Sunday, October 3, 2021

Week-end Wrap – Political Economy – October 3, 2021

 Week-end Wrap – Political Economy – October 3, 2021

by Tony Wikrent

Strategic Political Economy

Iran Cements Alliance With China, Russia In Clear Message To Washington

[, September 28, 2021, via Mike Norman Economics]

Iran’s approval last week for full membership to the Shanghai Cooperation Organization (SCO) is the surest sign yet that any U.S. efforts to keep it, or Iraq, or many key Shia Crescent Middle East states out of the China-Russia-Iran sphere of influence may now be entirely futile. The SCO is the world’s biggest regional organization both in terms of geographic scope and of population, covering 60 percent of the Eurasian continent (by far the biggest single landmass on Earth), 40 percent of the world’s population, and more than 20 percent of global GDP. Iran’s acceptance into the group’s full membership grouping, in which it held ‘observer status’ only for over 15 years, means, in effect: that the seismic, multi-generational Iran-China deal is set for full roll-out, with Russia firmly alongside both playing its role; and, that any new ‘nuclear deal’ done with Iran by the new U.S. administration will not be worth the paper it is written on.

[Twitter, via Naked Capitalism 9-26-2021]



Modern party leaders are actively seeking to avoid the fate of the USSR. However, many outside observers assume PRC leaders view political liberalization as the primary cause of the collapse of the Soviet Union.

When Xi came to power in 2012/2013, he initiated his “anti-corruption drive” to resolve three primary constraints:

- Reduce corruption

- Soften the power-base of entrenched interests

- Uproot the most acute sources of factionalism


In hindsight, the past eight years of Xi’s reign as a continuous effort to mitigate the long-term impact of state capture and factionalism. The fact that we’re eight years in and these problems still exist likely means these are permanent features of the system. 8/

Concerning US-China relations, China is drawing lessons from the post-2008 US in the same way it draws lessons from the collapse of the Soviet Union. 18/

Many in China believe the US is deeply constrained (even incapacitated) by a combination of its private sector, entrenched state interests, and populist ultra-nationalism. 19/

"Institutional advantage" reflects a belief that the Chinese system can self-correct internally and adapt to externalities in ways the US simply cannot. 22/

China believes either sides’ ability to shed the weight of entrenched interests and conduct deep self-correction in real-time is what will define US-China relations in the 21st century. 23/

“United States Corporate Profits”

[Trading Economics, via Naked Capitalism Water Cooler 9-30-21]

“Corporate profits in the United States climbed 10.5% to a record high of USD 2.44 trillion in the second quarter of 2021, after rising 4.5% in the previous period and compared with a preliminary estimate of a 9.7% jump. Undistributed profits climbed 21.4% to $1.03 trillion and net cash flow with inventory valuation adjustment, the internal funds available to corporations for investment, advanced 7.9% to $3.08 trillion. Also, net dividends rose 3.8% to $1.41 trillion.”

The Pandemic and Capitalism 

[Democracy Journal, via Naked Capitalism 9-29-2021]

There is perhaps one thing that Trump and his cohort have grasped that would usefully complement the agenda of solidarity, sustainability, social insurance, and countervailing power that emerges from this book. And that is that the failure of the neoliberal model to deliver on its promises of growth through competitiveness and “tough love” for ordinary workers and the poor is not due solely to the fact that it handed Anglo-Saxon capitalism over to predators, thugs, and fraudsters posing as financiers. It is also due to actual existing competition from better-performing systems. We must consider the fact that Anglo-Saxon money-manager capitalism isn’t the only economic system out there in the world today. There are alternatives. And not only that: Experience shows us that the alternatives are superior, both in delivering competitiveness and in improving living standards and reducing extreme poverty, as well as in retaining the capacity to respond to an extreme crisis, coming, for instance, from the biosphere.

A mixed economy featuring corporations with long time horizons, stable relationships with their bankers and countervailing power was never wholly dismantled in Germany, in Scandinavia or Japan, and it took root in Korea, where it survived several severe financial shocks that would have demolished it in Europe or North America. These serve as the prime examples of successful resistance within the West to untrammelled exercise of financial power….

What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic; in the production of medical masks, for instance, China ramped up capacity almost six-fold in a month. Money-market capitalism, in a vast transformation initiated in the early 1980s by Reagan and Paul Volcker, has left an industrial shell, with capacity in some areas limited by bottlenecks in others, and by the failure, so far, of clear and effective chains of command. The Anglo-American model is therefore now under enormous stress, as capital markets crumble and market-based networks begin to break down.

Conservative / Libertarian Drive to Civil War

The Koch Empire Goes All Out to Sink Joe Biden’s Agenda — and His Presidency, Too

[Rolling Stone, September 30, 2021]

The Koch network is one of the most extensive and well-funded political and policy operations in the country, having pledged to spend more than a billion dollars in the past four election cycles. The web of nonprofit groups funded by or affiliated with the Koch network — dubbed the “Kochtopus” by critics — broadly promotes an anti-government, libertarian-style vision for American life. In most cases, the donors who bankroll the network’s groups remain anonymous, playing a central role in the spike in dark-money spending in American politics….

Koch-aligned groups are together spending millions of dollars on advertising, targeting moderate Democratic lawmakers, and pushing their influence in the halls of Congress to whittle down or outright kill the sweeping policy package, which would represent the largest expansion of the social safety net in the past 50 years and the biggest step toward addressing climate change in U.S. history.

“Fighting the reconciliation bill is a top priority for Charles Koch’s surrogates,” says Connor Gibson, founder of the corporate watchdog organization Grassrootbeer Investigations, who has spent years tracking Koch influence in the United States. “This is a viable threat for his network, and we can see that all the tentacles of the Kochtopus are out in full force trying to stop it from passing.”

