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.
“U.S. aluminum tariffs have led to investment, jobs -think tank study”
[Reuters, via Naked Capitalism Water Cooler 5-25-21]
“U.S. tariffs on aluminum imports imposed by former president Donald Trump and continued by President Joe Biden have led to increased output, employment and capital investment by domestic producers, a new study from a left-leaning think tank showed on Tuesday. The Economic Policy Institute said the 10% aluminum tariffs, imposed in March 2018 under the “Section 232″ national security section of a Cold War-era trade law, have led to $6 billion in 57 downstream aluminum product manufacturing projects that will employ over 4,500 additional workers.”
Of course, the “free trade” ideologues are promoting the Reason Foundation paper that argues only eight percent of the “extra” cost of tariffs are being paid by the Chinese exporters, and the remaining 92 percent are being imposed on American consumers. Any simple review of actual economic history [pdf] shows that tariffs and preferences for domestic manufacturing have been the only means for a country to industrialize. Which is why mainstream neoliberal economists are not taught actual economic history.
Yanis Varoufakis [Project Syndicate, via Naked Capitalism 5-26-2021]
But if austerity is such a bad idea, sapping our economies of energy, why is it so popular among the powerful? …. But suppose for a moment, and for argument’s sake, that everyone agreed that printing another trillion dollars to finance a basic income for the poor would boost neither inflation nor interest rates. The rich and powerful would still oppose it, owing to the debilitating fear that they would end up like Peel in Australia: monied but bereft of the power to compel the less monied…. their most important interest is not to conserve economic potential. It is to preserve the power of the few to compel the many.
Signs of economic immiseration:
[Twitter, via Naked Capitalism 5-27-2021]
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Investigating Oversight: Why congressional hearings are bad, and how they can be made great again
David Sirota [Daily Poster, May 27, 2021]
Very long and detailed, but no one else is addressing this problem. And, Dayen obviously has a number of sources inside Congress who have been dealing with and pondering this problem for years. And, again, the negative role of anti-government ideologues is a large part of the problem.
IN DISCUSSING OVERSIGHT with over 20 members of Congress, current and former staffers, and congressional experts, many pointed to the rise of Newt Gingrich as House Speaker as a turning point. Committee chairs previously had much more autonomy to direct their own committees, but after Gingrich, they had to ask permission to hold a hearing. Budgets for committees and staffs were slashed, as were external organizations that assisted Congress with investigations and reports, like the Government Accountability Office and the Congressional Research Service. The Office of Technology Assessment, which provided scientific and technical analysis to Congress, was abolished entirely.
“The Congress disarmed themselves,” as Nader put it. Gingrich shrank the House’s presence in Washington, stuffing most work between Tuesdays and Thursdays. That cannibalized 40 percent of a committee’s workweek that might otherwise be put toward oversight. A conservative movement that questioned the utility of government set about to destroy government from within, so they could point to that destruction as proof of their claims.
Daniel Schuman of Demand Progress, one of the closest watchers of the legislative branch, supplied me the numbers. House committees receive $100 million less in funding than they did ten years ago, and Senate committees are down $60 to $70 million. Personal member offices have had the same allotment of 18 staff members since 1978. “The population of the districts have doubled, and those are the people who have to do constituency work,” Schuman said. “Policy work gets squeezed, and given to junior people because we don’t pay them well.”
The Biden Transition and the Fight for Real Hope and Change This Time
“So Much For “Transformational” Joe Biden”
Matt Taibbi [TK News, via Naked Capitalism Water Cooler 5-28-21]
Just a few weeks ago, we were being told in headline after headline that Biden was a ‘transformational’ president who’d heroically abandoned fruitless efforts at bipartisanship and moreover had conquered the fear of deficit spending that kept Barack Obama from fulfilling his own ‘transformative‘ destiny. Insiders regaled us with tales about how this administration exiled the Clintonian tricksters like Larry Summers who robbed Obama of his legacy by whispering false worries about inflation….. Then a few weeks ago, on Meet The Press, Yellen reverted to form and said that Joe Biden ‘has made clear that permanent increases in spending should be paid for, and I agree,’ adding that ‘over the long run, deficits need to be contained.’ After that came the Post story and word that the administration had backed off a host of plans, including a proposal to lower prescription drug costs, while also engaging with seeming seriousness in ‘bipartisan’ negotiations on an infrastructure/jobs bill…. Translation: Biden is worried about deficits, and having Republicans on whom they can pin lower budgetary outlays is once again politically useful. Therefore, bipartisanship is back, fiscal restraint is back, maybe even austerity is back. Good times! Whatever one’s feeling about the appropriateness of any of these policies, it’s clear the messaging surrounding them has undergone a near-complete turnaround almost overnight, which would normally prompt at least a raised eyebrow or two in media. But all that’s happened is that the moment the Biden administration stopped talking about being ‘transformative,’ the White House press quietly did the same, in silent recognition that they’ll all be selling a different product for while. Joe Biden’s journey to ‘transformational’ status and back has been an expert political PR campaign. It took a year, and Biden’s camp never had to break a sweat.”
