Week-end Wrap – Political Economy – April 24, 2022

by Tony Wikrent

Strategic Political Economy

The Godless Empire: Evil Cannot Create Anything New, Only Corrupt What Good Created

[The Reading Junkie, via Mike Norman Economics 4-18-2022]

Analysts in Washington study a culture and find its most primal, barbaric roots, and create a cartoonish caricature of it. With that caricature as a false god, that whole society is turned into a death cult, the perfect, self-destructing weapon against Washington’s rivals. The suicidal nature of Washington’s pawns is deliberate. After Russia is destroyed, there would be no use for a Ukraine anymore, so it is actually better for Ukraine to be destroyed in the process too…. The West loves “blood harvests” and projects that idea onto other cultures like Iraq, Libya, and Ukraine, but it originated on our own shores. Look at modern movies and shows like 300 and Vikings. Why do our filmmakers dream so much of mass killings, rapes, and blood gods? Why do they love depicting barbarians raping and massacring weak and pathetic Christians? It’s weird.

TW: This is why it is a tragedy that contemporary scholars of civic republicanism such as Pettit sand Rawls are misleading people by defining civic republicanism as “freedom from domination.” What makes civic republicanism a superior philosophy of political economy and governance is its insistence on promoting the human capacity to “do good,” by striving toward perfection.

Samuel Scolnicov, “An Image of Perfection: The Good and the Rational in Plato’s Material Universe” (Revue de Philosophie Ancienne, Vol. 10, No. 1, 1992)

Matt J. Rossano, Seeking Perfection: A Dialogue About the Mind, the Soul, and What it Means to be Human (Routledge, 2015)

This idea is, of course, reflected in the Preamble of the USA Constitution (“a more perfect union”) , but the philosophical importance of its inclusion is today all but forgotten. 

[Twitter, via Naked Capitalism Water Cooler 4-20-2022]

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The Taliban Were Afghanistan’s Real Modernizers 

[Palladium, via Naked Capitalism 4-22-2022]

Carter Malkasian’s The American War in Afghanistan: A History is the first history to adequately capture this story. Malkasian deployed as a civilian officer in Kunar and Helmand provinces in the aughts, and then returned to Afghanistan as an advisor to General Joseph Dunford in 2013, and stayed at Dunford’s side through his tenure on the Joint Chiefs of Staff. Malkasian speaks Pashto fluently, traveled widely across Afghanistan conducting interviews, and participated in the Trump era negotiations with the Taliban.

Malkasian’s account of American error builds on these personal experiences. His catalog of American mistakes and miscalculations is long….

Most accounts of the conflict are one-sided portrayals of the American experience in Afghanistan. Malkasian’s fluency in Pashto allows The American War in Afghanistan to escape the limitations of the genre. Entire chapters are built on Afghan sources that other histories of the war ignore. From their perspective, the U.S. war in Afghanistan was not really American at all. Over the last two decades, it was Afghans, not Americans, who have done the majority of the killing, bleeding, and dying. The war in Afghanistan was first and foremost a civil war. Any account of the Taliban’s victory must start with what each side of this civil war was fighting for.

Mexico nationalises lithium in populist president’s push to extend state control 

[FT, via Naked Capitalism 4-212-2022]

Democrats got one thing right—the American Rescue Plan. It might just realign U.S. politics….

That one thing was the $1.9 trillion American Rescue Plan (ARP), which created the conditions for a revival of the labor movement, and just maybe a labor-based politics.

What we’re seeing in labor markets, with a return to the pre-pandemic unemployment rate, the lowest level of first-time jobless claims since the late 1960s, and quit rates at a 50-year high, was not preordained. Remember, the unemployment rate was still 6.4 percent in January 2021, compared to 3.6 percent today, and rapid reductions didn’t really happen until midyear, after the American Rescue Plan kicked in.

The carnage of mainstream neoliberal economics

Life in the Real Economy

Harold Meyerson, April 19, 2022 [The American Prospect]

Two new studies—one on poverty wages, one on the declining share of revenues going to workers—are at once authoritative and mind-boggling.

