Week-end Wrap – Political Economy – March 12, 2023

Week-end Wrap – Political Economy – March 12, 2023

by Tony Wikrent

Strategic Political Economy

“Marianne Williamson: ‘Anything Is Possible’” (interview) 

[The Nation, via Naked Capitalism Water Cooler 3-10-2023]

Your background is different from the typical presidential candidate. You’ve run for office before, but you’ve gained notoriety as someone who helps people explore their experiences, often from a spiritual perspective. Do you see that as a challenge or an advantage?

[WILLIAMSON]: It is key to my strength here and I’ll tell you why: I have dealt in my 40-year career with helping people both endure crises, and transform them. That is exactly what this country needs now: someone who can help us both endure and transform the trauma of these times. The chaos is external, but the trauma created by the chaos is internal. Secondly, because of my experience with all kinds of personality types and all kinds of people, I have a deep understanding of what a sociopath is. A sociopath is someone who simply doesn’t care.… It is because of that that I recognize as deeply as I do that an economic system—namely hyper-capitalism, namely neoliberalism—has at its root a deep spiritual darkness. It does not care. It is a sociopathic economic system that prioritizes short-term profit maximization for these huge corporate entities. It is a destructive force. And the political establishment, at its best right now, only tries to stave off its worst aspects. That’s what corporatist Democrats do. They recognize the disease to some extent, and they try to help people survive it. But they refuse to challenge the underlying corporate forces that make the return of all that pain and all that trauma inevitable.

 

The permanent recession that never arrives

[Axios, via The Big Picture 3-7-2023]

According to public opinion, the U.S. is seemingly in a semi-permanent recession, and the Fed has failed to improve matters….

• In reality, the economy is hot, unemployment is at record lows, and there’s no sign of a downturn any time soon.

[TW: Not sure if it’s stupidity or cupidity, but it remains astonishing how many journalists, academicians, politicians, and other elites continue to cling to national income accounting that clearly no longer captures what is actually happening in the economy. There can’t be a stronger signal that our economic statistical tools are misleading at best, useless at worst, than collapsing life expectancy.

Furthermore, if you reject the doctrine of mainstream classical neoliberal economics that there is no place for normative judgement and policy preferences in economics, you can easily see that world industrial productions needs to be vastly increased if we are to meet the challenges of climate change and environmental destruction. The rub, of course, is that this increase in industrial production must not occur under the reigning doctrine of “economic efficiency” as measured by lowest “price,” but by full and unhesitating investment in complete environmental protection and remediation, including, for example, designing for disassembly and recycling. [See Jon Larson’s Elegant Technology: Economic Prosperity from and Environmental Blueprint.]

From this perspective, we need at least an order of magnitude increase in electric vehicle sales and manufacturing, while ceasing entirely manufacture of internal combustion engine vehicles.

Graph: New vehicle sales, by type ]

 

Government and the Economy: Studies of the “Commonwealth” Policy in Nineteenth-Century America

Harry N. Scheiber, The Journal of Interdisciplinary History, Vol. 3, No. 1 (Summer, 1972), pp. 135-151

Commonwealth: A Study of the Role of Government in the American Economy: Massachusetts, 1774-1861. By Oscar Handlin and Mary Flug Handlin (Cambridge, Mass., Harvard University Press, I969; rev. ed; Ist ed. 1947) 314 pp. $12.50

A landmark of American historical scholarship is a group of mono- graphs published in the I940s and early I950s that subjected the question of government’s role in the nineteenth-century American economy to intensive re-examination and re-evaluation. Taken as a whole, as Lively suggested, these monographs “invite[d] a new view of American capitalism in its formative years.” Charting an “unfamiliar land,” the new literature portrayed a landscape in which the elected public official replaced the individual enterpriser as the key figure in the release of capitalist energy; the public treasury, rather than private saving, became the major source of venture capital; and com- munity purpose outweighed personal ambition in the selection of large goals for local economies….

…the two studies offered a portrayal of a society that found proper and congenial (as the Handlins stated) “a conception of government prominent in the direction and management of productive enterprise” (242). The whole colonial and township tradition of Massachusetts reinforced a widely shared belief “in the Commonwealth as an active force in the economy” (6I). This general belief-which the Handlins termed “the primordial concept of common interests” (I30)….

The very multiplication of corporations, which had begun even before I820, impaired the state’s “capacity to direct production through judicious bestowal of the privilege” (I80). Yet, “there was no counterpart in America of the transatlantic tendency to transpose objections against privilege into objections against government regulation. In the United States the people who favored reform were not held back by a fear of the state; the people were the state” (243). In short, the laissez- faire ideology was born in Europe and not carried here until the Civil War years; it was left to the Social Darwinists to complete the transfer. Lively responded in a critical vein to the Handlins’ version of the belief system that legitimated intervention, objecting that they had substituted a new myth for the laissez-faire shibboleth by dint of their “exercises in intellectual history”—that their “image of the positive state” was built largely upon an incomplete basis of evidence from statutory law and men’s political rhetoric. Still needed was a testing of this “image” against the harder data that required rigorous investigation of the actual administrative record of government, and also an analysis of the actual economic impacts of the policies….

How the Social Darwinists injected laissez- faire ideology into USA is detailed by Michael J., Thompson in his 2007 book, The Politics of Inequality: A Political History of the Idea of Economic Inequality in America (Columbia University Press), including “liberalism and its opposition to republicanism” (pp. 163-199).

[William Graham] Sumner’s aim was to strip moral and “sentimental” impulses from soda analysis and to show that the status quo of American society—and here he specifically meant to focus on the class inequalities of his day—best for the realization of human liberty. Reversing George’s dictum that progress and poverty were opposite sides of the coin of economic development, Sumner also wanted to claim that the interference with the activity of capita was the cause of social misery and poverty, not the reverse. Society as a whole progressed and increased its standard of living as capital was freed to unfold and operate according to its own logic and the logic of its owners. It was only when the economy was allowed to work freely that liberty could be realized since liberty was conceived as a set of laws and institutions that “create great organs of civil life which can eliminate, as far as possible, arbitrary and personal elements from the adjustment of interest and the definition of rights.”31 For Sumner, liberty was to be emphasized over democracy; the former was a greater value than the latter because it accorded with the rational distribution of the fruits of labor, talent, and skill. To assume equality among individuals was sheer nonsense. Just as Jeremy Bentham had mocked the idea of natural law theory in the eighteenth century by calling it “metaphysics on stilts,” Sumner was equally critical of natural law doctrines, preferring a positivist interpretation of political and legal categories. (p. 122)….

