Week-end Wrap – Political Economy – July 30, 2023

Week-end Wrap – Political Economy – July 30, 2023

by Tony Wikrent

A rare opportunity to be heard

Antitrust Guidelines and Overthrowing a Corrupt Priesthood  

Matt Stoller [BIG, via Naked Capitalism 7-23-2023]

Today’s issue is about an obscure but important document on corporate power released this week known as merger guidelines. It is in many ways the overthrow of the corrupt antitrust priesthood…. this particular issue of BIG is important. There aren’t a lot of real actions people can take to influence government, but this one is real, and will make a meaningful difference in whether we truly address corporate power….

Over the past four days, I’ve been watching the business press go crazy about an obscure document that the antitrust agencies put out, known as ‘merger guidelines.’ And like the Catholic Church of the 1500s, or really members of any authoritarian social hierarchy, the antitrust priesthood is very upset.

For instance, Larry Summers, the avatar of Democratic Party economic policymaking under both Bill Clinton and Barack Obama, is in a rage, asserting these represent a “war on business.” Biglaw firms are sending out alerts to clients, saying “investors, boards and C-suites should anticipate significant delays and expenses associated with a far broader range of proposed transactions.” And the House Republicans are even trying to defund the very ability of the government to publish this document in their government funding bills.

Why does this document create such anger? The answer is that it is an attempt to return antitrust back to the rule of law, and away from the corporate revolution of the 1980s….

Nearly every major dangerous social trend today, from wage inequality to regional collapse to social despair to the inability to efficiently shift energy sources, is a result of monopolization, and mergers are the primary mechanism through which firms monopolize. In 1890, 1913, 1950, and 1975, Congress passed various laws to deal with it. The current key law on mergers today is called the Clayton Act, and it is still on the books. Unfortunately, because of the Reagan administration, and the ideological acceptance by the Democrats of what Reagan wrought, under-enforcement has been so poor that, well, Ticketmaster….

Now, here’s where you come in. Two days ago, I asked a question to Antitrust chief Jonathan Kanter at a Federalist Society event about the role of public comments in this process, and he said that hearing from the public is incredibly important in helping the agencies understand how markets actually work. Thousands of people chimed in a year and a half ago, including doctors, writers, truck drivers, nurses, and software programmers. Now it’s time to do it again. These guidelines are in draft form, they will be finalized soon.

There are 60 days to give our feedback. The government has set up a site on Regulations.gov where you can tell them about your experience with mergers, or offer thoughts on antitrust law, mergers, big business, or unfair methods of business. It looks like this, click on the comment button in the red circle.

So that’s how you can help. Tell the government about your experience with mergers through this site. There are already over one hundred comments, and you can browse and read them.

Oligarchy — not a republic if you can’t keep it

The Causal Effects of Admission to Highly Selective Private Colleges 

Tyler Cowen, via Naked Capitalism 7-25-2023]

Affirmative Action for rich kids: It’s more than just legacy admissions 

[NPR, via The Big Picture 7-27-2023]

Chetty and his colleagues provide compelling evidence that fancy schools are promoting a kind of neo-aristocracy, with admission programs that help to perpetuate a family’s class privilege from one generation to the next

Climate and environmental crises

Warning of a forthcoming collapse of the Atlantic meridional overturning circulation

[Nature, via Naked Capitalism Water Cooler 7-25-2023]

“The Atlantic meridional overturning circulation (AMOC) is a major tipping element in the climate system and a future collapse would have severe impacts on the climate in the North Atlantic region. In recent years weakening in circulation has been reported, but assessments by the Intergovernmental Panel on Climate Change (IPCC), based on the Climate Model Intercomparison Project (CMIP) model simulations suggest that a full collapse is unlikely within the 21st century. Tipping to an undesired state in the climate is, however, a growing concern with increasing greenhouse gas concentrations. Predictions based on observations rely on detecting early-warning signals, primarily an increase in variance (loss of resilience) and increased autocorrelation (critical slowing down), which have recently been reported for the AMOC. Here we provide statistical significance and data-driven estimators for the time of tipping. We estimate a collapse of the AMOC to occur around mid-century under the current scenario of future emissions.”

