Week-end Wrap – Political Economy – May 16, 2021

by Tony Wikrent

Strategic Political Economy

Insider view: the tragedy of the US Deep State

Pepe Escobar [Strategic Culture Foundation, via Mike Norman Economics 5-12-2021]

“Now, Kissinger reflects the Deep State angst on the Russia-Chinese relationship and wants this split up for dear life. This is interestingly covered here by Kissinger. He does not want to tell the truth about balance of power realities. He describes them as “our values”, when the U.S. has no values left but anarchy, looting, and burning down hundreds of cities. Biden hopes to buy all these disenfranchised masses as money printing goes wild.

“So we are back to Kissinger shocked at the new Russian-Chinese alliance. They must be separated.

“Now, I do not agree with the balance of power intriguers in that morality or noble values should govern international relations, and not power. The U.S. has been following balance of power dreams since 1900 and now it faces economic ruin. These ideas do not work.  There is no reason the U.S. cannot be a friend of Russia and China and the differences can be worked out. But you cannot get to first base as balance of power considerations dominate everything. That is the tragedy of our time.”

Tech-Tonic Shift in Sino-Russian Cooperation

[BRICS – Joint Site of Ministries of Foreign Affairs of BRICS Member States, via Mike Norman Economics 5-13-2021]

Russia-China engagement in the military-technical field has ‘strategic importance’ for both parties, with bilateral cooperation on the upswing since 2010. This has gained momentum in the aftermath of the 2014 Ukrainian crisis, with Russia shedding its earlier reluctance to sell latest technology to China, signing deals for supply of Su-35 fighter jets and the S-400 missile defence system. The two sides are also engaged in joint projects, and Russia has agreed to help China develop its ballistic missile early-warning system. In fact, the latter development has been interpreted as a sign of increasing closeness between the two countries, which while not an alliance, does signal deepening engagement.

Mark Blyth – Trailer Age of Economics

We need to break the “folk models” of how people, and especially policy makers, think about economic issues.

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Neoliberalism requires a police state

Chris Hedges on Trauma to Transformation

Chris Hedges on the Ruling Class’ Revenge Against Julian Assange

[Scheerpost, via Naked Capitalism 5-9-2021]

The Biden Transition and the Fight for Real Hope and Change This Time

Why Joe Biden Punched Big Pharma in the Nose Over Covid Vaccines

Matt Stoller, BIG, via Naked Capitalism 5-10-2021]

“The people in charge of money and guns took the progressive position, because the progressive position was a way to counter Russian and Chinese vaccine diplomacy, and to keep the economy free from a renewed pandemic threat.” So where’s the PR campaign from the Biden administration? From this humble blogger’s perspective, the vaccine waiver story is yet another story that vanished as soon as Biden said he’d do something about it.

Biden Defies Pharma Plan To Never Wipe Out Covid So They Can Profit Forever

Ian Welsh, May 10. 2021

Class war and economic disequilibrium

It’s not a ‘labor shortage.’ It’s a great reassessment of work in America.

WaPo, via Naked Capitalism 5-9-2021]

“‘The problem is we are not making enough money to make it worth it to go back to these jobs that are difficult and dirty and usually thankless. You’re getting yelled at and disrespected all day. It’s hell,’ said Sara, who is 31. She added that with two young kids, finding child care has also been a huge issue lately. The couple have decided to sell their suburban Detroit home and buy a camper van to travel the country. They hope to home-school their kids and spend more time as a family.”

The Business Class Has Been Fearmongering About Worker Shortages for Centuries

[The Intercept, via Naked Capitalism 5-9-2021]

The Resurrection Of Reagan’s “Welfare Queen”

Andrew Perez and David Sirota, May 14, 2021 [Daily Poster]

With other GOP senators, millionaire pundits, and millionaire lobbyists echoing this narrative, the idea of the welfare queen has been reincarnated and willed into an unquestioned notion, to the point where GOP governors are now moving to cut off federal unemployment benefits to hundreds of thousands of Americans in the name of rescuing families, communities, and the American economy.

