Week-end Wrap – Political Economy – May 7, 2023
by Tony Wikrent
The ‘Free Market’ is a Fever Dream and Adam Smith Wasn’t in It [YouTube]
[Rhodes Center Podcast, via YouTube, Mar 31, 2023]
Mark Blyth interviews “Jacob Soll... professor of philosophy, history, and accounting at the University of Southern California, and in his book “Free Market: The History of an Idea,” he begins way back in ancient Rome, stops in 17th-century France with Louis XIV’s minister Jean-Baptiste Colbert, and, on the way to the present, barely mentions Adam Smith at all.”
…. [1:16] French Minister Colbert reviled today as a so-called mercantilist who becomes the critical builder of markets and whose state-led form of development has had a far bigger impact on how the world actually works….
… [8:58] Smith says guilds are the worst thing in the world — except that's where capitalism comes from it comes from... if you go to Florence and see the Duomo or the Palazzo Vecchio it's covered with all the signs of the guilds who pay for the government and they're very aware that they're paying for government... this is where Machiavelli comes in… remarkably visionary, Machiavelli… says, look all these Merchants are necessary but the state has to be richer than any single Merchant otherwise we have an oligarchy or a dictatorship. And of course that's what had happened under the Medici….
[10:03] ...so where you really make... a controversial contribution though is to really invert the relationship that we commonly have in our heads between France and the UK, and between the figures of Colbert and Smith. So let's go right into this…
[11:38] [The supremacy of Smith is] an Anglo-Saxon fantasy, yes, to put it politely…. Colbert is a former businessman, but he's working for a monarchy he's got to raise funds so he tries to reorganize the government. But he doesn't believe in wealth hoarding; he doesn't believe that gold is just the simple road to riches; ...he believes he believes that manufacturing will create extensive expanding wealth, and so will imperial Seaborne trade….
[17:03] ...that myth does not exist in the mid-18th century; it doesn't even really exist under Smith. The Americans, people like [Alexander] Hamilton are reading Jacques Necker … Hamilton says he wants to be the new Colbert when he's building the American state. He doesn't talk about Smith; in fact please read his Report on Manufactures — it is a direct response to The Wealth of Nations. He basically knocks down every one of Smith's theories: the idea that agriculture will make you rich; the idea that open markets can work for developing nations like early America. He knocks it all down, and America has the highest rate of tariffs for the whole of the 19th century…. no one's heard of Henry Clay; no one has any idea this guy Henry Clay continues Hamilton's policies, calling it the American System, which is a system of tariffs and small subsidies for infant industry, which is how America gets on its feet. America is not a free market nation in the 19th century….
[18:40] England has this very special trick up its sleeve (France has some of this trick too), it's called the global Empire. It's an Empire run on coercion and gun boats, it's not that friendly, it's based on pillaging. We calculate that over 140 years Britain extracted around 44 trillion dollars from India alone. That's just the colony of India….
[19:06] The free marketeers who say they are against Empire Still are for maintaining the Empire against uprisings. Theoretically they're against it, just like Smith is theoretically against slavery. But is he really against slavery? Are these guys really against Empire? Not when push comes to shove… This guy is essentially a huckster… the 18th century equivalent of somebody who's in the ideas industry, as Dan Dresner wrote about a few years ago. He makes his living getting grants from giant oligarchical landowners who basically allow him to do the things that he wants to do, and he writes very flattering books that never implicate them in anything….
Smith's a hedger. You have to think of Smith as a professor who's on the make with some big donors. He works for the donors. He actually lives in the donor's house, the Earl of Baklao [TW — name incorrect, but I can’t find correct name] who's really one of the richest most powerful men in all of Britain. These people run the parliament. They're trying to cleanse their lands of peasants and crafters so that they can put lambs or sheep and these high return cattle. So they're... land owning oligarchical agricultural entrepreneurs and if you read Smith that is what the system that he is talking about. Do businessmen exist? Yes. Does manufacturing exist? Sure, but they can never produce wealth on their own according to [Smith]— all wealth comes from agricultural labor and all industry is dependent on agricultural production. Which we know is just not true; that's not how it works.
There is a huge and long tradition of people desperately arguing that agriculture will not create enough wealth, it will not create stable wealth or growth, that you need for a modern commercial society. All these other authors who you've never heard of, but are in my book, are calling for this. Most notably Alexander Hamilton. And so Hamilton's the heir of a long tradition of market thinkers who don't believe that agriculture is the path to wealth.
Smith is what we might call a medieval economist or a sort of neo-feudalist. This is not the father of capitalist thinking… [In the] Anglo-Saxon world we live in a bubble, I think. that came from the British Empire and then from American hegemony, and the fact is we've written a story that supports a certain narrative of how we got rich which just isn't the story at all. It just happens to back up lots of people's interests or certain interests.…
[27:21] But how did America actually get rich? There's a huge reaction first of all to FDR— that's so much of what people are angry about economically: FDR creating Social Security; FDR bringing the state more into the economy…. the narratives of the 20th century get written after the war and that's where a lot of this economic stuff comes from, especially in America, with the Austrian School and others. So there's definitely the material interest in telling a particular story because it protects ... the wealth and property rights of those who are telling the story….
[29:31] I don't know really good examples of wealth creation without government involvement at some point…. [TW: see my series on How America Was Built; some of the subsequently posted articles are listed at the end of HAWB 1954-1976: The three major developments in aerodynamics].
Michael Perelman, The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation (Duke University Press, 2000). Online PDF here.
...Smith’s Wealth of Nations, as we shall see, was not a particularly influential book until a generation after its publication. Once opinion leaders found the book useful in promoting their desired political outcomes, its popularity soared. Only then did Smith become a polestar of classical political economy, and his work a reference point by which all others are judged. Because of this flawed selection process, most histories of the period studiously analyze Smith and Ricardo, along with a handful of supposedly secondary figures. Other equally deserving economists generally escape notice altogether….