Koch-funded group provides pointers for harassing your local school board

Aldous J Pennyfarthing, October 2, 2021 [DailyKos]

The Washington Post has obtained a form letter suggesting that the recent “grassroots” effort to turn our schoolchildren into little disease vectors of freedom is not so grassroots after all. The Koch(s) is (are) behind it….

“But the heartfelt appeal is not the product of a grass roots groundswell. Rather, it is a template drafted and circulated this week within a conservative network built on the scaffolding of the Koch fortune and the largesse of other GOP megadonors.

“That makes the document, which was obtained by The Washington Post, the latest salvo in an inflamed debate over mask requirements in schools, which have become the epicenter of partisan battles over everything from gender identity to critical race theory. The political melee engulfing educators has complicated efforts to reopen schools safely during a new wave of the virus brought on by the highly transmissible delta variant.

“The document offers a rare glimpse into the inner workings of a well-financed conservative campaign to undermine regulations that health authorities say are necessary to contain the coronavirus. The frustration of many parents who want a greater say is deeply felt, school superintendents say. But their anger is also being fueled by organized activists whose influence is ordinarily veiled.”

Always remember that the Bill Clinton administration had enough information on the Kochs, because of dissident whistle-blower brother William, to put Charles and David in prison. In addition, the Kochs had just lost a devastating wrongful death suit in the case of two teenagers literally incinerated by a butane leak from a Koch pipeline in Lively, Texas. But Clinton allowed the Kochs to buy Oklahoma US Senator Don Nickles, who had the lead federal prosecutor against the Kochs replaced. Charles and David Koch went so far as to hire “private investigators” who spied on members of both the federal prosecutor’s team, and a separate U.S. Senate committee also examining the Kochs. Jane Mayer has documented all this in her 2016 book, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right.

When public health becomes the public enemy

[High Country Journal, September 24, 2021]

Far-right extremists are robbing the West of the officials who protect community health.

Before COVID-19, local health departments were all but invisible to the general public. Their work kept communities running — they handled septic tank regulations, infant and maternal health programs, food safety inspections, air and water quality readings and immunizations — but they rarely attracted attention. “Nobody realizes it day to day, because they don’t have to deal with (those issues) — because we prevent it,” Robinson says. Few citizens knew the names of their local health officers or health department board members.

But the pandemic changed everything. As COVID cases increased in Montana, discussion swirled around what precautions to take, and Robinson became an easily recognizable public figure — and a convenient scapegoat for local citizens’ fears and frustrations. Every day, hateful emails and phone calls accused her of threatening people’s constitutional freedoms and destroying businesses. Protesters lurked outside her office, holding signs that proclaimed “Tamalee is a tyrant” and “Got dictatorial powers? Tamalee does.”

School board group asks for federal help to stop threats and violence in debates on Covid and critical race theory

[CNN, October 1, 2021, via DailyKos]

A group representing national school board associations asked President Joe Biden and the federal government on Wednesday to help look into threats against school board members and educators to see if laws were broken regarding bullying, hate crimes, or domestic terror, as anger around masks and critical race theory have boiled over around the country.

"America's public schools and its education leaders are under an immediate threat," said the letter, signed by National School Boards Association President Viola M. Garcia and NSBA interim Executive Director and CEO Chip Slaven.
The NSBA requested the resources of the US Department of Justice, Federal Bureau of Investigation, Department of Homeland Security, Secret Service, and its National Threat Assessment Center "regarding the level of risk to public schoolchildren, educators, board members, and facilities/campuses." They also asked for the help of the US Postal Inspection Service regarding threatening letters and cyberbullying.
      "As these acts of malice, violence, and threats against public school officials have increased, the classification of these heinous actions could be the equivalent to a form of domestic terrorism and hate crimes," the school boards association stated in its letter to Biden.

      How Milton Friedman Aided and Abetted Segregationists in His Quest to Privatize Public Education
      Nancy MacLean, September 29, 2021 [Institute for New Economic Thinking, via Naked Capitalism 9-29-2021]

      Robert Kagan, September 23, 2021 [Washington Post]
      I find it grating that Kagan now warns that violence is imminent from “the division of the country into warring red and blue enclaves,” after Kagan has spent a lifetime advancing the movement conservatism that is explicitly aimed at replacing the post-World War Two “liberal consensus” and destroying the civic republicanism USA was founded on. Especially since Kagan insists the problem is the new threat posed by “Trump and his Republican allies,” who are “ are giving themselves greater control over the election certification process”:

      Meanwhile, the amateurish “stop the steal” efforts of 2020 have given way to an organized nationwide campaign to ensure that Trump and his supporters will have the control over state and local election officials that they lacked in 2020. Those recalcitrant Republican state officials who effectively saved the country from calamity by refusing to falsely declare fraud or to “find” more votes for Trump are being systematically removed or hounded from office. Republican legislatures are giving themselves greater control over the election certification process. As of this spring, Republicans have proposed or passed measures in at least 16 states that would shift certain election authorities from the purview of the governor, secretary of state or other executive-branch officers to the legislature. An Arizona bill flatly states that the legislature may “revoke the secretary of state’s issuance or certification of a presidential elector’s certificate of election” by a simple majority vote. Some state legislatures seek to impose criminal penalties on local election officials alleged to have committed “technical infractions,” including obstructing the view of poll watchers.

      The stage is thus being set for chaos. Imagine weeks of competing mass protests across multiple states as lawmakers from both parties claim victory and charge the other with unconstitutional efforts to take power. Partisans on both sides are likely to be better armed and more willing to inflict harm than they were in 2020. Would governors call out the National Guard? Would President Biden nationalize the Guard and place it under his control, invoke the Insurrection Act, and send troops into Pennsylvania or Texas or Wisconsin to quell violent protests? Deploying federal power in the states would be decried as tyranny. Biden would find himself where other presidents have been — where Andrew Jackson was during the nullification crisis, or where Abraham Lincoln was after the South seceded — navigating without rules or precedents, making his own judgments about what constitutional powers he does and doesn’t have.

