**This Post Is By Tony Wikrent**
Strategic Political Economy
How Swedes and Norwegians Broke the Power of the ‘One Percent’
[Films for Action, via Naked Capitalism 3-14-19]
By 1935, Norway was on the brink. The Conservative-led government was losing legitimacy daily; the 1 percent became increasingly desperate as militancy grew among workers and farmers. A complete overthrow might be just a couple years away, radical workers thought. However, the misery of the poor became more urgent daily, and the Labor Party felt increasing pressure from its members to alleviate their suffering, which it could do only if it took charge of the government in a compromise agreement with the other side.
This it did. In a compromise that allowed owners to retain the right to own and manage their firms, Labor in 1935 took the reins of government in coalition with the Agrarian Party. They expanded the economy and started public works projects to head toward a policy of full employment that became the keystone of Norwegian economic policy. Labor’s success and the continued militancy of workers enabled steady inroads against the privileges of the one percent, to the point that majority ownership of all large firms was taken by the public interest. (There is an entry on this case as well at the Global Nonviolent Action Database.)
The one percent thereby lost its historic power to dominate the economy and society. Not until three decades later could the Conservatives return to a governing coalition, having by then accepted the new rules of the game, including a high degree of public ownership of the means of production, extremely progressive taxation, strong business regulation for the public good and the virtual abolition of poverty. When Conservatives eventually tried a fling with neoliberal policies, the economy generated a bubble and headed for disaster. (Sound familiar?)
Labor stepped in, seized the three largest banks, fired the top management, left the stockholders without a dime and refused to bail out any of the smaller banks. The well-purged Norwegian financial sector was not one of those that lurched into crisis in 2008; carefully regulated and much of it publicly owned, the sector was solid.
The Birth of Predatory Capitalism: How the Free World Took Four Giant Leaps to Self-Destruction
[Medium, via Mike Norman Economics 2-10-19]
Economics in the real world
“Lawmakers who supported the ban said cashless stores were unintentionally discriminating against people in the community who don’t have debit or credit cards, since they would be unable to make purchases. Cash is also an appealing choice for people who want to keep their purchasing history private from retailers, credit card companies, or perhaps even spouses. It also negates any potential risks, in the event a company is breached and customer information is leaked to hackers. While cash and coins are legal tender, there is no federal law that requires businesses to accept them, according to the Federal Reserve’s website.”
“[T]he Amazon is the world’s longest river not crossed by any bridges… For most of its length, the Amazon isn’t anywhere close to too wide to bridge—in the dry season. But during the rainy season, the river rises thirty feet, and crossings that were once three miles wide can balloon to thirty miles in a matter of weeks. The soft sediment that makes up the river bank is constantly eroding, and the river is often full of debris, including floating vegetation islands called matupás, which can measure up to 10 square acres. It’s a civil engineer’s worst nightmare. But the real reason for the lack of bridges is simply this: the Amazon Basin has very few roads for bridges to connect.”
‘They Never Stopped, Ever’: Here Are Some of Your Student Loan Horror Stories
Earlier this week, in the aftermath of the college admissions scandal, I wrote about my own experience with college and student loans. After that post, many of you emailed me and relayed your own heartbreaking and ridiculous stories about student loans, and the shit you’ve put yourself through to pay…
What the Hell Actually Happens to Money You Put in A Flexible Spending Account?
A $9 monthly maintenance fee or $100 in forfeited funds are small, bitter losses on an individual level, but somewhat more ominous when assessed as a whole. One of the few programs the government offers to save Americans money on private health care could ultimately be leaking hundreds of millions of dollars back to their employers, or, in a roundabout way, to the third-party companies paid to approve or deny employee claims…. In trying to figure out how much money is forfeited every year, I was told that the idea of the mass loss of wages was overstated, but I also couldn’t get a reliable ballpark number, even from the government agency whose rules ostensibly determine who gets their money back.
For the people who routinely deal in tax law and human resources claims, this is a common sense benefit, and I was treated with something close to exasperation when I asked why these accounts work the way they do. I was also given very different answers about what happens to forfeited funds by compliance experts and the businesses that administer the accounts…. Consumer complaint boards are full of stories like these, told by people who stash their money in good faith and are then baffled by the hurdles imposed by third-party administrators and the IRS. But the amounts lost are too small to take to proper court, and at least one large third-party administrator requires that disputes must be privately arbitrated….
Mercer’s annual employment survey estimates that people at large companies who have flexible spending accounts and forfeit funds lose as average of $67 a year. They tell me that in 2018, they stopped including numbers for flexible spending accounts, because there’s been little change in the numbers over time. An analysis of data provided by Wageworks, another third-party administrator of these programs, indicates the amount of wages forfeited in these programs may be well over $522 million a year.
Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street.
Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower turned one-woman swat team, the 340-page tome takes the reader along on her gut-wrenching workdays for an entire seven months inside one of the most powerful and corrupted watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank of New York. (The days were literally gut-wrenching. Segarra reports that after months of being alternately gas-lighted and bullied at the New York Fed to whip her into the ranks of the corrupted, she had to go to a gastroenterologist and learned her stomach lining was gone.) She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs, Segarra released the tapes to ProPublica and the radio program This American Life and the story went viral from there.
The book exquisitely confirms, from a Wall Street veteran educated at Harvard, Columbia and Cornell Law, what Wall Street On Parade has been telling our readers for years – the New York Fed is at the core of Wall Street’s corrupt model.
Last Wednesday, the Federal Reserve Board of Governors rushed through a rule change to its stress test for the too-big-to-fail banks on Wall Street, putting it into immediate effect without the customary 30-day delay. It is further noteworthy that the Board did not get the customary unanimous vote to move forward with the rule change: Fed Board Governor Lael Brainard, arguably the smartest member of the Board, voted against the rule change while the four other Governors, including Chairman Jerome Powell, voted in favor.
