Week-end Wrap – Political Economy – March 31, 2024

Week-end Wrap – Political Economy – March 31, 2024

by Tony Wikrent

Strategic Political Economy

There Are Four Postelection Scenarios, and Not One Is Good 

Brynn Tannehill, March 22, 2024 [The New Republic]

Secret RCMP report warns Canadians may revolt once they realize how broke they are 

[National Post, via Naked Capitalism 03-24-2024]

“The coming period of recession will … accelerate the decline in living standards that the younger generations have already witnessed compared to earlier generations,” reads the report, entitled Whole-of-Government Five-Year Trends for Canada.

“For example, many Canadians under 35 are unlikely ever to be able to buy a place to live,” it adds.

The report, labelled secret, is intended as a piece of “special operational information” to be distributed only within the RCMP and among “decision-makers” in the federal government.

Global power shift

This is the way the West ends 

[Asia Times, via Naked Capitalism 03-30-2024]

With the United States entangled in conflicts in Ukraine and Gaza and the threat of a war with China looming large, Professor Michael Brenner’s insights and views on the state of the US-led liberal order are arguably as timely and important as ever….

MB: The entire foreign policy community in the United States now shares the basic tenets of neoconservatives. Actually, the scripture is Paul Wolfowitz’s notorious memorandum of March 1991 wherein he laid out a comprehensive, detailed strategy for systematizing American global dominance. Everything that Washington is doing, and thinking, now is derivative of that plan.

Its core principles: the United States should use all the means at its disposal to establish American global dominance; to that end, it must be ready to act preventively to stymie the emergence of any power that could challenge our hegemony; and to maintain full spectrum dominance in every region of the globe. Ideals and values are relegated to an auxiliary role as a veneer on the application of power and as a stick with which to beat others. Classic diplomacy is disparaged as inappropriate to this scheme of things.

For Biden himself, a confident, assertive, hard-edged approach to dealing with others derives naturally from belief in Americanism as a Unified Field Theory that explains, interprets and justifies whatever the US thinks and does. Were Biden reelected, this outlook will remain unchanged. And were he to be replaced by Kamala Harris mid-term, which is likely, inertia will keep everything on the fixed course.

Week-end Wrap – Political Economy – March 24, 2024

Week-end Wrap – Political Economy – March 24, 2024

by Tony Wikrent

Strategic Political Economy

Global Population Set To Fall For First Time In 700 Years 

[Modernity, via Naked Capitalism 03-23-2024]

Delayed Gratification – Why Are Global Birth Rates Falling, and Does It Matter? 

[Alpha Sources, via Naked Capitalism 03-18-2024]

[TW: It is astonishing how upset many people are about the prospect of shrinking populations. The political economic vision of civic republicans should be emphasizing that the entire aim of developing and employing technology that replaces human labor, is to diminish the need for human labor. But the benefits of new technologies must be shared equitably. ]

The Keys to a Long Life Are Sleep and a Better Diet—and Money [ 

[Wired, via Naked Capitalism Water Cooler 03-21-2024]

“The top 10 percent in both the UK and the US live over a decade more than the bottom 10 percent. It’s not even that they live more, they live more healthy lives. Why is that? Well the poor often don’t have the chance to exercise, their diets are often poor, and they work multiple jobs and have problems with sleep. All these things we think we can do, they’re harder if you’re poor and have to juggle jobs, child care, et cetera. One worry I have is that if we discover sophisticated interventions—like turning on stem cells and so on, or having to give transcription factors to people intravenously—depending on the sophistication of the intervention only the rich might be able to afford them. That would make the disparity even worse. Not only are the rich living longer, they’re going to live even longer and healthier.” 

Week-end Wrap – Political Economy – March 17, 2024

Week-end Wrap – Political Economy – March 17, 2024

by Tony Wikrent

Strategic Political Economy

 “‘If something requires us to cease production, we will do that:’ FAA  

[Leeham News & Analysis, via Naked Capitalism Water Cooler 03-13-2024]

“The Federal Aviation Administration (FAA) is considering whether to suspend the Production Certificate of Boeing Commercial Airplanes (BCA) if it’s not satisfied changes to its safety culture are sufficient, LNA has learned. It’s the “nuclear option” LNA has written about on previous occasions following the Jan. 5 in-flight accident/explosive decompression of a Boeing 737-9 MAX operated by Alaska Airlines. Already under heightened scrutiny by the FAA, Boeing took yet another in a series of safety blows when a special panel of experts appointed by the FAA to independently review Boeing’s safety culture issued a scathing report on Feb. 26.” Lambert Strether: “See Water Cooler here; document is now readable.] More: “The FAA levied fines—and suspended some of them—for previous safety violations 36 times, according to a tracking website. And despite pledges and actions taken to improve safety following the 2018-2019 MAX crisis, Boeing still has fallen short.” FAA’s leverage: “So, what’s the ultimate hammer the FAA has? It’s suspending the PC 700 certificate, and this is under consideration, LNA is told…. Boeing holds what’s known as a Production Certificate, named PC 700. This allows Boeing Commercial Airplanes to produce commercial airlines and military aircraft that are based on airliners…. If the FAA imposed a full suspension of PC 700, all 7-Series airliners would be affected. So would the commercially-based P-8 and KC-46A. Deliveries of the inventoried aircraft likely would be suspended. The FAA could choose to segregate the PC 700 more narrowly.” And: “It’s an election year. There is bipartisan Congressional criticism of Boeing, including from Congressional members from Washington State where the 737, 767, KC-46A, P-8A, and 777 are built. Despite the bipartisan nature, if the FAA suspended the PC 700 authority, the damage to Boeing and the affected supply chains would undoubtedly be subject to criticisms of President Joe Biden by Republicans.”