Within this context, Adam Smith becomes less original. His importance appears to emanate from the vigor of his ideological project of advocating laissez-faire and obfuscating all information that might cast doubt on his ideology. Others, such as Edward Gibbon Wakefield and John Rae, took a more realistic view about the nature of accumulation, but later economists set their analyses aside to create the impression of a humanitarian heritage of political economy….
According to Smithian theory, the social division of labor would evolve in a satisfactory manner
without recourse to outside intervention. This chapter demonstrates that even Smith’s celebrated discussion of the invisible hand was developed as a means of avoiding the challenge that primitive accumulation posed for his system. By showing that the social division of labor would evolve without recourse to outside intervention, Smith had hoped to put the question of primitive accumulation to rest. Although Smith’s theory was accepted as such, practice continued in a different manner. In fact, Smith himself advocated practices that were not in accordance with his theory. This chapter also indicates that Smith was far more interested in changing human behavior than he was with matters of economic development.Chapter 9 examines how Smith attempted to distort history, sociology, and psychology to provide confirmation of this theory of the naturally evolving social division of labor. Chapter 10 continues with the work of Adam Smith, who based much of his theory on the experience of the colonies. Although Smith made great use of the colonial experience, the colonials did not take him nearly as seriously as the English did. The reason is not hard to fathom. In harnessing the story of the colonies to his ideological cart, Smith did not do justice to the actual situation in the colonies. By tracing his analysis of the colonies, this chapter delves deeper into the manner in which Smith purposely obscured the nature of the social division of labor. (pp. 8-9)
Nicholas Guyatt [The New York Review, May 25, 2023 issue
Two new books argue that the innovations the Lincoln administration used to finance the Civil War transformed the nation from a modest and decentralized economy into the global juggernaut of the twentieth and twenty-first centuries….
Reviewed:
Ways and Means: Lincoln and His Cabinet and the Financing of the Civil War
by Roger Lowenstein
Penguin Press, 432 pp., $30.00; $20.00 (paper)
Bonds of War: How Civil War Financial Agents Sold the World on the Unionby David K. Thomson
University of North Carolina Press, 268 pp., $95.00; $29.95 (paper)Roger Lowenstein’s Ways and Means and David K. Thomson’s Bonds of War remind us that the Civil War energized the nation’s transformation from a modest and decentralized economic actor into the global juggernaut of the twentieth and twenty-first centuries. During the war years, banks were reorganized as national rather than state institutions, Congress introduced the first federal income tax, billions of dollars of government bonds were sold to an unprecedentedly diverse range of buyers, and the Treasury printed $450 million of “greenbacks”—the first paper currency issued by the American government since the Revolution.
These innovations undoubtedly helped the United States win the Civil War, but did they increase economic opportunity? One of the many ironies of nineteenth-century history is that the Republicans who saved the Union and destroyed slavery in the 1860s oversaw some of the biggest financial scandals of the following decades. They also ran interference for corporate and financial interests that tyrannized labor before the century was out. Both books grapple with the question of whether this unedifying outcome was a betrayal of the Civil War years or a consequence of the tools and precedents that the war had supplied to America’s political and financial elites.
From the earliest moments of the republic, political elites argued about the extent of the government’s involvement in the economy. During the 1790s Alexander Hamilton championed an interventionist approach that would settle Revolutionary War debts, assist nascent industries and businesses, and establish a national bank along the lines of the Bank of England. Hamilton’s detractors—including Thomas Jefferson and James Madison—warned that his prescriptions would concentrate economic power and squander the republic’s greatest advantage over Europe: its vast reserve of western land, with the potential to support industrious farmers rather than an industrial proletariat….
Before 1861 government officials and bankers had routinely colluded to protect slavery, or even to use the proceeds of slave trading to secure the government’s finances. In the 1710s Britain transferred a huge portion of its national debt to the South Sea Company, which had acquired the lucrative right to trade enslaved people to Spanish America. A century later, the Second Bank of the United States helped drive the slavery boom in the emerging cotton belt. In the 1830s, when Britain finally abolished Caribbean slavery, its government borrowed £20 million to compensate planters for the loss of the human beings they had enslaved. This debt, to some of the wealthiest families in Britain, was paid off by British taxpayers only in 2015.
By contrast, the Civil War’s unprecedented financial mobilization had a radical directness: taxes, bonds, and greenbacks facilitated the destruction of slavery without compensation or compromise. The British approach to abolition had been to preserve enslavers’ wealth by expanding the national debt; the Union approach was to destroy that fictive $2.7 billion of white southern wealth and to liberate four million human beings who had been brutally commodified.
Lowenstein and Thomson make even wider claims for the economic radicalism of the Civil War. Republicans sincerely believed that the interests of labor and capital could be reconciled, insists Lowenstein, and that enlightened management of the economy could produce a prosperous and egalitarian society….
The Fed, the Supreme Court, and Their Legitimacy
Max Moran, May 5, 2023 [The American Prospect]
The government’s least democratic branches are incompetent and corrupt because they are unaccountable. James Madison would not be surprised….
The Fed and the Court are the two least democratic, and arguably most powerful, branches of the federal government today. In both, we see demonstrations of one of America’s founding principles: Unchecked power wielded by unelected rulers breeds corruption, and ultimately, tyranny. The Fed is not there yet, but the Court certainly is.
You’re Not Deficient, You’re Just Ruled By Assholes
Caitlin Johnstone [via Mike Norman Economics, May 2, 2023]
A popular socialist YouTuber called Second Thought has a good new video out called “You’re Not Immune To Propaganda” which examines the subject from a different angle than you might be used to. Second Thought emphasises the mundane, everyday nature of propaganda in our society as opposed to the shinier, better-known instances of its use like the consent-manufacturing for the Iraq invasion; the way it manipulates our understanding of who we are and what our values should be so that we will blame our struggles on ourselves instead of the neoliberal systems of oppression that are crushing people’s spirits throughout western civilization.
