Week-end Wrap – Political Economy – August 30, 2020

“The Sanders team went on to list examples of government subsidies and tax breaks given to the Trump family, fossil fuel companies, and Amazon, as well as bailouts given to Wall Street following lobbying by White House economic adviser and ‘high priest of unfettered capitalism’ Larry Kudlow, before quoting Martin Luther King: ‘This country has socialism for the rich, and rugged individualism for the poor.’”

“Republican Gov. Baker Wades Into Democratic Primary To Endorse Rep. Neal”

This kind of hectoring has become a defining part of the Democratic Party’s culture. As the late great journalist Bill Greider lamented in this must-watch clip: “The way the Democratic Party is run for quite a number of presidential cycles is they pick a nominee in a kind of half-assed process that doesn’t really represent much of anybody and then they tell everybody to just shut up — don’t bring up anything that will complicate life for your nominee… shut up, turn off your brains.”

…. at the very moment many good progressives are blunting their criticism and making clear that defeating Trump is of utmost importance, Corporate Democrats aren’t being asked to wait or hold their tongues. In fact, they are doing the opposite: Rahm Emanuel — who has been advising Biden — just went on television to show that the corporate wing of the party is intent on using the stretch run of the Most Important Election Of Our Lifetime™ not to doggedly focus on actually winning the election, but to instead try to predetermine post-election policy outcomes….

The larger dynamic at play was exemplified by Emanuel’s television appearance on a CNBC segment dubbed “Democrats 2020 Agenda: What’s at stake for business?” As progressives are being told to keep quiet and not even so much as tweet their concerns, Emanuel used the platform to demand that during this health care and climate emergency, a prospective Biden administration must reject the two major initiatives that polls show are popular.

“Two things I would say if I was advising an administration,” said Emanuel, who left the Chicago mayoralty in disgrace after his city officials suppressed a video of the police murder of a teenager. “One is no there’s no new Green Deal, there’s no Medicare For All, probably the single two topics that were discussed the most. That’s not even in the platform.”

“A battle is brewing on K Street over an effort by progressives to ensure a Biden administration is devoid of any former Wall Street executives or corporate lobbyists. Black and Latino lobbyists say a ban of that sort would end up shutting out minorities and could make the administration less diverse if Democrats win back the White House.”

A New Deal for a New Reality: Relief, Recovery & Reform.
The Executive Committee of the Progressive Caucus of the North Carolina Democratic Party has approved the release of a policy platform, modeled on Franklin Roosevelt’s Relief, Recovery & Reform approach to ending the First Great Depression. The PCNCDP platform is comprehensive, and therefore not a short read, but it is full of links for further reading on each point, including the work of dozens of organizations such as ACLU, Brennan Center for Justice, Brookings Institute, Economic Policy Institute, Immigrant Justice Network, Movement for Black Lives, National Women’s Law Center, Poor People’s Campaign, Society of Professional Journalists, and others. The PCNCDP platform covers 15 issues:

The Carnage of Establishment Neoliberal Economics

“What ‘Capitalism’ Is and How It Affects People”

“Capitalism is defined as an economic system in which a country’s trade, industry, and profits are controlled by private companies, instead of by the people whose time and labor powers those companies. The United States and many other nations around the world are capitalist countries, but capitalism is not the only economic system available…. The kind of impact that capitalism has on your life depends on whether you’re a worker or a boss. …. There are many forms of socialism, but at its core, socialism is an economic system in which a whole community — not just bosses or private companies — control the means of production equally…. In a capitalist country, the focus is on profits over anything else; in a socialist country, the public is seen to be more important, and social welfare is a major priority.” • “Editor’s note: This piece was originally published on April 10, 2018”[Twitter, via Naked Capitalism 8-30-20]

Krystal Ball
@krystalball
These numbers are staggering 1 in 4 young adults say they’ve seriously contemplated suicide in last 30 days.

Glenn Greenwald
@ggreenwald
· Aug 28
The social fabric of the U.S. is fraying severely if not unravelling https://interc.pt/2EIqUdM
Show this thread
12:54 PM · Aug 28, 2020·Twitter for iPhone

Glenn Greenwald August 28, 2020 [The Intercept]

Perhaps the most illustrative study was one released by the Centers for Disease Control and Prevention earlier this month, based on an extensive mental health survey of Americans in late June.

One question posed by researchers was whether someone has “seriously considered suicide in the past 30 days”— not fleetingly considered it as a momentary fantasy nor thought about it ever in their lifetime, but seriously considered suicide at least once in the past 30 days. The results are staggering.