Week-end Wrap – Political Economy – July 23, 2023

Week-end Wrap – Political Economy – July 23, 2023

by Tony Wikrent

COVID

Covid Origins Scientist Denounces Reporting On His Messages As A “Conspiracy Theory” 

[Public, via Naked Capitalism 7-21-2023]

First major survey of doctors with Long Covid reveals debilitating impact on health, life and work

[BMA, via Naked Capitalism Water Cooler 7-21-2023]

“Around 60% of doctors told the BMA that post-acute Covid ill health has impacted on their ability to carry out day-to-day activities on a regular basis; Almost one in five respondents (18%) reported that they were now unable to work due to their post-acute Covid ill-health; Less than one in three (31%) doctors said they were working full-time, compared to more than half (57%) before the onset of their illness; Nearly half (48%) said they have experienced some form of loss of earnings as a result of post-acute Covid.”  

War

‘An Act of War’: Inside America’s Silicon Blockade Against China 

[NYT, via Naked Capitalism 7-16-2023]

Though delivered in the unassuming form of updated export rules, the Oct. 7 controls essentially seek to eradicate, root and branch, China’s entire ecosystem of advanced technology. “The new policy embodied in Oct. 7 is: Not only are we not going to allow China to progress any further technologically, we are going to actively reverse their current state of the art,” Allen says. C.J. Muse, a senior semiconductor analyst at Evercore ISI, put it this way: “If you’d told me about these rules five years ago, I would’ve told you that’s an act of war — we’d have to be at war.”

If the controls are successful, they could handicap China for a generation; if they fail, they may backfire spectacularly, hastening the very future the United States is trying desperately to avoid.

The Looming War Against China

Michael Hudson [On Finance, Real Estate And The Powers Of Neoliberalism, via Mike Norman Economics, July 22, 2023]

Why Russia pulled out of its grain deal with Ukraine – and what that means for the global food system 

[The Conversation, via Naked Capitalism 7-20-2023]

What makes Ukraine such an important part of the global food supply chain?

Ukraine has been called the breadbasket of Europe and is a major supplier of wheat, barley, sunflower products and corn to Europe as well as to developing countries such as in the Middle East, Northern Africa and China.

More than 400 million people relied on foodstuffs from Ukraine before Russia invaded Ukraine in February 2022.

One key reason for that is Ukraine has approximately one-third of the world’s most fertile soil, which is known as chernozem, or black soil. And before the war, Ukraine was able to rely on its year-round access to ice-free harbors in the Black Sea to ship grains to nearby markets in the Middle East and Africa….

The U.N. and Turkey brokered what is officially known as the Black Sea Grain Deal with Ukraine and Russia on July 22, 2022…. Ukraine has exported more than 32 million tons of food products through the Black Sea since August 2022. The World Food Program, the world’s largest humanitarian agency, purchased 80% of its wheat from Ukraine. Ethiopia, Yemen, Afghanistan and Turkey have been the biggest recipients of humanitarian shipments.

The U.N. has estimated that the grain deal has reduced food prices by more than 23% since March 2022….

Russia has threatened to exit the deal before, but each time it has chosen to stay in.

But on July 17, 2023, it said it’s unwilling to stay in the deal unless its demands are met to ship more of its own food and fertilizer. Over the following two days, it attacked Odesa with drones and missiles in one of the largest sustained assaults on the port. Russia also said it would deem any ship in the Black Sea bound for a Ukrainian port to be a legitimate military target.

Week-end Wrap – Political Economy – July 16, 2023

Week-end Wrap – Political Economy – July 16, 2023

by Tony Wikrent

Global power shift

Has the West lost control of oil? 