Herbert Spencer’s work The Man Versus the State, published in 1884, laid out the firm argument that state intervention was opposed to liberal individualism; state interference was inherently opposed to the idea of liberty. The state stood for coercion, and any extension of the state’s role beyond enforcing contracts—what Spencer referred to as “anarchy plus the constable”—amounted to the erosion of liberty in economic affairs and, in the American interpretation of things, the elimination of freedom itself. (p. 124)….

In this way, thinkers such as Sumner, and even Calhoun before him, did more than privilege the interest of one particular class over another; this is far too simplistic. What they were able to achieve was the purging of ethical and moral categories from social theory and analysis. They were able to reinterpret liberty and the entire American brand of liberalism itself as a radical individualism that was—when framed in the context of a capitalist economic framework—conducive to progress. It was not an ideology that embraced the past or a conservative ideology that sought to prevent progress and modernity. Sumner and others who followed his ideas were different from George, Lloyd, and even Bellamy in the sense that they saw moral categories as obstructing social progress. (pp. 124-125)

 

Henry Charles Carey, The Unity of Law, as Exhibited in the Relations of Physical, Social, Mental, and Moral Science (pdf)

Henry Charles Carey (1872, Philadelphia, Henry Carey Baird]

Adam Smith having assumed that the work of cultivation commenced always with the richest soils, Mr. Malthus adopted the idea as basis for a law of population requiring that large numbers of men, women, and children should “regularly die of want.” Mr. Ricardo next perfected the system, furnishing a theory of rent by means of which he sought to establish that precisely as it became necessary to cultivate the poorer soils, and as labor became less and less productive, the landlord’s share of the products increased, leaving steadily less and less for the unfortunate laborer; the tendency toward absolute enslavement of the latter becoming necessarily greater with each successive hour. From that time forward, all the distress, all the pauperism, of England, was treated as natural result of a necessity for cultivating the “inferior soils.” So far indeed was this idea carried out, that it was not unfrequently suggested that the remedy for existing difficulties would be found in throwing out of cultivation all such soils.

The time arriving, however, when the theory was shown to be wholly without foundation, it came then to be discovered, that this fundamental question—as important in furnishing a stand point in Social Science as had been that of Copernicus in the astronomical one—was wholly unimportant, and might be left entirely unconsidered; the essence of the RicardoMaithusian doctrine being, however, still retained in that assumption which constitutes the basis of the existing system…. (Preface, p. xi)

Competition may be for the SALE of human force, physical or mental, or its products; or, it may be for the PURCHASE of each and all of these. The first increases as societary positives and negatives become more widely separated; as labor becomes less productive and more controlled by capital; and as matter thus obtains power over mind. The second grows as positives and negatives are brought into more intimate connection each with every other; as labor becomes more productive, and as the laborer of the present grows in power as compared with the accumulations of the past; mind thus obtaining increased control over matter. In the one case the tendency is in the direction of inequality of condition, growing selfishness and barbarism, and daily diminished societary force. In the other it is toward equality of condition, growing self-respect, civilization, and daily growing societary force.

The British system looks to annihilation of competition for purchase of labor or its products elsewhere than in Britain. The resistant one looks to production of such competition throughout the world. Hence it is, that while the former tends everywhere toward subjection of mind to matter, and toward the subjugation of labor to capital, the latter tends equally toward perfect freedom of thought, speech, and action among all mankind. (pp. 377-378)

[TW: I strongly suspect that anyone who spends some time reading Carey, the foremost American economist of the 19th century, will never again be able to tolerate mainstream classical neoliberal economics. Today’s economics textbooks make no mention of Carey, or Benjamin Franklin, or Alexander Hamilton, but have pages and pages of material on Smith, Ricardo, Marx, von Hayek, and Friedman. Look in some textbooks and see for yourself.]

 

Restoring balance to the economy

Interview: Auto Workers Region 9 Winner on Rebuilding a Fighting Union 

[Labor Notes, via Naked Capitalism 3-11-2023]

Reform challenger Shawn Fain appears poised to win the presidency of the United Auto Workers, defeating incumbent Ray Curry for the union’s top leadership spot. With more than 137,000 votes counted, Fain has a lead of 645 votes; the counting of the remaining challenged ballots will resume March 16.

If Fain wins, challengers to the ruling caucus will hold not only the presidency but also a majority on the union’s international executive board. UAW Members United ran on a platform of no corruption, no tiers, and no concessions.

It’s a watershed after nearly 80 years of the Administration Caucus’s stranglehold on power—defined by corruption scandals, diminished bargaining power, and a multi-tier wage system that wrecked worker solidarity.

 

Who was Oliver Harvey? 

[Scalawag, via Naked Capitalism 3-5-2023]

Oliver Harvey worked for decades at Duke, but not as a professor, administrator or coach. He was a janitor. His struggle to organize Duke’s non-academic employees made him a civil rights and anti-poverty leader and a role model for many students. He was a fierce critic of Duke’s treatment of workers, especially African Americans, and a veteran antagonist of the university administration. But by pushing to create a more equitable workplace, he brought about meaningful change to Duke’s labor policies and practices….

How did an African American janitor at an elite, almost all-white university in North Carolina force change and capture the imagination of students in the 1960s? We set out to answer that question by interviewing former students, digging through university archives, and searching for Harvey’s descendants in North Carolina and beyond. The portrait of Harvey that emerged was that of a solitary figure absorbed in the struggles of his times, a gentle personality who was not shy about confronting powerful people and institutions, and a student of protest and organization who became an influential teacher. And yet part of Harvey’s mystery endures, not just in the gaps of his story, but in its improbability.

 

Michigan Rights Wrong, Beginning the Repeal of ‘Right to Work’ 

Harold Meyerson, March 10, 2023 [The American Prospect]

 A newly Democratic state government votes to restore some democracy in the workplace.