There is a strong case that can be made that the rushed rule change was to protect the biggest banks on Wall Street – the ones serially charged with crimes around the globe – while putting the public at risk of another epic financial collapse….
The third thing you need to know is that the Wall Street mega banks are reporting some eye-popping criminal investigations of their activities, both here and abroad, in their 10-K filings with the Securities and Exchange Commission. According to JPMorgan Chase’s 10-K, the U.S. Justice Department’s Criminal Division is “conducting investigations relating to trading practices in the precious metals markets and related conduct. The Firm is responding to and cooperating with these investigations.” Another criminal charge would be highly problematic for JPMorgan Chase as it has already pleaded guilty to three criminal felonies: two in 2014 related to the Bernie Madoff Ponzi scheme and one in 2015 related to the rigging of foreign exchange trading. It reports in its current 10-K that it is under probation in the foreign exchange matter until January 2020…. For Citigroup’s past history in money laundering, see here.
And, of course, there is Goldman Sachs – the firm for whom, according to Segarra, the New York Fed ran a protection racket. In December, Malaysia filed criminal charges against Goldman in relation to sweeping investigations of a Malaysia investment development fund known as 1MDB. On November 1 the U.S. Department of Justice brought criminal indictments against former bankers at Goldman Sachs on charges of money laundering and bribery, also related to the 1MDB matter.
In summary, what we continue to tolerate in the United States are out-of-control casino banks on Wall Street holding trillions of dollars in Federally-insured U.S. deposits – thus making them too-big-to-fail and perpetually dependent on a taxpayer bailout – while crony regulators find every excuse to cut them slack and look the other way.
Long Read: How Secretive Tax Havens are Used to Steal Your Money
….since 1983, trillions and trillions of dollars of tax have been illegally and secretly evaded as wealthy individuals and corporations, criminals and crime syndicates, international organizations and governments channel their incomes and profits through tax havens. Laws and legal systems throughout the world make this possible and, provided it is done correctly, it is quite straightforward to avoid any penalties for secretly evading payment of taxes or hiding money acquired through criminal activity. But the point, as you can see, is that tax evasion by wealthy individuals and corporations meant that many of these individuals and corporations didn’t pay taxes to kill people either. They just didn’t pay taxes at all.
Steve Cox
✔@RealSteveCox
Imagine if you had $1000 in your pocket and someone told you, “We can fix Flint, Michigan’s water immediately for a total of $65.”
Would you give them the $65?
Now, change $1000 to $1 Billion, and $65 to $65 Million.
Exact same thing.
All these billionaires, yet no solutions.
Steve Cox
✔@RealSteveCox
$1 Billion is 1000 million. It will cost about $65 million to fix Flint’s water supply.
Jeff Bezos is worth 140,000 million dollars. He has a million dollars 140,000 times. He does nothing but hoard it.
Imagine having $140,000 and it’s only $65 to fix Flint’s water…
Organized Labor
The Donald Trump administration is proposing a new overtime regulation that would protect at least 2.8 million fewer workers than the overtime regulation proposed by the Barack Obama administration in 2016.
The AFL-CIO and other overtime advocates had urged the Trump administration to implement the Obama administration’s overtime rule and defend it against a court challenge by business trade associations and Republican state governments, but the Trump administration has refused to do so.
The 2016 Obama administration’s proposal would raise the overtime threshold from $23,660 to $47,476. However, because the Obama rule provided for automatic updates of the threshold to keep overtime protections from being eroded by inflation, the threshold under the Obama rule would be $51,064 today and $55,000 in 2022.
By contrast, the Trump administration’s proposal sets the overtime threshold at $35,308 and does not provide for automatic updates. By the administration’s own estimates, 2.8 million fewer workers would be newly eligible for overtime in the first year of the new rule.
Economic News
[Washington Post 3-12-19]
See how each agency’s discretionary funding would be affected by Trump’s proposal.
Now is a good time to get serious about anti-interventionism
[Antiwar, via John Claydon]
“President Trump has unveiled a budget plan which, in addition to cutting social spending across the board [including a 10 percent cut in Medicare], would seek a huge increase in military spending, centered almost entirely on war funding.”
Dismantling oligarchy’s first line of defense
Anand Giridharadas
✔@AnandWrites
The college bribery scam is not a college bribery scam. It is a master class in how America — governed by a cheater, ruled by rule breakers, managed by a class that confuses its privilege for merit — functions.VICE
✔@VICE
The college bribery scam reveals how rich people use ‘charity’ to cheat. https://bit.ly/2VSYd11
The ‘Hidden Mechanisms’ That Help Those Born Rich to Excel in Elite Jobs
The result of this research is Laurison and Friedman’s new book, The Class Ceiling: Why It Pays to Be Privileged, which shows how the customs of elite workplaces can favor those who grew up wealthier. The authors describe a series of “hidden mechanisms”—such as unwritten codes of office behavior and informal systems of professional advancement—that benefit the already affluent while disadvantaging those with working-class backgrounds.
A belief in meritocracy is not only false: it’s bad for you
[Aeon, via Naked Capitalism 3-11-19]
In addition to being false, a growing body of research in psychology and neuroscience suggests that believing in meritocracy makes people more selfish, less self-critical and even more prone to acting in discriminatory ways. Meritocracy is not only wrong; it’s bad….
Perhaps more disturbing, simply holding meritocracy as a value seems to promote discriminatory behaviour. The management scholar Emilio Castilla at the Massachusetts Institute of Technology and the sociologist Stephen Benard at Indiana University studied attempts to implement meritocratic practices, such as performance-based compensation in private companies. They found that, in companies that explicitly held meritocracy as a core value, managers assigned greater rewards to male employees over female employees with identical performance evaluations. This preference disappeared where meritocracy was not explicitly adopted as a value.
