Sunday, August 29, 2021

Week-end Wrap – Political Economy – August 29, 2021

 Week-end Wrap – Political Economy – August 29, 2021

by Tony Wikrent


Strategic Political Economy
Chamathe Palihapitiya - Everyone is WRONG About China 

[Youtube, via Mike Norman Economics, August 23, 2021]

This is extremely informative on two levels. First, former Facebook executive provides his assessment of the short term and long term in China. Short term, the CCP has unambiguously demonstrated that it is firmly in control and that “we will decide how money is made, and who makes it.” Long term, China’s current population of 1.4 billion people is expected to fall by half to 700 million people by 2200. Palihapitiya says that the CC’P’s response to this demographic “time bomb” is to reinforce socialism — which is similar to the argument I make that increasing automation, robotics, and AI in USA and other countries will require more and more “social spending” to support people who simply do not, and cannot, have the means to earn a decent income. Secondly, is to contrast the composure and temperament of Palihapitiya, who clearly sees that the CCP is exerting control over “markets” in a way not thinkable in USA and the West, with that of Palihapitiya’s interlocutor, who is so enmeshed in “free market” theology that he is flipping out over what the CCP is doing. 

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Who Has the Cure for America’s Declining Birthrate? Canada.

[New York Times, via The Big Picture 8-24-2021]

Over the last century, two moments that transformed America and positioned it as the global economic leader were the post-World War II economic boom and the I.T. revolution of the 1990s. In both cases, America tore down many forms of discrimination and other barriers to harness the talents of marginalized groups in the country and to welcome new ones, injecting demographic vitality into the economy. To continue America’s upward trajectory in the 21st century, the country must reverse its current demographic decline.

That last sentence especially shows that the writer is locked into the mainstream economic idea that declining population necessarily means a loss of national wealth. This thinking is based on the ideas of feudal mercantilism, which Alexander Hamilton overthrew by his design of the USA economy: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted;” and, “the intrinsic wealth of a nation is to be measured, not by the abundance of the precious metals, contained in it, but by the quantity of the productions of its labor and industry….” Mercantalism is zero-sum. What one nation gained in trade, another lost. But Hamilton’s emphasis on machinery and the inventive genius of the human mind meant that the real wealth of a society is based on its technology, and the application of that technology to the processes of production, transportation, and communication.


The U.S. could be on the verge of a productivity boom, a game-changer for the economy 

[Washington Post, via The Big Picture 8-23-2021]

Rapid adoption of robots and artificial intelligence during the pandemic combined with a rebound in government investment is making some economists optimistic about a return of a 1990s economy with widespread benefits.

Neither WaPo writer or Ritholtz asks what should be an obvious question: If we can produce so much more with so many less workers, why do people need to work? In a republic, the ability of society to provide for human needs must be distributed in such a way that all citizens are guaranteed to decent life, with the material conditions needed for each to make their own, unique contributions. 

Sunday, August 22, 2021

Week-end Wrap – Political Economy – August 22, 2021

 Afghanistan

Who Lost Afghanistan? — Nick Turse

[The Intercept, via Mike Norman Economics 8-17-2021]

Journalist Craig Whitlock’s new book, “The Afghanistan Papers: A Secret History of the War,” will help ensure that no one forgets the harm America’s civilian and military leaders did, the lies they told, and the war they lost.

Synthesizing more than 1,000 interviews and 10,000 pages of documents, Whitlock provides a stunning study of failure and mendacity, an irrefutable account of the U.S.’s ignoble defeat in the words of those who — from the battlefield to NATO headquarters in Kabul and from the Pentagon to the White House — got it so wrong for so long, papered their failures over with falsehoods, and sought to avoid even an ounce of accountability.


GOP Scrubs Webpage Touting Trump’s ‘Historic’ Taliban Deal 

Gizmodo, via Naked Capitalism 8-17-2021]


We Failed Afghanistan, Not the Other Way Around 

Matt Taibbi, via Naked Capitalism 8-19-2021] 

Per corruption on the US side, Taibbi is correct and then some. This has been endemic in US operations in the Middle East since at least the Gulf War. For instance, see this 2007 story in Vanity Fair about how Alan Grayson, before he ran for Congress, in his capacity as a lawyer and US contracting expert, filed a qui tam suit on the horrific grifting by US contractors in Iraq. What was most remarkable is the DoJ, in stark contrast with just about any other big ticket, well documented suit alleging theft in government contracting, refused to join the action. We also regularly mention the US inability to account for Pentagon spending, see this Cynthia McKinney clip to illustrate how long this has been going on. McKinney being ousted for showing too much ‘tude (such as towards the Capitol Police and AIPAC) always looked like trumped up charges, that it was her poking at the Pentagon was the real proximate cause. And generally, looks like the looting was a feature, not a bug.


Inside US Afghanistan pullout, CIA opium ratline, pipeline conflict, new cold war

[YouTube, via Jon Larson]

Moderate Rebels live: Max Blumenthal and Ben Norton discuss the US military pullout from Afghanistan with journalist Pepe Escobar, who has extensive experience reporting in the country and was even arrested by the Taliban.


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Sunday, August 15, 2021

Week-end Wrap – Political Economy – August 15, 2021

 Strategic Political Economy

What China Wants and Why

[Bill Totten's Weblog, via Mike Norman Economics, August 14, 2021]

One of the most concise summaries of the  geographic, economic, and demographic determinants of a country’s history and strategic interests I have ever read. 

Of China’s 1.4 billion people, 94% are Han, and their distribution follows nearly perfectly the Hu/15-in isohyet/NSGL line. This is surprising, especially if you compare it to India {4}, and its diverse ethnicities {5}. Why is China’s population so uniform?

To understand that, we need to look at history.


