Week-end Wrap – Political Economy – February 26, 2023
by Tony Wikrent
War
How The U.S. (And UK) Sabotaged Peace In Ukraine
[Moon of Alabama, via Naked Capitalism 2-23-2023]
In an interview with an Israeli outlet (vid), former prime minister of Israel Naftali Bennett, who was personally deeply involved in the negotiation process, also alleged that the 'West' blocked them:
“Reports at the time reflect Bennet’s comments and said Russia and Ukraine were softening their positions. Citing Israeli officials, Axios reported on March 8 that Putin’s “proposal is difficult for Zelensky to accept but not as extreme as they anticipated. They said the proposal doesn’t include regime change in Kyiv and allows Ukraine to keep its sovereignty.”
“Discussing how Western leaders felt about his mediation efforts, Bennett said then-British Prime Minister Boris Johnson took an “aggressive line” while French President Emmanuel Macron and German Chancellor Olaf Scholz were more “pragmatic.” Bennett said President Biden adopted “both” positions.
“But ultimately, the Western leaders opposed Bennet’s efforts. “I’ll say this in the broad sense. I think there was a legitimate decision by the West to keep striking Putin and not [negotiate],” Bennett said.
“When asked if the Western powers “blocked” the mediation efforts, Bennet said,
“ "Basically, yes. They blocked it, and I thought they were wrong." “
Recognizing The War Is Lost The ‘West’ Seeks An Exit
[Moon of Alabama, via Naked Capitalism 2-21-2023]
President Vladimir Putin’s State of the Nation address, 21 February 2023
Gilbert Doctorow [via Naked Capitalism 2-25-2023]
The State Duma has just approved a law sent to it by the President declaring the suspension of Russian participation in the New Start treaty. There is now no remaining convention limiting the nuclear arsenals of the nuclear superpowers.
The constellation of treaties that was developed starting in the 1970s was important not only for setting down numbers and kinds of systems that were permitted to the signatories. Still more important were the verification procedures which were ongoing. They involved regular meetings of high officials from both sides and served to establish some kind of mutual respect and trust. As I noted from the opening remarks of Vladimir Putin in his address, there is now zero mutual trust and the guard rails protecting us from nuclear holocaust have been removed.
A Fight for Survival: What Victory Looks Like to Putin
[Carnegie Endowment for International Peace, via Naked Capitalism 2-24-2023]
Putin’s state of the nation address effectively suggests that in the growing confrontation with the West, Russia will rely on one sole argument: the nuclear option. In this respect, suspending the New START treaty also sends a warning to non-Western countries of the consequences for the entire world of the West’s anti-Russian policies. Moscow is presenting the global community with a choice between Russia or descending into a nuclear disaster.
[The Converstion, via Naked Capitalism 2-22-2023]
Russia summons US ambassador over ‘aggressive course’ in Ukraine
[Press TV, via Naked Capitalism 2-22-2023]
Assessing the Economic Value of Military Materiel
Philip Pilkington [American Affairs, via Mike Norman Economics 2-22-2023]
This reflects what former USSR naval officer Andrei Martyanov has been saying and writing books about for a long time. The West is using the wrong standards of comparison, like nominal GDP rather than national capacity. In this light, Russia and China are far stronger than the West realizes using Western-preferred metrics.This has been brought out by industrial warfare. Pursuit of neoliberalism has apparently weakened the West's industrial capacity as factories were moved to locations of cheap labor, notably China.The West not only misjudged the power of sanctions but also underestimated relative national capacity in relation to Russia with respect to effect on war-making. This was a double failure on the part of intelligence that amounts to a serious strategic blunder.
Global power shift
Who’s Winning and Losing the Economic War Over Ukraine?
Medea Benjamin and Nicolas J. S. Davies [Naked Capitalism, February 22, 2023]
The pandemic
“Inside these parents’ long, nerdy struggle over how to improve air quality in Calgary schools”
[CBC, via Naked Capitalism Water Cooler 2-23-2023]
“[T]his stuff matters, especially for Canadians, who spend so much time indoors during the winter months. These systems deliver the majority of the air we breathe…. School administrators say they’ve upgraded the filters in these systems “wherever possible” to a higher standard, known as MERV-13. These filters are much better at trapping tiny particles, such as viruses, in the air…. Both the Calgary Board of Education (CBE) and the Calgary Catholic School District (CCSD) say they’ve put ventilation upgrades at the core of their strategy to improve air quality in schools. In addition to MERV-13 filters, they say they have taken additional protective steps, such as setting the systems to maximize fresh-air intake and running them in ‘occupied mode’ before and after school each day to further flush out stale air and replace it with clean air. In Edmonton, however, the public school board has gone a step further. It made similar upgrades to its ventilation systems, but it didn’t stop there. It also purchased nearly 6,000 portable HEPA filter units — enough for every classroom and office — as an additional layer of protection from viruses, allergens and other airborne particles that can make people sick. ‘We invested in these measures in an effort to provide the safest possible learning and working environments for our staff and students,’ said Veronica Jubinville, a spokesperson with Edmonton Public Schools. Those portable HEPA filters were installed in Edmonton last spring. Ever since, the group of concerned parents here in Calgary have been wondering why the same can’t happen in their kids’ classrooms. ‘I can’t understand why anyone would block these measures,’ said Lacey Elliot, who has one child in kindergarten and another in Grade 2. ‘We all breathe air. We know how viruses are transmitted. We have the resources to keep our kids healthy and further help alleviate this public health issue. Why would we not do this?'”