Climate and environmental crises
The Other Kind of Climate Denialism
[The New Yorker, via Naked Capitalism 3-11-19]
In 2008 and 2009, the American Psychological Association put together a task force to examine the relationship between psychology and climate change. It found that, although people said that climate change was important, they did not “feel a sense of urgency.” The task force identified several mental barriers that contributed to this blasé stance. People were uncertain about climate change, mistrustful of the science, or denied that it was related to human activity. They tended to minimize the risks and believe that there was plenty of time to make changes before the real impacts were felt. Just ten years later, these attitudes about climate feel like ancient relics. But two key factors, which the task force identified as keeping people from taking action, have stood the test of time: one was habit, and the other was lack of control. “Ingrained behaviors are extremely resistant to permanent change,” the group stated. “People believe their actions would be too small to make a difference and choose to do nothing.”
Wallace-Wells hits this note in his book, too, writing, “We seem most comfortable adopting a learned posture of powerlessness.” As uncertainty and denial about climate have diminished, they have been replaced by similarly paralyzing feelings of panic, anxiety, and resignation. As we begin to live through the massive dangers imparted by climate change, as one psychologist put it to me, “We are in psychological terrain, whether we like it or not.”John Fraser is a conservation psychologist who has studied burnout and trauma among people doing environmental work. “We have to move beyond terrorizing people with disaster stories,” he told me….
Salamon hosts periodic phone sessions in which callers can dial in to discuss their feelings about climate change and climate activism. All sorts of emotions have come up on these calls: guilt and shame, grief, panic, helplessness, even “destructive glee” from people who are angry that their warnings haven’t been heeded. Salamon stresses the importance of processing climate change as an emotional and personal phenomenon, not just a scientific one. Everyone, she said, needs to grieve for his or her own future, which isn’t going to look the way we thought. It’s going to be more parched, more crowded, more dangerous, and more austere.
“In about 1,700 cities in more than 100 countries — from Nepal to Vanuatu — thousands of young people are planning to walk out of schools to demand that adults do more to combat climate change… The day is set to be the biggest moment yet for a grassroots movement that has developed into a global phenomenon in only a few months. Most protestors — including Nakate — have been inspired by Swedish teen Greta Thunberg, who kick-started the movement when she began regularly walking out of classes in August 2018 to sit outside the Swedish parliament in Stockholm with a sign reading ‘school strike for climate’… ‘You say you love your children above all else, and yet you are stealing their future in front of their very eyes,’ [Thunberg] said in a speech at the 2018 United Nations climate conference in Katowice, Poland.”
“GOP lawmaker: Green New Deal is like genocide”
[Axios, via Naked Capitalism 3-15-19]
“Rep. Rob Bishop (R-Utah) said the ideas behind the progressive policy are ‘tantamount to genocide. That may be an overstatement but not by a whole lot,’ Bishop said at a press conference Thursday morning on Capitol Hill.”
G.O.P. Congressman: Green New Deal Is Basically Ethnic Cleansing
[Vanity Fair, via Naked Capitalism 3-16-19]
Kansas City Will Make Its Government 100 Percent Carbon-Free by Next Year
[Inhabitat, via Naked Capitalism 3-11-19]
Wetland carbon storage controlled by millennial-scale variation in relative sea-level rise
“Coastal wetlands (mangrove, tidal marsh and seagrass) sustain the highest rates of carbon sequestration per unit area of all natural systems, primarily because of their comparatively high productivity and preservation of organic carbon within sedimentary substrates. Climate change and associated relative sea-level rise (RSLR) have been proposed to increase the rate of organic-carbon burial in coastal wetlands in the first half of the twenty-first century, but these carbon–climate feedback effects have been modelled to diminish over time as wetlands are increasingly submerged and carbon stores become compromised by erosion. Here we show that tidal marshes on coastlines that experienced rapid RSLR over the past few millennia (in the late Holocene, from about 4,200 years ago to the present) have on average 1.7 to 3.7 times higher soil carbon concentrations within 20 centimetres of the surface than those subject to a long period of sea-level stability.”
A New Paradigm for Plastics
March 6, 2019 [Project Syndicate, via The Big Picture 3-11-19]
By focusing environmental and public-health debates on the issue of waste-management, plastics producers have managed to conceal the elephant in the room. But governments and consumers can no longer ignore the fact that plastic is a problem at all stages of its life cycle – not just after it ends up in the ocean….
The US plastics industry alone plans to boost production by 30% in the next few years.
Though the public associates plastic with life-saving wonder materials, an estimated 40% of global plastic production is for single-use packaging. By design, it is used temporarily for transport and storage, and then simply thrown away. As a result, nearly 80% of all the plastic ever produced has ended up either in a landfill or loose in the natural environment, despite years of industry messaging to encourage recycling. Not only do we lack the recycling capacity to manage the plastic already in circulation; recent innovations in recycling appear to be causing further damage to the environment and public health, through air pollution, toxic ash, and other externalities.
Clean energy jobs grew in nearly every US state in 2018, marking an increase of 3.6% or about 110,000 roles and bringing the nation’s total clean energy employment to 3.26 million, says Environmental Entrepreneurs. Texas has more clean energy jobs than any other state, with 233,000 people working in wind and other fields.
Analysis: 100% zero-carbon goals are gaining momentum nationwide
[Bloomberg BNA (free content), via American Wind Energy Association 3-15-19]
California and Hawaii are already on the path to 100% carbon-free generation, and similar measures are underway in New Mexico, New Jersey, New York and Washington state, writes Bobby Magill, noting all of the states’ Democratic leadership. Republican-led states have yet to propose such initiatives, says Natural Resources Defense Council Senior Attorney Noah Long.