Airplanes and engineering: The way we were  

[Star-Tribune, via Naked Capitalism Water Cooler 03-12-2024]

When it changed: “Working for Honeywell in Minneapolis, I was involved in product developments for several Boeing aircraft: new platforms B-757, B-767, B-777 and B-787, and revisions on older designs, including the B-737. Each of these developments involved an intimate relationship between Boeing and Honeywell across multiple levels of organization. At the heart of the work were the customers’ requirements. Meeting these drove daily decisions in the project planning…. One afternoon, we started calling our contacts in Boeing Engineering. Engineering had prioritized the bidders and assured us Honeywell was their first choice. However, they would not confirm that Boeing management had signed off on the selection. We still believed we would win the program. In the past, Boeing always selected the highest technical bidder then renegotiated the price as the program phased into volume production. It was the best process to meet Boeing’s and the passengers’ quality demands… we were notified we were not selected for the program. Through several discussions with the Boeing engineering managers, we later found out that Boeing’s procurement process had changed. Boeing supply management downgraded the engineering assessment from prioritized capability to either meeting or not meeting the requirements. Then, procurement would select the lowest bidder from this pool of suppliers meeting the requirements. Engineering was no longer needed to sign off on the selection. (We heard that Boeing engineers wore a black armband for a month protesting the selection for this program.) The selection process could now be done in a spreadsheet with no account for the uncertainty that engineering often expected and hoped to have some insurance against. This would become a fundamental change in the aircraft industry.”

Week-end Wrap – Political Economy – March 10, 2024

Week-end Wrap – Political Economy – March 10, 2024

by Tony Wikrent

Global power shift

[X-Twitter, via Naked Capitalism 03-06-2024]

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Ukraine war and Western system’s fatal flaw 

Alex Krainer, Marck 6, 2024 [substack]

One of the talking points that has been making rounds among the West’s true believers, is that we can outspend Russia by a factor of 10 in military expenditures….

As the New York Times reported last September, Russia is producing at least seven times more ammunition than the US and its Western allies combined, and she is producing it at about 1/10th of the cost of western manufacturers. For example, while the cost per round for a Russian 152 mm round is about $600, NATO must budget between $6,000 and $8,000 per each 155 mm round.

Not only is Russia vastly ahead in terms of sheer production volumes but also in terms of innovation, quality and overall effectiveness. Her arsenal spans a very large array of weaponry from ultra-sophisticated hypersonic precision-guided missiles, world's most effective air-defense complexes and cheap but deadly drones, to the basic stuff like field artillery and ample ammunition to keep it firing 24/7 for months on end. At the same time, the United States and NATO still rely on legacy weapons systems that were state-of-the art in the 1990s, but are in large part obsolete today.

Purpose-driven vs. profit-driven systems: it’s no match

In a superb and important piece of analysis referencing the recent US Department of Defense National Defense Industrial Strategy (NDIS), former Marine and military affairs analyst Brian Berletic dissected many of the reasons why the combined West is now clearly losing the arms race, not only against Russia but also against China. He points out the key differentiator: while Russia's defense industry is purpose-driven, that of the West is profit-driven....

The undiagnosed malignancy

... Even as it endeavors to maintain a dominant geostrategic position in the world, Western powers have cannibalized their own capability to enforce and defend that position. The inescapable conclusion is that there is a deep, systemic flaw in the Western model of governance.

For generations, we'd all been educated to worship at the altar of private capital's unrestrained pursuit of profit for the greatest benefit of its shareholders, as Milton Friedman argued in his 1970 essay entitled “The Social Responsibility of Business is to Increase its Profits” (PDF). No other considerations can shape the development of production and distribution of goods and services in our economies, else someone will shriek, SOCIALISM! Worse, we’ve even allowed ourselves to become convinced that individuals’ unrestrained pursuit of their own interests can somehow automagically lead to the best possible outcome for the whole society.

As it turns out, those ideas were the owner class’s self-serving delusions that incubated the fatal flaw within their system, rendering it fragile and weak. The flaw has festered as an undiagnosed malignancy because it enabled the interests who own our Military Industrial Complex and other key industries (the big banks, big tech, big ag, and big pharma) to become extremely wealthy. They also became deeply entrenched in society’s power networks. As such they’ve grown and wholly resistant to any curtailment of their extraordinary privileges, even when it becomes clear that they are driving their nations to destruction….

China and Russia, the industrial production superpowers that could win a war 

[bne Intellinews, via Naked Capitalism 03-03-2024]

Week-end Wrap – Political Economy – March 3, 2024

Week-end Wrap – Political Economy – March 3, 2024

by Tony Wikrent

Strategic Political Economy

Amitav Ghosh’s Reckoning With Opium.

Alexander Zaitchik, March 1, 2024 [The New Republic]

His new book, Smoke and Ashes, traces the ravages of British opium on India from the eighteenth century to the present.

[TW: I April 2016 I posted an excerpt from Commerce, Christianity, and Civilization, Versus British Free Trade. Letters in Reply to the London Times, by Henry C. Carey. Philadelphia, Collins, 1876. Though Carey today is rarely mentioned in economics textbooks, he was the leading USA economist of the mid-nineteenth century, a staunch protectionist who was probably the single greatest proponent of what was then called the American School of Political Economy. 

