Week-end Wrap – Political Economy – January 12, 2025
By Tony Wikrent
Strategic Political Economy
The Lost Memos That Predicted This Era
David Sirota, January 07, 2025 [The Lever]
THE PLUTONOMY MEMOS: As we welcome in 2025, it’s worth noting that this year is the 20th anniversary of the release of the so-called Plutonomy Memos — a series of Nostradamus-like reports that predicted much of the world we live in today.
The memos written in 2005 and 2006 came from Citigroup, and they effectively admit that Wall Street and its neoliberal political allies were creating a feudal American economy. These documents — which you can find here, here, and here — survive on economist Brad DeLong’s blog and in a few old media mentions, book references, and tweets but barely exist on the internet (Citigroup reportedly worked to get them memory-holed off the Internet).
“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take,” the Citigroup analysts wrote. “There are the rest, the ‘non-rich,’ the multitudinous many, but only accounting for surprisingly small bites of the national pie.”
Underscoring the accuracy of these predictions, a new UBS report finds that billionaires’ total wealth has more than doubled over the past ten years to $14 trillion.
Dougald Lamont, January 09, 2025
Their plan? Figure out how to make even more money from making the rich richer, and the poor poorer. Spoiler: Citigroup flamed out three years later….
Now, if you’re looking for some kind of morality in this tale, you should know Citigroup and its leaders managed to create the conditions for the 2008 Global Financial Crisis. They had lobbied for the 1990s-era repeal of the New Deal Era Glass-Steagal Act, which kept commercial banks and investment banks separate.
The “Plutonomy” is a study in Icarean Hubris. In the Global Financial Crisis, Citigroup crashed and received more in bailout money than it was worth;
“The U.S. Treasury extended a $45-billion credit line, and gave it a guarantee for $300 billion in "trouble assets" junk mortgages whose market price had fallen by 60 to 80 percent. Thic actions saved the bank and its bondholders, but Citigroup stock plunged belov a dollar by March 2009 as its equity value fell by more than 90 percent, to just $20 billion compared to $244 billion in 2006….
“Little of this note should tally with conventional thinking. Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1) the world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy?….
4) In a plutonomy there is no such animal as "the U.S. consumer" or "the UK consumer", or indeed the "Russian consumer". There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take.
There are the rest, the "non-rich", the multitudinous many, but only accounting for surprisingly small bites of the national pie.
Global power shift
Collapsing Empire: RIP ‘Overt Operations’
Kit Klarenburg, January 05, 2025 [Global Delinquents]
In recent months, a remarkable development in the Empire’s decline has gone almost entirely unnoticed. The National Endowment for Democracy’s grant database has been removed from the web. Until recently, a searchable interface allowed visitors to view detailed records of Washington-funded NGOs, civil society groups, and media projects in particular countries - covering most of the world - the sums involved, and entities responsible for delivering these initiatives. This resource has now inexplicably vanished, and with it, enormous amounts of incontrovertible, self-incriminating evidence of destructive US skullduggery abroad.
Take for example NED grant records for Georgia, the site of recent repeated colour revolution efforts, at the forefront of which were Endowment-bankrolled organisations. While still accessible via internet archives, they were deleted during the summer. Today, visitors to associated URLs are redirected to a brief entry simply titled “Eurasia”. The accompanying text describes in very broad terms the Endowment’s aims regionally and the total being spent, but the crucial questions of where and on what aren’t clarified….
Gaza / Palestine / Israel
The dream of a free Middle East is coming true
[The Telegraph, via Naked Capitalism 01-06-2025]
Israel built an ‘AI factory’ for war. It unleashed it in Gaza.
[Washington Post, via Naked Capitalism 01-06-2025]
Chris Hedges: Genocide — The New Normal
[Consortium News, 01-08-2025]
New York Times rejects Quaker ad for calling Israel’s actions “genocide”
[American Friends Service Committee, via Naked Capitalism 01-09-2025]
Oligarchy
Larry Johnson [via Naked Capitalism 01-11-2025]
[TW: a very interesting interpretation of the Deep State, which sees its origins in privatization of military and intelligence functions under Clinton, rather the assassinations and coups run by the CIA in the 1950s and 1960s.]
[Persuasion, via Naked Capitalism 01-11-2025]
...I worked in Corporate America for twenty years, and I can tell you with absolute certainty, [CEOs] are, for the most part, not people we should be revering. These people are not well. They are, quite often, batshit crazy. Most people who’ve suffered working for these folks know as I do that the C in “C Suite” stands for cray-cray. Or cuckoo. Or, increasingly, criminal. It is not that they have no moral compass, it’s that they do not want one. A moral compass is bad for business.
