Week-end Wrap – Political Economy – October 15, 2023

by Tony Wikrent

Strategic Political Economy

US science agencies on track to hit 25-year funding low 

[Nature, via Naked Capitalism 10-11-2023]

The Smart Corporate Tax Idea That Might Have Prevented the UAW Strike

Jessica Church, October 9, 2023 [washingtonmonthly]

Targeting out-of-control CEO pay by using the tax code is the right policy for this moment. Here’s how it works….

Indeed, this strike could have been avoided were company profits shared more equitably among workers and management. But despite taxpayer largesse that not only rescued the auto industry during the Great Recession but led it to thrive, that has not been the case. Under the Barack Obama-era bailout, workers and company executives were supposed to make sacrifices. But while unions accepted that two-tier wage system that the UAW is fighting, executive compensation has soared.

A situation where executive compensation shoots up like a missile while workers’ wages flatline was not inevitable. In 2021, Congress debated a measure that might have made the strike unlikely and unnecessary. Both chambers considered versions of the Tax Executive CEO Pay Act, introduced by Bernie Sanders, the independent senator from Vermont.

The clever and potentially revolutionary legislation (discussed extensively in Washington Monthly) aimed to rein in excessive executive compensation by levying a tax on companies that pay their CEOs 50 times or more than their median employee earns. The tax came as a surcharge on corporate income tax, meaning that it only applied to profitable companies with federal corporate income tax liability. That surcharge increased as the CEO-to-median worker pay ratio worsened (0.5% for ratios between 50-100:1, 1% for ratios between 100-200:1, 2% for ratios between 200-300:1 and so on, up to 5% for ratios more than 500:1)….

How red-state politics are shaving years off American lives

[Washington Post, via The Big Picture 10-09-2023]

Americans are more likely to die before age 65 than residents of similar nations, despite living in a country that spends substantially more per person on health care than its peers. Many of those early deaths can be traced to decisions made years ago by local and state lawmakers over whether to implement cigarette taxes, invest in public health or tighten seat-belt regulations, among other policies, an examination by The Washington Post found. States’ politics — and their resulting policies — are shaving years off American lives.

Africa’s revolt against Net Zero 

Thomas Fazi [UnHerd, via Naked Capitalism 10-14-2023]

For the past two centuries, human prosperity has correlated with one factor: energy, released through the burning of fossil fuels. This is a self-evident global truth. Europe and North America, the wealthiest regions on the planet, are also those with the highest per capita CO2 emissions (along with the oil-producing Gulf states); Africa, on the other hand, has the world’s lowest levels of per capita energy use — the average African consumes less electricity than a refrigerator and around 600 million people live without access to to electricity. In this sense, it’s the “greenest” continent on the planet. It’s also the poorest, with almost half a billion Africans living in extreme poverty.

More than any other resource, Africa is starved of the energy it needs for economic development. This isn’t for lack of natural endowment. Africa possesses vast reserves of coal, oil and natural gas. But extracting those resources and using them for domestic development requires money, infrastructure, expertise and institutional capacity — which Africa’s poorest nations, especially in the sub-Sahara, sadly lack. One solution is partnering with foreign energy companies — until recently, mostly European and American firms — but that means that much of the domestically produced gas and oil is then exported rather than used for local development….

Global power shift

You’re not going to like what comes after Pax Americana 

Noah Smith [Noahpinion, via Naked Capitalism 10-08-2023]

War

Egypt intelligence official says Israel ignored repeated warnings of ‘something big’

[Times of Israel]

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[X-Twitter, via Naked Capitalism 10-10-2023]

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Gaza ‘will soon be a tent city’ says Israeli official as IDF launches 250 airstrikes in one hour into Gaza’s ‘Nest of Terror’ and readies for ground invasion: Generals have ‘released all restraints’ on its troops for fight against Hamas 

[Daily Mail, via Naked Capitalism 10-11-2023]

The Horrifying Details of What It Is Like in Gaza Right Now: The bulldozers have run out of fuel to clear the rubble to get to the bodies.