[American protectionism was much more than simply a rejection of the concept of comparative advantage. Michael Hudson explains in the Preface to his 2010 book America’s Protectionist Takeoff: The Neglected American School of Political Economy:

The protectionist doctrine that shaped America's industry and agriculture... went beyond the narrow boundaries of today's economics discipline by deeming public policy and technology central to economic theorizing, not "exogenous." Analyzing what was needed to increase productivity, the American School emphasized that wages and prices had to be high enough to sustain rising living and educational standards for labor, and investment in rising energy mobilization by capital."

[But the American School even went beyond that. Carey and other American School economists always kept in view the ultimate goal of economic policies: the establishment and enhancement of civilization. And unlike the competing British School of Adams, Ricardo, and Mill, a central element of the American School was morality. Note the heavy tone of scorn and sarcasm Carey uses in his fifth letter to the editors of the Times of London, as he reviews and condemns the British opium trade and its disastrous consequences for China. -TW]

Japan’s new births fall to record low as demographic woes worsen 

[ABC Australia, via Naked Capitalism 02-28-2024]

Power in the shadows

CIA, Ukraine Exchange Pre-Divorce Propaganda 

Matt Taibbi, via Naked Capitalism 02-28-2024] Important

The CIA in Ukraine — The NY Times Gets a Guided Tour 

[ScheerPost, via Naked Capitalism 03-02-2024] 

Week-end Wrap – Political Economy – February 25, 2024

Week-end Wrap – Political Economy – February 25, 2024

by Tony Wikrent

Gaza / Palestine / Israel

Opinion: I’m an American doctor who went to Gaza. What I saw wasn’t war — it was annihilation 

[Los Angeles Times, via Naked Capitalism 02-22-2024]

Global power shift

[X-Twitter, via Naked Capitalism 02-19-2024]

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SCOTT RITTER: Mike Turner’s Folly 

[Consortium News, via Naked Capitalism 02-18-2024]

The carnage of mainstream neoliberal economics

You paid more in income taxes last year than a corporation with billions in profits

[Popular Information, via The Big Picture 02-18-2024]

On February 2, for example, General Electric (GE) reported about $7 billion in profits for 2023. GE CEO and Chairman H. Lawrence Culp Jr. was effusive. "In 2023, our teams delivered an excellent year, more than tripling earnings and generating almost 70 percent more free cash flow," Culp said in a statement. Culp noted the company was able to fatten the pockets of its shareholders by spending $7 billion on "dividends, buybacks, and retiring our preferred equity."

You might expect that, with such a profitable year, GE sent a giant check to the federal government. Instead, GE received a refund of $423 million.

Data from Americans for Tax Fairness shows that GE is not an anomaly. Earlier this month, T-Mobile reported over $10.9 billion in profits in 2023 but paid just $42 million in federal income taxes, an effective tax rate of just 0.4%. Meanwhile, Tesla recorded $3.2 billion in domestic profits in 2023 but paid just $48 million in federal income taxes, an effective tax rate of 1.5%.

The 2023 annual reports of public companies will be filed throughout the year. But in 2020, "55 of the largest corporations in America paid no federal corporate income taxes… despite enjoying substantial pretax profits in the United States," according to a report by the Institute on Taxation and Economic Policy (ITEP). Those 55 companies collectively brought in over $40 billion in pre-tax domestic profit. But instead of paying federal income taxes, they received $3.5 billion in rebates from the federal government.

Another ITEP report found that 39 profitable companies paid no taxes over the three-year period from 2018 to 2020. This group included FedEx, Salesforce, Penske, and Advanced Micro Devices. And T-Mobile paid no taxes over that three-year period despite collecting $11.5 billion in profits. Another 79 profitable corporations paid less than half of the statutory rate of 21% between 2018 and 2020.  

Companies are able to pay little or no taxes in part due to "long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act," the signature tax policy of former President Trump. Companies can continue to take advantage of tax loopholes, including huge write-offs for giving executives stock options, shifting profits off-shore, and accelerated depreciation of equipment purchases. But the statutory tax rate was also reduced from 35% to 21%. So, companies are taking these deductions off of a much smaller base.

The Tax Cuts and Jobs Act was supposed to "broaden the base" by eliminating loopholes and lowering the rate. It ended up just lowering the rate and keeping most of the loopholes. As a result, many companies are paying little to nothing.

Week-end Wrap – Political Economy – February 18, 2024

Week-end Wrap – Political Economy – February 18, 2024

by Tony Wikrent

Who will guard the guardians? 

U.S. Government Is Hiding Documents That Incriminate Intelligence Community For Illegal Spying And Election Interference, Say Sources 

Public, via Naked Capitalism 02-15-2024]

“Former CIA Director Gina Haspel blocked the release of ‘binder’ with evidence that may identify her role in the Trump-Russia collusion hoax.”

CIA Had Foreign Allies Spy On Trump Team, Triggering Russia Collusion Hoax, Sources Say 

Michael Shellenberger, Matt Taibbi, and Alex Gutentag [via Naked Capitalism 02-14-2024]

[TW:  I want to put forward the observation that given Trump’s close association with Roy Cohn, and business dealings with the Russian mafia, it would have been malpractice for USA intelligence agencies NOT to make such requests. The real problem with this is that there is no longer any reason to believe the the CIA, FBI, NSA and other intelligence agencies actually serve the General Welfare of the citizens of USA. 

Or to put it another way, how would we want an intelligence agency to have dealt with Aaron Burr when Burr was running for president? Or how about dealing with Secretary of War Jefferson Davis in the 1850s as the sectional crisis worsened? What do we want an intelligence agency to do when one such appears headed for the highest office in the land? Or actually wins it?