      But Kagan’s essay has received widespread and positive coverage in the leading organs of the establishment news media, from which I conclude it is the latest summary of USA ruling elite’s gestalt (see Josh Marshall’s post, linked below). It should therefore be carefully noted that Kagan dismisses “paint[ing] all GOP policies for the past 30 years as nothing more than precursors to Trumpism” as “opportunistic partisanship and conspiracy-mongerin… bad history, [and] no cure for what ails the nation.”

      Finally, also note that Kagan sets forth a very truncated definition of American civic republicanism that carefully excludes any notion of promoting the General Welfare.” According to the civic republican concept of public virtue, citizens of a republic are expected to set aside their self-interests, when these endanger the common good. We now see an extreme example in those conservatives and libertarians who insist that mask and vaccine mandates are “totalitarian” assaults on individual liberty, or the Supreme Court striking down the national eviction moratoriumFor Kagan — or anyone else — to support the concepts of promoting the General Welfare and public virtue, they would have to abandon their free market theology that the clash of individual self interests naturally result in the best allocation of society’s resources. 

      As it happens, however, that is what the American experiment in republican democracy requires. It is what the Framers meant by “republican virtue,” a love of freedom not only for oneself but also as an abstract, universal good; a love of self-government as an ideal; a commitment to abide by the laws passed by legitimate democratic processes; and a healthy fear of and vigilance against tyranny of any kind. Even James Madison, who framed the Constitution on the assumption that people would always pursue their selfish interests, nevertheless argued that it was “chimerical” to believe that any form of government could “secure liberty and happiness without any virtue in the people.” Al Gore and his supporters displayed republican virtue when they abided by the Supreme Court’s judgment in 2000 despite the partisan nature of the justices’ decision. (Whether the court itself displayed republican virtue is another question.)

      I do not see how civic republicanism can be restored without setting limits on the what the Kochs and others can say and do. The extraordinary court judgement against Alex Jones points us to one possible solution: 

      Alex Jones Just Lost 2 Sandy Hook Cases 

      [Huffington Post, via Naked Capitalism 10-1-2021]

      Infowars host Alex Jones has lost two of several lawsuits filed against him by relatives of Sandy Hook victims after he routinely failed to comply with requests to produce documents related to his involvement in spreading lies about the deadly shooting.

      Judge Maya Guerra Gamble on Monday issued her ruling for default judgments against Jones in two different cases, which means he and the conspiracy-theory-spewing outlet Infowars have been found liable for all damages and a jury will now be convened to determine how much he will owe the plaintiffs. The new rulings became public Thursday.

      In the filings, Gamble eviscerated Jones and reasoned that default judgments should be ordered because “an escalating series of judicial admonishments, monetary penalties, and non-dispositive sanctions have all been ineffective at deterring the abuse,” caused by Jones’ unwillingness to turn over documents related to the cases, the Texas judge ruled.

      The ruling — which is often referred to in Texas as a “death penalty sanction” for a party unwilling to comply with court orders — is a rarity in the legal world. Jones, who is now on his seventh lawyer in these cases, had years to provide documentation requested by the court, including internal company emails.

      Of course, as in the case of the Kochs in the 1990s, simply enforcing already existing law and holding rich and powerful elites to account to the fullest extent— unlike the recent conclusion of the Purdue / Sackler family case — is probably the best remedy. Instead, we get the horrifying injustice against an attorney who successfully held Chevron to account. 

      An Insider from the Purdue Pharma Bankruptcy Speaks Out

      [The New Yorker, September 20, 2021]

      Purdue had been sued by virtually every state in the nation and by thousands of other plaintiffs. The attorneys general of some two dozen states had brought civil charges against members of the Sackler family who had served on the company’s board. This is what lawyers call a “mass tort” situation, but tort law would not be the mechanism for resolving it. Instead, in September, 2019, Purdue filed for bankruptcy in White Plains, New York. American corporations can choose where they want to file for bankruptcy, and the company had handpicked a judge from whom it hoped to obtain a favorable result.

      Earlier this month, that judge, Robert Drain, conditionally signed off on a controversial settlement in the case. The Sacklers will give up their interest in Purdue and pay some four and a half billion dollars over roughly the next decade to fund addiction treatments and other solutions to the opioid epidemic. But, in exchange, the family will receive a sweeping grant of immunity from any future civil liability related to the crisis—and a comparatively small fraction of the over-all settlement will be paid out directly to individual victims and their families. The day before Drain issued his approval of the deal, Hampton resigned in protest. His frustration had been growing throughout the proceeding. Although he had been sworn to secrecy about the sensitive work that he was doing, he was also secretly writing a memoir. “Unsettled” is an account of his Kafkaesque experience inside the Purdue bankruptcy, and he provides many new details about the ways in which a bankruptcy court is not an ideal forum for redressing widespread harm and corporate misconduct—and about the reclusive family at the center of the story. In Hampton’s brutal assessment, the bankruptcy was a “bloodbath.”

      CHEVRON V. DONZIGER: An update 

      Marianne Williamson [Transform, via Naked Capitalism 9-27-2021]

      The Road to the Stolen 2024 Election

      Josh Marshall, September 27, 2021 [via DailyKos] 

      I’ve been gratified to see that the threat to the 2024 election and really all elections that come after it is beginning to seep into the mainstream or prestige political dialog. You may have seen Robert Kagan’s essay in the Post or this one in Politico or other pieces that have appeared in the last week or more. These don’t tell us a lot that we don’t know. But especially pieces like Kagan’s place the critical conversation in one of those prestige venues that exist outside the limits of “both sides” analysis. Maybe the foundations of our democracy are under active threat and we see it all happening right in front of us. Maybe it’s not a general issue. Maybe it’s the radicalization of one political party increasingly taking aim at the foundational rules and agreements that make civic life possible in this country.

