Week-end Wrap – Political Economy – June 18, 2023

by Tony Wikrent

MY FIFTY YEARS WITH DAN ELLSBERG 

Seymour Hersh [via Naked Capitalism 6-17-2023]

Climate and environmental crises

WTF is Happening? An Overview 

[Watching the World Go Bye, via Naked Capitalism 6-14-2023]

As of June 10, 2023, worldwide data showed the remarkable concurrence of three dramatic climate events.

The first WTF is in the Antarctic, where sea-ice extent is setting record lows daily, now fully over 2 million kilometers below the 1991-2020 mean.…

For the second WTF we are going to move from the ocean to land and consider global 2-meter surface temperatures, where on June 10, for the third consecutive day temperatures breached the 1.5°C barrier (above the 1850-1900 IPCC baseline)….

And the third WTF is perhaps the furthest from any notion of normalcy. WTF is happening to the world’s oceans, and in particular the North Atlantic? Ocean temperatures have been setting unprecedented daily records, spiking to highs that are shocking climate scientists, as they look for possible reasons….

Narrowing the scope of the 1972 Clean Water Act 

[Angry Bear, via Naked Capitalism 6-13-2023]

How Arizona squeezes tribes for water 

[High Country News, via Naked Capitalism 6-15-2023]

Strategic Political Economy

The AMLO Project 

[New Left Review, via Naked Capitalism 6-12-2023]

The Mexican political system was shaken on 1 July 2018, when Andrés Manuel López Obrador (AMLO) and his new party MORENA achieved a resounding electoral victory, winning 53% of the votes in a four-way race – a thirty-point lead over his closest contender….

The idiosyncrasies of AMLO’s left-populist presidency have pitted him not only against the neoliberal right, but also against the ‘progressive’ cosmopolitan intelligentsia and neozapatista-adjacent autonomists. These groups have variously accused him of ‘turning the country into Venezuela’, peddling ‘conservativism’ and acting as a ‘henchman of capital’. Yet as his six-year term reaches its final lap, a closer look at AMLO’s record reveals a much more complex picture. His overarching project has been to move away from neoliberalism towards a model of nationalist-developmentalist capitalism. To what extent has he succeeded, and what can the left learn from this endeavour?

Lina Khan Fires a Crooked CEO 

Matt Stoller [BIG, via Naked Capitalism 6-16-2023]

The FTC blocked a genomics technology merger, leading to the firing of a CEO. The deal involved Bill Gates, Barack Obama, China and Jeff Bezos. And corporate America is in shock….

…it’s worth taking a look at one of the biggest recent stories in corporate America that went largely unnoticed by the political world. Last Sunday, Francis deSouza resigned from his position as the CEO of Illumina, which is one of the most important medical technology firms in the world. Since 2019, deSouza had pursued a string of failed acquisitions, and ultimately his shareholders revolted. His most recent was an attempt to buy cancer test producer Grail, which was ruled unlawful by both European antitrust enforcers and the Federal Trade Commission’s Lina Khan.

You may not have heard of Illumina, and you probably haven’t heard of deSouza. But deSouza is now the second CEO to lose his job due to Biden antitrust enforcers, after Penguin Random House CEO Markus Dohle resigned last year in the wake of a failed merger with Simon & Schuster. In C Suites, and within the antitrust bar, deSouza, and Dohle, are now cautionary tales of empire building gone wrong….

…And this brings me to Microsoft, which is pursuing a somewhat irrational acquisition of game giant Activision, a bank shot attempt to monopolize gaming. The merger is on the rocks, because Great Britain ruled that it’s illegal, and the combination is also being challenged by the FTC. And yet Microsoft won’t relent. A few weeks ago, in an essay called Corporate Temper Tantrums, I noted that there’s an open question about whether large corporations or democratic governments set the rules for our societies. Microsoft is the key example. Its threat to combine operations with Activision, despite the British government calling the transaction illegal, looks completely crazy, akin to civil disobedience by a Fortune 500 firm. There’s no reason for it, since the firm has a great path ahead embedding AI in its products. Gaming is a sideshow. Why would the firm destroy its political reputation with this scorched earth campaign?

The answer, I believe, runs straight through the resignation of Illumina’s CEO….

When Did All the Fun Stuff Go Upscale? 

[Slate, via The Big Picture 6-16-2023]

Las Vegas is leaving its everyman reputation behind. Fewer people visited in 2022 than in 2019, but gambling revenue rose by more than 25 percent. Hotel rooms, concerts, and restaurants have also gotten more expensive. And blackjack losses—that is, revenue from the game—neared $1 billion last year, the highest number since 2007, despite a reduced number of tables….

Consider Six Flags: A recent profile, also in the Wall Street Journal, recounts the theme-park operator’s effort to justify higher prices with family-focused attractions, tastier food, VIP lounges with air conditioning, and better “streetmosphere,” including trees and sitting areas. In 2022, the parks’ admission price rose by 25 percent, and visitor spending rose by 22 percent, even as attendance fell by 26 percent. So far this year, customer daily spending is above $80 a person, almost twice what it was in 2019.

Something similar is happening with movie theaters….

What’s happening in leisure, hospitality, and some higher-end consumer goods is a little different: Business leaders have simply decided it makes more sense to prioritize fewer, higher-margin transactions than compete for market share, in some cases abandoning their low-price offerings entirely. U.S. automakers, for example, started years ago to prioritize larger, heavier, more expensive vehicles and discontinue smaller, cheaper cars. (The phenomenon is even more pronounced with electric vehicles, where the only low-cost American-made model, the Chevy Bolt, was eliminated by GM in April.) Homebuilders, too, increasingly aim at a higher-end clientele, with the median new home about 40 percent larger than it was a generation ago.