 

The American Rescue Plan’s Hidden Triumphs

David Dayen, March 10, 2023 2023 [The American Prospect]

Medicaid expansion in North Carolina and Eli Lilly’s insulin price cuts are largely due to the March 2021 law….

But there’s another factor. Medicaid prevents drug companies from raising list prices above the rate of inflation. Any company that does so must pay Medicaid a rebate, which includes a 23.1 percent discount of the average manufacturer price, and an additional rebate in the event of price spikes. These rebates can be incredibly large if price spikes are high. But since 2010, this rebate has been capped at 100 percent of the cost of the average purchase price of the medication, so drug companies wouldn’t have to essentially pay Medicaid whenever their product is used.

That changed in a little law called the American Rescue Plan. Starting in 2024, the Medicaid rebates become uncapped. And the biggest loser in that policy change is Eli Lilly. According to a 2019 study from drug pricing analyst Sean Dickson, 38 percent of the reduced rebate for the entire program due to the cap was attributable to Lilly’s Humalog insulin. If the rebate had been uncapped in 2017, Dickson estimates, Lilly’s revenues would have fallen by $1.7 billion that year. Put another way, if Lilly had the same list price for Humalog next year, they would have had to pay Medicaid $150 for every vial used, according to a Stat News estimate.

So Lilly instead reduced the list price by 70 percent, to get out of the Medicaid penalty. Notably, the price cut won’t take effect until the fourth quarter of 2023, just in time for the cap changes in the first quarter of 2024.

Federal policy in the ARP, then, forced Eli Lilly to atone for its historical practice of jacking up the price of insulin. Slashing that price back will save all patients and health plans, not just Medicaid, billions of dollars. Contrary to the conventional wisdom that the “bully pulpit” encouraged Lilly to make this change, it was policy affecting its bottom line that likely did the trick.

 

Biden turns to austerity

The covid response showed the U.S. how to solve childhood hunger. Why are we backtracking?

[Grid, via The Big Picture 3-5-2023]

Special pandemic aid programs pushed child hunger to historic lows, even as schools and businesses closed — and many U.S. kids could now face a “hunger cliff” as these covid-era measures end.

 

The Incredible Shrinking Power of Joe Biden’s Welfare State 

[Slate, via Naked Capitalism 3-8-2023]

On March 1, the federal government shut off enhanced SNAP benefits for 32 states, D.C., Guam, and the U.S. Virgin Islands. SNAP, colloquially known as food stamps, gives monthly food stipends to low-income Americans, and was expanded as part of the COVID emergency response, increasing benefits for the program’s 42 million recipients.

Now, with those emergency allotments cut off, the average recipient will get about $90 less per month in food aid than they’d been getting for over two years; a family of four could see their monthly benefit cut by about $328 a month; and seniors could see their benefits drop from $281 a month to just $23. An estimated 31 million Americans have now been thrown off what’s been called “the hunger cliff.”

 

War

How Quickly The West Forgot It Was Their 2020 Regime-Change Project That Drove Belarus Into Russia’s Arms – OpEd 

Mark Ames [Asia Review, via Naked Capitalism 3-6-2023]

 

In race to arm Ukraine, U.S. faces cracks in its manufacturing might 

[Washington Post, via Naked Capitalism 3-10-2023]

NC contributor Resilc: “There is no manufacturing might. We cannot make complete systems of anything without global components.”

 

Brigadier General of the 43rd Brigade Oleg Shevchuk

[Pravda.com.ua, via The Big Picture 3-11-2023]

Jaw-dropping throughout. How Ukraine’s army leveraged social media against Russia’s invasion. “We called civilians and asked: ‘Do you see this section of road? If a shell hits in a minute and a half, can you tell us roughly where it exploded?’ The person would describe the place of the explosion, we would open a Google map and see: Yes, there is such a place behind the vegetable garden.” (Pravda.com.ua) Note: Use Chrome translate to read in English, or go to WarTranslated

 

Liberalism / libertarianism vs. public health

Parental Nonadherence to Health Policy Recommendations for Prevention of COVID-19 Transmission Among Children 

[JAMA, via Naked Capitalism 3-7-2023]

From the Abstract: “One hundred fifty participants (25.9%) reported misrepresentation and/or nonadherence in at least 1 of 7 behaviors; the most common behaviors were not telling someone who was with their child that they thought or knew their child had COVID-19 (63 of 263 [24.0%]) and allowing their child to break quarantine rules (67 of 318 [21.1%]))…. The most common reason was wanting to exercise personal freedom as a parent.”

Lambert Strether: “So, and unsurprisingly, living with Covid involves a lot of lying. Really, can you imagine not telling the parents of a child playing with your child that your child was infected? As I’ve said for some time: “‘Freedom’ is how a libertarian says ‘f*ck you.’” “

[Twitter, via Naked Capitalism Water Cooler 3-9-2023]

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“Covid backlash hobbles public health and future pandemic response”

[Washington Post, via Naked Capitalism Water Cooler 3-9-2023]

“When the next pandemic sweeps the United States, health officials in Ohio won’t be able to shutter businesses or schools, even if they become epicenters of outbreaks. Nor will they be empowered to force Ohioans who have been exposed to go into quarantine. State officials in North Dakota are barred from directing people to wear masks to slow the spread. Not even the president can force federal agencies to issue vaccination or testing mandates to thwart its march. Conservative and libertarian forces have defanged much of the nation’s public health system through legislation and litigation as the world staggers into the fourth year of covid. At least 30 states, nearly all led by Republican legislatures, have passed laws since 2020 that limit public health authority, according to a Washington Post analysis of laws collected by Kaiser Health News and the Associated Press as well as the Association of State and Territorial Health Officials and the Center for Public Health Law Research at Temple University.”

 

…the Cochrane implosion…

Lambert Strether [Naked Capitalism Water Cooler 3-10-2023]

Again, it’s the review’s authors — and their funders and allies at the Brownstone Institute — who are going round making this “interpretation.” They not only need to revise the papers, they need to stuff the authors back in their boxes, and get them off any other reviews they’ve got going (along with anyone else their funders fund). This “Statement” is extremely weak tea. (For example, in my own piece on “Physical Intervention, “New, Buzzy Cochrane Study Sets the ‘Fools Gold’ Standard for Anti-Maskers“, and gosh, was I right [does happy dance], I show that the Review had an unlisted and uncredited author, Carl Heneghan, also — and I know this will surprise you — from the Brownstone Institute, against Cochrane Library standards. That calls for a revision. Will Soares-Weiser make it? Or will she try to sweep Brownstone Institute’s involvement under the rug?

