Week-end Wrap – Political Economy – October 16, 2022

by Tony Wikrent

Strategic Political Economy

“How We Create–Then Blame–A Viral Underclass” (interview)

Steven Thrasher [MedScape, via Naked Capitalism Water Cooler 10-14-2022]

[TW: Viruses, diseases, public health — are all reality based and have no respect for the ideologies of neoliberals, conservatives, or libertarians.]

…viruses give us this map of understanding that there is no distinct me and distinct you. There’s always this organic material that potentially can be transmitting between us, and our fates are linked to one another. … Viruses are continually telling us that the fates of people on the globe are connected to each other. The risk we always have is not the same, but our fates are connected to one another. As we think about climate change and the changes that are going to happen in the world, there are lots of lessons that we’ve had in the past few years. The most powerful to me is that we’re always going to have a connection to one another, whether we like it or not. And the borders that we imagine to be very strong around gender, race, or nationality are fictions. The viruses can cross between them, and they give us a map for learning how to work with one another in an interconnected way.”

 

Iran

Khamenei’s Dilemma 

Christopher de Bellaigue, October 13, 2022 [The New York Review]

How far will Iran’s supreme leader go to suppress the protests that have rocked the Islamic Republic since mid-September?

The official response to the unrest bears the signature of Ayatollah Ali Khamenei, the country’s supreme leader, who more than anyone will determine how this will end. His approach to the most serious threat to the Islamic Republic since the Iran–Iraq War of the 1980s is heavily informed by what happened the last time an Iranian regime tottered and fell. As a young cleric, Khamenei was a militant opponent of Shah Mohammad Reza Pahlavi, spent time in his jails, and was tortured by his police. The hatred he exudes for the Shah is indivisible from his contempt for the tactical errors that the monarchy committed in its final phase and his determination to avoid them.

….What’s particularly hard to ascertain is the porosity of the line that divides the loyalist diehards—the men who have been taught that the protesters are evil-doers on a commission from Satan—and their adversaries. What would it take for the ideologue to give back his privileges and concessions, his monthly dole and fabricated university degree, his license to beat and rape and revile? In the late 1990s and early 2000s the country had a reformist government that offered to be a bridge between the loyalists and their adversaries. With the suppression of the reformists that bridge was burned….

Not that brutality is something the regime wants to be associated with. Over the past few weeks the authorities have constructed elaborate alibis, through coroners, prosecutors, and the official media, to shield themselves from charges of thuggery. In this parallel world Mahsa Amini died from a heart attack, Nika Shakarami fell to her death, and Sarina Esmailzadeh—another sixteen-year-old who didn’t come back from a protest—committed suicide. Where possible the families are dragged before the cameras to corroborate the state’s version, and if no one’s taken in, that’s not the point: the waters are muddied, seeds of doubt sown. That Shakarami’s body was buried in secret and without her family’s knowledge is a lesson from 1978. Much of the revolution’s momentum came from the funerals of people who had been killed in demonstrations, each funeral an excuse for another demonstration, leading to more deaths and more funerals and on and on.

 

Russia / Ukraine

How Russia Views America 

Philip Pilkington, American Affairs, via Naked Capitalism 10-14-2022]

[Review by former NCer Pilkington of Andrei Martyanov’s Disintegration: Indicators of the Coming American Collapse. ]

 

Does the United States Have a Plan in Ukraine? 

Matt Taibbi [TK News, via Naked Capitalism 10-14-2022]

Like the Times, the Post moved back and forth between reporting information in its own voice and attributing information to anonymous sources. It seemed odd when they noted “recent events have only added to the sense that the war will be a long slog,” and “all of this adds up to a war that looks increasingly open-ended.” However, much of the rest described White House efforts to keep other nations backing Ukraine, which seemed uncontroversial enough. Then the paper dropped a stunner:

Privately, U.S. officials say neither Russia nor Ukraine is capable of winning the war outright, but they have ruled out the idea of pushing or even nudging Ukraine to the negotiating table. They say they do not know what the end of the war looks like, or how it might end or when, insisting that is up to Kyiv.

