Week-end Wrap – Political Economy – August 11 2024
by Tony Wikrent
Strategic Political Economy
In 2023 the world’s forests stopped acting as a carbon sink
[REDD Monitor, via Naked Capitalism 08-10-2024]
At the recent International Carbon Dioxide Conference in Manaus, Brazil, scientists presented preliminary findings that in 2023 the world’s forests stopped acting as a carbon sink. An intense drought in the Amazon rainforest and record wildfires in Canada were part of the reason that forests and other land ecosystems emitted almost as much carbon dioxide as they removed from the atmosphere.
Usually, forests remove about one-quarter of the world’s annual CO₂ emissions from the atmosphere. But in 2023, that carbon sink collapsed, study co-author Philippe Ciais of the French research organisation the Laboratory for Climate and Environmental Sciences told Reuters.
As a result, in 2023, the growth rate of CO₂ in the atmosphere shot up by 86% compared to 2022. Yet CO₂ emissions — which come mainly from burning fossil fuels — only increased by between 0.1% and 1.1%. The explanation is that natural carbon sinks absorbed much less….
'Holy Sh*t This Ad Is Powerful': UAW Says It Knows How to Defeat Trump and the Billionaire Class
Jon Queally, August 10, 2024 [CommonDreams]
"This is brilliant," said author Naomi Klein in response to new United Auto Workers ad….
"There is only one answer to the threat we face as a nation. The answer is solidarity."
That is the core message directed at the American working class from the United Auto Workers (UAW) in a new ad that frames the nation's current political battle as one between organized workers and the billionaire and corporate classes.
"We stand at a historic crossroads in this country right now," says UAW president Shawn Fain to begin the 2-minute video. "And it's clear Donald Trump represents the billionaire class—that's his base." ….
"The dream of a man like Donald Trump is that the vast majority of working class people will remain divide," says Fain. "They divide us by race. They divide us by gender, by who we love, or where we were born. That's the game of the wealthy, divide and conquer
The battle over who makes the rules for US companies
[Financial Times, via Naked Capitalism 08-06-2024]
….Over the past autumn and winter, the Chancery trial court ruled on three highly esoteric matters of corporate law, making certain long-accepted dealmaking practices impermissible.But, this summer, the state’s legislature and governor were quickly persuaded by the influential law firms that represent big companies to enact changes to the Delaware General Corporation Law that nullified the rulings. The convention of waiting for the Delaware Supreme Court, often a tempering mechanism, to hear any appeals was ignored.Lawyers representing pension funds, asset managers and individual shareholders fret that the changes will unduly limit their ability to bring lawsuits against misbehaving corporate boards and overmighty founders.And many law professors worry that the foundations of Delaware corporate law have been carelessly erased without an understanding of the broader consequences….
Global power shift
China Is Done With Global Carmakers: "Thanks For Coming": Dwindling Sales and Vanishing Profits
Michael Dunne, August 06, 2024 [via Naked Capitalism 08-10-2024]
For most of this century, foreign brands totally dominated China’s car market. Every year, they sold millions of cars and earned billions in profits.
Chinese consumers swarmed into Buick, Volkswagen, BMW and Toyota showrooms nationwide, happy to pay cash for the prestige of owning a brand that wasn’t Chinese.
“China is our forever profit machine,” my colleagues at GM liked to humble-brag a decade ago, back when I ran GM’s Indonesia operations. “We can bank on an easy $2 billion dividend every year.”
Now, suddenly, that golden era is over.
Sales and profits in the People’s Republic are vanishing. And boards in Detroit, Wolfsburg and Tokyo are stunned by the speed and intensity of the changes.
Ford has lost more than $5 billion in China since 2020. Sales are down 70% from their peak. “We’ve never seen competition like this before,” says CEO Jim Farley.
GM is hurting, too. The former poster child for sunny US-China relations, GM has lost more than $200 million so far this year alone. That marks the first time in two decades that GM’s China operations have printed red ink….
Driving China’s ascendancy is a massive and abrupt shift to electric vehicles. The EV share of total car sales will jump to almost 50% this year, up from just 6% in 2020.
Think about that. China has sprinted from 1 million to more than 10 million annual EV deliveries in just four short years. (I already see you dealership folks scratching your heads in amazement.)
Global automakers were caught flat-footed on EVs, lulled into complacency by years of winning at selling gasoline-powered vehicles.
TSMC Arizona struggles to overcome vast differences between Taiwanese and US work culture
[Tom’s Hardware, via Naked Capitalism 08-10-2024]
[NC commenter Micael T: “So all this American Talwan vs. China nonsense iis really about importing new management practices to the US?” Moi: Some of you may remember that Toyota went into a joint venture with GM to take over GM’s worst plant, which feature regular absenteeism and drunkenness in its workforce, and of course high defect rates. Toyota got the plant performance to above average for Toyota plants, which was much higher than GM levels.”]
Adam Tooze [via Naked Capitalism 08-10-2024]
Furthermore, industrial policy makes most sense at an early stage where it can hope to exercise something like a formative influence, or in industries with many players and plenty of opportunity for benchmarking and competition. The global semi-conductor industry, by contrast, is a vast oligopoly in which the winning and losing hands were already distributed. Taxpayer-funded industrial policy has virtually no chance to creatively reshape the industry. Anyone wanting to play the chip game on a substantial scale has to get in bed with the big players. And amongst those, Intel is the big loser.
