Week-end Wrap – Political Economy – June 20, 2021

by Tony Wikrent

Strategic Political Economy

The Lords Of Hell (And Their Slaves)

Ian Welsh

Homelessness, despair and so on are required: without them people will not work at bad jobs. Indeed, without them many people would not work any more than required to feed and house themselves.

Now, understand clearly, rip a hole in your skull, and put this in: there is more food than needed and way more homes than homeless people in all developed countries and more food than needed to feed everyone in the world. We could easily feed and house everyone in the world. It is almost a trivial problem. We simply have to do it.

Industrialization plus modern agriculture produces more than we need, easily. Automation should mean that less and less hours needed working. We should be living in a paradise of free time and choice.

We do not because a small minority has captured power and enslaved the rest of us.

These people are monsters on every possible level, including their depraved indifference to what will happen to their children and grandchildren under environmental collapse and climate change.

We have a surplus, but it is generated in the stupidest ways possible: with planned obsolesence, soil degradation and pollution causing environmental collapse.

Matt Stoller: A Society Designed to Incentivize Criminal Behavior at the Highest Level

Washington’s Dangerous New Consensus on China (not paywalled)

Bernie Sanders [Foreign Affairs, via Naked Capitalism 6-18-2021]

The deck: “Don’t Start Another Cold War.”

The carnage of mainstream neoliberal economics

Many Americans moved to less pricey housing markets in 2020

[AP, via The Big Picture 6-15-2021]

Many Americans who moved last year relocated to areas where homes were, on average, bigger and less expensive. On average, people who moved to a different city in 2020 ended up in a ZIP code where average home values were nearly $27,000 lower than in their previous ZIP code.

“Biden Could Cancel Student Loan Debt Right Now By Signing an Executive Order” [Teen Vogue, via Naked Capitalism Water Cooler 6-16-21]

“When the Department of Education was first given the power to issue student loans, it was also granted the power to “compromise, waive, or release any right” to collect on them, an authority known as “compromise and settlement.” Essentially, the Biden administration can suspend the collection of student debt altogether, and poof!, tens of millions of Americans would be student loan debt-free! It’d be like waving a magic wand, except the wand isn’t magic, it’s a legitimate legal authority vested in the Department of Education by Congress.”

Why Buffalo is a hub for illegal debt collectors who scam thousands across the country

[The Buffalo News, via Naked Capitalism 6-15-2021]

Inflation Is Here: Fast Food Bosses Make $5,460 An Hour

[Investor’s Business Daily), via The Big Picture 6-15-2021]

Chipotle’s CEO Brian Niccol is in a class of his own — and his paycheck shows it. Niccol pulled down more than $38 million in total reported compensation in 2020. That’s more than double what he made the prior year. It’s also $18,286 an hour, if you assume 40-hour weeks for 52 weeks.

ProPublica’s Release of Leaked Tax Return Data for Billionaires: Why Wall Street’s Mega Banks Are Freaking Out

Pam Martens and Russ Martens, June 14, 2021 [Wall Street on Parade]

For Student Debtors, Time’s Running Out

[The American Prospect, 6-17-2021]

In just three months, the student loan payment moratorium is scheduled to come to an end. Borrowers are starting to panic….

Through interviews with nearly a dozen student loan borrowers, it’s clear how much student debt weighs on Americans. Currently, 45 million people owe $1.7 trillion in student debt, and the average monthly payment is $393. Student loans are one of the greatest debts of any type in the country, surpassing national credit card and auto debt. A few borrowers told me that they expect to die with their student loans….

The burden of student debt isn’t equal across borrowers; it disproportionately impacts Black Americans, making it one of the key mechanisms exacerbating systemic economic inequality. On average, Black borrowers owe $25,000 more in student loans than their white counterparts….

The administration does have options. While Biden’s Education Department got off to a slow start on reforming borrower relief programs, student loan advocacy groups cheered when he appointed Richard Cordray, formerly in charge of the Consumer Financial Protection Bureau, as chief of federal student loan programs. Cordray has a record of protecting borrowers, and he could be part of the department’s enabling of more loan forgiveness and fixing current systems, while cracking down on unscrupulous student loan companies that often deny borrowers relief to which they’re entitled.

The administration could also extend the moratorium, or bring it back with a phased restart, only requiring a portion of payments to start. And of course, they could cancel the debt, a legal recourse under the Higher Education Act that doesn’t require additional legislation.