Aymann Ismail, October 14 [Slate]

[X-Twitter, via Naked Capitalism 10-14-2023]

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The carnage of mainstream neoliberal economics

US wealth, income concentration resume upward climb in post-pandemic era

Howard Schneider, October 9, 2023 [Reuters, via downwithtyranny.com]

“The richest Americans are emerging from the coronavirus pandemic with their share of wealth and income on the rise again despite some thought that the tight job market and hefty wage gains spawned by the crisis might narrow the gulf between rich and poor… For the bottom 40% by income that means a smaller slice of the pie even as their net worth has risen at the swiftest pace in years. While the collective net worth of the bottom one-fifth was up 27% to $4.2 trillion at the end of the second quarter from $3.3 trillion in 2019, their share of the country’s wealth shrank to 6.7% from 7% during that time.

Stealing Home: Corporate Welfare: America’s Other Favorite Pastime

Senator Chris Larson (DownWithTyranny]

What Wisconsin company is worth more than 7 times what it was 17 years ago (now $1.6 billion), averages $20.6 million per year in profit, pays no property tax on 265 acres of land, and has received $1.5 billion in public benefits since 1996?….

The answer is the Milwaukee Brewers, whose owners are now asking for over $600 million in additional taxpayer funds— not for anything new— but to maintain and improve their stadium for 20 years beyond the existing lease….

Mark Attanasio bought the Brewers in 2005 for $223 million. The team has been profitable every year of his  ownership except the covid-stalled 2020 season. It is now worth a whopping $1.605 billion. He could sell the team, pay for the requested $600 million in stadium renovations out of his own pocket, and still come out of the deal $1 billion richer. We’re talking about millionaires and billionaires making hundreds of millions of dollars on cannot-lose investments. The only part of pro sports that doesn’t appreciate in value over time is the stadiums themselves. Ask any private business owner— if they could keep all the profits from their business and outsource all of their capital liabilities to someone else, they’d take that deal every single time….

Major League Baseball’s ownership cartel has decided that maximizing profit is more important than creating the best product on the field or securing the long-term stability of the league. As such, they’ve decided to outlaw public ownership of MLB franchises. But public ownership may actually be the best thing that could happen to the sport….

‘Wage Theft Is Built Into the Business Models of Many Industries’ 

[FAIR, via Naked Capitalism 10-13-2023]

March of the Four–Stars: The Role of Retired Generals and Admirals in the Arms Industry

[Quincy Institute for responsible statecraft, via Naked Capitalism 10-08-2023]

National Association of Realtors Is Imploding

Barry Ritholtz, October 13, 2023 [The Big Picture]

Predatory finance

The Free-Money Experiment Is Over

[Businessweek, via The Big Picture 10-11-2023]

The carnage from the bond market—where the rout is worse than anything you’ll find in the history books since 1787—is spreading, and the implications are nasty.

Fed’s Vice Chair for Supervision Says Another Financial Crisis Could Cost U.S. $5 Trillion to $25 Trillion – Potentially as Much as 100 Percent of GDP

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

There Are Two Reasons that 75 Percent of U.S. Banks Didn’t Hedge Their Interest Rate Risk as the Fed Hiked Rates at the Fastest Pace in 40 Years

Pam Martens and Russ Martens, October 9, 2023 [Wall Street on Parade]

The New Kings of Wall Street Aren’t Banks

[Wall Street Journal, via The Big Picture 10-11-2023]

Private Funds Fuel Corporate America. With interest rates at multiyear highs, hedge funds and private equity are taking over lending.

Janet Yellen’s Treasury Department Hires 5-Count Felon JPMorgan Chase to Look for Fraud

Pam Martens and Russ Martens, October 11, 2023 [Wall Street on Parade]

Finance as alchemy

[Aeon, via The Big Picture 10-14-2023]

Finance fraud is not a deviation from an essentially rational system but a window onto the reality-distortion of markets.