Intel was once a world leader. It formed a combination with Microsoft and IBM in the 1980s which shaped the early stages of desktop IT. But in the 2000s it missed the boat on chips for cellphones. Then on the fab side it made fundamental missteps in manufacturing. And then it missed the boat on AI. So now it is playing catchup on all fronts….
Gaza / Palestine / Israel
[X-Twitter, via Naked Capitalism 08-06-2024]
Caitlin Johnstone
@caitoz
·
Follow
Pay attention to that "but world won't let us" bit at the end. Never let anyone tell you that your efforts to oppose Israeli atrocities make no difference. If westerners weren't creating pressure on western governments about this, Israel would be acting SO much worse than it is.
Assal Rad
@AssalRad
Nothing to see here, just an Israeli minister saying it’s justified to kill 2,000,000 Palestinians by starving them.I wonder if Western media will decide that the official of a state accused of genocide at the ICJ justifying genocide and starvation is newsworthy. Quiet so far…
.
Why Ilan Pappe’s new book on the Israel lobby is a must-read
[Middle East Eye, via Naked Capitalism 08-09-2024]
Oligarchy
Pam Martens and Russ Martens, August 7, 2024 [Wall Street on Parade]
Robert B. Reich, the former U.S. Labor Secretary under President Bill Clinton, a bestselling author and Professor Emeritus at UC Berkeley, penned an essay in May on why billionaires should not exist. Reich declares that there are only five ways someone can become a billionaire. (Reich narrates his essay in the video below, complete with cool graphics.) Reich lists the following five methods of becoming a billionaire: (1) exploit a monopoly; (2) exploit inside information; (3) buy off politicians; (4) defraud investors; (5) get money from rich relatives.
You are likely thinking that there is nothing wrong with inheriting wealth from a rich relative. But if the money is inherited from a billionaire relative, it means that he or she likely got that wealth through one of the first four methods. Thus, dirty money is simply moving from generation to generation. That’s our thought; Reich has other thoughts on the matter involving the wealthy using tax loopholes “lobbied for by the wealthy.”….
But what we really want to focus on is how the repeal of the Glass-Steagall Act in 1999 by a fat cat on Wall Street, together with sycophants in President Bill Clinton’s administration, and cheerleading from the New York Times’ Editorial Board, has created a whole new method of becoming a billionaire without any risk of jail time, while undermining the safety and soundness of the U.S. financial system. We’re talking about obscene stock option compensation at the megabanks on Wall Street….
The chief architect of the repeal of Glass-Steagall, Sandy Weill, was still listed as a billionaire by Forbes as of three years ago. This is how he became a billionaire:
Despite it being illegal at the time, in 1998 Weill combined his Travelers Group with Citicorp, the parent of the federally-insured commercial bank, Citibank. Travelers Group consisted of a large insurance company, an investment bank (Salomon Brothers) and a retail brokerage firm, Smith Barney. It would become the first of the megabanks (“universal banks”) on Wall Street.
The New York Times’ Editorial Board heralded the illegal and dangerous combination with this on April 8, 1998:
“Congress dithers, so John Reed of Citicorp and Sanford Weill of Travelers Group grandly propose to modernize financial markets on their own. They have announced a $70 billion merger — the biggest in history — that would create the largest financial services company in the world, worth more than $140 billion… In one stroke, Mr. Reed and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.”
The repeal of the 1933 Glass-Steagall Act in 1999 allowed the trading casinos on Wall Street to merge with deposit-taking commercial banks – a practice which had been banned for 66 years because it was responsible for the 1929 stock market crash, thousands of insolvent banks, and ensuing Great Depression….
The carnage of mainstream neoliberal economics
The end of progressive neoliberalism in Canada
[Canadian Dimension, via Naked Capitalism 08-04-2024]
Elections highlight differences. Justin Trudeau and Pierre Poilievre already seem like opposites, and once the federal election campaign heats up, they will look even further apart.
But after election day, magnified differences fade away. A Poilievre government would undoubtedly bring change, but also considerable continuity in critical areas.
That’s because Liberals and Tories share a deep-seated commitment to market-based approaches. Both parties tackle socioeconomic challenges by giving corporations ever more incentives and subsidies and staying clear of regulating them, even where regulation is the most direct and least costly solution.
Political philosopher Nancy Fraser famously coined the term “progressive neoliberalism” to describe governments that openly embrace equity and diversity ideals from social movements while actively defending corporate and financial sector interests. Bill Clinton paved the way for Barack Obama in the United States. Tony Blair was the face of it in the United Kingdom.
We have seen this in Canada, too.
Trudeau’s Liberals have repeatedly combined progressive language and inspiring plans with market fundamentalism. Nowhere is this more visible than in their climate change and housing policies. In these areas, Poilievre is likely to reverse some small but positive changes, while continuing to defend the primacy of markets.
'Corporate Greed Is Out of Control': Warren Slams Kroger's AI Pricing Scheme
Julia Conley, August 09, 2024 [CommonDreams]
Expressing doubt that a new artificial intelligence-powered "dynamic pricing" model used by the Kroger grocery chain is truly meant to "better the customer experience," Sens. Elizabeth Warren said Friday that the practice shows how "corporate greed is out of control."
