Week-end Wrap – Political Economy – February 02, 2025
By Tony Wikrent
Strategic Political Economy
David Dayen, January 27, 2025 [The American Prospect]
GRAPH — The Road to $2 Trillion
Elon Musk wants to cut government spending. But the waste in the system goes to elites like him. Here’s a better way to bring down deficits….
This article should come with a warning label: We should not cancel the equivalent of 7 percent in annual GDP all at once, which would trigger a deep recession. But identifying the real sources of inefficiency in our government—the trillions funneled to elites—can preserve resources for programs to help those in need….
Ramaswamy has called for a 75 percent personnel reduction across federal agencies. This would hardly save anything. According to the Congressional Budget Office, there are about 2.3 million federal employees with total compensation in 2023 of $271 billion; that’s 4 percent of the U.S. budget. Federal employees were roughly 4.3 percent of all workers in 1960 and 1.4 percent today. As a result, we’ve seen an explosion in contractors undertaking tasks that government workers used to perform. Nearly three times as much money is spent on contractors than federal workers.
Slashing the federal workforce, almost two-thirds of which is at the Departments of Defense, Veterans Affairs, and Homeland Security, would likely lead to more expensive contractors, and also increase the $247 billion in improper payments the government makes every year....
Physicians for a National Health Program (PNHP), which advocates for a single-payer system, noticed even greater savings potential in the MedPAC report. Traditional Medicare sets a “benchmark” for spending on the average beneficiary. Several studies have shown that MA plans spend between 11 and 14 percent less, because they cherry-pick healthier patients, even after accounting for upcoding to make them look sicker. Increasing denials of care allows MA plans to rake in even more profit.
In all, PNHP found that MA plans charge the government at rates $140 billion per year higher than traditional Medicare….
The government also spends massive amounts of money on prescription drugs. In 2022, U.S. drug prices were 178 percent higher than in 33 other industrialized nations, according to a report funded by the Department of Health and Human Services. Some of these drugs are sold at 20 to 30 times the cost of production and distribution; pharmaceutical profit margins are significantly higher than private-sector counterparts…. Using federal statutes to seize certain drug patents and distribute them to generic manufacturers that charge less would also save billions. But more structurally, we could overhaul the monopoly patent system that gives drug companies exclusive rights to charge whatever they want for a set period….
Of course, moving to a single-payer system wholesale could yield over half a trillion dollars in savings from administrative expenses alone, per the People’s Policy Project. But even if the nation isn’t ready for single-payer, limiting private-sector profit-taking and boosting public provision comes to roughly $490 billion per year….
In 2021, the Congressional Budget Office offered a range of options to take the Pentagon budget down by $1 trillion over a decade. Gledhill estimated significant savings from service contracts, which make up close to half of all Pentagon obligations. Many are redundant or could be done more cheaply in-house. Other possibilities include unwinding ineffective contract orders and bringing in other firms to drive down costs through a competitive bidding process….
Putting a number on Pentagon savings is difficult, but using CBO’s conservative figures would net $100 billion per year. Some people I talked to think that could double. Let’s split the difference and say $150 billion a year.
The kind of procurement reform in service contracts and equipment orders needed at DOD could be replicated across the government, insourcing operations and ensuring that taxpayers aren’t routinely ripped off. The Project on Government Oversight has found that federal employees are almost uniformly less expensive than contractors. The Organization for Economic Co-Operation and Development estimates that one-fifth of government procurement globally is siphoned away through bid-rigging. In the U.S., that translates to $150 billion a year. As much as $521 billion a year is lost due to fraud, according to the Government Accountability Office. As Matt Stoller has written, management consultants with a tendency to do nothing but add bloat cost the government $70 billion in 2023.
GRAPH — The Road to $2 Trillion
…. the tax gap, the distance between tax liability in a given year and actual taxes paid. In 2022, the last year studied, the IRS put this number at an astonishing $606 billion per year. This gap is concentrated among the top 1 percent, who evade $163 billion per year, according to a 2021 Treasury Department report….
...A one-percentage-point increase in the corporate tax rate equals about $13.5 billion per year in revenue. Setting a 25 percent tax rate through stock returns would lead to almost no difference between the nominal and the effective tax rate. For the past couple of years, the effective corporate tax rate has been around 20 percent. Add five points and you’re up to $65 billion per year….
...There are several other major tax expenditures; the Tax Policy Center lists the top 13 as costing between $1.12 trillion and $1.38 trillion per year, depending on the estimate. It’s a dizzying amount of money, funneled mostly from working people to elites….
Trump and Elon Musk Just Pulled Off Another Purge—and It’s a Scary One
Greg Sargent, January 31, 2025 [The New Republic]
...Why is Musk’s DOGE trying to access payment systems inside the Treasury Department? It’s not clear what relevance this would have to his ostensible role, which is to search for savings and inefficiencies in government, not to directly influence whether previously authorized government obligations are honored.
Another question: Did Trump directly authorize Musk to do this, or did he not? Either answer is bad. If Trump did, he may be authorizing an unelected billionaire to exert unprecedented control over the internal workings of government payment systems. If he did not, then Musk may be going rogue to an even greater extent than we thought….
Former officials I spoke with were at a loss to explain why Musk would want such access. They noted that while we don’t yet know Musk’s motive, the move could potentially give DOGE the power to turn off all kinds of government payments in a targeted way. They said we now must establish if Musk is seeking to carry out what Trump tried via his federal funding freeze: Turn off government payments previously authorized by Congress. The White House rescinded the freeze after a national outcry, but Trump’s spokesperson vowed the hunt for spending to halt will continue. The former officials are asking: Is this Treasury power grab a way to execute that?
“Anybody who would have access to these systems is in a position to turn off funding selectively,” said Michael Linden, a former OMB official who is now director of Families Over Billionaires, a group fighting Trump’s tax cuts for the rich. “The only reason Musk wants to get himself in there must be because he wants to turn some things off.”