International Bank Study, Using 150 Years of Data, Shows Mega Banks Like the Big Four in the U.S. Produce Financial Instability and More Severe Crises

Pam Martens and Russ Martens, October 9, 2023 [Wall Street on Parade]

SHE EXPOSED ONE OF THE WORLD’S BIGGEST BANKS. THEY RUINED HER LIFE

Chris Hedges, October 13, 2023 [The Real News Network

Stephanie Gibaud pulled back the cover on the criminal activities of UBS, the world’s largest private bank. The French government has utterly failed to protect her from the harassment and retaliation that followed.

Health care crisis

A Price Jump From Pennies to $20/Pill for the Same Drug 

[MedPage, via Naked Capitalism 10-14-2023]

Information age dystopia / surveillance state

Fixing Disinformation Online

Anya Schiffrin, October 13, 2023 [The American Prospect]

What will it take to regulate the abuses of Big Tech without undermining free speech?

[Books reviewed:]

Digital Empires: The Global Battle to Regulate Technology

By Anu Bradford

Oxford University Press

Building Back Truth in an Age of Misinformation

By Leslie F. Stebbins

Rowman & Littlefield

 

Restoring balance to the economy

Why Walgreens pharmacy workers are walking off the job 

[CNN, via Naked Capitalism 10-13-2023]

Biden’s Latest Initiatives Against Junk Fees

Robert Kuttner,  October 11, 2023 [The American Prospect]

Why did it take so long for other presidents to appreciate the power of these regulatory counterweights?

To take a tour of all the deceptive “junk fees” imposed on consumers by an array of industries is to appreciate the insidious nature of predatory capitalism that has become all too normal. Getting rid of junk fees and saving consumers hundreds of billions of dollars has been a Biden administration theme.

It’s also very good politics, since it demonstrates how Democrats are on the side of ordinary people, as well as demonstrating the need for countervailing consumer regulation—and it smokes out Republican fake “populism,” since Republicans hate an activist state constraining corporate abuses.

Today, the administration took junk-fee prohibition to a new level, with detailed initiatives by the Federal Trade Commission and the Consumer Financial Protection Bureau. New FTC rules will require all businesses to show all fees up front, as well as clear disclosure of whether fees are refundable. This rule would apply to event tickets, hotels, car rentals, apartment rentals, and more. Companies that failed to comply would pay fines as well as customer refunds….

A Plan To Stop The Vulture Funds Fueling Global Debt

[The Lever, October 12, 2023]

As conversations on the global debt crisis heat up, activists push New York State lawmakers to take on exploitative private creditors.

Feds Rein in Predictive Software That Limits Care for Medicare Advantage Patients 

[Pharmacist Steve, via Naked Capitalism 10-09-2023]

The Cooperative That Could: How S Group became Finland’s most dominant retailer

Ryan Cooper, October 11, 2023 [The American Prospect]

…The interesting thing about S Market, and what brought me all the way to Finland, is not this bog-standard grocery store. It’s the parent entity S Group, a cooperative network owned by its members—and one of the biggest and most successful companies in Finland. S Group has about 2.5 million members—in a country of just 5.6 million inhabitants—representing 78 percent of Finnish households, along with 41,000 employees, 1,984 business locations, and an annual revenue of €13.5 billion last year. S Group accounts for fully 47 percent of the Finnish grocery market.

While nowhere near Walmart in absolute terms, relative to the size of the Finnish economy, it’s about twice as large as Walmart’s U.S. operations, which controls about a quarter of domestic grocery spending. And it’s member-owned.

From an American perspective, this is difficult to understand. Practically our whole society is built on the assumption that the only way to have a wealthy, productive economy is for entrepreneurs to be incentivized with massive rewards for building efficient businesses. It is necessary for people like Jeff Bezos and Elon Musk to become rich beyond the dreams of avarice, so the theory goes, because otherwise we wouldn’t have Amazon or Tesla.