“The COVID-19 Pandemic Will Be Over When Americans Think It Is”
Steven Phillips [Time, via Naked Capitalism Water Cooler 2-23-2023]
[TW: Phillips is a ghoul; I link to this to relay Lambert Strether’s unsparing comments.]
“[T]he country will not fully emerge from the COVID-19 pandemic until most people in our diverse nation accept the risk and consequences of exposure to a ubiquitous SARS-CoV-2, the virus that causes COVID-19.”
[Strether: “elites have no inclination whatever to accept the “risks and consequences of exposure”; hence Davos Man ventilating and filtering his air; Biden ventilating and filtering his gymnasium appearance; and Jha and Walensky’s wealthy community spending millions to ventilate its school system.”]
“A recent national poll demonstrates a strikingly divided public, not ready to make peace with the virus: while nearly half say that they have returned to their pre-COVID life, one-third still believe this is more than a year away or never.”
[Strether: “ “Make peace” with the virus? Did this dude really write that? “Make peace” with the vascular and neurological damage? “Make peace” with Long Covid? Also, one-third is a remarkably high number, given the enormous wave of eugenicist propaganda that daily engulfs us.]
“Instead a sharper understanding can be gained through an agnostic evaluation of the evidence and science. Today, this strongly supports a new paradigm of ‘living with the virus’ through accepting exposure for most Americans.”
[Strether: “What a vile screed. Phillips is a member of the American College of Epidemiology. I wonder if they support his view? Or have they joined what can only be characterized as a death cult? (Not for elites, of course; just for the rest of us.) Phillips is quite a character:”]
[Twitter, via Naked Capitalism Water Cooler 2-23-2023]
[TW: Strether has sharpened his understanding, and condemnation, of the eugenics underlying much of the thinking and actions of USA and western elites. Though I think it would be useful if he went further and also condemned these eugenics ideas as neo-Malthusian, and thus openly identify them with the British empire.]
“Opinion: Treating kids as invulnerable is treating them as disposable”
[Calgary Herald, via Naked Capitalism Water Cooler 2-20-2023]
“The solutions for protecting kids can be gleaned from behaviours of wealthy elites, and they involve layering protections to create clean indoor air. The recent World Economic Forum in Davos used the following safety systems: mandatory daily PCR testing with ID-badge access linked to results, new ‘state-of-the-art ventilation systems‘, HEPA purifiers everywhere, various levels of masking and, it appeared, virus-killing UV lighting systems. Our children deserve these protections, in their schools and elsewhere. These measures, along with boosters, are in fact the only currently existing ways of reducing the public health need for universal indoor masking. By treating children as invulnerable we are actually treating them as disposable. But they are everything — to our lives and to our future. Their long-term health is at risk and we need to protect them.”
Eric Reinhart [STAT, via Naked Capitalism Water Cooler 2-24-2023]
“Through its stranglehold on resources and institutional power, the U.S. medical profession has also come to distort the very definition of public health and what is now widely believed to constitute relevant knowledge. As I noted in a related essay in The Nation, lessons from labor history, social anthropology, political economy, epidemiology, communication, law, and various other nonmedical fields represent the bulk of the expertise that is most essential to formulating effective public health policy. Medical interventions constitute just 10% to 20% of modifiable factors that affect health, yet narrow biomedical expertise has been consistently prioritized in the selection of U.S. public health leaders from local to state and federal levels. The marginalization of non-biomedical knowledge within public health administration and the corresponding elevation of physicians to power has had catastrophic consequences for population-level health. While the clinical frameworks that characterize medical training are appropriate for the one-to-one encounters of patient care, misapplying them to the population-level problems of public health leads to a failure to effectively anticipate and address the social conditions upon which disease and disability feed. This, in turn, fuels a top heavy, reactive national health policy that prioritizes profitable medical treatment rather than cost- and life-saving prevention via community-based social services. Declining life expectancy in the U.S. — now at its lowest in nearly two decades — reflects the consequences of this policy choice. Rebuilding public health in the U.S. will require reclaiming it from its biomedical perversions.”
[TW: in the 19th century, a large part of the national policy of ensuring public health centered on the construction of massive public water works and sewage systems: Chronology of American Waterworks from 1649 to 1865. Here’s the separate page for 1866 to 1880. Here’s a website dedicated to the history of the Chicago waterworks, including pictures of the water crib built offshore in Lake Michigan, and the Water Tower built near the end of the Civil War. How were these financed? Who paid for them? Would these even be possible today, with governments infested by hundreds and thousands of libertarians, deficit scolds, NIMBYs, and general anti-government right wingers? ]
[Twitter, via Naked Capitalism Water Cooler 2-24-2023]
[TW: Historians generally agree that there were three national policies that guided the Hamiltonian program for building the USA economy: a protective tariff, a national banking and financial system, and “internal improvements” what we today call “infrastructure.” Ie., municipal water and sewage systems. (Generally overlooked as a fourth Hamiltonian national policy is the Doctrine of High Wages.) As John Lauritz Larson writes in his conclusion of Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States (University of North Carolina Press, 2001, p, 263):
The tragedy for Americans was not that they had failed to build a national system of roads and canals, or that they lost control of the railroads to the private sector. The tragedy lay in the subtle substitution, during the long struggle over internal improvements, of economic liberalism for political republicanism at the heart of the American experiment. ]
Civic republicanism
Anaximander and the Nature of Science by Carlo Rovelli review – the ancient master of the universe
[Guardian, via Naked Capitalism 2-22-2023]
...the Miletus of 2,600 years ago was a time and place in which the ability to read and write moved beyond a limited circle of elite scribes. The effect of extending education far and wide was instantaneous. And it was no coincidence that Anaximander’s revolutionary thinking also coincided with the birth of the polis – the nascent democratic structures built on debate as to how best to govern society. Once people started seeing power as negotiable then everything else became debatable too. “Alongside the desacralisation and secularisation of public life,” Rovelli argues, “which passed from the hands of divine kings to those of citizens, came the desacralisation and secularisation of knowledge… law was not handed down once and for all but was instead questioned again and again.”