Just as it was forty years ago, the storyline is unsubstantiated bullshit. But it’s bullshit tied to a specific corporate agenda that the millionaires on your cable TV news won’t admit. The GOP goal is not to rescue communities or raise standards of living, but to instead use welfare-to-work demagoguery to recreate the Reagan record of skyrocketing business profits, boosted by subpar wages for workers. And this time around, that means Republican politicians forcing people out of their houses and into low-paying, risky jobs in which those same GOP officials have passed laws shielding employers from legal consequences if their cost-cutting business practices expose people to COVID-19.

Debt Collectors Spending Big To Block A Crackdown

David Sirota, May 13, 2021 [Daily Poster]

Two months ago, debt collectors won a victory when congressional lawmakers allowed stimulus checks to be garnished by creditors and government agencies. Now, as the credit industry hits a jackpot during the pandemic, the leading lobby group for debt collectors has more than tripled the amount of cash it funnels to lawmakers as it campaigns to block upcoming Democratic legislation to protect millions of Americans from the repo man.

At issue is a package of bills designed to restrict the $13 billion debt collection industry, as new Federal Reserve and Census Bureau reports show consumer and medical debt has skyrocketed during the pandemic.

One measure would prohibit the collection of medical debt for the first two years after a medical payment is due. Another would discharge student debt in the event of a debtor’s death. Other provisions aim to block lenders from forcing debtors to sign away their legal rights; outlaw threats of demotion that debt collectors reportedly aim at members of the military; and subject government-contracted debt collectors to the same restrictions as consumer debt collectors.

“In the midst of the pandemic crisis, predatory debt collectors have made record profits while continuing with their abusive, harassing tactics while consumers struggle to make ends meet through no fault of their own,” said Democratic Rep. Maxine Waters, who led the successful effort to pass the bill through the House Financial Services Committee last month over the objections of GOP lawmakers….

While ramping up its efforts to try to block the legislation, ACA has spent $136,000 on lobbying lawmakers and its political action committee has made more than $72,000 in campaign donations in the first three months of 2021, according to federal records reviewed by The Daily Poster. That includes almost $60,000 — or roughly $2,000 a day — in the month of April alone, as the legislation was being negotiated.

The campaign cash represents a nearly four-fold increase in donations from the group compared to the first three months of 2019, during the start of the last election cycle.

Among the recipients are Sens. Joe Manchin and Kyrsten Sinema, both conservative Democrats, as well as the National Republican Senatorial Campaign Committee, which bankrolls GOP senators’ election bids.

Restoring balance to the economy

[Twitter, via Naked Capitalism Water Cooler 5-10-21]

Fighting the Big Grocery Monopoly

[Washington Monthly, via Naked Capitalism 5-14-2021]

They’re not capitalists – they’re a criminal predatory class

How America Became the Money Laundering Capital of the World

[The New Republic, via Mike Norman Economics 5-10-2021]

Experts and former prosecutors say that such fines have essentially become the cost of doing business, and that America’s entire approach to money laundering needs radical rethinking.… “The threat of a prison sentence is much more persuasive than the threat of a large money penalty,” Jim Richards, a former anti–money laundering director at Wells Fargo and other big banks who now runs Regtech Consulting, told me. “It’s pretty simple: Anything that can be fixed with money isn’t a problem to a large bank, it’s simply an expense.”

Uber used 50 Dutch shell companies to dodge taxes on nearly $6 billion in revenue, report says

[Business Insider, via Naked Capitalism 5-13-2021]

Uber has been using a complex tax shelter involving around 50 Dutch shell companies to reduce its global tax bill, according to recent research from the Center for International Corporate Tax Accountability and Research.

In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes — in reality, it brought in $5.8 billion in operating revenue, according to CICTAR, an Australia-based research group.