The Dangers of Ducking the Health Care Fight
David Dayen, May 20, 2021 [American Prospect]
Shying away from a fight with the health industry today will just lead to a more impossible fight tomorrow. And yet, that pretty well articulates what the Biden administration’s political theory is right now. For the past 50 years, incoming Democratic administrations and the party base have made health care a top policy priority; the Biden administration has not. The American Rescue Plan did nothing on health care other than increasing federal subsidies for the purchase of health insurance, and only for a limited time period tied to the pandemic. The White House had to be dragged kicking and screaming just to extend those subsidies in its current American Families Plan proposal. Other Biden campaign promises, like a public option or a plan to deal with prescription drug costs, have thus far been left on the cutting-room floor.
The carnage of mainstream neoliberal economics
Is There Really A Truck Driver Shortage?
[NPR, via The Big Picture 5-27-2021]
The real problem is not a shortage but retention. According to ATA’s statistics, the average annual turnover rate for long-haul truckers at big trucking companies has been greater than 90% for decades. If a company has 10 truckers, nine will be gone within a year because so many new drivers leave within a few months.
How McKinsey Destroyed the Middle Class
[The Atlantic, via The Big Picture 5-23-2021]
Technocratic management, no matter how brilliant, cannot unwind structural inequalities. Things changed in the 1960s, with McKinsey leading the way….
Mid-century labor unions (which represented a third of the private-sector workforce), organized the lower rungs of a company’s hierarchy into an additional control center—as part of what the United States Supreme Court, writing in 1960, called “industrial self-government”—and in this way also contributed to the management function. Even production workers became, on account of lifetime employment and workplace training, functionally the lowest-level managers. They were charged with planning and coordinating the development of their own skills to serve the long-run interests of their employers.
And that’s what management consultants destroyed. Also note the role of corporate raiders [who were financially dependent on money from organized crime]. Today, we call them “private equity.”
Management consultants thus implemented and rationalized a transformation in the American corporation. Companies that had long affirmed express “no layoff” policies now took aim at what the corporate raider Carl Icahn, writing in the The New York Times in the late 1980s, called “corporate bureaucracies” run by “incompetent” and “inbred” middle managers. They downsized in response not to particular business problems but rather to a new managerial ethos and methods; they downsized when profitable as well as when struggling, and during booms as well as busts. The downsizing peaked during the extraordinary economic boom of the 1990s. The culls, moreover, were dramatic. AT&T, for example, once aimed to cut the ratio of managers to nonmanagers in one of its units from 1:5 to 1:30. Overall, middle managers were downsized at nearly twice the rate of nonmanagerial workers. Downsizing was indeed wrenching. When IBM abandoned lifetime employment in the 1990s, local officials asked gun-shop owners around its headquarters to close their stores while employees absorbed the shock.
[Twitter, via Naked Capitalism Water Cooler 5-27-21]
Lambert Strether askes: “But [is] Chu’s theory true? Are the VCs really pulling out? And would they do so without completing, through Uber, the projects that benefit their class as a whole? That is, (a) destroying public transportation and (b) creating a new relation between workers and capital where workers have been less rights than before? (E.g., Proposition 22.)”
Are children ‘dying like dogs’ in effort to build better batteries?
