by Tony Wikrent
North Carolina Democratic Party Progressive Caucus
Strategic Political Economy
[Wired, via The Big Picture 10-19-19]
….Mazzucato, an Italian-American economist who had spent decades researching the economics of innovation and the high tech industry, decided to look deeper into the early history of some of the world’s most innovative companies. The development of Google’s search algorithm, for instance, had been supported by a grant from the National Science Foundation, a US public grant-awarding body. Electric car company Tesla initially struggled to secure investment until it received a $465 million (£380 million) loan from the US Department of Energy. In fact, three companies founded by Elon Musk — Tesla, SolarCity and SpaceX — had jointly benefited from nearly $4.9 billion (£3.9bn) in public support of various kinds. Many other well-known US startups had been funded by the Small Business Innovation Research programme, a public venture capital fund. “It wasn’t just early research, it was also applied research, early stage finance, strategic procurement,” she says. “The more I looked, the more I realised: state investment is everywhere.”
Mazzucato included her findings in a 150-page pamphlet she submitted to UK policy think tank Demos. It was distributed to thousands of policymakers, and received coverage in daily newspapers. “It was obvious that it had touched a nerve,” she says. “The more I thought about it, the more I wanted to go straight to the core of the myths about innovation.” She decided to dissect the product that symbolised Silicon Valley’s engineering prowess: the iPhone.
Mazzucato traced the provenance of every technology that made the iPhone. The HTTP protocol, of course, had been developed by British scientist Tim Berners-Lee and implemented on the computers at CERN, in Geneva. The internet began as a network of computers called Arpanet, funded by the US Department of Defense (DoD) in the 60s to solve the problem of satellite communication. The DoD was also behind the development of GPS during the 70s, initially to determine the location of military equipment. The hard disk drive, microprocessors, memory chips and LCD display had also been funded by the DoD. Siri was the outcome of a Stanford Research Institute project to develop a virtual assistant for military staff, commissioned by the Defense Advanced Research Projects Agency (DARPA). The touchscreen was the result of graduate research at the University of Delaware, funded by the National Science Foundation and the CIA.
Contemporary liberals are temperamentally conservative — and what they want to conserve is a morally bankrupt political order. […] No, that instinct owes much more to watching Barack Obama summon forth a tidal wave of popular goodwill, then proceed to invite the same old cadre of apparatchiks and financiers back into the White House to carry on business as usual despite the most punishing economic crisis since the Great Depression; to seeing the ‘war on terror’ become a permanent fixture of the global landscape long after its original architects had been booted from the halls of power, courtesy of supposedly enlightened humanitarians; to witnessing a potentially monumental hunger for change be sacrificed on the altar of managerialism and technocratic respectability. It comes from watching a smiling Nick Clegg stand next to David Cameron in the Rose Garden at Number 10 Downing Street before rubber-stamping a series of lacerating cuts to Britain’s welfare state and betraying a generation of students in the process; to seeing the dexterity by which Canada’s liberals gesture to the left then govern from the right; and from seeing the radical demands of global anti-austerity movements endlessly whittled down and regurgitated as neoliberal slam poetry to be recited at Davos by the hip young innovators du jour.
Matt Stoller [Wired, via The Big Picture 10-17-19]
Last month, after a fierce lobbying battle, California passed a law that will likely end up mandating that companies in the “gig economy,” such as Uber, treat gig workers as employees. After losing the battle to carve out an exception for Uber drivers, Uber’s general counsel, former Obama official Tony West, announced the company simply did not believe the law applied to it. Disrespect toward law is not a surprise at Uber. From the very beginning, leaders there have often seen laws as something to be tested, not followed; at one point in 2017, the company was under five separate criminal investigations.
West’s announcement reflects an important ethos at Uber, and in corporate America in general. On the verge of the 2020s, we’re reverting to the 1920s: The rule of law, if you are powerful in either business or government, increasingly seems optional.
Elite disrespect for law is prompting a political backlash, often framed as a “techlash.” ….