Restoring balance to the economy

How America’s Weirdest Guidebooks Were Funded by the Government

[New York Times, June 15, 2021]

Republic Of Detours: How the New Deal Paid Broke Writers to Rediscover America
By Scott Borchert
The main idea was simple: to hire a vast work force of impecunious and anonymous writers to create local and state guides that would avoid boosterism and mythmaking. The writers succeeded, instead showcasing incongruities, minorities and arcana. (They also collected oral histories, including invaluable interviews with formerly enslaved people.) The stunning richness and poverty of the American landscape and people have never been as impertinently depicted. And the entire project was, as Borchert points out, as antifascist as possible….

Although more than 10,000 people helped produce the guides, two were the brains, soul and beating heart of the project: Henry Alsberg, its founding director and one of its most colorful figures, and Katharine Kellock, who came up with the idea for the guides and served as their primary editor. (She was, as Borchert writes, their “engineer and philosopher.”) Women played a huge role in the F.W.P., making up 40 percent of its staff, which is more than you could say for practically any other government office of its time….

… Martin Dies Jr., the Texas congressman whose House Committee on Un-American Activities essentially destroyed the F.W.P. in 1939, labeling the guidebooks “a splendid vehicle for the dissemination of class hatreds.” (The project limped on for a few more years, but was fatally crippled.)

The Infrastructure Success Story in Chattanooga

[The American Prospect, June 17, 2021]

Some of the fastest broadband speeds in the world come from this Tennessee city’s public network. It could be replicated across the country.

The Antitrust Revolution Has Found Its Leader

Matt Stoller, June 16, 2021 [Big]

The earth-shattering news in the antitrust world is that yesterday, Lina Khan became the Chair of the Federal Trade Commission, one of the two agencies that enforces antitrust law. In this issue, I’m going to explain who she is, why she got both Republican and Democratic votes for her confirmation in the Senate, and how her selection to this position indicates a potential revolutionary shift in politics.

The TLDR version is that something just happened to make Wall Street analysts on CNBC very nervous….

Khan is something rare in progressive politics, someone with academic credentials and mastery over a dense technical subject, but also connected with a broad-based populist social movement that crosses partisan lines. I can’t tell you how many people I’ve spoken to in business, Republicans as well as Democrats, who talk in reverential tones about Khan. It’s not just that she is an important thinker, it’s that she *understands* what they are going through, the coercive power they are up against. And that’s because she got her start understanding the economy not in a classroom or at a law firm, but as a business journalist, listening to business people and workers facing monopolists….

Then she went to law school. While a student, Khan used her experience as a journalist to help craft a legal argument on the roots of Amazon’s power, which she traced to the transformation of antitrust enforcement. Her analysis, titled Amazon’s Antitrust Paradox, put her at the center of a worldwide debate over concentration and monopoly power….

What is fascinating about the nomination and confirmation of Khan is that it suggests a different political roadmap, not just for Democrats but for Republicans as well. Both parties are confused and trying to figure out what they think, with scuffles within parties as much as between them, mirroring the disputes within the commercial world. Political operatives, pollsters, politicians, and lawyers in both parties are not comfortable with this new populist language and policy and how to wield it.

On the right, libertarians and corporatist lawyers are the only ones with the substantive chops to operate in this dense and complex area. On the left, there’s a cultural dislike of commerce. Some Democratic activists often imagine, wrongly, that business questions are wonky, niche, and not relevant to ordinary people. Thinking about monopoly power isn’t really even politics to them, or if it is, using terms like ‘markets,’ and ‘competition’ signifies conservative political beliefs.

Nonetheless, it’s evident there is interest on the right and left in addressing concentrated private power through revamped competition policy enforcement. What is increasingly clear is that there is consensus that something must be done, and that there is opportunity here to steal this issue from the other party. Both the Democrats and Republicans are trying to outflank each other on who is stronger on antitrust.

In many ways, competition policy is very similar to trade, where Donald Trump stole the traditional Democratic issue and made it his own, accurately pointing out that Democrats like Bill Clinton and Barack Obama pursued policies incentivizing offshoring to China instead of protecting American jobs. Rather than oppose Trump on trade, populist Democrats quietly worked with Trump to reorient American policy. Trump’s trade chief, Robert Lighthizer, was the only cabinet member respected by Democrats, and was able to bring nearly every Democrat on board for a rewrite of NAFTA. Biden is trying to steal this issue back; Katherine Tai, who is Biden’s pick for trade, has continued Lighthizer’s agenda, with some modifications (like challenging pharma’s vaccine monopoly).

