Week-end Wrap – Political Economy – March 26, 2023
by Tony Wikrent
“U.S. Announces Plans To Reclassify Everyone’s Race Based On Net Worth”
[The Onion, via Naked Capitalism Water Cooler 3-25-2023]
“‘It is resolved by the U.S. Senate and House of Representatives that any American whose wealth exceeds $1 million shall be white,’ read the bipartisan legislation, which went on to state that citizens who were dissatisfied with the race they were assigned under the new criteria would be ‘free to pull themselves up by their bootstraps” in order to reach a racial category of greater privilege. ‘Now, regardless of the color of their skin, those who are rich will receive all the rights a wealthy person is entitled to in this country. Meanwhile, those with a net worth in the six figures, though they cannot be white, will still qualify as Asian, with the social scale moving downward from there to Latino and Black. This should go a long way toward making our racial stereotypes as accurate as possible.’ In an attempt to deal a final blow to the complications of intersectionality, Congress was reportedly taking up additional legislation to ensure everyone earning above the median income level was classified as a man, and everyone below it as a woman.”
Climate and environmental crises
Climate Change 2022: Mitigation of Climate Change.
[Working Group III Contribution to the IPCC Sixth Assessment Report, via Naked Capitalism 3-22-2023]
War
Why hypersonic weapons change everything
[Alex Krainer's TrendCompass
It was in 2018 that Vladimir Putin took the stage to present Russia's new hypersonic weapons. The term "hypersonic" refers to missiles that fly at speeds of 5 mach and higher. At the time, many in the west dismissed Putin's claims and thought it was a bluff. We now know that he wasn't bluffing. Russia is the only country in the world that has deployment-ready hypersonic missiles - not one but three types: Zircons, Kinzhals and Avantguards.…
Russia's new Kinzhal missile flies at speeds of mach 12 to mach 15 and nothing in western defensive arsenals can stop its strike. During the war in Ukraine, Russia staged a stunning demonstration of its power. The first Kinzhal strike, delivered one month after the beginning of hostilities in Ukraine, was perhaps the most significant: Russian forces targeted a large weapons depot in Ukraine which had been built during the Soviet times to withstand a nuclear strike. It was buried 170 meters (over 500 ft) underground and protected by several layers of armored concrete.
The Kinzhal flies at altitudes of between 20 and 40 km, with a maximum range of 2,000 km. When above target, it dives perpendicularly and accelerates to 15 mach, generating enormous kinetic energy in addition to its explosive payload. That first strike with a single Kinzhal missile destroyed Ukraine's nuke-proof underground weapons depot. This was a message for the west.
The Kinzhal was developed with the express purpose of destroying aircraft carrier strike groups…
According to Admiral Domazet, neither the western powers nor China are anywhere near having weapons like that. He explained that the critical issue with hypersonic weapons are the extreme temperatures reached during hypersonic flights on the surface of missiles, which can cause them to break apart mid-flight. Russia is the only nation that has developed special materials that enable the missiles to withstand this stress, so their flight can be controlled throughout its trajectory and delivered with pinpoint accuracy.
Western intelligence estimated that Russia had some 50 Kinzhals at the start of the war in Ukraine, and thus far it has used only 9 of them. Last week, they fired six Kinzhals in a single salvo. That too, was a message. Here’s how Domazet explained it: United States have 11 aircraft carrier strike groups. Of these, fewer than half will be active at any one time (while others are in dock for maintenance, or in preparation). Firing six Kinzhals in one go is military-speak for, “we have the capability to sink ALL of your aircraft carriers at once.”
Reviving the Arsenal of Democracy: Steps for Surging Defense Industrial Capacity
[Center for Strategic and International Studies, via Naked Capitalism 3-20-2023]
[National Post, via Naked Capitalism 3-19-2023]
Imperial follies
[Grid, via The Big Picture 3-22-2023]
Twenty years ago this month, Secretary of State Colin Powell sat with me for half an hour, discussing Iraq, Afghanistan, national security — and a job that would soon consume me: I had been nominated as an assistant secretary of state. This was March 3, just two weeks prior to the U.S. invasion of Iraq. Our conversation was focused on a specific task: I would direct the Bureau of International Narcotics and Law Enforcement (INL), which would receive $2 billion, half for counternarcotics, half for training the virtually nonexistent police forces in Iraq and Afghanistan….
As a former Naval Intelligence officer, former assistant secretary of state, and believer in both freedom and America’s leadership role in the world, I strongly feel that entry into war should not be driven by those who think wars are easily waged and won, nor by politics, ego or fantastic ideas of glory. Wars are long, dirty and devastating — shrapnel, glass and blood everywhere — even if they sound like a good idea at the outset….
It’s notable that Bush and Cheney between them had five military deferments, Rumsfeld had never seen combat and Rice — with no military experience or firsthand knowledge of either Iraq or Afghanistan — was a convenient foil. The result, as we now know, can be summarized by one word: regret….
Rumsfeld was among those who believed the elder George Bush had erred in not “finishing” the 1991 Gulf War, in which the U.S. and allied forces liberated Kuwait but stopped short of marching on Baghdad in pursuit of Saddam Hussein.
Ultimately, Rumsfeld — aided by Cheney and Rice — achieved two regrettable outcomes with one act. He prevented a swift completion of conflict in Afghanistan, the “just war” that the 9/11 attacks had triggered, and then argued that al-Qaeda was active in Iraq (which it was not) to initiate a second war….
By the end of that year, Powell’s State Department — and my bureau — had set up the major engine for training Iraqi police. It was located outside Amman, in Muwaqqar, and called the Jordan International Police Training Center, or JIPTC. The goal was to help stabilize Iraq by schooling at least 3,000 Iraqi police recruits every eight weeks and gradually reinserting them under the tutelage of State Department field advisers — seasoned police trainers with at least five years’ experience — across Iraq. This process had worked around the world, from Colombia to Kosovo. We believed it would work here.
The U.S. Congress had faith in Powell, State and a proven police training program and curriculum. Notably, it is a program still used today to great effect around the world. Throughout the end of 2003, 2004 and early-2005, State’s INL team — government and contract employees — trained the Iraqi Police….
Initially, Gen. David Petraeus and I worked out lines of training authority: The State Department would handle the police training, Petraeus’ officers would train the Iraq military. (They shared space at the Baghdad Police training facility.) Things seemed on track.