Trump: We’re Forging A New Political Majority That’s Shattering The New Deal Coalition
[RealClearPolitics, via Naked Capitalism Water Cooler 01-28-2025]
President Donald Trump speaks at the House Republican Issues Conference at the Trump National Doral Miami Resort: “Together, we’re forging a new political majority that’s shattering and replacing Franklin Roosevelt’s New Deal coalition, which dominated American politics for over 100 years…. If we do our job over the next 21 months, not only will House Republicans be reelected and expand our majority in 2026, we will cement a national governing coalition that will preserve American freedom for generations to come. There has never been anything like what’s happened in politics in the last few years.”
The Anti-Oligarchy Constitution: Reconstructing the Economic Foundations of American Democracy
Joseph Fishkin, and William E. Forbath (2024, Harvard University Press)
Chapter 7, “CONSTITUTIONAL COUNTERREVOLUTION AND THE LEGACIES OF A TRUNCATED NEW DEAL”
p. 319
Three of the principal actors in the New Deal drama-the nation's business elites, their Republican allies in Congress, and the leaders of the Southern wing of the Democratic Party-would have laughed out Inud at the notion of a constitutional settlement in the early 1940s. None had made peace with the idea of plenary national authority over the economy. All agreed that labor's new statutory and constitutional free-doms were counterfeit. They saw the Court as simply a judicial wing of the Roosevelt White House, and they embarked on a militant crusade to restore the old order. The crusade only gathered momentum as New Dealers tried to complete their project of building a democratic political economy-even beginning….
P. 324
As the New Dealers looked ahead to peacetime, they aspired to make their innovations permanent 25 They hoped to carry on with this public/private style of economic governance: a peacetime "mixed economy," committed to full employment and replete with democratic controls over economic decision-making to assure that the erstwhile oligarchs never again enjoyed such lopsided authority over the political economy and ordinary Americans' share of wealth, power, and opportunity. 26
A good illustration of this robust constitutional discourse emanating from the wartime executive branch came in the National Resources Planning Board's 1942 Annual Report. It began with a declaration of rights, a classic Rooseveltian Living Constitution proclamation: We must reinterpret "our provisions for human freedom.... [T]o the old freedoms we must add new freedoms and restate our objectives in modern terms."28 Roosevelt's speechwriter (and editor of his Public Papers), Samuel Rosenman, described how Roosevelt himself grabbed hold of the 1942 report and set about simplifying and "dramatiz[ing]" its meld of social and economic rights, structural reforms, and policy innovations for his widely published 1944 State of the Union address.
p. 327
… as the 1936 election approached, and business opposition to the New Deal intensified, Roosevelt grew more attentive to two crucial constituencies: the insurgent industrial unions of the CIO and the Black voters of the large cities of the North. As these groups gained importance in his 1936 re-election bid. Roosevelt's social and economic rights talk grew more robust and universal-and the Southerners attacked. Governor Eugene Talmadge of Georgia convened a "Grass Roots Convention" to "uphold the Constitution" against "Negroes, the New Deal and Karl Marx."
p. 328
Just as FDR had cemented his alliance with industrial labor and redoubled his attacks on corporate "tyrants," and just as executive redoch support for upstart Blacks and poor whites was mounting in branc hitherto had been secure provinces of "States' rights" and "local self-government," judicial safeguards against all these dangers seemed to crumble. In the fall of 1937, after the Court handed down West Coast Hotel Co. v. Parrish and Jones & Laughlin, who could say that the Court's steadfastness in upholding the old Constitution was still to be counted on?44 For all these reasons, the New Deal's foes in Congress were galvanized. A group of conservative Southern Democrats in the Senate met with like-minded Republican senators to consider a more formal alliance against the New Deal. 45
The counterrevolution contemplated party realignment in the name of the old Constitution, and its leaders drafted a "statement of principles and objectives, "46 which became known as the "Conservative Manifesto." If the Court was giving up the constitutional battle against economic radicalism and centralized government, these conservatives would carry it on. The manifesto proclaimed the conservative Democrats' and Re-publicans' shared devotion to the Constitution of states' rights, liberty of contract, and the property rights of the owners of capital." The attempt at forming a new conservative party foundered, but the coalition and its role as bulwark for the old Constitution held firm.
The leaders of the new coalition declaimed against "Roosevelt constitutional tyranny.”….
Ryan Cooper January 29, 2025 [The American Prospect]
These are not bright guys, and things got out of hand….
In the initial order, it was not specified directly whether Medicaid was subject to the funding freeze, but as a grant program, it seemed to qualify. Sure enough, Sen. Ron Wyden (D-OR) reported on Tuesday that all states had lost access to the federal Medicaid reimbursement portal. By later that day, a White House
Stirling S Newberry, January 15, 2025
Part one is here. Looking backwards at the President Election and Forward to a New Epoch
Part Two is here. We must tell them that a new dawn is breaking.
It is always darkest before the dawn because the sun has yet to rise and the night is so very cold. This is true in politics where the forces of reaction play on the fears and terrors of losing the past. It is true that the past is slipping away from us because we can no longer ignore the costs that it imposes. We can only look to President Buchanan and President Hoover as the nadir before dawn’s early light….
There are two areas of capitalism where the amount of profit extracted by the producers exceeds the benefit of the consumers. In this graph above that is the shortfall of lifespan of the United States versus other countries who are able to spend less and get more. All of the developed countries guarantee healthcare by one means or another through the government. This is because the advantage of capitalization is the ability to pick the winners and the losers. However, from the government’s perspective and the nation’s perspective, everybody must be covered. This defeats the advantage of private capital: it wants to pick the winners and not ensure the losers. But in this case, the losers die. But further, if there is no advantage to private capital the private capital still must make a profit. Which means that it charges more for less utility to the consumers. In other words, the advantage of private capital is to degrade the nation’s health, which does not work.
Part Three is here. A New Engine for a New Economy
...there is another task that needs to be done: there are gaps in economics, political science, history, and law that need to be addressed within the academic world. Some of these require major reforms to the way institutions are made, but many of them address the inconsistencies that the Orthodox view of social science has adopted and have not checked them for consistency. One of these problems is the level of profitability that a company or other collection of economic interests generates. Throughout the 20th century and the first part of the 21st century, the level of carbon dioxide and other gases that warm the planet has been ignored as a source of losses on the company’s profit statement. Now has been seen to be a faulty definition of the word profit. This means that the entire history of companies has to be restated with the global warming gases factored in….