For Americans between 18-24 years old, 25.5 percent — just over 1 out of every 4 young Americans — said they had. For the much larger group of Americans ages 25-44, the percentage was somewhat lower but still extremely alarming: 16 percent. A total of 18.6 percent of Hispanic Americans and 15 percent of African Americans said they had seriously considered suicide in the past month. The two groups with the largest percentage who said yes: Americans with less than a high school degree and unpaid caregivers, both of whom have 30 percent — or almost 1 out of every 3 — who answered in the affirmative. A full 10 percent of the U.S. population generally had seriously contemplated suicide in the month of June.

In a remotely healthy society, one that provides basic emotional needs to its population, suicide and serious suicidal ideation are rare events. It is anathema to the most basic human instinct: the will to live. A society in which such a vast swath of the population is seriously considering it as an option is one which is anything but healthy, one which is plainly failing to provide its citizens the basic necessities for a fulfilling life.

Legal Interventions to Address US Reductions in Life Expectancy
[Journal of the American Medical Association, via Naked Capitalism 8-26-20]

Age-based, geographic, and socioeconomic status disparities collectively diminish average life expectancy. Midlife “diseases of despair” (eg, suicides, drug overdoses, and alcohol-related conditions), firearm violence, and obesity also are contributing factors for reduced life expectancy, especially in rural counties, the industrial Midwest, and Appalachia. Life expectancy gaps among the richest and poorest 1% of the population are estimated to exceed 10 years for women and 14 years for men. Stated simply, poorer, less-educated individuals in the US live considerably shorter lives. This pattern of inequality has been highlighted further during the COVID-19 pandemic.

Lambert Strether: “Complete, across-the-board failure by the political class in its entirety at the most basic, material level. Or overwhelming success, depending.”

The Pandemic

Only Medicare For All Can Beat Covid 

[Counterpunch, via Naked Capitalism 8-23-20]

The U.S. has coped with Covid-19 far worse than any other country on the globe. Though much, much of this catastrophe of over 170,000 dead can be laid at Trump’s door, some of it has to do with the uniquely awful American system of for-profit health care. Those words, “for profit,” mean that the U.S. public health infrastructure, always stunted, had completely shriveled by the time the plague struck. Other countries dealt better with covid because they have different health care systems – single payer or Medicare for All systems, in other words, ones that are, to varying degrees, socialized….

One person who argues very convincingly that the U.S. failure to contain covid derives from its uniquely dreadful and unequal health care system is historian Thomas Frank. His recent Le Monde Diplomatique article was titled “It’s the health care system, stupid.” He critiques those who blame feckless Americans for the virus spinning out of control; after all, had Trump not stupidly elevated mask-wearing to the deadly status of a culture war, and had instead promoted it, millions in his base would have followed his lead.

Instead of the “irresponsible Americans” line, Frank explains that “plenty of blame must go to our screwed-up health care system which scorns the very idea of public health and treats access to medical care as a private luxury that is rightfully available only to some.” The medical community has “for almost a century used the prestige of expertise” to keep health care a privilege of the affluent few, Frank writes.

[NYT, via Naked Capitalism 8-23-20]

Creating new economic potential – science and technology

China planning high-speed rail freight network to help e-commerce sector

[SCMP, via Naked Capitalism 8-23-20]Are U.S. Utilities About To Become Politicized?

[OilPrice, via Naked Capitalism 8-25-20]

The is some big spending ahead for electric utilities. More than the politicians and policymakers expect. Electric utilities have to decarbonize and modernize. Even if there were no pressure to retire fossil-fuel generation, the electric industry would have to spend money for a simple reason. The average age of utility assets in the U.S. exceeds thirty years. This implies three things: 1) the average utility plant is already old; 2) it will soon have to be replaced; and 3) due to inflation, the cost of new assets will exceed the cost of original equipment. So on top of an already expensive capital replacement cycle of the industry, it also has expeditiously decarbonize. Electric companies, then, will have to attract increasing amounts of equity and debt capital. The returns on that capital are set, largely, by regulatory commissions. If regulators permit the state’s utilities to earn “excessive” returns in an essential, monopoly business, then consumers overpay for electricity. If the reverse becomes true and authorized returns are slashed severely then the utility’s shareholders will suffer.

Predatory Capitalism in the Time of COVID19

“Debt Relief And The CARES Act: Which Borrowers Benefit The Most?”