Unfortunately, not long after, Rumsfeld and Cheney, with a nod from Bush and compliance from Rice (by then the new Secretary of State), made a fateful decision. They transferred the half a billion dollars dedicated to the State’s police adviser program in Iraq — those who were making real police officers of police trained in Jordan — over to the Defense Department.
Again, exercising an odd knack for two-in-one mistakes, Rumsfeld’s decision to rob Peter and pay Paul — stripping State of police training and shifting that money to pet Defense Department projects — would prove a tragic mistake. In one fell swoop, he ended a successful police training model and increased funding for so-called “special units’ in Iraq, which would ultimately turn into Shia-dominated vendetta squads.
An insider reflects on the nightmare — and what America has learned A former State Department official reflects on the road to war and the traumas that followed.
HOW IRAN WON THE U.S. WAR IN IRAQ
[The Intercept, via Naked Capitalism 3-19-2023]
US MEDIA’S IRAQ WAR PUSHERS 20 YEARS ON: WHERE ARE THEY NOW? RICH AND INFLUENTIAL.
[The Real News Network, via Naked Capitalism 3-19-2023]
[Twitter, via Naked Capitalism Water Cooler 3-21-2023]
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Selling the Iraq War: a How-to Guide
JEFFREY ST. CLAIR, March 23, 2023 [CounterPunch, via Naked Capitalism 3-24-2023]
The Bush claque of neocon hawks viewed the Iraq war as a product and, just like a new pair of Nikes, it required a roll-out campaign to soften up the consumers. The same techniques (and often the same PR gurus) that have been used to hawk cigarettes, SUVs and nuclear waste dumps were deployed to retail the Iraq war. To peddle the invasion, Donald Rumsfeld and Colin Powell and company recruited public relations gurus into top-level jobs at the Pentagon and the State Department. These spinmeisters soon had more say over how the rationale for war on Iraq should be presented than intelligence agencies and career diplomats. If the intelligence didn’t fit the script, it was shaded, retooled or junked.
Take Charlotte Beers whom Powell picked as undersecretary of state in the post-9/11 world. Beers wasn’t a diplomat. She wasn’t even a politician. She was a grand diva of spin, known on the business and gossip pages as “the queen of Madison Avenue.” On the strength of two advertising campaigns, one for Uncle Ben’s Rice and another for Head and Shoulder’s dandruff shampoo, Beers rocketed to the top of the heap in the PR world, heading two giant PR houses: Ogilvy and Mathers as well as J. Walter Thompson.
AIPAC, FDD websites erase all evidence of their Iraq War cheerleading
[Responsible Statecraft, via Naked Capitalism 3-21-2023]
Arizona State Senate Passes Defend the Guard Act
[Antiwar.com, via Naked Capitalism 3-23-2023]
Global power shift
In Moscow, Xi and Putin bury Pax Americana
Pepe Escobar [The Cradle, via Mike Norman Economics 3-21-2023]
In Moscow this week, the Chinese and Russian leaders revealed their joint commitment to redesign the global order, an undertaking that has 'not been seen in 100 years.'
Can this traspire without WWIII, already being waged through hybrid warfare, without going kinetic. If t goes hot, can nulear winter be avoided? These are the questions on the table now that the gauntlet has been thrown down.
G7 vs BRICS — Off to the Races
Scott Ritter: [Consortium News, via Mike Norman Economics 3-22-2023]
After rooting through the IMF’s World Economic Outlook Data Base, [Richard] Dias [of Acorn Macro Consulting] conducted a comparative analysis of the percentage of global GDP adjusted for PPP between the G7 and BRICS, and made a surprising discovery: BRICS had surpassed the G7. This was not a projection, but rather a statement of accomplished fact: BRICS was responsible for 31.5 percent of the PPP-adjusted global GDP, while the G7 provided 30.7 percent. Making matters worse for the G7, the trends projected showed that the gap between the two economic blocs would only widen going forward….
They’re not capitalists — they’re predatory criminals
Senator Bernie Sanders [CounterPunch, via Naked Capitalism 3-24-2023]
...In the pharmaceutical industry today we are looking at an unprecedented level of corporate greed – and that is certainly true with Moderna. Today, while 37 percent of the American people could not afford the prescription drugs their doctors prescribe, 10 major pharmaceutical companies made over $100 billion dollars in profits in 2021 – a 137% increase from the previous year. In these corporations, the 50 top executives made over $1.9 billion in total compensation in 2021 and are in line to receive billions more in golden parachutes once they leave their companies. In other words, Americans die because they cannot afford the outrageous cost of prescription drugs, while the drug companies make huge profits….
As a matter of public record, U.S. taxpayers spent $12 billion on the research, development and procurement of the NIH-Moderna COVID vaccine.
And here is the thank you the taxpayers of this country received from Moderna for that huge investment: They are thanking the taxpayers of America by proposing to quadruple the price of the COVID vaccine to as much as $130 once the government stockpile runs out – at a time when it costs just $2.85 to manufacture that vaccine.
What this means is that Moderna will be charging Medicare, Medicaid, the VA, the Department of Defense, the Indian Health Service and insurance plans on the Affordable Care Act billions of dollars more for the COVID vaccine.
Meanwhile, Moderna has already made $21 billion in profits off of the COVID vaccine during the pandemic and four of Moderna’s executives and investors collectively became more than $10 billion wealthier as a result of the massive taxpayer investment into that corporation.
William I. Robinson, Can Global Capitalism Endure?
Elna Tulus, March 21, 2023 [Progress in Political Economy, via Mike Norman Economics 3-20-2023]
...The book showcases elements of Robinson’s previous work, such as the growing use of militarisation by the transnational capitalist class (TCC) in The Global Police State published in 2020 by Pluto Press. However, more relevant to the collapse of civilisation from the impact of the transnational model on food is Robinson’s critique of the agriculture industry in greater detail in his book Latin America and Global Capitalism: A Critical Globalization Perspective published in 2010 by Johns Hopkins University Press. It establishes the transformation of economies by transnational capital, which have become highly specialised by focusing on Non-Traditional Agricultural Exports (NTAEs). For example, almost 100% of pineapple exports from Costa Rica are controlled by TNCs like Del Monte. The process of developing NTAEs comes at the cost of the country’s own decline in domestic grain production.