Warren (D-Mass.) was joined by Sen. Bob Casey (D-Pa.) on Wednesday in writing a letter to the chairman and CEO of the Kroger Company, Rodney McMullen, raising concerns about how the company's collaboration with AI company IntelligenceNode could result in both privacy violations and worsened inequality as customers are forced to pay more based on personal data Kroger gathers about them "to determine how much price hiking [they] can tolerate."
As the senators wrote, the chain first introduced dynamic pricing in 2018 and expanded to 500 of its nearly 3,000 stores last year. The company has partnered with Microsoft to develop an Electronic Shelving Label (ESL) system known as Enhanced Display for Grocery Environment (EDGE), using a digital tag to display prices in stores so that employees can change prices throughout the day with the click of a button.
Predatory finance
Gretchen Morgenson [NBC, via Naked Capitalism 08-09-2024]
They’re not capitalists — they’re predatory criminals
Private Equity: In Essence, Plunder?
[CFA Institute, via Naked Capitalism 08-05-2024]
Statistically, there is an increased risk of failure with private equity ownership. PE portfolio companies are about 10 times as likely to go bankrupt as non-PE-owned companies. Granted, one out of five companies going bankrupt doesn’t portend certain failure, but it is a startling statistic….
But to understand what private equity is at its worst is a call to action, personally and professionally. We need to monitor the specific and repetitive activities that benefit the operators and no one else.
That, in a nutshell, is the key takeaway from our conversation with Brendan Ballou, the award-winning author of Plunder: Private Equity’s Plan to Pillage America. Ballou, who has experience as a federal prosecutor and special counsel for private equity at the US Department of Justice, was speaking in a personal capacity at the fireside chat hosted by CFA Society Hong Kong. Drawing from his extensive background, Ballou is well-placed to help us understand how PE firms leverage their influence to the detriment of the broader economy. He shared his insights on the inner workings and profound impact of private equity firms….
Restoring balance to the economy
Matt Stoller, August 7, 2024 [The Lever]
Monday was a big day for American business.
“After having carefully considered and weighed the witness testimony and evidence,” wrote Judge Amit Mehta in his decision of the case United States of America vs. Google LLC, “the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act.”
Fifteen years after it was first investigated, search giant Google is finally going to be held accountable for unfairly thwarting competition. In this piece, I’m going to discuss the complaint against Google, why it lost, the next steps, and what this case means for American business going forward….
The alleged harms of this monopoly maintenance are what you’d expect. The government argues it allowed Google to raise prices for advertisers without regard to the prices of ads on other digital platforms, and has allowed Google to forgo quality improvements in privacy and other areas that it would have otherwise pursued. Consumers are also deprived of the potential for a higher-quality search engine that could emerge if there was healthier competition….
Mehta quoted Google’s behavioral economics team in 2021 discussing how much defaults matter, noting consumers don’t change their search engine very often, if ever. “Inertia is the path of the least resistance,” this team said internally. “People tend to stick with the status quo, as it takes more effort to make changes.”
[TW: My usual reference back to First Secretary of the Treasury Alexander Hamilton:
“Experience teaches, that men are often so much governed by what they are accustomed to see and practise, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance, and by slow gradations…. To produce the desirable changes as early as may be expedient may therefore require the incitement and patronage of government… — Report on Manufactures (1791).
[ As I have argued a number of times, one of the principles of civic republicanism is a positive requirement to do and encourage good works, “good works” being defined as those that improve the human condition.]
...The next stage is called the remedy phase, during which the court will hear arguments about what to do to address the bad conduct. He has ordered both parties to propose a schedule for the remedy phase by September 4.
No doubt Google will appeal, and will ask for the remedy phase to be delayed while it does so. I doubt Google will be able to delay the remedy phase while its appeals happen, but the law there isn’t crystal clear. I don’t think Google’s appeal will succeed; Mehta’s decision is tightly written and if Google isn’t a monopoly, then antitrust law is really a dead letter.
However, the risk here is political. I don’t have any confidence in either Donald Trump or Kamala Harris to continue this antitrust regime, and they will both be tempted to settle this case, and others like it, on the cheap. Congress won’t be happy if they do that, and neither will the media….
...Google’s control of the web is ending.
What will a non-Google dominated web look like? Well, it’s hard to know, but I think there’s a vision tucked in an April speech by Federal Trade Commission consumer protection chief Sam Levine on how the internet didn’t have to become the cesspool that it is today. He sketched out what the internet could become if well regulated, a place where we have zones of privacy, where not everything operates like a casino, and where AI works for us. This case brings us a step closer to Levine’s vision, because it means that people who want to build better safer products now have the chance to compete.
So that’s Google. What about the rest of business? Well, this decision means monopolization law is back. Exclusive contracts and arrangements are pervasive in American commerce, and until recently, executives could reliably exploit such deals without fearing that they might face any legal liability. But that era is over. This case is in the headlines, which means every single competent executive in America in any firm with market power is going to get a memo from their antitrust or general counsel on what they can and can’t do going forward. And they will likely begin changing their behavior to avoid being brought to court for monopolization.
And that, more than almost anything, is what the rule of law means.
You Love To See It, August 10, 2024 [The Lever]
Hawaiian Electric Industries and several other defendants agreed to a $4 billion settlement after last year’s devastating wildfires in Maui that killed 102 people and displaced more than 3,000 households after the destruction of the historic town of Lahaina. Hawaiian Electric and its parent company will pay the greatest share, almost $2 billion.