Brace For "Nasty" Debt Ceiling Fight As GOP Goes Full "Scorched Earth Mode" On Democrats

[ZeroHedge, August 11, 2021]


House Members’ Letter to Pelosi Mostly Barking Up the Wrong Tree 

Stephanie Kelton [The Lens, via Naked Capitalism 8-8-2021]

Are they worried about running out of money? It sounds an awful lot like what former Treasury Secretaries Jack Lew and Larry Summers said in the run-up to passage of the Trump tax cuts back in 2017. Back then, both men warned that if the Republicans were successful in passing the Tax Cuts and Jobs Act (TCJA), then Congress would be left without the capacity to boost spending in the event of an emergency.

Here’s Lew:

If we had a crisis right now whether a financial crisis or a business cycle recession, we don’t have the fiscal policy to respond or the monetary policy. It’s quite scary. … We now don’t have a fiscal arsenal because we spent it on the tax cut and on the spending agreement. We’ve kind of spent the fiscal resources.

And here’s Summers:

Our country will be living on a shoestring for decades because of the increases in the deficits that will result. This is a serious threat to our national security because of what it will mean over time for our ability to fund national defense.

Obviously, both men were wrong…. Congress has the Power of the Purse. It can’t run out of financial resources. If the votes are there, the money will go out. 

Sunday, August 8, 2021

Week-end Wrap – Political Economy – August 8, 2021

 Week-end Wrap – Political Economy – August 8, 2021

by Tony Wikrent


This is the best time all year to see the ringed magnificence of Saturn 

[Syfy Wire, via The Big Picture 8-5-2021]

Saturn takes 29 years to orbit the Sun once. Earth is closer to the Sun and moves much more rapidly, completing an orbit in one year. If Saturn didn’t move then opposition would occur once every Earth year. But Saturn does orbit around the Sun, in the same direction as Earth does, so we have to spend a little bit of extra time catching up to it.


The pandemic

Vaccine Mandates Are as American as Apple Pie 

[Portside, via Naked Capitalism 8-1-2021]


Opinion: Require the vaccine. It’s time to stop coddling the reckless. 

Ruth Marcus, WaPo, via Naked Capitalism 8-2-2021]


“The C.D.C. Needs to Stop Confusing the Public”

Zeynep Tufecki [New York Times, via Naked Capitalism Water Cooler 8-4-2021]


GRAPH: Who’s vaccinated and who’s not


[The Big Picture 8-1-2021]

[Twitter, via DailyPoster 8-4-2021]

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Sunday, August 1, 2021

Week-end Wrap – Political Economy – August 1, 2021

Week-end Wrap – Political Economy – August 1, 2021

by Tony Wikrent


Strategic Political Economy

U.S. Population Growth, an Economic Driver, Grinds to a Halt 

[Wall Street Journal, via Naked Capitalism 7-26-2021]

America’s weak population growth, already held back by a decadelong fertility slump, is dropping closer to zero because of the Covid-19 pandemic.

In half of all states last year, more people died than were born, up from five states in 2019. Early estimates show the total U.S. population grew 0.35% for the year ended July 1, 2020, the lowest ever documented, and growth is expected to remain near flat this year.

Some demographers cite an outside chance the population could shrink for the first time on record. Population growth is an important influence on the size of the labor market and a country’s fiscal and economic strength.


I placed this under “Strategic Political Economy” because it exemplifies everything that is wrong with how almost everyone thinks of political economy. “How many people you have” is a holdover from feudalistic mercantile zero-sum economics. The real important measure of the health of a country is the productive power of human labor to sustainably transform nature into needed goods and services. This is Hamiltonian political economy in its essence. Science and technology. 

1791 Report to Congress on the Subject of Manufactures, most especially “Section II: As to an extension of the use of Machinery…” viz.:
“The employment of Machinery forms an item of great importance in the general mass of national industry. ‘Tis an artificial force brought in aid of the natural force of man; and, to all the purposes of labour, is an increase of hands…”

Hamilton is explicit on this issue: “To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted.” And in his December 1790 Second Report on the Public Credit, Hamilton wrote, “the intrinsic wealth of a nation is to be measured, not by the abundance of the precious metals, contained in it, but by the quantity of the productions of its labor and industry….”

The more productive power, the better. If there is economic activity that is not productive — i.e, private equity, Wall Street and the City of London — then as the climate crisis worsens, it becomes ever more crucial to discourage, curtail, and even punish that useless economic activity. 

Having one person in the active labor force support three or four or more people is exactly where we want to go. With technology in hand, an entire factory producing a few hundred thousand light bulbs each day can be operated by a tea, of just a few dozen people. The real danger is allowing the rentiers and financier seize such a huge chunk of economic rewards, and convince us they deserve it because of their “hard work.” By such myths and means are we killing our own civilization. 

Sunday, July 25, 2021

Week-end Wrap – Political Economy – July 25, 2021

 Week-end Wrap – Political Economy – July 25, 2021

by Tony Wikrent


The Pandemic

US sees COVID-19 cases surge by 224% in last three weeks as CDC director says the Indian ‘Delta’ variant now makes up 83% of all new infections 

[Daily Mail, via Naked Capitalism 7-21-2021]


‘I’m sorry, but it’s too late’: Alabama doctor on treating unvaccinated, dying COVID patients 

[AL.com, via Naked Capitalism 7-22-2021]

In the United States, COVID is now a pandemic of the unvaccinated, according to the head of the U.S. Centers for Disease Control and Prevention. In Alabama, state officials report 94% of COVID hospital patients and 96% of Alabamians who have died of COVID since April were not fully vaccinated….

“I try to be very non-judgmental when I’m getting a new COVID patient that’s unvaccinated, but I really just started asking them, ‘Why haven’t you gotten the vaccine?’ And I’ll just ask it point blank, in the least judgmental way possible,” she said. “And most of them, they’re very honest, they give me answers. ‘I talked to this person, I saw this thing on Facebook, I got this email, I saw this on the news,’ you know, these are all the reasons that I didn’t get vaccinated.