…as one remarkable survey released today by the Economic Policy Institute (EPI) demonstrates, the number of workers in starvation-wage jobs still numbers in the many millions.

And, as another remarkable study by Rick Wartzman of Claremont Graduate University’s Drucker Institute demonstrates, American corporations have massively redistributed their revenues from employees to shareholders over the past six decades. Wartzman’s survey was first published by Capital & Main.

The EPI study, undertaken in conjunction with the Shift Project, surveyed nearly 21,000 service-sector workers at 66 prominent corporations in 2021, to collect information on hourly wages. The study, entitled the Company Wage Tracker, groups those wages in seven categories, from under $10 an hour to $20 or higher, and shows what percentage of that company’s workers fall in each of those categories. The data for each of those companies is available by clicking on those companies’ logos, which are displayed on the survey’s main page.

The data are no less dismaying for being unsurprising, at least to those who attempt to follow our actual economy. The company logos are displayed alphabetically, from Ace Hardware (71 percent of whose workers make less than $15 an hour) to Wyndham Hotels (87 percent of whose employees make under $15). At Dollar General, McDonald’s, Sonic, Subway, Waffle House, and Wyndham, more than 1 in 5 workers make less than $10 an hour; at Pizza Hut, it’s 1 in 4.

Comparing the company’s pay rates makes clear that business models can make a major difference. While 51 percent of Walmart workers make less than $15 and 91 percent make under $20, just 1 percent of employees at Costco are paid under $15, and over half make over $20. Walmart’s roots in the rural South and its reliance on military-style management differ sharply from Costco’s, which started out seeking a unionized clientele, and one of whose founders, Sol Price (whose Price Club merged with Costco in 1993), was as liberal as Sam Walton was conservative….

The business model in Bezos-World is in a class by itself. Since Amazon pledged a $15 an hour minimum wage in 2018, no workers make under that amount; but 87 percent make under $20. In Bessemer, Alabama, that likely means Amazon pays more than comparable employers; in New York City, it surely does not. The fact that Amazon warehouses and delivery drivers have to be in or close to cities where pay is higher than rural areas is doubtless one reason why pay levels must be higher than at Walmart, the nation’s only larger employer, which serves a less-urban clientele. But the fact that practically nobody advances enough to get a raise over the $20 level shows that the Amazon business model is structured to attract entry-level workers with pay, burn them out with the pace and difficulty of the work (yearly turnover is 150 percent of the workforce), and attract new entry-level workers….

The level of worker power—which in America ranges from some to, more commonly, none—makes a difference, too. At UPS, which long has been unionized by the Teamsters, fully 63 percent of employees make more than $20 an hour, while at non-union FedEx, just 40 percent make $20 or more. I suspect the wage levels at UPS are a major reason why FedEx pays even 40 percent of its workers that much, lest they decide to go Teamster and start driving for the unionized company. UPS’s union shop has insulated it from having to find workers in a tight labor market, giving it lower turnover and better reliability during the supply chain crunch….

Some of the highlights, or lowlights, of Wartzman’s discoveries: Amex spent 43 percent of its revenues on its 10,000 employees in 1960, and just 12.6 percent on its 64,000 in 2019, with the percentage going to shareholders doubling over that time, and a major share going to “other expenses,” which could well mean workers under contract, usually lower-paid and without benefits.

Chrysler devoted 27 percent of its 1960 revenues to its 105,000 employees, and just 10.5 percent to its 192,000 employees in 2019, while the share going to holders of Chrysler stock increased seven-fold. The pressures presented by non-union automakers in the South and imports from lower-wage countries greatly weakened the United Auto Workers over the ensuing 60 years, which clearly is a major factor in the falling employee share.

Union Pacific Railroad had almost an identical number of employees in 2019 as it had it 1960, but the share of company revenues they received plummeted from 47 percent in 1960 to 21 percent in 2019.The share going to stockholders, by contrast, rose from 7 percent to 39 percent. The amount going to reinvestment (new equipment, R&D, etc.) fell from 6 percent to -11 percent (that’s negative 11 percent).