This new freedom to doubt received wisdom was crucial in Anaximander revealing what it took Chinese stargazers – advanced in many other respects – another 2,000 years to acknowledge: that the Earth was suspended in space. But there was one other critical factor in the new way of thinking. It was implicit in Miletus’s geography as a trading city in which Greek and Egyptian and Babylonian cultures met. Anaximander borrowed knowledge from all these traditions to build his theories. In this, Rovelli suggests, he sends perhaps his most potent message through the ages, “one that can serve as a warning to us today”. That message, as relevant in Rovelli’s native Italy as in contemporary Britain, is this: “Each time that we – as a nation, a group, a continent or a religion – look inward in celebration of our specific identity we do nothing but lionise our own limits and sing of our stupidity.”
Anaximander and the Nature of Science by Carlo Rovelli (translated by Marion Lignana Rosenberg) is published by Allen Lane (£16.99).
[TW: The really important message in “Anaximander” is not the creation of science, but that every human being has the potential to contribute, hence the need to educate everyone, and give everyone a voice in the polis: “Each time that we – as a nation, a group, a continent or a religion – look inward in celebration of our specific identity we do nothing but lionise our own limits and sing of our stupidity.”
“The Court [is supposed to] protect the republican state — that is, the citizens politically engaged — from lapsing into a politics of self-denial. It challenges “the people’s” self-enclosing tendency to assume their own moral completion as they now are and thus to deny to themselves the plurality on which their capacity for transformative self-renewal depends.”
— Frank Michelman
“Law’s Republic” (pdf), The Yale Law Journal, Volume 97, Number 8, July 1988
The carnage of mainstream neoliberal economics
[WSWS, via Naked Capitalism Water Cooler 2-21-2023]
“Railroaders have been warning about the conditions that resulted in the derailment for years. They include the impact of Precision Scheduled Railroading and similar attendance schemes, endless cost-cutting by the railroads, a massive reduction in the size of the nationwide workforce, and a relaxation of inspection and maintenance. These have made the trains ticking time bombs. We all knew that something like this was bound to happen. In fact, it happens every day, where on average there are three derailments in the United States…. The disaster is a direct consequence of Congress’ ban on our striking. The conditions on the railroads have been decaying for years. We wanted to fight for better and safer conditions, adequate staffing and maintenance. But the government decided that the profit interests of the railroads are more sacred than our democratic right to strike and even the right of the public to a safe and healthy environment.” • Certainly odd that that Lever News and a chorus of liberals immediately focused on technical solutions….
How Congressional Rail Industry Allies Helped Block Safety Regulations
[Intercept, via Naked Capitalism 2-25-2023]
Norfolk Southern eliminated key maintenance role in derailment region, union says
[FreightWaves, via Naked Capitalism 2-19-2023]
[The Holler, via Naked Capitalism 2-23-2023]
John Russell of The Holler is interviewed by Frank Capallo of The Level: “[CAPALLO]: “You’ve also been speaking to the rail workers about this specific derailment, which they are saying was caused by a wheel bearing issue rather than the brake system. So can you go into a little bit of detail about that? Because I don’t think this is something that our audience has really heard about yet. [RUSSELL:] But there’s video of this wheel bearing glowing white hot for as much as 20 miles before the derailment. And this was caught by ring doorbell cameras, security footage, etc…. Because had these braking system has been updated and the chemicals classified accurately this disaster and the response likely would have been much less terrible. Rail workers have been telling me about this wheel bearing since I arrived here. And they’ve also told me that PSR, precision scheduled railroad, has put pressure on every aspect of how the railroads are run, including inspection and maintenance on things like wheel bearings.”
[Lambert Strether comments: “Well, I’m glad that finally somebody at The Lever knows about the bearing (“the hot box“). (It has occurred to me that the immediate focus on regulating braking systems + regulation vs. bearings + Precision Scheduled Railroading (PSR) has appeal for liberal Democrats, (a) because they could focus on blaming Trump (correctly) for deregulation, while (b) not talking to actual rail workers, who they just screwed over with their anti-strike legislation, and (c) definitely avoided talking about worker empowerment, let alone nationalization, which talking about PSR would have entailed. I was surprised to see Lever News erasing the views of rail workers, but these are strange times). However, I don’t see a reason to split the difference on braking systems. Again, if you investigate what rail workers have to say, you will find that the East Palestine train was improperly “blocked,” with the heavy cars at the front. I would need to know that new braking systems would bring an improperly blocked train to a safe stop. This is naturally not addressed.]
“Norfolk Southern, in wake of toxic derailment, gives in on sick days for one of its unions”
[CNN, via Naked Capitalism Water Cooler 2-22-2023]
“Norfolk Southern has agreed to give one of its unions the paid sick days it demanded for members in negotiations last year, and is in talks to grant sick days to its other unions as well. The announcement comes hours after the company’s chief financial officer, Mark George, told investors that it is still struggling to fill the open positions it has at almost all 95 locations where staff is based. George also said the company may have cut staff too deep during the early days of the pandemic, and that it has had trouble bringing back laid-off staff members.
