Week-end Wrap – Political Economy – August 14, 2022
by Tony Wikrent
The Inflation Reduction Act is Not Designed to Reduce Inflation
Benjamin Studebaker [via Naked Capitalism 8-8-2022, also Water Cooler 8-8-2022]
“If you actually look at this thing, this legislation only raises $739 billion over the next decade. This means that on average, each year, it only raises around $73.9 billion. This is not as much money as you might think. The US spends around $782 billion on defense each year. Last year alone, the federal government spent $6.8 trillion. We’re looking at less than 10% of the defense budget, 1% of the federal budget, and about 0.3% of GDP. How is the federal government meant to combat inflation with a new tax that is smaller than a third of a percentage point of the economy? The purpose of the bill is to be seen to be doing something. The Biden administration needs something to run on in the midterms…. [T]he United States suffers from a chronic lack of state capacity. It struggles to pass all but the most paltry legislation. It cannot get out in front of its problems and it cannot even solve crises as they arise. So, it papers over its dysfunction by measuring spending in decades rather than in years, by sticking that extra zero on the end of every number. Seven hundred billion sounds much better than seventy billion. It almost sounds like somebody’s doing something. But it’s the sound of silence.”
“A Complete Breakdown of the Good, the Bad, and the Ugly in the Inflation Reduction Act”
[Slate, via Naked Capitalism Water Cooler 8-11-2022]
“The Inflation Reduction Act is the Walt Whitman of federal legislation: like the great American poet, the bill contradicts itself; it is large and contains multitudes. It represents the most significant climate investment in U.S. history, but it also paves the way for a massive expansion of oil and gas drilling on federal lands and in federal waters. It includes a new minimum tax designed to ensure that large corporations pay at least 15 percent of their profits to the federal government, but it also showers corporations in tax subsidies that will push many more firms’ tax rates below 15 percent (and in some cases below zero). It is disappointingly modest in its aspirations, but it will arguably be—along with the Affordable Care Act—the most ambitious piece of legislation signed by a Democratic president in more than a half century.”
Digging Into the Inflation Reduction Act (podcast)
[The American Prospect, August 12, 2022]
In this episode, the hosts interview David Dayen about just what is in the monster Inflation Reduction Act: gobs of tax credits, new regulations, tax hikes, and so on. Then they discuss what its passage reveals about the state of the Democratic coalition and what it might bode for the future.
Climate and environmental crises
Bad News for Earth: Rainwater Is No Longer Safe to Drink, Study Says
[Popular Mechanics, via Ian Welsh 8-12-2022]
Earth is officially past its safe zone for plastic contamination. The PFAS “boundary has been exceeded,” according to a study published August 2 in the journal Environmental Science and Technology. PFAS are known to be hazardous to both the environment and human health. At this point, these “forever chemicals” are all over the globe and have seeded the atmosphere. Most importantly, they don’t break down in the environment.
Strategic Political Economy
‘Debt bomb’ risks: More than 40 nations are at risk of default — and that’s a problem for us all
[Grid, via The Big Picture 8-7-2022]
The world faces the possibility of a series of economic collapses that could destabilize the lives of millions of people.
US occupation loots most of Syria’s oil: Ministry
[Al Mayadeen, via Mike Norman Economics 8-10-2022]
Global power shift as USA and west commit suicide by neoliberalism
Tara Copp, Navy Adm. Chas Richard [Defense One, via Mike Norman Economics 8-12-2022]
The US is now in uncharted territory with two peer competitors of the US allied with each other.
[Moon of Alabama, via Mike Norman Economics 8-10-2022]
If the Russian forces also take Kryvyi Rih and Dnipro they will have about 75-80% of Ukraine's pre-war GDP under their control.
Russia's war effort is currently financed by the 'west' which pays for it through record energy prices created by its own sanctions on Russia.
As the Russian Interfax agency reported yesterday (machine translation):
”The positive balance of the current account of the balance of payments of the Russian Federation in January-July 2022 amounted to $166.6 billion, which is 3.3 times more than in the same period in 2021 ($50.1 billion). Such information is contained in the assessment of the balance of payments of the Russian Federation, published on the website of the Bank of Russia.… According to the base scenario of the Central Bank’s forecast for 2022, updated in July, with an average annual oil price of $80 per barrel, the current account surplus is expected to be $243 billion, the positive balance of foreign trade in goods and services - $277 billion, and the negative balance of primary and secondary income - $33 billion.”
Dr. Leon Tressell [SouthFront, via Mike Norman Economics 8-12-2022]
"The picture that has been presented of the war in Ukraine is completely at odds with the reality of the situation on the ground. Surprisingly, information that supports this assertion, which totally undermines the Western media narratives regarding the war, is provided by an article in the August edition of the United States Marine Corps Gazette. Writing under under the pen name Marinus, a senior marine corps officer, provides an objective analysis of Russian military strategy since late February. It totally undermines the narratives provided by Western media and pro Washington politicians."