What??? If the White House doesn’t think the war can be won, but also refuses to negotiate itself, or “nudge” others to do it for them, what exactly is its end strategy? Waiting for things to get worse and then reassessing?

 

Predatory Finance

 

BLOODSUCKERS: The Industry Devouring the American Dream

Jason Linkins, October 15, 2022 [The New Republic]

Private equity’s tentacles reach nearly every aspect of our lives, and it’s making everything worse….

The tale the private equity industry tells about itself is a virtuous one: They’re savvy investors rescuing ailing firms and making them profitable. Naturally, popular culture has provided an alternative story: that of leveraged buyouts and hostile takeovers. But as Mother Jones’s Hannah Levintova explained, yesteryear’s mythmaking doesn’t really capture how much the industry has evolved. It’s no longer the case that private equity firms mainly hunt down dying businesses to pluck profit like carrion from their bones. Now, she writes, “the bulk of the work done by modern-day private equity firms is not to finish off sick companies, but rather to stalk and gut the healthy ones.”

…As The Financial Times reported in June 2021, the private equity industry’s assets amounted to more than $3 trillion. And its acquisitions run the gamut: As Levintova notes, the industry acquired numerous for-profit colleges, “enveloped the health care sector,” and gobbled up nursing homes, with the end result being lower graduation rates, increased student debt, higher medical costs, and a rise in the mortality of nursing home patients. Elsewhere, we learn that these firms have devoured trailer parks, neighborhood grocers, and big retail chains. (One thing private equity consistently fails to do is make things better. As TNR contributor Jon Skolnik recently noted, “In the retail sector alone, the industry is estimated to have killed at least 1.3 million jobs since 2009.”)

 

Despite Everything, Private Equity Dealmaking Is Still Going Strong 

[Institutional Investor, via Naked Capitalism 10-14-2022]

 

“Ex-HSBC Trader Claims Bank Has ‘Epic’ Front-Running Problem”

[Bloomberg, via Naked Capitalism Water Cooler 10-12-2022]

“A former HSBC Holdings Plc trader sued the bank, claiming he was fired for warning management about its ‘epic’ front-running problem and confronting a colleague about trading ahead of an order for Steve Cohen’s Point72 Asset Management. Stephen Callahan, who said he joined HSBC’s US rates trading desk as a director in 2021, claimed in a suit filed Tuesday in Manhattan federal court that he witnessed ‘rampant front-running, including directives to junior traders to ‘always’ prioritize the bank’s proprietary account.’”

 

Casino Banking: Wall Street Mega Banks Traded More in their Federally-Insured Bank than the Total for their Bank Holding Company 

Pam Martens and Russ Martens, October 13, 2022 [Wall Street on Parade]

When something happens for the first time in history at federally-insured banks, Congress and federal regulators need to pull their heads out of the sand and pay attention. We’re talking about the fact that in the second quarter of this year, trading revenues at federally-insured commercial banks eclipsed the trading revenues at bank holding companies – which typically include subsidiaries where traders actually have licenses to trade.

This latest data on what is happening inside the nation’s largest federally-insured banks comes from the Office of the Comptroller of the Currency (OCC), see pages 2 and 3 here. The federally-insured banks generated a total of $10.3 billion in trading revenue in the second quarter versus $10.2 billion for the bank holding companies, or 101 percent of the bank holding company revenues. That’s never happened before according to the data provided by the OCC….

Trading does not belong in a federally-insured bank that is backstopped by U.S. taxpayers and that is holding the life savings of average Americans who put their money there because they can’t afford to take risks. The banking collapse of the early 1930s grew out of depository banks being allowed to engage in speculative trading on Wall Street. The runs on banks that followed the 1929 stock market crash and its aftermath led to thousands of banks failing.

In 1933 the U.S. Congress brought this form of casino banking to an end with the passage of the Glass-Steagall Act. It banned the combination of Wall Street trading houses with deposit-taking banks and created federal deposit insurance for commercial banks to restore the public’s faith in banking and stop the runs on banks. Glass-Steagall served the country well for 66 years until its repeal under the Wall Street-friendly Bill Clinton administration in 1999. It took just nine years after its repeal for Wall Street to collapse in 2008, in a replay of 1929.