“Norfolk Southern CEO to East Palestine residents: ‘I understand the anger'”
[The Hill, via Naked Capitalism Water Cooler 2-22-2023]
“Jim Stewart, who said he has lived in East Palestine for 65 years, said that he no longer feels safe in the town, and is worried about the value of his home. He said he has had a lingering cough since the derailment and has developed a rash on his cheek. ‘Did you shorten my life, now? I want to retire and enjoy it. How are we gonna enjoy it? You burned me,’ he said. ‘We were going to sell our house. Our value went poof. Do I mow the grass? Do I — can I plant tomatoes next summer? What can I do? I’m afraid to.'”
After Norfolk Southern Support, DeWine Says No Disaster In East Palestine
Matthew Cunningham-Cook, February 23, 2023 [The Lever]
Ohio Gov. Mike DeWine’s track record and rail company links raise questions about his ability to hold the rail giant accountable for the derailment disaster.
The overlooked message behind Republicans’ response to the Ohio train derailment
Ben Jacobs, February 23, 2023 [Vox]
...Yet it also did capture a certain bit of the conservative zeitgeist within what Schweppe called “elite populist circles.” As he put it, “There is a growing sense that all of these corporations are against us — not only are they trying to screw us over on the woke stuff, but generally, they just don’t care about ordinary people.”
Sharma noted that this happened only months after some Republicans joined with progressives in December to oppose a Biden-backed effort to settle a railway strike that was opposed by some unions. The strike, Sharma said, presents an opportunity for the right to draw attention to “a case of corporate malfeasance that doesn’t have an easy culture war angle.”
The question is whether the East Palestine accident drives Republicans to embrace those populist issues. As one Republican familiar with the response told Vox, there are “cross-cutting cleavages.” The Republican said while “corporate graft and greed” can be blamed, there are other easy villains, including “bureaucratic incompetence” and the indifference of “cultural elites,” that fit easily within existing conservative messaging.
[US Department of Labor, via Naked Capitalism 2-20-2023]
[Lambert Strether: “Is it just me or is the frequency of these stories increasing?”]
THE FOUR HORSEMEN OF INFLATION
[The Intercept, via Naked Capitalism 2-20-2023]
War, pestilence, climate change, and the rich.
When Neoliberals Declared War on the Poor
[CounterPunch, via Naked Capitalism 2-25-2023]
[TW: An excerpt from An Orgy of Thieves: Neoliberalism and Its Discontents, by Alexander Cockburn and Jeffrey St. Clair, details how Bill Clinton and Al Gore destroyed most of the social safety net built by the New Dealers. It’s gut-wrenching and infuriating. Even Robert Rubin advised them not to do it. Left me wondering why Democrats continue to admire Clinton and Gore. ]
On Lina Khan Derangement Syndrome
Matt Stoller [BIG, via Naked Capitalism 2-20-2023]
On Wednesday, Republican FTC commissioner Christine Wilson penned a resignation letter in the Wall Street Journal editorial pages, accusing Chair Lina Khan of lawlessness and deception, and saying she could no longer be part of the commission as a result.
Why does such a move matter? Wilson is a mostly irrelevant minor functionary. But as odd as it may sound, the corporatist wing of the GOP - a network of antitrust defense lawyers, monopoly-funded academics, and Wall Street lobbyists - think that this huffy resignation has delivered a deadly blow to Lina Khan’s agenda. I’m going to explain their point of view, as well as the entrenched anger they feel not just towards Khan, but towards the anti-monopoly movement, as well as their real fear, which is that the Republican Party itself is starting to buy into what Khan is selling….
Despite Ronald Reagan’s history as a divorced Hollywood icon who had championed abortion rights in California while Governor, he built a deep and enduring bond with the religious right. In 1988, Jerry Falwell, a man with immense influence among white evangelicals, made that clear, saying that “Ronald Reagan saved the country.” Behind this statement was a political deal. Social conservatives would provide the votes, Wall Street would provide the money, and an ascendant Republican coalition would put judges on the bench who would serve both.
Under this new ‘fusion’ coalition, Robert Bork’s Chicago School pro-monopoly antitrust revolution flowered. Since 1890, and again in 1913, 1936, 1950, and 1976, Congress had passed laws to attack corporate consolidation. As Judge Learned Hand wrote in 1945, “Among the purposes of Congress in 1890 was a desire to put an end to great aggregations of capital because of the helplessness of the individual before them.” But in 1981, the views of Bork, and associated operatives like Tim Muris, Jim Miller, and Bill Baxter, spread from the Wall Street Journal editorial page, and turned antitrust law on its head.
Bork, et al, thought that consolidation was good, and that traditional anti-monopoly safeguards for small business and workers were a form of inefficient ‘protectionism.’ They did not like how antitrust enforcers looked at real-world evidence of how the economy did work. Instead, they wanted enforcers to use wholly theoretical economic models about how the economy should work, calling this the ‘law and economics’ school of policy….
As my colleague Erik Peinert proved with internal Reagan administration memos, these advocates knew they were acting unlawfully when they relaxed antitrust enforcement. But they correctly thought Congress wouldn’t stop them. Mergers exploded as a result, and sectors across the economy consolidated.
[TW: in the mid-80s I was tracking this issue; by the end of the 1980s, the dollar value of mergers and acquisitions had exceeded both the total amount spent on scientific research, and private spending on new plant and equipment. Also noteworthy: the largest amount of mergers and acquisitions of USA companies by foreigners each year was never from Japan, but from the UK and the British commonwealth. ]
Gradually, antitrust establishment lawyers and economists took over the field entirely, and a club of narrow technocrats came to imagine themselves as quasi-scientific experts over the economy, above politics or accountability. And until recently, this group ruled, without much dissent. But in 2008, they faced a challenge. The financial crisis….