JPMorgan, Citigroup and BofA Ruled Not “Fit” to Participate in Huge European Bond Offering Because of Past Crimes

Pam Martens and Russ Martens, June 18, 2021 [Wall Street on Parade]

What’s at stake at the Teamsters’ convention

[Tempest, via Naked Capitalism 6-18-2021]

Delaware General Assembly passes $15 minimum wage, sends bill to Gov. John Carney

[Delaware Online, via The DailyPoster 6-17-2021]

Both houses of the Delaware state legislature have now passed a bill to raise the minimum wage to $15 an hour by 2025, and Gov. John Carney is expected to sign it into law. When he does, Delaware will be the tenth state to have a $15 minimum wage. Not only is it a win for workers, but it also undermines the arguments made by the state’s federal senators who previously helped Republicans kill an effort to include a $15 minimum wage in the American Rescue Plan.

California Defies Doom With No. 1 U.S. Economy

[Bloomberg, via The Big Picture 6-15-2021]

Despite conservatives and Republicans insisting California’s “welfare state” is chasing out entrepreneurs and “makers”….

California just keeps being the opposite of whatever doomed is. The Golden State has no peers when it comes to expanding GDP, raising household income, investing in innovation and a host of other key metrics.

Climate and environmental crises

“Drought is here to stay in the Western U.S. How will states adapt?”

[NBC, via Naked Capitalism Water Cooler 6-15-21]

“Water is increasingly scarce in the Western U.S. — where 72 percent of the region is in “severe” drought, 26 percent is in exceptional drought, and populations are booming. Insufficient monsoon rains last summer and low snowpacks over the winter left states like Arizona, Utah and Nevada without the typical amount of water they need, and forecasts for the rainy summer season don’t show promise. This year’s aridity is happening against the backdrop of a 20-year-long drought. The past two decades have been the driest or the second driest in the last 1,200 years in the West, posing existential questions about how to secure a livable future in the region. It’s time to ask, “Is this a drought, or is it just the way the hydrology of the Colorado River is going to be?” said John Entsminger, the general manager of the Southern Nevada Water Authority.”

Information Age Dystopia

NY can’t force ISPs to offer $15 low-income broadband plans, judge rules

[Ars Technica, via Naked Capitalism 6-13-2021]

“What are you legally allowed to say at work? A group of fired Googlers could change the rules.”

[Recode, via Naked Capitalism Water Cooler 6-14-21]

“The National Labor Relations Board (NLRB), the US’s top enforcer of labor rights, just expanded its complaint against Google to include three more fired Google workers. Those former employees say the company retaliated against them for protesting its work with US Customs and Border Protection (CBP)… The NLRB first filed its complaint against Google in December 2020, saying the company was “interfering with, restraining, and coercing employees” who were exercising their legal rights to discuss workplace issues with their colleagues, including firing two employees. In an amended complaint filed this Wednesday, the San Francisco regional office of the NLRB stated Google was similarly in the wrong for firing three other employees involved in workplace organizing around the same time… Meanwhile, tech companies such as Coinbase and Basecamp have tried to quell internal debate by banning political discussion at work entirely. But the Google NLRB case shows that when politics are inherently intertwined with a company’s business — something that often applies to tech companies when their services are used globally by billions of people, including national governments and world leaders — those boundaries can blur. Generally, employees don’t have a constitutional right to free speech at work. But under US labor law, companies are not allowed to punish workers for discussing wages or working conditions in what’s called “protected concerted activity.” Typically, though, the type of activities that are protected are ones that more obviously relate to the terms of workers’ employment, like asking for better shifts or refusing to work in an unsafe environment. In this case, the three Google workers being added to the complaint, all software engineers, were not asking for higher wages or longer lunch breaks. Instead, they were protesting work that they viewed as unethical.”

Audio of Joe Manchin talking to Dark Money in private is different from Manchin in Public

xaxnar [DailyKos 6-16-2021]

Spread The Blame Around

Atrios, June 16, 2021 [Eschaton, via Naked Capitalism 5-19-20]

A lot of politicians love our the worst parts of Congress because it allows the blame to be spread around when things fail, and to pretend to support things you don’t. Vote for things you know don’t have any chance of passing. When you need 50 votes, blame Manchin, when you need 60, blame the Republicans. The President can say he wants Congress to do it, Congress can say the president has authority. And on and on and on.