Part Four is here. These are our people and we should realize that their problems are ours.
One issue that needs to be talked about is that the majority of the Democratic party is female. There are certain key issues that the Democratic Party must stand firm on because they affect the lives of so many of our core constituents. We must look at the issue of life because it is essential. Women have a more complex relationship with life than men do: because women bear life and have inmate differences in a number of ways. This goes onwards to the rest of their lives in many cases.
First, because it is women who bring life into the world. And this causes a collision between what is biologically essential and what is culturally essential. This means that there needs to be a person who decides whether this life, in these circumstances, with these chances should be brought into the world. The Democratic Party that that decision should be made by the potential mother. Not the father, and certainly not the state.
This is in direct contradiction to what the Republican party believes: they leave that the father and the state override whatever it is the potential mother believes. There are very few issues where there is right and wrong but this is one of them: either you believe that the primary responsibility is with the potential mother or you believe that she is chattel under the control of others....
Part Five is here. Bring the Political Equilibrium Back to Balance
...This is why The New Republic, for example, over and over again stresses how wonderful the economy is doing, because, for their group of readers, it is. However, their group. of readers is not the working class or the bottom half of the middle class. And for those groups of people, it is not working. This is because this is a fallacy that is older than our country: the difference between. average and median. The two are not the same. This is because the average is the total wealth divided by the number of people while the median is the level of income represented by the 50th percentile. The reason that these two are not the same is because the absurdly wealthy, and even the merely wealthy, take up most of the income. That means that the average is skewed upwards….
The enemy of your enemy may not be your friend
Cory Doctorow [via God's Spies, January 30, 2025
Every merger that is being teed up now for the coming four years is illegal under the antitrust laws that we stopped enforcing in the Reagan era…
This will create a trap for people who hate Trump but don't pay close attention to anticorruption cases. It's a trap that Trump sprung successfully in his first term, when he lashed out at the "intelligence community" – the brutal, corrupt, vicious, lawless American spy agencies that are the sworn enemies of working people and the struggle for justice at home and abroad – and American liberals decided that the enemy of their enemy was their friend […]
Over the next four years, Trump will use antitrust and other corruption-taming regulations to selectively punish crooked companies. He won't target them because they're crooked: he'll target them because they aren't sufficiently loyal to him.
[But] If you let your hatred of Trump blind you to the crookedness of these companies, you lose and Trump wins. [bolded emphasis mine]
There’s a lot more on this tendency here (David Graeber alert). More later perhaps.
Top AI Investor Says Goal Is to Crash Human Wages
[Futurism, via Naked Capitalism Water Cooler 01-28-2025]
“In a recent tweet, [Marc Andreessen,] the American billionaire investor casually proclaimed that AI must ‘crash’ everyone’s wages before it can deliver us an economic utopia — one that’ll definitely happen, and certainly not create a permanent underclass of have-nots…. ‘A world in which human wages crash from AI — logically, necessarily — is a world in which productivity growth goes through the roof, and prices for goods and services crash to near zero,’ Andreessen wrote. ‘Consumer cornucopia. Everything you need and want for pennies.’ So fret not, lowly laborer: you may be destined for financial ruin, but paradise is right around the corner. Pinky promise.” \
Gaza / Palestine / Israel
Trump’s Nightmare Plan for Gaza
[The Intercept, January 31, 2025]
Oligarchy
Why are the oligarchs so grossly aggressive? Here are four answers
[Today’s ETC, via Naked Capitalism 02-01-2025]
The carnage of mainstream neoliberal economics
The Wage Crisis of 2025: 73% of Workers Struggle Beyond Basic Living Expenses
[Resume Now, via Naked Capitalism Water Cooler 01-27-2025]
Self-reported, but in a way that’s the point: “A recent survey by Resume Now reveals that financial stress has reached a breaking point for American workers, with 73% of employees struggling to afford anything beyond their basic living expenses.” And:
- 12% often cannot afford basic living expenses, and 24% struggle to cover essentials.
- Only 6% are able to save for the future.
- One-third of workers say their salary has not kept up with inflation.
- 55% think their salary is lower than it should be.
- 29% have moved to lower-cost areas or housing to navigate financial strain.
- 3 in 10 have taken on debt to cover living expenses.
- Only 4% of workers feel truly valued in their role.
DeepSeek just proved Lina Khan right
[DropSite, via Naked Capitalism 01-28-2025]
Trumpillnomics
Coffee prices hit record high after Trump stand-off with Colombia
[Telegraph, via Naked Capitalism 02-01-2025]
Greenland is the New Congo of the 21st Century
[The Wire, via Naked Capitalism 01-31-2025]
...Long before the 2010 mining boom, Greenland’s economy was rooted in its mineral wealth. The island’s unique geology, teeming with rare metals and minerals, had long piqued the interest of outsiders. From 1854 to 1962, the Ivittuut mine extracted cryolite, a mineral indispensable to aluminium production, securing Greenland’s strategic importance during World War II. During this time, the United States, recognizing the vital role of Greenland’s resources, took control of its defence. Greenland’s mines yielded copper, zinc, lead, coal, and uranium for nearly a century. Yet by 1990, with resources dwindling, the industry that had once driven the island’s economy faltered and collapsed.
The world’s gaze has since turned to Greenland’s rare earth elements (REEs) – 17 elusive metals that power the pulse of modern technology. These elements are the lifeblood of electronics, hybrid vehicles, and renewable energy infrastructure. As global demand for these materials spiralled, the spectre of supply interruptions loomed ever larger. For two decades, China reigned unchallenged as the dominant supplier of REEs, controlling over 90% of global production. When environmental concerns forced the United States to abandon its own production, China’s monopolistic hold on vital resources became even more pronounced….