And this brings me to Lina Khan, the Biden antitrust enforcer who has inspired fear, admiration, and to the antitrust defense bar, utter derangement. Khan was appointed in 2021 to run the FTC, but before she was picked, her career was shaped by the same financial crisis. In the early 2010s, a network of anti-monopoly writers, scholars, workers, and businesspeople, spurred by the great collapse of 2008, came together and began arguing that Bork’s framework led to authoritarian commerce dominated by monopolies….
Naturally, the Reagan and Clinton era officials were unhappy to see their work criticized. But what blew their minds was that Donald Trump, and then Joe Biden, accepted anti-monopoly arguments instead of what they, a self-defined scientific elite, thought. When Khan was appointed Chair of the FTC in 2021, it reflected that this narrow clique was no longer in control of antitrust law.
How They RIGGED It All: A Corporate Law Professor Explains (w/ Jon Hanson)
[Bad Faith podcast, via YouTube, February 24, 2023]
[TW: hard to believe, but inspires hope, that this guy teaches at Harvard Law.]
19:32 …the legal system reflects the cultural common sense… that what happens to anyone is the consequence of their choice…. On that notion we build this idea that who you are is what you consume, what you buy right: that's your identity… manifested through the choices you make and we have opened up this set of markets for you the more chances you have to purchase and express yourself, that's what Freedom looks like.”
22:53 …Richard Posner, 7th Circuit Judge… the father of Law and Economics, this very major legal theory that dominated the late part of the 20th century and still is really important for shaping how we understand our laws…. what Richard Posner did in the 1990s was say, no, we don't really need strict liability; let's adopt a standard that is harder to meet, called negligence. You have to show that these transporters… those who are producing these chemicals, did something wrong.”
1:20:02 …in real life if the obligation is for the harmed party to prove negligence you're in a situation where you're hoping that through the deposition process the person that wronged you is going to disclose information that proves they knew that there was a risk here that they ignored and could have controlled for that. [you're hoping] you're going to get those documents and you're going be able to prove it in court [but]in real life corporations are very good at not ratting themselves out in that way.
37:34 The way corporate law is produced is through a competition among the states where little Delaware has won that competition by providing to large corporations the terms of governance
that most the appeals to the decision makers for corporations. So it's not law that's being imposed, it's law that's being consumed, in a marketplace of laws and… Delaware has managed to provide such attractive law that it attracts a significant majority of the largest global corporations in the world that are us-based and Delaware based now. And those companies now all have a shared common interest: their common interest is we want more markets; we want less regulation; we like stories that make markets look good and stories that make regulation look bad; and we want to interact in the political process….49:37 [Explaining the background to the creation and promotion of the Powell Memo advising corporations to band together to defend the “free enterprise system”, by tobacco lawyer and Philip Morris board member Lewis F. Powell.] Now I'll go back to my tobacco story. Tobacco had weathered this storm in the 1950s where the evidence had come out that their product was killing lots of people, and they had to figure out a way to navigate that through public relations… The key two aspects of that solution was, one, we're going to create doubts as long as we can, and, two, we're going to promote freedom and choice as much as we can. Where there's doubts we can say, look, we didn't do it and where there's freedom and choice, we're not responsible… Both of those strategies worked up to a point. But around 1964 … it's just too obvious by that point that tobacco is killing hundreds of thousands of people…
[Discusses impact in 1960s of Rachel Carson and Ralph Nader in further damaging reputation of corporations.]
52:25 so it's in 1970, 1971 in which Milton Friedman writes for the New York Times Sunday magazine a piece on why shareholder Primacy should be the primary goal of corporations… corporations should not have to take into account any effects they have on stakeholders, it should just be profit and doing otherwise would be unadulterated socialism….
1:08:19 When legal economists speak about what the normative goal of law should be, what should law be trying to do, should it be trying to advance justice or somehow be true to the the goals and meanings of the founders…. The dominant answer in the late 20th century for much of law was it should be trying to advance the goal of efficiency…. [which] led to a set of presumptions among legal theorists that markets would achieve efficiency more effectively than any non-market institution or process… We will get there as long as people have the ability to choose and no one else imposes their views on people. So we're back now to a story that would justify and valorize choice over everything else, and again, what have we done we've ignored context, we've ignored history, we've ignored circumstances. All the things that the law had basically been doing back in the Lochner era, it's now going to do again.
Introduction, The Anti-Oligarchy Constitution Reconstructing the Economic Foundations of American Democracy
by Joseph Fishkin and William E. Forbath (Harvard University Press, 2022)
Confronting the present crisis will require liberals and progressives to reclaim many of their older arguments about political economy and enact policies and laws that implement them. This is work for the elected branches. Much of the work is federal legislation. And nearly all of it is vulnerable to constitutional attack by an emboldened conservative political and legal movement that aims, as its predecessors did a century ago, to elevate an anti-redistributive vision of political economy into constitutional arguments to be enforced in court.
In the looming constitutional confrontation, the democratically elected branches have some tools and methods of their own, which they can and likely will use to challenge, defy, or threaten the courts, pushing back against judges' constitutional and statutory claims.' But in the name of what? General theories of democracy? A broad vision of congressional power? Precedent and stare decisis, to protect old holdings won in prior rounds of this same conflict, such as the battle over the New Deal? There is room for all these arguments, although each has real limitations. But there is also something else. There is an American tradition of constitutional argument that directly addresses the central problems of oligarchy and inequality we now face. That tradition is the subject of this book.