Citigroup’s “Plutonomy Report” from October 2005 (pdf) “The World is dividing into two blocs – the Plutonomy and the rest.”

How the U.S. let EV battery tech born here wind up in the hands of China 

Autoblog [Bloomberg, via Naked Capitalism 6-16-2023]

In the mid-1990s, a compound called lithium iron phosphate (LFP), the primary battery chemistry now used by CATL and most battery companies in China, was discovered by scientists at the University of Texas at Austin and commercialized a few years later by the startup A123 Systems LLC in Watertown, Massachusetts. In 2009, A123 was awarded hundreds of millions of dollars by the Obama administration with the great hope that it would help kick-start production of electric cars in the U.S.. But it was too early. There wasn’t demand for EVs, and car companies making vehicles that use less gas didn’t want to risk relying on an unproven startup.

By 2012, A123 had filed for bankruptcy and become a symbol of government waste often mentioned in the same breath as Solyndra, the California solar-panel maker that filed for bankruptcy in 2011 after receiving a half-billion dollars in federal loan guarantees. To this day, Dave Vieau, A123’s former chief executive officer, is dogged by occasional finger-wagging when people learn he ran the company. “You’re the A123 guy who stole all the government money” is a line he’s gotten more than once.

Now, almost 30 years after the discovery of LFP, the U.S. is scrambling to build its own battery supply chain, and the pioneer of the modern assembly line is turning to China to learn how to make the car of the 21st century. It’s an unsubtle reminder that America learned the wrong lesson from A123. Rather than letting a potentially breakthrough technology, or a young company trying to commercialize that technology, live or die by the whims of the free market, the U.S. could have been committed to a much longer game. And rather than allowing a battery discovery to slip through its fingers and into the hands of what’s now its greatest economic and geopolitical rival, the U.S. could have figured out how to nurture and protect a nascent industry that was inevitably going to encounter trial and error. With the wisdom of hindsight, A123 is a case for tweaking the orthodox rules of American capitalism in the age of competition with China.

[TW: Forget “tweaking” the rules. They must be replaced. This story, and so many others like it — are the result of the conservative / libertarian / neoliberal economic philosphies that worship “free markets” and hate governments. The historical facts are that almost every major technological development that created our modern mass-production industrial economies was initially supported and nurtured by government funding:

Community-Based Careers and Economic Virtue: Arming, Disarming, and Rearming the
Springfield, Western Massachusetts, Metalworking Region, Chapter 19 from The Boundaryless Career: A New Employment Principle for a New Organizational Era, edited by Michael B. Arthur, Denise M. Rousseau.

By the turn of the century, Springfield was a diversified manufacturing center with over 300 firms and thousands of skilled workers producing a variety of products. Springfield had indeed earned the nickname “Industrial Beehive.”

The origin of the Industrial Beehive was the concept of interchangeability—an idea that drove the US. Army’s sponsorship of contracts for the purchase of muskets. The Springfield Armory converted the concept into a working principle for the production of muskets, under which individual parts were no longer hand-fitted, or filed to fit, into individualized guns but, instead, could be “promiscuously” inserted into standardized guns. The advantages for the army were enormous—it no longer needed skilled craftsmen behind the battle lines to repair weapons; a broken part could simply be replaced by a new, interchangeable one.

The new “American system” of production redefined the requisite skills of the craftsman and opened up the age of the specialist machine. The growth of the emerging metalworking industrial district was based on three interrelated factors: technological innovation and diffusion, generated initially by the Springfield Armory; a diverse nucleus of locally owned machine-tool builders who, in turn, became refiners and transmission agents of technical innovations across a broad range of industries; and a base of skilled workers capable of handling the precision machinery required to turn out world-class products.

Note that this process of economic transformation is completely contrary to the Marxist belief that the ownership of the means of production determines the political and social superstructure. What actually happened is that the government — following first Treasury Secretary Alexander Hamilton’s prescriptions — acted to initiate and nurture “new ways of doing things” that created entire new industries and social institutions. Our entire age of electronic computerized communications was initiated by the decision, by the U.S. Navy Office of Naval Research, and U.S. Army Ordnance Department, to disseminate into the civilian economy the technological knowledge and progress in electronic computation achieved by World War 2 defense research programs at the Moore School of Electrical Engineering, University of Pennsylvania, in July-August, 1946.

In other words, what the “right” believes about the development of the USA economy—that it was driven by entrepreneurs—is a lie on the most important points, and what the “left” believes about the development of the USA economy—that it was driven by exploitative accumulation—is also essentially a lie. Both overlook the crucial role of government in advancing science and technology. And thus it is that an erroneous philosophy of political economy, separated from any notion of civic republicanism’s doctrine of “promoting the general welfare” ends with USA initiating crucial new technologies, then losing control of those new technologies to other countries. Note also that the shift to plutonomy cripples the ability of USA business to commercialize those new technologies by destroying the purchasing power of the majority of workers, thereby shrinking the market. If household income after Reagan had continued to increase at the same rate it had before Reagan, the USA household median income would now be triple what it is. How many more electric vehicles and home roof solar arrays could be sold if the average American had three times their current income?

This is why the shift from republicanism to liberalism has been such a disaster. The cultural demand that the development and health of the community must take precedence over individual self interest has been so weakened as to completely derange the economy and allow it to fall under the control of predators.

The next link shows that conservatives and (anti)Republicans are scrambling to deal with the disastrous consequences of their own anti-government economic doctrines, but have yet to accept the principle of civic republicanism that the rights of the community and the general welfare are just as important as individual liberty. Rather than rebuild this principle of civic republicanism, conservatives and (anti)Republicans prefer to wage a hate campaign against “liberalism.”]

‘I Don’t Want to Violently Overthrow the Government. I Want Something Far More Revolutionary.’ 