 

Nomi Prins’ New Book: “No One Wanted to Call the Fed’s QE a Ponzi Scheme. But It Was.”

Pam Martens and Russ Martens, October 11, 2022 [Wall Street on Parade]

Wall Street veteran Nomi Prins’ new book is being released today with a title that should give every member of the Senate Banking and House Financial Services Committees pause: Permanent Distortion: How the Financial Markets Abandoned the Real Economy Forever. The book does what neither of these Committees has done for the American people. It explains how the financial crash of 2008 unleashed an unbridled and unaccountable Fed as Wall Street’s permanent sugar daddy, distorting market functioning with its perpetual money spigot to the point that markets no longer function as a pricing mechanism or efficient allocator of capital but more along the lines of a Ponzi scheme for the rich.

 

They’re not capitalists — they’re predatory criminals

The Gangster Who Changed Money Laundering 

[ProPublica, via Naked Capitalism 10-12-2022]

 

Professional Management Class war on workers

Glacier Northwest v. Teamsters: An Assault on the Administrative State?

Lambert Strether, October 9, 2022 [Naked Capitalism]

Perhaps Glacier Concrete will serve as the pretext for Gorsuch et al. to interpret the words of the Court “less generously” with respect not only to the NLRB, but for all Federal agencies. Such an outcome would be wondefully clarifying; after all, the dark side of the administrative state is — no surprise here — the PMC performing their usual gatekeeping functions. Richard Trumka wrote in “Why Labor Law Had Failed” (1987), on the pre-emption issue:

“This is the world I envision: the world without preemption and the expert agency. It is a world of struggle within the political and social arenas and of jury trials in the legal arena. We do not need an expert agency anymore. It only hurts labor and working people. I say abolish the Act. Abolish the affirmative protections of labor that it promises but does not deliver as well as the secondary boycott provisions that hamstring labor at every turn. Deregulate. Labor lawyers will then go to juries and not to that gulag of section 7 rights-the Reagan NLRB. Unions will no longer foster the false expectations attendant to the use of the Board processes and will be compelled to make more fundamental appeals to workers. These appeals will inevitably have social and political dimensions beyond the workplace. That is the price we pay, as a society, for perverting the dream of the progressives and abandoning the rule of law in labor relations. I have a profound faith in the judiciary and jury system as it exists at common law. It has been the enduring bulwark against biased decisionmaking by “experts.” The Board has transformed itself into a bureaucratic mechanism for defeating the rights of workers. Let unions get political, let unions get involved in the selection of state court judges, let labor law cases go to the jury.”

 

“Large rail union rejects deal, renewing strike possibility”

[Associated Press, via Naked Capitalism Water Cooler 10-11-2022]

“The U.S.’s third largest railroad union rejected a deal with employers Monday, renewing the possibility of a strike that could cripple the economy. Both sides will return to the bargaining table before that happens. Over half of track maintenance workers represented by the Brotherhood of Maintenance of Way Employees Division who voted opposed the five-year contract despite 24% raises and $5,000 in bonuses. Union President Tony Cardwell said the railroads didn’t do enough to address the lack of paid time off — particularly sick time — and working conditions after the major railroads eliminated nearly one-third of their jobs over the past six years. ‘Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard. Railroaders do not feel valued,’ Cardwell said in a statement. ‘They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness.’ The group that represents the railroads in negotiations said they were disappointed the union rejected the agreement, but emphasized that no immediate threat of a strike exists because the union [that is, the Union’s management] agreed to keep working for now.”

 

First rejection of Biden’s deal brings strike clouds on the US horizon again 

[Rail Freight, via Naked Capitalism 10-13-2022]

 

Starbucks Ex-Manager Says He Was Told to Punish Pro-Union Employees 

[Bloomberg, via Naked Capitalism 10-12-2022]

 

Starbucks ex-manager testifies he was told to punish pro-union workers 

[Seattle Times, via Naked Capitalism 10-13-2022]

 

Teens as young as 13 worked at Kia, Hyundai parts manufacturer in Alabama, feds say 

[Miami Herald, via Naked Capitalism 10-13-2022]

 

Biden to Gig Economy: Stop Stealing Wages

Timothy Noah, October 13, 2022 [The New Republic]

Studies show that somewhere between 10 percent and 30 percent of today’s workforce in the United States consists of people misclassified under current law as independent contractors so that employers can dodge paying minimum wage, overtime, payroll tax, unemployment insurance, and any other benefits they give their “real” employees. A 2009 Government Accountability Office study concluded that misclassification cost the Treasury nearly $3 billion each year. That was based on old data and is almost certainly too low.