A biotech report from Goldman Sachs posed the question: “Is Curing Patients A Sustainable Business Model?” After all, they continue, one-shot therapies might be medically attractive, but they “offer a very different outlook with regard to recurring revenue versus chronic therapies.”
These are not healthy people.
A recent Senate probe revealed that Amazon—which earned $500 billion in 2023—manipulates injury data to make their warehouses appear safer, rather than spending on safer warehouses.
These people are not well….
What accounts for this? Here’s a clue:
Mark Zuckerberg, asked who he admires most, named Augustus. Caesar Augustus, who came to power by fomenting civil war and forming a military junta, who granted himself lifelong immunity from all crimes, who effectively made himself Censor so he could manipulate votes, who filled the Senate with loyalists who wouldn’t question him and who took control of the mint so he could control the production of money. What’s wrong, Mark, was Gandhi too obvious a choice? Jane Goodall not doing it for you? Jesus too blue-collar?
These are our heroes?
These are our role models?
These people may be better off in padded rooms than corner offices. That was the finding, incidentally, in a 2006 study of CEOs: fully 12% exhibited psychopathic traits, meaning psychopathy is somewhere around 12 times more common among senior management than among the general population, and about the same rate found in prisons….
The Truth About Musk, From His Biographer
[Proof, via The Big Picture January 05, 2025]
A viral Bluesky thread introduced tens of thousands around the world to a first glimpse of a forthcoming biography of Elon Musk. Here—in a single essay—is some of what the world just learned….
Understand first that Musk doesn’t believe in or care about education. Not at all. Not even a little bit. To the extent Musk has any core values, a dubious proposition indeed, this would be one: education of any kind is a waste of time. It’s one reason Musk now appears to be functionally media illiterate, functionally digitally illiterate, and lacking even the most basic knowledge about the world: certainly most of the knowledge we would expect from a high school graduate with even a nominal intellectual curiosity.
Instead of education—self- or otherwise—Elon believes in making money, and usually with the ideas of others and almost exclusively their labor. His aim is to use his dodgy skills as a hype man (like those of Donald Trump, more predicated on the idea that a sucker is born every minute than the flawed notion that he is especially persuasive or charismatic) to turn some money into more money, more money into obscene money, and obscene money into historic wealth that’s not just generational but history-making….
After he graduated from high school as an indifferent student, Elon first flamed out at University of Pretoria—a school he now tries to elide from his biography altogether—largely because he didn’t want to be in South Africa at all. He had contempt for his home country, not for the reasons you might hope (apartheid) but because he believed it inadequately resourced to provide for the enrichment of an already ultra-rich young white man. His dad has since made clear that it’s a family view that the reason South Africa couldn’t provide for the Musk boys in the way they demanded was because it had an emerging highly politically engaged Black population and emerging Black political class in the 1980s that would, in the 1990s, become a Black government Errol believed illegitimate and (yes, due to race) incompetent.
The carnage of mainstream neoliberal economics
Monopoly Round-Up: Big Ag vs Make America Healthy Again
Matt Stoller [BIG, via Naked Capitalism 01-06-2025]
Predatory finance
The Great Crypto Crash: Trump will usher in a speculative frenzy.
[The Atlantic, via Naked Capitalism 01-08-2025]
Having written about bitcoin for more than a decade—and having covered the last financial crisis and its long hangover—I have some sense of what might cause that boom and bust. Crypto assets tend to be exceedingly volatile, much more so than real estate, commodities, stocks, and bonds. Egged on by Washington, more Americans will invest in crypto. Prices will go up as cash floods in. Individuals and institutions will get wiped out when prices drop, as they inevitably will.The experts I spoke with did not counter that narrative. But if that’s all that happens, they told me, the United States and the world should count themselves lucky. The danger is not just that crypto-friendly regulation will expose millions of Americans to scams and volatility. The danger is that it will lead to an increase in leverage across the whole of the financial system. It will foster opacity, making it harder for investors to determine the riskiness of and assign prices to financial products. And it will do so at the same time as the Trump administration cuts regulations and regulators.
Restoring balance to the economy
The Labor Movement Just Notched Two Big Wins” [The New Republic].
Timothy Noah, January 10, 2025 [The New Republic]
One so seldom has the opportunity to report good news about labor unions that when two good things happen in the space of 24 hours that’s a triumph. The first is a rebuke to the incoming Trump administration. The second is an unacknowledged favor to it (but, more importantly, to the nation as well).