They’re not capitalists — they’re predatory criminals
Cory Doctorow [Pluralistic, via Naked Capitalism Water Cooler 01-29-2025]
“Unions don’t owe their existence to labor laws that protect organizing activities. Rather, labor laws exist because once-illegal unions were formed in the teeth of violent suppression, and those unions demanded – and got – labor law. Bosses have hated unions since the start, and they’ve really hated laws protecting workers. Dress this up in whatever self-serving rationale you want – ‘the freedom to contract,’ or ‘meritocracy’ – it all cashes out to this: when workers bargain collectively, value that would otherwise go to investors and executives goes to the workers. I’m not just talking about wages here, either. If an employer is forced – by a union, or by a labor law that only exists because of union militancy – to operate a safe workplace, they have to spend money on things like fire suppression, PPE, and paid breaks to avoid repetitive strain injuries. In the absence of some force that corrals bosses into providing these safety measures, they can use that money to pay themselves, and externalize the cost of on-the-job injuries to their workers.”
The first days of Boss Politics Antitrust
Cory Doctorow [Pluralistic, via Naked Capitalism 01-26-2025]
"Boss politics" are a feature of corrupt societies. When a society is dominated by self-dealing, corrupt institutions, strongman leaders can seize control by appealing to the public's fury and desperation. Then, the boss can selectively punish corrupt entities that oppose him, and since everyone is corrupt, these will be valid prosecutions….
Trump is a classic boss politician – that's what people mean when they call him "transactional": he doesn't act out of principle, he acts out of self interest. The people who give him the most get the most back from him. This means that Biden's brightest legacy – militant antitrust enforcement of a type not seen in generations – is now going to become "boss antitrust," where genuine monopolists are attacked under antitrust law, but only if they oppose Trump:
https://pluralistic.net/2024/11/12/the-enemy-of-your-enemy/#is-your-enemy….
The Federal Trade Commission has lost its Biden-era chair, the extraordinary Lina Khan, who did more in four years than all her predecessors did in the preceding forty years, combined. The new chair is Republican Andrew Ferguson, whose first day on the job was a bloodbath, in which he killed off multiple, significant actions aimed at producing real, material benefits from Americans who are being absolutely screwed by corporations:
https://prospect.org/politics/2025-01-24-executive-action-reaction-day-4/
Ferguson killed off a public comment process on "surveillance pricing," where companies spy on you and then reprice their goods based on their estimation of how desperate you are:
https://pluralistic.net/2025/01/11/socialism-for-the-wealthy/#rugged-individualism-for-the-poor
Subprime Mortgages Destroyed Them. Who Paid the Price?
[NYT, via Naked Capitalism 01-31-2025]
In “The Killing Fields of East New York,” Stacy Horn profiles one 1990s white-collar crime spree and the wreckage it left behind….
Horn tells the story of how a network of bankers, mortgage brokers and federal housing officials in the 1970s conspired to commit “the perfect financial crime.” It went like this: In cities across the country, brokers and other speculators descended on places like East New York, the Brooklyn neighborhood on which Horn centers her tale. They persuaded middle-class families to sell their homes at cut-rate prices by stoking fears about the imminent arrival of minorities. Other times they bought decrepit properties and performed superficial repairs. Then they resold the homes at big profits — sometimes five times as much as they’d just paid — to low-income Black and Latino families….
Vanessa Ogle, February 1, 2025 [The New York Review]
...Today the most important transit hub for dirty gold is Dubai, the tax and regulatory paradise in the United Arab Emirates (UAE). Gold traders in the Emirates are known to wave through incoming shipments with questionable origins, and they’re quick to furnish gold with a new identity in one of roughly ten operational refineries. From there the metal usually travels for rectification to Switzerland, another tax haven, where between 60 and 70 percent of the world’s gold is processed. Illegal miners also set up shell com
panies with obscure ownership arrangements in places like the British Virgin Islands, the Cayman Islands, and Panama to launder profits by commingling dirty mining revenues with legitimate business earnings. Gold in this respect is both a vehicle for disguising illicit financial flows and a product of illicit activity itself.
London has historically been the world’s most important gold trading hub. At the height of the classical gold standard in the second half of the nineteenth century—during which major European economies pegged their currencies to gold reserves—Britain was the world’s foremost economic power, and the Bank of England dominanted international monetary policy. (It helped that several of the world’s known gold reserves were situated in the British Empire, above all in South Africa and Australia.) ….
Restoring balance to the economy
California bill would let insurers sue oil companies to avoid raising rates
[eenews, via Naked Capitalism 02-01-2025]
Confirmed: Unions Squandered the Biden Years
Hamilton Nolan, January 28, 2025 [How Things Work]
In constant fear of being crushed by hostile Republican laws, unions have poured billions of dollars into, mostly, getting Democrats elected at the national level. And Joe Biden was as good as this game has ever gotten for them. We just lived through four years of the fruits of this approach. It is not theoretical. We can now evaluate it on its merits….
The real question is: Has achieving electoral political power translated into the growth of union power?… Today, we can definitively say the answer is ‘no.’…
In 2024, union density in America fell to 9.9% of the work force. In 1983, union density was 20.1%, meaning that organized labor is now less than half as powerful as it was during the Reagan presidency…. In 2020, union density was 10.8%. That means that over the course of the most pro-union presidency in my lifetime, not only did union density not rise—it declined into single digits. We are losing….
[Organizing] is the responsibility of existing unions and the broader labor movement. That means that unions must spend every dollar they possibly can on new organizing. They have not done this. They did not do it, during the course of the Biden administration. They still are not doing it….
Dark Times Are Coming -The labor movement faces its worst environment in a century.
Hamilton Nolan, January 31, 2025 [How Things Work]
...Republican anti-union presidential administrations have always weaponized the NLRB against organized labor by naming anti-union bastards to run it. Then Democrats put more pro-union people on it, and so it goes. Still, even anti-union NLRBs still, to some extent, are bound by the framework of labor law. They can get less enthusiastic about enforcing it, and their general counsels can undertake efforts to make regulations more anti-union, but the process has always been somewhat deliberate and characterized by this legalistic back-and-forth.
Something different is happening now. Corporate America is in the midst of a concerted legal effort to destroy the NLRA altogether and have the NLRB declared unconstitutional. Trump has, in a blatantly illegal move, fired a Democratic NLRB member, denying the board a quorum. This effectively allows employers to escape labor law enforcement indefinitely….