There are many people who have a knee jerk reaction against intelligence agencies.  Are we to abolish any and all intelligence agencies? I have no doubt that there are many people who immediately answer with an emphatic “yes!” I would ask them to take the time to read James Fenimore Cooper’s The Bravo/ It is Cooper’s “novel” of how the secret service of Venice blackmails a poor man into being an assassin. At the very least, read Cooper’s Introduction; there is nothing fictional there at all. Cooper explains that he wrote the novel to explore the process of cultivating evil in the dark recesses of government power, and how that contrasts to the process of acculturation in civic values that is supposed to occur in a real republic.

In the case of Trump, we know that his behavior and character was molded in profoundly evil ways because Trump was tutored in Cohn’s methods and philosophy of government. But, again, what are we to do about this when we no longer have government institutions steeped in the civic values of republicanism? Recall that Jeffrey Epstein’s first troubles with law enforcement were dissipated by the intervention of intelligence agencies with the district attorney in Florida who wanted to bring charges.

Lambert Strether applauds (anti)Republicans for opposing the campaign of the intelligence agencies against Trump, but I do not think these (anti)Republicans are acting from any moral commitment to the good. Rather, their position is part of their partisan warfare against the Democrats, calculated to gain a political advantage.  The excesses and coups of the CIA, let us remember were committed as much, if not more, under Republicans as Democrats. The names Dulles, Helms, Colby and Casey come to mind. And then there is George Bush Sr., who was both CIA director and POTUS. And I think it is a mistake to assume that only the Democrats thought they would benefit from the RussiaGate operation. Trump is as much a danger to the Republican establishment as he is to the Democratic Party. Nobody yet has been much interested in looking for a RussiaGate connection to the Bush family apparatus yet, but I suspect there are some important stories there waiting to be uncovered.

It is useful to look at the history of intelligence activities before the formal establishment of intelligence agencies — and especially the creation of the national security state — beginning with Franklin’s and Washington’s espionage operations during the Revolutionary War. Why were there no scandals arising from those operations? Or from the Union Army and Pinkerton operations during the Civil War? I contend that a large part of the reason was that the guardrails of public duty as defined by civic republicanism were still in place and quite robust.

In the final analysis, the only real way to “guard the guardians” is to make sure that the doctrines and values of civic republicanism a suffused throughout the nation. But capitalism, and its single-minded emphasis on self-interest, is a strong and dangerous corrosive element that must be reckoned with. — TW]

Death of Aleksei Navalny: the Brits did it! 

Gilbert Doctorow [via Naked Capitalism 02-17-2024]

...In all of the false flag operations that have been directed by the West against Russia over the past decade or more, I have argued that the old Roman investigative principle of cui bono militated against the Kremlin having been involved in any way.  So it is today:  why would Putin want to murder Navalny, when the man is now largely forgotten within Russia. Navalny is yesterday’s news and his ‘anti-corruption’ campaign is irrelevant to Russians in the midst of an existential struggle with the Collective West that is being fought on the territory of Ukraine?  However, the murder of Navalny clearly serves the interests of that same Collective West.…

Let us go beyond the cui bono argumentation to circumstantial evidence that is damning for the Brits. As the Americans like to say, there are ‘fingerprints’ of the Brits all over this death of Navalny.

A fair number of the poisonings and other assorted deaths of people who could be said were ‘inconvenient’ to the Kremlin happened in the U.K., after all. That is where Boris Berezovsky, the exiled oligarch who opposed Putin tooth and nail, was ‘suicided’ and it occurred in 2013 at his London estate when it was widely rumored he was looking for forgiveness for his treachery and was preparing to return to Mother Russia with a trove of documents.  Earlier still, the U.K. is where the Berezovsky employee Alexander Litvinenko met his death in 2006 from polonium poisoning in a very British cuppa tea.

However, more recently there were incidents in the U.K. which bear directly on the fate of Navalny, and their timing is very relevant. I am thinking about the Novichok poisoning of former Russian spy Alexander Skripal in Salisbury at the start of March 2018, ahead of the 18 March presidential elections in Russia that year, when Putin was making his return to power following the interregnum when Dmitry Medvedev was president….

Week-end Wrap – Political Economy – February 11, 2024

Week-end Wrap – Political Economy – February 11, 2024

by Tony Wikrent

Gaza / Palestine / Israel

Israel’s Relentless Bombing Erases Gaza’s Heritage Sites 

[Wide Walls, via Naked Capitalism 02-09-2024]

The war in Gaza is wiping out Palestine’s education and knowledge systems 

[The Conversation, via Naked Capitalism 02-09-2024]

In the past four months, all or parts of Gaza’s 12 universities have been bombed and mostly destroyed.

Approximately 378 schools have been destroyed or damaged. The Palestinian Ministry of Education has reported the deaths of over 4,327 students, 231 teachers and 94 professors.

Numerous cultural heritage sites, including libraries, archives and museums, have also been destroyed, damaged and plundered.

Oligarchs' war on the experiment of republican self-government

The Republican Party and Their Billionaire Backers’ Plot Against America

Thom Hartmann, February 8, 2024 [Common Dreams]

...The most appealing thing about a dictator is that he can “get things done.”

Dictators don’t have to worry about bureaucracies hindering them, or pesky laws and regulations. They don’t care about local opposition to their projects, or their impact on the environment.

From making the trains run on time to building an autobahn and a car company to go with it, dictators famously “get things done.”

The corollary to that old nostrum is that when things are going well, when things are working smoothly, when the people are getting what they want from their government, there is little interest in putting a dictator into office.