[Desert News, via Naked Capitalism 5-25-2021]
Obama Labor Secretary [and former DNC Chair] Joins Anti-Union Law Firm
[The Daily Poster, May 27, 2021]
Former Obama Labor Secretary Tom Perez announced on Thursday that he’s joining the law firm Venable LLP, whose website boasts that its lawyers “regularly counsel and train clients on union avoidance.”
Perez, who was the Democratic National Committee (DNC) chair until January, joins a growing number of Obama officials who cashed in their government experience with jobs at union-busting companies. That list includes press secretaries Jay Carney, who became the top flack at Amazon, and Robert Gibbs, who spent several years as a top flack for McDonald’s. Obama senior advisor David Plouffe served as policy chief at Uber, while former senior adviser Valerie Jarrett has a board seat at Lyft.
Rather than avoid issues he oversaw as Labor Secretary, Perez said in a press release he will be working specifically on those issues.
“Venable’s attorneys are at the forefront of helping clients navigate dynamic regulatory, policy, and labor and employment issues,” Perez said in Venable’s press release announcing his hiring. “I look forward to joining them in this important work.”
….One Venable partner’s firm bio brags that he “defeated a labor union bid for recognition as the collective bargaining representative after advising and coordinating the employer's five-month anti-union campaign.”
Another Venable lawyer’s bio gloats that she secured a “favorable result for [a] corporation undergoing a Department of Labor investigation regarding violations of the Federal Labor Standards Act.”
Neoliberalism requires a police state
“5 Ways Officials Have Cracked Down on Protests Since the Floyd Uprisings”
[Teen Vogue, via Naked Capitalism Water Cooler 5-25-21]
“[A] sample of the repressive measures officials have taken in the year since the Floyd uprisings: Enacting curfews that make protesting an arrestable offense; Deploying the National Guard; Using surveillance tools to monitor protesters; Increasing police budgets; Pushing harsh state laws and pretrial detention.” • Lots of linky goodness, and more excellent work from Teen Vogue. Tiger Beat this is not.
[Dodge County Independent, via Naked Capitalism Water Cooler 5-25-20]
“I ask, what has local law enforcement done to support the people of Dodge County? Fighting back against installation of the 11th and 12th swine factory farms in a three-mile radius, my family has faced repeated harassment and intimidation following initiation of legal action against Dodge County officials and area swine contract growers. Manure-stained blue farm booties purposely blemish the township road leading from a nearby swine factory farm to our family farm—another reminder that industry giants are large and in charge. Bullet holes shot in the stop sign a few hours after my brother and I pulled weeds from the fi eld a few feet away, constant garbage dumped in our roadside ditches and driveway, a large piece of metal hidden in the tall grass that damaged our mower, pure Roundup sprayed on the corn field and caused thousands of dollars of damage, false telephone calls by industry folks to the sheriff ’s department (not to report some illegal activity but to put the heat on my family and get us to shut up), harassing late night phone calls to my elderly father, including such comments as ‘Have you changed yet?’ and other harassing tactics. The tactics employed against my family are consistent with the tactics employed against other frontline families across the Midwest fighting installation of a factory farm next door. Serving as a watchdog for powerful industry giants, local law enforcement immediately responds to calls from area swine operators for assistance, including requests to identify a black SUV near our farm and report back to the industry. The culprit—a KSTP news truck.”
[Twitter, via Naked Capitalism 5-29-2021]
Replying to
@jason_kint
Most damning in newly unsealed evidence (1) Google’s employees admitting there's almost no way NOT to provide your location to Google (2) Google designs its ecosystem for location data collection.
“This doesn’t sound like something we would want on the front page of the NYT.” /4
Predatory Capitalism in the Time of COVID19
For 94% of those who died from Covid, staying at home wasn’t an option
[Mexico News Daily, via Naked Capitalism 5-25-2021]
[British Medical Journal, via Naked Capitalism 5-25-2021]
[LSE Legal Studies Working Paper (2021, Forthcoming), via Naked Capitalism 5-25-2021]
From the Introduction:
“The crisis further demonstrates the failure of high income countries (HICs) to realise the promise they made at the time of the TRIPS negotiations in 1994, that by agreeing to the terms of TRIPS, lower and middle-income countries (LMICs) would benefit from technology transfer and the building of productive capacity. As such, the current crisis is revealing not only of inadequacies of how to deal with global emergencies, but also of deficiencies within the international ‘patent bargain’ itself.”