The Labor Department’s proposed regulation would make it harder than it is right now for businesses to classify people who work for them as independent contractors. Naturally, it’s occasioning bellyaching from the business lobby. It will “foster massive confusion, endless litigation, reduced innovation, and fewer opportunities for employees and independent contractors alike,” griped the National Retail Federation to Rebecca Rainey of Bloomberg Law. Stock prices for Uber and Lyft tumbled Tuesday on news of the proposed rule. But all the rule does, really, is bring Labor Department policy back in line with the FLSA’s statutory language and nine decades of judicial interpretation that followed, most especially United States v. Silk and Rutherford Food Corp. v. McComb, two 1947 Supreme Court cases that established an “economic reality” test typically based on six questions:

….The Trump Labor Department, shortly before President Donald Trump left office and under the leadership of Eugene Scalia (son of Antonin), previously a management-side attorney on labor matters, issued a rule that said the questions regarding control and profit and loss should take precedence. This had the effect of making it much easier to classify a worker as an independent contractor. It also defied the FLSA’s statutory language, Supreme Court precedent, and past practice. The Biden administration tried to toss the rule out, but a district court judge in Texas wouldn’t allow that. So now it’s gone through the more formal process of crafting a new regulation that essentially reinstates the previous economic reality test.

 

The carnage of mainstream neoliberal economics

With Just 26 Days of Heating Oil, US Households Face Costliest Winter in Decades 

[Bloomberg, via Naked Capitalism 10-14-2022]

 

The 40-Year Robbing of Rural America 

[In These Times, via Naked Capitalism 10-9-2022]

 

“Why A Kroger/Albertsons Merger Is A Bad Idea”

[Forbes, via Naked Capitalism Water Cooler 10-14-2022]

“The combination would be great for investors and top executives, who have extracted windfall profits from both chains since the pandemic began, pocketing billions in dividends and buybacks. Profit margins have soared as a result of price inflation above the rate of cost increases, alongside record sales from greater consumer demand for stay at home cooking, store brands and comfort foods.” So what’s the issue? More: “A merger may make it tougher for unions; a 2004 grocery strike for better wages in California was squashed once Kroger and Albertsons joined forces against their own employees. And a merger would also mean large scale layoffs in redundant white collar jobs, such as office-based marketing, procurement, analytics, digital sales and category management roles. And the combination would mean big problems for nearly everyone else in the supply chain.”

[TW: The political ideology of civic republicanism — which has been supplanted by liberalism — is always opposed to concentrations of economic power, not just because of preference for fairness and equality, but because concentrated economic power inevitably erodes civic virtue, corrupts the body politic, and destroys political liberty. As Michael J. Thompson explains in The Politics of Inequality: A Political History of the Idea of Economic Inequality in America (New York, NY, Columbia University Press, 2007), the framers of the Constitution understood that economic inequality “creates new forms of hierarchy, social fragmentation, and constraints on individual liberty.” [p, 12]

What writers and thinkers within the economic egalitarian tradition sought to emphasize was the way that the growing disparity of economic power would form  the groundwork for distortions in political and social power. New forms of economic life would foster not individual liberty and independence but a new form of economic dependence of working people on others (namely owners) and the erosion of social and political freedom. At the root of the American economic egalitarian tradition is the notion that economic divisions lead inexorably to political and social inequalities of power; that the essence of any real sense of political equality could only be guaranteed by a sensibly equal distribution of property and wealth. This meant that political and economic life were in fact inseparable and that social power was a function not only of political power but of the ways individuals had the power over their own economic life and the ability to direct their lives independently of others—whether political tyrants or factory owners. Historically, Americans were reacting against the memories and vestiges of aristocracy and feudalism… 

The fear of the aristocracy and the destruction of America’s republican experiment were therefore at the core of early American ideas about inequality.”