Tax cheating and even tax avoidance are anathema in a properly functioning republic. A century ago, large American companies such as the Pennsylvania Railroad actually boasted in advertisements that they paid more taxes and higher wages than other companies. I decided to look up the CEO of Uber, Dara Khosrowshahi, and see if there was anything in his background that could explain the antisocial pathology of his company. Hooo boy! Jackpot! According to Wikipedia:

“In 1991, Khosrowshahi joined Allen & Company, an investment bank, as an analyst.^[4] In 1998, he left Allen & Company to work for one of his former clients at the bank, Barry Diller, first at Diller’s USA Networks, where he held the positions of senior vice president for strategic planning and then president, and later as chief financial officer of IAC, another company controlled by Diller.”

When Rupert Murdoch founded Fox TV, he did it with Diller as his CEO. Prior to that, Diller had been CEO of Paramount Pictures — then part of the Gulf & Western multinational conglomerate that was one of the first “legitimate” fronts for organized crime money in the 1960s. So, when Hollywood doge Lew Wasserman died in 2002, it was Diller who organized the memorial service. In his biography of Wasserman in New York Review of books a year later, Larry McMurtry nimbly and gingerly shied away from mentioning Wasserman’s ties to organized crime, but the title said more than enough: “The Don of Dons.” Wasserman’s beginning in the entertainment industry was traced by investigative reporter Gus Russo to the Moe Dalitz mob in Cleveland. Wasserman’s friend and partner, Jules Stein, was affiliated with Al Capone in Chicago. Stein’s and Wasserman’s Music Corporation of America (MCA) had a monopoly on juke boxes, that was enforced by the Cleveland and Chicago mobs, who then used MCA to establish themselves in Hollywood. In 1952, MCA was granted a waiver by the Screen Actors Guild to produce as many television shows as MCA wanted. The waiver was granted by the SGA president who had been basically installed by Wasserman, and whose name was Ronald Reagan. MCA was repeatedly investigated by anti-trust invetigators, but somehow every investigation was called off before getting near prosecution. In 1980, MCA’s problem of repeatedly violating anti-trust law was solved when Reagan become President of USA, and all government anti-trust activity was entirely shut down. 

There are no direct connections from Dalitz and Capone to Dara Khosrowshahi and his mentor Barry Diller. Neither Khosrowshahi or Diller have ever walked into a tavern or restaurant and busted the joint up to shake down the owner for monthly vig. The point is to examine the philosophy of management you might expect to find in a business headed by someone who lauded and idolized Lew Wasserman, who achieved success with a world view molded by gangsters and murderers. What view of workers, wages, and unions would you expect such a business to have? What view of social obligations and community responsibility? What view of the principle of civic virtue that is supposed to be the bedrock of a republic? 

Are there laws that can be written and enforced that would prohibit what Khosrowshahi or Diller do? Probably, but the real safeguard against the “criminal capitalist” mindset of a Khosrowshahi or Diller is the civic republican insistence that all economic activity must comport to society’s moral norms AND serve to promote the General Welfare. It is, and always will be, a blurred and ambiguous line in the sand, but it must be drawn. But if a society’s highest moral aspiration for its economic activity is only to achieve the highest possible rate of return on investment, then that line will never be drawn, and no one will ever be measured against it. 

As for Murdoch — well, he is a British subject, and as such, was never schooled in or supportive of civic republican ideals of self-government. He should therefore have never been allowed to establish himself as an owner of news media in USA. His control of news media should be regarded with as much suspicion and hostility as most people today regard news media controlled by the Russians or Chinese. 

[Twitter, via Naked Capitalism Water Cooler 5-14-20]

To introduce the short video below, I will note that Diller has previously served on the board of The New York Times Company.

Uber, Lyft want more public subsidies to meet California EV mandates

[Reuters, via Naked Capitalism 5-13-2021]

Corey Husak [WCEG — The Equitablog, via Mike Norman Economics 5-15-2021]

Tens of millions of Americans will duly pay the taxes they owe and file for their refunds by Tax Day in 2021, which was delayed until May 17. Meanwhile, some of the wealthiest Americans will engage in complicated tax evasion schemes that will cost the U.S. government $700 billion this year, according to U.S. Treasury Secretary Janet Yellen.

Tax evasion has reached such heights that the Biden administration is proposing bold measures to crack down on rich tax cheats. And academic research is leading the way in exposing the schemes and frauds that the rich use to evade taxes and how to close the so-called tax gap.