[Reuters, via American Wind Energy Association 3-15-19]
Equinor wants to invest in renewables but is struggling to find projects, said CEO Eldar Saetre at the CERAWeek by IHS Markit conference in Houston. Governments worldwide must do more to create opportunities for projects to advance, he says.
Wind accounted for 21% of new generating capacity in 2018, Energy Dept. says
[Houston Chronicle (tiered subscription model), via American Wind Energy Association 3-13-19]
The US added 31.3 gigawatts of new generating capacity in 2018, with 21% of that total coming from wind, says the Energy Department. The US retired 18.7 GW of total capacity in 2018.
[Recharge (tiered subscription model), via American Wind Energy Association 3-13-19]
Clearway Energy’s 946-megawatt Alta Wind project in California is the largest of its kind in the US, followed by the Duke Energy’s 912-MW Los Vientos in Texas and the 845-MW Shepherds Flat site from Caithness Energy in Oregon, according to this analysis. The American Wind Energy Association says the average wind farm in the US has a capacity of 200 MW.
[Houston Chronicle (tiered subscription model), via American Wind Energy Association 3-13-19]
The cost for new wind and solar projects is falling faster than the energy industry anticipated, said Royal Dutch Shell New Energy Director and Director of Integrated Gas Maarten Wetselaar at IHS Markit’s CERAWeek. The Energy Department says the US sourced 17% of its energy needs from renewables in 2017.
Gov. Cooper wants $300K to study North Carolina offshore wind supply chain
[Energy News Network, via American Wind Energy Association 3-12-19]
North Carolina Gov. Roy Cooper’s budget proposal would set aside $300,000 to study the state’s potential to build a supply chain for offshore wind development. “The supply chain study will shed light on the best approaches for our state’s existing network of suppliers and for our skilled manufacturing workforce,” said the state Department of Commerce.
[Bloomberg, via The Big Picture 3-10-19]
After one too many snowstorms, Boston tech executive Larry Kim had had it with shoveling out his car and struggling to find parking. So in 2014 he ditched his Infiniti luxury sedan and began commuting by Uber and Lyft—at an annual cost of as much as $20,000. “I would never go back to owning a car,” says Kim, chief executive officer of MobileMonkey Inc., a Facebook Messenger marketing platform, who says he’s recovered an hour a day by not driving. “Your time is not free, right? Your time is worth more than $20 an hour. So in my case, why not spend $15,000 to $20,000 a year to get all of that time saved?”
The automobile—once both a badge of success and the most convenient conveyance between points A and B—is falling out of favor in cities around the world as ride-hailing and other new transportation options proliferate and concerns over gridlock and pollution spark a reevaluation of privately owned wheels. Auto sales in the U.S., after four record or near-record years, are declining this year, and analysts say they may never again reach those heights. Worldwide, residents are migrating to megacities—expected to be home to two-thirds of the global population by midcentury—where an automobile can be an expensive inconvenience. Young people continue to turn away from cars, with only 26 percent of U.S. 16-year-olds earning a driver’s license in 2017, a rite of passage that almost half that cohort would have obtained just 36 years ago, according to Sivak Applied Research….
A decade ago the auto industry predicted annual global vehicle sales would top 100 million by now, but they’ve stalled instead, falling to 94.2 million last year, down 1 million from 2017. Researcher IHS Markit predicts the 100 million vehicle milestone will be surpassed in the next decade, but only because of growth in China, India, Russia, and other emerging markets.
[Phys.org, via Naked Capitalism 3-11-19]
No patient left behind
I read 1,182 emergency room bills this year. Here’s what I learned.
[Vox, via Naked Capitalism 3-14-19]
Before I started reporting this project, I knew from my decade as a health care reporter that America has sky-high medical prices. But what I didn’t know was that patients can face steep bills even if they don’t see a doctor or have their ailment treated. They can decline treatment and still end up with a hefty fee.
I learned about this from a bill sent to me by Jessica Pell. She told me about going to an emergency room in New Jersey after she fell and cut her ear. She was given an ice pack but no other treatment. She never received a diagnosis. But she did get a bill for $5,751.
Barry Ritholtz [The Big Picture 3-14-19]
The recipe for the longest life? “married happy-go-lucky oydoors-loving sex-mad hippy party-girl in senior management with a cat.”
When technostructures fail…
A second 737 Max crash raises questions about airplane automation
HN thread with excerpts of pilot complaints about 737 MAX
[Hacker News, via Naked Capitalism 3-13-19]
“The remarkable safety record of commercial airliners is an achievement of bureaucracy rather than technology. Airplanes are not safe because they are made of strong materials, nor because the computers that help fly them are so sophisticated. They are safe because of an elaborate international system of regulation that, with scores of checklists and reams of systematized procedures, makes ‘Safety first’ not a slogan but a reality. That system is now showing signs of strain…. within a day of the crash, 23 airlines had grounded their 737 Max fleets. None of these are American-flagged… This demonstrates a fracturing of technocratic consensus…. Taking things at face value, maybe China is showing an abundance of caution, and the FAA is not jumping to conclusions. But it sure looks as if China is taking the chance to undermine confidence in its global rival, while the US government is doing what it can to protect America’s largest exporter, which is an important source of manufacturing jobs.”
Research: Bridge Asset Management and the Degradation Model
[Railway Age 3-13-19]
Extending the useful service life of aging bridges is a critical issue of national interest. One of the problems faced by the US transportation industry is the degradation of structural components of highway bridges….