 

“Top World Health Organisation COVID-19 Advisor Bankrolled by Great Barrington Declaration Successor Organization”

[Byline Times, via Naked Capitalism Water Cooler 3-10-2023]

“A top World Health Organization (WHO) advisor and grant recipient researching COVID-19 transmission and respiratory viruses is on the payroll of a successor organisation to the Great Barrington Declaration (GBD)…. The advisor, who plays a key role in helping set the agenda for the WHO’s funding of external scientific research on COVID-19 while also being a beneficiary of WHO funding is Dr Tom Jefferson, a British epidemiologist who works with the Cochrane Collaboration. He is currently receiving WHO funding to provide an updated Cochrane review of physical interventions to interrupt the spread of respiratory viruses, as well as to participate in a systematic review of COVID-19 transmission by the Centre for Evidence-Based Medicine at Oxford University run by Professor Carl Heneghan. He is also a member of the WHO Infection Prevention and Control Research and Development Expert Group for COVID-19 (IPCRDEG-C19), which advises the WHO on how it should commission external research.”

Lambert Strether comments: “Ka-ching. Does make you wonder if these guys had anything to do with WHO’s horrid positions on airborne transmission and masks.”

 

“Almost Half of All Public Health Workers Left Their Jobs Over the Past 5 Years”

[MedPage Today, via Naked Capitalism Water Cooler 3-9-2023]

“Nearly half of all public health workers in state and local agencies left their positions over the last half-decade, a new study found. Comparing public health agency staff lists from 2017 with those of 2021, researchers led by Jonathon P. Leider, PhD, of the University of Minnesota in Minneapolis, discovered that 46% of workers were no longer present in 2021. Importantly, more than 100,000 workers — which amounts to half of the total governmental public health workforce — could leave by 2025 if current trends continue, the group detailed in Health Affairs. Their study tracked intent to leave as well as actual separations of 150,000 workers at close to 100 agencies participating in the Public Health Workforce Interests and Needs Survey (PH WINS) in 2017 and 2021. ‘Even though we’ve had so many people already leave, we still have 40% plus of the workforce saying, ‘I’m thinking about leaving,’” Leider told MedPage Today. ‘These are the people that are more educated in public health science than ever before, in pandemic crisis management than ever before. How do you replace people like that?’”

Lambert Strether added: “You don’t. That’s the plan.”

 

“Long Covid patients face medical debt after insurance denies claims” 

[NBC, via Naked Capitalism Water Cooler 3-9-2023]

“In order for the care a patient receives to be deemed medically necessary by an insurance provider, there has to be substantial research or evidence that shows that it works, she said. That’s ‘a key issue for long Covid,’ she said, because the illness is so new and still poorly understood. ‘Research, just like everything with Covid, is all new,’ she said. ‘Nobody really quite knows what works and nobody really understands why some people have it longer than others.’ To be sure, as of 2021, there are diagnostic codes for long Covid — key tools used by doctors to characterize medical diagnoses for insurance coverage, said Dr. Alan Kwan, a cardiologist at Cedars-Sinai Medical Center in Los Angeles. Those codes, however, don’t always cover the myriad health problems linked to long Covid, he said. Doctors may work hard to get a patient a formal diagnosis for long Covid to help with insurance, though there isn’t an official test for long Covid and the testing that is done may not be covered by insurance.”

Lambert Strether added: “First the killing, then the billing.”

 

“Long COVID Now Looks like a Neurological Disease, Helping Doctors to Focus Treatments”

[Scientific American, via Naked Capitalism Water Cooler 3-10-2023]

“The most common, persistent and disabling symptoms of long COVID are neurological. Some are easily recognized as brain- or nerve-related: many people experience cognitive dysfunction in the form of difficulty with memory, attention, sleep and mood. Others may seem rooted more in the body than the brain, such as pain and postexertional malaise (PEM), a kind of “energy crash” that people experience after even mild exercise. But those, too, result from nerve dysfunction, often in the autonomic nervous system, which directs our bodies to breathe and digest food and generally runs our organs on autopilot. This so-called dysautonomia can lead to dizziness, a racing heart, high or low blood pressure, and gut disturbances, sometimes leaving people unable to work or even function independently. The SARS-CoV-2 virus is new, but postviral syndromes are not. Research on other viruses, and on neurological damage from the human immunodeficiency virus (HIV) in particular, is guiding work on long COVID. And the recognition that the syndrome may cause its many effects through the brain and the nervous system is beginning to shape approaches to medical treatment. “I now think of COVID as a neurological disease as much as I think of it as a pulmonary disease, and that’s definitely true in long COVID,” says William Pittman, a physician at UCLA Health in Los Angeles, who treats Ghormley and many similar patients.”

 

Oligarchy and system legitimacy

[Twitter, via Naked Capitalism 3-5-2023]

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[Twitter, via Naked Capitalism 3-5-2023]

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The Rich List: The 22nd Annual Ranking of the Highest-Earning Hedge Fund Managers

[Institutional Investor, via The Big Picture 3-8-2023]

Altogether, the top 25 made $21.5 billion in 2022, making last year’s total the third highest, after 2020 and 2021. This works out to an average of about $860 million each….

The top earner was Ken Griffin, founder of multistrategy giant Citadel. He personally made $4.1 billion — the most any hedge fund manager has ever earned in the history of the Rich List…. Griffin was followed by multistrat rival Izzy Englander of Millennium Management, who made $3.2 billion. Altogether, Englander has earned more than $10 billion over the past three years….