The tax gap is the difference between what taxpayers owe to the IRS and what is actually paid. Because unreported or hidden income cannot be directly observed, academic research is key in documenting the sources and size of the tax gap. For instance, Natasha Sarin, now at the U.S. Department of the Treasury, and Larry Summers at the Harvard Kennedy School of Government corroborate Secretary Yellen’s assertion that the tax gap is about $700 billion this year and outline many steps to close it.

This issue brief examines the following factors that help determine the size of the tax gap:

California’s Taxes: The Only Ones Suited for the 21st Century
Harold Meyerson, May 11, 2021 [The American Prospect]

For decades, the right has been complaining that California’s taxes are too high. What they actually mean is too progressive, as the top rates now hover around 13 percent of personal income….

Undaunted, California has continued to levy the most progressive taxes of any state, and in the past two days, we’ve seen the results. This year, the state boasts an astounding budget surplus of $75.7 billion. California’s high-tech rich have seen their stocks rise so dizzyingly this year that the state’s capital gains and income taxes have yielded a bonanza, funded very disproportionately by what is still a sliver of the wealthy’s new wealth.

And what will the state do with all that funding? According to Gov. Gavin Newsom’s newly revised budget, it will, should the Democratic-controlled legislature pass it (which is likely), devote at least $5 billion to erasing many tenants’ unpaid back rent, devote another $12 billion to constructing affordable housing largely intended for the homeless, pour an even more generous share of the bounty into the coffers of public schools, and provide $600 tax rebates to Californians with incomes of less than $75,000, including those Californians too poor to have paid taxes at all last year.

That’s for starters.

Heather Cox Richardson, May 14, 2021 [Letters from an American]

….leaders of the current Republican Party are willing to abandon democracy in order to save the country from what they call “socialism.”

But what Republicans mean when they say “socialism” is not the political system most countries recognize when they use that word: one in which the people, through their government, own the means of production. What Republicans mean comes from America’s peculiar history after the Civil War, when new national taxation coincided with the expansion of voting to include Black men.

In the years just after the firing stopped, white southerners who hated the idea that Black men could use the vote to protect themselves terrorized their Black neighbors. Pretending to be the ghosts of dead Confederate soldiers, they dressed in white robes with hoods to cover their faces and warned formerly enslaved people not to show up at the polls. But in 1870, Congress created the Department of Justice, and President U.S. Grant’s attorney general set out to destroy the Ku Klux Klan.

In 1871, southern leaders changed their tactics. The same men who had vowed that Black people would never be equal to whites began to say that their objection to Black voting was not based on race. No, they said, their objection was that Black people were poor and uneducated and would elect lawmakers who promised to give them things—hospitals, and roads, and schools—that could be paid for only through tax levies on people with property: white men. In this formulation, voting was not a means to ensuring equality; it was a redistribution of wealth from hardworking white men to African Americans who wanted a handout. Black voting meant “socialism,” and it would destroy America.

With this argument, northerners who had fought alongside Black colleagues and insisted they must be equal before the law on racial grounds were willing to see Black men kept from the polls. Black voting, which northerners had recognized as key to African Americans being able to protect their interests—and, for that matter, to defend the national government from the former Confederates who still wanted to destroy it—slowed. And then it stopped.

The South became a one-party state ruled by a small elite class, defined by white supremacy, and mired in poverty. For its part, the North also turned on workers, undermining the labor movement and focusing on protecting the new industrial factories whose owners claimed they were the ones driving the economy.

Inside Pictet, the Secretive Swiss Bank for the World’s Richest People

[Bloomberg, via Naked Capitalism 5-11-2021]

“The Truth Turns Out to Be Ugly”: How Paul, Weiss Tried to Thwart Reporting on The Caesars Palace Collapse

[Vanity Fair, via The Big Picture 5-9-2021]

The idea that a major Wall Street law firm would demand to know a journalist’s confidential sources and had asked for a copy of a not yet existent manuscript was threatening and intimidating, and the journalists took it that way. “It was unsettling to be threatened by a highly prestigious New York law firm,” Indap wrote in a text to me, “and then to be told to hand over our manuscript and a list of our confidential sources, things no journalist could or would or should ever do. More generally, the power of the corporate and financial services sectors only continues to grow along with their various agents and it is unfortunately chilling the work of the already precariously positioned news media sector.”