      I thought it was worth laying out just what we’re talking about in specific terms. The general problem is that a radicalized GOP simply no longer accepts the idea that elections apply to them. Or rather, elections they don’t win can’t be legitimate, by definition.

      The carnage of mainstream neoliberal economics

      Fertilizer Prices Soar Near 2008 Highs on Supply Shocks, Concerns Sprout Over Sourcing Enough for 2022 U.S. Corn Acres 

      [AgWeb, via Naked Capitalism 9-29-2021] Troy P adds:

      If you look at the drought monitor map the drought conditions keep expanding to the east and are now in major corn and soybean growing states. Since they are in a moisture deficit now they will need a wet fall and winter to replenish topsoil moisture for next spring planting. If they are still in drought next spring and there are fertilizer supply shocks things could get real ugly for the cost of food next year

      The $52 Trillion Shadow Banks That Supercharged The Commodity Boom — Alex Kimani

      [via Mike Norman Economics 9-29-2021]

      With a dearth in lending, trade finance is becoming an increasingly important alternative credit investment strategy where a growing variety of shadow banks and investment funds are becoming "the new banks".

      Shadow banks–a term the industry generally resents–consists of financial intermediaries who facilitate the creation of credit across the global financial system. The shadow banking system can also refer to unregulated activities by regulated institutions, including hedge funds, unlisted derivatives, and even credit default swaps. One big distinction between shadow banks vs. traditional lenders: Shadow bankers are mostly exempt from regulatory oversight because these institutions do not accept traditional deposits. Naturally, they also charge much higher rates than traditional lenders–sometimes twice as high.

      These companies have been seeing a surge in business during the ongoing commodity boom as banks turn their backs on smaller and higher-risk traders....

      The workers who keep global supply chains moving are warning of a ‘system collapse’ 

      [CNN, via Naked Capitalism 9-30-2021]

      Global supply chains at risk of collapse, warn business leaders 

      [Financial Times, via Naked Capitalism 9-30-2021]

      ​​​​​​​Health Care Crisis

      Woman charged for crying during surgery 

      [Boing Boingvia, via  Naked Capitalism 10-1-2021]

      Includes an image of the bill, with an $11.00 charge for 96127, “Brief Emotion”:

      According to a Mentegram article titled, “CPT Code 96127: How to Increase Revenue with This NEW Behavioral or Emotional Assessment” CPT Code 96127 “is a code that may be used to report brief behavioral or emotional assessments for reimbursement” and “may be billed four times for each patient per visit, utilizing four different instruments or assessments. So not only will clinicians have more efficient practices by utilizing these screenings, but they can also use them to build revenue.” The article concludes with “Can you see how this missed income can really add up?”

      Lambert Strether added: “On upcoding and the Direct Contracting Entity Business model designed to privatize Medicare, see here. It’s beautiful, in its own way. Health care for profit creates a system so vicious you cry when you experience it. Then they bill you for crying. It’s the neoliberal circle of life!”

      Restoring balance to the economy

      “Amazon Has to Disclose How Its Algorithms Judge Workers Per a New California Law”

      [Interesting Engineering, via Naked Capitalism Water Cooler 9-27-21]

      “On Wednesday, California Governor Gavin Newsom signed a bill into law that will bar ‘mega-retailers’ like Amazon, from firing warehouse workers for missing quotas, according to the San Francisco Gate. Mega-retailers, those companies that employ more than 1,000 warehouse workers, will now have to disclose how their algorithms judge worker productivity. ‘We cannot allow corporations to put profit over people,’ Newsom, said in a news release announcing he had signed the law according to the San Francisco Gate. The new law will also ensure that mega-retailers cannot discipline workers for following health and safety laws and will allow employees to sue for suspension of unsafe quotas or combating retaliation. The bill, AB 701, goes into effect on January 1 and gives mega-retailers just 30 days to disclose ‘each quota to which the employee is subject.’ Mega-retailers will now have to outline ‘the quantified number of tasks to be performed, or materials to be produced or handled, within the defined time period, and any potential adverse employment action that could result from failure to meet the quota.'”

      “An NYC restaurant owner raised staff wages to $25 an hour. She’s had no trouble recruiting – but still doesn’t think she pays employees enough.”

      [Business Insider, via Naked Capitalism Water Cooler 9-28-21]

      “Cohen said that the wage hikes meant she had to raise prices by around 30%. She streamlined the restaurant’s menu, too. Previously, it offered tasting menus of five and ten courses, but now it just offers one five-course menu, which she said slashed the restaurant’s food costs and meant she could afford to pay staff more. ‘We put the focus on staff comes first and everything comes second,’ Cohen said. ‘I can’t succeed without a staff.’ Other restaurants have voiced concerns that price hikes could lead to fewer visitors, but Cohen said her menu changes hadn’t deterred diners. She said that the restaurant, which seats 44, was serving between 85 and 90 diners on an average night, which was roughly the same as pre-pandemic.'”