Inside London’s Struggle to Wean Itself From Russian Billions
[Vanity Fair, via Naked Capitalism 8-7-2022]
Is the US Underestimating China’s Space and Counterspace Capabilities?
Yves Smith [Naked Capitalism]
China's scientific research climbs to No 1
[ECNS (Chinese official English news service), via Mike Norman Economics 8-11-2022]
China has become the world leader in both scientific research output and "high impact" studies, surpassing the United States, a Japanese report shows.
The figures come from a report published by Japan's National Institute of Science and Technology Policy on Tuesday, based on yearly averages between 2018 and 2020.
"Research papers are considered higher quality the more they are cited by others," according to NIKKEI Asia.
Chinese research, which is number one in the world, comprised 27.2 percent, or 4,744, of the world's top one percent most frequently cited papers, while the U.S.' number is 24.9 percent, or 4,330, and thirdly the UK at 5.5 percent, according to the report.
China And Saudi Arabia Intensify Energy Cooperation With Critical Deal
Simon Watkins [Oilprice, via Mike Norman Economics 8-10-2022]
Some Implications of the Sino-American Split
Ambassador Chas W. Freeman, Jr., August 5, 2022, via Mike Norman Economics 8-8-2022]
For most of human history, China was the wealthiest and most powerful society on the planet. Over the past four decades, it has sought to restore itself to this status without challenging the United States, which has enjoyed a century of global primacy. In this endeavor, China has developed a uniquely competitive form of entrepreneurial capitalism, a convincing deterrent capacity against foreign attack, an unmeddlesome approach to working with foreign countries regardless of their ideologies, social systems, and other idiosyncrasies, and identification with the post-World War II world order defined by the United Nations Charter and international law.
But Beijing has failed to persuade Americans that this progress constitutes an unalarming, “peaceful rise.” To many in the United States, China’s return to wealth and power is a rebuke to America’s values, imperils continued U.S. economic and military primacy, offsets and thereby erodes U.S. global and regional political authority, and offers an unwelcome retort to post-Cold War U.S. unilateralism. This makes it look like a threat….
The problem is not, as many in Washington seem to imagine, a dearth of military-to-military communication. It is a confluence of the ill-considered evolution of American policies and intensified Chinese nationalism. This has made conflict between the two countries’ armed forces an ever more realistic possibility.
Recent American policy statements acknowledge the risk of war with China but ignore and refuse to address Beijing’s objections to the U.S. policies that it views as a casus belli….
Washington has been talking a lot about investing in education, research, and the technologies of the future to get our groove back. But while we mouth off, Beijing has acted. Complacency, indolence, and lofty talk are no match for ambition, diligence, and the focused pursuit of excellence. The United States has the capacity to outcompete China if it puts its money where its mouth is. It can’t seem to do so. Nineteen of the world’s twenty fastest growing semiconductor companies are now in mainland China. None are in the United States.
Even at nominal exchange rates (which understate the purchasing power of its currency by about fifty percent), China now outspends the United States on R&D, with a significantly higher percentage going to basic scientific research rather than marketing-related product improvement. It is home to one-third of the world’s manufacturing. Chinese universities already graduate at least four times as many students as we do in science, technology, engineering, and math (STEM) and the gap is widening….
The war in Ukraine has severed Russian ties to Europe, leaving Moscow with no alternative to partnership with China and India and the pursuit of an Asian rather than European identity. This has accelerated the emergence of a global economy divided between a U.S. dominated sphere and the rest of the world, in which China, India, Iran, Russia, and other nations resistant to U.S. policing compete for markets.
You can pretty much map the non-US sphere by identifying the countries that have not banned the Chinese telecommunications giant, Huawei. They account for two-thirds of global GDP and include the world’s fastest growing economies. U.S. export controls and their extraterritorial application are helping to bring into being distinct technological ecospheres. After a long period of convergence in international industrial and other standards, they are diverging. The world to come will be one of regional technological incompatibilities and independently managed, firewalled internet systems….
Lastly, the apparent closing of the American mind amidst an increasingly corrupt information environment that is rife with conspiracy theories and tendentious misinformation is a much larger threat to our competitiveness than China. Both “liberals” and “conservatives” have become unprecedentedly insistent on political correctness. Neither tolerates dissent. Both thereby jeopardize the purposes for which universities exist.
US miscalculations are now legion — but what to do now?