CT Gov Threatens National Guard to Bust Nursing Home Strike – Factory Workers in Rural PA Strike – Rise in Restaurant Walkouts

Mike Elk [via Naked Capitalism 5-13-2021]

Climate and environmental crises

The Role of Critical Minerals in Clean Energy Transitions (PDF)

[IEA, via Naked Capitalism 5-10-2021]

There’s a New Definition of ‘Normal’ for Weather

[New York Times, via Naked Capitalism 5-13-2021]

Disrupting mainstream politics

Why Trump Will Win — Michael Moore Explains — October 27, 2016

The Dark Side

The most significant piece of justice reform in decades is flaming out

[Reuters, via Naked Capitalism 5-9-2021]

Trump’s Big Lie Devoured the G.O.P. and Now Eyes Our Democracy
Thomas Friedman, May 4, 2021 [New York Times]

Under Trump’s command and control from Mar-a-Largo, and with the complicity of most of his party’s leaders, that Big Lie — that the greatest election in our history, when more Republicans and Democrats voted than ever before, in the midst of a pandemic, must have been rigged because Trump lost — has metastasized. It’s being embraced by a solid majority of elected Republicans and ordinary party members — local, state and national.

“Denying the legitimacy of our last election is becoming a prerequisite for being elected as a Republican in 2022,” observed Gautam Mukunda, host of Nasdaq’s “World Reimagined” podcast and author of the book “Indispensable: When Leaders Really Mattered.”

“This is creating a filter that over time will block out anyone willing to tell the truth about the election.” It will leave us with “a Republican Party where you cannot rise without declaring that the sun sets in the East, a Republican Party where being willing to help steal an election is literally a job requirement.”

“What Happens When Republicans Simply Refuse to Certify Democratic Wins?” [David Atkins, Washington Monthly WC 5-10].

“The Big Lie that Trump really won the election is now canon among a majority of Republican voters. Any Republicans who refuses to toe the line is branded a heretic, and elections officials who dared to certify Biden’s win are being censured or stripped of their power.”

How corporate PACs are plotting to ‘move beyond’ January 6

[Popular Information, via Naked Capitalism Water Cooler 5-10-20]

“On March 2, NABPAC hosted a webinar called “Where Do We Go From Here.” The event featured Michael DuHaime, a prominent Republican operative and crisis communications consultant. During the event, DuHaime and others provided strategic and messaging advice about how to restart political donations — including donations to the 147 Republicans who voted not to certify the Electoral College results based on Trump’s lies. The event was attended by about 80 representatives of corporate PACs, including major companies like Delta, Dow, Altria, Northrup Grumman, New York Life, Lincoln Financial, and Boston Scientific. NABPAC board members include representatives from Microsoft, Kraft Heinz, Eli Lilly, Home Depot, and Cigna. In the webinar, DuHaime encouraged companies not to be pressured to withhold donations from Republicans who voted to overturn the election. Instead, DuHaime said corporations should ‘do what’s right for your organization’ and ‘deal with the fallout.’ He predicted that resuming contributions to Republican objectors “most likely… would be a one day story and most likely you are not going to lose customer share over it.’”

GOP lawmaker who called COVID-19 a ‘hoax’ is sued by ex-staffer for endangering employees

Aldous J Pennyfarthing, May 15, 2021 [DailyKos]

“Pope — a Marine veteran who started with Lamborn as a Wounded Warrior fellow before being promoted to defense policy adviser — claims in the suit that early in the pandemic, he raised safety concerns to a superior. He suggested teleworking or at least some social distancing in the office after hearing from colleagues who were worried about the health risks of in-person work because of immunocompromised family members. Those suggestions were ignored, Pope says.”