Item One is that the Service Employees International Union, reversing a bad decision 20 years ago to disaffiliate with the AFL-CIO, is rejoining the labor federation. Even Andy Stern, who as SEIU president took the union out of the AFL-CIO and sought (in the end, unsuccessfully) to build a rival federation called Change to Win with the Teamsters and five smaller unions, said Wednesday that this is ‘an appropriate time to unite SEIU’s strength with other unions.’ The move will expand AFL-CIO membership from nearly 13 million to nearly 15 million. (Change to Win was a bust. It lost most of its affiliates, stopped calling itself a labor federation, and now operates as something called the Strategic Organizing Center.)
Item Two is that the International Longshoremen’s Association, or ILA, which represents dockworkers on the East Coast and in the Gulf of Mexico, reached a deal on a new contract, averting a second dockworker strike. The first strike, in October, lasted three days before a wage deal was reached under heavy pressure on management from the Biden White House, with further negotiations postponed until after the presidential election….
Big Landlord Settles With US, Will Cooperate In Price-Fixing Investigation
[ars technica, via Naked Capitalism 01-08-2025]
[Yves Smith notes “This was fast for at least one defendant. See date on this article: US Justice Department accuses six major landlords of scheming to keep rents high Associated Press” ]
Disrupting mainstream economics
Crisis? What Crisis? A Video for Elon Musk on the Deficit
Steve Keen, via Naked Capitalism 01-08-2025]
Economists Are in the Wilderness. Can They Find a Way Back to Influence?
[New York Times, via Naked Capitalism Water Cooler 01-10-2024]
[Lambert Strether: “Never have I felt happier to know of Betteridge’s Law.”]
Bill Mitchell [via Naked Capitalism 01-08-2025]
[Yves Smith: “Important. It confirms a point many, including yours truly, have made repeatedly over the years: QE is not money printing and does not generate inflation.]
The Minimum Wage Claims You Keep Hearing Are Totally Fake. We Can Prove It.
[Drop Site, via The Big Picture January 05, 2025]
In September 2023, California passed a law to bring fast food workers’ minimum wage up from $16 to $20 an hour. A flurry of reports predictably followed from the likes of The Wall Street Journal, Employment Policies Institute, and the Hoover Institution claiming that restaurants and other businesses were already laying off workers based on the new law. This December, Ohanian retracted his claim; Hoover retracted 8 additional Ohanian claims.
Health care crisis
America’s Health Insurance Grinches: A Scathing Indictment of “Market” Economics
[Institute for New Economic Thinking, via The Big Picture January 05, 2025]
The country’s flawed insurance model, driven by greed, leads to inefficiency, inequality, and denied care – a colossal scam that has sparked fury across the nation.
Health Insurers Limit Coverage of Prosthetic Limbs, Questioning Their Medical Necessity
Michelle Andrews [KFF Health News, via Naked Capitalism 01-07-2025]
Information age dystopia / surveillance state
A Day in the Life of a Prolific Voice Phishing Crew
[Krebs on Security, via Naked Capitalism 01-10-2025]
Climate and environmental crises
Earth shattered heat records in 2023 and 2024: is global warming speeding up?
[Nature, via Naked Capitalism 01-08-2025]
Climate Models Can’t Explain What’s Happening to Earth
[Atlantic, via Naked Capitalism 01-08-2025]
The Architects Of L.A.’s Wildfire Devastation
Katya Schwenk, January 10, 2025 [The Lever]
Developers and real estate interests crushed efforts to limit development in high-wildfire-risk areas — including in L.A. neighborhoods now in ashes.
The Unstoppable Rise of Energy Realism
Ruy Teixeira [The Liberal Patriot], via Naked Capitalism Water Cooler 01-10-2024]
“For the last decade, Democrats and the left have ever more eagerly embraced a climate catastrophist narrative on energy policy…. So what have the Democrats gained from their fervent advocacy for climate catastrophism? Not much…. Nor have Democrats been rewarded with a political bonanza for their embrace of climate catastrophism. Quite the contrary. They just lost the presidential election to an opponent who says “drill, baby, drill” and whose priority is cheap, abundant energy—not clean energy…. Can Democrats wean themselves away from climate catastrophism and their obsession with net zero? It could be difficult. Their net zero commitment stems from the extremely high priority placed on this goal by the educated elites and activists who now dominate the party. These elites and activists—unlike working-class voters—believe that nothing is more important than stopping global warming since it is not just a problem, but an ‘existential crisis’ that must be confronted as rapidly as possible to prevent a global apocalypse.”
