st water shortage declaration
[Associated Press, via Mike Norman Economics, April 17, 2021]
The Pandemic
India’s health system has collapsed
[Hindustani Times, via Mike Norman Economics, April 16, 2021]
The Biden Transition and the Fight for Real Hope and Change This Time
Shifting Balance of Power?
Barry Ritholtz, April 16, 2021 [The Big Picture]
A massive shift is occurring in the labor market today, one that has been misinterpreted by economists of all stripes…. fear of the virus is a valid reason keeping people from low paying jobs requiring interaction with potentially deadly, infectious members of the public. “Who the hell wants to risk their lives for $8 an hour before taxes?”
….I suspect it is something broader, more than merely the economic recovery being impacted by Covid. Maybe more of a significant change, perhaps even a secular reversal of the longstanding power dynamic between capital and labor.
“Investors lament being frozen out of Biden infrastructure plan” [Financial Times, via Naked Capitalism Water Cooler 4-13-21] “President Joe Biden’s ‘American jobs plan’, unveiled last month, calls for $2tn of investment in highways, electrical grids and other basic infrastructure. At the same time, the White House put forward corporate tax reforms that it said would generate enough money to pay for the investment spree within 15 years. That has disappointed some investors and asset managers who once expected public-private partnerships would be a lucrative financing opportunity.”
...By the late 1960s/early 70s, the economy began shifting. Rising inflation and the collapse of unions were but two factors impacting this once idyllic economy. The next the next half century saw an ongoing increase in corporate power, both politically and economically. There is a longer discussion to be had about how the Supreme Court of the United States made some truly boneheaded WTF?!? decisions – Corporations are people; money is speech? – as part of that ideologically driven shift. You can debate the jurisprudence or ideology behind these, but the results were a widespread decrease in the standard of living for many Americans. Political donations and lobbying that were once seen as corrupt graft became the norm. Thanks, SCOTUS!
Biden infrastructure plan upsets investors
[Twitter, via Naked Capitalism Water Cooler 4-13-21]
Lambert Strether: “The sucking mandibles are helpfully shaded red.”
Joe Biden Wants to Put the World’s Corporate Tax Havens Out of Business
[Slate, via The Big Picture 4-12-2021]
The administration is vowing to fund a historically ambitious infrastructure and economic modernization plan in part by solving one of the thorniest problems created by global capitalism. “If implemented, such an international agreement would lead to a collapse of the development model of tax havens. A high global minimum tax can change the face of globalization.”
Health Care Crisis
Medicaid Estate Claims: Perpetuating Poverty & Inequality for a Minimal Return
[Justice in Aging, via Naked Capitalism 4-11-2021]
See NC here and here, in 2014, which would be 2021 – 2014 = seven years ago.
Federal law requires state Medicaid programs to seek repayment of specified Medicaid benefits, even if the state would prefer not to seek such recovery. The Medicaid program’s claim is enforced against the heirs of now deceased persons who relied on Medicaid, forcing the heirs in many cases to sell a family home that otherwise would have been passed down.
The burden of estate claims falls disproportionately on economically oppressed families and communities of color, preventing families from building wealth through home ownership, which has been historically denied to communities of color through discriminatory public policy. The burden also falls inequitably on families due to medical unpredictability – for example, because their family member developed Alzheimer’s Disease, needing months or years of nursing home care or equivalent home and community-based services.
This unpredictability is exacerbated by inequities in our health care system that particularly harm lower-income and older adults of color. All these factors contribute to estate claim collections being unfair and societally counterproductive.
The carnage of mainstream neoliberal economics
[Twitter, via Naked Capitalism Water Cooler 4-12-21]
“Long-Term Unemployment Is Headed The Wrong Way”
[Econintersect, via Naked Capitalism Water Cooler 4-16-21]
“We are witnessing a dramatic increase in the duration of unemployment spells. Part of this is due to the impact of Covid19 pandemic concentrated in specific sectors. Part of this is down to the generosity of unemployment benefits supplements and direct subsidies during the pandemic. Part of it is also down to the longer term changes in the U.S. labor markets and changes in households’ composition and investment/consumption patterns. Irrespective of the causes, the problem is obvious: the longer the person remains unemployed, the sharper is the depreciation of skills and their employability. If this (post-2008) experience is the ‘new normal’, America is developing a massive class of disillusioned and human capital poor workers.” Handy chart:
McKinsey & Co. Stealing Puerto Rico Government Funds
[Twitter, via Naked Capitalism 4-13-2021]
The Crisis of Venture Capital: Fixing America’s Broken Start-Up System
[American Affairs, via The Big Picture 4-17-2021]
Despite all the attention and investment that Silicon Valley’s recent start-ups have received, they have done little but lose money: Uber, Lyft, WeWork, Pinterest, and Snapchat have consistently failed to turn profits, with Uber’s cumulative losses exceeding $25 billion. Even more notorious are bankrupt and discredited start-ups such as Theranos, Luckin Coffee, and Wirecard, which were plagued with management failures, technical problems, or even outright fraud that auditors failed to notice.
