Week-end Wrap – Political Economy – May 22, 2022
by Tony Wikrent
Buffalo mass shooting
[Twitter, via Naked Capitalism Water Cooler 5-16-2022]
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Real Scarcity Informed Buffalo Shooter’s Racist Conspiracy
[Intercept, via Naked Capitalism 5-18-2022]
Addressing this violence, though, also requires considering the role of scarcity — not a conspiracy theory, but a very real system of extreme inequality and ecological destruction. It is a system in which the most wealthy and powerful continue to see their wealth and power grow — at the expense of the masses. Faced with actual strained resources and environmental calamity, some of these forsaken people are turning to dark fantasies like the “great replacement theory” to make sense of it all.
Matthew Cunningham-Cook, May 16, 2022 [The Lever]
Particularly in the U.S. — where the socialist branch of the labor movement that brought us the eight-hour workday, the weekend, and Social Security was crushed in the McCarthy era and never recovered — we must start explaining the virtues of worker control over production and worker power in politics, and how it addresses the problem we face: The rich make every economic decision in society, while treating workers as subhuman.
“Call it democracy, or call it democratic socialism, but there must be a better distribution of wealth within this country for all God’s children,” King said.
The one percent — like Rupert Murdoch, the misanthropic owner of Fox News, and TV host Tucker Carlson — uses racism to get a portion of the white 99 percent to act against their own economic interests.
Strategic Political Economy
Who is leading the United States to war?
[Monthly Review, via Mike Norman Economics 5-20-2022]
This article comes to three conclusions: first, in the Biden administration, two foreign policy elite groups that used to compete against each other, liberal hawks and neoconservatives, have merged strategically, forming the most important foreign policy consensus within the elite echelon since 1948 and bringing the country’s war policy to a new level; second, in consideration of long-term interests, the big bourgeoisie in the United States has reached a consensus that China is a strategic rival, and has established solid support for its foreign policy; and third, due to the design of the U.S. Constitution, the expansion of the far-right forces, and the sheer monetization of elections, the so-called democratic institutions of checks and balances are completely incapable of restraining the belligerent policy from spreading..
The Merging of Belligerent Foreign Policy Elites
With the dissolution of the Soviet Union in 1991 and the rise of U.S. unilateralism, the neoconservatives entered the mainstream in U.S. foreign policy with their thought leader, Paul Wolfowitz, who was once an aide to Henry Jackson. In 1992, just a few months after the disintegration of the Soviet Union, then Under Secretary of Defense for Policy Wolfowitz introduced his Defense Policy Guidance, which explicitly advocated a permanent unipolar position for the United States to be created through the expansion of U.S. military power into the sphere of influence of the former Soviet Union and along all its perimeters, with the object of preventing the reemergence of Russia as a great power. The unipolar U.S.-led “grand strategy”, through the projection of military force, served to guide the foreign policies of George H.W. Bush and his son George W. Bush, along with Bill Clinton and Barak Obama. The first Gulf War was made possible, in large part, due to the Soviet weakness. This was followed by the U.S./NATO military dismemberment of Yugoslavia. After 911, the Bush Jr. administration’s foreign policy was completely dominated by the neoconservatives, including Vice President Dick Cheney and Defense Secretary Donald Rumsfeld.
While they both advocated foreign military interventions, there are two historic differences between liberal hawks and neoconservatives. First, liberal hawks believed that the United States should influence the UN and other international institutions to carry out military intervention, while neoconservatives intended to ignore multilateral institutions. Second, liberal hawks sought military intervention alongside U.S.-led Western allies, while neoconservatives were not afraid to conduct unilateral military operations and violate anything resembling international laws.
Eric Alterman, May 20, 2022 [The American Prospect]
Post-Afghanistan and Ukraine, neocons have attempted to seize an opportunity to return themselves to the center of foreign-policy debate, now that (maybe) people don’t remember Iraq so well. Abrams, who literally has never met a potential U.S. (or Israeli) military action for which he did not cheerlead (and simultaneously accuse its opponents of lily-livered cowardice), showed up to argue that the nearly 40 percent of world military spending we account for is far too little….
Some neocons have shown a willingness to reconsider their previous errors in light of their politics having led to Trump. Max Boot gets most of the honors in this category. (William Kristol is in a sort of purgatory for acting like he now knows he was wrong about pretty much everything, but would just as soon move on. I wrote a sort of scorecard on this point back in 2009.) But Abrams, perhaps the man who needed to do more than anyone else alive to repudiate his past views, is sticking to his rhetorical (and metaphorical) guns. This would almost be funny in the way that Lindsey Graham or Ted Cruz’s constant brownnosing of Trump is almost funny. Abrams, however, is particularly problematic because he continues to be taken seriously by most of the members of the mainstream media and what remains of the foreign-policy establishment. (He is after all a senior fellow of the Council on Foreign Relations, among his other appointments.) Yet not only has he been demonstrably wrong about virtually every major issue since he was a “child prodigy,” but he was also convicted of lying to Congress during the Iran-Contra scandal while holding the very position that Nordlinger thinks ought to recommend him….
Well, it’s been said, not by me, that “where there is no vision, the people perish,” and vision on the left as far as foreign policy has been in decidedly short supply. Fortunately, we now have two prescient pieces in Foreign Affairs by Bernie Sanders’s foreign-policy guru (and Altercation good friend and long-ago American Prospect intern) Matt Duss. Following up on his 2020 piece, “U.S. Foreign Policy Never Recovered From the War on Terror,” Duss’s new contribution lays the groundwork for a policy that is both hard-headed and soft-hearted; providing a framework for the rest of us to think about individual places and issues that elude simple slogans. In the article entitled “The War in Ukraine Calls for a Reset of Biden’s Foreign Policy,” Duss recognizes that Russia’s war against Ukraine requires a “paradigm shift” in our approach to the world, and credits the Biden administration with handling the crisis well so far. But taking us well beyond just holding NATO together (or further expanding it), he seeks to locate how it might be possible to actually apply the principles to which our politicians so frequently pay tribute in rhetoric while ignoring them in practice. I cannot do justice to all, or really any, of Duss’s proposals in this space except to say that if you read these two articles, you will come away with the single best discussion of what’s wrong with U.S. foreign policy and how it might possibly be repaired.
[The Ink, via The Big Picture 5-15-2022]
A conversation with journalist David de Jong about the secret Nazi pasts of many of modern Germany’s great fortunes — and his warning for American business leaders….