As more Americans traveled by air, the number of United Airlines employees rose from 22,000 in 1960 to 96,000 in 2019. The share of revenues going to employees, however, dropped from 47 percent to 21 percent over that time, while that going to shareholders rose from 7 percent to 39 percent, with a decline in reinvestment identical to that at Union Pacific.

The American Dream Is Dead: For The First Time, Less Than Half Of Americans Believe They’ll Ever Own A Home

[Zero Hedge, via Mike Norman Economics 4-20-2022]

“To win,” he said, “you need to tell a story about cogs. At Google, you’re a cog. Whereas with me, you’re an instrumental piece of this great thing that we’ll build together. Articulate the vision. Don’t even try to pay well. It’s not about cash. It’s about breaking through the wall of cynicism.”

Deliberately creating mass unemployment now would be the work of vandals and New Keynesians

Bill Mitchell [billy blog, via Mike Norman Economics 4-19-2022]

Last week, the New York Times published the latest Paul Krugman article on inflation (which is behind its paywall). It is syndicated elsewhere and you can access it here at The Berkshire Eagle (April 13, 2022) – Paul Krugman: Inflation is about to come down — but don’t get too excited. I wondered whether the author had offered his services cheaper to the NYTs and elsewhere given his concern for inflation, and, apparently, his assertion that wages are a critical factor in sustaining it. What this article highlights is mainstream New Keynesian macroeconomics – the dominant paradigm in our teaching, research and policy circles. What it also highlights is how different the mainstream is to Modern Monetary Theory (MMT), despite characters like Krugman and his fellow New Keynesians trying to tell the world that there is nothing particularly different about MMT and the way they do economics. It also provides another chance for me to add nuance to the Job Guarantee.…

Economics: The Discipline That Refuses to Change.

[The Atlantic, via The Big Picture 4-192022]

Behavioral economics upended the idea that humans act solely in their rational self-interest. So why do most undergrads barely learn anything about the field?

Disrupting mainstream economics – Modern Monetary Theory

The main insight of MMT

Lars P. Syll’s Blog [via Mike Norman Economics 4-19-2022]

Can the conventional economists understand it though, considering the baggage they bring? Simply put, they do not start that the beginning so it is no wonder they get lost on the way with their “axiomatic” deductive approach instead of a balance sheet approach.

Banking Debate Woes (Part I)

[Bond Economics, via Mike Norman Economics 4-19-2022]

This article was triggered by some discussions I ran into on Twitter. My belief is that the economics literature on banking (with some exceptions) is a failure. From the perspective of advancing knowledge, the best course of action would be to ritually burn the literature, and start over from scratch.

(Note: due to the length of this discussion, I am breaking it into (at least) two parts. This first part gives an overview, then turns to the analysis of individual banks.)

The core of the problem is that the economics fraternity started from the wrong place, and the incorrect description of banking was enshrined in Economics 101 textbooks. The heterodox literature then responded to the incorrect theory, which then has the unfortunate effect of making the whole discussion even harder to understand…

Money & Banking

[New Economic Perspectives

The monetary and banking aspects and their relation to the macroeconomy are analyzed extensively in this material by relying on the literature that has been available for decades in non-mainstream journals, but that has been mostly ignored until recently. Gone is the money multiplier theory, gone in the financial intermediary theory of banks, gone is the idea that central bank control monetary aggregates, gone is the idea that finance is neutral in any range of time, and gone is the idea that nominal values are irrelevant. Preoccupations about monetary gains, solvency and liquidity are central to the dynamics of capitalism, and finance is not constrained by the amount of saving.

Climate and environmental crises

FRONTLINE: THE POWER OF BIG OIL, PART ONE: DENIAL 

[PBS, via Naked Capitalism 4-20-2022]

The Surprising Climate Cost of the Humblest Battery Material 

[Wired, via Naked Capitalism 4-20-2022]

Lithium costs a lot of money—so why aren’t we recycling lithium batteries? 