The electric company was criticized for not properly weatherizing power lines and being slow to put power lines underground, which helps prevent wildfires. Moreover, the company’s obsolete power poles did not meet national standards that required key components of Hawaii’s power grid to be able to withstand wind speeds of up to 105 miles per hour. Flash droughts exacerbated by climate change, the introduction of non-native grasses by humans, and high air pressure and winds caused by a distant hurricane all contributed to the blaze.
KKR Founders Sued for Allegedly Getting Giant Payday for No Work
[Wall Street Journal, via Naked Capitalism 08-09-2024]
When Henry Kravis and George Roberts handed off the day-to-day management of private-equity firm KKR KKR 4.12%increase; green up pointing triangle to their successors in 2021, the two billionaires netted shares now worth more than $650 million.A new lawsuit is accusing the company of paying Kravis and Roberts but getting nothing in return. Their windfalls came from a complicated financial structure that has netted billions of dollars for other company founders and dealmakers in similar transactions.A spokeswoman for KKR said the deal offered substantial benefits to shareholders. The firm said the lawsuit is legally deficient and mischaracterizes the transaction. KKR expects to move to dismiss the suit, she said.The shareholder suit filed by a Steamfitters union local pension fund is one of a string of legal actions that are steadily gaining momentum in Delaware courts that could force many private-equity executives to hand back the payouts. Already, a healthcare company has agreed to pay $71 million to settle a similar lawsuit and judges have issued decisions in other cases that have largely been favorable to plaintiffs….
Disrupting mainstream economics
The Case for Pragmatic Socialism
Ryan Cooper, August 5, 2024 [The American Prospect]
...The most prominent socialist tradition, of course, is Marxism, whose basic argument is that capitalism is based on the exploitation of the labor of the working class, and will undermine itself thanks to its inherent contradictions, ultimately leading in dialectical fashion to a socialist revolution.
I think this is a fundamentally flawed approach. Marx’s theory is built on Hegelian dialectics, and is incommensurate with arguments in which a moral standard is outlined and then strategies to achieve it worked out. As Polish philosopher Leszek Kołakowski writes in Main Currents of Marxism, the working class has “no need of a separate imperative telling them that they should strive for liberation in general or that freedom from oppression is a good thing.”
The economic institutions of America and the world are so flagrantly unjust that one doesn’t need a metaphysically and logically airtight theory to justify radical reforms. It is howling injustice for a handful of oligarchs to control nation-state-sized hoards of wealth while millions go hungry. Economic institutions should be rearranged to produce the most equal practical distribution of resources. That’s enough to get started, without the need to wait for the system to collapse of its own weight.
Before any kind of detailed program, we need a rough story of how an economy can work. Marx’s labor theory of value (LTV) comes directly from classical economists David Ricardo and Adam Smith. If labor produces all value, then it follows that capitalist profits are all appropriations of labor’s surplus.
There are several objections to the LTV from a pragmatist standpoint. First, Marxian value is impossible to measure. Workers use tools and machinery, which are of course produced by other workers. You can account for this by separating out the labor time used to make the tools, but of course those workers used tools as well. For a pragmatist, this is a lot of complicated, pointless abstraction….
There are further background conditions necessary for economic activity that most people take completely for granted. Modern manufacturing, for instance, requires scientific theories and evidence that have been painstakingly built up over centuries and written down, so we don’t have to perpetually rediscover them. If you are designing or building anything, you’ll need to determine what size the pieces should be. Weights and measures have also been standardized over centuries and today can be assessed using highly accurate tools that cost only a few dollars. Remove any one of these (and no doubt many other) pieces of economic architecture, and the economy would cease to function.
Therefore it is not possible even in principle to determine which portion of economic production is produced by labor, or capital, or raw materials, or whatever else, since each one is a but-for requirement necessary for the whole operation. It is the entire system in concert that produces the social product. In other words, it doesn’t actually matter where the social product comes from exactly. Because of this, everyone deserves the most equal possible share of the social product, not only because we are all equal citizens, but because virtually everyone participates in its creation in some way, at some point.
I find this vastly more plausible—and far less complicated—than the labor theory of value, or neoliberals’ marginal productivity theory, or anything else. Of course economic production depends on workers, able leadership, raw materials, machinery, built-up technology, and who knows what other stuff. In addition, it underlines a point that I think is rather underappreciated on the American left: The functioning of economic systems of production, whether capitalist or otherwise, is extremely dependent on complex technical details, above all government policy frameworks….
[TW: Thorstein Veblen emphasized the cooperative social nature of industrial production, especially the use of tools, in a number of his books, including The Instinct of Workmanship and the State of the Industrial Arts (1914), and The Engineers and the Price System (1919).]
Government deficits create private wealth
[Funding the Future, via Naked Capitalism 08-05-2024]
Surveillance police state
Andy Worthington [Close Guantanamo, via Naked Capitalism 08-04-2024]
[Consortium News, via Naked Capitalism 08-06-2024]
FBI raids NY home of ex-UN weapons inspector Scott Ritter
Matt Troutman and Vaughn Golden, August 7, 2024 [New York Post]
American Stasi: Tulsi Gabbard Confirms “Quiet Skies” Nightmare
Matt Taibbi, Racket News, via Naked Capitalism 08-09-2024]
Information age dystopia
FEC Should Reverse Dangerous Decision To Not Regulate Deepfakes
Today, Axios reported that the Federal Election Commission (FEC) will not propose any new rules for the use of AI-generated deepfakes in political advertising this year. The news comes over a year after Public Citizen petitioned the agency for rulemaking on the issue.