719 Billionaires Own Four Times More Wealth Than Bottom 165 Million Americans
[Common Dreams, April 15, 2021, via DailyPoster]
Big Corporations Now Deploying Woke Ideology the Way Intelligence Agencies Do: As a Disguise
Glenn Greenwald [via Naked Capitalism 4-14-2021]
The Death of Neoliberalism Is Greatly Exaggerated
James Galbraith [Foreign Policy, via Naked Capitalism 4-14-2021]
But the ideology remained. It was what mathematicians called an attractor and astronomers a black hole: a massive blob of thought around which economic policy views revolved. The financial crisis of 2007 to 2009 shook the blob. The complete failure of mainstream economists to foresee the crisis—indeed their denial that it could have been foreseen—was embarrassing. The fact that so many were on the payroll of the perpetrators was even worse. But in the end, the blob survived. In the end, not a single senior economist retired in disgrace nor was a single dissenter or pre-crisis prophet hired to any senior post—and quite possibly not to any junior one—at any of the self-described “top” academic economics departments.
Last year though, the COVID-19 pandemic blew the post-financial crisis world apart….
In this emergency, actions outpaced ideas and created unmistakable facts. Direct federal income supports and unemployment insurance totaling 10 percent of previous national income were enacted. Even larger sums were placed in support of bond markets and by extension of the stock market. Both continued to function. Manufacturing and residential home construction revived even in the teeth of the pandemic. In a seeming vindication of heterodox Modern Monetary Theory, there was no revival of inflation. Neoliberal economists fell in line or fell silent.
The pandemic year combined with other factors—a left turn in the Democratic Party led by Sen. Bernie Sanders, the unexpected deliverance of a narrow Senate majority, and the new president’s own political instincts and experience—gave the United States the rare gift of a progressive political moment. This has already produced the $1.9 trillion American Rescue Plan, bringing financial relief to households, businesses, and state and local government budgets—a prospect that presages a surge of local infrastructure, transportation, and urban projects long blocked by fiscal constraints. A new federal infrastructure, energy, and climate initiative, totaling $2 trillion, is on the horizon….
It is impossible to sensibly treat the United States’ economic problems without having a grip on the global setting and specifically (though not exclusively) on the role of China—a country that only 50 years ago was utterly irrelevant to the economic welfare of the United States. But it is equally impossible to treat the global economy in neoliberal terms and make any sense at all of what is going on.
That’s because China refused to conform to neoliberal ideas. What grew up in China was instead a curious hybrid of what Westerners might recognize as—and, in important cases, actually were—the teachings of economists Adam Smith, Henry George, John Maynard Keynes, and my father John Kenneth Galbraith, flavored by Marxism and adorned with Chinese characteristics. The focus was on continuity, growth, improvement of productive practices, acquisition of new technologies and engineering skills, construction of new cities and transportation systems, social stability, and the elimination of mass poverty—and therefore, the drag of impoverished people on national economic and social life….
In short, the United States has an entirely new set of problems—rooted in the decay of core economic functions, the fragility of its recovery from the last crisis, and its unstable position at the top of the world’s economic pyramid—in the face of a new, hybrid, competing, and non-neoliberal model that shows every sign of lasting success. These structural facts are among those that policymakers must now address with no help from mainstream orthodoxies—and no possibility of returning to the equally deficient orthodoxies of an earlier era either.
But here is the way forward the United States needs for academic economics, for economics education, and for the training of future economic policymakers. That way is to replace the defunct neoliberal dogma and the people who diffuse it with scholars who have practical and historical knowledge of the economic problems, policies, and institutions of the world—and of the United States with all its complexities and details.
Unemployed workers defect and debate their next moves, leaving restaurant owners to contend with a labor shortage The Counter, via Naked Capitalism 4-14-2021]
As Lambert Strether notes: “If only there were some mechanism to match demand and supply.” The neoliberal hatred of the working class remains so strong and is now so ingrained, raising wages to a level at which a worker can actually raise a family — $35 an hour — remains outside the cranial capacity of the PMC. Most of America’s corporate management needs to be forcibly retired.