We had four years of Trumpism, but it's not gone. There's a real question about it coming back in 2024. I imagine some, if not all, of the big CEOs and billionaires are privately wrestling with it and wondering, Is there some moral limit? We haven't really seen one for most of them yet.
Based on this very extreme experience in Germany, what warning would you give to American business leaders and billionaires about how to think about the problem of fascism on the rise in America and the eternal pragmatism of the businessperson?
Don't let short-term profits guide your political decisions.
It's an extremely naive warning, but they should be mindful of history. I'm not only talking about the four years of Trump. Throughout American and German history, we've seen the complicity between business and politics and the horrific effects it can have on a global level. Be mindful of history. Let history guide your decisions.
What’s Happening to America? A Theocratic-Fascist Revolution
umair haque [Eudaimonia, via The Big Picture 5-15-2022]
It’s been a decade or so since I began to predict — and warn — America was collapsing. And over the years, I’ve been called everything from hyperbolic to an “alarmist” and beyond, insulted in the New York Times, attacked by the Atlantic, the list goes on. I have a question for you. Do you believe me yet?
Here America is. People are in shock and disbelief, though they shouldn’t be, because, well, like I said, plenty of people have been warning….
The future of America looks incredibly bleak. It is bleaker than Americans can yet imagine. They haven’t lived through the horrors of totalitarianism and theocracy. I have. They haven’t studied them really. I have. We have, rather, because there are plenty like me. But the average person is still out there — remember when I said this all those years ago? — underestimating American collapse.
What do I mean by that? For the last decade, American collapse has been relatively slow, punctuated by a spectacular event every now and then. Trump plodded his way through an early variant of fascism, incompetently, and all that ended in a bloody coup attempt — and that was only last year….
But now American collapse is happening at light speed. So fast you get whiplash just watching it every day. Who can keep up anymore?
Here’s a random smattering of events from just the last week. Kentucky’s fanatics want to ban contraception — LOL, even Pakistan doesn’t do that. Mississippi’s governor refused to rule out banning contraception. Missouri’s lunatics wants to stop women leaving the state. Louisiana advanced a bill that would criminalise abortion — both the provider and the patient. That same bill would also class IUDs and Plan B as murder. Tennessee’s governor signed a bill restricting access to abortion pills. Mitch McConnell said it was “possible” that a GOP controlled Senate would attempt a federal ban on abortion.
Alito Outs and Splits the Republicans
Robert Kuttner, May 16, 2022 [The American Prospect]
In Texas, doctors are reporting that the state’s recent law is making it much more difficult to treat women after a miscarriage. The doctor is made responsible for assuring that the miscarriage wasn’t actually a deliberate abortion, and becomes an agent of a police state rather than a caregiver to women.
In Louisiana, legislation was fast-tracked to define a woman who had an abortion as a murderer, vulnerable to prosecution for homicide. Republicans and their allies in the anti-abortion movement, enraged about the possibility of sanctuary states helping women from jurisdictions that prohibit abortion, have been planning national legislation to prohibit abortion everywhere.
The Death of the Democratic Party
W. J. Astore, Lieutenant Colonel (USAF ret.) [Bracing Views, via Mike Norman Economics 5-20-2022]
Not a single Democrat is against spending more than $50 billion that will serve to feed a war rather than putting a stop to it?
$54 billion represents roughly 80% of what Russia spends on its military for an entire year. How much is the U.S. government prepared to spend if the war drags on for the next few months? Another $54 billion? More?
The Democratic Party can’t get all its members to vote for a $15 federal minimum wage, or for student debt relief, or more affordable health care and lower prescription drug prices, and similar promises made by Joe Biden as he ran for president in 2020. But weapons for Ukraine brings instant and total accord and rapid action.
Your Money and Your Life: Private Equity Blasts Ethical Boundaries of American Medicine
Lynn Parramore [Institute for New Economic Thinking, via Naked Capitalism 5-19-2022]
...PE seeks to invest or acquire equity ownership in companies and flip them fast for a higher price. They’ll get that higher price by any means necessary – chopping staff, cutting corners, and loading the company with debt along the way. The idea is to buy, squeeze, dump, repeat. Private equity is now a major player in the health care sector, with investments accelerated in recent years at a mind-blowing pace ($100 billion in capital invested in 2018 alone).
So how do these motives and operations line up with health care? Let’s see … how would you like to send your loved one to a rehab facility where successful treatment would be considered a failure because they want the patient to come back?
As Olson documents, that’s how perverse things get. She notes that in order to gin up business, PE firms taking over rehab centers will resort to a tactic known as “body brokering” – having companies pay intermediaries to lure patients in by trolling on social media, hanging out at 12-step meetings, and spinning fancy marketing campaigns. If the (often unscientific) treatments don’t work, score one for private equity! Owners aren’t liable for ineffective treatments, Olson points out, “so when patients relapse they can charge them another round.” Meanwhile, they abuse eligibility for federal payments, soaking up taxpayer funds meant to fight human tragedies like the opioid scourge….
The Institute for New Economic Thinking (INET) has focused on the alarming trend of private equity buying health care providers and taking them private through research by Eileen Appelbaum and Rosemary Batt, and detailed the encroachment of private equity into emergency rooms in a series of articles over the pandemic. INET’s Thomas Ferguson and colleagues Paul Jorgensen and Jie Chen have also focused attention on private equity’s political contributions. Now, Laura Katz Olson shares her perspective with INET on how we got to this dangerous place and what we can do to get out of it….
Laura Katz Olson: Private equity firms used to take huge conglomerates and tear them apart to sell off the parts because the parts were worth far more than the whole. Today what they do is the opposite – they take a small piece that’s well-functioning, like a flourishing dental practice, and they add more and more dental practices to it — consolidating. They’re especially interested in niches that are not consolidated. After they consolidate for three or four years, they sell it in a secondary LBO [leveraged buyout], and after that, they’re selling it to a third, on and on…. They put all this debt on the company and then squeeze it. When you’re talking about services like home care or hospice care, it’s the front-line staff that will get squeezed. They cut the workforce, so you have fewer workers per patient. You lower the qualifications for the staff so you can get cheaper labor. You have fewer physicians because they’re expensive. You have less training and supervision. You overbook – you get a kind of production line going. For products, you use cheaper materials. You skimp on medical supplies, etc…..