West’s statement is remarkable for what it implies about democratic institutions. Uber lobbied against the law, will go to court to fight the law while refusing to apply it to its drivers, and, even after the law passed the assembly, is trying to negotiate with the governor. More importantly, West says that Uber and Lyft “have already transferred $60 million into a campaign committee account” to run a ballot initiative against the new California labor law. Uber and Lyft are imposing a “money veto” over the will of elected leaders….
As British writer Gilbert K. Chesterton once put it, “The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all.”
The Carnage of Establishment Neoliberal Economics
The IMF Convenes in Washington, Deaf to the Suffering It Causes Across the Planet
Vijay Prashad, October 15, 2019 [Globetrotter (project of the Independent Media Institute), via Naked Capitalism]
For the past 40 years, the IMF has had the same agenda: to make sure that developing countries adhere to the rules of globalization set by the advanced capitalist states. Sovereignty of these developing countries has become irrelevant, as their governments have to accede to pressure from the IMF on fiscal and monetary policy as well as their trade and development agenda. Any attempt to break the orthodoxy of the IMF is met with a ferocious array of sanctions, including a nod from the IMF toward international creditors not to lend to the country that they determine is a scofflaw. Funds will only flow to distressed countries if they accept the full policy slate developed for them not by their lawmakers, but by the IMF economists in Washington, D.C.
Over these four decades, fires have burned on the streets of the countries that have gone to the IMF and then forced austerity upon their populations. In the 1980s, these uprisings used to be called “IMF riots.” It was clear to everyone that the IMF’s policies had provoked desperate people to take to the streets. The name given to these riots was precise. The emphasis had to be on the IMF and not on the riots themselves. The most famous of these riots took place in Venezuela—the Caracazo of 1989—which opened up a process that brought Hugo Chavez to power and that created the Bolivarian Revolution. It is reasonable to call the Arab Spring of 2011 an IMF riot because it was provoked by IMF austerity policies combined with rising food prices. The current unrest from Pakistan to Ecuador should be filed under IMF riot.
“In September, Billy Foister, a 48-year-old Amazon warehouse worker, died after a heart attack at work. According to his brother, an Amazon human resources representative informed him at the hospital that Billy had lain on the floor for 20 minutes before receiving treatment from Amazon’s internal safety responders…. Amazon said it had responded to Foister’s collapse ‘within minutes’ [lol]. The worker, who requested to remain anonymous for fear of retaliation, noted the Amnesty worker started CPR after finding Foister. … The incident is among the latest in a series of accidents and fatalities that have led to Amazon’s inclusion on the National Council for Occupational Safety and Health’s 2019 Dirty Dozen list of the most dangerous employers in the United States.”
“Amazon Is Spending Big to Oust Seattle’s Socialist Council Member”
“The Amazon-backed PAC is backing challengers against all but one of the three incumbents running for reelection, which has left many predicting that the City Council is going to look a lot different next year. The Washington Technology Industry Association, the state’s largest tech trade group, which this year endorsed political candidates for the first time, also backed Orion. Top executives at Amazon, Boeing, and Microsoft have donated to Orion’s campaign, including Jay Carney, the PR and policy chief for Amazon and former White House press secretary to President Barack Obama; and Sam Whiting, director of Boeing Global Engagement. ‘It’s clear now to the majority of people that big corporations like Amazon are absolutely going to war against ordinary people in this city, in this election, and are attempting to buy this election,’ said Sawant.”
The ‘Glass Floor’ Is Keeping America’s Richest Idiots At The Top
[Huffington Post, via Naked Capitalism 10-14-19]
America has a social mobility problem. Children born in 1940 had a 90% chance of earning more than their parents. For children born in 1984, the odds were 50-50.
Most accounts of this trend focus on the breakdown of upward mobility: It’s getting harder for the poor to become rich. But equally important is the decline of downward mobility: The rich, regardless of their intelligence, are becoming more likely to stay that way.