 “To summarize, we have investigated who may benefit (and the expected forbearance amounts) from the various debt relief provisions in the CARES Act. We find that while student debt relief may be expected to reach a larger share of borrowers in majority Black neighborhoods, the dollar value of expected student debt relief per borrower will be perceptibly less in low income, majority Black, and majority Hispanic neighborhoods. Unlike student debt relief, mortgage relief may be concentrated in high income and majority white neighborhoods, both in terms of dollar amounts and share of borrowers that will be potentially assisted. It is worth emphasizing that in this post we have outlined who may benefit from the mortgage and student debt relief provisions of the CARES Act. In other words, we have focused on the supply of this relief to different neighborhoods. Who will actually benefit and the amount of relief obtained will be determined by a combination of supply and demand factors. Since, low income and majority minority neighborhoods have been affected more negatively by this pandemic, residents in these neighborhoods may have the highest take-up rate. Moreover, mortgage benefits are not automatic; mortgagors must actively seek out these benefits by contacting servicers and proving financial hardship. Thus, ultimately, who actually benefits and by how much will be determined by a combination of factors, a topic we will continue to study.”

“Walmart, Amazon, Target, Home Depot, Lowe’s and Costco Wholesale accounted for 29.1% of all U.S. retail sales in the second quarter, according to Customer Growth Partners, up from 25.6% in the same period a year ago. The big retailers were allowed to remain open, and critical factors in their growth included that they had already invested their online businesses, had large supply networks to restock and sophisticated transportation networks that include dedicated fleets. That advantage isn’t likely to fade. Experts say a winnowing out of the sector is likely to continue as the economy picks up steam, with big retailers leapfrogging smaller competitors.”

Predatory Finance

‘Funk Money’: The End of Empires, The Expansion of Tax Havens, and Decolonization as an Economic and Financial Event

[Oxford Academic, via Naked Capitalism 8-25-20]

….the subsequent end of European rule during the 1950s and 1960s was often accompanied by a liquidation and removal of European assets.3 Distrustful of newly independent governments and non-white rule, fearing resentment, increased taxation or possibly even nationalization, Euro-American businesses active in the colonial world divested from empire. Many Europeans, moreover, held deep-seated racist convictions about the absence of business acumen among native populations and simply could not imagine economic life continuing in regular form after independence. Following decolonization, many low-income countries therefore desperately needed foreign capital to start a process of industrialization and growth promotion. Furthermore, the European withdrawal created a training problem in many post-colonial economic sectors as whites had held management and higher-ranking positions in industries without providing adequate training opportunities for local leadership: hence the quest for expertise and technical advisers….

Where did funds go upon leaving the colonial world? Some money returned to metropolitan contexts, if only temporarily, awaiting new opportunities. More importantly for the story outlined here, a significant share of funds was moved to an emerging system of offshore tax havens….

Yet it was Switzerland that stood to gain most from the late colonial money panic that had descended on North Africa and Tangier in the 1950s. Switzerland was one of the oldest tax havens, having flourished during the inter-war years when political and economic instability as well as newly introduced income taxes sent German, Italian, French and other money to bank accounts and holding companies in Switzerland. For wealthy French citizens, Switzerland had always been the tax haven of choice. It is fitting, then, that as a result of such older ties, French and other Europeans looking to move assets out of French North Africa and the Middle East chose to rely on the time-honoured services offered by Swiss lawyers and bankers.

Disrupting mainstream economics

How Do Banks Create Money?
[via Naked Capitalism, August 26, 2020

By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK. Modern monetary theory highlights the important role of the government in creating money when it spends. That process makes sure our money has value. But it’s not alone in creating money: banks can do it too. This video explores the implications of that.

The Mathematical Model of Modern Monetary Theory 2 

Lambert Strether: We had the training wheels version with our Richard Murphy video yesterday. This is Tour de France level.

Information Age Dystopia

“A Chrome feature is creating enormous load on global root DNS servers” 

Lambert Strether: This is entertaining, but complicated, and I can’t excerpt it properly. What it looks like to me is that Google’s programmers ended up hijacking the commons to solve a programming problem they were unable to address (“Hopefully, the issue will soon be resolved—and the world’s root DNS servers will no longer need to answer about 60 billion bogus queries every day”).

The Dark Side

Racial segregation at US universities is back, with the advent of black-only dormitories. Martin Luther King would be appalled

America and Russia in the 1990s: This is what real meddling looks like Yasha Levine, Immigrants as a Weapon., via Naked Capitalism 8-27-20] Levine comments:https://twitter.com/yashalevine/status/1299114060189822976

Yasha Levine
@yashalevine
Why would anyone want to be reminded of this deadly, cynical chapter in American politics? Why would anyone want to remember that their liberal government — under the Clinton Democrats, no less — had helped plunge Russia into utter ruin, killing and impoverishing millions?
6:38 PM · Aug 27, 2020

Yasha Levine

@yashalevine
22h
Replying to
@yashalevine
Hell, the very same Clinton Democrats that destroyed and plundered Russia are now being offered as America’s only salvation, an America that increasingly looks more and more like the neoliberal, privatized, and oligarchic Russia that they helped create.