All of these political and legal realities raise the related question: Are unions ready for this? The answer is “no.” An unfortunate but probably inevitable truth is that big unions that have operated in the framework of the NLRA and the NLRB for 90 years are built from top to bottom to work in that framework. There is no reason to believe that the majority of unions will nimbly adapt to a world in which they cannot file ULPs and they cannot get the NLRB to schedule union elections and they cannot get their contracts enforced in a timely manner. Most unions today simply are not built for these harsh realities….
There are two basic takeaways from what is happening here, for the labor movement, and for workers in general. The first is that the social bargain that has governed labor relations for a century is gone. I mean, we can wait and see if the Supreme Court will save it, but that’s a bad bet, and in the meantime the smart move is to assume that things will turn out poorly. The sooner that unions wrap their minds around the reality of operating in an environment in which the NLRB will not enforce labor law on their behalf, the better.
The second takeaway is also the answer to the question, “Well how do we make employers do anything, then?” And that is: more strikes. Strikes are the one fundamental labor power that the government and Elon Musk and the Supreme Court put together cannot take away….
[TW: I am dismayed that Nolan believes “Strikes are the one fundamental labor power that the government and Elon Musk and the Supreme Court put together cannot take away.” This has been a key objective of the plutocrats who have funded and nurtured movement conservatism over the past eight decades. Trump and Musk will simply ignore whatever the law actually is and will order paramilitary attacks on striking workers. Whether it’s the actual US military deployed in stark violation of the Posse Comitatus Act, or “January 6” brownshirt thugs like the recently pardoned Proud Boys, lots of people are going to die. This what we need to be preparing for.
[One of Trump’s first acts was to declare that the United States is being “invaded” at the southern border. Commentators and bloggers have not yet begin to discuss the implications of this declaration. Does it remove the Posse Comitatus Act restriction on the deployment of the US military on USA soil? I’ll bet that is exactly the intent of Trump and whoever wrote it. ]
Disrupting mainstream economics
Caitlin Zaloom [The New York Review, February 13, 2025 issue]
Reviewed:
The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism
by Clara E. MatteiUniversity of Chicago Press, 452 pp., $30.00; $22.50 (paper)Thinking Like an Economist: How Efficiency Replaced Equality in US Public Policy
by Elizabeth Popp BermanPrinceton University Press, 329 pp., $24.95 (paper)Economics in America: An Immigrant Economist Explores the Land of Inequality
by Angus DeatonPrinceton University Press, 271 pp., $17.95 (paper)...The decades before [World War One] were marked by extreme income inequality and the expansion of brutal factory work, with only minimal protections for women and children and none for men. World War I, which heaved tens of millions of working men onto battlefields across continents and eventually left more than 20 million dead and maimed, tore apart any remaining faith in the fairness of laissez-faire capitalism. In May 1917 near Glasgow, 200,000 metalworkers struck for more than three weeks, occupying the city’s streets. At the end of that summer employees walked out of factories across Turin, then looted stores and claimed control of entire districts. Others fought with pens and megaphones for social programs that would soften the cruelty of low pay. On both the Continent and in Britain workers formed councils to sustain the strikes and protests. They saw nothing inevitable about exploitation.
Mattei argues that the principles of austerity were invented in large part to quash these upheavals. In order to wage the war, Britain and Italy had each borrowed enormous sums, making these governments highly motivated to stabilize their economies and increase investors’ confidence, which would keep the loans flowing. To do this, the British government bypassed democratic channels, pursuing their policies through the Treasury and the Bank of England. There, they deferred to economic experts, especially the economist Ralph Hawtrey, and fought inflation—which they blamed on the spending of “unruly” consumers (read: workers)—by throttling the buying power of all but the wealthiest. They also placed every social support on the chopping block—even a bread subsidy that helped British citizens keep food on the table—while levying taxes that disproportionately took from those who could least spare it.
In Italy, Parliament slashed pensions, unemployment and disability insurance, and supports for veterans and their families. As in Britain, it enacted a host of economic policies that squeezed wages and forced workers back into factories on owners’ terms. For the finance minister Alberto de’ Stefani, a celebrated economist and prominent fascist, abandoning the vulnerable was essential for recovery. “I need to place on the national agenda the conscious renunciation of the rights gained by the crippled, the invalids, the soldiers,” he instructed lawmakers. “These renunciations constitute for our soul a sacred sacrifice: austerity.” Austerity required victims, just as the war had….
Mattei’s early-twentieth-century economists argued that this economic order was the only one that could be successful because its social hierarchies resulted not from the decisions of men in conference rooms but from natural selection. “It seems obvious,” said Maffeo Pantaleoni, the main engineer of fascist austerity, “that the classes with lower incomes are significantly deficient in qualities with respect to others. So that this deficiency [deficienza] is the cause of the lower income and not the lower income the cause of the deficiency.”
The lower classes, he claimed, made their scarce self-control clear in excessive spending on alcohol, “sweets, chocolate, and biscuits,” and various other “pleasures.” Mattei observes that across Britain and fascist Italy, economists agreed that business owners were, as Pantaleoni put it, “men of talent and personality whom selection makes into entrepreneurs.”
The opinions of the early twentieth century persist today, Mattei argues, in policy approaches that proceed under a mantle of disinterest and technical impartiality but rely on similar assumptions about the natural origin of social hierarchies and the inherent virtue of the successful. Deaton agrees that these beliefs persist within the discipline, now often disguised as faith in meritocracy….
conomic power is difficult to perceive because it has become the very language of governance, the sociologist Elizabeth Popp Berman contends. Considering the US in the 1960s through the 1980s, her book Thinking Like an Economist: How Efficiency Replaced Equality in US Public Policy focuses not on economists’ theories but on the much wider spread of an “economic style of reasoning.” This way of thinking assumes that social ills such as failing health systems, environmental hazards, and corporate concentration can be avoided or alleviated by increasing competition among producers, expanding choices for consumers, and nudging both groups with incentives. This rhetoric of market efficiency insulates economic policies from political debate, Berman argues, and avoids messy conversations about decisions that favor the interests of certain races, classes, and geographic areas over others.