The reasons aren’t always excuses, but if you take on the responsibility for leading things, you have taken on the responsibility for getting things done. There are carrots and sticks, and while no one is all powerful, if Chuck Schumer isn’t promising to shit in Joe Manchin’s Buick (or offering to move the Pentagon to Wheeling), he isn’t doing all he can.

Another problem is we have driven out all the good political corruption and replaced it with the bad kind. Good political corruption is “shower money for infrastructure on my districts and state and I will play ball.” Bad political corruption is… I whatever the fuck is going on right now.

Atrios’ comment about “we have driven out all the good political corruption” reminds me of the quote attributed to Alexander Hamilton about corruption being necessary in politics, invariably purveyed by Hamilton haters like Matt Stoller. I think they are wrong to label Hamilton an authoritarian elitist; a more accurate label would be scandalously honest realist.

When the Institution Doesn’t Trust Itself

David Dayen, June 18, 2021 [The American Prospect]

….The problem with this cunning plan lies with the Democrats in the House and Senate who would have to go along with it. And they just don’t trust one another. This is why a popular infrastructure package (68 percent in the most recent poll) is circling the drain, because in the simplest terms, nobody believes that Congress can actually function well enough to pass it—not even the actual members of Congress….

Fundamentally, neither side of the Democratic congressional delegation believes in the other’s ability to live up to their commitments. Centrists aren’t buying into that at all, and progressives don’t think it can be done incrementally, with popular support building at each step. With the current composition of Congress, lawmakers who want to do something big need everyone to agree, but at least a faction of the party seems committed to doing as little as possible.

But it’s worse than that. Not only do members question whether Congress can work, some of them don’t think it should. I’ll have more on this in future pieces, but one of the “pay-fors” in the bipartisan package involves privatizing the government’s assets, or selling off public assets to find the money to build the infrastructure. (This is sometimes called “asset recycling.”) That contradicts the basic bargain of the Biden presidency, that a muscular public sector can benefit everyone’s interests. There’s this deep-seated belief that government can’t do things it did routinely in the past, and only by creating private toll roads and selling water systems can we improve the country’s infrastructure. It’s untrue, but it’s part of a belief system that government shouldn’t be a factor in people’s lives.

Again, it’s the philosophy, stupid. 

Conservative / Libertarian Drive to Civil War

“Laws Preventing Dark Money Disclosure Are Sweeping the Nation”

[ReadSludge, via Naked Capitalism Water Cooler 6-16-21]

“In four states, laws were adopted this year that bar government agencies from requiring nonprofit organizations to report their donors, essentially codifying the campaign finance loopholes that have allowed for an explosion of ‘dark money’ in politics. …The four laws passed this year represent the acceleration of a trend dating back to 2018, when Arizona became the first state to prohibit itself from seeking to disclose the identities of nonprofits’ donors. Mississippi adopted a donor disclosure ban in 2019, and three states enacted them last year: Utah, Oklahoma, and Virginia. The states that adopted the laws in 2021 are Arkansas, Iowa, South Dakota, and Tennessee. Penalties for violating the laws vary between the states, but in some states could include prison sentences. Iowa’s law, for example, says that anyone who knowingly discloses nonprofit donors would be ‘guilty of a serious misdemeanor punishable by imprisonment for not more than ninety days or a fine of not more than one thousand dollars, or both.’” • If money is speech, why are we trying to make it so people can’t hear it?

Toll from political push at UNC continues to mount

[NC Policy Watch, June 14, 2021]

But like much of the faculty, she said, she has seen a glaring pattern in the school’s decision-making.

An illegal, backroom deal with the Sons of Confederate Veterans over the Silent Sam Confederate monument. The disastrous decision to bring students back to full capacity dorms in the middle of the COVID-19 pandemic against the advice of the Orange County Health Department. Private communications with wealthy, conservative donors over the hiring of Hannah-Jones and the decision to avoid a vote on the tenure bestowed on her white predecessors.

The pattern in these actions: leadership that prized the political concerns of the conservative dominated UNC Board of Governors, political appointees of the North Carolina General Assembly’s GOP majority, above all else.

These decisions have risked the health and safety of students and faculty, Lowery said, harmed their trust in the university and cost the campus millions in lost court battles and grants pulled by funding partners who say the school is betraying its own declared values.

The Fort Bragg Murders Rolling Stone, via Naked Capitalism 6-18-2021]