Week-end Wrap – Political Economy – May 30, 2021

 eek-end Wrap – Political Economy – May 30, 2021

by Tony Wikrent

Strategic Political Economy

Long Slide Looms for World Population, With Sweeping Ramifications 

[NYT, via Naked Capitalism 5-23-2021]

“1 big thing: The state of the world, according to me”

Dion Rabouin [Axios, via Naked Capitalism Water Cooler 5-27-21]

I find this very interesting because Rabouin implies that he is conveying the elite consensus he has gathered from his contacts and sources over the past years. The elites are well aware of the socio-economic problems afflicting average people: “Because consumers don't have cash to spend, many companies struggle to generate real profits.” Then the bottom line: “But it doesn't seem like there's much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.” 

As Ian Welsh explains in CDC Decides To Just Not Count All Covid Cases, 

The people making decisions not only don’t care if you die, if you dying will make them richer or more powerful, they’ll go with the decision path that leads to you or mum or your best friend dying or winding up homeless. You aren’t nothing to them, you’re meat. A prey animal.

Welcome to late capitalism.

Rabouin: 

This being my last Axios Markets newsletter, I figured I'd break from tradition and tell you what I really think. I'm not anyone important, but I read a lot of reports and I talk to a lot of smart people, so I've learned a thing or two.

I believe our country is in trouble. And it’s not about a loss of morality or religion or liberals or conservatives or the current president or the last president. It’s about a fundamental problem we have as a nation — a reckless imbalance of wealth. The people at the top have too much and the people at the bottom don't have enough.

This is not a philosophical matter of doing what’s “right.” It’s a practical matter of doing what’s necessary to uphold and maintain a consumption-based economy…. We’re living in a world now where the wealthy have so much money they literally don’t know what to do with it…. Those who aren’t asset holders haven’t even benefited from the risk-asset inflation that’s accompanied housing, medical and education price inflation for the past decade because wage inflation hasn’t even come close…. 

This problem isn't new. We've been lurching toward this imbalance for years as corporations busted unions, moved jobs offshore and muscled out independent small businesses, aided by politicians who rewarded them with tax breaks and no-bid contracts for doing it….

• Retailers can't raise prices, so it is almost entirely a race to the bottom — nearly half of all new retail store openings announced so far this year are from Dollar General, Dollar Tree and Family Dollar.
• The obvious exception being luxury brands, which are selling products to the wealthy who have more money than they know what to do with.

New companies today almost universally either lose money, free-ride by offering a service that makes some other service cheaper, or sell something to large corporations or the government.

#BigFacts: Because consumers don't have cash to spend, many companies struggle to generate real profits.

• However, because interest rates are so low, if a company is big enough it can just keep issuing bonds to keep itself afloat.
• That's why nearly a quarter of the largest public U.S. companies today are zombies — firms that don't even make enough money to pay the interest on their debt.

….But it doesn't seem like there's much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.

Week-end Wrap – Political Economy – May 23, 2021

Week-end Wrap – Political Economy – May 23, 2021

by Tony Wikrent

Predatory Capitalism in the Time of COVID19

‘Government Money That’s Gone Into Vaccine Development Is Being Privatized by a Handful of Companies’ 

[FAIR, via Naked Capitalism 5-16-2021]

It Was The Government That Produced COVID-19 Vaccine Success 

[Health Affairs Blog, via Naked Capitalism 5-16-2021]

“Who owns the covid vaccines?”

Cory Doctorow [via Naked Capitalism Water Cooler 5-17-2021]

““Behind every great fortune lies a great crime.” The true mRNA vaccines theft isn’t entrepreneur-inventors who face robbery by the public sector — rather, those “entrepreneurs” have enjoyed billions in public subsidies, and now insist they owe nothing in return….. Pharma’s claim that it doesn’t owe us anything in return makes no sense, even by the companies’ own logic. They say that markets produce wonders because they reward canny risk-taking with vast fortunes. By that logic, the public — who assumed the majority of the risk in developing vaccines — are the angel investors in this high-tech unicorn, and the pharma companies are the VCs who came in with some late capital to help scale up a sure thing.”

America Is Failing Its Moral Test on Vaccines
New York Times Editorial Board, May 14, 2021, via Naked Capitalism 5-16-2021]

The H.I.V. advocacy group PrEP4All estimates that for $4 billion — less than the country is spending per day on coronavirus response efforts — the federal government could build enough manufacturing capacity to vaccinate the entire planet against the coronavirus. It will cost much more to actually make the needed doses, of course. The nonprofit advocacy group Public Citizen estimates that a $25 billion government-wide initiative would produce around eight billion doses of mRNA vaccine, or enough to vaccinate half the planet. That’s far less than the trillions that could be lost if the economy contracts further as the pandemic persists.

Week-end Wrap – Political Economy – May 16, 2021

 Week-end Wrap – Political Economy – May 16, 2021

by Tony Wikrent

Strategic Political Economy

Insider view: the tragedy of the US Deep State 

Pepe Escobar [Strategic Culture Foundation, via Mike Norman Economics 5-12-2021]

“Now, Kissinger reflects the Deep State angst on the Russia-Chinese relationship and wants this split up for dear life. This is interestingly covered here by Kissinger. He does not want to tell the truth about balance of power realities. He describes them as “our values”, when the U.S. has no values left but anarchy, looting, and burning down hundreds of cities. Biden hopes to buy all these disenfranchised masses as money printing goes wild.

“So we are back to Kissinger shocked at the new Russian-Chinese alliance. They must be separated.