[ars technica, via Naked Capitalism 4-20-2022]

Arizona’s Top Water Official: “We’re Going To Have To Live With Less Water”

[Zero Hedge, via Mike Norman Economics 4-21-2022]

[New Wayland, via Mike Norman Economics 4-18-2022]

West has attacked institution of private property

Bhim Bhurtel, via Mike Norman Economics 4-19-2022]

Former Intelligence Officials, Citing Russia, Say Big Tech Monopoly Power is Vital to National Security

Glenn Greenwald [via Naked Capitalism 4-21-2022]

Information age dystopia

These hackers showed just how easy it is to target critical infrastructure

[MIT Technology Review, via Naked Capitalism 4-23-2022]

Liberalism, conservatism but no discussion of civic republicanism

The End of Progressive Intellectual Life

Michael Lind [The Tablet, via Naked Capitalism 4-19-2022]

“The space to the left-of-center that was once filled with magazines and organizations devoted to what Diana Trilling called the “life of significant contention” is now filled by the ritualized gobbledygook of foundation-funded, single-issue nonprofits like a pond choked by weeds…. It is not surprising that the written output of this billionaire-funded bureaucratic apparatus tends to read like an NGO word salad with crunchy croutons in the form of acronyms that stud post-intellectual progressive discourse: DEI, CRT, AAPI, BIPOC, LGBTQ+. Wokespeak is Grantspeak….Meanwhile, in one area of public policy or politics after another, Progressivism Inc. has shut down debate on the center left through its interlocking networks of program officers, nonprofit functionaries, and editors and writers, all of whom can move with more or less ease between these roles during their careers as bureaucratic functionaries whose salaries are ultimately paid by America’s richest families and individuals. The result is a spectacularly well-funded NGO-sphere whose intellectual depth and breadth are contracting all the time….. Who decides what is and is not permissible for American progressives to think or discuss or support? The answer is the Ford Foundation, the Open Society Foundation, the Omidyar Network, and other donor foundations, an increasing number of which are funded by fortunes rooted in Silicon Valley. It is this donor elite, bound together by a set of common class prejudices and economic interests, on which most progressive media, think tanks, and advocacy groups depend for funding. The center-left donor network uses its financial clout, exercised through its swarms of NGO bureaucrats, to impose common orthodoxy and common messaging on their grantees. The methods by which they enforce this discipline can be described as chain-ganging and shoe-horning. Chain-ganging (a term I have borrowed from international relations theory) in this context means implicitly or explicitly banning any grantee from publicly criticizing the positions of any other grantee…. Shoe-horning is what I call the progressive donor practice of requiring all grantees to assert their fealty to environmentalist orthodoxy and support for race and gender quotas, even if those topics have nothing to do with the subject of the grant.”

The Middle-Class Leviathan: Corona, the “Fascism” Blackmail, and the Defeat of the Working Class (pdf)

[CRISIS AND CRITIQUE, via Naked Capitalism 4-19-2022]

After months of an unprecedented global economic shutdown in the spring of 2020, whose political orchestration by elite liberals and conservatives kept the world in suspense, it all suddenly  seems like a memory from the past: within days, the same liberal elites, now hitching themselves to the riots against racist police violence in the US, put social distancing measures on the line. The volatility of the liberal imaginary, which can be seen in the view of the police as the beneficial state enforcer of the “Stay at Home, Save Lives“ -policy in one minute, and a “structurally racist“ institution in the next, is not incidental, however. In fact, as this article will argue, at no point in history has society been so unequivocally submitted to the Leviathanic “mood swings” of the professional-managerial class, historically known as despotism, which express the helpless discontent of this strata, while reinforcing the dictatorship of capital and the political absence of the working class.

The authoritarian excesses of left-liberal elite thinking however, find their logic in the need to construct a spectacle of mass consensus around continued neoliberal restructuring through the deployment of an alleged ‘fascist’ threat. Today, a left which represents the interests of the professional middle classes demands unity around its agenda of therapeutic authoritarianism in the name of struggle against the ‘extreme right’. We counter both the Middle Class Leviathan and the populist right by making the case for an exit from the culturalist class war from above, and a return to the defence of working class interests.