      “Instacart Workers Are Asking Users to #DeleteInstacart”

      [Vice, via Naked Capitalism Water Cooler 9-29-21]

      “A group of Instacart gig workers is requesting that all customers who shop on the platform boycott the grocery delivery app to pressure it to improve conditions for workers. Using the hashtag #DeleteInstacart, workers are trying to pressure the company ahead of a rumored IPO, one of the most highly anticipated of the year. ‘Continuing to utilize Instacart’s services would only enable its unethical behavior, endorse its continued exploitation of workers, and reward its corporate greed,’ the collective of Instacart gig workers wrote in an open letter to customers published Monday. Instacart workers on the platform are demanding a reinstatement of a commission based pay model, the reinstatement of 10 percent default tip, a more transparent system for assigning orders to workers, occupational death benefits, and a rating system that does not punish workers for reasons that are beyond their control, such as inventory issues at a grocery store. Until these demands are met, the Instacart gig workers say they’ll continue to call for a boycott from customers. According to Gig Workers Collective organizers, Instacart’s gig workers are predominantly women, many of them single moms with childcare responsibilities.”

      “John Deere Workers Just Voted To Authorize A Strike”

      [Jalopnik, via Naked Capitalism Water Cooler 10-1-21]

      “The strike was voted on after renegotiations for a six-year-old contract came grinding to a halt earlier this month. The old contract wasn’t a very popular one, as it barely passed at the last vote. It really only crested the cutoff by 200 votes because of ratification bonuses…. The strike couldn’t come at a worse time for John Deere management. With $1.6 billion dollars in the third quarter profits, the company is reporting higher numbers than ever. If the strike goes forward, workers would put down tools in the first half of October, and with the harvest season underway, this could spell doom for the company and potentially have larger ripple effects throughout the agriculture industry. UAW workers rightly contend that they need to be sharing in the record profits. A former local UAW president said the company is aware it needs to do right by workers.”

      Disrupting mainstream economics

      “How Biden Could End the Debt-Ceiling Crisis by ‘Minting the Coin’”

      [Eric Levitz, New York Magazine, via Naked Capitalism Water Cooler 9-31-21]

      For those who came in late: “Back in 1995, America’s coin collectors successfully lobbied Congress for legislation that would empower the Treasury Department to mint collectible platinum coins in a greater variety of sizes. The idea was to facilitate the creation of smaller, cheaper coins to help less affluent coin collectors get in on the sweet platinum action. In writing this legislation, however, Congress accidentally — and yet quite explicitly! — gave the Treasury secretary extraordinary money-creation powers…. In 2011, the blogger Carlos Mucha, writing under his commenter name “Beowulf,” noted that this law seemed to provide a debt-ceiling work-around: If the Treasury secretary has the power to mint platinum coins of any denomination, then he or she could (1) mint a $1 trillion platinum coin and then (2) take it to the Federal Reserve and use it to repurchase $1 trillion in Fed-held U.S. Treasury debt. Just like that, the U.S. debt level would be brought well below the statutory ceiling, and the government could carry on paying interest on its debt while meeting all its statutory spending obligations. Notably, such an action would not be inflationary “money printing.” The supply of money circulating in the real economy would not change. One branch of the government would simply deposit a coin in the account of another branch of government, thereby erasing $1 trillion from the national debt. Nothing would change except accounting figures that Congress has fetishized. This is part of what makes the “mint the coin” option so appealing to critics of Beltway deficit politics in general, and proponents of Modern Monetary Theory in particular: It helps expose the absurdity of fixating on national-debt totals that are already influenced by factors nearly as arbitrary as the platinum-coin gambit, while spotlighting our government’s absolute sovereignty over money creation.”

      Top House Budget Dem: DC Can Spend All It Wants Because It's 'Like the Banker in Monopoly'

      [InsideSources, September 29, 2021, via Mike Norman Economics]

      Representative John Yarmuth (D-Ky.) is Chairman of the House Budget Committee, which is playing a key role in crafting the $3.5 trillion reconciliation bill currently being debated in Congress. During a speech to the Louisville, Ky. Rotary Club in June, he explained why he believes the government can borrow and spend the trillions under discussion without any negative impact on the economy.…
      Not only would not have a negative impact, it would have a positive impact on people's lives by investing public funds created by the state in public resources, thereby increasing productivity and raising the living standard. Of course, the devil is in the details and spending for the sake of spending y is not guaranteed to produce positive outcomes. Rather, government spending needs to be tightly targeted toward public purpose in light of both contemporary needs and long-term distributed prosperity.

      Mike Norman comments on Felix Salmon’s article, which I do not include here:

      But a positive thing is that a lot of people are coming to understand more about how the monetary system works as a ledger system. The bottom line is that while taxes and debt-issuance "fund" government spending in an accounting sense, they do not "pay for" spending when the government is sovereign in its currency and issues the currency through an institutional process. Where "the coin" fails is potentially confusing the coin as a money thing (token) for "the money," which is actually a matter of ledger entries. "Money" is not a "thing" but credi

      How Dominant are Big US Corporations?

      [Economics from the Top Down, via Mike Norman Economics 9-29-2021]

      Size matters. Not only are they dominant but also their dominance is increasing, making large corps powerful enough to preclude government anti-trust legislation and regulation.

      Debate : Michael Hudson and Thomas Piketty

      [The Vineyard of the Saker, October 01, 2021, via Mike Norman Economics]

      Michael Hudson and Thomas Piketty Debate Inequality, Debt, and Reform

      [Naked Capitalism, September 29, 2021]

      Senior Fed Economist Slams Economics As "Arrant Nonsense", Hints It Perpetuates "Criminally Oppressive, Unjust Social Order" 

      [ZeroHedge, via Mike Norman Economics 9-27-2021]

      “I leave aside the deeper concern that the primary role of mainstream economics in our society is to provide an apologetics for a criminally oppressive, unsustainable, and unjust social order.”

      Actually not to leave this concern aside: the elites in USA and most of the west are, in fact, criminals or products of a criminogenic environment. 