[Responsible Statecraft — The Quincy Institute, via Mike Norman Economics 8-10-2022]
The Biden administration continues to misconstrue international realities with respect to U.S. policy toward Russia…. Unfortunately, Biden administration officials operate as though the unipolar moment still exists. In the process, they have greatly overestimated Washington’s ability to impose its will on other countries. Administration leaders dismissed the Kremlin’s repeated warnings that trying to make Ukraine a NATO military asset would cross a red line with respect to Russia’s security. They discovered belatedly that Vladimir Putin was not about to cower and accept U.S. diktats simply because the United States insisted that Ukraine had a “right” to join NATO. Nor did he accept the proposition that Washington had a right to make Ukraine a de facto U.S. military ally perched on Russia’s border....
One common feature linking those multiple miscalculations is arrogance. U.S. officials cling to the assumptions of a bygone era when U.S. power and influence vastly eclipsed that of any other nation — or combination of nations….
The coalition that the U.S. was able to assemble [to apply sanctions against Russia after the invasion of Ukraine] consisted almost entirely of NATO and America’s longtime military allies in East Asia. The rest of the global map confirms that virtually no countries in the Middle East, Central and South Asia, Africa, or even Latin America have responded favorably to Washington’s pressure and imposed economic sanctions. It is especially significant that such key powers as China, India, South Africa, Indonesia, Brazil and Mexico remain on the sidelines.
How to Resist the Empire’s Neoliberal Debt Trap
Michael Hudson [Counterpunch, via Mike Norman Economics 8-8-2022]
The carnage of mainstream neoliberal economics
CHART — Corporate revenues increase on price increases, not more sales
[Bloomberg, via The Big Picture 8-11-2022]
Corporate Stagflation Means Rising Sales With Flat Volumes
(Businessweek, via The Big Picture 8-8-2022]
It’s growth, but not healthy growth, and it doesn’t really help the economy.
Shrinking U.S. cattle herd signals more pain from high beef prices
[Reuters, via Naked Capitalism 8-10-2022]
Pam Martens and Russ Martens, August 11, 2022 [Wall Street on Parade]
That statement captures a rear view mirror look at U.S. households. The picture is deteriorating rapidly. More on that in a moment, but first a look at some hair-raising charts that capture the dire straits of U.S. households during the 2008-2010 financial crisis versus today. The New York Fed released its Household Debt and Credit Report for the second quarter of 2022 last week. It showed total household debt rising by $312 billion in the second quarter to reach an historic high of $16.10 trillion. Also setting a new historic record was mortgage debt, which climbed to $11.39 trillion and represented 70.5 percent of all household debt….
What neither Fed Chair Powell nor the New York Fed report is telling the public is that things could deteriorate very fast without all that stimulus money and debt relief that Congress enacted to deal with the pandemic. One hint of that came from the following snippet in the New York Fed’s report:
“Although foreclosures have been very low due to the moratoria on new foreclosures and mortgage forbearances, 35,000 individuals saw new foreclosures on the credit reports, an increase from 24,000 in the previous quarter, an uptick potentially suggesting the beginning of a return to more typical levels.”
An increase from 24,000 foreclosures to 35,000 foreclosures is actually an increase of 45.8 percent in a three-month time span. That sounds pretty scary to us.
Pam Martens and Russ Martens, August 10, 2022 [Wall Street on Parade]
[Twitter, via Naked Capitalism Water Cooler 8-8-2022]
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“Why Americans are increasingly dubious about going to college”
[NBC, via Naked Capitalism Water Cooler 8-10-2022]
“There are 4 million fewer students in college now than there were 10 years ago, a falloff many observers blame on Covid-19, a dip in the number of Americans under 18 and a strong labor market that is sucking young people straight into the workforce. But while the pandemic certainly made things worse, the downturn took hold well before it started. Demographics alone cannot explain the scale of this drop. And statistics belie the argument that recent high school graduates are getting jobs instead of going to college: Workforce participation for 16- to 24-year-olds is lower than it was before Covid hit, the Bureau of Labor Statistics, or BLS, reports. Focus groups and public opinion surveys point to other, less easily solved reasons for the sharp downward trend. These include widespread and fast-growing skepticism about the value of a degree, impatience with the time it takes to get one, and costs that have finally exceeded many people’s ability or willingness to pay. There has been a significant and steady drop nationwide in the proportion of high school graduates enrolling in college in the fall after they finish school — from a high of 70% in 2016 to 63% in 2020, the most recent year for which the figure is available, according to the National Center for Education Statistics.”
They're not capitalists - they're a criminal predatory class
A Hopeful Sign for Holding the Powerful Accountable
David Dayen, August 12, 2022 [The American Prospect]
And it wasn’t the FBI raid at Mar-a-Lago….