Think about the consequences it would have on mental health to continually be bombarded with messaging that you need to keep working like a machine under whatever conditions your employer sees fit to provide, for whatever compensation your employer sees fit to offer, and that if you can’t thrive in this soul-crushing environment the problem lies with you and not the system which permits such an exploitative relationship. Then consider the possibility that this is exactly what’s happening.
This nonstop propaganda messaging is further bolstered by the just-world fallacy, a cognitive bias which causes people to incorrectly assume that if anything bad happens to someone it’s because they deserved it. This common glitch in human reasoning arises because of people’s need to feel like they’re in control of their lives; they get that feeling of control by espousing the fallacious belief that as long as people always make good common sense decisions, nothing bad will ever happen to them. As a Twitter follower named Joe Ligato recently pointed out to me, this fallacy would cause people to blame themselves for problems in their lives that actually exist because of exploitative systems.
War
‘Securing Ourselves Is in Our Hands; and Defeat of the Enemy Lies in His Own Hands’
Alastair Crooke [Strategic Culture Foundation, via Mike Norman Economics, May 3, 2023]
The Anglo-American system of economics, James Fallows, a former White House speechwriter has noted [TW: I have linked to this many times], like any system, rests on certain principles and beliefs:
“But rather than acting as if these are the best principles, or the ones their societies prefer, Britons and Americans often act as if these were the only possible principles: And that no one, except in error, could choose any others. Political economics becomes an essentially religious question, subject to the standard drawback of any religion – the failure to understand why people outside the faith might act as they do” [emphasis added].
“To make this more specific: Today’s Anglo-American world view rests on the shoulders of three men. One is Isaac Newton, the father of modern science. One is Jean-Jacques Rousseau, the father of liberal political theory. (If we want to keep this purely Anglo-American, John Locke can serve in his place.) And one is Adam Smith, the father of laissez-faire economics. From these founding titans come the principles by which advanced society, in the Anglo-American view, is supposed to work … And it is supposed to recognize that the most prosperous future for the greatest number of people comes from the free workings of the market”.
So, back to that ‘which has not changed’, Secretary Yellen recently delivered a speech on the U.S.-China relationship, implying that China largely had prospered on the back of this Anglo, ‘free workings’ market order; yet now was pivoting toward a state-driven posture: one that “is confrontational towards the U.S. and its allies”. The U.S. wants to co-operate with China, but wholly and exclusively on its own terms, she said.
The U.S. seeks “constructive engagement”, but one that must be subject to the U.S. securing its own security interests and values. “We will clearly communicate to the PRC our concerns about its behaviour … And we will protect human rights”. Secondly, “we will continue to respond to China’s unfair economic practices. And we will continue to make critical investments at home – while engaging with the world to advance our vision for an open, fair, and rules-based global economic order”. She finishes by saying China must ‘play by today’s international rules’.
Unsurprisingly, China will have none of it, noting that the U.S. seeks to gain economically from China – whilst demanding a free hand to pursue exclusively U.S. interests.
Put simply, Yellen’s speech displays a complete failure to acknowledge that the Sino-Russian ‘revolution’ is not confined to the political, but extends to the economic sphere, too. It shows just how important the ‘other war’ is for Putin and XI – the war to shape an exit from the grip of the financialised, neo-liberal paradigm….
Marx and Lenin were not the only ones to challenge the Anglo, liberal version. In 1800, Johann Fichte published The Closed Commercial State. In 1827, Friedrich List published his theories which took issue with the ‘cosmopolitan economics’ of Adam Smith and JB Say. In 1889, Count Sergius Witte, a Prime Minister in Imperial Russia, published a paper, which cited Friedrich List and which justified the need for a strong domestic industry, protected from foreign competition by customs barriers.
Thus, in place of Rousseau and Locke, the German theoreticians had offered Hegel. In place of Adam Smith, they had proposed Friedrich List.
The Anglo-American approach is premised on the basis that the ultimate measure of a society is its level of consumption. In the long run however, List argued, a society’s well-being and its overall wealth are determined not by what the society can buy, but by what it can make (i.e. value arising from a real, self-sufficient economy). The German school, deeply sceptical of Adam Smith’s market ‘serendipity’, argued that emphasizing consumption would eventually be self-defeating. It would bias the system away from wealth creation, and ultimately make it impossible to consume as much, or to employ so many.
[Moon of Alabama, via Naked Capitalism 4-30-2023]
ZubuBrothers has a piece that reports about a talk given by the Chief of the General Staff of the Polish Armed Forces General Rajmund Andrzejczak:
“Andrzejczak said that the situation doesn’t look good for Kiev at all when considering the economic dynamics of this conflict, with him drawing particular attention to finance, infrastructure issues, social issues, technology, and food production, et al. From this vantage point, he predicts that Russia can continue conducting its special operation for 1-2 more years before it begins to feel any structural pressure to curtail its activities.
“By contrast, Kiev is burning through tens of billions of dollars’ worth of aid, yet it still remains very far away from achieving its maximum objectives. Andrzejczak candidly said that Poland’s Western partners aren’t properly assessing the challenges that stand in the way of Ukraine’s victory, including those connected to the “race of logistics”/“war of attrition” that the NATO chief declared in mid-February. Another serious problems concerns refugees’ unwillingness to return to their homeland anytime soon.”
Putin’s Bloody Missile Attack Is Horrifying: Colonel Macgregor
Stephen Gardner [YouTube, via Naked Capitalism 5-3-2023]
[TW: Macgregor’s description of the immense damage inflicted on the Ukrainian military—especially its command structure—by recent Russian missile strikes (in the first 15 minutes), entirely contradicts the mainstream reporting of the war.]