...you have to worry about getting lured into procedures you don’t need. I’ve heard of dental offices where children were put in straight jackets and teeth were pulled that didn’t need to be pulled. Elderly people have been given unnecessary dental work. I’m particularly offended by what goes on in hospice care. You have people dying and Medicare is paying for them to have a dignified, quiet death. Instead, they are neglected as these PE firms are profiteering. Children with autism are being harmed, too. Autism is an easy target for profiteering because there’s a shortage of practitioners and you’re free to do whatever treatment you want and call it standard treatment. There’s so much that goes wrong. These are just a few examples.
Private Equity Gloats Over A Doctor Glut
Maureen Tkacik, May 20, 2022 [The Lever]
A private-equity-owned emergency room staffing firm co-founded by a wealthy Republican congressman has been openly hailing a coming “oversupply” of doctors, promising prospective investors that a surplus of emergency physicians — soon projected to reach nearly 10,000 — will drive doctors’ wages low enough to offset the haircut that health care reforms have imposed upon its profit margins….
Like most of its competitors, APP has watched its profit margins and credit ratings sink since various laws banning surprise billing were enacted last year. While APP claims it never sent surprise bills to patients, it has also told its doctors in email exchanges reviewed by The Lever that various laws banning the practice had resulted in a 50 percent drop in the company’s revenues from certain large insurers.
But in its November 2021 pitch deck to investors, APP tells a different story, promising the company will more than make up for the expected $5.8 million to $11.6 million hit to its $122 million in annual gross earnings, by slashing some $19.6 million from its payroll costs. APP can do this in the midst of a once-in-a-generation health care labor shortage, according to the presentation, thanks to a coming glut of ER doctors.
The carnage of mainstream neoliberal economics
First on CNN: Record-high gas prices slash US spending by $9 billion a month
[CNN, via Naked Capitalism 5-16-2022]
[TYT, via The Lever 5-15-2022]
“Wall Street created the loophole almost a decade ago, to escape U.S. regulation of complex financial trades related to commodities like oil and wheat. Then the Trump administration fortified the loophole.”
[Twitter, via Naked Capitalism 5-16-2022]
TW: The obvious answer is that “many economists” are not interested in truth, because they are merely shills and propagandists for a predatory economic system owned and run by criminals and sociopaths.
The pandemic
How Australia Saved Thousands of Lives While Covid Killed a Million Americans
[New York Times, via Naked Capitalism 5-16-2022]
….Australia offers perhaps the sharpest comparisons with the American experience. Both countries are English-speaking democracies with similar demographic profiles. In Australia and in the United States, the median age is 38. Roughly 86 percent of Australians live in urban areas, compared with 83 percent of Americans.
Yet Australia’s Covid death rate sits at one-tenth of America’s, putting the nation of 25 million people (with around 7,500 deaths) near the top of global rankings in the protection of life….
In global surveys, Australians were more likely than Americans to agree that “most people can be trusted” — a major factor, researchers found, in getting people to change their behavior for the common good to combat Covid, by reducing their movements, wearing masks and getting vaccinated. Partly because of that compliance, which kept the virus more in check, Australia’s economy has grown faster than America’s through the pandemic.
But of greater import, interpersonal trust — a belief that others would do what was right not just for the individual but for the community — saved lives. Trust mattered more than smoking prevalence, health spending or form of government, a study of 177 countries in The Lancet recently found. And in Australia, the process of turning trust into action began early.
How Public Health Failed America
[The Atlantic, via Naked Capitalism 5-19-2022]
Kansas Gov. Laura Kelly vetoes GOP bill aimed at banning all future mask mandates
[Kansas City Star, via Naked Capitalism 5-15-2022]
[Twitter, via Naked Capitalism 5-15-2022]
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Information age dystopia
Pfizer CEO Discusses His Next Breakthrough Technology – CPU Pill That Makes Sure You’re Compliant
[BitChute, via Naked Capitalism 5-21-2022]
They're not capitalists - they're a criminal predatory class
CEO Pay Packages Rose to Median $14.7 Million in 2021, a New High
[Wall Street Journal, via Naked Capitalism 5-16-2022]
Is the Typical CEO Really Worth $15 Million?
[New Republic, via Naked Capitalism 5-18-2022]
The Union-Busting Crime Wave at Starbucks and Amazon Is Getting Worse
[Jacobin, via Naked Capitalism 5-15-2022]
Chicken Prices and Chicken Shit — Defense lawyers go after Antitrust chief Jonathan Kanter
Matt Stoller [BIG, via Naked Capitalism 5-15-2022]
Defense lawyers go after Antitrust chief Jonathan Kanter for citing the 'Chickenshit Club.' It is a 'crass double-entendre,' they say, and an ethics violation for Kanter to talk like a normal human.
BABY FORMULA INDUSTRY SUCCESSFULLY LOBBIED TO WEAKEN BACTERIA SAFETY TESTING STANDARDS
[The Intercept, via Naked Capitalism 5-15-2022]
TW: Killing babies. Babies. The lobbyists and executives involved at the very least should suffer the long term disruption of defending themselves against murder charges. That’s how you deter this generation of selfish, money-driven, sociopathic professionals.
David Dayen, May 16, 2022 [The American Prospect]
What led to our current predicament of rising prices, missing goods, and rationing was obvious if you knew where to look. Weeks before COVID lockdowns in the U.S., the American Economic Liberties Project’s Matt Stoller wrote the most perceptive and also the simplest prediction we’ve seen over the past several years. It boils down to this: Our system of production, logistics, and regulatory oversight was not engineered to handle any stress.
Why Your Utility Company Sucks
Kate Aronoff, May 19, 2022 [The New Republic]
The United States will be asking a lot of its electric grid over the coming decades. Everything from home heating to transportation will need to move to the grid, as a system built to distribute electrons out from a central source transforms to accept them back from millions of rooftop solar arrays—all as it swiftly excises coal and gas and weathers the climate crisis those fuel sources have already created... Right now, the vast majority of the U.S. grid is managed by companies that have had regulatory capture and rampant corruption baked into their business model.
This week, 235 organizations—including nonprofits Solar United Neighbors, the Energy and Policy Institute, the Institute for Local Self-Reliance, the Center for Biological Diversity, and the Open Markets Institute, as well as a variety of consumer and anti-monopoly advocates, environmental groups, and rooftop solar companies—submitted a petition asking the Federal Trade Commission to open an investigation into investor-owned utilities’ anti-competitive practices and violations of consumer protections. Specifically, they’re asking the agency to explore “unfair competitive actions that harm clean energy competitors, including consumers generating their own renewable electricity” and “unfair and deceptive acts, including corrupt dealings and voting interference, that enrich utilities and ultimately drive up consumer electricity rates and decrease consumer choice.”