You have to break government pretty badly before people are willing to trade in a normal democracy for a dictatorship, but it’s sure happened before.

Germany wouldn’t have embraced Hitler if it weren’t for the depression the country had slid into because they lost World War I and were hit with fierce sanctions in the Treaty of Versailles.…

One of the most successful ways the forces of autocracy and authoritarianism have risen to power throughout history is by creating or stepping into a crisis and promising to be the “strongman” who will fix things and fix them now.

Which, of course, is why right-wing billionaires and the Republicans they own have been working so hard in the decades since the Reagan Revolution to break our government.

They want a series of terrible crises. And if they don’t happen organically, right wingers are more than happy to create them, as we saw this week when Republicans in the House of Representatives refused to do anything about our southern border or to fund aid to Ukraine and the Palestinians….

Week-end Wrap – Political Economy – February 4, 2024

Week-end Wrap – Political Economy – February 4, 2024

by Tony Wikrent

Trader Joe’s Attorney Argues National Labor Relations Board Is ‘Unconstitutional’ 

HuffPo, via Naked Capitalism 01-29-2024]

Global power shift

Everything You’re Told About The Global Economy Is Wrong (interview)

Philip Pilkington, YouTube, via Naked Capitalism 02-02-2024] Grab a cup of coffee. Or two cups. Starting with the Houthis and moving on from there:

Gaza / Palestine / Israel

Domicide: The Mass Destruction of Homes Should Be a Crime Against Humanity 

[New York Times, via Naked Capitalism 01-30-2024]

How war destroyed Gaza’s neighbourhoods – visual investigation 

[Guardian, via Naked Capitalism 02-01-2024]

Satellite image with destroyed buildings in red

Israeli Ministers Attend ‘Resettle Gaza’ Conference 

[Antiwar.com, via Naked Capitalism 01-30-2024]

[X-Twitter, via Naked Capitalism Links 01-31-2024]

Week-end Wrap – Political Economy – January 28, 2024

Week-end Wrap – Political Economy – January 28, 2024

by Tony Wikrent

Global power shift

Maersk ships in US Navy convoy forced to retreat under Houthi missile attack 

[Trade Winds, via Naked Capitalism 01-26-2024]

As Armchair Warlord noted on X(Twitter): “Lost amid all the other news breaking in the last 24 hours is one particularly disturbing story: the United States Navy lost a battle at sea yesterday.”

[X-Twitter, via Naked Capitalism 01-25-2024]

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The Reason China Can’t Stop Its Decline

Among specialists who follow China most closely, the two main causes cited for this new conventional wisdom have been known for years. The first is that China’s growth model has been overreliant on policies such as financial repression and extraordinary levels of investment. Here, repression has nothing to do with the usual political usage of the word. It means, rather, that the state controls domestic interest, exchange rates, and capital outflows in such a way that citizens receive little accrual or benefit from their high rates of savings. Instead, these are captured by the state and channeled into industries that are favored or prioritized by bureaucrats, including many that are state-owned.

Some of the problems that might arise from financial repression can seem apparent even to lay people. Bureaucrats tend to know little about business and are unlikely to be in the best position to make the smartest and nimblest economic bets about the industrial future. Some features of this setup may be less than obvious, though. When the state captures and invests the nation’s savings according to its own whims, capital becomes scarcer and more expensive for private investors. This also suppresses the domestic consumption that most mature economies depend on for growth. Finally, as the state channels more and more investment into industries of its choosing, average return on investment falls. China is now at the point where it must invest huge amounts of capital to produce each new dollar of economic growth, and everything points to this continuing to worsen….

[TW: I included this because of its use of the term “financial repression” in an example of clumsy and terribly inaccurate Western analysis of China.  In fact, financial predators are the very reason the USA industrial base was “hollowed out” inevitably resulting in the inability to produce enough ammunition. or to build safe and cost-effective aircraft.]

Week-end Wrap – Political Economy – January 21, 2024

Week-end Wrap – Political Economy – January 21, 2024

by Tony Wikrent

Global power shift

China Is the World’s Sole Manufacturing Superpower

Richard Baldwin [VoxEU, via Naked Capitalism 01-17-2024]

...The US is the world’s sole military superpower. It spends more on its military than the ten next highest spending countries combined. China is now the world’s sole manufacturing superpower. Its production exceeds that of the nine next largest manufacturers combined. This column uses the recently released 2023 update of the OECD TiVA database to paint an eight-chart portrait of China’s journey to superpower status and the asymmetric impact that its dominance has had on global supply chains….

When it comes to gross production, China’s share is three times the US’ share, six times Japan’s, and nine times Germany’s. Taiwan, Mexico, Russia, and Brazil now have higher gross output than the UK. Canada is further down the ranking, in 15th place….

China’s dominance is less stark in exports (Figure 3), though the rise is equally amazing. In 1995 China had just 3% of world manufacturing exports, By 2020, its share had risen to 20%. The corresponding fall in the G7 share was less dramatic than for its share of production….

Figure 4, left panel, shows that the US relies far more on Chinese manufacturing production than vice versa. ² While shocking at first sight, this should not be unexpected. It is natural that a country with 11% of the world output buys more from a country that produces 35% than vice versa, but the numbers are astounding. China was more exposed to US inputs before 2002, but the US has had greater exposure since then. In 2020, the US was about three times more exposed to Chinese manufacturing production than vice versa….

Robust growth in 2023: China maintains top position in global shipbuilding sector for 14 years

[news.cgtn.com, via Naked Capitalism comments 01-17-2024]

In the past 12 months, China's shipbuilding output reached 42.32 million deadweight tonnes (dwt), a year-on-year increase of 11.8 percent, accounting for 50.2 percent of the world's total.