But the most hopeful elite accountability moment this week, the one that suggests that maybe the rule of law has a pulse, wasn’t actually conducted with a search warrant at Mar-a-Lago. It was a Justice Department victory in a different case that actually holds top officials of one of the nation’s biggest corporate recidivists accountable.
On Wednesday, a jury in Chicago convicted two traders from JPMorgan Chase, including managing director Michael Nowak, who was the head of the bank’s gold trading desk, for financial fraud in gold markets. The traders were engaging in “spoofing,” a practice of entering fake trades to spur activity and boost the commodity price.
Financial-reform observers believe this case involves the most senior bank officers ever charged in recent history, let alone convicted. The Justice Department actually went for a racketeering charge, depicting the precious metals trading desk as a criminal enterprise within the bank. This is incredibly new stuff for a Justice Department that has long been moribund on corporate crime. “RICO is now clearly a valid charge in white-collar criminal cases like this, and that’s a very, very powerful weapon,” said Dennis Kelleher of the financial reform group Better Markets.
Disrupting mainstream economics
The Shrinking Deficit and Our Shrinking Economy
Stephanie Kelton [The Lens, via Mike Norman Economics 8-11-2022]
he US Treasury Department has reported that “for the first ten months of the fiscal year, which ends Sept. 30, the deficit was $726 billion, down sharply from $2.5 trillion in the same period last year. That’s a record $1.8 trillion narrowing.” …
Radical change is needed and mainstream economics will not be part of the solution
Bill Mitchell [billy blog, via Mike Norman Economics 8-11-2022]
I wrote about what I am terming a ‘poly crisis’ in this recent blog post – The global poly crisis is the culmination of the absurdity of neoliberalism (July 18, 2022). I am working on material for my next book to follow up – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, September 2017). The German word ‘Zeitenwende’ means turning point. A fork in the road. It carries with it, from one interpretation, a recognition that the path that has been traversed to date is not the path that should be followed in the future. Something has to give. Whether Albert Einstein actually said “Insanity is doing the same thing over and over and expecting different results” is an interesting literary issue but the essence of the quote (correctly attributed to him or not) is sound. The idea of a ‘poly crisis’ is that big shifts in thinking and behaviour are required. We simply cannot continue to act in the same way as before whether it be on an individual level (us making our own choices) or at a societal level. The organisation of economic activity, our patterns of consumption and conduct of economic policy must all change – radically – for the planet to survive. Tinkering around the edges will be insufficient. Identifying a ‘poly crisis’ is tantamount to declaring the neoliberal experiment has failed dramatically and taken us all to the brink. It cannot form a basis for the future. But there is massive resistance to change and in Australia in the last week we have seen that in spades....
The underlying reason for problems affecting the world, and there are many, is lack of systems awareness. Markets are supposed to overcome the inherent uncertainty affecting human decision making, but this is a questionable assumption, if not a discredited one. A new approach is needed and apparently needs to be managed. The question is whether humans are capable of doing this in a way that meets the challenges, If not, disaster impends. There are no clear solutions on the table and it is questionable whether concerted action on them would even be possible in the current geopolitical situation. But best effort is a moral obligation, at the very least necessitated by consequentialism.
Creating new economic potential - science and technology
More Energy on Less Land: The Drive to Shrink Solar’s Footprint
[Yale Environment 360, via The Big Picture 8-10-2022]
With the push for renewables leading to land-use conflicts, building highly efficient utility-scale solar farms on ever-smaller tracts of land has become a top priority. New approaches range from installing PV arrays that take up less space to growing crops between rows of panels.
Information age dystopia
These Companies Know When You’re Pregnant—And They’re Not Keeping It Secret
[Gizmodo, via Naked Capitalism 8-8-2022]
This Is the Data Facebook Gave Police to Prosecute a Teenager for Abortion
[Vice, via Naked Capitalism 8-10-2022]
Zephyr Teachout [The New York Review, August 18, 2022 issue]
Reviewed:
Super Pumped: The Battle for Uber
by Mike IsaacNorton, 387 pp., $27.95; $18.95 (paper)Private Government: How Employers Rule Our Lives (and Why We Don’t Talk About It)
by Elizabeth Anderson, with an introduction by Stephen MacedoPrinceton University Press, 196 pp., $39.95; $19.95 (paper)Amazon Unbound: Jeff Bezos and the Invention of a Global Empire
by Brad StoneSimon and Schuster, 492 pp., $30.00; $20.00 (paper)Your Boss Is an Algorithm: Artificial Intelligence, Platform Work and Labour
by Antonio Aloisi and Valerio De StefanoHart, 190 pp., $90.00; $29.95 (paper)….the 1980s and 1990s were a major turning point in surveillance, the period when companies went on their first buying sprees for electronic performance-monitoring. In 1987 approximately six million workers were watched in some kind of mediated way, generally a video camera or audio recorder; by 1994, roughly one in seven American workers, about 20 million, was being electronically tracked at work….The second big turning point in electronic performance-monitoring is happening right now. It’s driven by wearable tech, artificial intelligence, and Covid. Corporations’ use of surveillance software increased by 50 percent in 2020, the first year of the pandemic, according to some estimates, and has continued to grow.