One might attack this narrative empirically—Amazon was helped tremendously in its early days by not paying state sales taxes, while Tesla has relied on large government subsidies for most of its existence—but S Group poses a more fundamental challenge. Here we have a hyper-efficient retail operation, run with cutting-edge management and logistics, dominating half the grocery market of a wealthy country, without minting a single billionaire in the process. It is not just competitive with capitalist businesses; it is more successful. It’s enough to make the ghost of Ronald Reagan cry….

Green New Deal – An opportunity too big to miss

Low-Key Green: Pueblo is a world-class model for the clean-energy economy envisioned in the Inflation Reduction Act. But its residents may not feel it.

Chase Woodruff, October 12, 2023 [The American Prospect]

…Dubbed “The Pittsburgh of the West” by its 19th-century founders, Pueblo is a coal and steel town — which is to say, it’s a railroad town. The former Colorado Fuel & Iron plant, now owned by Russian conglomerate EVRAZ, still churns out roughly half of the railroad track laid down in North America.

Today, the facility is the world’s first and largest solar-powered steel mill. Its considerable energy needs are almost entirely met by a purpose-built photovoltaic array next to a nearby coal plant, Comanche Generating Station, where the first of three boilers has already come offline as Colorado pursues an aggressive coal-retirement strategy. Shifting energy policy and falling wind and solar costs have helped make Pueblo County a burgeoning renewables hub, and not just for solar; to the south, a sprawling factory owned by CS Wind is the world’s largest manufacturer of wind turbine towers.

“Pueblo is going to be, I hope, known as the renewable energy capital of the world,” said Mayor Nick Gradisar, the son and grandson of CF&I steelworkers. “It’s exciting what’s happening here.”

‘People are happier in a walkable neighbourhood’: the US town that banned cars

[The Guardian, via The Big Picture 10-14-2023]

For the first piece in our new series the alternatives we visit a community without cars in the desert of Tempe, Arizona.

Creating new economic potential – science and technology

The world’s first true female car crash dummy is here — and it’s a big deal 

[ZMEScience, via Naked Capitalism 10-11-2023]

…a report from the US Department of Transportation suggests that women are at a 17 percent higher risk of dying from a car crash. They are also 75 percent more prone to severe injuries during an accident but, unfortunately, nobody is talking about these facts….

…“We see from statistics that men and women are at different risks from different types of crashes. The aim of the prototype dummy is to show that we can make models of the female population in the same way as we have, for a long time, made models of the male population,” Astrid Linder, an engineer who is leading the SET 50F team at VTI, told CNN.

Most women have less muscle mass and body weight than men of their age. In fact, even if a man and a woman have equal body size, the skeletal size and bone mass will still typically be higher in the man.

“Women are generally lighter than men, so they are catapulted forward more quickly, and subject to greater acceleration,” Anna Carlsson, a researcher from Chalmers University, told the Norwegian Broadcasting Corporation….

Democrats’ political malpractice

As 2024 Looms, Democrats’ Campaign Tech Crumbles Under Private Equity Squeeze

[The Intercept, via Naked Capitalism Water Cooler 10-10-2023]