This past week, both the House Financial Services Committee and the Senate Banking Committee heard testimony from top financial executives. The articles on the hearings by Wall Street on Parade included excellent background material.
House Hearing: Only Jamie Dimon’s Microphone Mysteriously Malfunctions During Pivotal Questioning, Pam Martens and Russ Martens, May 28, 2021
Justice Department Opens Probe into Potential Bank Cartel that Financed Archegos, Pam Martens and Russ Martens, May 27, 2021
Senator Sherrod Brown Sends a Message to Wall Street Banks: You No Longer Own the Senate Banking Committee, Pam Martens and Russ Martens, May 27, 2021
This Is What Jamie Dimon Will Tell the U.S. Senate Today (With Annotated Text)e, Pam Martens and Russ Martens, May 26, 2021
Three Wall Street Mega Banks Have Admitted to a Combined Eight Felony Counts; But Don’t Expect the Word “Felony” to Come Up in Wednesday’s Senate Banking Hearing with their CEOs, Pam Martens and Russ Martens, May 25, 2021
Collapse of Independent News Media
How New York City Is Saving Its Local News Outlets
[New York Times, via The Daily Poster 5-23-2021]
“At a time when newsrooms nationwide are laying off reporters and some are closing down, a program begun by Mayor Bill de Blasio’s administration has been helping to sustain small, independent media outlets in every corner of the city. In May 2019 he signed an executive order requiring city agencies to direct at least half their budgets for digital and print advertising to community newspapers and websites. These media outlets are often their communities’ most trusted sources of information. They publish in more than 30 languages throughout the five boroughs, serving immigrants, ethnic and religious groups and communities of color. It has been a resounding success.”
Bezos Weaponizes The Washington Post Homepage
[DailyPoster, May 26, 2021]
Eric Alterman, May 28, 2021 [The American Prospect]
“Our democracy is being destroyed and the groundwork for fascism is being laid by our political system’s tolerance—nay, embrace—of the Republican Party’s unending avalanche of lies.” You are never going to see or hear those words from a mainstream news source….
Economics, though, is hardly the only problem. I hate using the word “obviously,” but obviously, the rise of right-wing media is also a fundamental problem that the rest of the media do not know how to handle. The big mistake occurred back in 1996 when journalists and politicians decided to treat Fox News as a legitimate news source. Everybody knew that the clowns on talk radio weren’t doing journalism. They were rabble-rousers and carnival barkers who riled up the yahoos to complain to journalists (and politicians)—but no intelligent, well-informed person took them seriously. Then Roger Ailes dressed these clowns up in nice clothes and Rupert Murdoch handed out checks, and suddenly their lies, racism, and ethnocentrism were setting the agenda for our politics. (For details, see Brian Rosenwald’s Talk Radio’s America: How an Industry Took Over a Political Party That Took Over the United States.)
The right had been “working the refs” for decades, but once Fox was launched, the danger came from inside the room. Ailes smartly hired a few real journalists for window dressing, just so the rest of the profession could not write Fox off entirely. Plus, the company made billions of dollars, and so the moguls who ran its competitors lusted after its viewers and did what they could to attract them, farming out part of their broadcast time to faux Foxes. (This explains why literally every cable company and even PBS has felt it necessary to employ Tucker Carlson at some time or another.)
Climate and environmental crises
Controversial forestry experiment will be largest-ever in United States
[Nature, via Naked Capitalism 5-25-2021]
“Shell Loses Climate Case That May Set Precedent for Big Oil”
[Bloomberg, via Naked Capitalism Water Cooler 5-26-21]
“Royal Dutch Shell Plc was ordered by a Dutch court to slash its emissions harder and faster than planned, a ruling that could have far-reaching consequences for the rest of the global fossil fuel industry. Shell, which said it expects to appeal the ruling, has pledged to reduce its greenhouse gas emissions by 20% within a decade, and to net-zero before 2050. That’s not enough, a court in The Hague ruled Wednesday, ordering the oil producer to slash emissions 45% by 2030 compared to 2019 levels. The court said the ruling applies to the entire Shell group, which is headquartered in the Dutch city and incorporated in the U.K. That raises the prospect of the company having to radically speed up its current climate and divestment policies in order to hit the new target. The ruling will be scrutinized globally amid a new era of litigation related to climate change.”