[Military.com, via Naked Capitalism 4-30-2023]
[Twitter, via Naked Capitalism 4-30-2023]
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Abandoning the US, more scientists go to China
[Modern Diplomacy, via Naked Capitalism 5-1-2023]
[Twitter, via Naked Capitalism 4-30-2023]
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[Twitter, via Naked Capitalism 5-1-2023]
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(Anti)Republican Party debt charade
Lars P. Syll [via Mike Norman Economics, May 1, 2023]
[German economist Dirk Ehnts:] “Mainstream economists do not believe that “countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt.” Looking at the result from a survey, not a single economist agreed with that statement. If these economists had been right, we would see lots of governments running out of money in 2020 and 2021. After all, tax revenues collapsed, government spending was increased and accordingly public deficits and public debts skyrocketed. Surely, the Greek government, surpassing 200 percent of public debt-to-GDP in 2021, would be in for a repeat of the Euro crisis? Nothing of that kind happened. As we all know by now, a government cannot run out of its own money for technical reasons … In the Eurozone, all national governments made their payments on time — all of them. This needs to be explained.”
[Syll:] Few issues in politics and economics are nowadays more discussed — and less understood — than public debt. Many raise their voices to urge for reducing the debt, but few explain why and in what way reducing the debt would be conducive to a better economy or a fairer society. And there are no limits to all the — especially macroeconomic — calamities and evils a large public debt is supposed to result in — unemployment, inflation, higher interest rates, lower productivity growth, increased burdens for subsequent generations, etc., etc.
But the truth is that public debt is normally nothing to fear, especially if it is financed within the country itself (but even foreign loans can be beneficent for the economy if invested in the right way). Some members of society hold bonds and earn interest on them, while others have to pay the taxes that ultimately pay the interest on the debt. The debt is not a net burden for society as a whole since the debt cancels itself out between the two groups. If the state issues bonds at a low-interest rate, unemployment can be reduced without necessarily resulting in strong inflationary pressure. And the inter-generational burden is also not a real burden since — if used in a suitable way — the debt, through its effects on investments and employment, actually makes future generations net winners. There can, of course, be unwanted negative distributional side effects for the future generation, but that is mostly a minor problem since when our children and grandchildren repay the national debt these payments will be made to our children and grandchildren.
Taking Debt Ceiling Negotiations Seriously
David Dayen, May 5, 2023 [The American Prospect]
Democrats didn’t solve this problem when they had full control of the government….
I think the end result of this analysis is that there is no real solution available. The reason that there hasn’t been much interest in gaming out a negotiation is that there’s nothing to game out. Either McCarthy accepts a cosmetic solution, an unlikely scenario, or Biden sells out his party and ushers in an economic downturn before his re-election campaign, also an unlikely scenario. The reason there’s been interest in an executive action, a legal fight, or some other resolution outside of Congress is that there doesn’t seem to be any resolution available inside it.
Restoring balance to the economy
William Mitchell [Modern Monetary Theory, via Mike Norman Economics, May 1, 2023]
There is something deeply wrong with the world under Capitalism when the poorest countries in the world pay more out on debt servicing to loans that the wealthy countries have provided than they do on maintaining their health care services. I have been examining data derived from the World Bank WDI database and the IMF WEO database pertaining to the debt sustainability of the poorest nations in the world. Using 2019 data (most recent) 64 nations, for which coherent data is available, spend more on external debt services than they do on health care (Source). At the same time, the most recent assessment from the IMF and the World Bank, under their Debt Sustainability Program (DSA) shows that debt distress is rising fast across the low-income bloc of countries. The response of the multilateral institutions is to enter ‘agreements’ with these nations that impose fiscal austerity and enforce a range of changes such as privatisation, outsourcing and more. This strategy does not work and only serves to protect the assets of the rich countries and corporations. A debt jubilee is the only way low-income nations will escape the penury of debt distress and the austerity-obsessed clutches of the IMF and the World Bank.
In terms of the 70 nations that are included as eligible under the IMF/World Bank Poverty Reduction and Growth Trust (PRGT), 13 per cent are in debt distress and a further 39.1 per cent are at high risk of distress, according to the most recent assessment published on February 28, 2023 – List of LIC DSAs for PRGT-Eligible Countries.
Want More Jobs? Raise the Minimum Wage
Barry Ritholtz, May 4, 2023 [The Big Picture]
I have been writing about issues with the minimum wage for (it seems like) decades. During that time, consuming lots of academic research, I reached a few logically supported conclusions. The least contentious of which is that modest increases in minimum wages increase economic activity and create jobs….
I have been nurturing a pet thesis as to why higher minimum wages are a net positive for an economy: It acts as a transfer of revenue allocation from low-wage employers and franchisees, from Capital to Labor. Meaning, less profits to ownership and more wages to workers.
Low-wage workers tend to paycheck to paycheck; each incremental dollar they earn tends to go towards food, clothing, health care, etc. It stays local and is likely to benefit the regional economy.
Owners tend to be fairly well off, and each incremental dollar they earn is more likely to be spent elsewhere – retirement savings, durable goods, etc. It has a much smaller impact on the local economy. (Note: I have not seen conclusive research as to whether this is so or not).
Regardless, a new research paper confirms that higher minimum wages tend to equal more jobs and a better local economy.
High Minimum Wages and the Monopsony Puzzle
Justin C. Wiltshire, Carl McPherson and Michael Reich, May 1, 2023 [Institute for Research on Labor and Employment, University of California, Berkeley, via The Big Picture 5-4-2023]
Abstract
We present the first causal analysis of recent large minimum wage increases, focusing on 47 larger U.S. counties that reached $15 or more by 2022q1. Using stacked county-level synthetic control estimators, we find substantial pay growth, no disemployment effects and reduced wage inequality. Our novel procedure ameliorates pandemic-related bias. We pose and address a monopsony puzzle: Researchers often invoke monopsony to explain absent negative employment effects, yet the model generally predicts positive employment effects. When we reduce selection and attenuation biases—by excluding areas with local minimum wages and high-wage counties—we find large, significant positive employment effects.
Willa Glickman [The New York Review, May 25, 2023 issue]
America’s lowest-paid workers are at a breaking point, and grassroots labor organizing may offer the only way out.