The new orders rose 56.4 percent year on year to 71.2 million dwt during the period, taking up 66.6 percent of the world's total.

By the end of December, the volume of orders on hand was 139.39 million dwt, up 32 percent year on year, accounting for 55 percent of the world's total.

In 2023, five Chinese shipbuilding enterprises ranked in the global top 10 in output, seven in top 10 for new order volume, and six for holding orders, said the MIIT.

The US, Israel Have Lost Battlefield Control – Houthis Have Attacked US Destroyer, Hit Greek-US Owned Bulker; Iran Has Hit US Base in Kurdish Capital, Erbil

John Helmer [via Naked Capitalism 01-17-2024]

Week-end Wrap – Political Economy – December 31, 2023

Week-end Wrap – Political Economy – December 31, 2023

by Tony Wikrent

Oligarchy

Oligarchy and Democracy

Jeffrey A. Winters [The American Interest, via The Big Picture 12-24-2023]

Winters is professor of political science at Northwestern University and author of Oligarchy, published by Cambridge University Press in 2011.

Everyone is by now aware of the staggering shift in fortunes upward favoring the wealthy. Less well understood is that this rising inequality is not the result of something economically rational, such as a surge in productivity or value-added contributions from financiers and hedge-fund CEOs, but is rather a direct reflection of redistributive policies that have helped the richest get richer.

[TW: I would argue that this is, in fact, well understood: that’s why Biden’s polling is so terrible. People generally understand the economy is rigged, and the see no effort being made to unrig it, nor any effort to rein in the worst abuses of economic predators, such as private equity. ]

The tiny proportion of wealthy actors among eligible voters cannot account for the immense political firepower needed to keep winning these policy victories. While motivated and mobilized minorities—those organized over issues like gay marriage, for example—can sometimes win legislative victories despite broad opposition from the electorate, America’s ultra-rich all together could barely fill a large sports stadium. They never assemble for rallies or marches, sign petitions, or mount Facebook or Twitter campaigns. So how do they so consistently get their way?

One increasingly popular answer is that America is an oligarchy rather than a democracy.¹ The complex truth, however, is that the American political economy is both an oligarchy and a democracy; the challenge is to understand how these two political forms can coexist in a single system. Sorting out this duality begins with a recognition of the different kinds of power involved in each realm. Oligarchy rests on the concentration of material power, democracy on the dispersion of non-material power. The American system, like many others, pits a few with money power against the many with participation power. The chronic problem is not just that electoral democracy provides few constraints on the power of oligarchs in general, but that American democracy is by design particularly responsive to the power of money….

Oligarchy should be understood as the politics of wealth defense, which has evolved in important ways throughout human civilization. For most of history, this has meant oligarchs were focused on defending their claims to property. They did so by arming themselves or by ruling directly and jointly over armed forces they assembled and funded. Every great increase in wealth required oligarchs to spend additional resources on armaments, castles, militias and other means of defense. The greatest transformation in the politics of wealth defense and thus of oligarchy came with the rise of the modern state. Through its impersonal system of laws, the armed modern state converted individual oligarchic property claims into secure societal property rights. In exchange, oligarchs disarmed and submitted to the same protective legal infrastructure that applied to all citizens (in theory if not always in practice). Property rights offered reliable safeguards not only against potential antagonists without property, but also, no less important, against other oligarchs and the armed state itself that administered the entire arrangement.

[TW: Here, I think Winters commits a grievous error of omission by not considering the mental and social pathologies which characterize the rich, and the society they dominate. Theorists of civic republicanism repeatedly warned of the self-glorification the rich engage in. ]

Week-end Wrap – Political Economy – December 24, 2023

Week-end Wrap – Political Economy – December 24, 2023

by Tony Wikrent

14th Amendment

Why 14th Amendment bars Trump from office: A constitutional law scholar explains principle behind Colorado Supreme Court ruling

Mark A. Graber [The Conversation, via Naked Capitalism Water Cooler 12-20-2023]

“Section 3 then says people can be disqualified from holding office if they ‘engaged in insurrection or rebellion.’ Legal authorities from the American Revolution to the post-Civil War Reconstruction understood an insurrection to have occurred when two or more people resisted a federal law by force or violence for a public, or civic, purpose. Shay’s Rebellion, the Whiskey Insurrection, Burr’s Rebellion, John Brown’s Raid and other events were insurrections, even when the goal was not overturning the government. What these events had in common was that people were trying to prevent the enforcement of laws that were consequences of persuasion, coalition building and voting. Or they were trying to create new laws by force, violence and intimidation.” 

Donald Trump blocked from appearing on presidential primary ballot by Colorado Supreme Court

[Colorado Sun, via Naked Capitalism 12-22-2023] 

Chief Justice Boatright: “The framework that (Colorado’s election law) offers for identifying qualified candidates is not commensurate with the extraordinary determination to disqualify a candidate because they engaged in insurrection against the Constitution.” [Boatright] said the plaintiffs relied on the ‘breakneck pace’ required in Colorado’s election laws to pursue Trump’s disqualification and that they ‘overwhelmed the process.’ ‘This speed comes with consequences, namely, the absence of procedures that courts, litigants, and the public would expect for complex constitutional litigation,’ Boatright added.” Justice Samour called the challenge ‘a square constitutional peg that could not be jammed into our election code’s round hole’ and labeled the district court proceedings a ‘procedural Frankenstein’ for not following the strict deadlines in state election law.” Berkenkotter: “Three days to appeal a district court’s order regarding a challenge to a candidate’s age? Sure. But a challenge to whether a former President engaged in insurrection by inciting a mob to breach the Capitol and prevent the peaceful transfer of power? I am not convinced this is what the General Assembly had in mind.”