“In recent years, the privately owned monopoly over the Democratic Party’s voter data has changed hands from one for-profit company to another. Apax Partners, a global private equity firm, currently owns EveryAction and NGP VAN, the firms that house the Democrats’ suite of voter file, compliance, and organizing tools. Apax acquired them from another private equity firm in 2021, creating a new merged entity called Bonterra. Last month, according to current and former employees, Bonterra cut at least 20 percent of its staff, more than 200 employees. Staff members across EveryAction and NGP VAN, which hold the Democratic Party’s most sensitive data, were cut. At least a quarter of the people laid off belonged to the union, 51 of them unit members from EveryAction and NGP VAN. At least half of the developers at ActionKit, a fundraising and customer relations management software acquired by EveryAction in 2019, lost their jobs…. The recent cuts at Bonterra come after layoffs earlier in the year, which preceded a wave of contraction in the Democratic-aligned campaign industry.” Makes you wonder how much was funded by SBF. More: “In the two years since Bonterra’s creation, at least 340 people have been laid off. Cuts in January were followed three months later by layoffs at other Democratic and progressive consulting, media, and polling firms like Middle Seat and ActBlue. Last month, EMILY’s List laid off eight people, including most staff working on grassroots candidate outreach and training, and shut down its national training and recruitment program. The leader of the group who oversaw the cuts, Laphonza Butler, was just appointed to represent California in the Senate on Tuesday.”

West Virginia Used To Be A Solid Democratic State… When Will They Come Back?

Howie Klein, October 11, 2023 [downwithtyranny.com]

On Sunday, Richard Eskow wondered if the Democrats could ever reclaim West Virginia. Now that the state Democrats have adopted an updated version of FDR’s Economic Bill of Rights (only the 3rd state party to have done so), it may not be as far-fetched as it looks. He focused on McDowell County, the poorest county in the state….

…Here’s how McDowell County voted in the 2016 primaries:

• Donald Trump: 785
• Hillary Clinton: 817
• Bernie Sanders: 1,488

That’s right: the democratic socialist got more votes than Trump or Clinton by a factor of nearly two to one.

The general election results were as follows:

• Hillary Clinton: 1,438 (less than Sanders received in the primary)
• Donald Trump: 4,629
• Decline to participate: 11,433

That’s a decisive victory — for political alienation….

“Trump country”? Nationally, 27 percent of eligible voters cast their ballots for Donald Trump. In McDowell, that percentage was a slightly lower (if statistically insignificant) 26.45 percent.

Yes, Trump won decisively in McDowell among those who voted. But McDowell County isn’t “Trump country.” It’s “None of the Above” country.

And yet, despite the fact that Donald Trump only won the votes of about one in four voters, the county’s residents soon became the poster children for right-wing “deplorability.”

Oligarchy

A billionaire-backed think tank keeps sabotaging Florida workers. More attacks are coming

Jason Garcia [Seeking Rents, via Naked Capitalism Water Cooler 10-13-2023]

“Dick Uihlein, the Midwestern billionaire and Republican megadonor who is the largest funder of the Foundation for Government Accountability. Uihlein, an heir to the Schlitz brewing fortune and the founder of the shipping supply company Uline, has been very good to Ron DeSantis Campaign-finance filings show that Uihlein has given more than $2.4 million to DeSantis over the past five years — including $1.4 million to a state political committee that DeSantis used to control and another $1 million to a federal super PAC now financing his campaign for president. Uihlein’s wife, Liz Uihlein, has given DeSanits another $1.5 million. And Ron DeSantis has been very good to Dick Uihlein and his Foundation for Government Accountability. Emails, schedules and lobbying records show that senior DeSantis aides have worked closely with FGA staffers while simultaneously cultivating Uihlein with perks like invitations to private events at the Governor’s Mansion in Tallahassee….. With Uihlein’s FGA cheering him on and providing public-relations cover, DeSantis has slashed unemployment payments to laid-off workers. He has made it harder for public-sector employees to band together in unions and collectively bargain for better pay and benefits. And he has refused to extend Medicaid to an estimated 800,000 Floridians who don’t have health insurance — and is now presiding over a particularly callous purge of the state’s post-pandemic Medicaid rolls. The FGA is pushing for more. Records show it been working on proposals that could deny food stamps to more Floridians, evict some people from affordable housing, lock full-time college students into near-full-time jobs, and allow government contractors to pay their employees poorer wages.”