3
$1.9 Billion
Steven Cohen
Point72 Asset Management

4
$1.2 Billion
David Tepper
Appaloosa Management

5
$1.1 Billion
James Simons
Renaissance Technologies

 

Jamie Dimon Is Fighting a Deposition in a Devastating Lawsuit Charging JPMorgan With Being the Cash Conduit for Jeffrey Epstein’s Sex Crimes

Pam Martens and Russ Martens, March 6, 2023 [Wall Street on Parade]

The Attorney General’s office of the U.S. Virgin Islands (USVI) has filed a First Amended Complaint against JPMorgan Chase that has less redactions than an earlier version. The complaint makes devastating and detailed charges. It charges that the bank sat on a pile of evidence that Jeffrey Epstein was running a child sex trafficking ring as it continued to keep him as a client; accept his lucrative referrals of wealthy clients; and provided him with large sums of cash and wire transfers to pay off victims – one of whom was a “14-year old sex slave.”

Attorneys for the bank are now resisting allowing Chairman and CEO Jamie Dimon from being deposed under oath in the matter as to what he knew and when he knew it.

The case is USVI v JPMorgan Chase Bank N.A. (22-cv-10904) in U.S. District Court for the Southern District of New York….

“ “In January 2011, JP Morgan’s AML [Anti Money Laundering] compliance director requested re-approval for the bank’s relationship with Epstein from JP Morgan’s then-General Counsel ‘in light of the new allegations of human trafficking . . .’ Another JP Morgan employee responded: ‘I thought we did that in approving a $50 million new line of credit last month?’ ” “

 

Biden set to appoint mass foreclosure cheerleader to the Fed 

Cory Doctorow [Pluralistic, via Naked Capitalism 3-7-2023]

While the Democrats’ anti-corporate wing got to drive the administration’s competition agencies, the corporate wing has enjoyed near-total dominance over finance regulations (with notable exceptions, e.g. Rohit Chopra), starting with Trump’s Jerome Powell, a bloodletting monster happy to shovel workers into their bosses’ crushers all day long:

https://pluralistic.net/2023/01/19/creditors-vs-workers/#finance-colored-glasses

Corporate Dems continue to flex their muscle. A seat has just opened up on the Federal Reserve Board, and the WSJ is pretty sure the seat is going to Janice Eberly, a corporate ghoul who helped Obama Treasury Secretary Timothy Geithner steal Americans’ houses on behalf of the bankers who destroyed the world economy in 2008:

https://www.wsj.com/articles/white-house-considers-two-economists-for-fed-vice-chair-58f13344

A quick refresher: Obama inherited the Great Financial Crisis, a massive global asset crash that followed from a decade of real-estate and derivatives deregulation that saw the world’s largest banks issuing mortgages they knew would fail, and then placing massive bets on “collateralized debt obligations” that were supposed to offset the risk.

The banks gambled trillions, nearly destroyed the world’s economy, and then blamed it all on reckless borrowers….

 

“Tax Avoidance Continues to Fuel School Privatization Efforts”

[Institute on Taxation and Economic Policy, via Naked Capitalism Water Cooler 3-8-2023]

“Lawmakers in several states are discussing enacting or expanding school voucher tax credits, which reimburse individuals and businesses for ‘donations’ they make to organizations that give out vouchers for free or reduced tuition at private K-12 schools. In effect, these credits allow contributing families to opt out of paying for public education and other public services. New data—published here for the first time—reveal that wealthy families are overwhelmingly the ones using these credits to opt out of paying tax to public coffers. In all three states providing data, most of the credits are being claimed by families with incomes over $200,000. Wealthy families’ interest in these programs is being driven partly by a pair of tax shelters that can make ‘donating’ profitable. These shelters hinge on stacking state and federal tax cuts and are being advertised in the states as a way to get a ‘double tax benefit’ and ‘make money’ in the process. This kind of language is a far cry from most nonprofit fundraising pitches and gives some sense of the supersized nature of the tax benefits being offered for private and religious K-12 schooling. Voucher tax credits are without merit and should be repealed. Short of that, states can end their use as profitable tax shelters with straightforward reforms. A national solution to this problem, however, will require action by the IRS.”

 

The carnage of mainstream neoliberal economics

Sellers’ Inflation, Profits and Conflict: Why can Large Firms Hike Prices in an Emergency? 

[UMass Amherst Political Economy Research Institute, via Naked Capitalism 3-5-2023]

From the abstract: “We argue that the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices. Such firms are price makers, but they only engage in price hikes if they expect their competitors to do the same. This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks.”

 

How ‘Excuseflation’ Is Keeping Prices — and Corporate Profits — High

[Bloomberg, via Naked Capitalism Water Cooler 3-9-2023]

A growing body of analysts and researchers see a pattern playing out across Corporate America, with companies using the unusual disruptions of recent years as an excuse to raise prices, and expand their profit margins.

 

“Silicon Valley Bank Collapses Following Run on Deposits”

[Wall Street Journal, via Naked Capitalism Water Cooler 3-10-2023]

“Silicon Valley Bank collapsed Friday in the second-biggest bank failure in U.S. history after a run on deposits doomed the tech-focused lender’s plans to raise fresh capital. The Federal Deposit Insurance Corp. said it has taken control of the bank via a new entity it created called the Deposit Insurance National Bank of Santa Clara. All of the bank’s deposits have been transferred to the new bank, the regulator said. Insured depositors will have access to their funds by Monday morning, the FDIC said. Depositors with funds exceeding insurance caps will get receivership certificates for their uninsured balances. Once a darling of the banking business, Silicon Valley Bank collapsed at warp speed after it announced a big loss on its bondholdings and plans to shore up its balance sheet, tanking its stock and sparking widespread customer withdrawals. The bank is the 16th largest in the U.S., with some $209 billion in assets as of Dec. 31, according to the Federal Reserve. It is by far the biggest bank to fail since the near collapse of the financial system in 2008, second only to the crisis-era shutdown of Washington Mutual Inc. The bank’s parent company, SVB Financial Group, was racing to find a buyer after scrapping a planned $2.25 billion share sale Friday morning. Regulators weren’t willing to wait. The California Department of Financial Protection and Innovation closed the bank Friday within hours and put it under the control of the FDIC. SVB, based in Santa Clara, Calif., earlier this week surprised investors by announcing that it lost nearly $2 billion selling assets following a larger-than-expected decline in deposits. The stock has lost more than 80% since then, and tech clients rushed to pull their deposits over concerns about the bank’s health.”