For early warnings on structural damage, deterioration before costly maintenance repair, or even before unexpected collapses occur, bridge engineering is equipped with structural health monitoring technologies (Brownjohn, 2007). Probabilistic and statistical concepts for bridge performance prediction are used in the application of bridge health monitoring (BHM). Repair actions are generally used to prevent failures and to maintain or extend the lifetime of deteriorating structures. To establish optimum inspection/repair planning for a structure, the structure’s performance under uncertainty should be assessed and predicted using probabilistic concepts and methods (Frangopol and Tsompanakis, 2014). Current bridge management systems use deterministic, Markov chain, or the semi-Markov process to predict a structure’s future performance and service life (Maguire, 2014). Many states have successfully developed deterioration models for their inventory. The semi-Markov process can be used in load rating-based bridge deterioration modelling for bridge asset management. It is observed that the Weibull-based approach performs better in terms of the observed conditions than the traditionally used Markov chains approach for developing deterioration curves for different bridge elements (Agarwal, Kawaguchi and Chen 2010).
Information Age Dystopia
World Wide Web inventor Tim Berners-Lee on Monday slammed the increasing commodification of personal information and appealed for internet users to strive to maintain “complete control” of their data….
“You should have complete control of your data. It’s not oil. It’s not a commodity,” he told a small group of journalists gathered at Europe’s physics lab CERN, where he first came up with the idea for the web 30 years ago. When it comes to personal data, “you should not be able to sell it for money,” he said, “because it’s a right”.
Berners-Lee, who last year launched a development platform called “Solid” aimed at giving users control of their data, described a frightening future if we do not rise to the challenge of privacy
Tech giants’ free pass means they haven’t innovated in years
“According to estimates by Tommaso Valletti, chief economist at the European Commission’s Directorate-General for Competition, since 2001 Google has acquired over 200 smaller firms, swallowing up one every 18 days in the years since 2010… Some it turned into products: Google Maps and Google Earth, for instance. Many others just disappeared. For Google, both results are wins – either it grows its market share, or it eliminates a potential competitor. At Facebook, Amazon and Apple it’s just the same. Far from innovating themselves, these companies have been buying innovation at a furious rate. Apple’s Siri and Amazon’s Alexa both started life as independent startups, as, famously, did Facebook’s Instagram and WhatsApp…. Silicon Valley firms were thought to possess a special power. Unlike ordinary companies, it was believed, they were innovative. In fact, they were mostly just rich.”
“Amazon is now a large draw from the relatively small talent pool of PhD economists, which in the United States grows by about only 1,000 new graduates every year. Although the definition of “economist” is fuzzy, the discipline is generally understood as the study of how people use resources and respond to incentives. In the past few years, Amazon has hired more than 150 PhD economists, making it probably the largest employer in the field behind institutions like the Federal Reserve, which has hundreds of economists on staff. It was the only company with a recruiting booth at the American Economics Association’s annual conference in January, handing out free pens and logoed stress balls.”
Lambert Strether: “Oddly, or not, mainstream economics works very well for Amazon, and very badly for the rest of us.”
[ars technica, via Naked Capitalism 3-16-19]
World Geopolitics
[South China Morning Post, via Naked Capitalism 3-10-19]
If forced to take sides in the high-stakes geopolitical rivalry and trade war between the United States and China, Malaysian Prime Minister Mahathir Mohamad would prefer the economic largesse of Beijing.
He pointed to the current state of unpredictability of the American superpower as a negative factor when asked about the impact of Sino-American tensions on other, smaller nations in the region…. Mahathir offered a perspective from history: “We always say, we have had China as a neighbour for 2,000 years, we were never conquered by them. But the Europeans came in 1509, in two years, they conquered Malaysia.”
[South China Morning Post, via Naked Capitalism 3-12-19]
Creating new economic potential – science and technology
This is a startling Twitter thread that includes 3 maps of the Moscow passenger rail transit system in 2006, now, and projected 2025, showing an amazing increase in route and service density. As Mark Ames, notes, meanwhile, in New York City, the transit system is circling the drain.
Disrupting mainstream politics
Alexandria Ocasio-Cortez
✔@AOC
I find it revealing when people mock where I came from, & say they’re going to “send me back to waitressing,” as if that is bad or shameful.
It’s as though they think being a member of Congress makes you intrinsically “better” than a waitress.
But our job is to serve, not rule.
“Hillary Clinton Is Still Deeply Confused About What Happened in Wisconsin. Here’s Why That Matters.”
The attempt to analogize the Southern struggle for voting rights with her fate in Wisconsin subordinates some uncomfortable, and likely more relevant, truths — in the service of a narrative offered by an element of the Democratic Party that would prefer to see cheating and illegality, rather than politics and policy, as the causes of its collapse. That narrative glosses over a remarkable, decades long decline in black economic conditions and political disillusionment outside the Southern, black Democratic firewall….
After having had three years to grapple with the realities of a vital Democratic base in the Midwest, it seems Clinton still hasn’t learned her lesson. If this is any indication of the party’s 2020 strategy, it may be handing Trump another victory….
As if corporate managers were all carbon copied on a memo, they plucked their manufacturing facilities from Milwaukee’s urban core and dropped them into foreign countries and Southern states, a trend that accelerated through the 1980s and ’90s. A factory job had meant union labor, including high wages and benefits that disproportionately benefited the city’s black, male population. In 1970, 73 percent of working-age black men in Milwaukee were employed, and half of them worked in manufacturing. By 2010, only 45 percent of working-age black men had a job.
Offshoring directly undermined black labor and killed hopes of economic prosperity that many black families sought after leaving the debt servitude of the South. Today, according to research by sociologist Marc Levine, Milwaukee’s joblessness rate among black men in their prime working years is higher than any major city’s in the country. The median black household income in the state is about half that of whites, the third-highest disparity in the country. Jobs were essentially replaced with prisons, giving Wisconsin the highest black male incarceration rate in the U.S.
In the face of disintegrating economic conditions, some of which could be attributed to the Democratic Party’s own neoliberal strategy, liberal legislators fumbled….