Ian Ward, June 8, 2023 [Politico, via Naked Capitalism 6-11-2023]

On a recent Wednesday evening, 250 members of Washington’s conservative intelligentsia packed into a ballroom at the Catholic University of America to hear a speech by the political philosopher Patrick Deneen…. Deneen isn’t your typical intellectual. In 2018, Deneen burst onto the conservative scene with his bestselling book Why Liberalism Failed, a sweeping philosophical critique of small-L liberalism that earned praise from figures ranging from David Brooks to Barack Obama. Since then, he has risen to prominence as a major intellectual on the New Right, a loose group of conservative academics, activists and politicians that took shape in the years following Donald Trump’s election. The movement doesn’t have a unified ideology, but almost all its members have bought into the central argument of Deneen’s book: that liberalism — the political system designed to protect individual rights and expand individual liberties — is crumbling under the weight of its own contradictions. In pursuit of life, liberty and happiness, Deneen argues, liberalism has instead delivered the opposite: widening material inequality, the breakdown of local communities and the unchecked growth of governmental and corporate power.

In Washington, Deneen’s thesis has found an eager audience among populist-minded conservatives like Vance, Josh Hawley and Marco Rubio who saw Trump’s election in 2016 as an opportunity to rebuild the Republican party around a working-class base, a combative approach to the culture war and an economic program that rejects free-market libertarian dogma.

But Deneen’s political vision doesn’t end with minor tweaks to the Republican Party’s agenda. As Deneen explained to his audience at Catholic, the major fault line in American politics is no longer the one between the progressive left and the conservative right. Instead, the country is split into two warring camps: “the Party of Progress” — a group of liberal and conservative elites who advocate for social and economic “progress” — and the “Party of Order,” a coalition of non-elites who support a populist agenda that combines support for unions and robust checks on corporate power with extensive limits on abortion, a prominent role for religion in the public sphere and far-reaching efforts to eradicate “wokeness.” In his new book Regime Change, out this month, Deneen calls on anti-liberal elites to join forces with the Party of Order to wrest control of political and cultural institutions from the Party of Progress, ushering in a new, non-liberal regime that Deneen and his allies on the right call “the postliberal order.”

[Readers will know my position on the absolute necessity for economic progress. Social progress is also absolute necessity, and for the argument as to why, I refer you to two articles in the Yale Law Review, Vol. 97, No. 8, Jul., 1988:

“Law’s Republic,” by Frank Michelman (pdf:

“The Court helps protect the republican state— that is, the citizens politically engaged—from lapsing into a politics of self-denial. It challenges “the people’s” self-enclosing tendency to assume their own moral completion as they now are and thus to deny to themselves the plurality on which their capacity for transformative self-renewal depends.”

and

“Beyond the Republican Revival,” by Cass R. Sunstein (pdf)]

Back to Deneen:

That Deneen’s ideas are finding an audience in Washington speaks not only to the steady anti-liberal drift of the Republican Party, but also to the critical role that intellectuals like Deneen are playing in its embrace of alternatives to liberal democracy….

“That’s right,” said Deneen. “Whether it’s on the right or the left, there’s no one who’s been arguing for a tradition that says, ‘What a lot of people in this country need is just a lot more sort of predictability in their lives, a kind of continuity in which their lives are not being constantly disrupted.’”

It was a far cry from the revolutionary tone he struck in his speech at Catholic, but it spoke to what Deneen sees as the core of his work: the effort to recover — or perhaps invent — the non-liberal tradition that Trilling thought was missing from American politics….

Deneen first caught a glimpse of this alternative tradition in the 1980s, while he was an undergraduate at Rutgers University in New Jersey. During his first year at Rutgers, Deneen met the charismatic political theorist Wilson Carey McWilliams, an outspoken proponent of communitarianism, a philosophy that emphasizes the shared norms and values that bind individuals into political communities. For communitarians like McWilliams, political life shouldn’t merely be oriented toward maximizing individuals’ freedom; it should also foster the feelings of solidarity and obligation that allow political communities to thrive….

In the final chapter of Why Liberalism Failed, Deneen argued that, although liberalism had “failed,” it had not reached the point of total collapse. Rather than trying to overthrow it and replace it with a new regime, Deneen counseled conservatives to focus on their local communities, building an archipelago of non-liberal communities within the broader sea of liberalism.

Within a year of the book’s publication, Deneen realized that this proposal was too modest. Around the world, liberal regimes were under assault from right- and left-wing populist movements. He saw that a window was opening for critics of liberalism to articulate a vision of an alternative regime in which conservatives presided over a strong central state.

[TW: I do not know if it is Deneen who is unfamiliar with civic republicanism, or the writer of this article. I do know that any attempt to build “an archipelago of non-liberal communities… presided over a strong central state” is a recipe for authoritarianism. To have any chance of improving the human condition, any attempt at political reform or revolution must include the two major principles of civic republicanism: the general welfare, and justice. (On the major principles of republicanism, see Senator Charles Sumner, The Equal Rights of All: The Great Guaranty and Present Necessity, for the Sake of Security, and to Maintain a Republican Government. Speech in the Senate, on the proposed Amendment of the Constitution fixing the Basis of Representation, February 5 and 6, 1866).]

Within the cohort of postliberal thinkers, Deneen has focused on articulating a vision of what he calls “common-good conservatism,” an alternative to the so-called “liberal conservatism” that has dominated right-wing movements around the world since the onset of the Cold War. On economic matters, Deneen’s “common good” approach rejects free market fundamentalism and endorses nominally “pro-worker” policies to strengthen unions, combat corporate monopolies and limit immigration. On social questions, it is explicitly reactionary, opposing “progressive” ideas about race, gender, and sexuality and supporting policies to promote heterosexual family formation.