“According to Pope’s lawsuit, early on in the pandemic, when most congressional offices moved to remote work, Lamborn insisted that his staff continue to operate in-person — allegedly saying that he would not allow House leadership to dictate how he ran his office, and “belittl[ing] any staffer who raised health-related concerns.” When Pope suggested that one staffer with health conditions at least be afforded a “zip wall” to limit exposure to other staff, Lamborn denied those requests….”

Pope also alleges that Lamborn once told a staffer, “Well, I don’t care about you guys getting it.” This was in October 2020, just as U.S. COVID-19 case numbers were poised to skyrocket, and after Lamborn had discovered his office was becoming a “hotbed” of infection. The lawsuit claims that around Oct. 5, 2020, Lamborn was told that his deputy chief of staff had tested positive. Despite having worked closely with the individual just prior to hearing about the positive result, Lamborn refused to quarantine, attending a campaign event and a shipyard tour in subsequent days. Earlier in the pandemic, Lamborn had also referred to COVID-19 as a “hoax” that was being hyped up to influence elections.

And it keeps getting worse. Lamborn also reportedly told his staff to stay mum about their infections “lest the media pick up on the office’s (COVID-19) problem.”

Looming Texas Law Would Allow Anti-Choice ‘Vigilantes’ to Sue Anyone Who ‘Aids or Abets’ an Abortion

[Common Dreams, via Naked Capitalism 5-15-2021]

Leaked Video: Dark Money Group Brags About Writing GOP Voter Suppression Bills Across the Country

[Mother Jones, via Heather Cox Richardson, May 13, 2021, Letters from an American]

But the real blockbuster political story of the day came in the form of a video obtained by Mother Jones and written about in a detailed article there by Ari Berman and Nick Surgey. The leaked video shows Jessica Anderson, the executive director of Heritage Action for America—the political arm of the right-wing Heritage Foundation think tank—explaining to big-money donors that Heritage Action has worked closely with Republican state legislators to enact voter suppression laws. “In some cases, we actually draft them for them,” she said, “or we have a sentinel on our behalf give them the model legislation so it has that grassroots, from-the-bottom-up type of vibe.”

The story is not entirely new. Heritage (as it is known) published a report last February outlining “best practices” for voting, many of which are in the new bills coming out of Republican-dominated state legislatures. And in a March article for the New York Times, Nick Corasaniti and Reid J. Epstein outlined the role of Heritage Action in Georgia’s and Arizona’s voting restrictions, noting that at least 23 of the proposed state bills that dealt with voting had language that looked like that of Heritage. They also wrote that Heritage plans to spend $24 million to change voting laws in Arizona, Florida, Georgia, Iowa, Michigan, Nevada, Texas, and Wisconsin before the 2022 election, and that the person behind the Heritage voting policies is Hans von Spakovsky, who mainstreamed the idea of voter fraud in the Republican Party, although experts agree it is vanishingly rare.

What is new and dramatic about the video is seeing Anderson make her pitch to donors for a coordinated right-wing effort to take the vote away from their opponents. She talks of working with similar groups: “We literally give marching orders for the week ahead,” Anderson said. “All so we’re singing from the same song sheet of the goals for that week and where the state bills are across the country.”

Heritage Action is fighting hard against the Democrats’ For the People Act, which would protect the right to vote, end partisan gerrymandering, and limit money in politics. Heritage summarized the bill, which it called the “Corrupt Politicians Act,” in a short sheet for lawmakers. Anderson explained: “We’ve made sure that every single member of Congress knows just how bad the bill is…. Then we’ve made sure there’s an echo chamber of support around these senators driven by your Heritage Action activists and sentinels across the country where we’ve driven hundreds of thousands of calls, emails, place[d] letters to the editor, hosted events, and run television and digital ads.”

Democrats cannot pass the For the People Act through the Senate without buy-in from all 50 of their senators, and Surgey noted that in March, Heritage Action and similar groups bussed protesters to West Virginia from other states for a big rally at the capitol to pressure Democratic West Virginia Senator Joe Manchin.

The “grassroots” protest against “voter fraud” is, in fact, conceived, funded, and organized by one of the most powerful elite political organizations in the country.