Week-end Wrap – Political Economy – December 17, 2023

Week-end Wrap – Political Economy – December 17, 2023

by Tony Wikrent

Oligarchs' war on the experiment of republican self-government

Constitution in the Crosshairs: The Far Right’s Plan for a New Confederacy

Nancy Maclean, Arn Pearson, December 11, 2023 [progressive.org, via Naked Capitalism 12-15-2023]

Frustrated by the surprise defeat of Mitt Romney in the 2012 presidential race, a group of breathtakingly rich and highly strategic actors on the radical right, including the Koch brothers, quietly launched an ambitious new campaign to lock in their political control once and for all. They had used their immense wealth and institution-building savvy to capture a majority of state legislatures in 2010, so the groundwork was already in place.

This campaign would be spearheaded by a corporate pay-to-play group they had long funded to influence state laws—the American Legislative Exchange Council (ALEC)—and a dark money group with deep ties to Charles and the late David Koch (who died in 2019), as well as the Tea Party movement—Citizens for Self-Governance (CSG). When legislators arrived at ALEC’s annual meeting in August 2013, they were given detailed instructions and model text to bring back to their statehouses for a resolution demanding the first Constitutional convention since 1787….

In the decade since those first secretive meetings, Meckler’s Convention of States has managed to rack up wins in nineteen states for a convention that would address sweeping proposals to radically curtail the powers of the federal government. ALEC-led groups also claim to have twenty-eight states behind their call for a more limited convention to propose a balanced budget amendment to the U.S. Constitution.

Should a convention be convened, what is it that the ultra-rich backers want? Their chosen so-called grassroots leaders mince no words when speaking to friendly audiences. Meckler has declared that the purpose is “to reverse 115 years of progressivism.” In fact, the endgame is even more consequential: to return this nation to its pre-Constitution roots under the Articles of Confederation, with a weak central government and sovereign states….

Indeed, most of what ALEC, CSG, and their billionaire backers want to achieve flies in the face of public opinion. And that’s what makes their plan so devious. “Voters have no role to play in the right’s vision of a Constitutional convention,” a report by the Center for Media and Democracy (CMD) concluded. Delegates would be handpicked by legislative leaders, and here’s the kicker: The votes taken at such a convention would be based not on population but on one vote per state in order to grossly underrepresent the majority of Americans.

In audio obtained by CMD, former U.S. Senator Rick Santorum, Republican of Pennsylvania, told an ALEC audience in 2021 how this strategy could be used to circumvent what most Americans want. “Because their [Democrats’] population is concentrated and ours isn’t,” Santorum said, “rural voters [Republicans] . . . actually have an outsized power granted under this process.”

He added, “We have the opportunity as a result of that to have a supermajority, even though . . . we may not even be in an absolute majority when it comes to the people who agree with us.”

Gaza / Palestine / Israel

[TW: The most disconcerting aspect of Israel’s ethnic cleansing of Gaza is not the brutality and inhumanity of it, or the shamelessness of Israeli officials, but the complete lack of any plan or even proposal for a constructive alternative to the killing and destruction. 

[Israeli leaders are clearly intent on driving Palestinians out of Gaza. And they say they will not accept a Palestinian state. But a Palestinian state is the only humane solution. Whether or not a Palestinian state will include Gaza and the West Bank is, at this point, entirely subject to Israeli intransigence.

[Palestinians must be given hope for building a better future, otherwise they can never be expected to be peaceful. Give them a chunk of Sinai and the resources to begin building new farms, villages, and cities, new schools, universities, and hospitals, and they will soon enough cease harboring a hatred for the state of Israel. They will be too busy building a new future to listen to jihadists who want to exterminate Israel. This is the only true way to lasting peace. 

[The only place for a Palestinian state, given Israeli intransigence, is the Sinai. The Egyptian government has very good reasons to oppose the displacement of over two million Palestinians into a peninsula that currently is home to only 600,000. But if the international community can summon the will, it is possible to offer Egypt much, much more than the complete forgiveness of its $160 billion in debt. 

[Gathering $1 trillion to create a new state of Palestine in Sinai would also force a break with the bankers dictatorship that has enforced neoliberal austerity on the world’s poor countries for three quarters of a century. Over $30 trillion is sitting in hot money centers around the world. Impose a mere one percent tax on those holdings world wide and you have a third of what’s needed. The oil rich Middle East countries can surely come up with another third. That leaves some $330 billion to be provided by the rest of the world. By contrast, the US has already provided $111 billion in weapons, equipment, humanitarian assistance and other aid to Ukraine. ]

Week-end Wrap – Political Economy – December 10, 2023

Week-end Wrap – Political Economy – December 10, 2023

by Tony Wikrent

War in Ukraine

Seymour Hersh, Anatol Lieven and the desperate DC gambit to end hostilities in Ukraine while claiming ‘victory’ 

Gilbert Doctorow [via Naked Capitalism 12-04-2023] Excellent.

Miscalculations, divisions marked offensive planning by U.S., Ukraine 

[Washington Post, via Naked Capitalism 12-07-2023]

Key elements that shaped the counteroffensive and the initial outcome include:

● Ukrainian, U.S. and British military officers held eight major tabletop war games to build a campaign plan. But Washington miscalculated the extent to which Ukraine’s forces could be transformed into a Western-style fighting force in a short period — especially without giving Kyiv air power integral to modern militaries.