[Unherd, via Naked Capitalism 7-10-2023]

Led by the odd pairing of the Saudi Crown Prince, Mohammad Bin Salman (MBS), and Vladimir Putin, the Opec Plus oil producers’ cartel exists to maintain a price floor for its fractious members in an energy environment where oil prices have crashed three times over the past two decades. But its importance in a geopolitical world defined by Sino-American competition is beginning to extend well beyond the gyrations of oil markets. Opec Plus has remained resilient even as the Beijing-Moscow-Tehran axis has hardened since Russia’s invasion of Ukraine, as well as the recent Chinese-brokered rapprochement between Saudi Arabia and Iran. This raises questions about whether Saudi Arabia is now defecting into the anti-Washington camp….

Forging an association between Opec and Moscow was an act of Saudi desperation. For the previous two years, Riyadh had sought to bankrupt the American shale sector by allowing prices to slump, but largely succeeded only in emptying its own foreign exchange reserves. When they finally reversed course in September 2016, the Saudis found that, having alienated most other Opec members with their recklessness, they could no longer control prices. Two months later, Russia and 10 other states agreed to support a second Opec oil output cut, and Opec Plus was born….

Undoubtedly, some broader geopolitical convergence between Riyadh and Moscow against Washington followed over the next three years. When King Salman visited Putin in October 2017 — the first ever state visit of a Saudi monarch to Moscow — the two leaders discussed military co-operation and the possibility of the Saudis purchasing Russian arms….

When, in September 2019, Iran — either alone or acting with its Houthi allies in Yemen — destroyed the large Saudi oil processing facility at Abqaiq with drones and cruise missiles, that chasm was laid bare. While the Saudis were crushed by the failure of their Patriot missile defence system, bought at great expense from the Americans, Putin appeared with the Iranian president and mock-solemnly pronounced that Moscow could sell Riyadh protection that would actually work….

The Trump administration’s Abraham Accords, which saw the UAE and Bahrain normalise relations with Israel in September 2020, compounded the cartel’s lack of internal coherence on Middle Eastern matters. In oil terms, the Accords also appeared strategic: the UAE is the only member of Opec Plus other than Saudi Arabia with clear spare capacity, and Bahrain has been sitting on a known large offshore shale oil formation since 2018.

But for the past three years, events have conspired decidedly to strengthen Opec Plus. With the new Democratic administration in Washington unable to bring Iran into another nuclear deal in 2021, and post-pandemic growth in the shale sector nearly entirely concentrated in the Permian Basin, Biden, just eight months into office, had to ask Opec Plus to increase production. His trip to Riyadh the following summer for the same purpose yielded little. Indeed, in the months after Biden’s visit, Opec Plus appeared to toy with the American president, announcing a major production cut just weeks before the mid-term elections. Unable at any time during his presidency to influence the cartel, Biden has had to release so much reserve US oil that in March 2023 the Strategic Petroleum Reserve contained only 58% of what it did three years previously.

The World China Is Building 

[NOEMA, via Naked Capitalism 7-14-2023]

...The International Monetary Fund expects Asian countries to account for 70% of growth globally this year. China must “shape a new international system that is conducive to hedging against the negative impacts of the West’s decoupling,” the scholar and former People’s Liberation Army theorist Cheng Yawen wrote recently….

The world China is reorienting itself to is a world that, in many respects, looks like China did a generation ago. On offer are the basics of development — education, health care, clean drinking water, housing. But also more than that — technology, communication and transportation.

Back in April, on the eve of a trip to China, Brazilian President Luiz Inacio Lula da Silva sat down for an interview with Reuters. “I am going to invite Xi Jinping to come to Brazil,” he said, “to get to know Brazil, to show him the projects that we have of interest for Chinese investment. … What we want is for the Chinese to make investments to generate new jobs and generate new productive assets in Brazil.” After Lula and Xi had met, the Brazilian finance minister proclaimed that “President Lula wants a policy of reindustrialization. This visit starts a new challenge for Brazil: bringing direct investments from China.” Three months later, the battery and electric vehicle giant BYD announced a $624 million investment to build a factory in Brazil, its first outside Asia….