The extent of global corporate takeover provides a “big picture” perspective which is particularly insightful to understand how globalisation, financialisation and digitisation affects the global food system and contributed to the 2008 global food crisis. It was through overspeculation by the transnational capital class (TCC) that a spike in the prices of staple grains resulted in civil unrest (or food riots) in several countries.
CITGO: A Multi-billion Dollar Heist? (infographic)
[Venezuelanalysis, via Naked Capitalism 3-22-2023]
Book Publishers Won’t Stop Until Libraries Are Dead
[TechDirt, via Naked Capitalism 3-24-2023]
How Vallas Helped Wall Street Loot Chicago’s Schools
Matthew Cunningham-Cook, March 23, 2023 [The Lever]
When he led the Chicago school system, mayoral candidate Paul Vallas took actions that resulted in more than $1.5 billion being transferred out of the city’s budget-strapped public schools and to some of the wealthiest individuals and banks on the planet, a new report shows.
Now, Vallas is in an election runoff against Cook County Commissioner Brandon Johnson to lead the city of Chicago, with big support from wealthy investors and other corporate interests — including from executives at law firms and banks that benefited from the controversial financing methods he used as CEO of Chicago Public Schools from 1995 to 2001….
With Vallas at the helm, Chicago Public Schools issued $666 million worth of so-called “payday loan” bonds, according to a report from the Action Center on Race and the Economy (ACRE).
The interest payments on the bonds totaled $1.5 billion. A 2016 analysis from the Texas Comptroller’s office found that the type of bonds Vallas issued can be three times more expensive than traditional bonds — meaning that Chicago Public Schools could have faced up to $1 billion in additional interest payments above a normal rate.
That $1 billion is almost exactly the budget shortfall that former Chicago Mayor Rahm Emanuel, the current Ambassador to Japan, cited as justification to shutter 50 Chicago public schools a decade ago. Some of Emanuel’s largest donors, like Citadel hedge fund CEO Ken Griffin and executives at private equity firm Madison Dearborn Partners, are currently backing Vallas.
“The venture capitalist’s dilemma”
Molly White [via Naked Capitalism Water Cooler 3-23-2023]
“But it was not the tech industry as a whole, its employees, or consumers and small businesses who were on the receiving end of the broad disdain that we saw throughout the SVB collapse. It was the financiers. We are coming to a point, I think, where the shine is wearing off. People are realizing that despite the hundreds of billions of dollars being deployed each year by venture capital firms in pursuit of “innovation”, the world doesn’t really feel hundreds of billions of dollars better off for it. For all the talk of unbridled innovation, venture capital services only very specific types of innovation: those that stand to produce large exits for investors, and with relatively low risk, regardless of whether the business itself holds much promise or provides any societal benefit.”
Lambert Strether comments: “Yep. Why are these easily panicked herd animals in charge of capital allocation, a social function?”
[pileusmmt.libsyn.com, via Mike Norman Economics 3-24-2023]
Bill Black on SVB: A Bipartisan Clown Car Crash
Colin Bruce Anthes, March 22, 2023 [theAnalysis.news, via Mike Norman Economics 3-24-2023]
“The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank”
[Slate, via Naked Capitalism Water Cooler 3-23-2023]
In a comprehensive case study of the VC industry, UC Davis law professor Peter Lee argues that these are structural deficits that fundamentally undercut venture capital’s ability to actually provide social utility…. To put it more plainly, for the past 10 years venture capitalists have had near-perfect laboratory conditions to create a lot of money and make the world a much better place. And yet, some of their proudest accomplishments that have attracted some of the most eye-watering sums have been: 1) chasing the dream of zeroing out labor costs while monopolizing a sector to charge the highest price possible (A.I. and the gig economy); 2) creating infrastructure for speculating on digital assets that will be used to commodify more and more of our daily lives (cryptocurrency and the metaverse); and 3) militarizing public space, or helping bolster police and military operations….. You would be hard-pressed to find another parasite that has so thoroughly wrecked the body and environment of its host, all while trying to convince the host that it is deserving of praise and further accommodation.”
Yves Smith [Naked Capitalism 3-22-2023]
We’ve argued since the crisis that banking is the most heavily government subsidized industry, far outstripping the military-surveillance complex in the support it gets from the great unwashed public. Yet every time banks predictably drive themselves off the cliff, they get even more goodies, with virtually nada in the way of new restrictions or punishment of miscreants. The US is keen to perp walk Donald Trump, but not bank executives.1
Aside from the long-overdue need to prosecute more bankers and also swiftly remove bank top managers who demonstrate that they are bad at banking, the US needs to regulate banks like utilities. They need to be kept stupid and allowed to make safe and boring profits. So no one talented will want to work for them? Outside of IT, where big banks’ systems are held together with duct tape and baling wire, banking does not require “talent” (which today usually amounts to rule-breaking or at least soft corruption), but people who perform reliably and competently. Our financial system is dangerously outsized. One way to put that in reverse is to set out to reduce pay levels across the industry.2
[Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism, via Mike Norman Economics 3-22-2023]
This was an impromptu conversation precipitated by former Congressman Dennis Kucinich to have a deep dive discussion with a former economic advisor, Michael Hudson, on the shockingly large recent bank collapses. As the former chair of the powerful Government Oversight Subcommittee, Kucinich had a ringside seat in unraveling the bank collapses after the housing bubble burst. He confronted the players in the field with withering questions in Congressional hearings. Now Kucinich wanted important feedback from a banking insider on how this crisis was different than the one in 2008.
Kucinich knew that Hudson was a former Wall Street banker/investment professional who worked for Chase Bank and then the Hudson Institute as well as managing the second most successful bond mutual fund one year. Hudson has often candidly admitted that everything he really learned about economics came on Wall Street and not in his Ph.D. classes.
Hudson’s first assignment at Chase was to figure how much money South American debtor countries could pay without collapsing. His intense and ground-breaking research into the predatory balance of payments system led to his first (of many) books, Super Imperialism, now in its third printing. The meeting was moderated by a close friend to both: David Kelley.
She Was Blocked for Being Right on Banks (podcast)
[The Lever, March 22, 2023]
In the new episode of our weekly podcast Lever Time, we reached out to two people who know what’s really going on in the banking system, and asked them what can be done to prevent these kinds of emergencies from happening: Cornell Law School Professor Saule Omarova and Matt Stoller, an analyst and researcher who writes frequently about financial regulation.