Philosophically, common-good conservatism is premised on the idea that there is a universal “common good” that transcends the interests of any particular community or constituency — a belief with deep roots in Catholic social teaching. It rejects pluralism, as well as conservatives’ traditional emphasis on limited government, arguing that a strong central government should endorse a socially conservative vision of morality and enforce that vision in law.

[TW: again, I believe Michelman’s elucidation of “juris-generative politics” is an excellent rejection of reactionary social movements, and Deneen’s ideas along these lines. “Law’s Republic,” by Frank Michelman (pdf). Michelman explicitly explains the importance of pluralism, and the social strength diversity can provide. Worthy of note that “republicanism” appears no where in the article about Deneen. And I fear that “the left” in USA, and members of the Democratic Party, are completely unprepared to see how dangerous Deneen’s ideas are, and how easily the (anti)Republican Party can corral the support of working class voters with these ideas, such as “common-good conservatism.” George Bush’s sales job of “compassionate conservatism” is instrutive. ]

In the main, however, Deneen and postliberals fellow travelers remain clear-eyed about the headwinds that they face in convincing the mainstream of the Republican Party to adopt even a modest version of their agenda. The first and most immediate problem is Trump himself, whom Deneen calls in his new book “a deeply flawed narcissist who at once appealed to the intuitions of the people, but without offering clarifying articulation of their grievances.”

But the more significant problem, Ahmari told me, arises from the entrenched influence of conservative economic elites, whom the postliberals see as actively fighting against the emergence of a robust populist movement within the GOP.

“I think we really underestimated the institutional power of libertarian and neoconservative influence on the right,” Ahmari said. “In 2018, we picked various fights and thought, ‘Oh, the voters seem to be with us, there we go, it’s going to happen,” and then suddenly you run up against the fact that there are donors out there who are willing to put up $2 billion to quash populist ideas.”

[TW: And here Deneen and his acolytes run headlong into another major problem—oligarchy—that can be readily solved by restoring civic republicanism, which has always been hostile to concentrated wealth and tendency of great wealth to corrupt the society.]

They’re not capitalists — they’re predatory criminals

“Relationship Managers” Handled Collapsed Silvergate and Signature Banks’ Crypto Accounts; Citibank’s Dictator Accounts; and JPMorgan’s Jeffrey Epstein Accounts

Pam Martens and Russ Martens, June 12, 2023 [Wall Street on Parade]

…Each of the Citibank clients named above had a Relationship Manager. A main focus of the 1999 hearing was on Amy G. Elliott, the Relationship Manager at Citibank who handled the Raul Salinas account. (Salinas had his murder conviction overturned on appeal and was released from prison in 2005.)

During the hearing, Robert L. Roach, Counsel to the Senate investigation, testified that the Relationship Manager’s role is to function as “in-house advocates” for the interests of their clients. Roach explained the services provided to Salinas, brother to then President of Mexico, Carlos Salinas, as follows:

“The private bank…established a shell company for Mr. Salinas with layers of disguised ownership. It permitted a third party using an alias to deposit funds into the accounts, and it moved the funds out of Mexico through a Citibank concentration account that aided in the obfuscation of the audit trail. Cititrust in the Cayman Islands activated a Cayman Island shell corporation called a PIC, or private investment corporation, called Trocca, Ltd., to serve as the owner of record for the Salinas private bank accounts…

“Cititrust used three Panamanian shell companies to function as Trocca’s Board of Directors. Cititrust also used three Cayman Island shell companies to serve as Trocca’s officers and principal shareholders. Cititrust controls all six of these shell companies and routinely uses them to function as directors and officers of PICs that it makes available to private clients. Later, Citibank established a trust, identified only by a number, to serve as the owner of Trocca, Ltd. Raul Salinas was the secret beneficiary of the trust.

“The result of this elaborate structure was that the Salinas name did not appear anywhere on Trocca’s incorporation papers. The Trocca, Ltd. accounts were established in London and Switzerland…

“To accommodate Mr. Salinas’ desire to conceal the fact that he was moving money out of Mexico, Ms. Elliott introduced Mr. Salinas’ then-fiancee Paulina Castanon as Patricia Rios to a service officer at the Mexico City branch of Citibank. Operating under that alias, Ms. Castanon would deliver cashier checks to the branch where they would be converted into dollars and wired into a concentration account in New York. The concentration account is a business account established by Citibank to hold funds from various destinations prior to depositing them into the proper accounts. Transferring funds through this account enables a client’s name and account number to be removed from the transaction, thereby clouding the audit trail. From there, the money would be transferred to the Trocca, Ltd. accounts in London and Switzerland…

“Between October 1992 and October 1994, more than $67 million was moved from Mexico to New York and then on to London and Switzerland by way of this system…Yet no one questioned Mr. Salinas about the origin of these funds. Far from inquiring about the sources of the funds, Ms. Elliott wrote to her colleagues in June 1993 that the Salinas account ‘is turning into an exciting, profitable one for us all. Many thanks for making me look good.’ ’’

JPMorgan to pay up to $290mn to settle Epstein accusers’ lawsuit

[Financial Times, via Naked Capitalism Water Cooler 6-12-2023]

“JPMorgan Chase has agreed to pay up to $290mn to settle one of two bombshell lawsuits over its 15-year relationship with Jeffrey Epstein, which accused the bank of profiting from human trafficking by ignoring multiple internal warnings about their former client’s sex crimes. The agreement came just hours after a federal judge ruled that the case, originally brought by a single Epstein accuser under the pseudonym Jane Doe, would be widened to include dozens of women who claim to also have been abused by the disgraced financier. The total size of the group who will share the payout exceeds 150 victims, a lawyer for Doe said.”