Democrats' political malpractice
Micah L, Sifrey, January 10, 2025 [The American Prospect]
Three weeks from now, the Democratic National Committee will convene in National Harbor, Maryland, to elect a new party chair and other national officers. For Democrats reeling from the defeat of Kamala Harris, this will be their first opportunity to anoint a fresh face for the national party to replace Jaime Harrison, who is stepping down.
A new chair, particularly one elected via an open vote and not merely picked by an incumbent president, as is the party’s tradition, could also change how Democrats operate at both the national and state level….
But who will make this decision? Officially, it’s a secret….
...Michael Kapp, a DNC member from California who was first elected to that position by his state party’s executive committee in 2016, told me the list isn’t public ‘because it’s the DNC—it’s a black box.’ He told me that leadership holds tightly to the list to prevent any organizing beyond their control. Today, we’re going to open up the DNC’s black box.
The list we are publishing was leaked to me by a trusted source with long experience with the national party. Like Kapp, this person thinks it’s absurd that the party’s roster of voting members is secret. Indeed, since there is no official public list, each of the candidates running for chair and other positions has undoubtedly had to create their own tallies from scratch—making it very likely our list comes from a candidate’s whip operation.” ….
“There are incentives for the DNC to keep us [members] apart,” Kapp added. “So we can’t organize, so we can’t talk to one another, so we can’t grow and learn.” Most crucially, “so we can’t organize against, or, if we wanted, in favor of whatever leadership wanted. By keeping us apart, they’re really able to organize and control these meetings from the top down.”
The DNC member list also matters because of ongoing efforts to get Democrats to strengthen their internal ethics rules—some of these party insiders also make a cushy living as corporate lobbyists—and try to reduce the role of dark money in Democratic election battles. Two and a half years ago, during its summer meeting, the DNC’s Gang of 448 voted to give itself the power to overrule any amendments to its bylaws that a national party convention, a much broader body with greater public input, might vote to enact. As Akela Lacy reported for The Intercept at the time, paid DNC staff whipped votes to ensure passage of this change, leading voting member Jessica Chambers of Wyoming to call the DNC “the least democratic organization that I’m involved with.”
Trump’s transactional regime
We’ve Never Been Here Before: The Zero-Accountability Presidency
Michael Tomasky, January 10, 2025 [The New Republic]
To say we’re in an unprecedented place is vastly understating it. We are in a place where no proper democracy has ever been or should ever be. We are about to have a president for whom there are utterly and literally no expectations. No one expects him to behave well. No one expects him to uphold normal standards of decency. If he muses one day about bombing London, or bombing Vancouver, or for that matter bombing Detroit, he will surprise no one. The panelists on The Five will just joke that there are certain sections of Detroit that a good bombing would only improve. Ha ha.
Conservative / Libertarian / (anti)Republican Drive to Civil War
The GOP Is Rewriting What It Means to Be a Person
Susan Rinkunas, January 8, 2025 [The New Republic]
...The Fourteenth Amendment was intended to extend full citizenship to formerly enslaved Black people, and it undergirds the right of all Americans to be treated equally under the law, no matter who they are or in which state they reside. Yet over the past year, conservatives have been increasingly open in their beliefs that pregnant women, transgender adolescents, affirming parents of trans kids, and immigrants are not legally entitled to the Fourteenth Amendment’s protections—all while arguing that fertilized eggs are. Republicans are using strategic litigation to effectively rewrite the Fourteenth Amendment to prioritize conservative white men and embryos above and beyond everyone else. They are warping something used to grant rights into a bludgeon to take them away, and are redefining who counts as a person in the United States.
DOGE is dispatching agents across U.S. government
[Washington Post, via Naked Capitalism Water Cooler 01-10-2024]
“Elon Musk and Vivek Ramaswamy are sending representatives to agencies across the federal government, four people familiar with the matter said, to begin preliminary interviews that will shape the tech executives’ enormous ambitions to tame Washington’s sprawling bureaucracy. In recent days, aides with the nongovernmental [but not a corporation, not a 501(c)(3), not a private club, so what?] ‘Department [sic] of Government Efficiency’ tied to [which means?] President-elect Donald Trump’s transition team have spoken with staffers at more than a dozen federal agencies, said the people, who spoke on the condition of anonymity because they were not authorized to speak with the media. The agencies include the Treasury Department, the Internal Revenue Service and the departments of Homeland Security, Veterans Affairs, and Health and Human Services, the people said.” Spoken under what authority? Elon’s mom? More: “At the same time, Musk and Ramaswamy have significantly stepped up hiring for their new entity [Oh, DOGE is an entity], with more than 50 staffers already working out of the offices of SpaceX, Musk’s rocket-building company, in downtown Washington, two of the people said. DOGE aims to have a staff of close to 100 people in place by Trump’s inauguration on Jan. 20, they said. While much about DOGE remains unclear [that is, we don’t know under what authority] — including who is paying the salaries of these staffers or exactly how DOGE representatives work with the formal transition team — the agency outreach reflects intensifying efforts by Musk and Ramaswamy to propose what they say will be “drastic” cuts to federal spending and regulations.” • One wonders what the DOGE onboard process is like, and whether, for example, it takes conflict of interest into account.