How did economic efficiency become an “insider consensus”? During the mid-twentieth century, Berman argues, many policymakers valued goals beyond efficiency—for example, protecting small businesses because they stabilized civic life in small towns. But in the 1960s and 1970s, Democratic reformers such as Presidents John F. Kennedy, Lyndon Johnson, and Jimmy Carter decided to advance a “scientific” approach to governing, particularly around policies related to transportation, health care, poverty alleviation, and environmental protection. They sought experts to supply “neutral, technocratic answers” to questions about whether to break up large companies or to pursue a negative income tax….
Climate and environmental crises
Trump rescinded a half-century of environmental rules. Here’s what that could mean
[Vox, via Naked Capitalism 01-31-2025]
Trump’s EPA Just Deleted Climate Change
Christopher D Cook, January 30, 2025 [The Lever]
On Jan. 27, the Environmental Protection Agency quietly removed all information about climate change from its homepage and other prominent areas of its website, burying it deep in sections that are harder to find…. The new erasure came two days before the U.S. Senate confirmed Trump’s nominee to lead the agency: former Rep. Lee Zeldin (R-N.Y.), who has pledged to slash EPA funding, roll back environmental protections, and promote more fossil fuel production.
Democrats' political malpractice
Our Revolution, January, 30 2025 [CommonDreams]
Trump’s transactional regime
Lawsuit claims systems behind OPM governmentwide email blast are illegal, insecure
[FedScoop, via Naked Capitalism Water Cooler 01-29-2025]
“A lawsuit filed in federal court Monday alleges that the Office of Personnel Management set up an on-premise server to conduct last week’s mass email blast to federal employees and store information it received in response without doing a privacy impact assessment on the system as required by law. Filed by two anonymous federal employees in the U.S. District Court for the District of Columbia, the class-action lawsuit calls for OPM to stop the use of the system until the agency can show that it’s lawfully conducted a privacy assessment. The two employees accuse OPM officials of deploying the new server — which is said to be ‘retaining information about every employee of the U.S. Executive Branch’ or potentially doing so through systems linked to it — in a ‘rapid’ manner without building proper security measures into it or assessing the privacy impacts as required by the E-Government Act of 2002. On Friday, OPM sent a mass email to employees across the federal government — though not every federal employee received it, including one of the plaintiffs in the lawsuit — to test ‘a new distribution and response list,’ asking recipients to reply ‘yes.’ Over the weekend, federal employees received another test ‘to confirm that an email can be sent and replied to by all government employees.’ Some agency and department heads gave guidance to their employees that the emails from OPM could be trusted. The complaint goes on to say: ‘OPM has not conducted a PIA for this unknown email server or any system which collects or maintains Personally Identifiable Information (‘PII’) obtained from its use,’ nor has a chief information officer or equivalent agency official signed off on an assessment. Finally, such an assessment would need to be made publicly available for review. ‘OPM’s failure to take these steps constitutes agency action unlawfully withheld or unreasonably delayed in violation of 5 U.S.C. § 706(1),’ the lawsuit states. ‘Plaintiffs are being materially harmed by this inaction because they are being denied information about how these systems — which will be rich in PII about every employee of the U.S. Executive Branch — are being designed and used.’ As a measure of relief, the plaintiffs call for an injunction of the systems involved in the matter until OPM conducts the required privacy assessment.”
The President’s Illegal Executive Orders: Why Trump has to be removed
Stirling S Newberry, January 29, 2025 [The Absurd Version]
...However, this means that because they are is no normal path to opposing his illegal Executive Orders, that means that extraordinary measures must be taken. Since we must alter and amend our election procedures so that clearly unconstitutional and illegal means are not used again, we are on a long road. There is no doubt that individuals will die or be damaged by the president and his administration. This is unfortunate but it is also the truth….
Conservative / Libertarian / (anti)Republican Drive to Civil War
The Trump White House Wants A Court Challenge Over Frozen Funds
[HuffingtonPost, via Naked Capitalism Water Cooler 01-30-2025]
“The Trump administration’s federal government funding freeze instituted Monday and apparently rescinded Wednesday appears to be a part of the White House’s official policy to get courts to hand President Donald Trump the power to pick and choose which congressionally authorized funding he will spend, according to a confidential document obtained by HuffPost. The confidential Office of Management and Budget document outlining “regulatory misalignment” calls on Trump to issue executive orders blocking the release of appropriated funds in order to provoke a court challenge over the president’s power to impound such funds…. [The] confusing series of events and conflicting statements and actions [over the OMB memo] may be a fiasco, but the confidential OMB document makes clear that the administration intends on fomenting this very court challenge over the president’s power to not spend congressionally authorized funds.”
Senior U.S. official to exit after rift with Musk allies over payment system
[Washington Post, via Naked Capitalism Water Cooler 01-31-2025]
“David A. Lebryk, who served in nonpolitical roles at Treasury for several decades, announced his retirement Friday in an email to colleagues obtained by The Washington Post. President Donald Trump named Lebryk as acting secretary upon taking office last week. Lebryk had a dispute with Musk’s surrogates over access to the payment system the U.S. government uses to disburse trillions of dollars every year, the people said. The exact nature of the disagreement was not immediately clear, they said.” That’s too bad. Why? “Typically only a small number of career officials control Treasury’s payment systems. Run by the Bureau of the Fiscal Service, the sensitive systems control the flow of more than $6 trillion annually to households, businesses and more nationwide. Tens, if not hundreds, of millions of people across the country rely on the systems, which are responsible for distributing Social Security and Medicare benefits, salaries for federal personnel, payments to government contractors and grant recipients and tax refunds, among tens of thousands of other functions…. ‘This is a mechanical job — they pay Social Security benefits, they pay vendors, whatever. It’s not one where there’s a role for nonmechanical things, at least from the career standpoint. Your whole job is to pay the bills as they’re due,’ [Mark Mazur, who served in senior treasury roles during the Obama and Biden administrations] said. ‘It’s never been used in a way to execute a partisan agenda. … You have to really put bad intentions in place for that to be the case.'” • Stephanie Kelton pulls out the key quote:
Trump’s Worst Instincts Are His Own— & Roy Cohn’s— But His Worst Austerity Ideas Are Russ Vought’s
Howie Klein, February 01, 2025 [downwithtyranny.com]
On Thursday, Branko Marcetic, came to the same conclusion Schumer had: Vought is the pits and was behind this week’s botched attempt to halt all federal grants, “which sent panic spasming through the country as schools, government programs, and charitable organizations ceased to function... Vought’s Trump-aligned think tank, the Center for Renewing America (CRA), has repeatedly advanced the view that the president can pause federally mandated funding or even refuse to spend it through ‘impoundment.’ Meanwhile, both the Project 2025 policy guide and the CRA’s mock budget are replete with proposals to cut or overhaul federal grants and make sure they aren’t funding ‘woke’ programs and groups.”….