 

Fed Hawkishness, Crypto Implosion, and Private Equity Subscription Lines of Credit Imperil Silicon Valley Bank and Freak Out Bank Stock Investors

Yves Smith, March 10, 2023 [Naked Capitalism]

 

SVB Chief Pressed Lawmakers To Weaken Bank Risk Regs 

Rebecca Burns, David Sirota, Julia Rock & Andrew Perez, March 10, 2023 [The Lever]

 

Bank Stocks Plummet as Bank Runs in the U.S. Gain Momentum at Federally-Insured, Non-Traditional Banks

Pam Martens and Russ Martens, March 10, 2023 [Wall Street on Parade]

 

Silicon Valley Bank Fails, With Deposits of Many Venture-Backed Companies Frozen. How Bad Will the Fallout Be?

Yves Smith, March 11, 2023 [Naked Capitalism]

 

FDIC Investigators Are on the Premises of Collapsing Federally-Insured, Crypto Related Bank, Silvergate: It’s Not a Friendly Visit

Pam Martens and Russ Martens, March 8, 2023 [Wall Street on Parade]

For starters, “FDIC examiners” are not investment bankers from Goldman Sachs or Perella Weinberg Partners. They don’t arrange mergers and acquisitions. If bank examiners from the Federal Deposit Insurance Corporation are on the premises of Silvergate Bank, it is because officials of that bank put a big red target on their bank for the Feds on March 1 when it made a filing with the Securities and Exchange Commission that stated that the bank had concerns about its “ability to continue as a going concern.”

The SEC filing also indicated that record-keeping at the bank is so suspect that it can’t even file its annual report for the full year of 2022 (Form 10-K) on time; and it needs more time to “record journal entries.” Equally troubling was the phrase that “its independent registered public accounting firm” will require more time “to complete certain audit procedures, including review of adjustments not yet recorded and the evaluation of the effectiveness of the Company’s internal control over financial reporting.”

And if all that weren’t enough, it added for good measure that it was under multiple investigations from regulators, Congress and – oops – those folks with criminal prosecution powers – the U.S. Department of Justice.

So, to summarize, that devastating information was released seven days ago and yet, yesterday, Bloomberg News’ reporters think that the Feds are on the premises of Silvergate to “salvage” the bank.

 

Silicon Valley Is Destroying the World (transcript)

[The New Republic, via Naked Capitalism 3-9-2023]

“How Stanford University turned optimization into the global capitalist credo.”

 

Leaked audio reveals US rail workers were told to skip inspections as Ohio crash prompts scrutiny to industry 

[Guardian, via Naked Capitalism 3-6-2023]

 

The Case for Nationalizing the Railroads 

[In These Times, via Naked Capitalism 3-6-2023]

 

High interest rates, car prices lead to record loans, debt 

[The Car Connection, via Naked Capitalism 3-6-2023]

 

The Fed is Breaking Things (and it could get worse) 

Barry Ritholtz, March 10, 2023 [The Big Picture]

 

After People on Medicaid Die, Some States Aggressively

Seek Repayment From Their Estates 

[Kaiser Health News, via Naked Capitalism 3-6-2023]

 

“Indoor air is full of flu and COVID viruses. Will countries clean it up?”

[Nature, via Naked Capitalism Water Cooler 3-8-2023]

“In March 2022, the US government launched a Clean Air in Buildings Challenge to spur building owners and operators to improve their ventilation and indoor air quality. In October last year, the state of California passed a law requiring all school buildings to provide clean indoor air. And in December, the White House announced that all federal buildings — some 1,500 in total — would meet minimum air-safety requirements. Also in December, the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) — a construction-industry body whose recommendations are adopted into law through local building codes in the United States and elsewhere — announced that it would be developing standards that take infection risk into account by June 2023…. Specialists in indoor air quality are buoyed by the prospect that the pandemic could bring lasting improvements to the air we breathe indoors. … ‘There’s never been, in history, so much action about indoor air quality,’ says Lidia Morawska, an aerosol scientist at the Queensland University of Technology in Brisbane, Australia…. Researchers say it will take time to lower the infection risks inside buildings. ‘We are looking at 30 years,’ says Morawska. ‘But we are talking about the future of our society.’”

 

[Twitter, via Naked Capitalism 3-5-2023]

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[Twitter, via Naked Capitalism Water Cooler 3-8-2023]

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Chris Hedges: Lynching the Deplorables 

Chris Hedges, Scheer Post, via Naked Capitalism 3-7-2023]

 

Legal Observer Hit with Terrorism Charges After Mass ‘Cop City’ Arrests 

[Daily Beast, via Naked Capitalism 3-7-2023]

 

John Kiriakou: The Threat to Journalism 

[ScheerPost, via Naked Capitalism 3-7-2023]

 

Climate and environmental crises

Why North Dakota is preparing to sue Minnesota over clean energy 

[Grist, via Naked Capitalism 3-6-2023]

 

Oil companies line up for billions of dollars in subsidies under US climate law 

[FT, via Naked Capitalism 3-7-2023]

 

When Suburbs Go to War With Transit

[CityLab / Bloomberg, via The Big Picture 3-6-2023]

A battle over building a housing development near a Baltimore light rail station illustrates why it’s so hard to make viable public transportation in the suburbs.

 

Information age dystopia

Inside the Suspicion Machine 

[Wired, via Naked Capitalism 3-7-2023]

Wired got hold of a social credit algo from Rotterdam. A sample: “The comment field in the Rotterdam system, for example, where caseworkers are asked to make general observations, is binary. Any comment is converted to a “1,” while a blank field is converted to a “0.” This means negative and positive comments affect the score in the same way.” And much else like that.

 

How to Take Back Control of What You Read on the Internet

[The Atlantic, via The Big Picture 3-8-2023]

Social-media algorithms show us what they want us to see, not what we want to see. But there is an alternative.