“And the one question that I always ask them is, did you make an appointment with your primary care doctor and ask them for their opinion on whether or not you should receive the vaccine? And so far, nobody has answered yes to that question.”


Republicans freak out because the delta variant they fostered is killing ... Republicans

Dartagnan, July 21, 2021 [DailyKos]

Let’s be clear on something: Variants to the COVID-19 virus are caused by allowing the virus to continue spreading among the unvaccinated, giving it more time and opportunity to mutate. The more unvaccinated people there are, the better the chance of a variant developing and spreading. That’s what led to this delta variant that’s now ravaging the vaccine-refusing Republican population in this country. In simpler terms, Republican intransigence and political pandering created and abetted the conditions that led to the spread of the delta variant and encouraged an environment that allowed it to flourish. And now that it’s disproportionately killing “their” people, in red-leaning states, Republican elected officials are desperately seeking—once again—to avoid the blame.


[Twitter, via Naked Capitalism Water Cooler 7-23-21]

You have to click through to see the math and the assumptions behind 80,000 Republican voters dying of COVID in Florida over the coming year.

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“In-person voting really did accelerate covid-19’s spread in America”

[Economist, via Naked Capitalism Water Cooler 7-20-21]

GRAPH

Sunday, July 18, 2021

Week-end Wrap – Political Economy – July 18, 2021

 Week-end Wrap – Political Economy – July 18, 2021

by Tony Wikrent


The Epidemic

NEW From CDC“Community Profile Report July 8 2021” (PDF), “Rapid Riser” counties

[CDC, via Naked Capitalism Water Cooler 7-16-21]


Five undervaccinated clusters put the entire United States at risk 

[CNN, via The Big Picture 7-12-2021]

Clusters of unvaccinated people, most of them in the southern United States, are vulnerable to surges in Covid-19 cases and could become breeding grounds for even more deadly Covid-19 variants: Starting in Georgia and stretching west to Texas and north to Missouri + include parts of Alabama, Arkansas, Louisiana, Oklahoma and Tennessee. 


There’s A Stark Red-Blue Divide When It Comes To States’ Vaccination Rates 

[NPR, via The Big Picture 7-13-2021]

But surveys have shown Trump supporters are the least likely to say they have been vaccinated or plan to be. Remember, Trump got vaccinated before leaving the White House, but that was reported months later. Unlike other public officials who were trying to encourage people to get the shot, Trump did it in private. 


Least Vaccinated U.S. Counties Have Something in Common: Trump Voters 

[New York Times, via The Big Picture 7-13-2021]

The disparity in vaccination rates has so far mainly broken down along political lines. For nearly every U.S. county, both the willingness to receive a vaccine and actual vaccination rates to date were lower, on average, in counties where a majority of residents voted to re-elect former President Donald J. Trump in 2020. 


Strategic Political Economy

Newsmax anchor goes full death cult, suggests vaccines go against evolution and nature

[Twitter, via, Aldous J Pennyfarthing, July 12, 2021, Dailykos]

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Sunday, July 11, 2021

Week-end Wrap – Political Economy – July 11, 2021

Week-end Wrap – Political Economy – July 11, 2021

by Tony Wikrent


Strategic Political Economy


Inside Operation Warp Speed: A New Model for Industrial Policy 

[American Affairs Journal, via The Big Picture 7-5-2021]

Operation Warp Speed was a triumph of public health policy. But it was also a triumph and validation of industrial policy. OWS shows what the U.S. government can still accomplish when it comes to tackling a seemingly unsolvable technological challenge. It demonstrates the strength of the U.S. developmental state, despite forty years of ideological assault.

A nice, timely historical review of one of the apocalyptic horsemen of that forty years of ideological assault. Note the shape-shifting use of political terminology by the horsie set. 

The End of Friedmanomics

The New Republic, June 17, 2021, via Avedon's Sideshow 6-30-2021]

….All of which makes a contemporary reading of Friedman’s Cape Town lectures a harrowing experience. His first speech was an unremitting diatribe against political democracy—an explicit rejection of, in Friedman’s words, “one person, one vote,” delivered to a nation in which more than half of the population was disenfranchised by race. Voting, Friedman declared, was inescapably corrupt, a distorted “market” in which “special interests” inevitably dictated the course of public life. Most voters were “ill-informed.” Voting was a “highly weighted” process that created the illusion of social cooperation that whitewashed a reality of “coercion and force.” True democracy, Friedman insisted, was to be found not through the franchise, but the free market, where consumers could express their preferences with their unencumbered wallets. South Africa, he warned, should avoid the example of the United States, which since 1929 had allowed political democracy to steadily encroach on the domain of the “economic market,” resulting in “a drastic restriction in economic, personal, and political freedom.”

….That this prescription found political purchase with the American right in the 1960s is not a surprise. Friedman’s opposition to state power during an era of liberal reform offered conservatives an intellectual justification to defend the old order. What remains remarkable is the extent to which the Democratic Party—Friedman’s lifelong political adversary—came to embrace core tenets of Friedmanism. When Friedman passed away in 2006, Larry Summers, who had advised Bill Clinton and would soon do the same for Barack Obama, acknowledged the success of Friedman’s attack on the very legitimacy of public power within his own party. “Any honest Democrat will admit that we are now all Friedmanites,” he declared in The New York Times….


Friedman responded to Brown in 1955 with “The Role of Government in Education,” an essay that called for the ostensibly race-neutral program of privatizing the school system by providing families with education vouchers that could be spent where parents wished. As in his essay on housing nine years before, Friedman appealed to the simple nineteenth-century logic of market competition and equilibrium to make his case. Public schools were a “monopoly” that put private schools at an unfair “disadvantage.” By transitioning from public schools to vouchers, families would enjoy a diversity of education options, and market competition over the quality of education would in time enhance the lot of students everywhere.