MiB: Gretchen Morgenson on Private Equity (podcast)

Barry Ritholtz, June 17, 2023 [The Big Picture]

This week, we speak with Gretchen Morgenson, senior financial reporter for the NBC News investigative unit. A former stockbroker and alumna of the New York Times and Wall Street Journal, she won the Pulitzer Prize in 2002 for her “trenchant and incisive” reporting on finance. She (and coauthor Joshua Rosner) recently published “These Are the Plunderers: How Private Equity Runs―and Wrecks―America.” They also wrote the 2011 bestseller “Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon,” about the mortgage crisis.

She discusses how the four largest private equity firms — Apollo Global Management (APO), The Blackstone Group (BX), The Carlyle Group (CG), and KKR & Co. (KKR) — have grown to have an outsized impact on not just the U.S. economy, but American society as a whole.

Morgenson explains how PE was originally an institutional type of product aimed at Pensions, Foundations, Endowments and other perpetual investment capital, but has recently moved into high-net-worth retail customers. UHNW investors have been so attracted to Private Equity’s diversified asset class and steady returns, especially in an era of zero interest rates.

We discuss the Carried Interest tax loophole, a tax dodge that benefits a few 1000 people in the country but cost U.S. taxpayers 180 billion dollars per decade. It has become impervious to any sort of attack due to the financial largesse of its beneficiaries to the political class. Apologists include Kirsten Sinema and Ted Cruz. Senators Baldwin, Manchin, Brown have repeatedly introduced legislation to close the Carried Interest Tax Loophole but it remains stubbornly in place.

‘Shadow Banks’ Account for Half of the World’s Assets—and Pose Growing Risks

[Barron’s, via The Big Picture 6-16-2023]

Regulators lack a clear view into the world of nonbank finance, or ‘shadow banking.’ Barron’s peers into this opaque world.

Profit Inflation Is Real

[Institute for New Economic Thinking, via The Big Picture 6-16-2023]

“A comparison shows how extraordinary our current inflationary distress actually has been and still is. Unlike during the 1970s, corporations today wield sufficient market power to effectively protect their profit mark-ups (and, by doing so, to realize higher profits) during a time of inflationary stress that is comparable to that of the 1970s.”

Capitalists hate capitalism 

Cory Doctorow, Pluralistic, via Naked Capitalism 6-11-2023]

…They don’t want to compete with one another, because that would interfere with their ability to raise the prices their customers pay and reduce the wages they pay their workers. Thus Peter Thiel’s anticapitalist rallying cry, “competition is for losers,” or Warren Buffett’s extreme horniness for businesses with “wide, sustainable moats.”

These anti-capitalist capitalists love big government. They love no-bid military contracts, they love ACA subsidies for health insurance companies, they love Farm Bill cash for Cargill and Monsanto. What they don’t love is markets.

Health care crisis

First People Sickened By COVID-19 Were Chinese Scientists At Wuhan Institute Of Virology, Say US Government Sources 

Michael Shellenberger, Matt Taibbi, and Alex Gutentag [Public, via Naked Capitalism 6-14-2023]

On Today’s Explosive Coronavirus Story 

Matt Taibbi [Racket News, via Naked Capitalism 6-14-2023]

“My silence is not for sale”: Bellingham doctor fired for COVID concerns refuses $2 million settlement

[KING5, via Naked Capitalism Water Cooler 6-13-2023]

“In March of 2020, Lin posted a video critical of PeaceHealth administrators for not having proper protective gear or protocols in place to keep patients and staff safe. Shortly thereafter, he was fired. ‘It was kind of humiliating, in a way. You feel like an outcast,’ he said. Lin filed a lawsuit claiming wrongful termination, saying the hospital accused him of ‘posting misinformation’ and creating a ‘toxic environment.’ Three years later his lawyers told him he should settle the suit for $2 million, but Lin refused. He believes the hospital should publicly admit wrongdoing, especially since, he says, it eventually ended up instituting much of what Lin requested. ‘It’s like a bully out there terrorizing people. Unless the bully acknowledges what he did wrong, you never solve the problem,’ says Lin. PeaceHealth spokesperson Beverly Mayhew tells KING 5 the hospital ‘can’t comment specifically on active litigation, however, it’s important to emphasize that patient and caregiver safety is and always has been, our top priority. This commitment drives all clinical decision-making at PeaceHealth.’ For Lin, walking away from $2 million is just the next step in his march toward justice. ‘Taking the money would just say that it’s OK for corporations to just pay people off to be silent,’ Lin said. ‘My silence is not for sale.’ Lin’s attorneys dropped him, so he is currently seeking new representation.”

Lambert Strether:

We also gave a corrupt and despicable public health system jurisdiction over an engineering problem, already solved in industry. And speaking of corrupt and despicable, I present the Brownnose Institute–

“Forest fires and n95 masking” [Vinay Prasad’s Observations and Thoughts]. The deck: “Masking without evidence is an untreated mental illness plaguing public health.”

[Twitter, via Naked Capitalism Water Cooler 6-13-2023]

.

Let Them Eat Plague!

[Red Clarion, via Naked Capitalism Water Cooler 6-13-2023]

Actually solving the pandemic was never in the cards for the U.S. and the rest of the capitalist world. It would have necessitated deep international cooperation, massive investment in clean air infrastructure, a persistent information campaign (and censoring of hazardous misinformation), efforts to build public trust in government, guaranteed paid leave, nationalization of key industries, and more. Basically, it would involve massively undercutting the philosophy of free market capitalism.

Instead, the explicit goal of the ruling class has been to make the pandemic simply disappear from public perception. Any reminder of the existence of a highly-transmissible, highly-dangerous, mass-disabling disease could trigger panic, or worse: organized, militant labor action. Averting this crisis required a careful campaign of culture-crafting; the people themselves needed to become convinced that there was no reason to fight. Consent for protracted mass infection needed to be manufactured.