….as Dan Kaufman notes in “The Fall of Wisconsin: The Conservative Conquest of a Progressive Bastion and the Future of American Politics” — Democrats failed to counter the conservatives’ vast political infrastructure with one of their own. Instead of broadly advancing progressive candidates and interests, according to Kaufman, Democratic leaders discouraged grassroots action amid Walker’s attack on collective bargaining, though protestors defied their orders. They also made “a fundamental political calculation to move rightward and support Republican priorities such as welfare reform and school vouchers,” Kaufman wrote in his book. In the face of extreme wealth and income disparities between Wisconsin’s black and white residents, state Democrats have taken the black vote for granted, as Milwaukee community activist Angela Lang told NPR last fall….
In the summer of 2016, less than three months before the general election, frustrations among black residents boiled over in days of unrest after the police killing of Sylville Smith. The spark lit by Smith’s death was all that was needed to engulf some of Milwaukee’s black neighborhoods in flames, already teeming from the pressure of persistent racial inequality.
With voting rights on the brink and a frustrated community over the edge, this was even more reason for Clinton and her team to campaign hard in Wisconsin. They didn’t. And in November 2016, the black voter turnout rate dropped from 79 percent in 2012 to 47 percent, the lowest black voter turnout in the state’s recorded history….
Census data released after the election also provides some insight about national trends of lower black turnout. In a survey of over 2.5 million black nonvoters around the country, an estimated 20 percent of them did not vote because they “did not like candidates or campaign issues.” This comprised the highest share of respondents’ answers. The second-most frequent reason at 19 percent was that they were “not interested.” “Registration problems” and “inconvenient polling place,” comprised a total of 7 percent.
Are Ilhan Omar and Alexandria Ocasio-Cortez Harbingers of the Turning of the Tide
They’re a bit less radical than the seem: Omar, for example, is for the two-state solution in Palestine, but compared to what was allowed to be said; what was allowed to be supported, they are radical.
Meanwhile the Democratic presidential field has as its norm support for Medicare for All, breaking up the big tech monopolies and so on. What it’s possible to talk about and espouse has changed.
On the other side of the ledger, the simple fact is that most of the new Democratic house members who were elected in 2018 are “moderates” and they have also received, overall, better committee assignments than the left-wingers. Nancy Pelosi, who’s in charge of House Democrats, openly mocked the idea of the Green New Deal. The Democratic Party establishment is still run by moderates; and those moderates still respect the right and despise the left….
The Millenials (who are no longer young) are coming of political age. Unlike Gen-X, which was not numerous enough to replace the Boomers wholesale, they will be the new majority in politics. How radical they will be remains to be seen. The trends are optimistic, but Millenials have an authoritarian streak as well as a radical one. Certainly we can expect them to take climate change, for example, more seriously: they will have to live with the results, while the Boomers always knew they’d be dead before it really mattered.
We will know by the end of 2024 approximately how this is going to play out. That’s when the demographic edge will simply require that millenials take over….
So we have cycles: the Democrats get their chance. The Republicans get their chance.
When one of them actually succeeds and makes enough Americans clearly better off in ways that Americans can feel, they’ll lock down politics for the next 30 years or so, in the same way that FDR did and that Reagan and Thatcher did. If they fail, they will simply pass the ball to the other party.
So far Democrats have been fine; more than fine, with just passing the ball back and forth. They liked Republicans, basically agreed with neoliberalism and wealth concentration (why not, Democratic leaders personally benefited) and didn’t want to upset the status quo.
AOC, and in particular Omar, are not ok with the Status Quo. Neither are most of the serious Democratic candidates for President. If they actually govern to change the status quo in a way that is win for a clear voting majority of Americans (and non voters can become voters) then they will be the turning of the tide.
“I don’t have any clue why they are running”: How the Democrats can stop nuking themselves and start obliterating Trump
[Vanity Fair 3-12-19]
The current reigning champs of Twitter, the ones wielding immense power over both the media and Democrats running for president, are the Democratic Socialists of New York City. While their presidential candidate is Sanders, their true leader and beating heart is Ocasio-Cortez, whose charm, media savvy, and masterful articulation of radical ideas have made her the Pied Piper not just of the dyed-in-the-wool socialists, but also of regular people who think she makes sense. Like Sanders, she has helped usher big ideas into the political mainstream, including the Green New Deal and a 70 percent top marginal income tax rate. Other ideas like Medicare-for-All, free college education, and a higher minimum wage have combined to make the idea of socialism sound pretty good to Democrats who would have chafed at the label only a few years ago
How Joe Biden helped spark the Global Financial Crash of 2007-2008
Tony Wikrent [Real Economics 3-14-19]
As a Senator from Delaware, Joe Biden was one of the major promoters of the Bankruptcy Abuse and Consumer Protection Act of 2005 (BACPA)….
I know, I know, you probably have never before heard that the 2005 BACPA bankruptcy reform is really what led to the 2007-2008 Global Financial Crisis. So, don’t take my word for it. Lend an ear to the good folks at the Federal Reserve Bank of New York.
Federal Reserve Bank of New York Staff Reports, “Seismic Effects of the Bankruptcy Reform” Staff Report No. 358, November 2008, Revised February 2009:“We argue that the 2005 bankruptcy abuse reform (BAR) contributed to the surge in subprime foreclosures that followed its passage.”
“Broad voter purges appeared to be the next step in a decade-long campaign to make voting more difficult. Expressing concerns about security, a majority of states have taken steps in recent years that restrict voting in one way or another, including photo identification requirements, cutbacks to early voting and policies designed to make it more difficult for students to vote where they attend college. But something else is happening in response. This year, hundreds of pieces of legislation are up for consideration in more than 30 states that seek to expand voting rights. Already, New York has passed a package of bills that would move the state, long considered one of the least voter-friendly in the nation, into the modern era. All over the country, both ballot measures and legislation are being promoted to make voting and registration easier and closer to universal. It’s not happening everywhere; there’s still a partisan divide on many voting issues. But politicians from both parties, in various states, have come around to the idea that it’s time to make voting easier. Differences in approaches to voting rights aren’t just partisan. They’re also historical and tend to swing like a pendulum.”