Big Philanthropy Is a Scam That Makes the Rich Look Better, Conceals Their Crimes 

[Teen Vogue, via Naked Capitalism 10-13-2023]

(anti)Republican Party

The Deeper Meaning of Scalise’s One Day Speakership (No Really…)

Josh Marshall, October 12, 2023 [Talking Points Memo]

…there’s an elemental breakdown here that transcends the individuals involved. Participating in a majority organizational vote means, if sometimes only implicitly, abiding by its results. The caucus vote wasn’t a straw poll or an advisory opinion. It’s binding. It’s over. And yet it was treated as basically a given, in the GOP caucus and in the press coverage, that Scalise, having won the vote, then had to build from the 113 he got in the caucus vote to 217.

You’re probably saying: We know this Josh. They’re a mess. But we know this.

But I think that’s only a measure of how much this has been normalized when it’s actually completely abnormal. The literal definition of a caucus in American political usage is a defined group that collectively decides on actions by majority vote and then acts in unison in a parliamentary context.

From one perspective this is no more than a replay of what happened in January. A group of holdouts refused to vote for the caucus’s candidate….

there’s a clear thread connecting this to 2020 rigged electionism and, perhaps more tightly, the dramas of debt ceiling hostage-taking and government shutdowns. The premise of all those dramas is that they’re what you do when you don’t have the votes to do what you want. If you’ve got the votes in the Congress and a President who will sign your bills, you just do it. Threatening to shut down the government is what you do when you don’t. Do what I say even though I don’t have the votes or I start breaking things. That’s the bottom line behind every one of these gambits.

The Republican House Speaker Doom Loop

Matt Ford, October 15, 2023 [The New Republic]

…The House GOP’s problem goes much deeper: a critical mass of their members expect the speaker to refuse to compromise on anything with the Democratic Party—a position that might work well on the campaign trail but is unfeasible in day-to-day governance.

Impeachments and forced removals from office emerge as partisan weapons in the states

[Associated Press, via Naked Capitalism Water Cooler 10-10-2023]

“As Republicans in Congress begin their impeachment inquiry into President Joe Biden, the process is calling attention to the increasing use of impeachment in the states as a partisan political weapon rather than as a step of last resort for officeholders believed to have committed a serious offense…. It’s not just impeachment. Over the past two years, Republicans also have sought to pry Democrats and nonpartisan executives from office through recalls, legislative maneuvers and forced removals, even when no allegations of wrongdoing have surfaced.”

Conservative / Libertarian Drive to Civil War

Trump tells court he had no duty to ‘support’ the Constitution as president

Matthew Chapman, October 11, 2023 [RawStory]

Former President Donald Trump is arguing to a judge in Colorado that he was not required to “support” the Constitution as president, reported Brandi Buchman from Law & Crime.

The argument came as he seeks to dismiss a lawsuit filed in the state by Citizens for Responsibility and Ethics in Washington (CREW), seeking to have him disqualified from the ballot in the state under the 14th Amendment. The Insurrection Clause of the amendment prohibits those who have “engaged in insurrection” against the United States from holding a civil, military, or elected office unless a two-thirds majority of the House and Senate approve.

But Trump’s lawyers are arguing that the specific language of the Constitution argues that this requirement only applies to people in offices who are bound to “support” the Constitution — and the presidency is not one of those offices.

In some states, more than half of the local election officials have left since 2020

[NPR, via The Big Picture 10-10-2023]

In some battleground states, more than half of the local election administrators will be new since the last presidential race, according to a new report from the democracy-focused advocacy group Issue One shared exclusively with NPR before its release.

The (anti)Federalist Society Infestation of the Courts

Two right-wing judges seem to be trying to rig a US House race

[Vox, via The Big Picture 10-10-2023]

Once again, the Supreme Court must deal with judicial arsonists on the Fifth Circuit.

The Next Targets for the Group That Overturned Roe

[New Yorker, via The Big Picture 10-09-2023]

Alliance Defending Freedom has won fifteen Supreme Court cases. Now it wants religious exemptions to anti-discrimination laws—and is going after trans rights.

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