It was every bit as neat and tidy as Friedman’s case against rent regulations. But as Leo Casey has detailed for Dissent magazine, Friedman gave away the political game in a lengthy footnote. Though he insisted, “I deplore segregation and racial prejudice,” Friedman nevertheless believed in the right of the private market to develop “exclusively white schools, exclusively colored schools, and mixed schools.”

….“The Role of Government in Education” marks the earliest appearance of what remains Friedman’s most damaging belief—the idea that bigotry and violence could be forced out of public life by the magic of the market. Friedman would insist on this basic proposition again and again throughout his career. In 1972, he would go so far as to suggest that the free market could have put a stop to the war in Vietnam if people had really wanted it to end. Enough chemists would have refused to make napalm that the cost of producing the explosive would have become prohibitively high. This was the appropriate way to stop a war—not the crude “voting mechanism” of “the political system.”

….The financial crisis of 2008 should have demolished this thinking. Markets, the crash made clear, often simply don’t serve the public interest. But the Democratic leaders who ascended to power in the Obama administration had been educated at the height of Friedman’s intellectual hegemony. There simply weren’t many New Deal–style thinkers in the top echelons of the Democratic Party anymore. Obama was as intellectually serious as American presidents get, but his coterie of intellectuals had been working under Friedmanesque assumptions for so long that they could not adapt to the reality that events had discredited those assumptions. Obama ultimately devoted more political energy to reducing the long-term federal budget deficit than to combating economic inequality. A unique historical moment to reclaim political democracy became, instead, the era of bending the cost curve.

It’s the economic ideology, stupid. And, racism. So, it’s the racist economic ideology, stupid. 

Sunday, July 4, 2021

Week-end Wrap – Political Economy – July 4, 2021

 Week-end Wrap – Political Economy – July 4, 2021

by Tony Wikrent


Strategic Political Economy

Techno-Feudalism Is Taking Over 

Yanis Varoufakis [Project Syndicate, via Naked Capitalism 06-30-2021]

Then, after 2008, everything changed. Ever since the G7’s central banks coalesced in April 2009 to use their money printing capacity to re-float global finance, a deep discontinuity emerged. Today, the global economy is powered by the constant generation of central bank money, not by private profit. Meanwhile, value extraction has increasingly shifted away from markets and onto digital platforms, like Facebook and Amazon, which no longer operate like oligopolistic firms, but rather like private fiefdoms or estates.

That central banks’ balance sheets, not profits, power the economic system explains what happened on August 12, 2020. Upon hearing the grim news, financiers thought: “Great! The Bank of England, panicking, will print even more pounds and channel them to us. Time to buy shares!” All over the West, central banks print money that financiers lend to corporations, which then use it to buy back their shares (whose prices have decoupled from profits). Meanwhile, digital platforms have replaced markets as the locus of private wealth extraction. For the first time in history, almost everyone produces for free the capital stock of large corporations. That is what it means to upload stuff on Facebook or move around while linked to Google Maps.


“Democrats Raise Ethical Concerns Over GOP Donor’s $1 Million Funding of Border Deployment”

[Military.com, via Naked Capitalism Water Cooler 7-1-21]

“A billionaire’s $1 million donation to fund a South Dakota National Guard mission to the U.S.-Mexico border has raised questions of whether the military is effectively for hire, and Democrats in the state are investigating the legality of the issue, Military.com has learned. Willis and Reba Johnson’s Foundation, helmed by billionaire Willis Johnson, pledged $1 million to South Dakota to cover the estimated cost of deploying some 50 guardsmen to the border for up to two months, according to a state government email reviewed by Military.com.”

This is exactly why I advocate replacing liberalism with civic republicanism, which is compelling in its clarity and simplicity: the rich are as much a danger to a republic as a standing army.

As James Madison wrote in his notes preparing for the Constitutional Convention: “If the minority happen to include all such as possess the skill and habits of military life, & such as possess the great pecuniary resources, one third only may conquer the remaining two thirds.”

Under liberalism, any individual has the “right” to amass as much property as they can. The rights of the community are decidedly secondary. Under civic republicanism, a properly functioning government breaks up any and all concentrated wealth, precisely because wealth, like power, corrupts, and, as we know too damn well, wealth buys power. Benjamin Franklin observed, “”There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of its filling a vacuum, it makes one. If it satisfies one want, it doubles and trebles that want another way.” In laying down “good whig principles,” Franklin recognized the insidious nature of concentrated wealth to corrupt politics, and wrote “the poor man has an equal right, but more need, to have representatives in the Legislature than the rich one.”

Remember the liberal reaction to AOC’s comment that all billionaires is a failure of policy? 

The true purpose of taxation in a republic, therefore, is not to fund the government, but to tax away excess wealth, and maintain a semblance of economic equality among the citizens. Under no circumstance is any citizen to be allowed to become so wealthy that he or she feels they can afford a “donation” that determines the deployment of either state or federal military forces. Or steers the destiny of legislation. Or determines the effect of regulation.

Clear and simple.

After all, isn’t that, when you boil it down, what the slavery oligarchy did to drag the country into Civil War? And it’s where the reactionary rich, and their conservative and libertarian movements, are dragging us again.


Can Biden Build Back Better? Yes, If He Abandons Fiscal “Pay Fors" — Yeva Nersisyan and L. Randall Wray

[Levy Institute of Economics, via Mike Norman Economics, July 1, 2021]

President Biden’s proposals for investing in social and physical infrastructure signal a return to a budget-neutral policymaking framework that has largely been set aside since the outbreak of the COVID-19 crisis. According Yeva Nersisyan and L. Randall Wray, this focus on ensuring revenues keep pace with spending increases can undermine the goals internal to both the public investment and tax components of the administration’s plans: the “pay-for” approach limits our spending on progressive policy to what we can raise through taxes, and we will only tax the amount we need to spend.