“The [OMB] director must view his job as the best, most comprehensive approximation of the President’s mind,” wrote Vought, and so “ensure that OMB has sufficient visibility into the deep caverns of agency decision-making.” ….For Trump’s purposes, that means making sure power is put as much as possible in the hands of political appointees plucked from Trump’s movement, and taken out of the hands of career civil servants who act on “the wishes of the sprawling ‘good government’ management community in and outside of government.”
Unscrubbed PDFs Reveal Authors of Trump Memos Are Project 2025 Heavy Hitters
Brett Wilkins, January 28, 2025 [CommonDreams]
"Trump has denied or downplayed links to Project 2025," said the researcher who exposed the memos' authors. "These documents show that implementation is well underway."
Presidential Bid to Take Over Federal Spending Is Four Years in the Making
David Dayen, January 30, 2025 [The American Prospect]
On the last day of Trump’s first term, Office of Management and Budget officials asserted that presidents can alter spending they don’t like. They’re returning to OMB to finish the job….
As I noted on Tuesday, Trump’s MAGA allies have been spoiling for this fight. Trump himself said in June 2023 that he would “do everything I can to challenge the Impoundment Control Act in court” and then “use the president’s long-recognized impoundment power to squeeze the bloated federal bureaucracy for massive savings.”
But the intention to challenge 50 years of statutory and judicial precedent on impoundment actually goes back to the last day of Trump’s first term. And it was co-authored by Mark Paoletta, a close confidant of Clarence Thomas….
Russell Vought, the nominee for director of OMB, and Paoletta, who has just been installed as its general counsel, were also in those positions at the end of Trump’s first term. In November 2020, the House Budget Committee, then chaired by Rep. John Yarmuth (D-KY), issued a report on what it called OMB’s “systemic abuse of executive spending authority” going back to 2018. Trump tried to use executive orders to block funding from “anarchist” state and local jurisdictions, and tried to shift budgeting authority to political appointees. GAO repeatedly determined that Vought and Paoletta violated the impoundment rules; Trump was even impeached for illegally impounding Ukraine funding to force the country to investigate Joe Biden.
Vought and Paoletta responded to this report on the very last full day of Trump’s first term—January 19, 2021—with a 14-page letter asserting their views on the federal budget process. In the letter, they insist that everything they did was lawful, that presidents have deferred and rescinded spending going back to Thomas Jefferson, that Congress’s power of the purse “infringes upon the President’s own constitutional authorities,” and that the ICA “is unworkable in practice and should be significantly reformed or repealed.”….
But while many Supreme Court precedents back up Congress’s power of the purse and its mechanisms for presidential impoundment, it’s likely coming back again, as Vought and Paoletta test the boundaries of executive power. And that’s where Paoletta’s close friendship with Justice Thomas kicks in.
As assistant counsel to George H.W. Bush, Paoletta assisted with Thomas’s confirmation back in the early 1990s. He co-edited a recent Thomas autobiography, and he represented Thomas’s wife Ginni in disputes involving the January 6th Committee. Paoletta even appears in the infamous painting of Thomas holding court at mega-donor Harlan Crow’s luxury resort.
Paoletta is a prime mover in the bid for legalizing impoundment. Thomas will be hearing the case. This raises the question of whether that should occur. It’s worth noting that the most vociferous defender of Thomas being able to hear January 6th or other cases during the documented ethical lapses of the past few years was Mark Paoletta, who called the charges “baseless” and requests to recuse “double standards.”...
Trump Ousts Top Labor Board Leaders Who Backed Broader Worker Rights
[Bloomberg, via Naked Capitalism Water Cooler 01-28-2025]
“Donald Trump is forcing out top leaders of the US labor board, ushering in a swift reboot of workplace law enforcement while testing the limits of presidential authority. Jennifer Abruzzo, the general counsel of the National Labor Relations Board, said she was fired via email late on Monday. Gwynne Wilcox, who was one of the labor board’s two Democratic members, said she was ousted, too. ‘As the first Black woman board member, I brought a unique perspective that I believe will be lost upon my unprecedented and illegal removal,’ Wilcox said in a statement. ‘I will be pursuing all legal avenues to challenge my removal, which violates long-standing Supreme Court precedent.'” Nice to see that the Democrats have some sort of SWAT Team to rush to her defense. Oh, wait…. More: “Firing Wilcox was less expected, particularly given that there were already enough vacant seats on the board for Trump to install a Republican majority in the coming months.”
Dan Kaufman, January 19, 2025 [The New York Review]
ICE Raids Are an Escalation of Our Long-Simmering De Facto Cold Civil War
[Daring Fireball, via Naked Capitalism 01-26-2025]
Tennessee GOP passes immigration law to criminalize elected officials’ votes
[The Tennessean, via Naked Capitalism 01-31-2025]
Emma Janssen, January 27, 2025 [The American Prospect]
From the church to the schoolyard to the legislature, Americans are making plans to protect themselves and their loved ones from deportation.
How Years of GOP Voter Suppression Helped Trump Win in 2024
Robert C. Koehler, February 01, 2025 [Common Dreams]
Numerous efforts over the years, at numerous governmental levels, have worked to play games with the electoral process and interfere with—and outright eliminate—certain voters’ right to vote.
