Sunday, August 29, 2021

Week-end Wrap – Political Economy – August 29, 2021

 Week-end Wrap – Political Economy – August 29, 2021

by Tony Wikrent

Strategic Political Economy
Chamathe Palihapitiya - Everyone is WRONG About China 

[Youtube, via Mike Norman Economics, August 23, 2021]

This is extremely informative on two levels. First, former Facebook executive provides his assessment of the short term and long term in China. Short term, the CCP has unambiguously demonstrated that it is firmly in control and that “we will decide how money is made, and who makes it.” Long term, China’s current population of 1.4 billion people is expected to fall by half to 700 million people by 2200. Palihapitiya says that the CC’P’s response to this demographic “time bomb” is to reinforce socialism — which is similar to the argument I make that increasing automation, robotics, and AI in USA and other countries will require more and more “social spending” to support people who simply do not, and cannot, have the means to earn a decent income. Secondly, is to contrast the composure and temperament of Palihapitiya, who clearly sees that the CCP is exerting control over “markets” in a way not thinkable in USA and the West, with that of Palihapitiya’s interlocutor, who is so enmeshed in “free market” theology that he is flipping out over what the CCP is doing. 



Who Has the Cure for America’s Declining Birthrate? Canada.

[New York Times, via The Big Picture 8-24-2021]

Over the last century, two moments that transformed America and positioned it as the global economic leader were the post-World War II economic boom and the I.T. revolution of the 1990s. In both cases, America tore down many forms of discrimination and other barriers to harness the talents of marginalized groups in the country and to welcome new ones, injecting demographic vitality into the economy. To continue America’s upward trajectory in the 21st century, the country must reverse its current demographic decline.

That last sentence especially shows that the writer is locked into the mainstream economic idea that declining population necessarily means a loss of national wealth. This thinking is based on the ideas of feudal mercantilism, which Alexander Hamilton overthrew by his design of the USA economy: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted;” and, “the intrinsic wealth of a nation is to be measured, not by the abundance of the precious metals, contained in it, but by the quantity of the productions of its labor and industry….” Mercantalism is zero-sum. What one nation gained in trade, another lost. But Hamilton’s emphasis on machinery and the inventive genius of the human mind meant that the real wealth of a society is based on its technology, and the application of that technology to the processes of production, transportation, and communication.

The U.S. could be on the verge of a productivity boom, a game-changer for the economy 

[Washington Post, via The Big Picture 8-23-2021]

Rapid adoption of robots and artificial intelligence during the pandemic combined with a rebound in government investment is making some economists optimistic about a return of a 1990s economy with widespread benefits.

Neither WaPo writer or Ritholtz asks what should be an obvious question: If we can produce so much more with so many less workers, why do people need to work? In a republic, the ability of society to provide for human needs must be distributed in such a way that all citizens are guaranteed to decent life, with the material conditions needed for each to make their own, unique contributions. 

Sunday, August 22, 2021

Week-end Wrap – Political Economy – August 22, 2021


Who Lost Afghanistan? — Nick Turse

[The Intercept, via Mike Norman Economics 8-17-2021]

Journalist Craig Whitlock’s new book, “The Afghanistan Papers: A Secret History of the War,” will help ensure that no one forgets the harm America’s civilian and military leaders did, the lies they told, and the war they lost.

Synthesizing more than 1,000 interviews and 10,000 pages of documents, Whitlock provides a stunning study of failure and mendacity, an irrefutable account of the U.S.’s ignoble defeat in the words of those who — from the battlefield to NATO headquarters in Kabul and from the Pentagon to the White House — got it so wrong for so long, papered their failures over with falsehoods, and sought to avoid even an ounce of accountability.

GOP Scrubs Webpage Touting Trump’s ‘Historic’ Taliban Deal 

Gizmodo, via Naked Capitalism 8-17-2021]

We Failed Afghanistan, Not the Other Way Around 

Matt Taibbi, via Naked Capitalism 8-19-2021] 

Per corruption on the US side, Taibbi is correct and then some. This has been endemic in US operations in the Middle East since at least the Gulf War. For instance, see this 2007 story in Vanity Fair about how Alan Grayson, before he ran for Congress, in his capacity as a lawyer and US contracting expert, filed a qui tam suit on the horrific grifting by US contractors in Iraq. What was most remarkable is the DoJ, in stark contrast with just about any other big ticket, well documented suit alleging theft in government contracting, refused to join the action. We also regularly mention the US inability to account for Pentagon spending, see this Cynthia McKinney clip to illustrate how long this has been going on. McKinney being ousted for showing too much ‘tude (such as towards the Capitol Police and AIPAC) always looked like trumped up charges, that it was her poking at the Pentagon was the real proximate cause. And generally, looks like the looting was a feature, not a bug.

Inside US Afghanistan pullout, CIA opium ratline, pipeline conflict, new cold war

[YouTube, via Jon Larson]

Moderate Rebels live: Max Blumenthal and Ben Norton discuss the US military pullout from Afghanistan with journalist Pepe Escobar, who has extensive experience reporting in the country and was even arrested by the Taliban.