      Climate and environmental crises

      “US to declare ivory-billed woodpecker and 22 more species extinct”

      [Guardian, via Naked Capitalism Water Cooler 9-30-21]

      “The US Fish and Wildlife Service officially proposed taking 23 plants and animals off the endangered species list Wednesday, because they have not been spotted in the wild and are believed to be completely gone from an earth experiencing human population growth and a climate crisis. Only 11 species previously have been removed due to extinction in the almost half-century since the Endangered Species Act was signed into law. The move underscores an extinction crisis that is growing worldwide. The rate at which extinction would naturally occur is about one to five species per year, according to Michael Reed, a biologist at Tufts University. He adds that now, species are going extinct at 1,000 to 10,000 times that background rate.”

      Information Age Dystopia

      Leaked Documents Show How Amazon’s Astro Robot Tracks Everything You Do 

      [Vice, via Naked Capitalism 9-29-21]

      Facebook Efforts to Attract Preteens Go Beyond What Is Publicly Known, Documents Show 

      [Wall Street Journal, via Naked Capitalism 9-29-21]

      Neoliberalism requires a police state

      Kidnapping, assassination and a London shoot-out: Inside the CIA’s secret war plans against WikiLeaks 

      [Yahoo, via Naked Capitalism 9-28-2021]

      Julian Assange Kidnapping Plot Casts New Light On 2018 Senate Intelligence Maneuver 

      [The Intercept, via Naked Capitalism 9-30-2021]

      Report On CIA Plans To Kidnap Assange Shows Clearest Evidence Yet Of Improper Pressure On Prosecutors 

      [The Dissenter, via Naked Capitalism 9-30-2021]

      Creating new economic potential - science and technology

      The train that shrunk France… and Europe 

      [ars technica, via Naked Capitalism 9-28-21]

      ...Thousands of enthusiasts flocked to the Gare de Lyon station to see the inaugural TGV (Train a Grande Vitesse), which was launched 40 years ago in September 1981….

      According to Eric Alexandre, who is an engineer and a driver at SNCF, the other distinctive aspect of the TGV is its affordability. “The TGV was meant for everyone and not just the rich.”

      The speed, comfort, and affordability made the trains popular in no time. By the end of the 1980s, the high-speed trains ferried an average of 50,000 passengers per day that went up to 90,000 during the peak. In 10 years, they witnessed a jump of 70 percent in passenger traffic, from 10 million to 17 million. As of today, the TGVs have carried more than 3 billion passengers. Currently, between 650 and 700 TGVs run every day serving around 230 destinations in France and Europe….

      The seeds of the TGV were sown in the 1960s, when SNCF began research on creating high-speed links between cities. “It was crucial for SNCF because the railway is an important segment of the transport network. In the 1960s, the motorway network and domestic aviation were being developed. A high-speed rail network was therefore absolutely necessary in order to ensure the relevance of railways for long-distance travel,” Vielliard says.

      The TGV has evolved a lot during the past 40 years in terms of speed, passenger-carrying capacity, and design. The next big change will occur in 2024 with the launch of TGV M, which is loaded with innovations, including improved aerodynamics and 20 percent less power consumption.

      “Iron Battery Breakthrough Could Eat Lithium’s Lunch”

      [Bloomberg, via Naked Capitalism Water Cooler 9-30-21]

      “SB Energy Corp., a U.S. renewable-energy firm that’s an arm of Japan’s SoftBank Group Corp., is making a record purchase of the batteries manufactured by ESS Inc. The Oregon company says it has new technology that can store renewable energy for longer and help overcome some of the reliability problems that have caused blackouts in California and record-high energy prices in Europe…. The units, which rely on something called “iron-flow chemistry,” will be used in utility-scale solar projects dotted across the U.S., allowing those power plants to provide electricity for hours after the sun sets…. ESS was founded in 2011 by Craig Evans, now president, and Julia Song, the chief technology officer. They recognized that while lithium-ion batteries will play a key role in electrification of transport, longer duration grid-scale energy storage needed a different battery. That’s because while the price of lithium-ion batteries has declined 90% over the last decade, their ingredients, which sometimes include expensive metals such as cobalt and nickel, limit how low the price can fall…. Flow batteries, however, look nothing like the battery inside smartphones or electric cars. That’s because the electrolyte needs to be physically moved using pumps as the battery charges or discharges. That makes these batteries large, with ESS’s main product sold inside a shipping container.”

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

      “It’s Always A Battle Against Corruption”

      David Sirota,, September 24, 2021 [Daily Poster].

      “Similarly, John Podesta — who ran the corporate-funded Center for American Progress — circulated a memo on Capitol Hill telling progressives to suddenly back off the $3.5 trillion framework, even though it already passed the House and Senate, even though $3.5 trillion is already a compromise from $6 trillion, and even though $3.5 trillion is a comparatively paltry sum that’s less than what the government is expected to shovel out the door to the Pentagon in just the next 5 years alone. Podesta has declared that “we will not secure the full $3.5 trillion investment” — demanding Democrats once again back off and live to never fight another day, all in the name of protecting the party’s prospects in the upcoming midterm elections. Somehow forgotten is how the same demands for compromise and capitulation were made during President Obama’s first two years, resulting in an all-too-small stimulus that did not adequately boost the economy, and that helped create the conditions for Democrats’ electoral shellacking in 2010.” • The top line matters, obviously, because Podesta says it doesn’t. If “progressives” want to wield real power, and be seen to do so, they need to arrange for both bills to fail if the $3.5 trillion top line is not met. [Family blog] ’em if they can’t take a joke

      “Why Biden Bet It All on Mandates”

      [The Atlantic, via Naked Capitalism Water Cooler 9-27-21]

      “‘Months ago, because of the potential political blowback, no one wanted to resort to mandates,” a senior Biden-administration official told me, speaking on the condition of anonymity to talk more freely. ‘But then it became clear that we didn’t have any other choice, because, essentially, we had pulled out all the stops. We tried trusted messengers [to promote the vaccines]. We made it very convenient. It wasn’t enough.” • I bet that senior official is Ron Klain.