“There’s a lot of talent being wasted because it’s not able to rise, but there’s also a lot of relatively untalented people who aren’t falling and end up occupying positions they shouldn’t,” said Richard Reeves, a Brookings Institution researcher and the author of “Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It.″
….But billionaire heirs are only a tiny part of the problem. Over the last 30 years, nearly every institution of social mobility, from education to work to government spending, has been systematically tilted toward the wealthy. Rather than sending our most brilliant minds up the income ladder, America is ensuring that the wealthy, no matter their mediocrity, retain their grip on the highest rung….
Last month, a Duke University study revealed that 43% of white Harvard students were not admitted on merit. They were ALDCs: recruited athletes, legacies, students on the dean’s interest list, and children of faculty and staff. The “dean’s interest list” is a roster of applicants with ties to wealthy donors.
The study — and the racial discrimination lawsuit that forced Harvard to reveal its admissions data — demonstrated the extent to which elite universities concentrate the privilege of their already-privileged students. To pick just a few representative statistics, children from the top 1% of the income distribution are 77 times more likely to attend Ivy League schools than the poorest 20%. Harvard’s class of 2022 includes more legacy students than African American students….
Public colleges are subject to the same trend. In 2017, University of Georgia students had a median family income of $129,800. Two-thirds of the students at the University of Michigan came from the richest fifth of the income distribution; just 1 in 30 came from the poorest fifth.
Nobel Winners in Economics Fail to Examine Structural Causes of Poverty
[The Real News Network 10-18-19]
While it’s good the Nobel Memorial Prize in Economics went to researchers who study poverty, their research falls far short of describing its structural causes, says development economist David Ruccio.
Republican fail: 40 years of tax cuts, record debt and inequality gap
In wealthier areas, biomarkers were consistent with a better diet. Metabolites produced by the dietary intake of B vitamins (not supplements) were significantly more abundant in areas with higher rents, in agreement with previous research that found socioeconomically disadvantaged groups are less likely to meet nutritional guidelines.
Wealthier and better educated areas also had much higher concentrations of the biomarkers associated with eating a lot of fresh fruit and vegetables, as well as grains. All of these are associated with a healthier overall diet….
In lower socioeconomic areas, there were significantly higher levels of prescription medication for treating depression (desvenlafaxine, amitriptyline and citalopram), chronic pain (opioids such as methadone, codeine, tramadol and oxycodone, as well as pregabalin, for neuropathy) and blood pressure (atenolol).
“‘The inequality of life expectancy,’ as economist Gabriel Zucman puts it, ‘is exploding in the U.S.’ The new GAO numbers ought to surprise no one. Over recent decades, a steady stream of studies have shown consistent links between rising inequality and shorter lifespans. The trends we see in the United States reflect similar dynamics worldwide, wherever income and wealth are concentrating. The more unequal a society becomes, the less healthy the society. On the other hand, the nations with the narrowest gaps between rich and poor turn out to have the longest lifespans. And the people living shorter lives don’t just include poorer people. Middle-income people in deeply unequal societies live shorter lives than middle-income people in more equal societies.”
Lambert Strether notes, “Everything’s going according to plan!”
Economics in the real world
[Jalopnik, via The Big Picture 10-15-19]
Climate and environmental crises
Revealed: the 20 firms behind a third of all carbon emissions
The global polluters list uses company-reported annual production of oil, natural gas, and coal and then calculates how much of the carbon and methane in the produced fuels is emitted to the atmosphere throughout the supply chain, from extraction to end use.
It found that 90% of the emissions attributed to the top 20 climate culprits was from use of their products, such as petrol, jet fuel, natural gas, and thermal coal. One-tenth came from extracting, refining, and delivering the finished fuels.
In 2014, China introduced an ambitious policy to rapidly reduce air pollution from coal-fired power stations. How well did that work?
A paper published in Nature Energy last week analyzed data from pollution monitoring systems and found dramatic changes. According to the monitoring data, China’s emissions of some common air pollutants dropped by 65% to 72% in just three years.