● U.S. and Ukrainian officials sharply disagreed at times over strategy, tactics and timing. The Pentagon wanted the assault to begin in mid-April to prevent Russia from continuing to strengthen its lines. The Ukrainians hesitated, insisting they weren’t ready without additional weapons and training.

● U.S. military officials were confident that a mechanized frontal attack on Russian lines was feasible with the troops and weapons that Ukraine had. The simulations concluded that Kyiv’s forces, in the best case, could reach the Sea of Azov and cut off Russian troops in the south in 60 to 90 days.

● The United States advocated a focused assault along that southern axis, but Ukraine’s leadership believed its forces had to attack at three distinct points along the 600-mile front, southward toward both Melitopol and Berdyansk on the Sea of Azov and east toward the embattled city of Bakhmut.

Dissecting the Washington Post’s “analysis” of Ukraine’s Failed Counter Offensive — Part 1 

Larry Johnson [via Naked Capitalism 12-09-2023]

Establishment Alarmism in Overdrive as Raytheon Lloyd Threatens Congress with War 

Simplicius the Thinker [via Naked Capitalism 12-08-2023]

Lying Was the Only Plan Biden, U.S. Ever Had in Ukraine 

Matt Taibbi [via Naked Capitalism 12-09-2023]

Democratic Party "stuck in its addictions to neoliberal economics" - Sen. Chris Murphy

 Luke Goldstein of The American Prospect reports on Senator Chris Murphy’s (D-CT) recent shift to an explicit rejection of neoliberalism. 

I pressed Murphy about why, despite executive actions, Democrats in Congress weren’t able to move forward in the last session on new antitrust legislation, such as the American Innovation and Choice Online Act or the Open App Markets Act, when they controlled both the House and Senate. He didn’t blame it on Senate Republicans or on party leadership, despite ample reporting that Senate Majority Leader Chuck Schumer (D-NY) was the main impediment holding up votes on both bills last year.

Did you catch that? The junior Democratic Senator from Connecticut says Democrats in Congress are not being blocked by Republicans, or even by the gerontocracy that unfortunately dominates the Democratic Party. So who or what does the Senator blame?

“I think there is still a sizable portion of the Democratic Party that is sort of stuck in its addictions to neoliberal economics that concentrated and globally integrated markets can deliver prosperity. I still think this party has not made a firm break from neoliberalism,” said Murphy.

Week-end Wrap – Political Economy – December 3, 2023

Week-end Wrap – Political Economy – December 3, 2023

by Tony Wikrent

Gaza / Palestine / Israel

[X-Twitter, via Naked Capitalism 12-01-2023]

x

‘A mass assassination factory’: Inside Israel’s calculated bombing of Gaza

[+972, via X-Teitter. above]

Permissive airstrikes on non-military targets and the use of an artificial intelligence system have enabled the Israeli army to carry out its deadliest war on Gaza….

The investigation by +972 and Local Call is based on conversations with seven current and former members of Israel’s intelligence community — including military intelligence and air force personnel who were involved in Israeli operations in the besieged Strip — in addition to Palestinian testimonies, data, and documentation from the Gaza Strip, and official statements by the IDF Spokesperson and other Israeli state institutions….

Several of the sources, who spoke to +972 and Local Call on the condition of anonymity, confirmed that the Israeli army has files on the vast majority of potential targets in Gaza — including homes — which stipulate the number of civilians who are likely to be killed in an attack on a particular target. This number is calculated and known in advance to the army’s intelligence units, who also know shortly before carrying out an attack roughly how many civilians are certain to be killed.

In one case discussed by the sources, the Israeli military command knowingly approved the killing of hundreds of Palestinian civilians in an attempt to assassinate a single top Hamas military commander. “The numbers increased from dozens of civilian deaths [permitted] as collateral damage as part of an attack on a senior official in previous operations, to hundreds of civilian deaths as collateral damage,” said one source.

“Nothing happens by accident,” said another source. “When a 3-year-old girl is killed in a home in Gaza, it’s because someone in the army decided it wasn’t a big deal for her to be killed — that it was a price worth paying in order to hit [another] target. We are not Hamas. These are not random rockets. Everything is intentional. We know exactly how much collateral damage there is in every home.”

According to the investigation, another reason for the large number of targets, and the extensive harm to civilian life in Gaza, is the widespread use of a system called “Habsora” (“The Gospel”), which is largely built on artificial intelligence and can “generate” targets almost automatically at a rate that far exceeds what was previously possible. This AI system, as described by a former intelligence officer, essentially facilitates a “mass assassination factory.”

“Wiping Gaza Off the Map”: Implementing Israel’s “Secret Intelligence Memorandum.” More Than 20,000 Civilians Killed 

Michel Chossudovsky [via Naked Capitalism 12-01-2023]

Out of Gaza’s 2.3 million people,

1.73 million are now displaced…

20,030 civilians killed…

8,176 children have been killed…

4,112 women have been killed…

7,000 people remain unaccounted for, including more than 4,700 children…

36,350 civilians have been injured….

...It’s genocide. The underlying modalities are confirmed in an official “secret” memorandum of Israel’s  Ministry of Intelligence. Washington is fully supportive of this military-intelligence operation.

Both US and British Operation  Forces are collaborating with the I.D.F. (See this)

The 10 page document  recommends “the forcible and permanent transfer of the Gaza Strip’s 2.2 million Palestinian residents to Egypt’s Sinai Peninsula”, namely to a refugee camp in Egyptian territory. There are indications of Israel-Egypt negotiations as well as routine consultations with U.S. intelligence….