Nersisyan and Wray propose an alternative approach to budgeting for large-scale public expenditure programs. In their view, policymakers should evaluate spending and tax proposals on their own terms, according to the goals each is intended to meet. If the purpose of taxing corporations and wealthy individuals is to reduce inequality, then the tax changes should be formulated to accomplish that—not to “raise funds” to finance proposed spending. And while it is possible that general tax hikes might be needed to prevent public investment programs from fueling inflation, they argue that the kinds of taxes proposed by the administration would do little to relieve inflationary pressures should they arise. Under current economic circumstances, however, the president’s proposed infrastructure spending should not require budgetary offsets or other measures to control inflation in their estimation.

Sunday, June 27, 2021

Week-end Wrap – Political Economy – June 27, 2021

Week-end Wrap – Political Economy – June 27, 2021

by Tony Wikrent


Strategic Political Economy

THE 50-100 PAY GAP: These 20 Harsh Facts About Income and Wealth Inequality Will Shock You 

[Capital & Main, via Naked Capitalism 6-22-2021]

Fourteen shocking facts on inequality and working Americans
● Worker hourly compensation increased just 17% from 1979 to 2019, while worker productivity increased more than 72% over the same time period.

● Had the income of the bottom 90% of Americans kept up with GDP growth, they’d have collectively taken home $2.5 trillion more in 2018. Over the 43 years since 1975 combined, the figure is $47 trillion.

● The wealth of the bottom half of families — roughly 64 million families — adds up to only 1% of total U.S. household wealth.

● The median white family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.

● In 2016, 72% of white families owned their home, compared to just 44% of Black families and 45% of Latino families.

● For the average American consumer, the share of their expenditures spent on health doubled from 1980 to 2018.

● Half of U.S. adults with lower incomes skipped necessary medical care such as doctor visits, recommended tests, treatments, follow-up care or prescription medications in the past year because of the high cost.

● Between 2008 and 2018, the number of states in which health insurance premiums and deductibles consumed at least 10% of median income increased from seven to 42.

● The price of education increased 600% more than incomes from 1980 to 2018.

● One in four Americans have no retirement savings — and those who do aren’t saving enough. The median retirement savings account of $120,000 for those approaching retirement (ages 55 to 64) will likely provide less than $1,000 per month over a 15-year retirement span.

● Social Security benefits have lost 30% of their buying power since 2000.

● Nearly 83 million adults — 34 percent of all adults in the country — reported that their household found it somewhat or very difficult to cover usual expenses such as food, rent or mortgage, car payments, medical expenses or student loans in the last seven days, according to survey research in November 2020.

● Nearly half of Black adults reported it was somewhat or very difficult to pay usual household expenses, nearly twice the rate among white adults and Asian adults (28%). A similar share (47%) of Latino adults reported such difficulties.

Sunday, June 20, 2021

Week-end Wrap – Political Economy – June 20, 2021

Week-end Wrap – Political Economy – June 20, 2021

by Tony Wikrent


Strategic Political Economy

The Lords Of Hell (And Their Slaves) 

Ian Welsh


Homelessness, despair and so on are required: without them people will not work at bad jobs. Indeed, without them many people would not work any more than required to feed and house themselves.

Now, understand clearly, rip a hole in your skull, and put this in: there is more food than needed and way more homes than homeless people in all developed countries and more food than needed to feed everyone in the world. We could easily feed and house everyone in the world. It is almost a trivial problem. We simply have to do it.

Industrialization plus modern agriculture produces more than we need, easily. Automation should mean that less and less hours needed working. We should be living in a paradise of free time and choice.

We do not because a small minority has captured power and enslaved the rest of us.

These people are monsters on every possible level, including their depraved indifference to what will happen to their children and grandchildren under environmental collapse and climate change.

We have a surplus, but it is generated in the stupidest ways possible: with planned obsolesence, soil degradation and pollution causing environmental collapse.


Matt Stoller: A Society Designed to Incentivize Criminal Behavior at the Highest Level


Washington’s Dangerous New Consensus on China (not paywalled)

Bernie Sanders [Foreign Affairs, via Naked Capitalism 6-18-2021]

The deck: “Don’t Start Another Cold War.”


The carnage of mainstream neoliberal economics

Many Americans moved to less pricey housing markets in 2020 

[AP, via The Big Picture 6-15-2021]

Many Americans who moved last year relocated to areas where homes were, on average, bigger and less expensive. On average, people who moved to a different city in 2020 ended up in a ZIP code where average home values were nearly $27,000 lower than in their previous ZIP code.

Sunday, June 13, 2021

Week-end Wrap – Political Economy – June 13, 2021

Week-end Wrap – Political Economy – June 13, 2021

by Tony Wikrent


Strategic Political Economy

[Twitter, via Naked Capitalism 6-11-21]

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Vast Majority of Voters Want Higher Taxes on Wealthy, Corporations 

[Americans For Tax Fairness, via Daily Poster 6-12-2021]

Nearly 7 in 10 voters support raising taxes on the wealthy and corporations, according to a new poll from ALG Research, Hart Research, and Americans for Tax Fairness. Moreover, voters become more supportive of President Joe Biden’s economic plans when they are told they will be funded by taxes on the wealthy and corporations.


The Global South has lost $152 trillion through unequal exchange since 1960
Dylan Sullivan [Progress in Political Economy, via Mike Norman Economics, June 7, 2021]

Dependency and world-systems theorists have long argued that “unequal exchange” is a key driver of global inequality. Since wages and natural resource prices are much lower in the global South than the North, poor countries must export many more units of embodied labour and resources than they import in order to achieve a monetary balance of trade. This creates a constant transfer of labour and ecology from the periphery to the core, developing the latter but impoverishing the former.

In a recent paper in New Political Economy that I co-authored with Jason Hickel from the University of London, and Huzaifa Zoomkawala, a data analyst based in Karachi, we quantify the value that has been appropriated from the South through unequal exchange since 1960. To do this, we use a method developed by the economist Gernot Köhler. Köhler proposes that we can use purchasing power parity (PPP) exchange rates constructed by the World Bank to value the South’s exports at the North’s price level. By subtracting the actual market price that the South received for its exports from this figure, we can measure the commodities appropriated by the imperialist states, in terms of the Northern price of those commodities.