 

ACLU Obtains Docs Detailing FBI, Pentagon Development of Facial Recognition Tech

[Common Dreams, via Naked Capitalism 3-9-2023]

 

Democrats Band Together to Try Yet Another Federal Facial Recognition Ban 

[Gizmodo, via Naked Capitalism 3-9-2023]

 

How Comrades Revealed the Existence of COINTELPRO 

[Black Agenda Report, via Naked Capitalism 3-9-2023]

 

“Commentary: Cory Doctorow: End to End”

Cory Doctorow [Locus, via Naked Capitalism Water Cooler 3-8-2023]

“Here’s something I think we should all agree upon: when a willing speaker wants to say something to a willing listener, our technology should be de­signed to make a best effort to deliver the speaker’s message to the person who asked to get it. I hope this is self-evidently true. When you dial a phone number, the phone company’s job is to connect you to that number, not to someone else. When you call Tony’s Pizza, you expect to be connected to Tony’s Pizza – not to Domino’s, not even if Domino’s is willing to pay for the privilege. When you use your TV remote to tune into CNN, you don’t want your cable operator to show you Fox instead – not even if Fox will pay them to do so. If you follow someone on social media, then the things that person says should show up in your timeline. That is not a radical proposition, but it is also not the case today. Facebook, Twitter, TikTok, YouTube and other dominant social media platforms treat the list of people we follow as suggestions, not commands. When you identify a list of people you want to hear from, the platform uses that as training data for suggestions that only incidentally contain the messages that the people you subscribed to. There are various reasons for this, but they all boil down to the platform shifting value away from its users to its shareholders. Obviously that is the case with ads: the volume of ‘‘sponsored posts” that enshittify your feed is titrated to be just below the threshold where the service becomes useless to you. But there’s another group of people who can pay to reach you – the people you’ve chosen to follow. When you subscribe to a performer, or a news outlet, or a political group, they have to pay to ensure that the things they publish show up for you. The platforms have cute names for this danegeld (‘‘boost­ing,” etc), but it boils down to the phone company telling Tony’s Pizza, ‘‘If you don’t pay us extra, then every time someone calls Tony’s, we’re going to connect them to Domino’s.” Thus the enshittification of your feed is only partially about showing you ads: it’s also about making the people you want to hear from pay to reach you. This shouldn’t be allowed. The services should make their best effort to deliver messages from willing senders to willing receivers. This principle can be generalized to other kinds of online services. When you search for a product on Amazon, the first result should be the product you searched for, not an Amazon own-brand clone of that product, or the product of a rival that paid for the privilege of being at the top of the results.”

 

Democrats’ political malpractice

The Democrats Have Lost the Plot 

Matt Taibbi [Racket News, via Naked Capitalism 3-11-2023].

“There are no more pockets of Wellstones and Kuciniches who were once tolerated and whose job it is to uphold a constitutionalist position within the larger whole. That crucial little pocket of principle is gone, and I don’t think it’s coming back.”

“My Statement to Congress”

Matt Taibbi [Racket News, via Naked Capitalism Water Cooler 3-9-2023]

“The original promise of the Internet was that it might democratize the exchange of information globally. A free internet would overwhelm all attempts to control information flow, its very existence a threat to anti-democratic forms of government everywhere. What we found in the Files was a sweeping effort to reverse that promise, and use machine learning and other tools to turn the internet into an instrument of censorship and social control. Unfortunately, our own government appears to be playing a lead role….. In a free society we don’t mandate truth, we arrive at it through discussion and debate. Any group that claims the “confidence” to decide fact and fiction, especially in the name of protecting democracy, is always, itself, the real threat to democracy. This is why ‘anti-disinformation’ just doesn’t work. Any experienced journalist knows experts are often initially wrong, and sometimes they even lie. In fact, when elite opinion is too much in sync, this itself can be a red flag. We just saw this with the Covid lab-leak theory. Many of the institutions we’re now investigating initially labeled the idea that Covid came from a lab “disinformation” and conspiracy theory. Now apparently even the FBI takes it seriously. It’s not possible to instantly arrive at truth. It is however becoming technologically possible to instantly define and enforce a political consensus online, which I believe is what we’re looking at. This is a grave threat to people of all political persuasions.”

[TW: Taibbi raises very troubling questions. But, how should we deal with misinformation, such as on vaccines and the efficacy of masking in an epidemic?]

The man who launched the vaccine wars

[UnHerd, via The Big Picture 3-5-2023]

[Andrew Wakefield’s] first “finding” would echo down the decades like machine-gun fire in a cathedral. For eight of the 12 (aged from three to nine), the paper said their parents, quizzed by doctors running the tests, recounted a terrifyingly similar experience: a son or daughter was developing normally, received a shot of the three-in-one “live virus” MMR, and showed autistic symptoms within days.

The paper further claimed discovery of a new medical “syndrome” of both brain and bowel disease in the children. All but one, it reported in text and tables, had developmental issues plus “chronic enterocolitis” — inflammation of both the large and small intestine. “It’s a moral issue for me,” Wakefield told his audience, calling for MMR to be suspended in favour of single shots for measles, mumps, and rubella. “I can’t support the continued use of these three vaccines, given in combination, until this issue has been resolved.” The dean equivocated, but the professor backed Wakefield. And so was born an intractable controversy as the paper was leveraged to launch a crusade: first against this vaccine, then later another… and another… all the way to SARS-CoV-2.

“It’s not a vaccine at all,” Wakefield would rail against the latter at the height of the Covid pandemic. “It’s actually genetic engineering.”….

Our first report splashed in February 2004, almost exactly six years after the press conference. “Revealed: MMR research scandal,” was the front page, igniting a new media firestorm. We had discovered a monstrous conflict of interest that Wakefield kept hidden, then denied. For two years before his “moral issue” surfaced — and before any of the children set foot in the hospital — he had been payrolled by a small-town solicitor named Richard Barr to help lead an attack on MMR. Unlike expert witnesses, who give advice and opinions, the doctor was delegated to arrange the tests, building pressure for a speculative lawsuit.

“I have mentioned to you before,” Barr wrote to Wakefield, six months before the Royal Free event, “the prime objective is to produce unassailable evidence in court so as to convince a court that these vaccines are dangerous.” Barr filed the lawsuit at the Royal Courts of Justice eight months after the breathless press conference. Wakefield claimed fees of £150 an hour (about £254 an hour at late 2022 values), drawn from the government’s legal aid fund. So, as he recruited the children and wrote the paper, he had a financial incentive not only to trigger a client-grabbing furore, but to keep it going for as long as he could.