Grid monitor warns of U.S. blackouts in ‘sobering report’
[EnergyWire, via Naked Capitalism 5-21-2022]
American Conservative, via Naked Capitalism 5-18-2022]
U.S. Consumer Spending On Gasoline Has Doubled In 12 Months
[OilPrice, via Naked Capitalism 5-21-2022]
Predatory Finance
May 18, 2022 [Naked Capitalism]
Fed Chair Powell Says “Markets Are Orderly” and “Functioning.” They’re Not.
Pam Martens and Russ Martens, May 19, 2022 [Wall Street on Parade]
Crypto assets, which have been widely called a pyramid scheme based on the Greater Fool theory but were nonetheless allowed to spread throughout U.S. markets, had climbed to a market value of $2.9 trillion last November. That’s now a $1.4 trillion market cap with $1.5 trillion of investors’ money going poof in six months. That’s certainly not an orderly market.
Last week we reported that Senator Catherine Cortez Masto told Treasury Secretary Janet Yellen at a hearing that the crypto market “is now larger than the subprime mortgage market which triggered the global financial crisis.”
[Investment Week, via Naked Capitalism Water Cooler 5-20-2022]
HSBC Asset Management global head of responsible investing Stuart Kirk: “‘At a big bank like ours, what do people think the average loan length is?’ he asked. ‘It is six years. What happens to the planet in year seven is actually irrelevant to our loan book. For coal, what happens in year seven is actually irrelevant. Let’s get back to making money out of the transition.” More: “Amsterdam has been six metres underwater for ages and that is a really nice place. We will cope with it.
Climate and environmental crises
Insurers Are Suffering Major Losses Due To Climate Change
[Oiprice, via Mike Norman Economics 5-18-2022]
Insurers are now suffering 3.6 times more losses from natural catastrophes than they were three decades ago, according to new research, which suggests insurance companies are being hit by the impacts of climate change.
Natural catastrophe events are costing insurers around the world 250 percent more than they were 30 years ago, due to an increase in events such as flooding, storms, and wildfires.
In 2021 alone, storms in the US cost insurers $60bn, while floods in Germany cost $9bn and wildfires in Australia cost insurance firms another $63bn.
The costs associated with climate change events are also set to rise in coming decades, as current policies are set to see 2.4°C of warming by 2100, the report from French consulting firm Capgemini and the European Financial Management Association (EFMA) says.
However, the report says climate change also poses an opportunity for insurers, as it claims climate risks are set to account for around 30-40 percent of the $2.5trn increase in global insurance premiums over the next two decades.
Restoring balance to the economy
Here’s why the arguments against canceling student debt make no sense
Michael Hiltzik [Los Angeles Times, via Naked Capitalism 5-19-2022]
Several States Are Taking the Lead on Restoring Overtime Pay
[The American Prospect, May 19, 2022]
But during decades in which lawmakers and lobbyists cut away at overtime access, states like Washington and California actually strengthened it. They increased the amount that a worker could earn while remaining eligible for overtime, and expanded overtime to previously exempt professions such as farmwork.
“In recent years, states have been leading the way for bolder action to restore and strengthen overtime protections,” says Paul Sonn, state policy program director at the National Employment Law Project.
By tapping into their progressive traditions to fill the federal void, such states suggest a pathway for others interested in bolstering such rights, regardless of what the White House does.
[Phenomenal World, via Naked Capitalism 5-20-2022]
Control of prices has also been a key feature of American law since the nineteenth century. In the early Republic, state governments employed licensing laws to fix minimum charges for such occupations as porters, carters, wagoners, draymen, and wood sawyers. After the Civil War, the political economy in the United States was largely redefined by competition over real income among three classes: farmers; large corporations in manufacturing, processing, and distribution; and industrial workers. Responding to the challenge, state governments in the 1870s fixed the prices charged by grain elevators and railroad corporations. Statute by statute, they enlarged the remit of public rate regulation over the next five decades to include fuel, meat, insurance, housing, and human labor. Under theories of “natural monopoly” elaborated by the founders of the American Economics Association (AEA) the states established public utility commissions. Congress established the Interstate Commerce Commission in 1887, the Federal Reserve Board in 1913, and the Federal Trade Commission in 1914.
Following World War I, the US Department of Agriculture undertook a decades-long exploratory program on the problem of declining farm prices and the resulting redistribution of resources from country to town, rural to urban communities. Wealthy organized farmers lobbied repeatedly for the McNary-Haugen acts of 1926–1927, which proposed a government export corporation to purchase surplus commodities at guaranteed high prices for dumping in foreign markets. With the coming of the New Deal, the general suspension of antitrust laws under the National Recovery Administration, and the Supreme Court’s eventual expansive reading of the Constitution’s interstate commerce clause, the taboo against price policy was openly challenged. During World War II, an unprecedented government-financed mobilization program under comprehensive control of prices brought production to capacity, with inflation almost entirely suppressed.
Tom Nelson says he knows how to fight for workers
[The Cap Times, via Naked Capitalism Water Cooler 5-16-2022]
“When he heard that members of United Auto Workers Local 180 were on strike against CNH, the multinational corporation that makes Case agricultural equipment in Racine County, Tom Nelson raced to join their picket line…. Nelson had heard this story before. He’s something of an expert on labor relations, having written a book, “One Day Stronger: How One Union Local Saved a Mill and Changed an Industry — and What It Means for American Manufacturing,” on the fight to prevent the shuttering of the Appleton Coated plant in the Fox River Valley.”
Disrupting mainstream economics
Advancing the Monetary Policy Toolkit through Outright Transfers
[International Monetary Fund, via Mike Norman Economics 5-17-2022]
This paper argues that in reserve currency issuing economies at the effective lower bound, outright transfers from the central bank to households are both more equitable and more effective in achieving monetary policy objectives than asset purchases or negative interest rates. It shows that concerns pertaining to central banks’ policy solvency and equity position can be addressed through a careful assessment of a central bank's loss absorbing capacity and, if need be, tiered reserve remuneration policies. It also spells out key differences to a debt or money financed fiscal stimulus, which are particularly pronounced in a currency union without a central fiscal capacity. The paper concludes by discussing broader institutional, political, and legal considerations.
Disrupting mainstream politics
The Surprising Benefits of Voting for Change — A look at the impact of voting incumbents out of office
[VoxEU, via Naked Capitalism 5-17-2022]
We show that electoral turnovers improve the performance of countries along several dimensions. For example, an electoral defeat of the national incumbent candidate or party results in an improvement of 0.34 standard deviations in economic performance on average during the following four years. This is mainly driven by a relative decline in inflation and unemployment after the close election of a challenger. These effects are large in magnitude and materialise gradually over time: the boost in economic performance is largest three years after the close election of a challenger candidate or party.