Indigenous farming practices failing as climate change disrupts seasons
“As scientists, we have an obligation that extends beyond merely describing and understanding the natural world to taking an active part in helping to protect it. We note that the scientific community has already tried all conventional methods to draw attention to the crisis. We believe that the continued governmental inaction over the climate and ecological crisis now justifies peaceful and nonviolent protest and direct action, even if this goes beyond the bounds of the current law. We therefore support those who are rising up peacefully against governments around the world that are failing to act proportionately to the scale of the crisis. We believe it is our moral duty to act now, and we urge other scientists to join us in helping to protect humanity’s only home.” • Looks like over 900 signatories…
[Axios, via The Big Picture 10-16-19]
Disrupting mainstream economics – Modern Monetary Theory
[Randy Wray, New Economic Perspectives, via Naked Capitalism 10-15-19]
Health Care Crisis
“Medicaid recipients over the age of 55 are expected to repay the government for many medical expenses—and states will seize houses and other assets after those recipients die in order to satisfy the debt.” • Horror story follows. And who do we have to thank for Medicaid asset seizure? You’ll never guess: “Bill clinton signed the Medicaid Estate Recovery Program into law as part of his deficit-reduction act in 1993. Previously, states had the right to seek repayment for Medicaid debts; the new law made it mandatory.” • And see NC, way back in 2014, here, here, and here. Naturally, nothing has been done.
For those who really love their insurance company:
Under M4A, if you liked your private plan, we can keep sending you their bills and stuff, but you don’t have to pay them. Just look at them and get anxious, kinda like now! We’ll also keep the Blue Cross number working with no one staffing it in case you liked being on hold
185 people are talking about this
I think this is a brilliant, innovative proposal. Set up Potemkin Care, and if people want somebody to lose their paperwork and put them on hold, they’ll still have that option!
hillary nominated at brokered convention 
[NBC, via Naked Capitalism 10-17-19]
Restoring balance to the economy
“The Radical Guidebook Embraced by Google Workers and Uber Drivers”
“[Views of striking workers,] based on century-old ideas, did not emerge in a vacuum. It can be traced in part to a book called “Labor Law for the Rank and Filer,” which many Googlers had read and discussed. Its authors are a longtime labor historian, Staughton Lynd, and an organizer, Daniel Gross. They identify with a strain of unionism popularized in the early 1900s by the Industrial Workers of the World, a radical labor group known as the Wobblies that defined itself in opposition to mainstream trade unions…. And Googlers aren’t the only ones who have drawn inspiration from the book. Workers at the crowdfunding company Kickstarter, the site of a recent union campaign, have studied it. Organizers with one of the largest Uber driver groups say the ideas have influenced them as well.”
Creating new economic potential – science and technology
Scientists Create a Material That Captures CO2 And Turns It Into Organic Matter
Lithium will fuel the clean energy boom. This company may have a breakthrough
Analysis: US “green economy” generates $1.3 trillion annually
[Bloomberg, via American Wind Energy Association 10-16-19]
Renewable energy, green finance and other aspects of the American green economy contribute $1.31 trillion to the nation’s GDP annually and employ about 9.5 million people, according to researchers from University College London. The findings show that green investments are beneficial, create jobs and grow the economy, says co-author Mark Maslin.
EIA: Non-hydro renewables will account for 12% of US energy by 2020
[North American Windpower online, via American Wind Energy Association 10-16-19]
More than 10% of the US’ generating capacity will likely be provided by wind and other non-hydro renewables this year, with that figure climbing to 12% in 2020, says the Energy Information Administration. Texas has more non-hydro renewable energy capacity than any other state.
White paper: Federal RES essential for renewables deployment
[North American Windpower online, via American Wind Energy Association 10-17-19]
The US can encourage the development of renewables like wind, create jobs and combat climate change by enacting a federal Renewable Energy Standard that enhances state-level RES and calls for wind, solar and other qualifying energy sources to account for at least 50% of the energy mix, according to a white paper from the American Council on Renewable Energy and law firm Wilson Sonsini Goodrich & Rosati. “The renewable sector is booming already, but if we’re going to mitigate the harmful impacts of climate change, America needs to dramatically increase the pace of renewable energy deployment, and federal leadership will be key,” says ACORE President and CEO Gregory Wetstone.