Robert Weissman, co-president of Public Citizen, released the following statement in response:
“A decision by the FEC not to regulate political deepfakes would be a shameful abrogation of its responsibilities. The idea expressed by FEC Chair Sean Cooksey that the FEC should wait for deceptive fraud to occur and study its consequences before acting to prevent the fraud is preposterous.
If you’ve ever shopped for car or health insurance or compared credit-card rates, there’s a good chance the form you filled out didn’t actually belong to a big insurance company or bank.
You likely fed your data to a “lead generator,” part of a sprawling, opaque network of companies and individuals that rake in billions of dollars a year by selling your data to the highest bidder. Sometimes that bidder is a major bank or insurer, but more often it’s an intermediary who, thanks to America’s loose privacy rules, can sell it to any number of buyers. That often leads to consumers receiving dozens or even hundreds of unwanted calls and solicitations.
For years, the FCC resisted calls from consumer advocates to strengthen its rules around lead generation, but last year, that changed. The agency released new guidelines on what marketing companies are allowed to do with the data they collect, placing liability on not only lead buyers but the generators themselves.
As the industry braces for the rules to take effect next year, Americans could soon see a precipitous drop in the number of calls and spam texts they get….
Collapse of independent news media
Why the Decline of Local Media Could Be a Security Risk
[RAND, via Naked Capitalism 08-09-2024]
Climate and environmental crises
Oil companies sold the public on a fake climate solution — and swindled taxpayers out of billions: The fossil fuel industry’s carbon capture bamboozle, explained.
[Vox, via The Big Picture 08-04-2024]
Major energy companies conceal 47% of biodiversity damage, according to research
[Phys.org, via Naked Capitalism 08-05-2024]
The Hidden Ways Extreme Heat Disrupts Infrastructure
[Scientific American, via Naked Capitalism 08-05-2024]
‘Astonishing’ Antarctica heat wave sends temperatures 50 degrees above normal
[CNN, via Naked Capitalism 08-05-2024]
Global Climate Change Impact on Crops Expected Within 10 Years, NASA Study Finds
[NAS, via Naked Capitalism 08-06-2024]
Paul R: “Potentially 24% less corn and 17% more wheat by 2030.
Creating new economic potential - science and technology
Cheaper, Faster, Cleaner: Scientists Have Developed the World’s First Anode-Free Sodium Battery
[SciTech Daily, via Naked Capitalism 08-07-2024]
Democrats' political malpractice
David Dayen, August 9, 2024 [The American Prospect]
...But there are clearer examples of questionable careers among Harris’s advisers. To wit, she is leaning on Tony West, her brother-in-law, for advice and counsel in the campaign. West is “a major force behind Ms. Harris’s campaign and its record-setting fund-raising,” serving as a “critical point of contact for business leaders and major donors,” according to The New York Times. He was also part of the vetting team that questioned vice-presidential candidates.
West took a leave of absence from being the chief legal officer of Uber to take a role as an unpaid adviser to the campaign. Uber is part of a coalition currently suing the Department of Labor over its independent contractor rule. That makes one of Harris’s top aides a key part of a lawsuit against the Biden-Harris administration. West also was a major part of the $200 million effort to purchase a special labor law in California at the ballot, after lawmakers attempted to make rideshare drivers and other gig-economy workers employees. (Harris opposed that ballot measure, for what it’s worth.)
That’s not great—but it’s not the only reason why people should be concerned about Tony West’s role, not just in this campaign but in a potential Harris administration, as has been rumored. West’s experience in government should be the concerning factor.
In fact, none of that investigation ever happened. The task force, months after its establishment, had “no office, no phones, no staff and no executive director.” In a congressional hearing, one of the other co-chairs admitted that the working group was mainly a repository for existing cases, and a vehicle for issuing press releases. No subpoenas were ever issued, and leading figures at the banks, like then-Citigroup chair Robert Rubin, were never brought in for an interview.
And needless to say, nobody went to jail….
[X-Twitter, via Naked Capitalism 08-10-2024]
Matt Stoller
@matthewstoller
Maryland Governor Wes Moore - who is a close ally of Harris - was asked on CNBC about what Kamala Harris will do about antitrust/regulation. And his answer is that she is going to change it from the Biden framework towards a more friendly partnership between government and big business.
“Squad” Rep. Cori Bush loses her Democratic primary
[Politico, via Naked Capitalism 08-07-2024]
Conservative / Libertarian / (anti)Republican Drive to Civil War
'They're Going to Lay the Groundwork,' Trump Once Said of Group Leading Project 2025
Jake Johnson, August 08, 2024 [CommonDreams]
Republican nominee Donald Trump's claims that he "knows nothing about" Project 2025 and has "no idea who is in charge" of it were further exposed as lies Wednesday as The Washington Postrevealed that the former president shared a private jet flight with the leader of the Heritage Foundation, the think tank spearheading the far-right agenda.
The Post published a photograph of Trump posing on the 2022 flight with Heritage Foundation president Kevin Roberts, who has faced national scrutiny in recent weeks over his role in crafting Project 2025 and his comments suggesting bloodshed could follow if the left refuses to capitulate to "the second American revolution" led by the former president….
Are White Nationalists Behind The GOP’s Worker Surveillance Push?