The Embarrassing Riffraff Of Evangelical Christianity Sees Señor T As God’s Wrecking Ball
Howie Klein, January 11, 2025 [downwithtyranny.com]
...according to a new essay by Stephanie McCrummen in The Atlantic, The Army of God Comes Out Of The Shadows, “the Christians who remain are becoming more radical... 42 percent of American Christians agreed with the statement ‘God wants Christians to stand atop the ‘7 Mountains of Society,’ according to Paul Djupe, a Denison University political scientist who has been developing new surveys to capture what he and others describe as a ‘fundamental shift’ in American Christianity. Roughly 61 percent agreed with the statement that ‘there are modern-day apostles and prophets.’ Roughly half agreed that ‘there are demonic principalities and powers who control physical territory,’ and that the Church should ‘organize campaigns of spiritual warfare and prayer to displace high-level demons.’”
Djupe told McCrummen that these radical Christians “are taking on these extreme beliefs that give them a sense of power— they believe they have the power to change the nature of the Earth. The adoption of these sort of beliefs is happening incredibly fast [and] have seeped into Trumpworld, influencing the agenda known as Project 2025, as well as proposals set forth by the America First Policy Institute. A new book called Unhumans, co-authored by the far-right conspiracy theorist Jack Posobiec and endorsed by J. D. Vance, describes political opponents as ‘unhumans’ who want to ‘undo civilization itself’ and who currently ‘run operations in media, government, education, economy, family, religion, and arts and entertainment’— the seven mountains. The book argues that these ‘unhumans must be ‘crushed. Our study of history has brought us to this conclusion: Democracy has never worked to protect innocents from the unhumans,’ the authors write. ‘It is time to stop playing by rules they won’t.’”….
Is There Something More Radical than MAGA?
[Politico, via The Big Picture January 05, 2025]
JD Vance Is Dreaming It. In a candid series of conversations, Vance revealed an ominous philosophy behind his first year in office….
“The thing that I would like to persuade people most is that [too] many people think the problem with the country and the world right now is, like, Klaus Schwab in a private room figuring all this shit out,” he said, name-checking the proudly plutocratic patron of the World Economic Forum in Davos. “The problem with the elites is not that they’re malevolent, it’s that they’re stupid. I think that recognition that incompetence and stupidity explain a lot more than malevolence is …” He trailed off, thinking.
The (anti)Federalist Society assault on the Constitution
Scoop: Heritage Foundation plans to ‘identify and target’ Wikipedia editors
[Forward, via Naked Capitalism 01-10-2025]
Civic republicanism
[TW: Stewartson provides significant and important background on elites such as Musk and Thiel, but I think he errors by focusing on malevolence as a primary driver of these elites’ behavior and policies. I don’t think it is malevolence as much as it is our failure as a culture to articulate, defend, and perpetuate the ideas of civic republicanism. I think what we are about to experience under the Trump regime is how a rejection of ignorance of the governing philosophy of republicanism results in policies and outcomes so awful and terrible, that they appear to be deliberately evil. It is worth keeping mind that Saint Augustine defined evil very simply as “the absence of good.” This has always been the fatal flaw of economics that held market outcomes to be the best means for allocating society’s resources , and moreover argued that any moral and state interference in those outcomes were wrong and unwanted. ]
Op-Ed By the Devil: Peter Thiel’s Yarvinite victory lap is a warning to people who want reality back
Jim Stewartson, January 11, 2025 [mind-war.com]
Eugenics Cabinet: The “Hyper-Racist” Plans of the PayPal Mafia
Jim Stewartson, Dec 17, 2024 [mind-war.com]
How Peter Thiel, Elon Musk and Steve Bannon are dragging America into Curtis Yarvin’s barely concealed Nazism
No comments:
Post a Comment