Alexander Sammon, May 18, 2022 [The American Prospect]
Tuesday’s primary elections were defined by historic super PAC spending attempting to quash a number of progressive candidates and an attempted hostile takeover of the Democratic primary process like we’ve never seen. At last count, just a handful of super PACs had dumped $18 million to influence the outcome in favor of moderates.
The expectation in politics is that the person with the most money wins. And that played out in several races Tuesday night. In numerous races, massive super PAC money backed moderate candidates with institutional endorsements and little enthusiasm. But surprisingly, progressives largely won the argument that voters want to see their representatives fighting for an agenda rather than fighting to stop it. The candidates most tied to trying to slam the brakes on progress were defeated. The candidates who organized their communities in favor of getting things done for the people were successful. And in one incredible instance, voters saw through the hollowness of millions of outside dollars.
The night’s early returns were headlined by the triumph of Pennsylvania Lt. Gov. John Fetterman over moderate House Rep. Conor Lamb for the state’s Democratic Senate nomination. Fetterman was expected to win, but did so resoundingly, winning every single county while holed up in a hospital bed recovering from pacemaker surgery….
In House races in Pennsylvania, progressives also won out. In a low-profile race that brought zero outside spending, former Bernie Sanders delegate Chris Deluzio won easily over moderate Sean Meloy in Pennsylvania’s 17th District. That seat is currently held by Lamb, who has long claimed that his political canniness in voting against Democratic legislative priorities made him the only Democrat who could win in that district. Now, Lamb could be replaced by a progressive….
Pennsylvania’s 12th, meanwhile, was anything but a low-profile contest. Thirty-four-year-old progressive Summer Lee eked out the narrowest of victories over Steve Irwin, a corporate lawyer whose firm engaged in union-busting campaigns. Just a handful of weeks ago, the race looked like a laugher, with Lee up 25 points. Then, AIPAC began blanketing the airwaves with at least $2.7 million in attack ads, while DMFI PAC chipped in another $400,000, bringing the margin of victory to near-zero. Because of Lee’s exceptional organization and ground game, and experience running against the Pennsylvania machine in a race just four years ago, she was able to pull it out….
In Oregon, massive super PAC spending on behalf of Democratic obstructionists was also unsuccessful. The race in the Fifth District has yet to be called, but Jamie McLeod-Skinner looks to have defeated incumbent Kurt Schrader, the Democratic representative best known for voting down President Biden’s extremely popular drug pricing reform legislation (or for calling the impeachment of Donald Trump after January 6, 2021, a “lynching”). McLeod-Skinner consistently called Schrader “the Joe Manchin of the House,” and was fond of saying that running to Schrader’s left just made her a normal Democrat…
In the Sixth District next door, Protect Our Future PAC, a super PAC associated with crypto billionaire Sam Bankman-Fried, put up more than $11 million for Carrick Flynn, a relative no-namer in an open seat. Crypto PACs are a new entrant into Democratic electioneering, and this race marked the PAC’s biggest investment. It was matched by $1 million in spending from the party’s own House Majority PAC, a move that enraged local Democrats and confused national ones.
Yet Flynn lost to Medicare for All supporter Andrea Salinas, and it wasn’t close. If anything, the massive amount of spending backfired on the neophyte candidate, turning off voters.
Dem Voters Flip Off Party Leaders And Their Big Donors
David Sirota, Matthew Cunningham-Cook & Andrew Perez, May 18, 2022 [The Lever]
Pennsylvania and Oregon election results show voters rejecting the demands of oligarchs and Democratic elites….
If projected election results hold, underdog progressive candidates will end up winning most of the big primary contests of the night, despite being vilified by oligarch-bankrolled super PACs linked to the Democratic Party machine.
Notably, in at least two of the races, the progressive candidates framed their primary contest as a referendum on the politics of Sen. Joe Manchin (D-W.Va.).
The progressive candidates’ success comes as new polling data show Democratic voters are frustrated with their party’s leadership’s incrementalism.
Democrats’ political suicide
“The Democratic Party’s Leadership Is Trying to Destroy Progressives”
David Sirota [Jacobin, via Naked Capitalism Water Cooler 5-18-2022]
“In all, more than a dozen consulting firms that have worked directly for either Democratic Party committees or President Joe Biden’s political apparatus have been paid more than $12 million by the allegedly independent super PACs now buying primary elections for corporate candidates, according to federal disclosures reviewed by us…. aken together, the endorsements, the donor overlap, and the party ties of the allegedly independent committees show there is no real separation between the Democratic leadership and the “outside” spending. This is one large party-sanctioned operation aimed at the Left, even when corporatists are undermining the party’s agenda and its own president. Indeed, rather than amping up potential progressive primary pressure on Senator Kyrsten Sinema (D-AZ), Biden’s political machine actually ran ads touting her as she was killing his signature economic legislation and driving down his approval ratings. This lack of pretense, where the leadership isn’t even pretending to be impartial or progressive, represents a significant break from the past. Once upon a time (read: up to the mid 2000s), Democratic leaders typically stayed officially neutral in intraparty battles. These weren’t exactly halcyon days — the power brokers still quietly encouraged donor support for preferred candidates. However, that kind of rigging was hidden in the shadows, so as to not publicly violate the once-sacrosanct idea that Democratic voters should be trusted to choose nominees and — by extension — the party’s ideological complexion. That tradition began to change in 2006 after Rahm Emanuel bought a Chicago-area congressional seat and began handpicking House Democratic nominees through the party’s campaign apparatus. Later, the party’s political machine went all in against Sanders’s 2020 presidential primary campaign and then went in even stronger for corporate candidates in contested Senate primaries in Iowa, Maine, Kentucky, North Carolina, Texas and Colorado — and in the latter case, even progressives like Senator Elizabeth Warren (D-MA) participated in the scale-thumbing. All of this escalated to the DCCC literally blacklisting political consultants who worked for unapproved Democratic candidates.”