There are three main ways this hegemonic narrative around COVID has been propagated to the public: official rhetoric, public policy, and media framing. These three facets of idea propagation feed into each other, and all three are maneuvered in various ways by the interests of capital. The process by which a hegemonic narrative is crafted in the capitalist sphere is not quite as straightforward as one might expect. It’s not a simple matter of a state propaganda department deciding on a central doctrine, issuing scripts to paid actors, and imprisoning all who dissent. There is no party line for the capitalists, no single convocation of business elites, and relatively few shadowy backroom deals. Explicit planning meetings are held — independently — among the leadership of different ruling class parties and distinct business interests, and their similar class interests lead them to similar priorities. But the way narrative unity of this sort is achieved is not through an all-powerful conspiracy. Instead, the “decision” for how to frame events arises organically from the interplay of the many individual sectors that comprise the ruling class propaganda machine.

“Pandemic Necropolitics: Vulnerability, Resilience, and the Crisis of Marginalization in the Liberal Democratic State” (forthcoming)

[Stefania Achella & Chantal Marazia, ed., Vulnerability in Post-pandemic. Medicine, Politics, Humanities, via Naked Capitalism Water Cooler 6-16-2023]

“Vulnerability, marginalization, and resilience in the pandemic and in an eventual “post-pandemic” state are examined through the lens of Achille Mbembe’s theory of necropolitics. The central claim made is that vulnerability and marginalization are products of a covert and intentional politics of death. It is also argued that for the vulnerable and marginalized, the pandemic does not demarcate between a previous normal and eventual normal state, but is rather, an escalation of a persistently abnormal state. A final claim is that reflection on the fate of the vulnerable and marginalized must resist a Kantian impulse to find and urge resilience and focus instead on a direct attack on the necropolitics that sustains suffering for this population.”

Why Are Corporate Healthcare Fraudsters Being Handed ‘Get Out of Jail Free Cards’? 

[Common Dreams, via Naked Capitalism 6-16-2023]

The Center for Medicare and Medicaid Services (CMS), the federal agency that oversees those national health care programs, has the dubious distinction of being light years ahead of other government regulators in excusing fraudulent conduct. CMS doesn’t just allow healthcare companies to repeatedly commit fraud and abuse with fines amounting to a tiny fraction of the profit; CMS goes much further.

CMS formally authorizes the violation of anti-corruption laws by granting “fraud and abuse” waivers to the corporate entities involved in experimental programs within its Center for Medicare and Medicaid Innovation (CMMI or Innovation Center).

It’s true. CMS has an official webpage named “Fraud and Abuse Waivers” that lists the programs entitled to their absolution.

Restoring balance to the economy

Can Public Banks Play in Tax Equity Markets? 

Lee Harris, June 16, 2023 [The American Prospect]

What’s the difference between building clean energy and paying for it to be built? With billions in tax breaks at stake, the distinction is becoming more important to parse.

On Wednesday, the Treasury Department released proposed guidance on direct pay, a new cash payment system to incentivize local governments, churches, public power utilities, nonprofits, and other tax-exempt entities to build renewable energy.

The details of this new tool, which was created in last year’s Inflation Reduction Act, will determine whether public entities make use of infrastructure subsidies that have long been reserved for the private sector.

During the New Deal, rural electric cooperatives, schools, and other public entities were major beneficiaries of federal grants for electrification. But since the 1980s, Congress has moved away from direct investment in energy and other forms of development, relying increasingly on the federal tax code, in a shift that has concealed the role of the state in economic planning.

“Direct pay turns that on its head,” according to Mike Konczal, an economist at the Roosevelt Institute who supports direct pay. He wrote on Twitter that the policy makes tax credits into “a kind of grant for the public sector.” Since most of the IRA’s support for clean energy is funneled through tax credits, the provision gives entities that don’t pay income taxes a cash payout for upgrading facilities or producing lower-carbon energy.

Why Unions Need More Democracy 

Ege Yumuşak [Boston Review, June 15, 2023]

Rules to Win By: Power and Participation in Union Negotiations
Jane F. McAlevey and Abby Lawlor
Oxford University Press, $29.95 (cloth)

In Rules to Win By, Jane McAlevey and Abby Lawlor reject backroom dealmaking. Rank-and-file workers are going even further.

Few of us have a voice in the political systems we are embedded in; the decisions that shape our lives are mostly made behind closed doors in rooms we can’t access. In theory, one exception to this rule is collective bargaining—a right that only 10 percent of U.S. workers exercise.

The goal of collective bargaining is clear enough: to escape what philosopher Elizabeth Anderson calls “private government,” the subjection of workers to the unaccountable authority of employers. By engaging in bargaining, the idea goes, workers can limit the scope of their employer’s control over their lives, improve their pay and benefits, and win protections to ensure they are treated with respect and dignity. In their new book, Rules To Win By: Power and Participation in Union Negotiations, veteran labor organizer Jane McAlevey and researcher Abby Lawlor expose how the practice of collective bargaining has often fallen short of this ideal. “Most negotiations today function a bit like our mangled democracy,” they argue. Union members may get to elect leaders and bargaining teams, but they rarely “experience the actual process of collective negotiations over the issues that are crucial, urgent, and relevant to their own lives.” Instead, they “are told that their role . . . is to vote to ratify or reject a contract presented to them at the end of lengthy, opaque contract negotiations” executed by union management and their lawyers. McAlevey and Lawlor want to empower workers to be more engaged and to change the script unions have long followed at the bargaining table.