This new tracking technology is ubiquitous and intrusive. Companies track for security, for efficiency, and because they can. They inspect and preserve and analyze movements, conversations, social connections, and affect. If the first surveillance expansion was a territorial grab, asserting authority over the whole person at work, the second is like fracking the land. It is changing the structural composition of how humans relate to one another and to themselves….
In 2011 Travis Kalanick, the founder of Uber, invited A-list Chicagoans to a party at the Elysian Hotel. On a large screen, he displayed what he initially called “God View” and later renamed “Heaven,” a map on which the company was able to track drivers, unbeknownst to them. The partygoers watched in amazement as hundreds of cars zipped around the city in real time, giddy in their perch on top of the world.
This anecdote, from Mike Isaac’s Super Pumped: The Battle for Uber, depicts Kalanick as elated, relishing the domination. More often we see him, and the company, exhibiting habitual paranoia, spying to protect the fortress. The book opens with Kalanick responding to regulatory resistance by hiring “ex-CIA, NSA, and FBI employees” to build a “high-functioning corporate espionage force” that “spied on government officials, looked deep into their personal lives, and at times followed them to their houses.” Once the corporate spies identified regulators who were trying to build a case that Uber was breaking local laws, Uber built code to make sure the regulators never actually matched with Uber drivers, and therefore could not investigate violations of local for-hire laws. Instead, Uber would serve up a mock model of the application with fake cars. The regulator would appear to match with a driver, but the driver would never appear. Uber called the program “Greyball.”
….All of this is demoralizing and dystopian, but what does it have to do with democracy? Elizabeth Anderson’s lively and persuasive 2017 book, Private Government, offers a partial answer. Anderson, a political philosopher at the University of Michigan, shakes the reader by the shoulders to get us out of the strange rigidity that pervades public discussion of government. Employment is a form of government, she argues, one that is far more relevant and immediate for most people than the Washington, D.C., kind.
When whistleblowers go to prison, we’re on the road to tyranny
[Salon, via Naked Capitalism 8-7-2022]
Professional Management Class war on workers
[Twitter, via Naked Capitalism Water Cooler 8-12-2022]
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[TW: The real problem is that we have created an elite class — which Thomas Frank as dubbed (quite accurately imo) the professional management class — which has been indoctrinated, not in the the civic republican tenets of public virtue (accepting that sometimes the public interest supersedes your own private self-interest), not even in the oligarchic tenets of noblesse oblige, but in the neoliberal tenets of cost-benefit analysis and economic “efficiency” is the greatest good. ]
Altercation: ‘News’ Without Context
Eric Alterman, August 12, 2022 [The American Prospect]
Imagine that the MSM actually noted that democracy was under threat and went so far as to say from whom…. Part of the reason for that is money; part is fear; and part is an attachment to outdated professional mores that no longer work when one party has been captured by a fascist cult in which telling lies is not merely excusable, it is obligatory. There is not going to be any “pro-democracy” push from any for-profit major media institution; nor from any that—like NPR or PBS—receives government funding. Instead, the media are busy hiring right-wing Trump apologists like CBS’s Mick Mulvaney to help with their plans to suck up even more aggressively to the Republican insurrectionists, because they expect them to take the House in the 2022 elections.
Democrats’ political suicide
We’re in an Emergency—Act Like It!
Mark Danner [The New York Review, August 18, 2022 issue]
The 2022 election will be the first held in the shadow of an attempted coup d’état—a nearly successful and still-unpunished crime against the state. It will be the first held after a Supreme Court decision that not only uprooted a half-century-old established right but that threatens the rescinding of other rights as well. And it will be the first in which it is clear that, from Republican legislators’ relentless efforts to change who counts the votes, the very character of American governance is on the ballot.
It is no accident that the last time an election was fought this way was also the last time the party holding the White House gained congressional seats in the midterms. Following the September 11 attacks George W. Bush’s Republicans made ruthless use of nationalism and, above all, fear. “Americans trust the Republicans,” Karl Rove told his colleagues, to keep “our families safe.” Though terrorists had killed thousands of Americans on their watch, the Republicans turned around and denounced Democrats as soft on terror. To vote for Democrats—even for heroic veterans like Senator Max Cleland of Georgia, who had lost three limbs in Vietnam—was to vote for Osama bin Laden. The argument was shameless, savage, deeply unfair. It was anything but subtle. And it worked….