Creating new economic potential - science and technology
Solar-to-Hydrogen Tech Sees “Remarkable” Efficiency Jump
[IEEE Spectrum, via Naked Capitalism 4-17-2021]
Restoring Balance
The Grassroots Battle To Change America’s Labor Laws
[DailyPoster April 12, 2021]
For the first time ever, the Democratic Socialists of America (DSA) is joining forces with major unions on a national campaign. On March 7, DSA, the Communications Workers of America (CWA) and International Union of Painters and Associated Trades (IUPAT) launched an effort with an ambitious goal: getting Congress to pass the Protecting the Right to Organize (PRO) Act. If signed into law, the legislation would be the most significant labor rights bill since the New Deal era.
Over the past month, thousands of volunteers and organizers representing both DSA and the unions have made over 500,000 phone calls to voters in key legislators’ home states, asking voters to tell their representatives to support the PRO Act. This month, DSA and the unions plan on escalating the campaign with in-person rallies and town halls.
NEW: The Citizens' Guide To Holding The Powerful Accountable
[DailyPoster April 12, 2021]
Disrupting mainstream politics
The End of the Insider Party Network
David Dayen, April 15, 2021 [The American Prospect]
The pipeline from corporate America and Democratic insider circles into government is being challenged.
TBH, the reason why I think left/right labels are now wrong is actually simple.
The left, as it’s now, cares more about believing it’s right than power.
The right, as it is now, care more about getting and retaining power than any “right or wrong”.
“Why Should We Vote for a Party that Holds Us in Contempt?” – A Viewer Comment
Paul Jay [via Naked Capitalism 4-13-2021]
[Twitter, via Naked Capitalism 4-13-2021]
“Sen. Mark Kelly Is Emerging As An Obstacle To The Pro Act”
[The Intercept, via Naked Capitalism Water Cooler 4-13-21]
“SEN. MARK KELLY has resisted co-sponsoring a major piece of labor law reform legislation known as the PRO Act, citing a policy of not endorsing measures that don’t also have Republican support, according to sources familiar with the reasoning provided to advocates of the bill. Winning Kelly’s support for the legislation is crucial, as it is hoped that if he comes on board he could bring his Arizona colleague, Sen. Kyrsten Sinema, with him, leaving backers just three cosponsors short of the 50 that would bring the bill to the floor. Kelly has told advocates that he doesn’t want to be the only Arizona senator to cosponsor the bill, so backers of the bill are hoping to win the two in tandem. The PRO Act, short for the Protecting the Right to Organize Act, has already passed the House of Representatives. The legislation would make it easier to form a union and win a contract, harder for companies to union-bust, and easier for the National Labor Relations Board to crack down on rule-breaking companies. It would also make more workers eligible to unionize, including independent contractors. It would arguably be the most transformative piece of legislation enacted since the 1970s.” • Kelly is, of course, a Democrat.
Chris Hedges: We Must Build A New Party
[YouTube, via Naked Capitalism 4-13-2021]
“1619 Project lead writer Nikole Hannah-Jones paid $25,000 for virtual lecture” [WSWS, via Naked Capitalism Water Cooler 4-15-21]
Just three weeks ago, Samaria Rice and Lisa Simpson, respective mothers of Tamir Rice and Richard Rishner, accused Cullors of profiting from the deaths of their children and other black people murdered by police. The pair criticized BLM for raising over $90 million in 2020 but doing little to help families impacted by police violence.
Khan and Cullors created the #BlackLivesMatter hashtag in 2013 after George Zimmerman was acquitted for the killing of Trayvon Martin. Since then, BLM has promoted racialist politics and raised substantial sums of money from large corporations like Google, Amazon, and Facebook. After BLM’s 2020 financial report was released, Cullors was accused of misappropriating funds by grassroots members of her organization.
In response to the allegations, she claimed that there were misunderstandings about BLM’s finances and that the organization was “scraping for money” in the past few years. If BLM truly was low on funds, Cullors purchasing luxury properties certainly did not help.
The wealth and privilege of the leading proponents of racialism demonstrate the reactionary character of identity politics. It is entirely divorced from the real concerns and experiences of the working class. Fearful of a unified workers’ movement, the ruling class seeks to sow artificial racial divisions among workers through the promotion of identity politics. Additionally, middle class layers seeking a bigger slice of the pie see identity as a means of advancing their own wealth and social position..