If Omarova’s name sounds a bit familiar, that’s because she was nominated by President Joe Biden to be one of the federal government’s top bank regulators, but her nomination was blocked in the U.S. Senate by Republicans and a group of corporate Democrats. They opposed her because she was promising very tough bank regulations — which might have helped prevent the current bank crisis.
Pam Martens and Russ Martens, March 21, 2023 [Wall Street on Parade]
Today, a headline appears at Bloomberg News that provides a big clue as to what Jamie Dimon’s frantic obsession with First Republic Bank is really about, that is, use a collapsing regional bank to get Treasury Secretary Janet Yellen on board to push for a government guarantee on all deposits, insured and uninsured, at all FDIC banks. By framing this as coming to the rescue of regional banks, rather than another crony bailout of the unaccountable mega banks on Wall Street, Jamie Dimon doesn’t have to explain to his compromised Board of Directors why 69 percent of the bank’s deposits were uninsured at year end. (See: If You’re Baffled as to Why JPMorgan Chase’s Board Hasn’t Sacked Jamie Dimon as the Bank Racked Up 5 Felony Counts – Here’s Your Answer.)
Wolf Richter, March 20, 2023 [WolfStreet, via Naked Capitalism 3-23-2023]
One of the elements in the takeunder by UBS of Credit Suisse was that CHF 16 billion (about $17.3 billion) in CoCo bonds got wiped out totally, while shareholders got wiped out only almost totally. Swiss regulator FINMA, when announcing the deal on Sunday, said that CoCo bonds would be written down to zero, in a sense subordinating bondholders to shareholders, which is like a total no-no very-bad-boy thing to do, because normally, shareholders would get totally wiped out first, and then bond holders would start taking their turn.
Turns out, there were some clauses in the documents of the CoCo bonds, issued in Switzerland, that allowed this under certain conditions and triggers. But no one ever reads any clauses, and so it came as a surprise, shaking up the $275 billion market for these creatures that came out of the swamp of the Financial Crisis.
CoCos – short for “contingent convertible capital instruments,” also known as Additional Tier 1 (AT1) bonds – were created in Europe in response to the financial crisis as a way to boost bank capital without diluting existing shareholders. Before, a bank would have to sell shares to raise capital, thereby diluting existing shareholders. With this instrument, they could weasel their way around selling shares and still raise capital for regulatory purposes….
In return, CoCos offered a relatively high coupon interest. For example, more recent Credit Suisse CoCos came with a coupon interest of over 9%; Deutsche Bank issued CoCos with coupons over 6%. These were tempting coupons in a world of Negative Interest Rate Policy.
Revealed: Credit Suisse leak unmasks criminals, fraudsters and corrupt politicians
Credit Suisse: a bank sunk by scandals
france24.com
(mis)Management geniuses at work
[Twitter, via Naked Capitalism Water Cooler 3-23-2023]
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Emmanuel Macron: the weakling autocrat brought to power by American meddling
Gilbert Doctorow [via Naked Capitalism 3-19-2023]
Has Emmanuel Macron broken France?
[Politico EU, via Naked Capitalism 3-19-2023]
Restoring balance to the economy
Minnesota becomes fourth state to offer universal free school meals
[Duluth News Tribune, via Naked Capitalism 3-19-2023]
A bill signed into law Friday, March 17, by Gov. Tim Walz provides more than $800 million in funding for school lunches and breakfasts over the next four years. A free meals program was one of the top priorities this session for the governor and Democratic-Farmer-Labor lawmakers, who say they want to craft a state budget that will prioritize education and families….
About one-third of Minnesota’s more than 800,000 public school students qualify for free or reduced-price lunches, according to Department of Education estimates — 275,000 students. The Hunger-Free Schools coalition, which includes Blue Cross and Blue Shield of Minnesota and food bank Second Harvest Heartland, estimates that one out of every six Minnesota children doesn’t have consistent access to nutritious food….
Minnesota is the fourth state to create a free school lunch program, Walz said. Other states such as California and Maine have universal lunch programs and Colorado voters in November approved a new tax on its wealthiest residents to create a free school lunch program….
Republican opponents of the bill raised concerns about the potential for waste and misappropriations. Others said the state would be better off spending money on improving reading and math scores. Sen. Steve Drazkowski, R-Mazeppa, got national attention for remarking on the Senate floor that he had never met a hungry Minnesotan.
Health crises
Medically Necessary — March 28, 2023, 2:00 pm EDT
[ProPublica, In partnership with The Capitol Forum]
Health insurers reject about 1 in 7 claims to cover treatment, and patients rarely fight back. Join ProPublica reporters and outside experts to discuss America’s broken health insurance system.
Health insurers have wide discretion in crafting what their policies cover, and they often deny claims for services they deem not “medically necessary.” An investigation by ProPublica and Capitol Forum revealed that Cigna, one of the largest health insurers in the country (and ProPublica’s insurance provider), built a system that allows its doctors to swiftly reject a claim on medical grounds without opening the patient file, leaving patients with unexpected bills. Using this method, one Cigna doctor single-handedly rejected 60,000 claims in a single month….
At this event, reporters and insiders will explain how health insurance companies approach and process patient claims, and how this is influenced by their bottom lines. Experts will also discuss patients’ rights and potential fixes for America’s broken health insurance industry.
[Twitter, via Naked Capitalism Water Cooler 3-20-2023]
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US maternal mortality is more than ten times higher than in Australia. Why?
[Guardian, via Naked Capitalism 3-21-2023]
The Maternal Health Crisis Is A Consequence Of Design
[Health Affairs, via Naked Capitalism 3-22-2023]
[Twitter, via Naked Capitalism Water Cooler 3-21-2023]
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How a Group of Health Executives Transformed the Liver Transplant System
[The Markup, via Naked Capitalism 3-22-2023]
The new rules—called the “acuity circles” policy—were implemented in February 2020 and broadened the initial area a liver is shared to 575 miles around the donor’s hospital. It succeeded in increasing the supply of livers for 40 percent of states, data shows, but at the expense of poorer states including Alabama, where fewer people get on the waiting list in the first place. Alabama performed 56 fewer liver transplants in 2021 than it did before the change, a 44 percent drop, despite the fact that donations and transplants nationally were up overall and have been for years….