      Lambert Strether decimates this: “They’re lying. The Administration didn’t pull out all the stops, even on vaccination, and the continued PMC preening that they did makes me want to claw my eyes out. First and foremost, they didn’t arrange for paid time off to get vaccinated (and for any adverse reactions). Second, they never attempted to make workplaces vaccination sites. Third, they seem to have expected no resistance from the right (“freedom”) and made no effort to prepare for it or head it off. Fourth, there was no national advertising campaign, on the model of “this is your brain on drugs.” Fifth, even simple measures like making sure, as Toronto did, that there were programs for those who fear needles were ignored. UPDATE Sixth, the “trusted messengers” obviously weren’t; perhaps the author thinks Fauci and Walensky are trusted, but that says more about the contagiousness of West Wing Brain than anything else. Seventh, calling people animals because they seek cheap and safe medications is at the very least an unconventional trustbuilding technique (as is lying about the medication itself). Eighth, the messaging strategy of the Biden administration has been bungled from pre-Inaugural planning to this very day; during the Trump era liberal Democrats kept whinging that Trump didn’t follow the “playbook” Obama left him. Well, it wasn’t a playbook, but it had some good ideas on messaging, and Biden didn’t follow them either. Ninth, the Biden administration never promoted a layered strategy, including especially ventilation. Why in the name of all that is holy wasn’t Jill Biden building a Corsi box on Good Morning America with some cute kids? It’s beyond belief — or would have been, once — that the liberal Democrats could talk themselves into the idea that “We did everything we could” when their intellectual laziness and policy flaccidity is so very, very obvious to the few of us who are paying attention. A less trusting soul than mine would give consideration to the idea that coercion was the endgame the whole time.”


      [Twitter, via Naked Capitalism Water Cooler 9-30-21]



      The Progressive Caucus Wields Power

      David Dayen, October 1, 2021 [The American Prospect]

      This is the 30th year of the Congressional Progressive Caucus (CPC), but in another sense, today is the first day. It’s the first day Washington has seen a coherent, organized coalition in Congress wielding power from the left. And it has the congressional leadership confused.

      In the past, whenever the Democratic leadership needed a vote on some compromised piece of whatever, they would lean on the Progressive Caucus with hackneyed phrases like “half a loaf is better than nothing” or “don’t let the perfect be the enemy of the good,” and caucus members would give in. There wasn’t much of a strategy to keep the caucus together and voting as a bloc, to force their ideas into the conversation. There wasn’t much of a strategy, period.

      Throughout the 1990s, a guy named Bernie Sanders was the chair, but he started with a caucus of only six, and picked up just a handful more throughout the decade…. This began to change after the 2018 midterms, when the ranks of the caucus jumped by 18 members, up to a high-water mark of 96. 


      “American Gentry”

      Patrick Wyman [The Atlantic, via Naked Capitalism Water Cooler 9-27-21] 

      “The conspicuously consuming celebrities and jet-setting cosmopolitans of popular imagination exist, but they are far outnumbered by a less exalted and less discussed elite group, one that sits at the pinnacle of the local hierarchies that govern daily life for tens of millions of people. Donald Trump grasped this group’s existence and its importance, acting, as he often does, on unthinking but effective instinct. When he crowed about his ‘beautiful boaters,’ lauding the flotillas of supporters trailing MAGA flags from their watercraft in his honor, or addressed his devoted followers among a rioting January 6 crowd that included people who had flown to the event on private jets, he knew what he was doing. Trump was courting the support of the American gentry, the salt-of-the-earth millionaires who see themselves as local leaders in business and politics, the unappreciated backbone of a once-great nation. This class of people exists all over the United States, usually in midsize metropolitan areas such as Yakima, Washington, the agricultural city where I grew up…. Yakima isn’t a tiny hamlet; it has a population of about 90,000 and sits at the heart of an extended metropolitan area that’s home to nearly a quarter of a million people. Millions of Americans live in small metropolitan areas much like it: exurban, surrounded by rural territory and wilderness, but not exactly isolated in the middle of nowhere…. Yakima’s economy revolved then, and revolves to an ever greater extent now, around commercial agriculture. As a result, the whole region is dominated by its wealthy, largely agricultural property-owning class….. The owners have a trusted and reasonably well-paid cadre of managers and specialists in law, finance, and the like—members of the educated professional-managerial class that my close classmates and I have joined—but the large majority of their employees are lower-wage laborers…. These elites’ wealth derives not from their salary—this is what separates them from even extremely prosperous members of the professional-managerial class, such as doctors and lawyers—but from their ownership of assets. Those assets vary depending on where in the country we’re talking about; they could be a bunch of McDonald’s franchises in Jackson, Mississippi; a beef-processing plant in Lubbock, Texas; a construction company in Billings, Montana; commercial properties in Portland, Maine; or a car dealership in western North Carolina. Even the less prosperous parts of the United States generate enough surplus to produce a class of wealthy people. Depending on the political culture and institutions of a locality or region, this elite class might wield more or less political power. In some places, it has an effective stranglehold over what gets done; in others, it’s important but not all-powerful.”

      “There Just Aren’t Enough College-Educated Voters!”

      Ruy Teixeira [The Liberal Patriot, via Naked Capitalism Water Cooler 9-30-21]

      In 2012, the difference in Democratic support between college-educated and noncollege (working class) voters in the Presidential election was about 4 margin points (Catalist data, two party vote), with college voters being more favorable to the Democrats than noncollege voters. In 2016 that difference ballooned to 18 points. And in 2020, it went up again to 22 points.