Helen Santoro, August 8, 2024 [The Lever]
A nonprofit with hate group ties is using a major GOP apparatus to push a controversial employee verification system to crush immigration.
Freedom from Dissent: The independence of public universities is under attack
Shilpa Jindia, August 2, 2024 [The Baffler, via Naked Capitalism 08-04-2024]
A short primer for understanding conservatives
Conservatives sometimes say confusing things. I’m here to help with a short, and sadly incomplete, primer on conserva-speak. (Kevin Drum)
Kevin Drum [via The Big Picture 08-04-2024]
Inside the powerful Peter Thiel network that anointed JD Vance
[Washington Post, via The Big Picture 08-10-2024]
A small influential network of right-wing techies orchestrated Vance’s rise in Silicon Valley — and then the GOP. Now the industry stands to gain if he wins the White House.
Checking Your Voter Registration Right Now Is Essential!
Joyce Vance, August 10, 2024
...Once you’ve been moved to inactive status, you can be purged from the rolls entirely if you don’t vote in the next set number of elections. In other words, being moved to inactive status puts you on track to be purged from the voter rolls. The Supreme Court approved of measures designed to “prune” supposedly inactive voters off of the rolls in a 2018 Ohio case, Husted v. A. Phillip Randolph Institute. Inactive voters can still vote, but they have to jump through the extra hoops of voting a provisional ballot, in some places you have to show up by the end of the week with additional proof of your status, which frequently results in votes not being counted. And as you might expect, the problems tend to be most acute in states that have measures in place to suppress
So smart voters have to know how to stay registered.
There is a step you can take in advance of voting in federal elections to make sure your registration status is active. And it’s easy. You can go online and check your registration status. Most states have a website, and many have their own apps. There are also sites you can use, like vote.gov or IWillVote.com, that let voters nationwide check their status. And here’s the best part, the National Motor Voter Act says you can’t be removed from the voter rolls closer than 90 days out from the election. Were past that point now, so, if you check your status and you’re an active voter, your state can’t change that before the election. Take a screenshot, keep it handy, and if there are any issues, you’ve got proof that you’re an active voter. If there’s any question at the polls, you’ve got documentation.
The (anti)Federalist Society assault on the Constitution
After Chevron: Political Economy and the Future of the Administrative State
[LPE Project, via Naked Capitalism 08-05-2024]
Shaun Richman, August 10, 2024 [The New York Review]
The Supreme Court’s recent Starbucks decision is the latest episode in a long history of judicial hostility toward labor.
Civic republicanism
What's Wrong and Right with Project 2025
Thomas Neuburger, August 06, 2024 [God's Spies]
...There’s nothing new in this. It’s standard fare for any administration that wants to shake things up, either left or right (by “left” I mean the actual left). If you don’t like your predatory neoliberalism liberally sauced with Christo-fascist ideology and toxic misogyny, of course it must be fought.
But it must be fought, not for its method of change, but for its ideas.
Consider the 2009 Obama administration. Progressives wanted him to thoroughly clean house, fire the Bush-Cheney embeds or left-behinds. He didn’t. There was no Project 2009, to our great loss….
So No, the civil service should be preserved, contrary to what Project 2025 envisions, but…
Yes, the recalcitrants and left-behinds must be replaced if any new administration is to accomplish its goals.
When You Win, You Must Rule
If you win power and don’t use it, you’ve lost. Unless your goal was to change nothing (see Biden in 2020), you’ve failed in your goal.Ian Welsh provides a stark reminder of this in several posts appropriate to this subject. In one he says (correctly, in my view):
You can’t play a game by the rules if the other side is determined to cheat and thinks you shouldn’t even be on the field.
The piece is entitled, “Why The Left Keeps Losing and What They Must Do to Win” ….
The lesson here is, when the actual left gains power, it must use it. That’s what every good change-agent movement attempts to do.
In that sense, the method of Project 2025 is not at all new; it’s the goals that are so repugnant. If we reject those methods in trying to accomplish our goals, we reject our own future win.
The Law of Purges
This leads to an obvious corollary, the law of purges: Purge your enemies from power or they’ll fight you forever.As Welsh points out in another piece aimed at giving advice to incoming left-wing Latin American administrations (emphasis mine):
“Let’s not dance around. Your first step will be to break the power of the current economic and political elites who are not willing to convincingly join you–or, at least, let you rule without trying to sabotage you.
“You must do this all at once. When it happens, it has to happen to everyone to whom it is going to happen. This is Machiavelli’s dictum, and he was right. After it has happened, those who weren’t broken know they’re safe as long as they don’t get in your way.
If the breaking keeps going on and on, everyone who still has something to lose (and still, thus, has power) lives in fear. They must destroy you before you destroy them.”
His example is a North American one, our wished-for Barack Obama in 2009, he of the “Yes, we can.” Here’s Welsh’s expansion of that basic idea:
“Let’s give a concrete example. Assume Obama was really a left-winger. He gets into power in 2009, and he really wants to change things. He needs to take out the financial elite: Wall Street and the big banks.
“They’ve handed him the opportunity. Here’s part of how he does it: He declares all the banks involved in the sub-prime fraud racket (all of the big ones and most of the small ones) conspiracies under RICO.
“He then says that all the individual executives’ money are proceeds derived from crime and confiscates it. (This is 100 percent legal under laws as they exist). He charges them, and they are forced to use public defenders.