Before February 2020, physical proximity was one of the most important factors in determining who got a new liver. The previous system divided the country into dozens of “donation service areas,” each surrounding transplant hospitals. These combined to make 11 regions. When an organ became available, the selection algorithm would identify the sickest matching patient in the donation service area; if there was no match or it wasn’t accepted, it would be offered to waitlisted patients in the larger region and then nation….
David Dayen, March 22, 2023 [The American Prospect]
President Biden’s NIH rejects a petition to seize the patent of an unaffordable prescription drug.
The Biden administration has seen firsthand in the past few weeks the benefits of using statutory power to bring down prescription drug costs. With Novo Nordisk and Sanofi following the lead of Eli Lilly and announcing their intent to slash the list price of their insulin medications by 65 percent or more, practically all diabetes patients will see relief, mostly thanks to a change in Medicaid rebates stuck into the American Rescue Plan. It upended the usual laissez-faire attitude about prescription price-gouging, and showed that the government, as a major medication buyer, can intervene to lower costs.
Which is why it’s so disappointing that a separate effort to take action on an even wider array of pharmaceuticals has fizzled. The Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) have rejected a petition from prostate cancer patients to use a provision of the Bayh-Dole Act of 1980 to seize the patents of a high-cost drug because of its high price.
The tactic, known as “march-in rights,” was a core pillar of the Day One Agenda. The Bayh-Dole Act specifies how the government awards patents to drugs developed with publicly funded research (a significant number). But if the feds find that the drug is not being made accessible on “reasonable terms,” they can march in and extinguish the patent, allowing generic competitors to market their own versions.
Private Equity and Its Hospitals
Merrill Goozner, March 24, 2023 [washingtonmonthly]
“Safety net hospitals” serve communities like those in Delaware County, Pennsylvania. Finance companies serve themselves.
If you want to know what happens after a private equity firm plunders one of its hospital acquisitions, visit Delaware County in southeast Pennsylvania. Earlier this month, Crozer Health laid off 215 workers, or 4 percent of the workforce, at its four hospitals in the suburban Philadelphia county amid reports it is late paying its bills, including rent on its hospitals.
Crozer’s owner is a privately held company, Prospect Medical Holdings, headquartered in Los Angeles. Prospect Medical’s purchase of Crozer in 2016 was financed by Leonard Green & Partners, which is an L.A.-based private equity firm with over $70 billion worth of assets in its portfolio that siphoned nearly a half billion dollars from Crozer in the last half-decade.
In addition to the new layoffs, Crozer announced plans to end drug and alcohol treatment at its 313-bed flagship teaching hospital in Chester, a small city in Delaware County some 20 miles from downtown Philadelphia. Chester is over 70 percent Black, with high poverty, unemployment, and substance abuse rates after decades of deindustrialization.
Those moves came after two years of Crozer cutting services. Last fall, the Pennsylvania Department of Health cited inadequate staffing at Crozer’s facilities and ordered it to close its emergency room at 168-bed Delaware County Memorial Hospital in Upper Darby, the second largest hospital in its system. Before the closure order, Crozer had shuttered the facility’s maternity ward, a severe blow in a small city of 85,000 that’s over a third Black and where 75 languages are spoken in the public schools.
[TW: We need to be thinking way past taxing wealth in order to restore fairness, to taxes — and other means — to claw back what these predators have looted from society.
Regarding “other means” : “how many divisions do the Cayman Islands have?”
The carnage of mainstream neoliberal economics
It’s Not A Wage-Price Spiral. It’s ‘Greedflation’!
[Heisenberg Report, via Naked Capitalism 3-24-2023]
Learning from Silicon Valley Bank’s apologists
Cory Doctorow [Pluralistic, via Naked Capitalism 3-20-2023]
Look, if you think the fact that my Internet of Shit door-lock failed because the company that designed it made no plan to let me into my house if they went out of business would make me sympathetic to that company, you are out of your fucking mind. If that happened to me, it would make me want to tear the lock out of my door, hunt down the CEO of the company that made it, set the lock on fire, and throw it through their front window.
Here's another terrible reason to support the bailout: if SVB's depositors lose their money, every other large depositor will flock to Morganstanley, on the theory that Morganstanley is too big to fail, and will behave just as recklessly, but will never be allowed to go under precisely because they are so structurally important:
I'm pretty sure this is true! It doesn't make me want to support an SVB bailout though – it makes me want to break up Morganstanley, regulate the everlasting shit out of the resulting fragments, and create massive public banks that are run by and for their depositors, insulated from the reckless, speculative conduct of these maniacs who keep crashing the world economy….
There are a lot of totally normal people who would suffer if not for this bailout – the people who clean the toilets or answer the customer-service calls for tech companies aren't stock-option-fattened bros in Patagoinia vests. They're totally normal working people who took no risks and bear no responsibility for the failure of SVB.
But come on. Does anyone seriously believe that the absolute fucking ghouls who came out against a barely-there student debt cancellation as a precursor to literal Stalinist gulags are advocating for endless billions for SVB's depositors because of the janitors?
….Listen: people aren't pissed off about the bailout because they want startups to fail. They're pissed off because they are living in the century of "socialism for the rich and rugged individualism for the poor":
Everything you think you know about homelessness is wrong
[Noahpinion, via The Big Picture 3-19-2023]
A failure or unwillingness to carefully look at the data has led countless people to believe that the primary drivers of homelessness are drugs, mental health, poverty, the weather, progressive policies, or virtually anything and everything that isn’t housing. And while some, but not all, of the aforementioned factors are indeed factors in homelessness, none of them, not a single one of them, are primary factors. Because if you want to understand homelessness, you have to follow the rent. And if you follow the rent, you will come to realize that homelessness is primarily a housing problem.
Matthew Desmond, March 21, 2023 [The New Republic]
The American government gives the most help to those who need it least. This is the true nature of our welfare state….
...It sounded obvious: America wasn’t getting back to work because we were paying people to stay home.
This hypothesis, as it turned out, was wrong. In June and July 2021, twenty-five states stopped some or all of the emergency benefits rolled out during the pandemic, including expanded unemployment insurance. This created an opportunity to see whether those states enjoyed a significant jump in their employment rates. But when the Labor Department released the August data, we learned that the five states with the fastest job growth (Alaska, Hawaii, North Carolina, Rhode Island, and Vermont) had retained some or all of the benefits. States that had cut unemployment benefits did not experience significant job growth.