Opinion: State AGs are key for advancing clean energy
[The Hill, via American Wind Energy Association 10-17-19]
State attorney generals have the authority to influence clean energy development at the state and federal levels and many are preparing to fight a Federal Energy Regulatory Commission proposal that “bar state-supported clean energy from participating in capacity markets,” writes Jessica Bell of the State Energy & Environmental Impact Center at the NYU School of Law. “States across the country have shown that a clean energy transition can be achieved equitably and at a reasonable cost with positive impacts on in-state economies, as jobs in the clean energy sector grow and are, on average, higher paying,” she writes.
[Times-Standard (Eureka, Calif.), via American Wind Energy Association 10-18-19]
Humboldt County, Calif., is taking its plans to source 100% of its electricity from renewables by 2030 into its own hands, considering microgrids and other options that Redwood Coast Energy Authority Executive Director Matthew Marshall says could serve as a model for other areas. The plan calls for offshore wind to account for 43% of its energy mix by 2030.
[Machine Design Today 10-16-19]
Lawrence Livermore National Laboratory (LLNL) researchers have designed a new class of 3D-printed lattice structures that are lightweight and highly stiff, a combination that is not supposed to be possible….
The team was surprised that the trusses appeared to violate Maxwell’s criterion, a theory of structural rigidity used in mechanical design that says the most efficient load-bearing structures deform only by stretching. In such structures, stiffness scales linearly with density. So, cutting a structure’s weight in half will reduce its stiffness by half. Less-efficient structures would have their stiffness cut by three-quarters or seven-eighths if their weight was cut in half. This linear scaling lets engineers create ultra-lightweight, ultra-stiff mechanical metamaterials.
“It had been believed that Maxwell’s criterion was necessary and sufficient to show a structure had high stiffness at low density,” says Watts. “We’ve shown that it is not a necessary condition. In other words, there is a larger class of trusses that have this linear scaling property. It also shows that what was the previous orthodoxy is not firm. And there are exceptions that can get you better properties.”
Scanning electron microscopy images of a classic octet lattice and topologically optimized, isotropic oblate and quasi-spherical octahedral lattice built with a projection micro-stereolithography 3D-printing technique.
[Slate, via The Big Picture 10-16-19]
Proposed Silver Line in Charlotte, N.C., may cost too much up front
[Railway Age 10-16-19]
Charlotte is looking to expand its light-rail service via a new Silver Line. The route will be 26 miles long and will connect Central Piedmont Community College in Matthews, N.C., to Belmont, N.C. Some leaders are calling the project one of the most ambitious in city history. The cost of the venture, however, is not known, and Charlotte will have to put in $50 million into initial planning for the Silver Line. That could take up to seven years and may cost more along the way. A more solid estimate of the project’s cost may not be revealed until the planning phase is 65 percent complete.
Takeaways, Locomotive and Railcar Conference Call: Cowen
[Railway Age 10-15-19]
According to Cowen and Company freight transportation analysts Jason Seidl (Managing Director and Railway Age Wall Street Contributing Editor), Matt Elkott and Adam Kramer, inquiries about new railcars appear to have risen slightly in the past month, while locomotive modernizations should remain solid, in the midst of a continuing weak new-build market. Industry-wide Precision Scheduled Railroading implementation has not been tested in a volume growth environment….
The locomotive new-build market in North America “is likely to be weak for the foreseeable future as rail traffic is down and PSR implementation remains under way,” the analysts reported. “Locomotive modernizations, however, should remain fairly robust, with most railroads having plans to perform them on some units. When it comes to modernizations, Wabtec generates roughly half the revenue of a new-build but at much higher margins. Wabtec’s service revenue on existing locomotives should have upside beyond modernizations as the railroads increase utilization and as locomotives get more technologically complex.”