Reviewed:
Essential: How the Pandemic Transformed the Long Fight for Worker Justice
by Jamie K. McCallumBasic Books, 305 pp., $30.00On the Clock: What Low-Wage Work Did to Me and How It Drives America Insane
by Emily GuendelsbergerLittle, Brown, 335 pp., $17.99 (paper)On the Line: A Story of Class, Solidarity, and Two Women’s Epic Fight to Build a Union
by Daisy PitkinAlgonquin, 272 pp., $27.95; $16.99 (paper)
Mexican Senate expeditiously approves set of laws, mining reform
[Reuters, via Naked Capitalism 4-30-2023]
Former President of Mexico Revealed as CIA Asset
[Orinoco Tribune, via The Big Picture 5-6-2023]
Declassified documents of the U.S. Central Intelligence Agency (CIA) have revealed that former president of Mexico, José López Portillo, who led the country during 1976-1982, was a CIA asset. The revelation comes as part of a new batch of declassified documents published by the U.S. National Archives.
Nurses to get more power over staffing levels under bill passed by Minnesota Legislature
[Minnesota Reformer, via Naked Capitalism 4-30-2023]
Sweeps of homeless people are in fact deadly, new medical study shows
[48 Hills, via Naked Capitalism 4-30-2023]
How Finland Virtually Ended Homelessness—and We Can Too
[Common Dreams, via Naked Capitalism 4-30-2023]
OK, so the Finns are more generous and just shell out a lot more to help the homeless, right? Actually not. The Finns are simply smarter.
Instead of abandoning the homeless, they housed them. And that led to an insight: people tend to function better when they’re not living on the street or under a bridge. Who would have guessed?
It turns out that, given a place to live, Finland’s homeless were better able to deal with addictions and other problems, not to mention handling job applications. So, more than a decade after the launch of the “Housing First” policy, 80 per cent of Finland’s homeless are doing well, still living in the housing they’d been provided with — but now paying the rent on their own.
This not only helps the homeless, it turns out to be cheaper.
Health care crisis
[Twitter, via Naked Capitalism 5-2-2023]
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[Business Insider, via Naked Capitalism 5-1-2023]
The carnage of mainstream neoliberal economics
Pam Martens and Russ Martens, May 2, 2023 [Wall Street on Parade]
There are two critical things you need to know about JPMorgan Chase’s Chairman and CEO Jamie Dimon’s ability to stabilize the banking crisis: (1) he’s tried twice and failed both times; (2) his bank is a key financier of hedge funds, some of which are undermining bank stock prices with short selling.
The Financial Times reported on April 5 that “Hedge funds made more than $7bn in profits by betting against bank shares during the recent crisis that rocked the sector, their biggest such haul since the 2008 financial crisis.” Shares of First Republic Bank have lost billions of dollars more in market value since April 5, meaning the $7 billion haul for short sellers is now an understatement.
The one thing that would help dramatically to stem the banking crisis is for President Biden (a man who derives his powers from U.S. voters rather than a p.r. machine like Dimon) to immediately issue an Executive Order halting the short selling of federally-insured bank stocks. As of right now, short sellers see an easy path to picking a regional or community bank target, or a bank that got in bed with crypto companies, or some inscrutable federally-insured fintech bank, and driving its share price into the ground while minting billions for themselves.
Pam Martens and Russ Martens, May 3, 2023 [Wall Street on Parade]
How Washington allowed bank CEOs to pocket huge bonuses amid failure
[(Washington Post, via The Big Picture 4-30-2023]
Two children aged TEN are discovered working unpaid shifts at Kentucky McDonald’s, where one illegally used deep fryer and both prepared meals while serving customers [Daily Mail, via Naked Capitalism 5-3-2023]
[Twitter, via Naked Capitalism 5-1-2023]
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Climate and environmental crises
Copper Mine Flashes Warning of ‘Huge Crisis’ for World Supply
[Bloomberg, via Naked Capitalism Water Cooler 5-3-2023]
“Oyu Tolgoi, in southern Mongolia just north of the Chinese border, is key to Rio’s efforts to move beyond its dependence on iron ore and expand in copper, the metal that underpins the clean energy transition. It’s also a vast deposit whose corporate, political and technical vicissitudes offer a glimpse of the red metal’s troubled future. As demand for copper surges, supply is increasingly likely to come from mines like this one on the arid steppe: expensive, technically complex, outside traditional copper jurisdictions and operating under the eye of governments jealously guarding their natural resources…. Analysts at Wood Mackenzie estimate a greener world will be short about six million tons of copper by next decade, meaning 12 new Oyu Tolgois need to come online within that period. But they aren’t — there are simply not enough new mines, much less enough large ones. The result is a gap: BloombergNEF estimates appetite for refined copper will grow by 53% by 2040, but mine supply will climb only 16%. The world’s largest miners aren’t standing idly by. After more than a decade of repenting for the excess that followed the China-led boom in demand in the 2000s, deals are back, with green metals in buyers’ sights.”
[Twitter, via Naked Capitalism Water Cooler 5-3-2023]
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Copper industry warns of looming supply gap without more mines
[Reuters, via Naked Capitalism Water Cooler 5-3-2023]
“The world’s appetite for copper to build most electronic devices will exceed supply over the next decade and imperil climate targets unless dozens of new mines are built, executives and analysts said this week at a key industry conference. The forecast lays bare the growing tension over where and how the world can procure metals for the green energy transition, including copper, one of the best electrical-conducting metals that is widely used in motors, batteries and wiring…. ‘There is no way for the world to meet the terms of the Paris climate agreement if we don’t have an increase in the supply of copper and other metals,” Joshua Meyer of mining equipment maker FLSmidth (FLS.CO), referring to the climate accord that aims to limit greenhouse gas emissions by keeping the global temperature rise “well below” 2.0 degrees Celsius (3.6 Fahrenheit) this century. Regulatory approval for new copper mines has fallen to the lowest in a decade, according to Goldman Sachs (GS.N), an ominous harbinger as mines often take 10 to 20 years to permit and build. Goldman expects surging copper demand to push prices to $15,000 a tonne by 2025, 67% above current levels. Much of the new demand is expected to come from electric vehicles, which are built with far more copper than internal combustion engines. But without enough copper, EV manufacturers could use less than expected or even turn to aluminum, analysts warned.”