Resistance
NY attorney general sues Trump administration as state gets locked out of Medicaid
[Gothamist, via Naked Capitalism 01-29-2025]
Declassified CIA Guide to Sabotaging Fascism Is Suddenly Viral
[404 Media, via Naked Capitalism Water Cooler 01-30-2025]
“A declassified World War II-era government guide to ‘simple sabotage’ is currently one of the most popular open source books on the internet. The book, called ‘Simple Sabotage Field Manual,’ was declassified in 2008 by the CIA and ‘describes ways to train normal people to be purposefully annoying telephone operators, dysfunctional train conductors, befuddling middle managers, blundering factory workers, unruly movie theater patrons, and so on. In other words, teaching people to do their jobs badly.’ Over the last week, the guide has surged to become the 5th-most-accessed book on Project Gutenberg, an open source repository of free and public domain ebooks.”
The (anti)Federalist Society assault on the Constitution
[JustSecurity, via Naked Capitalism Water Cooler 01-28-2025]
“On issue after issue, Trump claims that the Constitution directly empowers him to take certain actions, without any authorization by Congress and in the face of contrary statutes. The idea that the Constitution directly confers certain powers on the President is, by itself, neither new nor controversial. Yet in many of these orders, Trump is not simply asserting an inherent constitutional power to act. He is claiming a power to act in ways that clearly conflict with existing federal statutes. That is, he is asserting a constitutional prerogative to ignore, disregard, or even openly violate federal laws that are inconsistent with his policy agenda. Assertions of that general sort have been made in the past, and it is clear that the Constitution does confer on the President some exclusive powers that Congress may not regulate or restrict. Examples include the President’s power to veto proposed legislation, to grant pardons, to remove high-ranking executive officers he has appointed, and to recognize foreign governments. But these are the exceptions, not the rule. As Supreme Court Justice Amy Coney Barrett put it in her concurring opinion in the Trump immunity case, ‘the Constitution does not vest every exercise of executive power in the President’s sole discretion. … Congress has concurrent authority over many Government functions, and it may sometimes use that authority to regulate the President’s official conduct.’ Chief Justice John Roberts’ majority opinion in that case was sloppy and ill-reasoned in many respects, but neither he nor anyone else on the Court disagreed with Justice Barrett on this basic point. Indeed, Roberts relied heavily on Justice Robert Jackson’s concurring opinion in Youngstown Sheet and Tube Co. v. Sawyer, the steel seizure case. There, Jackson famously emphasized that presidential assertions of power to contravene federal law ‘must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system.’ Trump’s recent executive orders would completely upend that equilibrium. He appears to be asserting a roving authority to override or simply ignore binding federal legislation whenever it interferes with his policy aims — regardless of whether the context is one of foreign affairs or national emergency. It is as though Trump is reprising his claim from his 2016 nomination acceptance speech that he alone can address the vital needs of the nation, but extending it to say that he alone has a mandate to suspend the law in pursuit of his goals.”
Curtis Yarvin Concedes That “The NPR Class Are Not Evil People; They’re Human Beings”
Howie Klein, January 25, 2025 [downwithtyranny.com]
...And speaking of the NY Times, last week, David Marchese sat down for a conversation with there 51-year old Yarvin ….
So why is democracy so bad? It’s not even that democracy is bad; it’s just that it’s very weak. And the fact that it’s very weak is easily seen by the fact that very unpopular policies like mass immigration persist despite strong majorities being against them. So the question of “Is democracy good or bad?” is, I think, a secondary question to “Is it what we actually have?” When you say to a New York Times reader, “Democracy is bad,” they’re a little bit shocked. But when you say to them, “Politics is bad” or even “Populism is bad,” they’re like, Of course, these are horrible things. So when you want to say democracy is not a good system of government, just bridge that immediately to saying populism is not a good system of government, and then you’ll be like, Yes, of course, actually policy and laws should be set by wise experts and people in the courts and lawyers and professors. Then you’ll realize that what you’re actually endorsing is aristocracy rather than democracy….
Do you think it’s better that women got the vote? I don’t believe in voting at all.
Do you vote? No. Voting basically enables you to feel like you have a certain status. “What does this power mean to you?” is really the most important question. I think that what it means to most people today is that it makes them feel relevant. It makes them feel like they matter. There’s something deeply illusory about that sense of mattering that goes up against the important question of: We need a government that is actually good and that actually works, and we don’t have one.
The solution that you propose has to do with, as we’ve said multiple times, installing a monarch, a C.E.O. figure. Why do you have such faith in the ability of C.E.O.s? Most start-ups fail. We can all point to C.E.O.s who have been ineffective. And putting that aside, a C.E.O., or “dictator,” is more likely to think of citizens as pure economic units, rather than living, breathing human beings who want to flourish in their lives. So why are you so confident that a C.E.O. would be the kind of leader who could bring about better lives for people? It seems like such a simplistic way of thinking. It’s not a simplistic way of thinking, and having worked inside the salt mines where C.E.O.s do their CEOing, and having been a C.E.O. myself, I think I have a better sense of it than most people. If you took any of the Fortune 500 C.E.O.s, just pick one at random and put him or her in charge of Washington. I think you’d get something much, much better than what’s there. It doesn’t have to be Elon Musk….
[TW: the problem with Yarvin’s idea of CEO rule has been known for all of human history: “power corrupts and absolute power corrupts absolutely.” The solution of civic republicanism is to build governing institutions in which power is corralled by the rule of law. Yarvin, Musk, Trump, et. al are now moving quickly to dismantle those governing institutions as much as possible. We shall now see — and suffer — if the warnings of the history of the human use of political and economic power are correct. ]
Donald Trump’s Second Term Begins With a Crash
Ryan Cooper, January 30, 2025 [The American Prospect]
If the president wanted to cause airline disasters, it’s hard to imagine what he would have done differently….
On January 20, the day Trump was inaugurated, the administrator of the Federal Aviation Administration (FAA), Michael Whitaker, resigned. Since then, the agency has been run by acting administrator Chris Rocheleau….
...shadow president Elon Musk—who, let me emphasize, is a foreign-born billionaire who has not been elected or appointed to any post—had been demanding Whitaker be sacked for months, because the FAA had been attempting to regulate his company SpaceX. The agency had conducted investigations (when, for instance, a SpaceX rocket blew up near the ground), delayed launches, and imposed some fines—though the amounts were pitiful, just $633,009 when the company allegedly broke two promises about safety protocols and fuel use….