Why did we so readily embrace a story that blamed high unemployment on government aid when so many other explanations were available to us? Why didn’t we figure people weren’t returning to work because they didn’t want to get sick and die? Or because their jobs were lousy to begin with? Or because their children’s schools had closed, and they lacked reliable childcare? When asked why many Americans weren’t returning to work as fast as some people would have liked, why was our answer Because they are getting $300 extra each week? ….
When welfare dependency dominated public debate in the 1980s and 1990s, researchers set out to study the issue. They found that most young mothers on welfare stopped relying on it within two years of starting the program. Most of those mothers returned to welfare sometime down the road, leaning on it for limited periods between jobs or after a divorce. Those who stayed on the rolls for long stretches were the exception to the rule. A review of the research in Science concluded that “the welfare system does not foster reliance on welfare so much as it acts as insurance against temporary misfortune.”
Today the problem isn’t welfare dependency but welfare avoidance. Simply put, many poor families don’t take advantage of aid that’s available to them. Only a quarter of families who qualify for Temporary Assistance for Needy Families apply for it. Less than half (48 percent) of elderly Americans who qualify for food stamps sign up to receive them. One in five parents eligible for government health insurance (in the form of Medicaid and the Children’s Health Insurance Program) does not enroll, just as one in five workers who qualify for the Earned Income Tax Credit does not claim it. At the height of the Great Recession, one in ten Americans was out of work, but among that group only one in three drew unemployment.
There are no official estimates of the total amount of government aid that goes unclaimed by low-income Americans, but the number is in the hundreds of billions of dollars a year. Roughly seven million people who could receive the Earned Income Tax Credit don’t claim it, collectively passing up $17.3 billion annually. Combine that with the amount of money unclaimed each year by people who deny themselves food stamps ($13.4 billion), government health insurance ($62.2 billion), unemployment insurance when between jobs ($9.9 billion), and Supplemental Security Income ($38.9 billion), and you are already up to nearly $142 billion in unused aid….
The evidence indicates that low-income Americans are not taking full advantage of government programs for a much more banal reason: we’ve made it hard and confusing. People very simply often don’t know about aid designated for them or are burdened by the application process. When it comes to increasing enrollment in social programs, the most successful behavioral adjustments have been those that simply raised awareness and cut through red tape and hassle.
One intervention tripled the rate of elderly people getting food stamps by providing information about the program and offering sign-up assistance. Elderly households received a letter informing them they could apply for food stamps along with a number to call. Those who dialed the number were connected to a benefits specialist who helped callers fill out the application and collect the necessary documentation.
Shrinking savings and rising debt leave consumers on shaky financial footing
[NBC News, via Naked Capitalism 3-20-2023]
Disrupting mainstream politics
“The Progressive Takeover of Nevada’s Democratic Party Is Falling Apart”
[The Nation, via Naked Capitalism Water Cooler 3-22-2023]
“Over the past two years, the Democratic Party of Nevada—once, under Harry Reid’s tutelage, one of the most formidable political machines in the country—has been riven by divisions. In 2021, a pro–Bernie Sanders group managed to take over the state party and to capture key positions. Afterward, Reid’s allies walked, taking with them key voter data, hundreds of thousands of dollars of donations, and senior personnel, who regrouped under the auspices of the Washoe County Democratic Party (Washoe is home to Reno, the state’s second-largest city). They proceeded to establish National Democratic Victory, which Sanders’s supporters promptly denounced as a shadow party. The new leadership then embarked on what can only be described as a two-year flounder, failing in most of its efforts to activate a large, energized, progressive base, and ceding organizing ground and the image of political competence to the Washoe-centered grouping. Now nearly two years on, and one messy midterm election cycle later—a midterm in which the incumbent Democratic senator eked out a win, but the governor was defeated by his GOP opponent—that intraparty upheaval has reached its zenith.” And: “There are lessons in these elections: There is plenty of room for radical politics out West, and plenty of room for candidates looking to shake up the status quo. In many ways, it remains a petri dish in which new, and experimental, political ideas and alliances are cultivated. But at the end of the day, voters also want tangible results. Whitmer’s mediocre tenure, and her election defeat last week, is a wake-up call: If Democrats want to continue to hold power in places like Nevada, they need a party political machinery led by leaders who aren’t just idealistic but are also competent.”
[TW” Where are the establishment Democrats’ calls for “unity” now?] As Lambert Strether notes: “Of course, competence is less easy to achieve than it should be; the Washoe County Democratic Party sounds a lot like Parliamentary Labor, sabotaging Corbyn at every turn. ”
Grappling With the Overthrow of Reconstruction
Eric Herschthal, March 23, 2023 [The New Republic]
Historians call this period the Jim Crow era—when, after Reconstruction, racial apartheid was imposed in the South and reinforced by extralegal anti-Black violence that came to be known as “lynchings”—and the focus tends to be on the motivations of the white perpetrators, the spectacle of the lynching itself, the failure of local and federal officials to intervene, and how it challenges the general narratives we tell ourselves about racial progress, freedom, and democracy. But two new books ask us to shift our attention away from gruesome details of individual attacks and the political culture that enabled them, and instead focus on what it meant for the survivors—how a century of anti-Black violence affected its victims and the generations of Black families and communities that lived in its wake….
By rooting her history in the intimate lives of survivors, Williams highlights the considerable gains of the Reconstruction era. Freedom for most freedpeople during Reconstruction “wasn’t simply about being released from bondage, being paid for their labor, or even legal equality.” The three major constitutional amendments that capture the essence of Reconstruction—the Thirteenth Amendment abolishing slavery; the Fourteenth Amendment, which effectively made all Black Americans U.S. citizens and entitled them to equal protection before the law; and the Fifteenth, which gave Black men the right to vote—were a backstop intended to ensure that newly emancipated Black Americans could attain the basic rights that slavery had denied them: the rights to marry, to gain control of their children, to own land, attend schools, pass down wealth, build churches, and secure fair wages. Becoming a citizen and voting were, in short, not only ends in themselves but also means, giving Black Americans the freedom to form families and communities of their own choosing.