Farewell Transmission: Texas’ plan to fix its power grid is a disaster
[Slate, via The Big Picture 4-30-2023]
You don’t have to peruse that much more to detect a pattern: These are bills meant to boost fossil fuels and crowd out renewables. S.B. 1287 requires energy companies to cover more of the costs of connecting to the grid depending on distance—in what amounts to an added tax on renewable generators that often operate farther away from the central source and depend on lengthy transmission lines. Then there’s S.B. 2012, which would “incentivize the construction of dispatchable generation” and “require electric companies to pay generators to produce power in times of shortage.” Definition: more gas buildout, and more levies on electricity providers instead of gas producers. S.B. 2014 “eliminates Renewable Energy Credits” so as to “level the playing field” with gas sources, never mind the generous tax breaks that already benefit fossil fuel producers. S.B. 2015 “creates a goal of 50% dispatchable energy” for the central grid, essentially mandating that gas sources provide at least half of Texas’ electricity at all times. Senate Joint Resolution 1 hopes to enshrine S.B. 6’s gas backup program in the state constitution as a new amendment.
Green New Deal Advocates Just Won Big in New York. Here’s How They Did It.
Kate Aronoff, May 4, 2023 [The New Republic]
Four years after setting climate goals, New York has finally passed some bills to make good on them. Climate organizers this week can claim major victories in an otherwise depressing state budget passed over a month behind schedule. Among them are the country’s first statewide ban on gas hookups in new buildings, a “cap and invest” program selling greenhouse gas allowances to polluters, utility debt relief, and a boost in funding for public transit, including a pilot program for free buses. But perhaps the most notable win is a mandate that the public sector step in where the private sector fails to deliver on the state’s goal to get 70 percent of its power from renewable sources by 2030….
In deep blue New York, establishing climate goals at all required ousting right-leaning Democrats who caucused with Republicans, handing the GOP a de facto majority in Albany. After finally passing the Climate Leadership and Community Protection Act in 2019, New York’s Democratic supermajority repeatedly failed to pass legislation making good on its pledge to cut greenhouse gas emissions 40 percent below 1990 levels by 2030, and 85 percent by mid-century. Public power has been a rallying cry for the eco-socialist caucus of the Democratic Socialists of America, who in New York saw the opportunity for NYPA—the largest state-owned public utility in the country—to build clean energy in a way that wouldn’t be dictated by the whims of profit-seeking shareholders. The broader Public Power NY Coalition was formed in late 2019 to make that happen.
Anatomy of an ‘American Transit Disaster’
[CityLab, via The Big Picture 4-30-2023]
In his new book, historian Nicholas Dagen Bloom chronicles the collapse of public transportation in US cities — and explains who really deserves the blame.
Sacklers Gave Millions to Institution That Advises on Opioid Policy
[New York Times, via The Big Picture 4-30-2023]
Even as the nation’s drug crisis mounted, the National Academies of Sciences, Engineering and Medicine continued to accept funds from some members of the Sackler family, including those involved with Purdue Pharma.
Chicago’s $1 Billion Water Deal Shows Great Lakes Wealth
[Bloomberg, via Naked Capitalism 5-3-2023]
Information age dystopia
The Computer Scientist Peering Inside AI’s Black Boxes
[Quanta Magazine, via The Big Picture 5-1-2023]
Cynthia Rudin wants machine learning models, responsible for increasingly important decisions, to show their work.
Who Helped Overturn the “Pentagon Papers Principle”? The Washington Post and New York Times
Matt Taibbi [Racket News, via Naked Capitalism 5-5-2023]
[Lambert Strether: “Today’s must read. The ongoing blobbification of the Democrat Party, the spooks, and the national press, which started with the state of exception declared by the PMC in 2016, and whose intensification for 2020 is well-documented in The Twitter Files, reaches “some kinda awful climax” as — entirely a coincidence, I assure you! — top Blob Flexians wargame out a Hunter Biden laptop-like scenario (a “hack-and-dump” exercise), and then replay it in real life just weeks later. ]
[Slate, via The Big Picture 4-30-2023]
Millions of Americans were using telehealth company and prescription drug provider GoodRx—yet probably didn’t know that it was sharing their prescription medications and health conditions with Facebook, Google, and other third parties. The adult and child users of a popular “family safety” app likely didn’t realize that the company was quietly selling their location data.
How Rep. James Clyburn Protected His District at a Cost to Black Democrats
[Politico, via Naked Capitalism Water Cooler 5-5-2023]
“As the [redistricting] process commenced, Clyburn had a problem: His once majority Black district had suffered a daunting exodus of residents since the last count. He wanted his seat to be made as safe as possible. Republicans understood the powerful Black Democrat could not be ignored, even though he came from the opposing party and had no official role in the state-level process. Fortunately for them, Clyburn, who is 82 and was recently reelected to his 16th term, had long ago made peace with the art of bartering…. The resulting map, finalized in January 2022, made Clyburn’s lock on power stronger than it might have been otherwise. A House of Representatives seat that Democrats held as recently as 2018 would become even more solid for the incumbent Republican. This came at a cost: Democrats now have virtually no shot of winning any congressional seat in South Carolina other than Clyburn’s, state political leaders on both sides of the aisle say.”
How Biden’s New Communications Director Made His Millions
The Lever
(Anti)Republican Party
The Next Front in the GOP’s War on Women: No-Fault Divorce
Tessa Stuart, May 2, 2023 [Rolling Stone, via DanK, DailyKos 5-2-23]
STEVEN CROWDER, THE right-wing podcaster, is getting a divorce. “No, this was not my choice,” Crowder told his online audience last week. “My then-wife decided that she didn’t want to be married anymore — and in the state of Texas, that is completely permitted.”