“We’re Living in an Era of Extraordinary Corporate Power” 

[Washington Monthly, via Naked Capi
talism 4-20-2022]

Understanding the class dynamic in American politics requires understanding that class is not just about economics; it’s also about cultural differences. As the French sociologist Pierre Bourdieu pointed out, class status is enacted through cultural distinctions between elites and non-elites. Conservatives have weaponized the resulting class culture gap into bitter culture wars over everything from Covid to climate change. Progressives need an effective response: “Cultural voting” accounts for much of the shift to the right among non-elites since World War II.

Culture wars deftly deflect anger against exploitative business elites by directing non-elites’ anger toward cultural elites instead. Cultural voting helps explain disturbing trends that muddy the narrative that populism is just a defense of white privilege. In 2020, votes for Trump increased among noncollege voters of every racial group, winning about a third of the votes of nonwhite, noncollege men; Republicans now have gained so much support that recent polling warns that Latino voters could soon be evenly split between the parties. People of color still vote Democratic far more than white people, but we need to act now.

Too many idealistic progressives fail to appreciate the ways their politics reflect their worldview, and their worldview reflects their privilege. Close to half of college grads of all racial groups say they are liberal, but that’s true of only one-quarter of white and Latino noncollege voters, and about one-third of Black and Asian American ones.

Disrupting mainstream politics

I Am Not for Sale,’ Says Nina Turner as Billionaire-Funded Super PAC Backs Opponent 

[Common Dreams, via Naked Capitalism 4-18-2022]

WITH AN ATTEMPT TO UNSEAT REP. ILHAN OMAR, MINNESOTA HOUSE RACE SETS UP A CONTEST ON POLICING 

[The Intercept, via Naked Capitalism 4-18-2022]

 “FOR THE SECOND cycle in a row, Democratic Rep. Ilhan Omar of Minnesota is facing a serious primary challenger. Former Minneapolis City Council Member Don Samuels announced Thursday that his campaign had raised $350,000 in the month since its launch, with 75 percent in contributions under $100 and $320,000 cash on hand. Omar’s fundraising has been slower, pulling in $275,000 in the first quarter with an average donation of $13, with a total of $500,000 on hand. The Minneapolis primary will focus heavily on the question of policing. Over the past two years, the first count in the party establishment’s indictment of its progressive wing has been the push to “defund the police,” with President Joe Biden explicitly targeting the slogan during his State of the Union address and following it up with an infusion of cash for cops…. Almost two years ago, amid calls to reform the Minneapolis Police Department after cops there killed George Floyd, Samuels, who also served on the city’s school board, and his wife, Sondra, took on a new cause: In August 2020, they sued the city to hire more than 100 additional cops.” • Includes plenty of juicy detail on Samuels, like “got an envelope … with a couple grand.” The segment on the hot dog vendors is also good.

Democratic Elites Don’t Understand the Class Culture Gap 

[New Republic, via Naked Capitalism 4-20-2022]

Conservative / Libertarian Drive to Civil War

Trump-Appointed Judge Deemed ‘Not Qualified’ by Bar Association Voids Mask Mandate on Planes, Other Travel 

[Rolling Stone, via Naked Capitalism 4-19-2022]

The Trump judge’s opinion striking down the airplane mask mandate is a legal disaster 

[Vox, via Naked Capitalism 4-20-2022]

The Slime Machine Targeting Dozens of Biden Nominees 

[New Yorker, via Naked Capitalism 4-17-2022]

…a new conservative dark-money group that was created in 2020: the American Accountability Foundation. An explicit purpose of the A.A.F.—a politically active, tax-exempt nonprofit charity that doesn’t disclose its backers—is to prevent the approval of all Biden Administration nominees.

Who’s on the payroll of Peter Thiel’s dark-money “influencer” campaign? 