The Search for the Real Joe Biden
“Welcome to the New Progressive Era”
[Anand Giridharadas, The Atlantic, via Naked Capitalism Water Cooler 4-14-21]
“The conversations I’ve had in recent weeks have painted a portrait of an improbable coming-together of people and forces: a moderate president, with an ascendant progressive movement at his back and at his throat, facing a once-in-a-generation window of opportunity. It’s still early. It remains to be seen if this momentum will continue, if the infrastructure plan musters the votes, if the ungainly Sanders-to-Manchin coalition holds. But for now, a capital that has been defined in recent years by the absence of useful action bubbles with generative possibility. And many of us who thought we knew what a Biden presidency would look like, and didn’t expect much from it, are suddenly asking ourselves: How did we get him so wrong? Representative Ilhan Omar, a Minnesota Democrat and member of the so-called Squad, endorsed Sanders in the primary and didn’t anticipate a whole lot from Biden. Nevertheless, during the winter transition, she and her colleagues in the Congressional Progressive Caucus shared their ideas and priorities with the incoming administration—and were taken aback when many of them were adopted. ‘The $1.9 trillion package that they put forth was a surprise,” she told me. “A lot of us made recommendations when the administration was in their transition space, and I don’t think a lot of us expected many of those things would make it in.'”
If Biden wants to avoid the mistakes of Obama — and they were BIG mistakes that led, as many people, including myself, warned, led to a populist revolt that veered right because Obama opposed options for change from the left — then the better part of wisdom is not to get in Biden’s way. Which, of course, still leaves the problem of what to do about Democratic Party centrists still clinging to centrism.
Michael Lind [via Naked Capitalism 4-13-2021]
Matt Taibbi, April 9, 2021
The press is building an image of a "radical" progressive hero, while reality looks a lot like the same corporate Democrat
Why Joe Biden Does Not Remind Me of FDR
Lambert Strether, April 12, 2021 [Naked Capitalism]
On Unions, A Gap Between Biden’s Words And Actions
[Daily Poster, April 14, 2021]
The Dark Side
The Corporate Good Guys Who Are Really Bad Guys (Just About All of Them)
Harold Meyerson, April 15, 2021 [The American Prospect]
Florida Is Latest Hot Spot for Anti-Protest Legislation
Amelia Pollard, April 14, 2021 [The American Prospect]
Tear down a Confederate flag in Florida and a protester could be headed to prison. It’s all part of the same national movement to silence dissent in the wake of the George Floyd uprising.
‘A gaslighting chamber of insanity’: Moderate Republicans seethe at Biden” [Politico, via Naked Capitalism Water Cooler 4-14-21]
Politico refuses to admit that the Republicans did this to themselves by their virulent opposition to the first black President.
“What Will Trump Loyalists’ Sensed Powerlessness Mean For Politics?”
[Democracy Corps, via Naked Capitalism Water Cooler 4-14-21]
From March 26, still germane. “We conducted focus groups in March with Trump Loyalists in Georgia and Wisconsin and Trump-aligned, non-Trump conservatives and moderates in suburban and rural Georgia, Ohio, and Wisconsin. It took a long time to recruit these groups because Trump voters seemed particularly distrustful of outsiders right now, wary of being victimized, and avoided revealing their true position until in a Zoom room with all Trump voters — then, they let it all out.” .
Bartlett on Robert Mundell & Supply-Side Economics
Bruce Bartlett, April 11, 2021 [The Big Picture]
An insider’s history of one of the most destructive policy ideas of the past century.
Neoliberalism requires a police state
[Twitter, via Naked Capitalism Water Cooler 4-13-21]
“The New Politics of Higher Education” (review) [Boston Review, via Naked Capitalism Water Cooler 4-13-21] “Why the left’s turn from higher education has coincided with a newfound conservative appreciation for it.”
The (Anti)Federalist Society Infestation of the Courts
“Trump’s Power Won’t Peak for Another 20 Years”
[The Atlantic, via Naked Capitalism Water Cooler 4-15-21]
“Measured solely by the number of judges he appointed, Donald Trump’s impact is staggering: 234 judges, including 54 powerful appellate judges, almost one out of every three. By comparison, President Barack Obama appointed 172 judges (30 of them appellate) in his first term, while George W. Bush managed 204 (35 appellate). But Trump will have an even greater influence than this measurement suggests. That is because his judges won’t reach the apogee of their power until the early 2040s, when Trump-appointed chief judges are on track to simultaneously sit atop nearly every appeals court in the country.”
The Supreme Court Is Making New Law in the Shadows
[New York Times, via Naked Capitalism 4-17-2021]
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