Information Age Dystopia
Ask Slashdot: What Should I Do About My Landlord Forcing Smart Things Into My Home?
[Slashdot, via Naked Capitalism 10-16-19]Colleges are tracking applicants’ browser history, according to new report
[Mic, via Naked Capitalism 10-16-19]Google’s Auto-Delete Tools Are Practically Worthless For Privacy
[Fast Company, via Naked Capitalism 10-16-19]
Mark Zuckerberg has defended Facebook’s decision to let politicians lie in ads
[MIT Technology Review, via Naked Capitalism 10-19-19]
Disrupting mainstream politics
The Obamanauts: What is the defining achievement of Barack Obama?
“My fervent hope for many years could be coming true. […] This is fantastic news. Anything that accelerates the split in the decades-long marriage between the alleged party of the people and Big Money should be celebrated. The transformation in policy that would ensue if Wall Street Democrats walk away from the party, freeing it from self-censorship and bad ideas, far outstrips whatever money they might raise for Democratic candidates.”
“You see, Democrats must be able to maintain a centrist character and appeal to creepy freaks who would sooner microwave a hamster than vote to improve our crumbling social programs….
…one may “like” Sanders’ populist, pro-working-class ideology that has enticed — let me be clear — millions of struggling Americans, but being dragged too far left means losing the vote of cartoonish top-hat-wearing-villains, phrenology-practicing conservative centrists, and Democrat-leaning billionaires residing on secret sex-predator-islands, whose only apparent mission is to make the biosphere collapse faster.
“Basically it’s Shep Smith and Chris Wallace versus the shows that produce all the revenue,” the senior Fox source said.
The resolution of the feud in favor of the opinion hosts is perhaps the best indication yet that Lachlan Murdoch, who became CEO of Fox Corporation after his father sold film and television giant 21st Century Fox to Disney, has no plans to alienate the network’s deliriously pro-Trump audience, even as impeachment looms.
As long as the president’s approval rating among Republicans remains sky high — it’s currently at 87, per Gallup, and hasn’t dipped below 80 in nearly two years — it’s highly unlikely the Murdochs would try to guide coverage in a different direction. (Fox News did not respond to a request for comment.)
“Lachlan understands what’s at stake and doesn’t want to destroy the business,” the Fox source said. “You start messing with the formula and all of a sudden you’ve got New Coke.”
edmondo
Charlotte is looking to expand its light-rail service via a new Silver Line. The route will be 26 miles long and will connect Central Piedmont Community College in Matthews, N.C., to Belmont, N.C.
What’s the point of giving a construction company a blank check to write in as many billion dollars of tax money as they want to connect a “major metropolis” like Matthews NC (population 27000) with “The Harvard of Charlotte” Belmont Community College? Isn’t population density a requirement for potential usage? This is exactly the kind of stupid project that Republicans use to stop truly useful projects from going forward. You want to know what the odds of this thing passing? Look to see how much the construction company doled out in campaign contributions.
Eric Anderson
Good stuff as always, Tony.
Thank you 🙏
Hugh
Elon Musk may have gotten his technology for SpaceX and his electric cars from previous government investments, but he had the genius to realize that rockets could be used to put electric cars into space.
There is no Nobel Prize in Economics. There is a Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel which appropriates and exploits the Nobel name. The Sveriges Riksbank is Sweden’s Central Bank and *surprise* a big promoter of neoliberalism.
MMT, reports from the front, self-hype, much? This is the same Randy Wray who has fought so hard to keep the rich and corporations from being taxed. Scratch an MMTer and you will find a fairly typical neoliberal.
Camden Paillot in McSweeney’s nails it.
bruce wilder
“Elon Musk . . . had the genius to realize that rockets could be used to put electric cars into space.”
+1
450.org
Speaking of Elon Musk and the Green New Deal. There won’t be an answer for this externality. There never is and there is no reason to think it will change. Green is just another shade of lipstick on this PIG called mass production.
The Rise Of Electric Cars Could Leave Us With A Big Battery Waste Problem