The book arrives at the right time. Union election petitions shot up 53 percent from 2021 to 2022, and public opinion polling puts U.S. union support at its highest since 1965, with Americans now viewing unions more favorably than Joe Biden by almost two to one. Just as many workers are getting their first taste of organizing, McAlevey and Lawlor distill crucial insights from six case studies of recent union successes, offering vital prescriptions for making negotiations more democratic while building power vis-à-vis employers. Their central claim—that “high participation” is strategically effective—gives the lie to the supposed necessity of closed, backdoor dealmaking for achieving a win….

Disrupting mainstream economics 

The Rhodes Center Podcast: Does economics do more harm than good?

Mark Blyth [YouTube, June 7, 2023]

All Roads Lead to Cooperation

Amna A. Akbar, Bernard E. Harcourt, Anthony Morgan [Boston Review, May 31, 2023]

As part of our event series with The Philosopher, Amna Akbar sat down with Bernard Harcourt, legal scholar and professor of political science at Columbia University, to discuss his new book, Cooperation: A Political, Economic, and Social Theory. In the course of their conversation, moderated by Philosopher editor Anthony Morgan, they discuss the failure of traditional electoral politics and mass mobilization, existing cooperative efforts, our punitive society, and how we might build democratic self-governance. Below is a transcript of their conversation, which has been edited for clarity and concision….

Bernard Harcourt: It feels as if all roads led to cooperation, although it took a while for me to get there. Over the course of my life, I’ve been obsessed with two things. I think that you, too, share an interest in these. One is the punitiveness of our society. The other includes questions of political economy. I’ve tried to grapple with both over the course of my life, starting with death penalty work down in Alabama, but also writing about broken windows policing, racial profiling, and racialized mass incarceration. I’ve also worked on Foucault’s texts, such as The Punitive Society (1973)—giving name to these forms of racialized mass incarceration that we have today. Then I’ve also been interested in trying to figure out how that ties to our political economy, and how punishment is related to governing, economically and politically. That’s been the work of The Illusion of Free Markets and the Occupy Movement and political disobedience….

The Wealth of (Some) Nations [podcast]

[Roosevelt Institute, The New Republic, and PRX, June 15, 2023]

Thomas Piketty argues that it’s time to address global inequality—through radical changes in economic policy.

This episode of How to Save a Country takes a trip across the pond—to Paris, exactly—to attend an international panel on neoliberalism. Co-host Felicia Wong, President and CEO of The Roosevelt Institute, shares what she heard at the panel from speakers including former HTSAC guest Gary Gerstle and one of the world’s foremost scholars of inequality, Thomas Piketty. As Felicia recounts to co-host Michael Tomasky, editor of The New Republic, there was some disagreement about whether neoliberalism is actually dead or just on a forced hiatus. Following the panel, Felicia had the opportunity to speak with Piketty one-on-one about his policy ideas to bridge the inequality chasm (including a progressive wealth tax and a universal basic inheritance). They also discuss why focusing solely on income when discussing inequality is a mistake, as well as what the global north owes to the global south.

Elites

[Twitter, via Naked Capitalism Water Cooler 6-13-2023]

[I don’t like Carlson, but I think he’s correct about why “institutionalists” in both political parties really hate Trump. And I think moral duty requires we avail ourselves of every opportunity to take a swipe at the institutional lies that led us into war, and are now leading us into war with Russia and China.]

We can point to the precise moment that permanent Washington decided to send Donald Trump to prison. here it is it’s from the Republican candidates debate in Greenville South Carolina:

[TRUMP:] “We should have never been in Iraq; we have destabilized the Middle East. They lied, okay. They said there were weapons of mass destruction there were none and they knew there were none there were no weapons of mass destruction.”

We should never have been in Iraq, Trump said. We destabilized the Middle East. Now by the time Trump said that a lot of Republican primary voters were starting to reach the same conclusion; how could they not. But it was the next line that doomed Trump to today’s arrest. “They lied” he said, “there were no weapons of mass destruction” and they knew there were none.

Now when he said that a few in the crowd booed, most just sat there in silenced stunned. Can he say that? Well he said it anyway and by saying that he sealed his fate. That was the one thing you were not allowed to say because it implicated too many people on both sides, which on this topic is really just one side.

Hillary Clinton was guilty of it, but so was Paul Ryan. All of them were guilty; they all knew, they all lied, and to a person they hated Donald Trump for exposing them.

After that it was pretty clear that even if he did get elected president Trump was going to have a very hard time controlling the federal government he was supposed to be in charge of. Most of permanent Washington decided that thwarting Trump was the single most important mission in their lives.

U.S. Gun Violence in 2021: An Accounting of a Public Health Crisis

[John Hopkins Center for Gun Violence Solutions, via Naked Capitalism 6-11-2023]

One death every 11 minutes. 

Information age dystopia / surveillance state

NO ONE BELIEVES IN COP CITY. SO WHY DID ATLANTA’S CITY COUNCIL FUND IT?

[The Intercept, via Naked Capitalism 6-11-2023]

Microsoft’s Sudden AI Dominance Is Scrambling Silicon Valley’s Power Structure

[usinessweek, via The Big Picture 6-16-2023]

The company has quietly cornered the emerging software market, and it’s preparing to cash in.

Biden Administration Tells Car Manufacturers to Ignore Right-to-Repair Law 

[Gizmodo, via Naked Capitalism 6-15-2023]

The right-to-repair movement has suffered a setback in Massachusetts this week. The Biden administration told car manufacturers not to comply with a state law that would allow independent auto shops and car owners the ability to fix their own vehicles.

Vice first reported that the major concern the Biden administration’s National Highway Traffic Safety Administration has with the law, which is colloquially titled the Data Access Law, is hacking. To express these concerns, Kerry Kolodziej, from assistant chief counsel at the NHTSA, authored a letter (dated yesterday) to the chief counsel of nearly two dozen major automotive manufacturers including BMW, Ferrari, Ford, and Hyundai. Kolodziej argues in the letter that since the law grants open access to a car’s telematics—which are used to wirelessly send commands to cars—a “malicious actor here or abroad” could remotely command a car. The outcomes, the NHSTA says, could be vehicle crashes, passenger injuries, or death.