David Sirota, May 17, 2022 [The Lever]
[The Intercept, via Naked Capitalism Water Cooler 5-16-2022]
“[Rep. Kurt Schrader, D-Ore] was a leader of an effort by centrist Democrats to disrupt Pelosi and President Joe Biden’s plan to pair a bipartisan infrastructure package with a reconciliation bill that included Biden’s social policy agenda as well as an ambitious attempt to tackle the climate crisis. In June, Schrader had joined with Rep. Josh Gottheimer, D-N.J., and seven other Democrats demanding that the bipartisan bill be split apart from the broader agenda.” Fast forward to today: “On May 12, House Majority PAC, Pelosi’s super PAC, gave the maximum $5,000 to Schrader’s campaign. A Pelosi spokesperson wasn’t immediately available to respond to Schrader’s claim that the House speaker is truly a terrible person.”
“Republican Money Is Gushing Into Democratic Primaries To Nominate Conservative Dems”
[Down with Tyranny, via Naked Capitalism Water Cooler 5-16-2022]
“Massive amounts of Republican money is being laundered into Democratic primaries via AIPAC’s sleazy United Democracy Project and Mark Mellman’s even sleazier Democratic Majority for Israel. The two crooked right-wing organizations are attacking– usually with out-right lies– Erica Smith and Nida Allam in North Carolina, Summer Lee in Pennsylvania, Jamie McLeod-Skinner in Oregon, Jessica Cisneros in Texas.”
“Democrats’ Major Campaign Tech Firm Shifts Under New Private Equity Owner”
[The Intercept, via Naked Capitalism Water Cooler 5-16-2022]
“In August 2021, when the parent company of NGP VAN, a privately owned database that hosts Democrats’ most sensitive data, was sold to Apax Partners, a British private equity firm, a major vulnerability in the party infrastructure was exposed. NGP VAN, which is part of the fundraising management software company EveryAction, is one of two major organizations that run the coveted organizing, voter file, and compliance tools that the Democratic Party relies on to build power…. Progressive operatives have long been critical of NGP VAN’s effective duopoly over software for Democratic campaigns. Action Network, built to protect voter data from being used outside an organizing purpose, is its major nonprofit competitor. ActBlue, a major Democratic fundraising firm, integrated its services with NGP in 2018.” More: “The next week, the firm introduced its new corporate name: Bonterra. An umbrella that covers what were once four companies — EveryAction; another fundraising software for nonprofits called Network for Good; and two nonprofit and philanthropic tech companies that Apax combined with EveryAction in the August merger, Social Solutions and CyberGrants — Bonterra’s stated goal is to connect nonprofits to donors. While the four companies adopted the Bonterra name, NGP VAN, though functionally in the same position, remained a stand-alone brand.” “Bonterra.” Get it? More: “Apax partner Jason Wright, who is a director on Bonterra’s board, gave near-maximum contributions to Republican Senate candidates David Perdue and Kelly Loeffler in November 2020, several weeks after they both lost their elections. That month, he also gave $5,600 to WinRed, the GOP fundraising platform. Wright previously contributed to committees for Democratic and Republican presidential candidates Hillary Clinton and Mitt Romney. In a statement after the 2021 merger, Wright and Apax principal Adam Garson, another Bonterra director, said that the “resulting scale and connectivity between donors and non-profits will help reshape philanthropic giving.” A spokesperson for Apax, who declined to comment on the record, said Wright’s role at Bonterra was in oversight and that he had no operating control.”
Alex Pareene, May 16, 2022 [The New Republic]
The crew that would come to take over the Democratic Party organized themselves, in the 1980s, around the idea that the party had become discredited among the public because it was in thrall to its more liberal elements. These “New Democrats” gravitated toward Gary Hart, who unsuccessfully ran for the Democratic Party nomination in 1984, positioned as the candidate of “new ideas” against Walter Mondale, ostensibly the embodiment of stale Great Society liberalism. Hart, along with allies like Representative Tim Wirth, articulated what Geismer calls “larger generational skepticism with large institutions and bureaucracy.” In practice, “large institutions” tended to mean unions and government agencies. The New Democrats were similarly allergic to “transactional politics” and “special interest groups,” which Geismer helpfully defines as “African Americans, women, white farmers, and, especially, organized labor.”
….But what the New Democrats truly wanted, and truly believed their policy agenda would win, was the white suburban vote. In the wake of Ronald Reagan’s reelection, in 1985, the political strategist Al From founded the Democratic Leadership Council, with an inaugural membership of 41 people, including 14 senators and 17 representatives. Of that group, two members were nonwhite, and none were women. The philosophy of the DLC, shaped by early members like From, the political consultant David Osborne, and Arkansas Governor Bill Clinton, was to go after the “aspiring middle” electorate in suburbia rather than the working class and dispossessed, and to appeal to it with an agenda that stressed economic dynamism, free trade, embrace of the tech industry, and—vitally—the destruction of the welfare state.
Swiss Billionaire’s Mega-Influence On U.S. Politics
Real Clear Politics, via Naked Capitalism 5-18-2022]
Conservative / Libertarian Drive to Civil War
“The Plotters Against America”
John Ganz, Unpopular Front].
“[W]hen you begin to tally up the California think tank’s tanks accomplishments, things start to appear a little eerie: just about every illiberal, anti-democratic, and demagogic project attempted by the Right in the past few years is connected to Claremont in some way…. With all this activity, you might expect Claremont Institute’s ideological underpinnings to derive from neo-Confederatism or European fascism, but the intellectual sources of its revolt against American democracy are somewhat surprising. The Claremont Institute was founded by students of Harry V. Jaffa (1918-2015), himself a student of Leo Strauss and the American Right’s premier interpreter and defender of Abraham Lincoln.
[Twitter, via Naked Capitalism 5-18-2022]
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HOW POLITICS POISONED THE EVANGELICAL CHURCH
Tim Alberta [The Atlantic, via The Big Picture 5-15-2022]
...Pastors report losing an occasional liberal member because of their refusal to speak on Sunday mornings about bigotry or poverty or social injustice. But these same pastors report having lost—in the past few years alone—a significant portion of their congregation because of complaints that they and their staff did not advance right-wing political doctrines. Hard data are difficult to come by; churches are not required to disclose attendance figures. But a year’s worth of conversations with pastors, denominational leaders, evangelical scholars, and everyday Christians tells a clear story: Substantial numbers of evangelicals are fleeing their churches, and most of them are moving to ones further to the right….
...More than a few times, I’ve heard casual talk of civil war inside places that purport to worship the Prince of Peace. And, far from feeling misplaced, these conversations draw legitimacy from a sense of divine justice.
The Church is not a victim of America’s civic strife. Instead, it is one of the principal catalysts….
“And then,” Brown said, “came Barack Obama.”