      Democrats seem remarkably relaxed about this polarization, despite liking to style themselves as the party for “working people”. One reason for this is the general perception that the college-educated population is growing while the working class is declining. True as far as it goes but the fact remains that noncollege voters far outnumber college voters. In the 2020 Catalist data, the tally was 63 percent noncollege/37 percent college. That means that any given shift among noncollege voters is significantly more consequential than a similarly-sized shift among college voters. This situation will continue for many election cycles, as the noncollege voter share is likely to decline only gradually.

      Another reason for Democratic complacency is the firm belief that Democrats’ working class problem is solely confined to whites and that white working class voters are so racist/reactionary that it is a badge of honor to ignore them. This is highly questionable as a matter of political strategy and arithmetic, given that they are 44 percent of voters and a lot more than that in key swing states and districts.

      But there is a deeper problem. The perception that nonwhite working class voters are a lock for the Democrats is no longer tenable. In the 2020 election, working class nonwhites moved sharply toward Trump by 12 margin points, despite Democratic messaging that focused relentlessly on Trump’s animus toward nonwhites. According to Pew, Trump actually got 41 percent of the Hispanic working class vote in 2016. Since 2012, running against Trump twice, Democrats have lost 18 points off of their margin among nonwhite working class voters.

      Given this development, how did the Democrats manage to win in 2020? In broad brush terms, Democrats’ modest gains among the white working class—still by far the largest part of the working class—were about enough to cancel out the nonwhite working class losses, thereby allowing the Democrats’ white college gains to put them over the top. But if both segments of the working class move in tandem against the Democrats, that will be a big, big problem that gains among college voters—even if they continue—may not solve.

      Lambert Strether comments: ”Savagely ironic, since nobody was more influential ideologically than Ruy Teixeira in the Democrat turn from the working class; his concept of the “coalition ascendant” was the justification not only for identity politics (and the dense thicket of NGOs that support it), but for the pervasive Democrat belief that they never actually had to deliver on anything, because demographics would to their work for them. Biden, interestingly, seems to have abandoned that notion, or is old-fashioned enough never to have bought into it.

      The Dark Side

      “Armed Assembly: Guns, Demonstrations, and Political Violence in America” [ACLED (Armed Conflict Location & Event Data Project), via Naked Capitalism Water Cooler 9-27-21]

      “Armed demonstrations comprise nearly 10% of all violent or destructive demonstrations in the United States, and are violent much more often than unarmed demonstrations. Contrary to claims that the presence of guns in public spaces makes people safer, demonstrations involving at least one armed individual tend to be violent or destructive 16% of the time.”

      Trump’s Plans for a Coup Are Now Public 

      [The Atlantic, via The Big Picture 9-29-2021]

      Some of the plots to overturn the election happened in secret. But don’t forget the ones that unfolded in the open.

      The Failed Game Plan for Overthrowing the 2020 Vote 

      [The Bulwark, via The Big Picture 9-26-2021]

      The basis of John Eastman’s memo: Get Pence to lie, then count on the GOP to be Trump trucklers.

      The (Anti)Federalist Society Infestation of the Courts

      The Wall Street Journal Just Dropped a Bomb on the Federal Judiciary 

      [Esquire, via Naked Capitalism 9-29-2021]

      More than 130 federal judges have violated U.S. law and judicial ethics by overseeing court cases involving companies in which they or their family owned stock. A Wall Street Journal investigation found that judges have improperly failed to disqualify themselves from 685 court cases around the nation since 2010. The jurists were appointed by nearly every president from Lyndon Johnson to Donald Trump.

      About two-thirds of federal district judges disclosed holdings of individual stocks, and nearly one of every five who did heard at least one case involving those stocks. Alerted to the violations by the Journal, 56 of the judges have directed court clerks to notify parties in 329 lawsuits that they should have recused themselves. That means new judges might be assigned, potentially upending rulings. When judges participated in such cases, about two-thirds of their rulings on motions that were contested came down in favor of their or their family’s financial interests. 

      Haiti Since the 2010 Earthquake: A Review of 11 Years Following the Money CEP L 9-30

      “Can the System Save Itself Again?” [Vulgar Marxism, via Naked Capitalism Water Cooler 10-1-21] “From the point of view of the Democratic Party, Biden’s domestic agenda is critical to its short-term electoral fortunes, the medium-term stability of the political system that empowers it, and the long-term health of the biosphere in which the capitalist mode of production is possible. So how can it be that this party, both as a self-interested actor and the superego of American capital, may fail to pass it?… But it turns out capital remains as shortsighted as ever, and has mobilized to tank Biden’s agenda. At long last, we’re about to find out the answer to the most important question of our era: just how much can the political class extract from capital in the absence of mass popular mobilization or a muscular labor movement? If it isn’t enough to reverse, or at least arrest, the decline of living standards for the working class, we can expect further instability in the political system. Though they’d be loathed to admit it, Democrats should be thanking their lucky stars that the sui generis figure that first emerged to take advantage of these cracks in the foundation was Donald Trump. A right-populist insurgent with total independence from the Republican power structure, a highly activated base, and the ability to circumvent media gatekeeping could have executed a realignment that would have crippled the left for a generation or more – had he been willing to actually challenge capital. Thankfully, Trump’s real passion in life is doing Hot or Not segments on the TV Guide Channel to rank the looks from the Condé Nast Halloween party, so this fate was avoided – for now. But if this legislation also fails to provide for appropriate levels of decarbonization and climate resiliency, that’ll be the least of our worries. So far, the signs are not promising.” • Well worth a careful read (and a hat tip to the alert reader who pointed me to it.)

      • The Failed Game Plan for Overthrowing the 2020 Vote The basis of John Eastman’s memo: Get Pence to lie, then count on the GOP to be Trump trucklers. (The Bulwark) BP 9-26

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