Carl Beijer [via Naked Capitalism 4-20-2022]

“Inside The New Right, Where Peter Thiel Is Placing His Biggest Bets”

[Vanity Fair, via The Big Picture 4-22-2022]

“[M]ost of the media attention that the conference attracts focuses on a cohort of rosy young blazer-wearing activists and writers—a crop of people representing the American right’s “radical young intellectuals,” as a headline in The New Republic would soon put it, or conservatism’s “terrifying future,” as David Brooks called them in The Atlantic. But the people these pieces describe, who made up most of the partygoers around me, were only the most buttoned-up seam of a much larger and stranger political ferment, burbling up mainly within America’s young and well-educated elite, part of an intra-media class info-war. The podcasters, bro-ish anonymous Twitter posters, online philosophers, artists, and amorphous scenesters in this world are variously known as “dissidents,” “neo-reactionaries,” “post-leftists,” or the “heterodox” fringe—though they’re all often grouped for convenience under the heading of America’s New Right. They have a wildly diverse set of political backgrounds, with influences ranging from 17th-century Jacobite royalists to Marxist cultural critics to so-called reactionary feminists to the Unabomber, Ted Kaczynski, whom they sometimes refer to with semi-ironic affection as Uncle Ted. Which is to say that this New Right is not a part of the conservative movement as most people in America would understand it. It’s better described as a tangled set of frameworks for critiquing the systems of power and propaganda that most people reading this probably think of as “the way the world is.” And one point shapes all of it: It is a project to overthrow the thrust of progress, at least such as liberals understand the word.” • Interesting article. Every so often the press decides to try to make a bunch of young conservatives cool. It never succeeds, because they never are. Lots of noodling about Curtis Yarvin. And Peter Thiel, who is pumping money into the milieu (and, hopefully, not extracting blood).

“The billionaires cutting huge checks for the 2022 midterms”

[Yahoo Finance, via Naked Capitalism Water Cooler 4-22-2022]

“The richest Americans are quickly coming off of the sidelines as the 2022 midterm elections heat up, according to newly released filings from the Federal Election Commission. An analysis by Yahoo Finance of the data running through March 31 finds that super PACs (Political Action Committees) have received over 30 checks so far this year of at least $1 million each. And Blackstone CEO Stephen Schwarzman and Oracle co-founder Larry Ellison each gave eight-figure donations to Republican causes. Across the political landscape, Senate campaigns are building up their back accounts. At the same time, so-called dark money groups have added money into the system anonymously while Donald Trump has built an enormous war chest of his own. But it’s super PACs — which can receive unlimited donations — that get the eye-popping checks. Here are some of the biggest donations revealed in the latest filings.”

“Idaho extremists target judges, prosecutors, health workers in doxxing campaigns”

[Idaho Capitol Sun, via Naked Capitalism Water Cooler 4-22-2022]

“Ammon Bundy did not complete 40 hours of community service — his sentence for a conviction of trespassing and resisting arrest, stemming from Bundy’s refusal to leave a closed area at the Idaho Statehouse in 2020. Instead of performing community service, though, Bundy reported 40 hours of time spent on his political campaign for Idaho governor. McDevitt on April 7 ordered Bundy to spend 10 days in jail and pay a $3,000 fine for disobeying the court. ‘You didn’t just blow it off. Rather, you took the time and effort to blatantly disrespect the court’s order, making a mockery of the sentence you received,’ McDevitt told Bundy, according to the Idaho Statesman. ‘You were given an opportunity to go complete public service — you could have done it.’ The flier left in the Boise neighborhood [doxxing a judge and prosecutor assigned to one of Ammon Bundy’s criminal cases] did not acknowledge the legal basis for Bundy’s new jail sentence. This is an edited version of a photo of the flier distributed to Boise residents. ‘He is now being held, a political prisoner, in solitary confinement, at the Ada County Jail, causing a hardship on his family,’ the flier said. ‘TELL THESE JUDICIAL EXTREMISTS TO STOP TORMENTING THE GOOD PEOPLE OF IDAHO!’”

What Happens When An Election Official Believes The Big Lie

[FiveThirtyEight, via The Big Picture 4-22-2022]

There are likely hundreds of would-be Big Lie beleivers all across the country — candidates running for elected office in the midterm elections who believe, to varying extents, that the 2020 election was rife with fraud, despite all their evidence being categorically debunked. Election fraud believers are also running for less high-profile jobs that would give them influence over elections: secretary of state, attorney general and, yes, county clerk.