Delivering the message is only the beginning. Democrats must recognize that they have a grave credibility problem. Despite significant accomplishments, they made promises in 2020 that they have not kept. They need to face squarely the fact that for many voters, especially younger ones, Biden’s term—the disorganized flight from Afghanistan to the interminable negotiations over his signature “Build Back Better” bill—has been little more than a debacle. Voters who were drawn to the polls by his promises of dramatic steps to reduce greenhouse gases, to raise taxes on rich corporations and the very well-to-do, and to provide universal child care and two free years of junior college have seen little more than endless talk….
Democrats have never been short of ideas. What they lack now is credibility... That in the present emergency and in the shadow of the midterms they could not muster fifty votes to raise taxes on corporations and the very wealthy—a wildly popular measure vital to the entire Democratic program—casts embarrassing doubt on their legitimacy as a working- and middle-class party.
“Nothing will fundamentally change”
“Will Joe Biden Run in 2024? If He Does, It’s a Failure of Vision By the Democratic Party”
[[Teen Vogue, via Naked Capitalism Water Cooler 8-11-2022]
“Age is not an independent variable, unworthy of voter scrutiny or concern. It is inseparable from Biden’s ideology, legislative approach, and reelection strategy. Old age is also one of the defining characteristics of the current Democratic Party. While this Congress is the oldest, on average, of any Congress in two decades, House Democrats claim almost twice as many members at or over the age of 65 as House Republicans. The top three Democrats in the House — Nancy Pelosi, Steny Hoyer, and Jim Clyburn — are among the oldest leaders in Congress. Their leadership is one of the reasons why Democrats are still stuck in the second half of the 20th century, clinging desperately to bygone coalitions and governance models. The septuagenarians of the Democratic Party have essentially brought flowers and speeches to a knife fight. While Republicans cheer on the destruction of Roe v. Wade, Democrats recite poems and criticize their own base. As white Christian nationalism becomes the defining feature of the political right, Democrats extol the virtues of bipartisanship, patience, and moderation. We live in a country where the people who are charged with responding to our escalating political crises are also the least likely to live with the long-term consequences. So, yes, age matters.”
[NBC, via Naked Capitalism Water Cooler 8-12-2022]
“In January 2020, Glenn Youngkin, now the Republican governor of Virginia, got some welcome news. A complex corporate transaction had gone through at the Carlyle Group, the powerful private equity company that Youngkin led as co-chief executive. Under the deal, approved by the Carlyle board and code-named ‘Project Phoenix,’ he began receiving $8.5 million in cash and exchanged his almost $200 million stake in the company for an equal amount of tax-free shares, according to court documents. … Now, that transaction is under attack by a Carlyle shareholder in Delaware Chancery Court. The suit, filed last week by the city of Pittsburgh Comprehensive Municipal Pension Trust Fund, says the $344 million deal harmed Carlyle’s stockholders, who received nothing in return when they funded the payday. Meanwhile, the Carlyle insiders who received the payouts escaped a tax bill that would have exceeded $1 billion, according to the complaint, which accuses Rubenstein, Youngkin and other Carlyle officials of lining their own pockets at the expense of people like police officers and firefighters.”
Conservative / Libertarian Drive to Civil War
The Gun Industry Created a New Consumer. Now It’s Killing Us.
Ryan Busse [The Atlantic, via The Big Picture 8-13-2022]
...The gun industry’s modern marketing effort did not just arm these shooters; in a very real sense, it created them.
This is something I know a bit about, as someone who spent a quarter century in the business. Over my years as a rising executive with a successful gun manufacturer, I became more and more disturbed by the sort of firearms the industry was selling, how it was selling them, and to whom. Next week, I am testifying before the House Committee on Oversight and Reform at a hearing that, in the words of its chair, Representative Carolyn B. Maloney, “will examine the role of gun manufacturers in flooding our communities with weapons of war and fueling America’s gun violence crisis.” ….
Young men were the target. They had disposable income, a long customer life, and a readily exploited fascination with guns. The push to access these new customers took off in 2010 when the AR-15 maker Bushmaster launched its “Man Card” advertising campaign. GRAPH: Bushmaster’s “Man card issued”
….The gun industry could have shunned this type of promotional activity. Instead, it chose to penalize those who did. When Ed Stack, the then-longtime CEO of the major retail chain Dick’s Sporting Goods, stopped selling AR-15s after the Parkland school murders, the NSSF moved swiftly to expel Dick’s from its membership. By contrast, in 2021 the foundation honored Marty Daniel with a seat on its industry board of governors….