….Researchers who tracked the emergence of no-fault divorce laws state by state over that period found that reform led to dramatic drops in the rates of female suicide and domestic violence, as well as decreases in spousal homicide of women. The decreases, one researcher explained, were “not just because abused women (and men) could more easily divorce their abusers, but also because potential abusers knew that they were more likely to be left.”
Today, more than two-thirds of all heterosexual divorces in the U.S. are initiated by women.
Republicans across the country are now reconsidering no-fault divorce. There isn’t a huge mystery behind the campaign: Like the crusades against abortion and contraception, making it more difficult to leave an unhappy marriage is about control. Crowder’s home state could be the first to eliminate it, if the Texas GOP gets its way. Last year, the Republican Party of Texas added language to its platform calling for an end to no-fault divorce: “We urge the Legislature to rescind unilateral no-fault divorce laws, to support covenant marriage, and to pass legislation extending the period of time in which a divorce may occur to six months after the date of filing for divorce.”
….Crowder first complained about no-fault divorce in a segment last April, when his divorce proceedings were already underway. “There need to be changes to marital laws, and I’m not even talking about same-sex marriage … I’m talking about divorce laws, talking about alimony laws, talking about child-support laws.”
Incidentally, Crowder’s position may actually have been worse if Texas still had fault-based divorce: Days after he announced he and his wife had separated last week, a 2021 video emerged of the podcaster berating his wife, eight months pregnant at the time with the couple’s twins, for her failure to do “wifely things.”
The Far Right’s Dangerous Fertility Myths
Audrey Clare Farley, May 4, 2023 [The New Republic]
These days, it takes a lot for a right-wing influencer to break the internet with his misogyny. But podcaster Steven Crowder has pulled it off, dominating social media for over a week. The storm was provoked by Crowder’s announcement that his wife, Hilary, is divorcing him against his will. “In the state of Texas, that is completely permitted,” he vented on his Louder With Crowder channel, which boasts nearly six million subscribers. “She simply wanted out, and the law says that that’s how it works.” Not long after a clip of these words gained traction, “no-fault divorce” began trending on Twitter, with many users circulating a 2022 Jezebel story predicting the return of laws requiring divorce applicants to prove wrongdoing, such as infidelity or desertion.
Then came the footage of Crowder threatening his wife….
It seems that the likes of Owens, Rose, and Johnson are on the defensive because they’ve been caught in a lie. Along with many other conservatives, they have relentlessly pushed the narrative that only the so-called traditionalist (“trad”) daughter and wife are protected from male brutality—and it’s women of the infertile, unyoked, and unsubordinated variety who are prone to beating, rape, and other torments. In fact, Owens nodded to this very narrative when she claimed disbelief that a man could “speak to a woman like that, least of all when she is eight months pregnant.” Much like the sex abuse scandals dogging Josh Duggar, Doug Phillips, Bill Gothard, and other devotees of the “Quiverfull” movement, which mandates supersize families, the Crowder affair exposes that the pronatalist patriarchal milieu is not a refuge from violence but a primary site of it.
Gun Violence Is Actually Worse in Red States. It’s Not Even Close.
[Politico, via The Big Picture 4-30-2023]
America’s regions are poles apart when it comes to gun deaths and the cultural and ideological forces that drive them….
Those colonial projects — Puritan-controlled New England, the Dutch-settled area around what is now New York City; the Quaker-founded Delaware Valley; the Scots-Irish-led upland backcountry of the Appalachians; the West Indies-style slave society in the Deep South; the Spanish project in the southwest and so on — had different ethnographic, religious, economic and ideological characteristics. They were rivals and sometimes enemies, with even the British ones lining up on opposite sides of conflicts like the English Civil War in the 1640s. They settled much of the eastern half and southwestern third of what is now the U.S. in mutually exclusive settlement bands before significant third party in-migration picked up steam in the 1840s.
In the process they laid down the institutions, symbols, cultural norms and ideas about freedom, honor and violence that later arrivals would encounter and, by and large, assimilate into. Some states lie entirely or almost entirely within one of these regional cultures, others are split between them, propelling constant and profound disagreements on politics and policy alike in places like Pennsylvania, Ohio, Illinois, California and Oregon. Places you might not think have much in common, southwestern Pennsylvania and the Texas Hill Country, for instance, are actually at the beginning and end of well documented settlement streams; in their case, one dominated by generations of Scots-Irish and lowland Scots settlers moving to the early 18th century Pennsylvania frontier and later down the Great Wagon Road to settle the upland parts of Virginia, the Carolinas, Georgia, and Tennessee, and then into the Ozarks, North and central Texas, and southern Oklahoma. Similar colonization movements link Maine and Minnesota, Charleston and Houston, Pennsylvania Dutch Country and central Iowa.
In a thriving Michigan county, a community goes to war with itself
[Washington Post, via The Big Picture 4-30-2023]
Ottawa County offers a glimpse of what happens when one of the building blocks of American democracy is consumed by ideological battles….
WEST OLIVE, Mich. — The eight new members of the Ottawa County Board of Commissioners had run for office promising to “thwart tyranny” in their lakeside Michigan community of 300,000 people.
In this case the oppressive force they aimed to thwart was the county government they now ran. It was early January, their first day in charge. An American flag held down a spot at the front of the board’s windowless meeting room. Sea-foam green carpet covered the floor.
The new commissioners, all Republicans, swore their oaths of office on family Bibles. And then the firings began. Gone was the lawyer who had represented Ottawa County for 40 years. Gone was the county administrator who oversaw a staff of 1,800. To run the health department, they voted to install a service manager from a local HVAC company who had gained prominence as a critic of mask mandates.
As the session entered its fourth hour, Sylvia Rhodea, the board’s new vice chair, put forward a motion to change the motto that sat atop the county’s website and graced its official stationery. “Whereas the vision statement of ‘Where You Belong’ has been used to promote the divisive Marxist ideology of the race, equity movement,” Rhodea said.