‘Black Wednesday’ for big oil as courtrooms and boardrooms turn on industry
[Guardian, via Naked Capitalism 5-29-2021]
In a stunning series of defeats for the oil industry, over the course of less than 24 hours, courtrooms and boardrooms turned on the executives at Shell, ExxonMobil and Chevron. Shell was ordered by a court in The Hague to go far further to reduce its climate emissions, while shareholder rebellions in the US imposed emissions targets at Chevron and a boardroom overhaul at Exxon….
“It was honestly a really emotional moment,” says Jasper Teulings, the former general counsel for Greenpeace International. The ruling by the Dutch court ordering Shell to cut its emissions by 45% within the next 10 years “shifts the debate” and could influence courtrooms across the globe, he told the Guardian.
“It makes clear that the onus is on the industry to act, and that it can be held accountable to take very specific steps. It’s very relevant in legal terms because the ruling was very pure in its demand: it’s not about money, it’s about conduct. It was astutely reasonable,” he says.
The basis of the case, brought by Dutch climate campaigners at Milieudefensie, was rooted in norms derived from elements of human rights law and the UN’s Guiding Principles, which have “near-universal application” and could be used in cases against other major polluters.
“Biden administration unveils offshore wind plan for California”
[Los Angeles Times, via Naked Capitalism Water Cooler 5-26-21]
“Under the plan, the administration would allow wind power projects to be built in federal waters off the coast of Central California northwest of Morro Bay, as well as at a second location west of Humboldt Bay. Officials estimate that the two areas combined could generate 4,600 megawatts of electricity — enough to power 1.6 million homes. The government’s plans represent a ‘breakthrough,’ said Gina McCarthy, President Biden’s senior climate change advisor. ‘It’s an announcement that will set the stage for the long-term development of clean energy and the growth of a brand-new made-in-America industry.’ Gov. Gavin Newsom praised the plans, noting that California had spent years trying to advance offshore wind power under the Trump administration, with no success. The state, he said, will accelerate its own environmental review process in order to speed up the projects, which he estimated would be built at least 20 miles offshore with enough space for roughly 380 wind turbines.”
Conservative / Libertarian Drive to Civil War
Corporations Kept Bankrolling The Campaign Against Voting Rights
[The Daily Poster, May 26, 2021]
“Trump is starting to put together his own Contract with America. And he’s teaming up with Newt.”
[Politico, via Naked Capitalism Water Cooler 5-27-21]
“With an eye toward winning back the House and Senate in the 2022 midterm elections, former President Donald Trump has begun crafting a policy agenda outlining a MAGA doctrine for the party. His template is the 1994 ‘Contract with America,’ a legislative agenda released ahead of the midterm elections in the middle of President Bill Clinton’s first term. And, as a cherry on top, he’s teaming up with its main architect — Gingrich — to do it. In recent weeks, Trump sat down with the former House speaker as well as his former chief of staff Mark Meadows and Sen. Lindsey Graham (R-S.C.) at his private Mar-a-Lago club to begin crafting the document, according to a source familiar with the meeting. The group is still just beginning to hammer out the details of what a Trumpified Contract might look like. But it is likely to take an ‘America-First’ policy approach on everything from trade to immigration. The source described it as “a policy priority for 2022 and beyond.”
Joanne B. Freeman, The Field of Blood: Violence in Congress and the Road to Civil War, October 5, 2018 [YouTube]
From the 1830s to the Civil War, Congressmen sorted into two factions: “fighting men,” and “non-combatants.” Representatives from the Southern slave holding states comprised almost all the “fighting men,” and their repeated threats of personal violence against the “non-combatants” of the North, in and out of the halls of Congress, allowed Southern slaver-holders to dominate the national legislature. This began to change in the 1850s, as citizens in the North, increasingly aware and angry at this dynamic of threatened violence by Southerners, began to send their own “fighting men” to Congress to replace “non-combatants.” The parallels with today are obvious.
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Senate meltdown reveals deepening partisan divide
[The Hill, via Naked Capitalism 5-29-2021]
NRA Wins Permitless Carry for Handguns in Texas
[Rolling Stone, via Naked Capitalism 5-29-2021]
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