With this definition of freedom and its transformation of everyday life, Williams challenges arguments that Reconstruction was a failure by design. A vocal subset of racial justice activists contend that Reconstruction laws and amendments were intentionally riddled with loopholes and deliberately unenforced…. That families like the Tutsons were terrorized to the point of fleeing their land is not evidence of Reconstruction’s failures, she argues, but of the rapacity of the Southern white war against it. As Williams and others have put it, Reconstruction was not a failure: It was “overthrown.”
To counteract the notion that Reconstruction’s promises were meaningless, Williams highlights the real gains that many freed Black Southerners made under the protection of Reconstruction laws and federal enforcement....
Williams spends only two early chapters on the night raids themselves, as her real interest is in the long afterlife of these attacks. With great sensitivity and care, she details how such attacks were the start, not the culmination, of the pain and humiliation that Black survivors endured….
Williams casts these racist attacks on Southern Black families as a “war” against Reconstruction, a kind of forgotten “small war” that commenced after white Southerners lost the big one: the Civil War. Her larger point is that these attacks were not spontaneous acts of violence but well-planned and coordinated operations, akin to small military raids….
But her suggestion that these attacks amount to a kind of genocide—or, in her phrasing were “genocidal-like”—misses an important part of what these terror raids were all about. It’s true that these attacks were, like genocides, attacks by one ethnic or racial group against another. Yet genocide implies a deliberate intent to exterminate an entire group of people, and that was decidedly not the objective of all this racial violence. The goal was to keep Black labor cheap, just as slavery had done for two hundred years. Racial terrorism was intended to intimidate Black people into never asking for more money than white people thought they were worth. As Williams notes, when in 1879–80 nearly 40,000 Black Southerners fled the South for Kansas in what became known as the Exoduster movement, white elites panicked. If the goal was racial extermination, you would think they would have celebrated. But instead they were frightened because they wanted Black people to stay put so they could continue to exploit their labor. Associating racist violence with genocide may offer a certain kind of activist credibility, but it hinders a deeper understanding of the economic interests that anti-Blackness serves….
None of the lynch mob’s members ever faced a trial, and silence about what had happened was as common in the white community as it was in the Black one. But Crabtree argues that white and Black silences were not the same. For whites, silence about lynchings in the recent past—particularly when public lynchings became less acceptable amid the civil rights movement—served both to hide the shame and seduce white communities into believing they bore no responsibility. For Black communities, silence, or only threadbare references shrouded in vagueness (“They did a lot of very bad things”), was meant to protect family members. Particularly when Black families could not afford to leave the community after a lynching, or refused to, not sharing the details with one’s children was a way to protect them from more violence, as well as from the self-immolating rage and despair that might destroy them….
Less obvious are the legions of artworks that do not fit the traditional definition of “protest art”—they are not loud or fiery denunciations of racism but introspective works largely intended for Black audiences. Crabtree highlights, for instance, Richmond Barthé’s 1939 sculpture The Mother and Son (1939), which reworks Michelangelo’s Pieta (1498–99), Mary caressing the body of a crucified Jesus, into a Black mother holding her lynched son’s corpse. Then there is Jacob Lawrence’s reflective painting Subway, from 1938, which depicts three Black subway riders in New York gazing into the distance, as white subway straps resembling nooses hang over their heads….
This definition, though contested by some historians, is compelling: Crabtree concludes her book with a powerful epilogue that draws obvious parallels between Jim Crow–era lynchings and Black Americans being shot—being lynched—by white civilians and police today. White groups, she shows, managed to obscure this through line, creating the impression that lynchings were a thing of the past….
But lynchings did not go away. They simply changed form. Emmett Till, it’s worth noting, was not hanged in public: His killers put a bullet through his head, then dumped his body in the Tallahatchie River. When three civil rights activists—Jack Chaney, who was Black, and Andrew Goodman and Michael Schwerner, both white—were murdered by Klan members in 1964 in Philadelphia, Mississippi, there were no witnesses. By the traditional definition, they were not lynched. And at the time, the media, politicians, and even civil rights activists simply called these killings “murders.” All of this, of course, helped the nation convince itself that it was making racial progress, not unlike how our collective refusal to call many of the recent killings of unarmed Black Americans by civilians and police “lynchings” obscures what is actually happening.
Conservative / Libertarian Drive to Civil War
The Right-Wing Zealot Who Wrecked the Budget Process and Made Washington Dysfunctional
[New Republic, via The Big Picture 3-19-2023]
Grover Norquist’s 45-year-long reign of terror started with a simple pledge.
The election-denying Republicans who aided Trump’s ‘big lie’ and got promoted
[The Guardian, via The Big Picture 3-19-2023]
In 2022, many Republicans who embraced election denialism were re-elected and, in some cases, elevated to higher office.
The Misinformation Is the Point
[Slate, via The Big Picture 3-19-2023]
There’s a Lesson for Fighting Misinformation Buried in the Fox News Drama; For Fox News, peddling falsehoods is good for the bottom line.
“Culture War Bullshit Stole Your Broadband”
Cory Doctorow [via Naked Capitalism Water Cooler 3-20-2023]
“Apologists for America’s internet-of-garbage will tell you that all of this can’t be avoided. America is too big, its rural communities are too spread out, its infrastructure is too old. Bullshit. Hundreds of American small towns have built their own fiber networks, mostly in deep red counties in deep red states. Far from living in Stalinist broadband hellscapes, these rural Americans whose broadband comes from their local government are the only people in America who are happy with their broadband. There is no place too rural for public broadband: the poorest county in Appalachia pulled fiber to every home, including the ones beyond narrow mountain passes (they used a mule called Ol Bub to make those runs!), and experienced an economic miracle. As good as American cities and towns are at providing fiber, the private sector is very bad at it…. As bad as the private sector is at providing broadband, it is absolutely brilliant at corrupting the political process. Cities that so much as ponder providing decent broadband are beset by ‘grassroots; activists who are spittin’ mad at the idea of having reliable, low-cost internet. More often than not, these are really astroturf groups, fake activists in the employ of big cable and telephone companies. The whole bestiary of shadowy conservative billionaires get in on this — even the Kochs. Increasingly, though, conservative turkeys are being convinced to vote for Christmas, demanding their inalienable right to be fleeced by monopolists. How do you convince conservatives to vote against decent internet at a decent price? The same way you convince conservatives to do anything: You tell them it’s woke.”