“Now, I do not agree with the balance of power intriguers in that morality or noble values should govern international relations, and not power. The U.S. has been following balance of power dreams since 1900 and now it faces economic ruin. These ideas do not work.  There is no reason the U.S. cannot be a friend of Russia and China and the differences can be worked out. But you cannot get to first base as balance of power considerations dominate everything. That is the tragedy of our time.”

Tech-Tonic Shift in Sino-Russian Cooperation

[BRICS - Joint Site of Ministries of Foreign Affairs of BRICS Member States, via Mike Norman Economics 5-13-2021]

Russia-China engagement in the military-technical field has ‘strategic importance’ for both parties, with bilateral cooperation on the upswing since 2010. This has gained momentum in the aftermath of the 2014 Ukrainian crisis, with Russia shedding its earlier reluctance to sell latest technology to China, signing deals for supply of Su-35 fighter jets and the S-400 missile defence system. The two sides are also engaged in joint projects, and Russia has agreed to help China develop its ballistic missile early-warning system. In fact, the latter development has been interpreted as a sign of increasing closeness between the two countries, which while not an alliance, does signal deepening engagement.

Mark Blyth - Trailer Age of Economics

We need to break the “folk models” of how people, and especially policy makers, think about economic issues.

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Week-end Wrap – Political Economy – May 9, 2021

Week-end Wrap – Political Economy – May 9, 2021

by Tony Wikrent

Strategic Political Economy

"Economic Warfare: What Can World War One Tell us about 21st Century Conflicts?"

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Jonathan Kirshner is a Professor of Political Science and International Studies at Boston College, and the Stephen and Barbara Friedman Professor of International Political Economy Emeritus in the Department of Government, Cornell University. By the late 1920s France had Europe’s most powerful army, much of the world’s gold, and was an active and aggressive practitioner of economic warfare. Within a decade, however, tragically, and even shamefully, France could barely be roused to rise to its own self-defense. The stark difference between 1930 and 1940 is attributable to a radical polarization of French politics and an embrace of “the age of unreason” that paralyzed the country’s foreign policy practice. Kirshner explains how the shocking six week military collapse in autumn 1939 was prefigured by the destruction of French democracy in the six years before the German invasion. After the 1936 political collapse, the French upper classes openly opposed new Socialist Prime Minister Leon Blum with the slogan, “Better Hitler than Blum.” The United States today appears on a similar course of decline.

Week-end Wrap – Political Economy – May 2, 2021

 Strategic Political Economy

“The Free Market is Dead: What Will Replace It?”

[Chris Hughes, Time, via Naked Capitalism Water Cooler 4-27-21]

Significant because it’s Time, of all places. 

But corporate America’s newfound support for more public investment is not a temporary phenomenon. We are witnessing the most profound realignment in American political economy in nearly forty years. President Ronald Reagan summed up the conventional wisdom that reigned from the mid-1970s onward in the United States: “Government is not the solution to our problem, government is the problem.” Economists, policymakers, and everyday Americans alike generally accepted that markets, unfettered and free, are the best way to create economic growth…. That ideology began to crack after the Great Recession, and in the wake of the coronavirus pandemic, it has collapsed. The rise of ethno-nationalism on the right and democratic socialism on the left testify to the growing disillusionment with the conventional wisdom of how government and economics are supposed to work. It’s not just the fringes questioning free market orthodoxy in a time of disease. Cross-partisan supermajorities of Americans want some of the biggest companies of America to be broken up, significantly higher minimum wages, a wealth tax on billionaires, and believe significantly more public investment is required to create economic growth. We have had regulations, public investment, and macroeconomic management to varying degrees throughout American history. What makes this moment different is that Americans across parties, class, and educational background are using a new framework to think about how we create prosperity.” 

“What’s behind the growth slump? Takeaways from census data”

[Associated Press, via The Big Picture 4-28-2021]

“The U.S. population grew to 331 million, a 7.4% growth rate from the last time the Census Bureau counted every person in the country, in 2010. Those may sound like big numbers, but it’s actually the second slowest rate of population growth the census has ever recorded, just behind the 7.3% growth in the 1930s. That decade’s slowed growth was rooted in the Great Depression. Our past decade’s sluggish rate had similar beginnings in the long shadow of the Great Recession. The drawn-out recovery saw many young adults struggling to enter the job market, delaying marriage and starting a family. That dealt a blow to the nation’s birthrate. Then the pandemic hit last year and made matters worse. But while U.S. population growth recovered after the Great Depression, demographers are not optimistic it will pick up anytime soon. Most forecast even slower population growth in the decades to come. Americans are getting older — the median age in the U.S. is 38, up one year from 37 in 2010. Immigration had been dropping even before the pandemic effectively shut it down. And many Republicans have largely turned against the idea of immigration, legal or illegal, a new political barrier to the country adding more population quickly. ‘Unlike the Great Depression, it’s part of a process where we’re likely to keep having slow growth,’ said William Frey, a demographer at the Brookings Institution in Washington, D.C. That has potentially grim consequences for the nation’s future.”

“...we’re likely to keep having slow growth...” Why? Just because population growth slows down? What most people do not realize is that a transition to an economy free of fossil fuel dependencies — if done in time to meet the challenges of climate change — will require some of the fastest economic growth in recorded human history. What do you think it’s going to look like as we replace the 1.5 billion motor vehicles in the world with electric vehicles? Do you want to do that over 30 or 10 years, or over the next ten? Or sooner? In fact, the faster the growth, the faster will we be changing the economy to meet the challenge of climate change. Frey is obviously stuck in a old paradigm of economic thinking. A huge challenge is going to be to managing world-wide economic growth rates of ten to fifteen percent for about 15 or 20 years, then transitioning to near zero-growth rates after the world’s economy and transportation systems have been rebuilt on a carbon free basis.