Using Köhler’s method, we find that in 2017 the ‘emerging and developing economies,’ as defined by the IMF, lost $2.2 trillion worth of goods to the ‘advanced economies.’ This represents an enormous loss for the South. These resources could have ended extreme poverty 15 times over, but instead they were transferred gratis to the core. This windfall is of enormous benefit to the centres of empire. For instance, in 2017 the US gained $2,634 per person through unequal exchange, while the average Australian citizen received $3,116 from the South. Since 1990, the North’s annual gains from unequal exchange have sat at 5.2% of GDP, considerably higher than the North’s annual growth rate. In other words, if not for imperialist plunder, aggregate income in the North would have been declining for decades. The extraordinary levels of material consumption currently enjoyed in the North are predicated upon exploitation and poverty in the periphery.


Figure 1 shows total value transfer since 1960. All up, the South has lost $62 trillion (constant 2011 dollars), equivalent to 97% of its 2017 GDP. If this surplus had been available to the South, it could have been reinvested in domestic economic development. If we assume this surplus would have grown at the same rate as Southern GDP, it would now be equivalent to $152 trillion.…

And don’t forget the RAND study that found in USA alone, the one percent have taken over $50 trillion from the bottom 90 percent since 1975Trends in Income From 1975 to 2018.

Friday, June 11, 2021

A tribute to Frank Ryan, a Producer Class HERO

 

Frank Ryan passed in April 2021. He was a close friend who led one of the more interesting lives imaginable. He was a builder of complex and difficult things. And he made a decent living fabricating some of the parts of our complicated existence.

For example, he made what he laughingly called "terminator" parts—titanium pieces that were used by an orthopedic surgeon to re-enforce and replace bones during a long-term research project going on over at the University of Minnesota Hospital. The surgeon would ask for Frank by name and together, they created a whole line of prototypes that resulted in a serious expansion of what orthopedic surgery can actually fix. The doc had great ideas that Frank turned into titanium parts that were often so light, they fell like a leaf if dropped.

The shop where Frank worked had an established reputation and so received every month perhaps eight metal-bending journals directed at high-end fabricators. These publications were paid for by the machine toolmakers so I am pretty sure they were just junk mail for the shop. Fortunately, someone in the administrative offices carried these magazines down to the shop floor break room. Frank would wait a few days so anyone interested could look at the articles, and then would bring them home.

Which is how I got to see them. And I thought they were absolutely wonderful. And this is where the story gets complex and fascinating. The reason I was so interested in reading journals directed at the machine-tool industry, is because I was trying to understand what had happened to the USA economy (and by extension the global economy) during the late 1970s and the 80s. The trigger for my curiosity was an argument I had in 1982 with the highest-ranking civil servant I knew in Washington DC. We were discussing the effects of the Recession of 1980-1. His take on events was that Reaganomics was going to herald a new day of economic growth and prosperity. My take was that this economic calamity had wiped out hundreds of thousands of small and mid-sized farmers and businessmen and much of the destruction was permanent.

It was about that time I discovered that the political economist Thorstein Veblen had been very careful in drawing a distinction between business and industry. I had long assumed that these two words were simply synonyms. Not so! argued Veblen. For him, industry was the organization of the community's necessary work—growing food, building infrastructure, inventing, etc. Business, on the other hand, consisted of the efforts employed by those who could not or would not do the necessary work themselves and gained their incomes through force and fraud—imperialism, rents, usury, tithes, taxation, the whole predator-class list.

The business vs. industry dichotomy is one of those ideas that once you have seen it, it is damn difficult to unsee it. Ever! Veblen's famous "The Theory of the Leisure Class" in 1899 described the antics of the Business / Leisure classes. It took until 1914 for him to describe the characteristics of the industrial classes. He called that description "The Instinct of Workmanship: and the state of the industrial arts".

The implications of Veblen's Business / Industry dichotomy were, and still are, absolutely staggering. For one thing, the numbers suggested that while the Leisure Classes were culturally dominant, the overwhelming majority of humanity had to struggle through life employed in jobs that had little status and pay. On the other hand, the industrial classes were far more accepting of science and technological advancement. They had discovered that one sure way to advance themselves out of their subservient status was to invent and build a new world. 

When Veblen was born in 1857, the vast majority of the population farmed with brute labor—harvesting wheat with a scythe or picking corn by hand. 100 years later, plumbers owned Corvettes, radio and TV allowed everyone to have their own soundtrack, and food was so plentiful that anyone remotely interested could become a food snob. And all of this was made possible by a torrent of inventiveness that allowed for the mass production of high quality metals and tools that could output products to the accuracy of microns. The Industrial Revolution was the first and only revolution that provided real material progress to folks who had previously been slaves, share-croppers, serfs and peasants. 

I learned NONE of this tale of Industrial Class revolution during my years in school. And yet when I discovered these social histories by reading Veblen and others of the era of scientific invention, I immediately believed them because of my good friend, Frank Ryan, was a living example of why they were true. 

That Frank Ryan was this production genius is one in thousands of examples for why the USA Midwest became the global heartland of invention. If he had grown up in someplace like Detroit or Chicago or Muncie Indiana, he would have known dozens of people with his eventual mechanical skills. But Frank was born in a tiny, desolate, wind-swept burg near where the Missouri River exits the state of South Dakota. And while Ole Rolvaag was correct in asserting that it was only the Giants in the Earth that could settle the brutal environments that were the high prairies, these were not the high precision skills that produced substitute human body parts. The nearest such operation was probably at least 100 miles from where Frank spent his childhood.