How Trump’s Brand of Grievance Politics Roiled a Pennsylvania Campaign
“Here, among Republicans in the northeastern Pennsylvania region that has suffered with the gutting of the steel industry and the ravages of the opioid crisis, Mr. Trump’s language is endlessly repeated…. Over a bowl of stuffed pepper soup, [Frank Scavo Jr.] cited a statistic that is notorious among the group: that nonwhite Americans were expected to outnumber whites in the coming decades.”
I note, first of all, that Nancy Pelosi ruled out impeaching George Bush, so her reluctance to impeach for clear crimes is consistent with her record. I never understood why others thought that Pelosi would be pro-impeachment. The idea that she’s some partisan fighter is contradicted by her record. Pelosi is what she has: She has beliefs, and those beliefs include that the right is respectable and that left are unrealistic losers (as when she dismissed the Green New Deal).
But let’s leave Pelosi aside for a moment. The Democrats have control of the House. They can impeach. They cannot convict in the Senate, but impeachment is certainly possible.
Why would they want to?
Because it would cripple Trump and the Republicans. During the period of the impeachment, Republicans would be able to get virtually nothing done, except by executive fiat.
Disrupting mainstream economics
“To the extent that our eighteenth-century Constitution sets out economic rights at all, they pertain to protecting those with wealth from having it confiscated by the government…. What the Constitution does not forbid, apparently, is the systematic extraction of wealth from certain social groups lacking political power. Interestingly, both Justice Ginsburg and Justice Thomas in his concurrence discuss the practice of wealth extraction from African Americans after the abolition of slavery. Slavery itself, of course, was a massive, nationwide machine for wealth extraction, and a successful one. As Justices Ginsburg and Thomas further point out, the Black Codes passed in the South following the Civil War were an effort to build a similar machine. Using vague, elastic crimes such as “vagrancy” and draconian financial penalties for their commission, planters and state and local governments sought to recapture the fruits of black labor.”
Military Matters
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I’m buying that Carmen Segarra book brand new hardcover off the shelves even though I doubt I’ll be one bit surprised by any of it. In fact, I don’t even enjoy reading non-fiction books much and may never even read it. But I’ll buy it just to support her for being so brave and for doing what was right even though it would have been so much easier on her and obviously more lucrative for her to do wrong. That sort of courage and morality should be supported.
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If I was pewdiepie or whomever, and I had a huge internet presence, I’d start a campaign to crowdfund morality by supporting people like Carmen Segarra, a person who stood up to all that seething Wall Street corruption and did what was right, by buying her book. She also personally paid for it, the Wall Street boyz made sure of that, and also put in a lot of time and effort to educate people about Wall Street. This woman is a hero and exhibited behavior that we should want to incentivize.
Let’s start that right here, right now, and begin in essence a Crowdfunding Morality campaign for Carmen Segarra by encouraging people to support morality, to counter the backdoor bribes offered by Wall Street, the filthy rich, and corporate America, by buying this women’s book. Do something to help change the incentives in the system. Incentivize morality.
I don’t have posting access to nakedcapitalism, but would someone please share this idea on nakedcapitalism and bring it to the attention to Yves, who has an internet presence, and maybe it will blow up from there. And please post this idea on all other similar websites and twitter threads you participate in. With all the stupid, idiotic shit that goes viral these days like slapping a slice of cheese on your baby’s face, it would be great to have something indubitably positive go viral for once. Not only that, it would also put the spotlight on an entity, the New York Fed, that absolutely must be taken down from its current form to have a more moral and just country. They slide money to Wall Street which is used to push markets around per their benefit, and against ours, and disempower and disadvantage us by purchasing properties and cornering markets that we all pay for. It may not be a direct payment, but it is a much more insidious, incalculable, and endless toll we pay to them than simply just paying a set fee. This is an opportunity to fight back. It is an opportunity to shine a light on their filth.
Be Non-Compliant!!! Crowdfund Morality by buying “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street” by Carmen Segarra. Take a picture of yourself with the brand new hardback … preferably from a locally owned bookstore, and not from Bezos-ville … and instagram it or facebook it out and create a trend.
It’s certainly worth a shot to pass this idea on … and on … and on …
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Be Non-Compliant!!! Crowdfund Morality by buying “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street” by Carmen Segarra.
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Don’t just stand by and let Wall Street and the NY Fed incentivize immorality, Be Non-Compliant!!! Crowdfund Morality by buying “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street” by Carmen Segarra.
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Fight back!!! Incentivize Morality!!! Be Non-Compliant!!! Crowdfund Morality by buying “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street” by Carmen Segarra.
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Anthony K Wikrent
Z – I copied and pasted your first two comments and emailed them to Lambert Strether at Naked Capitalism.
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Great! Thank you.
One idea I got to help give it some fuel is to have someone create a twitter feed and have people that bought the book, take a photo of the book (by itself with a picture in the background, or in their hand, with themselves, or whatever, make it an interesting photo, make it anything with the book in it) and post it on the twitter site. “Be Non-Compliant to Wall Street!!!” or title the feed something along those lines. And see where it goes. We don’t know what’s out there.
People should be reading this book to bring light on the filthy NY Fed. It feeds the belly of the ugly beast. The Fed gives fuel, and the NY Fed directs that liquidity or maybe even administers it directly, to an immoral entity, Wall Street, that takes away our jobs by financially incentivizing mergers, job cutbacks, outsourcing jobs and factories, corporate buybacks and such, monopolizes property (like apartments) that forces us to pay higher rents, and makes us put up with this extremely immoral … it has gone way, way, way past amoral … health care system.