It felt silly at first—jokes about Obama’s birth certificate, comments about his faith. But over time, the discourse inside the church became more worrisome. One day, a longtime member told Brown something that at the time sounded shocking: The president wore a secret Islamic ring. Brown demanded to know the woman’s source. “And she sent me this fake, Photoshopped thing. It didn’t take long to debunk,” Brown told me. “So I wrote her back and said, ‘Hey, here’s the deal: If you have forwarded this to anyone, you have an obligation to go back to them and correct it. Because Christians cannot foment falsehood. We are people of truth.’ ”
….Even as Brown became more vocal, he knew he was being drowned out. Fear, the pastor says, was taking root inside Community Bible. Some of it was explainable: The cultural climate was getting chilly for evangelicals; the Great Recession was squeezing his blue-collar congregation. But much of the anxiety felt amorphous, cryptic—and manufactured. However effective Brown might be at soothing his congregants for 45 minutes on a Sunday morning, “Rush [Limbaugh] had them for three hours a day, five days a week, and Fox News had them every single night.” Brown kept reminding his people that scripture’s most cited command is “Fear not.” But he couldn’t break through. Looking back, he understands why.
[Alberta then goes to a “more conservative” church]:
While covering presidential campaigns, I had attended political rallies at churches across Iowa, South Carolina, Texas, and elsewhere. But I’d never seen anything quite like this. The parking lot swarmed with vehicles covered in partisan slogans. The narthex was jammed with people scribbling on clipboards. (I thought they were doing preemptive COVID contact tracing; they were actually enlisting volunteers for political activities.) Inside the sanctuary, attendees wore MAGA caps and Second Amendment–related shirts. I didn’t see a single person carrying a Bible.
The 2024 Presidential Election Is on the Ballot This Year
Ryan Cooper, May 20, 2022 [The American Prospect]
If Mastriano wins, there will not be a presidential election in Pennsylvania in 2024. No matter what the votes say, he will exercise the powers of the governor’s office to declare that the Republican candidate won.
It’s a virtual certainty that enough Republicans are going to be nominated for key election administration posts in swing states that if they win, what holds in Pennsylvania will hold for the United States. In sum, if Republicans sweep the midterm elections this year, there will not be a presidential election two years later.
The Pennsylvania governor appoints the secretary of state, who oversees the electoral process, and certifies the results after a presidential election. Up until today, that has been a perfunctory process, but potentially no longer. Not only is Mastriano a deranged maniac who has banned the press from his campaign rallies and regularly appears with QAnon cultists, he has also promised to somehow “decertify” the 2020 results (though there is no legal procedure for doing so)….
Reuters recently investigated 15 Republican candidates for secretaries of state in all the swing states but Pennsylvania (Wisconsin, Michigan, Nevada, Arizona, and Nevada), and found that ten of them “have either declared that the 2020 election was stolen or called for their state’s results to be invalidated or further investigated.”
Senate Republicans Want Your Cleaning Lady to Pay Income Tax, but Not FedEx
Timothy Noah, May 19, 2022 [The New Republic]
Dwindling revenues from corporate taxes are beggaring the Treasury, and the GOP doesn’t care.
Treasury Secretary Janet Yellen traveled to Poland this week to urge support for a 15 percent global minimum tax on corporate income. These negotiations are slow going, but the Poles will be pushovers compared to the United States Senate. The same Senate Republicans who wish to impose a minimum income tax on people refuse to impose one on corporations.
“All Americans should pay some income tax,” says Senator Rick Scott of Florida, chairman of the National Republican Senatorial Committee, in his Rescue America plan. In practice, that means someone making, for example, $30,000 annually should pay the IRS more than $1,000 in income tax. A thousand bucks is an awful lot of money to someone living on $30,000 a year. But it’s necessary for this person to pay something, Scott insists, so that he or she will “have skin in the game.”
….Should all American corporations pay income tax, Senator Scott? They don’t right now. A report by the nonprofit Institute on Taxation and Economic Policy that is cited a lot by President Joe Biden identified 55 large corporations, more than 10 percent of the S&P 500, that paid no income tax in 2020. These included FedEx, Nike, and Archer Daniels Midland. A report by the congressional Joint Committee on Taxation that sampled tax returns from 50 large corporations covering the years 2014 to 2018 found the percentage that paid no income tax was more like 20 percent.
Applying Scott’s logic, and that of the Journal’s editorial page, FedEx, Nike, and Archer Daniels Midland don’t have skin in the game. Ten to 20 percent of the biggest corporations in America have become “that much more detached from recognizing the costs of government.” Instead, they think of government merely as an automated teller machine that spits out accelerated depreciation schedules and opportunity zone tax credits.
“Madison Cawthorn’s cardinal sin against the GOP had nothing to do with misconduct”
[MSNBC, via Naked Capitalism Water Cooler 5-20-2022]
“But the reality is that Cawthorn was not ousted from the party purely for affiliation with scandals, which Republican voters have shown they have a very high tolerance for. Rather, he was plagued by association with the wrong kind of scandals. More important than his acts of deception or alleged mistreatment of women or extreme political positions was the fact that he embarrassed and rankled politicians in his own party by implicating them in his allegations that Washington is the site of ‘sexual perversion.’ The whole episode illustrates how the bright red line for the GOP is not authoritarianism or other potentially criminal acts, but undermining the power of the party.”
The (Anti)Federalist Society Infestation of the Courts
Another Sweeping Far-Right Court Ruling
Robert Kuttner, May 20, 2022 [The American Prospect]
On Wednesday, the US Court of Appeals for the Fifth Circuit issued a ruling that, if upheld by the Supreme Court, could literally shut down the regulatory authority of large parts of the federal government. In Jarkesy v. SEC, the Fifth Circuit overturned a penalty ordered by an SEC administrative law judge on the grounds that the Seventh Amendment to the Constitution guarantees the right to a jury trial. The Court, ignoring decades of Supreme Court precedent, held that Congress's delegation of such authority to the SEC is unconstitutional.
Jarkesy operated two hedge funds. After an extensive investigation by the SEC, the administrative law judge found that the hedge funds had misrepresented facts and risks in order to deceive investors, and ordered a fine of $300,000, a disgorgement of $685,000 in ill-gotten gains, and barred Jarkesy from a variety of securities activities. But the court reversed the orders as unconstitutional.
The federal government uses administrative law judges in some 30 different agencies. There are about 2,000 such judges, who are civil servants, about twice the number of federal district court judges. They do everything from adjudicating benefits disputes at the Social Security Administration to issuing findings and penalties at other regulatory agencies.