But Platte South Dakota wasn't nowhere. In fact, it had a lot of the same characteristics of the industrial incubators that gave us Henry Ford and the thousands of farm-kid inventors who would follow his recipe. In farm country, inventiveness is a survival skill. Being able to figure out a novel way to solve problems becomes a highly admired attribute. Frank's father was a veterinarian back before licensing procedures had been instituted. He was a vet because he successfully treated animals so it was farmers who kept him in business—not diplomas. He was successful because he was scientifically literate enough to understand causation.

Frank also grew up during the early heyday of model airplanes and apparently built a lot of them. Kits could be had for $0.10 and usually took a couple of months to assemble. Considering it took from the dawn of recorded history until 1903 to figure out powered flight, the fact that by the 1930s, models that flew were considered a children's pastime was really a stretch. For a model to fly, it must follow the same laws of nature that a full-sized airplane does. Frank never bragged about how well his models flew which suggests they probably usually crashed. Folks who build those large-scale models you see flying on YouTube are fabricated by middle-aged men (or older) with considerable skills and persistence. But simply building those $0.10 models taught a host of fabricating skills merely to get them to the stage where you could hang them from the bedroom ceiling.

And then there was the Army. Frank was hardly the first small-town kid that the military tapped to operate and maintain its technologically advanced tools of war. In fact, rural kids were considered prime recruits. Frank easily passed the Army entrance test which sought out technical skills and was told he could select any training path that interested him. He selected the skill that had the longest training. The Army got the last laugh—his training made him qualified to operate the over-the-horizon radars which supposedly gave an early heads-up on missiles launched over the North Pole. This meant he spent some long winters in places like Greenland and Alaska. Even a South Dakota upbringing does not prepare someone for the sheer brutality of a Greenland blizzard. There was a limit to how long someone could tolerate such an assignment especially since in practice, this meant that, at best, North Americans could be terrified for 20 extra minutes before their world would end.

After 7 years, Frank left the Army to join the post-war economic expansion. His military skills had no civilian application so he found himself selling temporary classrooms to frantic school boards facing the results of the baby boom. Sales gigs would become an increasingly difficult way to make a living so one day, a few years later, he walked in the door of small punch-press shop and was hired by someone who assumed that anyone with reasonable personal habits could feed one. But even in a small punch shop, there is a hierarchy of skills. By the time I met Frank in the early 1970s, he had become a premiere set-up specialist—the guy who arranges tools precisely so they make accurate parts. This was obviously a critical skill—not the least reason was the fact that even tiny mistakes could result in the destruction of $thousands worth of specialized tools. What made all this especially ironic was that those difficult jobs Frank would come to excel at, he had probably never even heard of that day when he went to work as a punch-press operator.

When I first met Frank, I took an instant liking for him—he was from a small prairie town, he understood and appreciated those rural survival skills, and most importantly, he had built flying model airplanes made of balsa and tissue—a hobby that had occupied a significant portion of my youth. He told interesting stories about the struggles to make difficult parts from a wide assortment of alloys. 

But most of all, he wanted to help me with my big problem. I had teamed up with a couple of dreamers who believed we should rehab a vacant building in a neighborhood that had deteriorated from fashionable to thoroughly dilapidated. I had built houses as a carpenter to help finance my college education and so I confidently assured them I could fix their building. It soon became apparent that the skills necessary to build tract houses did not obviously transfer to restoring late 19th-century Victorian and Queen Anne mansions. I was WAY in over my head. I had to figure it out on the fly and so I got together with Frank each night when he got off work and we would plot my next move. Frank was amazingly helpful. Not once on that project did I have to take something apart because I had taken a wrong turn.

Sometimes, I would have a project where I really needed an extra set of hands. Frank was an incredible sidekick. He would keep track of tools and materials, he would help organize the workspace, and when I needed those extra hands to guide large parts through tools, he always knew where to hold on and which way to push. One project involved making a teak room divider in a room with a 10' ceiling. It would have glass doors and shelves, it would be lit with a bulb on a dimmer, and there would be a a wooden cabinet to store the booze. No drawings had been produced so Frank had only a vague understanding how everything would go together but he soldiered on being his very useful self. The end result was stunning. The woman whose crystal collection this room divider would house showed up when Frank and I were sitting around and admiring our handiwork. She asked Frank when he actually understood what we were building. He laughed, "Oh, about 1/2 hour ago." It was at that moment when I realized what Frank had brought to my life—expert help, loyalty, trust, and understanding.

When Frank started supplying me with those machinist trade journals, he became someone who was more than an example of raising usefulness to an art form, he was making a critically important contribution to my intellectual understanding of the world. Veblen argued that the industrial classes were the numerical majority. What he left out of his argument were speculations on how amazingly stratified his giant industrial class was. Frank's magazines just exploded this point into my consciousness. Frank had more practical skills than anyone I had ever met, yet compared to the people who designed and built the machine tools he operated, he was a hobbyist. Hyper-accurate machine tools are one of the more critical elements of a science-based civilization. One of the easier ways to judge the technological sophistication of any social order is to examine the quality of their machine tools. Of course, even the finest machine tools are pretty worthless unless operated by passionately skilled and imaginative people...like Frank.

Once I had become acquainted with the nearly limitless possibilities and crazy difficult problems that could be solved by the nearly miraculous tools available to humanity, the question then became, "Why are we not creating this available utopia?" And I became fixated on expanding Veblen's class theories because it provided a believable answer to the question "Why are modern societies run by people who have NO IDEA how their world actually works?" Veblen's social theories provide a brilliantly simple response. The highest goal of the Leisure Classes is a life of uselessness. The highest goal of the industrial classes is usefulness. So while a Leisure Class occupation like politics has, if anything, deteriorated in the last 150 years (think Abe Lincoln to W. Bush) the Industrial Classes have invented miracles (like the progress from the telegraph to the satellite-based Internet). So it turns out that folks determined to live useful lives WILL significantly outperform the people determined to be absolutely worthless.