Iowa’s sharp right turn: From centrist state to ‘Florida of the North’
[Washington Post, via The Big Picture 3-25-2023]
Republicans in the Iowa legislature, empowered by the state’s recent “red wave,” have embarked on an ambitious new agenda that includes a costly school choice bill and legislation targeting the LGBTQ community, a historic divergence from Iowa’s history as a civil rights bastion.
The (Anti)Federalist Society Infestation of the Courts
An Appeals Court Upholds Constitutionality of the CFPB
Robert Kuttner, March 24, 2023 [The American Prospect]
And the decision was written by a Trump appointee, no less. Even this Supreme Court will be hard-pressed to disagree.
Information age dystopia
It’s Game Over on Vocal Deepfakes
[Daring Fireball, via Naked Capitalism 3-22-2023]
Now come this: a Twitter thread from John Meyer, who trained a clone of Jobs’s voice and then hooked it up to ChatGPT to generate the words. The clips he posted to Twitter are freakishly uncanny. It really sounds like Jobs. The only hitch is that it sounds like Jobs reading from a script, not speaking extemporaneously. But damned if it doesn’t sound like him.
It’s all fun and games in these demos, but this is inevitably going to be put to use by ratfuckers to create fake scandals in political campaigns. Recall the infamous “When you’re a star, they let you do it. Grab them by the pussy” Access Hollywood tape that The Washington Post published in October 2016. That tape obviously didn’t prevent him from winning the election, but it did hurt him by a few percent in the polls. There was no question at the time that the tape was legitimate. But if it came out now?
And it feels inevitable that a Roger Stone or Steve Bannon type will use this technology to commission, say, a recording of Joe Biden forgetting his own name or what year it is, or Kamala Harris claiming to be running an abortion clinic in the Eisenhower Executive Office Building or admitting to the existence of a Democrat-run sex-trafficking pedophile ring. A dangerous chunk of wingnuts bought into such a conspiracy in 2016 without compelling deepfake forgeries.
Real recordings will be called fake and fake recordings will be leaked as purportedly real. I don’t think the general population is prepared for this, and I worry that news media organizations aren’t either.
License Plate Surveillance, Courtesy of Your Homeowners Association
[Intercept, via Naked Capitalism 3-24-2023]
Strategic Political Economy
The doomers are wrong about humanity’s future — and its past
Bryan Walsh [Vox, via The Big Picture 3-25-2023]
I could tell you that a little more than 200 years ago, nearly half of all children born died before they reached their 15th birthday, and that today it’s less than 5 percent globally. I could tell you that in pre-industrial times, starvation was a constant specter and life expectancy was in the 30s at best. I could tell you that at the dawn of the 19th century, barely more than one person in 10 was literate, while today that ratio has been nearly reversed. I could tell you that today is, on average, the best time to be alive in human history. But that doesn’t mean you’ll be convinced….
In 1870, an average unskilled male worker in London could earn enough per day to buy 5,000 calories worth of food for himself and his family. That was more than in 1600, but not significantly more, and not enough to easily feed everyone consistently, given that mean household size in England at the time was just under five people.
By 2010 — the end of what DeLong in his book called “the long twentieth century” — that same worker could afford to buy the equivalent of 2.4 million calories of food per day, a nearly 50,000 percent increase.
[TW: I hesitated to include this post from Vox, because it not only uncritically pumps DeLong’s book, but commits the same grievous error of omission DeLong does. Walsh assigns agency to the nebulous concept of “progress”; DeLong is more pernicious in touting the agency of progress as the corporate research lab. The key turning point in humanity’s economic development — the shift from a struggle against scarcity and the forces of nature, to the production and distribution of surplus — is the creation of USA as a constitutional self-governing republic, with a political economy based on the idea of expanding humanity’s power over nature: the once widely-celebrated idea that new machinery and new technology allows one person to do the work that previously required a hundred. In other words, USA’s independence from the oligarchies of Europe liberated the fruits of human creativity and directed those fruits to the promotion of the general welfare, not the enrichment of ruling elites.]
“... positive use of government power for popular constructive purposes, such as public works of intemal improvement, never was proscribed by American republicanism but lay well within the presumed legitimate authority of revolutionary governments. In fact, one of the virtues of republican government supposedly lay in its capacity to render safe and liberal the pursuit of human improvement by representative authorities. In the hands of arbitrary rulers, purposeful designs and high-handed government easily tyranized nations, fostering the interests of corrupt favorites at the expense of the freedoms of the people. But in proper republics, designs supposedly could emanate only from the people themselves. Unless produced by dishonest intrigue, the designs of republican governors must necessarily reflect the public interest and serve the common good. Therefore, new American governments ought to have been ideally situated, not just to keep the peace and preserve order, but to foster improvement in the conditions of life.”
— John Lauritz Larson, Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States, Chapel Hill, University of North Carolina Press, 2001, .p 3 argues.
And,
Our own jaded era finds it hard to recapture the sense of wonder and joy these early technological achievements could arouse. Interestingly, they were not welcomed as labor-saving devices, at least not explicitly, for the proponents of industry did not praise leisure. It was not even the promise of an improved standard of living (of better clothing for millions of people, in the case of the loom) that altogether accounts for the enthusiasm. Technology represented an inspiring triumph of mind over matter, of mankind over nature. "Mind, acting through the useful arts, is the vital principle of modern civilized society. The mechanician, not the magician, is now the master of life [Edward Everett told the Massachusetts Charitable Mechanic Association in September 1837]…. This prodigious economy and accumulation of power, effected by the mechanic arts, are occupied in supplying the wants and promoting the comfort of man. When, therefore, the ingenious artisan makes an improvement in a useful machine, he economizes labor, creates power,accumulates usefulness, and promotes the progress of civilization. I doubt not,if it were possible to write the secret history of the mechanic arts, (if I may so express myself,) —to trace the most important manufactures and machines through their various stages to their origin,—to show how, by the addition of a spring here, a cog there, a knee-joint in this place, a perpetual screw in that, or a system of the powers, the most complicated engines have been brought from the humblest beginnings to their present condition.”
— Daniel Walker Howe, The Political Culture of the American Whigs, University of Chicago Press, 1979.
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