For an insider like me, the part that industry marketing was playing in creating these customers was unmistakable. The danger signs were evident in places like the Shooting, Hunting, and Outdoor Trade (SHOT) Show, the industry’s marquee annual event. Usually held in Las Vegas, the SHOT Show is one of the world’s largest trade conventions. I attended more than 25 of them and witnessed their transformation—from an event that once prohibited the display of militaristic tactical gear to one where that became the default….
A few months ago, the 2022 SHOT Show in Vegas welcomed a pioneer in the field: Wee1 Tactical is a company that uses cartoons to market JR-15s (Junior AR-15s) to kids. Customers flocked to its booth, and the company was named on some “best of” show lists.
On May 16, Daniel Defense posted a photo of a toddler cradling one of its AR-15s, captioned with a Bible verse beginning “Train up a child in the way he should go.” Just over a week later, schoolchildren in Uvalde were mutilated and murdered by shots fired from a Daniel Defense rifle. Since the shooting at Robb Elementary, this image has been vociferously criticized, but not by the firearms industry or the NSSF, which still counts Marty Daniel among its trusted leaders. To the rest of the industry, including those small companies hungry to make their mark, this complicit silence confers approval for this next step in firearms marketing.
Trump Supporters Think They’re in a Fight to the Death
[The Atlantic, via The Big Picture 8-7-2022]
Fear, hate, and grievances animate the new Republican Party.
How the Claremont Institute Became a Nerve Center of the American Right
[New York Times, via The Big Picture 8-10-2022]
They made the intellectual case for Trump. Now they believe the country is in a cultural civil war…
“Much of the scholarly work at the Claremont Institute stems from the belief that the American founding is the culmination of centuries of Western political thought. But, thanks to a century of liberalism, the principle of self-governance has been replaced with a permanent class of unelected experts: the regulatory bureaucracy otherwise known as the administrative state. Members of Claremont wish to see the right take control of all three branches of government for a generation, dissolve certain federal agencies — break up the C.I.A., get rid of the Department of Education, shrink the Equal Employment Opportunity Commission — and also stop, as Anton wrote in ‘Flight 93,’ the ‘ceaseless importation of Third World foreigners with no tradition of, taste for or experience in liberty.'”
What’s Really Going on With Fox News, Rupert Murdoch, and Donald Trump
[Slate, via The Big Picture 8-9-2022]The network does what its viewers want, not vice versa.
….incidents and indignities are spun into an ongoing narrative of American decline, are broadly similar to the sorts of stories that I saw on Fox every day during Trump’s actual presidency. Remember the notion, mentioned often in 2018, that a dangerous migrant caravan was marching toward the U.S. border hell-bent on overrunning the border? Consider the premise, broached fairly regularly on the network since the George Floyd protests of 2020, that protest-related property damage in some cities’ downtown cores is tantamount to complete and total lawlessness and chaos. Contrary to what some of the “Fox is turning on Trump” discourse seems to imply, the network wasn’t 24/7 Trump during the ex-president’s term in office. Before, during, and after the Trump presidency, Fox News has always spent the bulk of its programming hours telling its viewers that America is on fire—and that the Democrats bear the responsibility for the flames.
Through repetition, exaggeration, and scapegoating, the network creates the conditions for viewers to be receptive to Republican narratives. Once a Fox viewer is primed to believe that Democrats, the media, and the academy are actively shredding the fabric of middle America, then that viewer becomes receptive to whichever Republican politicians can most loudly and convincingly assert that they alone can fix it.
Is Partisanship Driving Consumer Sentiment?
Barry Ritholtz, August 9, 2022 [The Big Picture]
1. The past ~20 years have seen a much greater spillover from partisan beliefs into sentiment;
2. This is especially vivid around changes in White House party control;
3. Members of both major parties do this, but it is more intense among those who identify as “right-leaning;”
Consumer sentiment now worse than during:
1. 1980-82 Double Dip Recession
2. 1987 Crash
3. 1990 Recession
4. 9/11 Terrorist Attacks
5. 2000-2003 Dotcom implosion
6. 2007-09 Great Financial Crisis
7. 2020 Pandemic Panic
Inside the War Between Trump and His Generals
Susan B. Glasser and Peter Baker, August 8, 2022 [New Yorker, via Naked Capitalism 8-9-2022]
But the gulf between Trump and the generals was not really about money or practicalities, just as their endless policy battles were not only about clashing views on whether to withdraw from Afghanistan or how to combat the nuclear threat posed by North Korea and Iran. The divide was also a matter of values, of how they viewed the United States itself. That was never clearer than when Trump told his new chief of staff, John Kelly—like Mattis, a retired Marine Corps general—about his vision for Independence Day. “Look, I don’t want any wounded guys in the parade,” Trump said. “This doesn’t look good for me.” He explained with distaste that at the Bastille Day parade there had been several formations of injured veterans, including wheelchair-bound soldiers who had lost limbs in battle.