Soon I would write a book inspired by my new insights into Frank's world. When I had a first draft, I showed it to to him. He was absolutely delighted and read it in three days. We got together and he began to read some of the passages that truly amused him. A couple provoked genuine belly laughs—some a giggle. I was flattered beyond words that he thought I had captured the world-view of a prime set-up man.

Frank lived an important life. Everything that is truly amazing about this country was the result of the hard work, inventiveness, and determination of men like Frank Ryan. Folks like him still exist—though there seems to be fewer of them these days and their social situation seems nearly hopeless. 40+ years of USA de-industrialization will do that. So here's a toast to a Producer Class hero. R.I.P.

So what does a true Producer do when he retires? Why build a ridiculously complex trimaran, of course.

Sunday, June 6, 2021

Week-end Wrap – Political Economy – June 6, 2021

 Week-end Wrap – Political Economy – June 6, 2021

by Tony Wikrent


Strategic Political Economy

The Particular Psychology of Destroying a Planet” What kind of thinking goes into engaging in planetary sabotage?

Bill McKibben [The New Yorker]

….in a new book from the British psychoanalyst Sally Weintrobe. “Psychological Roots of the Climate Crisis” states its argument in its subtitle: “Neoliberal Exceptionalism and the Culture of Uncare.” Weintrobe writes that people’s psyches are divided into caring and uncaring parts, and the conflict between them “is at the heart of great literature down the ages, and all major religions.” The uncaring part wants to put ourselves first; it’s the narcissistic corners of the brain that persuade each of us that we are uniquely important and deserving, and make us want to except ourselves from the rules that society or morality set so that we can have what we want. “Most people’s caring self is strong enough to hold their inner exception in check,” she notes, but, troublingly, “ours is the Golden Age of Exceptionalism.” Neoliberalism—especially the ideas of people such as Ayn Rand, enshrined in public policy by Ronald Reagan and Margaret Thatcher—“crossed a Rubicon in the 1980s” and neoliberals “have been steadily consolidating their power ever since.” Weintrobe calls leaders who exempt themselves in these ways “exceptions” and says that, as they “drove globalization forwards in the 1980s,” they were captivated by an ideology that whispered, “Cut regulation, cut ties to reality and cut concern.” Donald Trump was the logical end of this way of thinking, a man so self-centered that he interpreted all problems, even a global pandemic, as attempts to undo him. “The self-assured neoliberal imagination has increasingly revealed itself to be not equipped to deal with problems it causes,” she writes.


The real Lord of the Flies: what happened when six boys were shipwrecked for 15 months

[The Guardian, via The Big Picture 6-3-2021]

When a group of schoolboys were marooned on an island in 1965, it turned out very differently from William Golding’s bestseller, writes Rutger Bregman….

For centuries western culture has been permeated by the idea that humans are selfish creatures. That cynical image of humanity has been proclaimed in films and novels, history books and scientific research. But in the last 20 years, something extraordinary has happened. Scientists from all over the world have switched to a more hopeful view of mankind. This development is still so young that researchers in different fields often don’t even know about each other.

Sunday, May 30, 2021

Week-end Wrap – Political Economy – May 30, 2021

 eek-end Wrap – Political Economy – May 30, 2021

by Tony Wikrent


Strategic Political Economy

Long Slide Looms for World Population, With Sweeping Ramifications 

[NYT, via Naked Capitalism 5-23-2021]


“1 big thing: The state of the world, according to me”

Dion Rabouin [Axios, via Naked Capitalism Water Cooler 5-27-21]

I find this very interesting because Rabouin implies that he is conveying the elite consensus he has gathered from his contacts and sources over the past years. The elites are well aware of the socio-economic problems afflicting average people: “Because consumers don't have cash to spend, many companies struggle to generate real profits.” Then the bottom line: “But it doesn't seem like there's much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.” 

As Ian Welsh explains in CDC Decides To Just Not Count All Covid Cases

The people making decisions not only don’t care if you die, if you dying will make them richer or more powerful, they’ll go with the decision path that leads to you or mum or your best friend dying or winding up homeless. You aren’t nothing to them, you’re meat. A prey animal.

Welcome to late capitalism.

Rabouin: 

This being my last Axios Markets newsletter, I figured I'd break from tradition and tell you what I really think. I'm not anyone important, but I read a lot of reports and I talk to a lot of smart people, so I've learned a thing or two.

I believe our country is in trouble. And it’s not about a loss of morality or religion or liberals or conservatives or the current president or the last president. It’s about a fundamental problem we have as a nation — a reckless imbalance of wealth. The people at the top have too much and the people at the bottom don't have enough.

This is not a philosophical matter of doing what’s “right.” It’s a practical matter of doing what’s necessary to uphold and maintain a consumption-based economy…. We’re living in a world now where the wealthy have so much money they literally don’t know what to do with it…. Those who aren’t asset holders haven’t even benefited from the risk-asset inflation that’s accompanied housing, medical and education price inflation for the past decade because wage inflation hasn’t even come close…. 

This problem isn't new. We've been lurching toward this imbalance for years as corporations busted unions, moved jobs offshore and muscled out independent small businesses, aided by politicians who rewarded them with tax breaks and no-bid contracts for doing it….

  • Retailers can't raise prices, so it is almost entirely a race to the bottom — nearly half of all new retail store openings announced so far this year are from Dollar General, Dollar Tree and Family Dollar.
  • The obvious exception being luxury brands, which are selling products to the wealthy who have more money than they know what to do with.

New companies today almost universally either lose money, free-ride by offering a service that makes some other service cheaper, or sell something to large corporations or the government.

#BigFacts: Because consumers don't have cash to spend, many companies struggle to generate real profits.

  • However, because interest rates are so low, if a company is big enough it can just keep issuing bonds to keep itself afloat.
  • That's why nearly a quarter of the largest public U.S. companies today are zombies — firms that don't even make enough money to pay the interest on their debt.

….But it doesn't seem like there's much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.