Inside the ‘Private and Confidential’ Conservative Group That Promises to ‘Crush Liberal Dominance'
[ProPublica, via Naked Capitalism Water Cooler 5-2-2023]
“A few months ago, Leonard Leo laid out his next audacious project…. Now, Leo declared in a slick but private video to potential donors, he planned to ‘crush liberal dominance’ across American life… Teneo is building what Leo called in the video ‘networks of conservatives that can roll back’ liberal influence in Wall Street and Silicon Valley, among authors and academics, with pro athletes and Hollywood producers. A Federalist Society for everything…. Baehr and Thiel lamented what they saw as the fragmented state of conservative networks, with their hidebound think tanks and intellectual centers that hold sway over right-of-center politics. A rare bright spot on their side [Teneo co-founder Evan Baehr] and [Peter] Thiel agreed, was the Federalist Society. Thiel had, in fact, served as president of the Stanford Federalist Society. What if there were a group similar to the Federalist Society for venture capitalists or corporate CEOs or members of the media?
When GOP Attorneys General Embraced Jan. 6, Corporate Funders Fled. Now They’re Back.
[ProPublica, via The Big Picture 4-30-2023]
Even as the Republican Attorneys General Association has leaned further into promoting Trumpism and sowing doubt about U.S. elections, major sponsors including Amazon, Walmart and Home Depot have resumed their contributions to the group.
Republicans ‘glorify political violence’ by embracing extreme gun culture
[The Guardian, via The Big Picture 4-30-2023]
Kyle Rittenhouse, who shot and killed two people at an anti-racism protest, was guest of honor at Idaho Republican party fundraiser.
Frum: The Coming Biden Blowout
[The Atlantic, via The Big Picture 5-2-2023]
Republicans are doing everything wrong. They are talking to their voters about Trump’s personal grievances and about boutique culture-war issues that their own base does not much care about, such as the state of Florida’s “war on Disney.” At the same time, Republican leaders are confronting Democratic voters with extremist threats on issues they care intensely about: bans on abortion medication by mail, restrictions on the freedom of young women to travel across state lines, attacks on student voting rights, proposed big cuts to Medicaid and food stamps in the GOP debt-ceiling ransom demand. Republicans offer no economic message and no affirming vision, even as they make new moves to police women’s bodies and start a land war in Mexico. They are well on their way to earning a deep, nasty defeat—and the smell of that defeat may be an additional draw to the polls for the Democratic-leaning constituencies that will inflict it.
The (Anti)Federalist Society Infestation of the Courts
The real reason for the Supreme Court’s corruption crisis
[Vox, via The Big Picture 4-30-2023]
Who watches the philosopher kings with lifetime appointments?
Clarence Thomas Had a Child in Private School. Harlan Crow Paid the Tuition
[Pro Publica, via Naked Capitalism Water Cooler 5-4-2023]
“In 2008, Supreme Court Justice Clarence Thomas decided to send his teenage grandnephew to Hidden Lake Academy, a private boarding school in the foothills of northern Georgia. The boy, Mark Martin, was far from home. For the previous decade, he had lived with the justice and his wife in the suburbs of Washington, D.C. Thomas had taken legal custody of Martin when he was 6 years old and had recently told an interviewer he was ‘raising him as a son.’ Tuition at the boarding school ran more than $6,000 a month. But Thomas did not cover the bill. A bank statement for the school from July 2009, buried in unrelated court filings, shows the source of Martin’s tuition payment for that month: the company of billionaire real estate magnate Harlan Crow. The payments extended beyond that month, according to Christopher Grimwood, a former administrator at the school. Crow paid Martin’s tuition the entire time he was a student there, which was about a year, Grimwood told ProPublica. ‘Harlan picked up the tab,’ said Grimwood, who got to know Crow and the Thomases and had access to school financial information through his work as an administrator. Before and after his time at Hidden Lake, Martin attended a second boarding school, Randolph-Macon Academy in Virginia. ‘Harlan said he was paying for the tuition at Randolph-Macon Academy as well,’ Grimwood said, recalling a conversation he had with Crow during a visit to the billionaire’s Adirondacks estate. ProPublica interviewed Martin, his former classmates and former staff at both schools. The exact total Crow paid for Martin’s education over the years remains unclear. If he paid for all four years at the two schools, the price tag could have exceeded $150,000, according to public records of tuition rates at the schools.”
The Supreme Court’s corruption crisis goes beyond Clarence Thomas
[Vox, via Naked Capitalism 5-3-2023]
New documents show how Sandra Day O’Connor helped George W. Bush win the 2000 election
[CNN, via Naked Capitalism 5-3-2023]
New Documents Undermine Supreme Court Student Debt Case
Julia Rock, May 2, 2023 [The Lever]
The Roberts court appears willing to ignore its purported judicial principles in order to end Biden’s student debt relief plan.
Civic republicanism
Joe Costello [via Naked Capitalism 5-2-2023]
[Yves Smith: “Arendt on how modern republicanism constrains action and the only parties allowed to engage in it were technocrats and scientists.”]
[TW: Arendt commits the same false equivalence committed in Joyce Appleby’s oft-cited Capitalism and a New Social Order: The Republican Vision of the 1790s (New York: New York University Press, 1984): critiquing the effects of liberalism and claiming they are the effects of republicanism, while ignoring how republicanism was slowly but inexorably replaced by capitalism and liberalism. This transition has been examined by more honest scholars, such as Michael J. Thompson, in The Politics of Inequality: A Political History of the Idea of Economic Inequality in America (New York, NY, Columbia University Press, 2007), and 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.
However, this does not necessarily mean Arendt’s argument that “technocrats and scientists” have dominant influence is incorrect. Thorstein Veblen openly hoped that engineers would provide a countervailing power to predatory business managers and their desire to “sabotage” industrial production and create artificial shortages to boost and maintain profitability — see Veblen’s The Engineers and the Price System (1921). Particularly troubling is the role technocrats and scientists must play in ensuring the cybersecurity of our modern information systems. See Kim Zetter, The Untold Story of the Boldest Supply-Chain Hack Ever [Wired, May 2, 2023]. ]
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