Throughout the nineteenth and early twentieth centuries, generations of reformers argued that America was becoming a society with a "moneyed aristocracy" or a "ruling class"—an "oligarchy," not a republic. These reformers were making constitutional claims. For them, circumstances resembling America's today, in which too much economic and political power is concentrated in the hands of the few, posed not just an economic, social, or political problem, but a constitutional problem.
Predatory Finance
“1 big thing: When a savings account is very risky”
Felix Salmon [Axios, via Naked Capitalism Water Cooler 2-20-2023]
“Compound Banc pays an eye-popping 7% on deposits — or at least things that look and feel a lot like deposits. But it’s not a bank, and the deposits — technically, they’re risky bonds — are not insured by the FDIC or anybody else. The product is aimed at very small investors: The minimum investment is just $10. People looking for improbably high interest rates on their money have learned the hard way to avoid crypto. That’s created an opening for dollar-denominated products taking advantage of various regulatory loopholes — and of the fact that Americans are increasingly comfortable handing over their money to digital institutions. Compound Banc’s product is marketed as a high-yield digital account. Savings start compounding immediately at a 7% APY (annual percentage yield); savers can withdraw their money at any time without any fees or penalties. ‘No if and or buts about it,’ says the homepage. Compound Banc is neither a bank nor a brokerage, and its savings bonds, if you read its SEC filings, are characterized by “a high degree of risk.” Accounts at Compound Banc are not insured by the FDIC, the SIPC, or any other government regulator. ‘We primarily lend to sub-prime real estate borrowers,’ notes Compound on page 7 of its offering circular.” Eesh. Preying on the absolute weakest. And: “The fact that Compound Banc has managed to go live without any real regulatory oversight — they say they have already issued some $1.5 million in bonds — demonstrates the limits of America’s existing regulatory infrastructure.”
Private Equity’s Senator Gets Big Payout
Julia Rock & Andrew Perez, Feb 23, 2023 [The Lever]
On February 22, Apollo Global Management announced that Toomey, who retired from the Senate in January, will serve on the firm’s board of directors. In 2021, Bloomberg reported that new directors at Apollo are granted $600,000 in restricted stock, in addition to a baseline $150,000 salary.
[TW: The historical background of Apollo Global Management helps to understand the process by which USA’s economy has fallen under the control of financial predators. Apollo was founded in 1990 by Leon Black, whose father Eli M. Black (1921–1975), was chairman of United Brands Company. A number of authors have described the role of United Brands (formerly United Fruit) in smuggling illegal narcotics, and arranging various coups in Central America. In 1975, when federal investigators were gathering evidence that United Brands had bribed Honduran government officials in preparation for a law suit that threatened to reveal the role of dirty money in the boardrooms of certain companies, Eli M. Black fell to his death from the 44th floor of Manhattan’s Pan Am Building. In March 2021, Leon Black was forced out of Apollo because after it was revealed pedophile and US/UK intelligence asset Jeffrey Epstein had been paid $158 million between 2012 and 2017.]
Disrupting mainstream politics
The West’s Betrayal of Freedom
Matt Taibbi [Racket News, via Naked Capitalism 2-20-2023]
How About a Victory for the Left Occasionally?
[Trying to Understand the World, via Naked Capitalism 2-19-2023]
Decisions, it is perhaps necessary to stress, are always made by people. They are seldom made by individuals alone, but most often by groups, including groups which may be outside the formal decision-making process itself. Even decisions formally made “personally” often have to take account of what is acceptable to others. The focus of any political campaign, therefore, has to be on individuals, with names, opinions, and potential weaknesses that can be exploited. Unless individuals who have the power to make decisions are deliberately targeted and subjected to adequate pressure, nothing will change and nothing will get done. Conversely, a Leftist government in power that does not identify its enemies as individuals, and then deliberately work to undermine their capacity for nuisance, will not last long.
Perhaps this sounds unattractively clinical and technical, and detached from considerations of ethics, or even political theory. But in fact, there is nothing more dispiriting and depressing than seeing representatives of causes you support failing hopelessly because they do not understand the basic rules of politics, while their opponents do.
...idealism isn’t unknown on the Right either: the peasants of Vendée who rose against the Republic in 1793, or the students and intellectuals who joined Franco’s Falange in 1936, were ready to fight, and if necessary die, for what they believed in. Many did. And that perhaps gives us one clue: when the Right talks about fighting, it means it literally. When the Left talks about fighting it means signing petitions.
Jeremy Corbyn on the establishment campaign to stop him becoming Prime Minister
[Declassified UK, via Naked Capitalism 2-20-2023]
The Power-Serving Myth That Anti-War Protests Make No Difference
[Caitlin’s Newsletter, via Naked Capitalism 2-20-2023]
One in 20 US homicides are committed by police – and the numbers aren’t falling
[The Guardian, via The Big Picture 2-19-2023]
Police killings of any sort account for nearly 5% of all homicides, with at least 1,192 people killed by law enforcement in 2022.
“Will the Left Stand Up to the Deep State?”
[Compact, via Naked Capitalism Water Cooler 2-23-2023]
“In 2020, Mickey Windecker showed up in Denver smoking cigars, driving a hearse loaded with guns, and talking ultra-radical claptrap about having served with Marxist Kurdish guerrillas in Syria. Despite his preposterous persona, Windecker managed to entrap one BLM activist into pleading guilty on weapons charges. He also worked to inflame peaceful demonstrations by ‘encouraging people to break windows and leading marches directly into police traps.’ Windecker and his FBI handlers even attempted to recruit BLM activists into an assassination plot against Colorado Attorney General Phil Weiser. Ultimately unsuccessful, this scheme shows the outrageous lengths to which the bureau will go to manufacture threats. It is reasonable to assume this was not the only recent FBI infiltration of a left political movement.” • So, the Democrats have a very clear choice here: Supporting BLM, or the organs of state security. I wonder why their choice will be?