“They are now powerless. This is the second law of purges: Anyone you damage, you must destroy utterly. If you take away half their power, and leave them half, they will hate you forever and use their remaining power to destroy you.
“Leave them whole, or destroy them. The financial executives would have been destroyed, and win or lose in the courts, the next five to ten years of their lives would be consumed by personal legal nightmares.”
If Obama were an actual leftist, he would have done all this … and we would have applauded him for it, despite the Machiavellian character of the means.
If Sanders had won in 2016, he hinted he would have cleaned house … and we would have applauded him for it. In fact, his core supporters would have been miserable had he not had the courage to use what power he had won….
[TW: At the time Obama squandered the historic opportunity to transform the American economy by failing to destroy Wall Street, there were a number of people, Ian Welsh, Stirling Newberry, and myself included, who warned that Obama’s failure would result in the inevitable tide of economic populism turning toward the authoritarian right, instead of the progressive left.
[Ron Suskind, in his excellent 2011 book, Confidence Men: Wall Street, Washington and the Education of a President, powerfully described the cultural transformations in political economy that has occurred under “free market" ideology, and which Obama had failed to comprehend. Suskind discusses the hearings by Massachusetts Congressman Ed Markey, into the Wall Street scandals of the time, the late 1980s:
As for the “type of behavior” that “led us to our crisis,” Markey could cite the moment he saw the culture shift, like some geological event.
It was in 1988, after the 1987 stock market crash, and the prosecution of insider trading and various securities frauds was well underway. “Something very basic, very fundamental, had changed on the Street, and we on the subcommittee couldn’t put our finger on what was different,” Markey recalled. So they decided to bring in an expert. Dennis Levine, one of the major Wall Streeters convicted of securities fraud, was serving time in New Jersey. Markey’s staff got in touch with the Bureau of Prisons and arranged to have him transported for an afternoon to a sub-committee conference room. Levine, who couldn’t be forced to cooperate, was asked what the subcommittee could do to persuade him to come. He said he’d do it for a McDonald’s Big Mac, fries, and a chocolate shake. Once a self-proclaimed “Master of the Universe,” those were the things he’d found he missed the most. Soon enough, Levine, in prison blues, was eating his Big Mac and describing how the rewards on Wall Street had suddenly grown so large, and the opportunities for self-dealing and misuse of insider information—so-called informational advantage—so widespread, that it would only get worse. “He said, we were ‘just at the very start,”‘ Markey recalled, “and that they’d figured out how to turn the investing of others people’s money into a kind of game, where they were constantly changing the rules in a way that was subtly fraudulent, against the basic principles of fairness or fiduciary duty. He said that with this much money to be made for doing very little, it was worth the risk of getting caught doing what you had to do, but that they were working on lowering that risk as well, with lawyers working overtime to make sure many of these activities were legal, or at least hard to prosecute.”
After an hour, Markey said that he and the committee members had heard enough and asked the felon what might be done. Levine, sucking on his shake, thought this over for a minute or two and then said, “You need to send out a slew of indictments, all at once, and at three p.m. on a sunny day, have Federal Marshals perp-walk three hundred Wall Street executives out of their offices in handcuffs and out on the street, with lots of cameras rolling. Everyone else would say, ‘If that happened to me, my mother would be so ashamed.’
“Levine was saying we should take a dramatic stand on principle to reverse the direction we were moving in . . . before things progressed any further and the problems got even bigger,” Markey said. “Culture is destiny and the only way you create real change is by acting in a way that changes the culture.”
[Suskind then recalls the difference in how President Obama treated Wall Street executives, and Rick Wagioner, CEO of General Motors, and makes what I consider the most trenchant criticism of Obama’s Presidency.
Presidents are among the few mortals who are sometimes graced with chances to change a culture. Throughout a windswept March [2009], the country had been working to dislodge some of the era’s prevailing certainties about markets being efficient, about people—economically, at least—getting what they deserve, along with the concomitant belief that financial barons are brilliant and indispensable, and manufacturing executives are dinosaurs.
With the eyes of the country on him, Barack Obama ended the month by shielding Wall Street executives against these winds of cultural change, while he fired a man who had effectively managed four hundred thousand workers in their making of seven million cars a year—without ever bothering to meet him.
[I argued at the time that it was not because Obama was malicious, but because Obama has been thoroughly “educated” — more accurately, "indoctrinated” — in the ideology and tenets of conservative / neoliberal political economy. Similarly, the CEOs and top executives of Boeing, Intel. and every other USA corporation that has basically self-destructed over the past few decades — are not malicious. They are merely products of the USA university system churning out elites thoroughly indoctrinated in conservative / neoliberal political economy.
[In March 2014, Ian Welsh posted Economic Theories are Prescriptive, not Descriptive,
Modern economics is famous for believing in the rational economic actor, almost entirely concerned with his or her own utility. (In normal parlance, a selfish bastard). This is a model of how people behave, but it’s an oversimplification of human nature so severe as to be wrong. Most people don’t behave like that most of the time: they cooperate, and they share and most of them don’t free ride.
[However, Welsh noted, there are people who fully embody the selfish bastard model of the rational economic actor. Individuals who have had formal economics training tend, more more than other people, to act more in accordance with the theoretical model. Then Welsh points to two other groups, which leads him to make a crucial point.
Who else behaves that way? Senior executives in large corporations and rich people. The people who control the economy, act as economic theory says they should.