Those clients poured in — nearly 1,600 families — as journalists were duped to fuel the scare. And by late 2003, when Barr’s lawsuit collapsed, Wakefield had. been handed £435,643 (about £738,000, or nearly US $900,000, at last year’s values), plus expenses, in taxpayers’ money. But as he gazed into the glare of TV lights, his legal deal was only one of his secrets. As he’d made his call for a switch to single vaccines, he forgot to mention that eight months previously he’d filed a confidential claim at the London Patent Office for his own, supposedly safer, single vaccine.

 

The (Anti)Federalist Society Infestation of the Courts

Conservative Witness Admits Potential Chaos From CFPB Court Case

David Dayen, March 10, 2023 2023 [The American Prospect]

Rep. Andy Barr (R-KY), chair of the Subcommittee on Financial Institutions and Monetary Policy that held the hearing, tried to temper Watkins’s remarks by asking witnesses to “address these sky-is-falling concerns” that the upcoming Supreme Court ruling “would call into doubt the other federal bank regulators.” But Watkins was insistent, replying that “it isn’t just the CFPB. There are other agencies out there that do have non-appropriated funds, and Congress should review those as well and think about how to return those agencies to congressionally funded appropriations process as well.”

At issue is a ruling from the conservative Fifth Circuit Court of Appeals in a case involving payday lenders, claiming that Congress has “exclusive power over the federal purse,” and that the CFPB’s funding from the Federal Reserve, which gets its funding from bank assessments, is “double insulated” from congressional appropriations, since it gets money outside the process from an agency that gets money outside the process.

CFPB, in a statement when the ruling was announced, also noted that numerous mandatory programs, including Medicare and Social Security, are funded outside the appropriations process, and a rigid ruling about Congress’s exclusive power could throw those into question as well.

 

The (anti)Republican Party

The Deep Archeology of Fox News

Josh Marshall [Talking Points Memo, via The Big Picture 3-10-2023]

The evidence emerging from the Dominion lawsuit against Fox News has the quality of liberal fever dreams. What’s the worst you can possibly imagine about Fox? What’s the most cartoonish caricature, the worst it could possibly be? Well, in these emails and texts you basically have that. Only it’s real. It’s not anyone believing the worst and giving no benefit of the doubt. This is what Fox is.

 

The Backlash Against ESG Faces Its Own Backlash

[Institutional Investor, via The Big Picture 3-10-2023]

Pension funds in red states say culture-war policies are interfering with the market and could cost retirees and taxpayers billions.

 

The attack on the fundamental principle of American democracy, the idea that all people are created equal.

Heather Cox Richardson, March, 10, 2023 [Letters from an American]

…Make no mistake: this attack on transgender people represents a deadly attack on the fundamental principle of American democracy, the idea that all people are created equal.

CPAC and its representatives have become increasingly close to Hungarian president Victor Orbán as he has asserted autocratic power in his own country. Orbán has explicitly rejected the liberal democracy that his country used to enjoy, saying that its emphasis on multiculturalism weakens national cultures while its insistence on human equality undermines traditional society by recognizing that women and LGBTQ people have the same rights as straight white men. The age of liberal democracy is over, he says, and a new age has begun.

In place of equality, Orbán advocates what he calls “illiberal democracy” or “Christian democracy.” “Christian democracy is, by definition, not liberal,” he said in July 2018; “it is, if you like, illiberal. And we can specifically say this in connection with a few important issues—say, three great issues. Liberal democracy is in favor of multiculturalism, while Christian democracy gives priority to Christian culture; this is an illiberal concept. Liberal democracy is pro-immigration, while Christian democracy is anti-immigration; this is again a genuinely illiberal concept. And liberal democracy sides with adaptable family models, while Christian democracy rests on the foundations of the Christian family model; once more, this is an illiberal concept.” ….

Once you give up the principle of equality, you have given up the whole game. You have admitted the principle that people are unequal, and that some people are better than others. Once you have replaced the principle of equality with the idea that humans are unequal, you have stamped your approval on the idea of rulers and subjects. At that point, all you can do is to hope that no one in power decides that you belong in the lesser group.

In 1858, Abraham Lincoln, then a candidate for the Senate, warned that arguments limiting American equality to white men and excluding black Americans were the same arguments “that kings have made for enslaving the people in all ages of the world…. Turn in whatever way you will—whether it come from the mouth of a King, an excuse for enslaving the people of his country, or from the mouth of men of one race as a reason for enslaving the men of another race, it is all the same old serpent.”

Republicans are systematically destroying democracy — and replacing it with strongman authoritarianism 

Thom Hartmann, March 08, 2023 [Rawstory, via DailyKos]

For some unfathomable reason, Democrats insist on calling their Republican colleagues their “friends.” They are not friends. With few exceptions, they are systematically destroying American democracy with the clear objective of replacing it with strongman authoritarianism, a new and American version of what Benito Mussolini called fascism….

Trump had previously proclaimed his desire to change the nation’s libel and slander laws so he could sue or imprison his political opponents and those in the media who opposed him; if he had succeeded on January 6th, that would have happened by now, and people like me (and maybe you) would be in jail.

Echoing one of Pinochet’s first 1973 laws, a Republican state legislator in Florida just proposed legislation requiring bloggers and writers to register with the state if they intend to criticize any elected official; had Trump succeeded we’d all be living under similar laws today.

Trump had previously promised his violent partisans that he’d pardon them and pick up their legal fees; if he’d held onto the White House, by now hundreds of Kyle Rittenhouse’s would have “defended themselves” against Black people, “Antifa,” and “commie liberals”without consequence.

If Republicans held a large enough majority in Congress, a constitutional convention like rightwing billionaires have been promoting and annually rehearsing in Washington, DC would be underway to rewrite our founding document. The right of all Americans to vote, separation of church and state, civil rights, protections of free speech and assembly, the right to due process and equal protection under the law, even the obscure Emoluments Clause would all be on the chopping block.

Trump-friendly corporations would be running political purges reminiscent of the Republican “Red Scare” and “Blacklist”1950s all across the country as social media accounts were examined for evidence of “leftist” leanings; Johnny McEntee began that process when he was “Deputy President” to Trump and was firing people in the executive branch for “liking” postings by “leftwing” entertainers like Taylor Swift.