Across the Global South, fast-growing countries from Bangladesh to Brazil can send raw materials to China and get technological devices in exchange. The idea is that what China is today, they could be tomorrow….

The majority of human beings alive today live in a world of not enough: not enough food; not enough security; not enough housing, education, health care; not enough rights for women; not enough potable water. They are desperate to get out of there, as China has. They might or might not like Chinese government policies or the transactional attitudes of Chinese entrepreneurs, but such concerns are usually of little importance to countries struggling to bootstrap their way out of poverty.

The first world tends to see the third as a rebuke and a threat. Most Southeast Asian countries have historically borne abuse in relationship to these American fears. Most American companies don’t tend to see Pakistan or Bangladesh or Sumatra as places they’d like invest money in. But opportunity beckons for Chinese companies seeking markets outside their nation’s borders and finding countries with rapidly growing populations and GDPs. Imagine a Huawei engineer in a rural Bangladeshi village, eating a bad lunch with the mayor, surrounded by rice paddies — he might remember the Hunan of his childhood.  

Week-end Wrap – Political Economy – July 9, 2023

Week-end Wrap – Political Economy – July 9, 2023

by Tony Wikrent

Climate and environmental crises

World Registers Hottest Day Ever Recorded on July 3 

[Reuters, via Naked Capitalism 7-5-2023]

6 southern Colorado counties, facing drought and thirsty neighbors, move to block water exports 

[Colorado Sun, via Naked Capitalism 7-4-2023]

Economic Armageddon

[Twitter, via Naked Capitalism 7-5-2023]

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Global power shift

China Restricts Exports of Two Metals Used in High-Performance Chips 

[Wall Street Journal, via Naked Capitalism 7-5-2023]

[Twitter, via Naked Capitalism 7-5-2023]

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Week-end Wrap – Political Economy – July 2, 2023

Week-end Wrap – Political Economy – July 2, 2023

by Tony Wikrent

War

The Darkness Ahead: Where The Ukraine War Is Headed 

John Mearsheimer [via Naked Capitalism 7-1-2023]

The real casualties of Russia’s ‘civil war’: the Beltway expert class 

Max Blumenthal [The Grayzone, via Naked Capitalism 6-29-2023]

FSB spooked the CIA on Prigozhin coup 

[Indian Punchline, via Naked Capitalism 6-29-2023]

THIS Is How NATO’s War On Russia Has FAILED w/ Scott Ritter 

[YouTube, via Naked Capitalism 7-1-2023]

[Yves Smith: “Worth the listen even though long. Revealing opening section on Iraq.” Ritter explains, for the first time to my satisfaction, why Iraq invaded Kuwait in August 1990. And why no weapons of mass destruction were found: because the UN inspection teams Ritter had been a member of had found them and forced their destruction before the war. ]

Further thoughts on the lessons of the Prigozhin armed rebellion 

Gilbert Doctorow, via Naked Capitalism 7-1-2023]

All aboard the gravy train: an independent audit of US funding for Ukraine 

[The Grayzone, via Naked Capitalism 6-28-2023]

The War Between My Two Words 

[Between Two World: The "Art" of an American Surviving in Small Town Russia, via Naked Capitalism 6-28-2023]

The Americans were wrong about Russia militarily and politically. There is no qualified Russian expert among the advisors to President Biden. The sanctions and the war prove that. I know from watching the U.S. news. Their descriptions of the impact the war has had on life in Russia are so far from reality that I really cannot believe these people get paid to fabricate such news.

My fear, as I have expressed in many contexts, is that the powers-that-be in the U.S. will not have the moral courage to admit they were wrong and they were lying. These are not people of strong convictions and integrity at the helm in America. I had two friends who posted two videos on my Facebook “wall” yesterday. One was the testimony of an FBI official, whose name I did not get, in a congressional hearing. The two representatives questioning him under oath caught him lying and evading their questions time after time. He just could not muster the courage to admit they had lied in reports which had been filed and then concealed those non-classified documents from Congress and the American public.