Be clear, all elites in all places and times have not acted this way... It is not even the case that executives in the 50s and 60s acted this way. When John Kenneth Galbraith investigated why executives back then didn’t pay themselves more, he came to the conclusion that they didn’t because they believed, as a group, that doing so would be wrong, and they took out anyone who tried to pay themselves more than they considered appropriate.
So why do executives act that way now?
Ideas lead culture and policy produces the outcomes one would expect. Thatcher and Reagan and intellectuals like Dawkins made being greedy and taking whatever you could get, screw the hindmost, acceptable... We were told this is how humans are; and this is how humans should be; and that doing this would produce better outcomes for everyone. This was legislated into law: the removal of protections from financial abuse put in place in the 30s, the lowering of top tax rates; the emphasis on consumption taxes over wealth taxes, the dropping of corporate tax rates; the “free trade” movement which allowed elites to avoid taxes and make goods in sweatshop nations.
The previous generation, those who experienced the Great Depression as adults, and who remembered the 20s and what the last great unregulated economy had wrought, were old, and out of power. Those who believed; who knew; that economic success had nothing to do with any sort of virtue, were gone. The new generations accepted a premise they desperately wanted to believe: that they could be selfish assholes, acting in their own interest and not caring about other people, and that it would all work out for the best.
[What we must understand, Welsh argued, is that we do not have to unquestioningly accept the current ideology, which legitimizes and enables the rich and their greed. Welsh concludes:
Ethics are socially bound, and are created and recreated by each generation. To be sure, they are related to the means of production and the incentive system; but we create the incentive system. The executives of the 50s and 60s, by and large, chose something different than the executives of the 80s through today.
What has been chosen, can be changed. If we want an economy which works for everyone, we can have it.
But we have to choose it, and we have convince or crush those who would chose otherwise. And for those who wince at the word crush, remember, inequality means death and illness for many people. The crushing has already happened, the class war occurred, and the rich won. And the casualties are piling up.
[Welsh's post elicited some negative comments, which are quite interesting, in a clinical sort of way. One commenter inveighed that it was absurd to argue that "Reagan and Thatcher invented greed." But that is not what Welsh wrote at all; he wrote that Reagan and Thatcher had "made... greed... acceptable." This is the fundamental shift in social norms I have attempted to highlight when I discuss how capitalism supplanted civic republicanism as the predominant theory of political economy. The comments seemed to me to be from people who are desperately looking for some piddling difference to argue over, to save themselves from either 1) having to deal with the implications of the need to crush the plutocrats and their apologists, or 2) having to accept that the only alternative to neoliberalism they were allowed to learn about — Marxism — simply does not work. Which is why I promote Thorstein Veblen's analysis rather than Marx's.
[The issue we must stay focused on is: How does a society create a system of incentives and punishments that steer individual desires and actions in a direction that comports with the general welfare?
[The genius of the USA Constitution, in my considered opinion, was that it began with an understanding that human nature is deeply flawed, but tried to create a framework of national government in which those flaws are checked and balanced, while at the same time promoting and protecting the general welfare. Only by conceiving of society and its economy as an interdependent system – as political economy – can you begin to identify and attack economic problems of misbehavior; and, begin to understand the depth of the hostility and enmity of conservative thinking to the USA form of government. Because conservatives and libertarians openly argue that the very idea of the general welfare is the slippery slope to statist totalitarianism.
[We call the period leading to the American Revolution the Enlightenment. And reading the works of such as Franklin, and Adams, and Hamilton is pure joy. What they write is enlightening, and it is uplifting. But to read Milton Friedman, von Hayek, von Mises, and Ayn Rand, is depressing, horribly depressing. There is no nobility of the human spirit in their world view. There is no concern for the welfare of other people. There is only base and disgusting selfishness, made slightly more presentable by renaming it self-interest. Madison, in his classic Federalist discussion of factions, argues forthrightly that factions arise from selfish economic interests, and then adds the important prescription — always ignored by conservatives — that the most important role of government is to regulate and restrain those interests. The conservative insistence that the markets must have priority over the state is a direct frontal attack on the American system of government, and its constitutional enthronement of the general welfare.
[Rich people have historically always been a major problem, in all societies. The sacred texts of Judaism and Christianity are quite clear on this issue: "it is easier for a camel to pass through the eye a needle than for a rich man to enter the kingdom of heaven."
[The classic writers on civic republicanism were quite clear on this issue as well, and carefully explained the social and psychological processes through which the rich come to think of themselves as superior and begin to pose a growing threat to the well being of others and society at large. These processes basically involve the rich surrounding themselves with sycophants and enablers.
[17th century English republican theorist James Harrington wrote:
“Equality of estates causeth equality of power, and equality of power is the liberty not only of the commonwealth, but of every man… Where there is inequality of estates there is inequality of power, and where there is inequality of power, there can be no commonwealth.”
[This was in The Commonwealth of Oceana, published in 1656, seven years after the execution of Charles I, as an exposition of an ideal constitution for a republic. Scholars of the political thought of the American Revolution and early republic, such as Bernard Bailyn and Gordon Wood, have shown that Harrington's ideas were much more important than John Locke’s at the beginning of the American experiment. Locke’s ideas became dominant as the ideologues and proponents of capitalism [and slavery, be it noted] sought to erode the moral constraints of republicanism, pushing a preeminent regard for private property over any concern for the General Welfare. ]
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