If all these questions must go before a jury, much of what the far right disparages as the “administrative state” is out of business. This is of course the Fifth Circuit's broader agenda, and it chimes with anti-regulation views of Chief Justice Roberts. The SEC can appeal to the Supreme Court, but good luck to that.
Aesthetics and uplifting a population
[BBC, via Naked Capitalism 5-16-2022]
After Slovenia's capital city of Ljubljana was devastated by an earthquake in 1895, an innovative architect reimagined the city in a way that not only improved it but set a standard for other European cities.
Slovene architect Jože Plečnik had already worked with notable designers of the era in Vienna and Prague before returning home to rebuild the capital in the 1930s. His plan was inspired by ancient Athens – he even called it "The Slovenian Acropolis". Art historian Peter Krečičv explained that Plečnik's design had direct analogies to ancient Athens: the Ljubljana Castle was the acropolis; the Žale cemetery was the necropolis; Congress Square was the agora, or gathering place; and Ljubljana's market incorporated the stoa (a covered portico).
But Plečnik didn't stop there; though Modernism and Functionalism were popular at the time, he wanted something different. "Both styles satisfied basic functions or needs but did not have the spiritual component Plečnik was looking for," said Ana Porok, director of the Plečnik House Museum. So, inspired by ancient cultures, and by Baroque and Renaissance art, Plečnik created a unique architecture utterly different from the prevailing style of the time.
"Plečnik rearranged classical elements, such as columns, arches and wreaths. These were practically banned under Modernist orthodoxy," said Krečičv. "Nevertheless, Plečnik uses them as the basis of his modern visual language."
Plečnik also made the progressive decision to close the city centre to motorised traffic – something other European cities would not do for decades.
Thorstein Veblen - The Instinct of Workmanship and the Irksomeness of Labor
[American Journal of Sociology, Volume 4 (1898-99)]
It is one of the commonplaces of the received economic theory that work is irksome. Many a discussion proceeds on this axiom that, so far as regards economic matters, men desire above all things to get the goods produced by labor and to avoid the labor by which the goods are produced....
A consistent aversion to whatever activity goes to maintain the life of the species is assuredly found in no other species of animal. Under the selective process through which species are held to have emerged and gained their stability there is no chance for the survival of a species gifted with such an aversion to the furtherance of its own life process....
Man's great advantage over other species in the struggle for survival has been his superior facility in turning the forces of the environment to account. It is to his proclivity for turning the material means of life to account that he owes his position as lord of creation. It is not a proclivity to effort, but to achievement- to the compassing of an end. His primacy is in the last resort an industrial or economic primacy. In his economic life man is an agent, not an absorbent; he is an agent seeking in every act the accomplishment of some concrete, objective, impersonal end. As this pervading norm of action guides the life of men in all the use they make of material things, so it must also serve as the point of departure and afford the guiding principle for any science that aims to be a theory of the economic life process. Within the purview of economic theory, the last analysis of any given phenomenon must run back to this ubiquitous human impulse to do the next thing.
All this seems to contradict what has just been said of the conventional aversion to labor. But the contradiction is not so sheer in fact as it appears to be at first sight. Its solution lies in the fact that the aversion to labor is in great part a conventional aversion only. In the intervals of sober reflection, when not harassed with the strain of overwork, men's common sense speaks unequivocally under the guidance of the instinct of workmanship. They like to see others spend their life to some purpose, and they like to reflect that their own life is of some use. All men have this quasi-aesthetic sense of economic or industrial merit, and to this sense of economic merit futility and inefficiency are distasteful. In its positive expression it is an impulse or instinct of workmanship; negatively it expresses itself in a deprecation of waste. This sense of merit and demerit with respect to the material furtherance or hindrance of life approves, the economically effective act and deprecates economic futility. It is needless to point out in detail the close relation between this norm of economic merit and the ethical norm of conduct, on the one hand, and the aesthetic norm of taste, on the other.
The Birth of the Egghead Paperback — How one very young man changed the course of publishing and intellectual life in America
[American Scholar, via Naked Capitalism 5-15-2022]
“I had been working at Doubleday as a trainee,” Epstein, who died in February, wrote to me in an email in 2018, “when it occurred to me that my classmates at Columbia on the G.I. Bill and others like them who could not afford hard-covered editions would welcome inexpensive paperbacks of their required texts. I mentioned this opportunity to our chief editor, himself a veteran, and he said go ahead. So I did.”
Launched in April 1953 with a list of 12 titles in attractive covers and boosted by clever marketing, Anchor Books, the result of the plan, quickly found an avid readership. It also had a profound effect on book publishing, higher education, and the world of ideas in America and beyond. Its positive repercussions are still being felt today….
One day in the early 1950s, an editorial assistant at Doubleday was walking across Central Park with his boss when he asked whether the company couldn’t publish quality paperbacks to sell in bookstores. The young man, named Jason Epstein, had an idea for a new line of sturdy, affordable editions of “books of permanent value” in literature, history, religion, philosophy, and the arts, and he was confident that bookstore patrons would go for them.
“Wouldn’t it make more sense,” Epstein asked, “to sell twenty copies of The Sound and the Fury at a dollar than one hardcover copy at ten dollars?” His boss liked the idea...
Epstein wanted authoritative editions on topics of perennial interest to students—the book to read if you’re interested in theater, say, or sociology, or Zen Buddhism—and accessible enough for college course adoptions year after year. Then Anchor would give booksellers a 40 percent trade discount, twice the cut that newsstands were offered for pulp paperbacks. At the time, most pocket books, as mass-market paperbacks were also known, were sold in drugstores and on newsstands and handled by magazine distributors. Epstein’s focus on selling through bookstores was a significant turning point: go to where your most appreciative audience is, with high-quality editions they can afford.
As Epstein recounts in his memoir, Book Business, after graduating from Columbia College in the class of ’49 and earning an MA the following year, almost every day after work he would visit the Eighth Street Bookstore near his apartment in Greenwich Village. The store, he wrote, was “a bibliographer’s paradise and an informal school for many fledgling publishers.” He spent hours among the shelves richly stocked with hardcover editions of Dostoyevsky, Melville, Yeats, and other classics. In those days you could easily buy a Mickey Spillane or Agatha Christie novel for a quarter at the corner drugstore, but try finding Proust or Woolf or Faulkner in paperback anywhere. It occurred to Epstein, and he suggested to the store’s owners, Eli and Ted Wilentz, that if offered in affordable paperback editions, such classic works would be popular with hungry young readers like himself. The Wilentz brothers agreed.
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