Creating new economic potential – science and technology

Recording the entire process of a tera-electron volt gamma-ray burst during the death of a massive star 

[PhysOrg, via Naked Capitalism 6-13-2023]

Democrats’ political malpractice

The Democrats’ long wander into the weeds 

[Art Cullen’s Notebook, via Naked Capitalism 6-11-2023]

Nothing is on the horizon to block Iowa’s steady march to the right and off a cliff….

The state’s congressional delegation is entirely Republican.

It’s going to take a seismic event, or series of them, and a messianic messenger for Democrats to even get back in the conversation.

There are no statewide races on the 2024 ballot. Iowa will be flooded with conservative propaganda — it’s already started — with the Republican presidential nominating process. Being anti-woke, whatever that is, will be the thing. The environment will heighten Reynolds’s visibility and burnish her image as a politician of national prominence. Democrats will ignore Iowa because there’s nothing at play here.

Iowa needs a two-party system but doesn’t have one. That’s been a long time coming. The GOP has played the long game in rural states since 1980 by investing in media, messaging and organization. It’s paying off in flyover country.

What Does The FBI Have On Hunter and Joe Biden? 

Ryan Grim and Ken Klippenstein, The Intercept.

The idea that the charge has been proven is preposterous, but readers looking for details on the case have little place to turn outside of the conservative news outlets that have been making such claims. Yet if the FBI is telling Congress that it hasn’t disproved the allegation, it does raise serious questions: What exactly are the Bidens accused of doing? What is this document? And what has the FBI done to test the veracity of that evidence?

Disrupting mainstream politics

CORNEL WEST, THE PITFALLS OF BOURGEOIS POLITICS, AND FORGING A NEW FUTURE AMONG THE RUBBLE 

[Hampton Institute, via Naked Capitalism 6-12-2023]

(anti)Republican Party

Inside the GOP’s Latest Desperate Attempt to Smear Joe Biden

Michael Tomasky, June 12, 2023 [The New Republic]

Here’s the long and short of it. It involves Burisma, the Ukrainian energy company on whose board Hunter Biden sat. The confidential source was told by the head of Burisma that he paid bribes of $5 million each to Joe and Hunter Biden. These were basically Rudy Giuliani’s old scotch-fueled rumors.

This all dates, by the way, to June 2020. This is a useful fact to keep in mind, for two reasons. One, it means that all of this is three years old; two, it means that Donald Trump was president and Bill Barr his still-loyal attorney general, when this document, an FD-1023 in FBI-speak, was logged.

Naturally, the Justice Department set out to look into it. Barr appointed Scott Brady, then the U.S. attorney for western Pennsylvania, to look into Giuliani’s claims…. In this case, the charges didn’t even move beyond the assessment phase. Brady did little, at least that we know of. The only thing he ever did with respect to this matter that made the papers was that he held one four-hour meeting with Giuliani. But he brought no charges, and now he’s back in private life….

Is it possible that Biden took a $5 million bribe? Sure, anything’s possible. But which is more likely: that Biden, who has been in the public eye for half a century without a single episode of financial scandal to his name, took a bribe (after, by the way, he was out of public life and finally making some serious jack on the lecture and book circuit, meaning that money was the last thing he needed); or that the right wing, which has peddled fiction after fiction about top-ranking Democrats, is lying?

This is what they do. They told 50 lies about Bill Clinton. None of them have been proven. He made no money from Whitewater. He did not protest the Vietnam War in front of the Kremlin. Yes, he had that affair, and he lied about that. But he did not obstruct justice. The zealous Mr. Starr would have found out if he had.

They lied about Al Gore, who never said he “invented” the internet. They lied about John Kerry’s military record—just ghastly, wholly fabricated assertions about a man who held a degree from Yale and could have found 500 ways to get out of military service but went to the Army recruiter’s office and demanded he be sent to the front lines in Vietnam. (By the way: Gore too graduated from Harvard and went immediately to a recruitment office in New Jersey to enlist to make absolutely sure that he would get no senator’s son breaks, while George W. Bush hid out in the Texas Air National Guard.)

They lied repeatedly about Barack Obama, who was not born in Kenya and did not smoke crack with his gay lover and was not a Communist Muslim terrorist sympathizer. They lied nonstop for 30 years about Hillary Clinton. Lying about her was an industry that at one time rivaled the gross domestic product of small nations. She sometimes didn’t help her own cause in the way she handled things, but remember this point, always: The number of “her emails” that were classified was … zero. Did you get that? Zero.

Don’t take this from Hillary. It was affirmed in 2019 by Donald Trump and Mike Pompeo’s State Department….

How Republicans and Big Business Broke Up

[Wall Street Journal, via The Big Picture 6-16-2023]

Republican lawmakers, accusing CEOs of skewing left, have become less dependent on corporate PAC money than at any time in the past three decades.

Good Riddance to the Architect of the GOP’s Environmental Culture Wars 

Liza Featherstone, June 16, 2023 [The New Republic]

James Watt was a fiery evangelical, a cultural laughingstock—and instrumental in shaping modern GOP rhetoric on the environment.

The (anti)Federalist Society Infestation of the Courts

Here’s a rough estimate of how many people recent SCOTUS rulings might kill 

[Ars Technica, via Naked Capitalism 6-11-2023]

Miscellany

Every self-help book ever, boiled down to 11 simple rules

Mashable [via The Big Picture 6-16-2023]

The basic advice in hundreds of bestsellers is older than you think.