Restoring balance to the economy
NLRB bans non-disparagement and confidentiality mandates in severance agreements
[Ohio Employer Law Blog, via Naked Capitalism 2-25-2023]
They’re not capitalists — they’re predatory criminals
Fear Made John McAfee Rich. It Also Ruined Him
[Businessweek, via The Big Picture 2-19-2023]
The cybersecurity pioneer’s long, strange saga started in Silicon Valley and ended in a Spanish prison. An exclusive story and podcast.
[TW: It really seems to be a pattern: these squillionaires newly minted over the past couple decades are drug-addled sex freaks who hate society and refuse to pay taxes. But Bill Clinton loves to party with them! No wonder Trump won in 2016 by mobilizing hatred against elites.]
Information age dystopia
“Science Fiction Magazines Battle a Flood of Chatbot-Generated Stories”
[New York Times, via Naked Capitalism Water Cooler 2-23-2023]
“The editors of three science fiction magazines — Clarkesworld, The Magazine of Fantasy & Science Fiction, and Asimov’s Science Fiction — said this week that they had been flooded by submissions of works of fiction generated by A.I. chatbots…. [Neil Clarke, the editor of Clarkesworld] declined to be more specific, saying he did not want to give those submitting the stories any advantages. The writing is also ‘bad in spectacular ways,’ Mr. Clarke said. ‘They’re just prompting, dumping, pasting and submitting to a magazine.’ He wrote on Twitter that the submissions were largely ‘driven by ‘side hustle’ experts making claims of easy money with ChatGPT.’ ‘It’s not just going to go away on its own, and I don’t have a solution,’ Mr. Clarke wrote on his blog. ‘I’m tinkering with some, but this isn’t a game of whack-a-mole that anyone can ‘win.’ The best we can hope for is to bail enough water to stay afloat. (Like we needed one more thing to bail.)'”
Joe Costello, via Naked Capitalism 2-25-2023]
Historian and novelist Gore Vidal wrote several decades ago,
“The late Murray Kempton once noted that although the New York Times likes to pose as being above the battle, this position has never stopped the Times, once the battle's fought, from sneaking onto the field and shooting the wounded.”
...However in the 20th century, for several reasons, this understanding of press subjectivity changed. One important reason was the rise of broadcast media. By the 1920s, as radio broadcasts proliferated, the government stepped in to regulate a limited broadcast spectrum. A few years later, the same model was applied to television. National ownership of broadcast media became concentrated in three corporations, a big difference from the preceding century’s massively distributed printing presses. This half-century of three corporations' domination of broadcast media is truly one of the great centrally controlled information regimes in history, though today's technology has the potential to be much worse….
In the 70s, the New York Times was never the biggest fan of the young California Governor and they certainly weren't excited about his insurgent message of reform in '92. The New York Times' reporter covering the campaign was Gwen Ifill, who later went on to fame with a whole other bad journalism kettle of fish – PBS. Ifill was also assigned to cover two or three other candidates besides us….
By this point, the Times had already had enough of the Brown candidacy and thought they were going to hang a head on the wall. I was in the Santa Monica office and got a call, not from Gwen, but queerly enough from one of the editors, this to say the least was unusual. They had caught in the announcement speech passages from Richard Goodwin. If you don't know who Dick Goodwin was, you should. He died a few years ago, one of those people whose passing represents the end of an era to which there is no return. Goodwin had been a speech writer for President John Kennedy and then his brother Robert. He also wrote for President Lyndon Johnson and was responsible in 1964, at the height of the Civil Rights Movement, for getting Johnson to say live on national television, “We shall overcome.”
Climate and environmental crises
[The London School of Economics and Political Science, via Naked Capitalism 2-19-2023]
New and recent books about climate and environmental justice
[Yale Climate Connections, via Naked Capitalism 2-21-2023]
Israel
Elite IDF reservists threaten to stop showing up for duty over judicial overhaul
[The Times of Israel, via Naked Capitalism 2-25-2023]
The signatories included lieutenant colonels, colonels, brigadier generals, and a major general, among dozens of junior officers and sergeants….
Much of the Special Operations Division is classified; however, it is known to conduct undercover intelligence-gathering operations deep in enemy territory….
Meanwhile, Israeli television reported Tuesday that top military prosecution officials have warned in recent weeks that the judicial shakeup could expose senior IDF commanders as well as senior political figures to criminal proceedings in international courts.
The Kan public broadcaster said a similar warning was issued Tuesday at a closed meeting of the Knesset’s Constitution, Law and Justice Committee by legal counsels to Shin Bet and Mossad, the Military Advocate General and senior Justice Ministry officials.
Senior diplomat Alon Ushpiz, who recently resigned as Foreign Ministry director general, issued a similar warning Thursday.
The International Criminal Court in The Hague does not investigate individuals in countries that have strong justice systems and which are seen as capable of investigating themselves. However, it is feared that a perception of the Israeli system as having been grievously harmed could lead the court to assert jurisdiction and investigate Israeli officials on suspicions of war crimes.
[Haaretz, via The Big Picture 2-19-2023]
The Israelis destabilizing democracy and disrupting elections worldwide. No morals, no qualms, no borders: Tal Hanan and Team Jorge have turned chaos into business (Haaretz)
[TW: This is part of the West’s “rule-based order.”]