The most important thing about Wall Street is this in the end: it incentivizes behavior. It heavily rewards behavior that is against the interests of the vast, vast majority of the American people. The NY Fed feeds that beast. It covers for that beast. It ensures that the markets will continue to work in the powerful’s favor.
The NY Fed absolutely has to be taken down from its current form in order for labor, aka the vast majority of the country, to gain more power over their lives. The NY Fed helps rig markets. They fund and cover for Wall Street’s illegalities that multiply the wealth of our already wealthy which comes at our ultimate cost because our wealthy gain power in that transaction, at our expense.
It is what feeds the belly of the ugly beast that is Wall Street.
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Another aspect of this is that this is a woman that got bullied around by the Wall Street, basically. Miss, you either play within our system and do what is NOT in the citizenry’s best interests or we’re going to fire you. That’s basically what happened. Missy, you got to learn how the game that we control works … and support it … or else we’ll wield our power on you.
And they made that woman pay.
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If we don’t promote this book organically, people aren’t going to read it. It’s not going to get any kind of sustained promotion from our media. We know that.
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This is a woman that really should be heard from by as many people as possible. This woman was right in the middle of that filth between Wall Street and their funder, the NY Fed, who apparently like a submissive bartender goes around Wall Street asking, “Got enough liquidity today boys? Shall I fill your cup again? Anything you need?”, serving them every morning before the trading day starts.
And she’s laying it out there for people to see: here it is people, this is the engine that truly controls this country, this is what goes on there. This is what you are up against.
It is a unique insight into that. Look at the incentives to play the game. Look at the punishment if you don’t. Not many come out of that without being corrupted and then write a book about it!!! Nobody does. Except her. Nowhere else will you get this insight.
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If you don’t change the incentive structure, and leave it as horribly unbalanced as it is, you’re never going to change the system.
That by itself is a good enough reason to hand over $30 for a book that she is going to financially benefit from.
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The media rarely, if ever, goes into anything the NY Fed does. There’s never sustained coverage, if any at all. If so, there’s no follow-up, no true no holds barred investigative reporting.
If this woman gets enough attention, the NY Fed can’t be ignored anymore. The media at some point has to react to it. She also seems comfortable with and willing to tell her story.
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This woman should be in the government. Look at the integrity she has and she’s obviously extremely intelligent. This is a person who has shown that she is suited for true public service. You know who she is. You know she can be trusted.
They ran her out.
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Not only that, she got the tapes to back enough of it up.
This is an extremely brave person.
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She had to realize at some level that the risks were beyond just being fired and being called bad names.
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Adam Eran
FYI, “Non compliant” is available from my library now in electronic form. No waiting.
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To tell you the truth, I think it’s best that people go out and buy the physical book.
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Take a photo of some sort with the book and put it on a common twitter feed. Watch the numbers pile up of people who understand how these people tilt the system against us. And who they are and how they operate.
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A movement like that: people physically buying the book and taking a photo of it and posting it on a common twitter feed.
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Here Missy, we’re not giving you any power, but we’ll let you have a nice, comfortable perch though, as long as you play the game and gaze the other way.
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And Warren, by the way, hasn’t been bashful in her criticism of the NY Fed. At least not in Congress. She knows on some level that they’re involved in rigging the game against us. That they support an immoral power structure.
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Hugh
The Segarra story reminded me of the Gary Aguirre affair (2005) There’s a wiki. He was a beginning investigator at the SEC looking into an insider trading case. He thought John Mack, Chairman and CEO of Morgan Stanley was involved and he wanted to depose him. Enter Mary Jo White, a high powered corporate attorney with connections. She got Aguirre fired. You may remember Mary Jo White. Obama named her to head the SEC, which she did for four years (2013-2017).
The college bribery scandal is an elite on elite affair. Nobody from the poor or middle class was affected. They had been already shut out of these schools. I mean both Trump and his kids Ivanka and Don, Jr. got into the Ivy UPenn on connections and money and not even the pretense of merit.
It reminds me of this passage from Reinhold Niebuhr Moral Man and Immoral Society (1932):
“The moral attitudes of dominant and privileged groups are characterised by universal self-deception and hypocrisy. The unconscious and conscious identification of their special interests with general interests and universal values, which we have noted in analysing national atti-
tudes, is equally obvious in the attitude of classes. The reason why privileged classes are more hypocritical than underprivileged ones is that special privilege can be defended in terms of the rational ideal of equal justice only, by proving that it contributes something to their good of the whole. Since inequalities of privilege are; greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold.
The most common form of hypocrisy among the privileged classes is to assume that their privileges are the just payments with which society rewards specially useful or meritorious functions.”
Meritocracy is a con. Shorter form, the rich and the elites tell us, “We have merit and deserve our wealth, power, and privilege, and you rubes don’t.”
Re innovation, I think Microsoft established the paradigm. As soon as it had a certain market share, it began acting like a monopoly and suppressing innovation that could challenge that monopoly. It didn’t try to stay ahead of the curve. It tried to do away with it.
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A movement like that: people physically buying the book and taking a photo of it and posting it on a common twitter feed. Not some electronic form of it.
You buy the physical book so you know that some of the money goes to who deserves it.
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The NY Fed basically made her pay for representing us, for truly being a public servant and looking after the public’s interests. I’m sure there’s no one offering her a million dollar cushy seat right now in some think tank for doing that. No big financial demand to have her ideas heard. No 6-figure keynote speaking engagements cluttering her calendar.
She’s paid a price, they made sure of that, because that’s the rules of the game: they offer a juicy carrot, and they enforce it with a vicious stick.
You buy the book to help cover her loss in her fight against Wall Street.
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And note that she also got the hook for regulating Goldman Sachs … Government Sachs to some … no surprise there. In fact Dudley, the NY Fed head, used to work for them.
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You buy her book because in some small way, you’re letting her know that we know you did for us and we got your back.
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