I don’t much like Frum, but he’s 100 percent right on this and it’s worth reading. Nor is it all “Republican,” some of this is shared by a lot of Democrats. I’m going to summarize, since the Atlantic has a very limited amount of free views.

1) Lower taxation is the most important economic policy.
2) Covid is no big deal. Reopen, let people die, the numbers aren’t that big.
3) Climate change is either no big deal or can be dealt with with technology, it’s not worth spending money on.
4) China is the US’s enemy, and when China loses, the US wins, and vice-versa.
5) The post-war order is dead — NATO and the WTO. The EU is a rival, Britain and Japan are subordinates; Canada, Australia and Mexico are satraps (he says dependencies).
6) You deserve as much health care as you can afford.
7) Voting is a privilege, not a right, and can be restricted.
8) Anti-black racism is BS, it’s whites and Christians and so on who are discriminated against now.
9) Abortion rights need to go. (Interestingly, he dances around this one a bit, while stating the other mostly clearly.)
10) Secret money and conflicts of interest are no big deal.
11) The border wall is good, and a long delay in granting illegal immigrants rights is good.
12) The protests should be crushed by granting police more powers. (Dances around this a bit too.)
13) Trump and his surrogates acting up on Twitter and so is just a reaction to worse excesses of his critics.

If you have free articles left at the Atlantic, this is worth reading in full. My take is that it’s accurate; this is the real Republican platform. Frum says it is kept secret because while Republicans agree, most non-Republicans don’t. Remember that there are a lot of independents and non-voters. All of these points are more or less known, and each point has been discussed by various people in detail, but what Frum has done is put them clearly and in one place.

“The Grand Old Meltdown” : interview of Frank Luntz

“[A student asked:] ‘What do Republicans believe? What does it mean to be a Republican?’ … I did not have a good answer to the student’s question…. I decided to call Frank Luntz…. ‘You know, I don’t have a history of dodging questions. But I don’t know how to answer that. There is no consistent philosophy,’ Luntz responded. ‘You can’t say it’s about making America great again at a time of Covid and economic distress and social unrest. It’s just not credible.’ Luntz thought for a moment. ‘I think it’s about promoting—’ he stopped suddenly. ‘But I can’t, I don’t—’ he took a pause. ‘That’s the best I can do.’ When I pressed, Luntz sounded as exasperated as the student whose question I was relaying. ‘Look, I’m the one guy who’s going to give you a straight answer. I don’t give a shit—I had a stroke in January, so there’s nothing anyone can do to me to make my life suck,’ he said. ‘I’ve tried to give you an answer and I can’t do it. You can ask it any different way. But I don’t know the answer. For the first time in my life, I don’t know the answer.’

“Trump’s Fights Are Their Fights. They Have His Back Unapologetically.” 

“In lengthy interviews over the last several weeks, a cross-section of Trump voters said they believed he had succeeded on issues like hardening the Southern border, appointing conservative judges, taking on China and putting “America first.” Many said the president’s grievances were their grievances, too. They believed kneeling during the national anthem was un-American, and they were appalled at what they viewed as liberals’ minimizing of violence that at times grew out of the protests over the killing of George Floyd. At the same time, Trump voters dismissed as irrelevant aspects of the president’s behavior that critics say make him historically unfit for office. All politicians lie, many said; as for the president’s suggestion that he might not accept the election results, supporters said voters should judge his actions, not his loose talk or tweets. ‘I didn’t vote for Trump because I wanted him to be my best friend,’ Ms. Schenkel said. ‘I wanted to make a change and a difference.’ ‘If he thinks it’s the right thing, he doesn’t care who’s going to get mad at him,’ she added. ‘I think he’s very misunderstood.’ … She grades the president highly on having met his promises, including slowing the flow of undocumented immigrants and building a strong economy before the virus struck. Other Trump supporters outlined myriad reasons for wanting to re-elect him, ranging from the pragmatic, like a new job made possible by the administration’s policies, to a gut-level attraction to his hard-nosed personality. His supporters related ‘aha’ moments in their upbringing when they realized they were conservatives, which they spoke of as nonnegotiable beliefs woven into their identity, like opposition to abortion.”

[Twitter, ,ia Naked Capitalism 8-27-20]