How Israeli youth helped usher in the farthest right-wing government ever
Claire Porter Robbins, February 23, 2023 [Vox]
A joint poll published by the Israel Democracy Institute last month found that 73 percent of Jewish Israelis between ages 18 and 24 identify as right-wing, compared with only 46 percent of Jewish Israelis over 65. Young Jewish Israelis are showing up to rallies and polling stations for the extremist politicians whose November electoral victory ushered in Israel’s farthest right-wing government ever….
“‘Moderate PAC’ is latest big-money push to keep Democrats in line on Israel”
[MondoWeiss, via Naked Capitalism Water Cooler 2-23-2023]
“A new Democratic political action committee (PAC) has arisen, dedicated to cultivating what it refers to as ‘moderate policies.’ It stands against Republicans, as it supports only Democrats, but primarily, it aims to move the Democratic party to the right. It’s the latest iteration of conservative efforts to revive the classical conservatism that has been drowned by right-wing fanaticism, creating the so-called “Never-Trump Republicans” who don’t have a political home for the moment…. The new PAC, which intends to raise at least $20 million to target progressive candidates in the 2024 election, currently has only one major donor: billionaire Jeffrey Yass. That name may not be familiar to most Americans, but it’s one we need to get to know better. Yass, often referred to as the richest person in Pennsylvania, is the driving force behind funding for the Kohelet Forum, an organization that bears a great deal of responsibility for pushing Israeli policy to the far right, and whose network expands not only throughout Israel but also deep into the United States…. In the U.S., Yass is a major figure in the background of Republican donations. He is a leading funder of Club for Growth, which supports the Trump base of the Republican party, including many who sought to overturn the 2020 election.”
[Lambert Strether adds: “More on Yass from (sigh) WikiPedia: “He is the co-founder and managing director of the Philadelphia-based Susquehanna International Group (SIG) and an early investor in TikTok. In 2001, he joined the executive advisory council of the Cato Institute.” ”]
Conservative / Libertarian Drive to Civil War
It’s Not a “National Divorce.” It’s a Call for One-Party Authoritarian Rule.
Matt Ford, February 25, 2023 [The New Republic]
Marjorie Taylor Greene’s idea for America to “separate by red states and blue states” isn’t just dumb and harmless. It’s also a window into a dangerous vision that’s ascendant in the Republican Party….
...It’s not worth quibbling with her about what Democrats and liberals actually believe or what Republicans and conservatives really hope to accomplish. The most important takeaway here is her complete rejection of the idea that Americans can resolve their political differences through discussion, persuasion, or compromise. In her preferred outcome, Greene would never have to convince a single voter that her policy ideas are better than her opponents’ or that they would be better off if they elected her. She simply wants to win by default….
She continued, “What I think would be something that some red states could propose is: Well, OK, if Democrat voters choose to flee these blue states where they cannot tolerate the living conditions, they don’t want their children taught these horrible things, and they really change their mind on the types of policies that they support, well once they move to a red state, guess what, maybe you don’t get to vote for five years. You can live there, and you can work there, but you don’t get to bring your values that you basically created in the blue states you came from by voting for Democrat leaders and Democrat policies.”
“National divorce,” in other words, is a call for one-party rule. Its proponents hope to abandon all those pesky democratic processes and practices so they can simply impose their policy agenda upon Americans by fiat. Never mind that the states aren’t homogenous, with plenty of Democrats living in the red states and plenty of Republicans living in the blue states….
The idea of breaking apart this country over pronouns or climate change regulations is nonsense. It should not be taken seriously. But Greene’s underlying idea—that all our perceived national problems would go away if we stopped trying to resolve our differences through elections and the democratic process—can’t be ignored. It demonstrates a dangerous and malignant view of politics in this country, one that has led to bloodshed and madness everywhere else it has been tried.
Florida Republicans’ New Bill May Be the Biggest Attack on Academic Freedom Yet
Prem Thakker, February 24, 2023 [The New Republic]
The bill calls for the removal of degrees in gender studies and critical race theory (or “any derivative major or minor of these belief systems,” perhaps left intentionally ambiguous) and bars anything else that promotes diversity, equity, and inclusion. The bill also prohibits universities from promoting, supporting, or maintaining any program or campus activities that “espouse diversity, equity, and inclusion or Critical Race Theory rhetoric.”
…. the bill also says that general education courses may not “suppress or distort significant historical events or include a curriculum that teaches identity politics, such as Critical Race Theory, or defines American history as contrary to the creation of a new nation based on universal principles stated in the Declaration of Independence.” And they ought to “promote the philosophical underpinnings of Western civilization.”
Texas asks a Trump judge to declare most of the federal government unconstitutional
Ian Millhiser, February 26, 2023 [Vox]
Earlier this month, Texas’s Republican Attorney General Ken Paxton filed a lawsuit claiming that the $1.7 trillion spending law that keeps most of the federal government — including the US military — operating through September of 2023 is unconstitutional.
Paxton’s claims in Texas v. Garland, which turn on the fact that many of the lawmakers who voted for the bill voted by proxy, should fail. They are at odds with the Constitution’s explicit text. And a bipartisan panel of a powerful federal appeals court in Washington, DC, already rejected a similar lawsuit in 2021.
Realistically, this lawsuit is unlikely to prevail even in the current, highly conservative Supreme Court. Declaring a law that funds most of the federal government unconstitutional would be an extraordinary act, especially given the very strong legal arguments against Paxton’s position.
But the case is a window into Paxton’s broader litigation strategy, where he frequently raises weak legal arguments undercutting federal policies before right-wing judges that he has personally chosen because of their ideology. And these judges often do sow chaos throughout the government, which can last months or longer, before a higher court steps in.
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