Sunday, August 15, 2021

Week-end Wrap – Political Economy – August 15, 2021

 Strategic Political Economy

What China Wants and Why

[Bill Totten's Weblog, via Mike Norman Economics, August 14, 2021]

One of the most concise summaries of the  geographic, economic, and demographic determinants of a country’s history and strategic interests I have ever read. 

Of China’s 1.4 billion people, 94% are Han, and their distribution follows nearly perfectly the Hu/15-in isohyet/NSGL line. This is surprising, especially if you compare it to India {4}, and its diverse ethnicities {5}. Why is China’s population so uniform?

To understand that, we need to look at history.

Brace For "Nasty" Debt Ceiling Fight As GOP Goes Full "Scorched Earth Mode" On Democrats

[ZeroHedge, August 11, 2021]

House Members’ Letter to Pelosi Mostly Barking Up the Wrong Tree 

Stephanie Kelton [The Lens, via Naked Capitalism 8-8-2021]

Are they worried about running out of money? It sounds an awful lot like what former Treasury Secretaries Jack Lew and Larry Summers said in the run-up to passage of the Trump tax cuts back in 2017. Back then, both men warned that if the Republicans were successful in passing the Tax Cuts and Jobs Act (TCJA), then Congress would be left without the capacity to boost spending in the event of an emergency.

Here’s Lew:

If we had a crisis right now whether a financial crisis or a business cycle recession, we don’t have the fiscal policy to respond or the monetary policy. It’s quite scary. … We now don’t have a fiscal arsenal because we spent it on the tax cut and on the spending agreement. We’ve kind of spent the fiscal resources.

And here’s Summers:

Our country will be living on a shoestring for decades because of the increases in the deficits that will result. This is a serious threat to our national security because of what it will mean over time for our ability to fund national defense.

Obviously, both men were wrong…. Congress has the Power of the Purse. It can’t run out of financial resources. If the votes are there, the money will go out. 

Sunday, August 8, 2021

Week-end Wrap – Political Economy – August 8, 2021

 Week-end Wrap – Political Economy – August 8, 2021

by Tony Wikrent

This is the best time all year to see the ringed magnificence of Saturn 

[Syfy Wire, via The Big Picture 8-5-2021]

Saturn takes 29 years to orbit the Sun once. Earth is closer to the Sun and moves much more rapidly, completing an orbit in one year. If Saturn didn’t move then opposition would occur once every Earth year. But Saturn does orbit around the Sun, in the same direction as Earth does, so we have to spend a little bit of extra time catching up to it.

The pandemic

Vaccine Mandates Are as American as Apple Pie 

[Portside, via Naked Capitalism 8-1-2021]

Opinion: Require the vaccine. It’s time to stop coddling the reckless. 

Ruth Marcus, WaPo, via Naked Capitalism 8-2-2021]

“The C.D.C. Needs to Stop Confusing the Public”

Zeynep Tufecki [New York Times, via Naked Capitalism Water Cooler 8-4-2021]

GRAPH: Who’s vaccinated and who’s not

[The Big Picture 8-1-2021]

[Twitter, via DailyPoster 8-4-2021]


Sunday, August 1, 2021

Week-end Wrap – Political Economy – August 1, 2021

Week-end Wrap – Political Economy – August 1, 2021

by Tony Wikrent

Strategic Political Economy

U.S. Population Growth, an Economic Driver, Grinds to a Halt 

[Wall Street Journal, via Naked Capitalism 7-26-2021]

America’s weak population growth, already held back by a decadelong fertility slump, is dropping closer to zero because of the Covid-19 pandemic.

In half of all states last year, more people died than were born, up from five states in 2019. Early estimates show the total U.S. population grew 0.35% for the year ended July 1, 2020, the lowest ever documented, and growth is expected to remain near flat this year.

Some demographers cite an outside chance the population could shrink for the first time on record. Population growth is an important influence on the size of the labor market and a country’s fiscal and economic strength.

I placed this under “Strategic Political Economy” because it exemplifies everything that is wrong with how almost everyone thinks of political economy. “How many people you have” is a holdover from feudalistic mercantile zero-sum economics. The real important measure of the health of a country is the productive power of human labor to sustainably transform nature into needed goods and services. This is Hamiltonian political economy in its essence. Science and technology. 

1791 Report to Congress on the Subject of Manufactures, most especially “Section II: As to an extension of the use of Machinery…” viz.:
“The employment of Machinery forms an item of great importance in the general mass of national industry. ‘Tis an artificial force brought in aid of the natural force of man; and, to all the purposes of labour, is an increase of hands…”

Hamilton is explicit on this issue: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted.” And in his December 1790 Second Report on the Public Credit, Hamilton wrote, “the intrinsic wealth of a nation is to be measured, not by the abundance of the precious metals, contained in it, but by the quantity of the productions of its labor and industry….”

The more productive power, the better. If there is economic activity that is not productive — i.e, private equity, Wall Street and the City of London — then as the climate crisis worsens, it becomes ever more crucial to discourage, curtail, and even punish that useless economic activity. 

Having one person in the active labor force support three or four or more people is exactly where we want to go. With technology in hand, an entire factory producing a few hundred thousand light bulbs each day can be operated by a tea, of just a few dozen people. The real danger is allowing the rentiers and financier seize such a huge chunk of economic rewards, and convince us they deserve it because of their “hard work.” By such myths and means are we killing our own civilization.