Kelly could not believe what he was hearing. “Those are the heroes,” he told Trump. “In our society, there’s only one group of people who are more heroic than they are—and they are buried over in Arlington.” Kelly did not mention that his own son Robert, a lieutenant killed in action in Afghanistan, was among the dead interred there.
“I don’t want them,” Trump repeated. “It doesn’t look good for me.”
The subject came up again during an Oval Office briefing that included Trump, Kelly, and Paul Selva, an Air Force general and the vice-chairman of the Joint Chiefs of Staff. Kelly joked in his deadpan way about the parade. “Well, you know, General Selva is going to be in charge of organizing the Fourth of July parade,” he told the President. Trump did not understand that Kelly was being sarcastic. “So, what do you think of the parade?” Trump asked Selva. Instead of telling Trump what he wanted to hear, Selva was forthright.
“I didn’t grow up in the United States, I actually grew up in Portugal,” Selva said. “Portugal was a dictatorship—and parades were about showing the people who had the guns. And in this country, we don’t do that.” He added, “It’s not who we are.”Even after this impassioned speech, Trump still did not get it. “So, you don’t like the idea?” he said, incredulous.“No,” Selva said. “It’s what dictators do.”….The decision to name Milley was a rare chance, as Trump saw it, to get back at Mattis. Trump would confirm this years later, after falling out with both men, saying that he had picked Milley only because Mattis “could not stand him, had no respect for him, and would not recommend him.”
….As Mattis would put it, Trump was so out of his depth that he had decided to drain the pool….
Milley was not the only senior official to seek Gates’s counsel. Several members of Trump’s national-security team had made the pilgrimage out to his home in Washington State during the previous two years. Gates would pour them a drink, grill them some salmon, and help them wrestle with the latest Trump conundrum. “The problem with resignation is you can only fire that gun once,” he told them. All the conversations were variations on a theme: “ ‘How do I walk us back from the ledge?’ ‘How do I keep this from happening, because it would be a terrible thing for the country?’ ”
After Lafayette Square, Gates told both Milley and Esper that, given Trump’s increasingly erratic and dangerous behavior, they needed to stay in the Pentagon as long as they could. “If you resign, it’s a one-day story,” Gates told them. “If you’re fired, it makes it clear you were standing up for the right thing.” Gates advised Milley that he had another important card and urged him to play it: “Keep the chiefs on board with you and make it clear to the White House that if you go they all go, so that the White House knows this isn’t just about firing Mark Milley. This is about the entire Joint Chiefs of Staff quitting in response.”
The (Anti)Federalist Society Infestation of the Courts
Egregiously Wrong: The Supreme Court’s Unprecedented Turn
David Cole [The New York Review, August 18, 2022 issue]
...this past term, which concluded on June 30, these five individuals abandoned caution and exerted their newfound authority like few justices ever have. The Court eliminated the right to abortion, struck down a century-old New York law that limited the public carrying of guns, required Maine to fund religious education and a Washington State public school to allow its football coach to pray publicly at the fifty-yard line after games, blocked President Biden’s Covid vaccine mandate for large businesses, and denied the Environmental Protection Agency the authority to require power plants to shift away from coal in order to slow global warming. Compromise, consensus, and the rule of law are out; the radical exercise of power is in.
In several of its most controversial decisions, including those on abortion, gun control, and prayer, the Court invoked originalism to overturn long-standing law and precedent. That approach, if applied consistently, would upend virtually all of constitutional law. Because so few justices throughout American history have been originalists, constitutional law as it stands today, especially with respect to its open-ended guarantees of liberty, equality, and due process, bears little resemblance to how it was originally understood.
[TW: Remarkably, Cole — who is the National Legal Director of the ACLU and the Honorable George J. Mitchell Professor in Law and Public Policy at the Georgetown University Law Center — does not quote or even mention Justice Joseph Story at this point, whose 1833 Commentaries on the Constitution of the United States is a rich resource that should be used against “orginalsim.” Nor does Cole mention at any point the historic issue of the doctrine of implied powers developed by Alexander Hamilton, and supported by Washington, Chief Justice John Marshall, and Story, versus the “enumerated powers” argument promoted by Jefferson, Calhoun, the southern slave-holders and secessionists, and today’s (anti)Federalist Society. Story writes. in Sections 1,238 to 1,289, § 1238. The plain import of the clause is, that congress shall have all the incidental and instrumental powers, necessary and proper to carry into execution all the express powers.… § 1250. The motive for its insertion doubtless was, the desire to remove all possible doubt respecting the right to legislate on that vast mass of incidental powers, which must be involved in the constitution, if that instrument be not a splendid pageant, or a delusive phantom of sovereignty.”]
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