…the overwhelming tenor of this tradition was the elimination of ineqaulities that would create unequal relations of social and political power and that would also lead to social and political fragmentation and the subordination of the public good to the interests of the few.” [pp. 13-16]

“…it was the political impulses of the American republican tradition that inspired the critique of inequality and sustained the discourse for well over a century as capitalism continued to mature and develop…. This was… inspired by the requirements of social welfare and the democratic principles of an egalitarian social order that were influenced by Enlightenment ideas countering hierarchy and privilege, but it was also motivated by what we now call the republican themes that emphasized a very different understanding of equality, which was fearful of the fragmentation of public life that would result from economic divisions of power.” [pp. 196-197]  

 

Returning to Fairness: A commissioner at the Federal Trade Commission considers rural America and open markets.

Commissioner Alvaro M. Bedoya, October 10, 2022 [The American Prospect]

…I also used that time to read a lot of history, which told a very different story. I learned that small farmers pressed Iowa to pass the nation’s first antitrust law in 1888. I learned that when Congress convened in 1890 to debate the Sherman Act, they did not talk about efficiency. No, the most common complaint in the Sherman Act debates was that a cartel of meatpackers was cheating cattlemen out of a fair price for their livestock. In 1936, Congress spent months debating a bill to protect small-town grocers being driven out of business by powerful chain stores who got secret payoffs from their suppliers….

Five times in 60 years, Congress passed antitrust laws that in letter or spirit demanded fairness for small business, often rural small business. Yet today, it is “axiomatic” that antitrust does not protect small business. And that the lodestar of antitrust is not fairness, but efficiency.

How did this happen? What has this focus on efficiency meant for rural America? And what would it look like to return to fairness?

….

I was in Des Moines for a conference; I asked our team to set up a listening session with some cattlemen and corn growers. It was about nine or ten people. Every one was in crisis.

The prices of seeds, feed, fertilizer, and farm equipment were going up. The prices of their products were going down. Farmers used to make 40 cents on every dollar spent at the grocery; they make 16 now. They are going out of business by the thousands. “We have a noose around our necks and we’re standing on an ice cube,” said one. “It’s like being picked apart by a chicken,” said another.

The group talked about a lot of factors behind these changes, but they kept returning to consolidation. Fertilizer, seeds, grain buying, meatpacking: There used to be dozens of firms, sometimes over a hundred, in each of these sectors. Now each is dominated by just four; depending on the region, there may now be just one supplier of a key input, or just one meatpacking plant.

What is it like to be down to just one place to sell your livestock? We’ve known since 1890 that it can depress farmers’ prices. But it’s more than that. One of the cattlemen described through tears how he had to gas a warehouse full of cattle when the one processing plant accessible to him was shut down because of COVID….

If efficiency is so important in antitrust, then why doesn’t that word, “efficiency,” appear anywhere in the antitrust statutes that Congress actually wrote and passed?

If efficiency is the goal of antitrust, then why am I charged by statute with stopping unfair methods of competition, and not “inefficient” ones?

We cannot let a principle that Congress never wrote into law trump a principle that Congress made a core feature of that law. I think it is time to return to fairness.

People may not know what is efficient—but they know what’s fair. It may be efficient to send a child home to wait two weeks for their cancer medicine. We all know it isn’t fair. It may be efficient to force cattlemen to sell their livestock to just one meatpacker. It may be efficient for Pine Ridge to go without baby formula. We all know that that’s not what fair markets look like.

That visceral understanding of fairness has often been dismissed as ambiguous and “impressionistic.” I disagree. Because Congress and the courts have told us, directly and repeatedly, how to implement protections against unfairness.

[TW: Much of the blame for the turn of anti-trust from fairness to efficiency rests squarely on Robert Bork and the conservative Law and Economics movement.  How Robert Bork Fathered the New Gilded Age [Pro-Market, via Naked Capitalism 9-6-19. See also Ideas Have Consequences: The Impact of Law and Economics on American Justice (pdf) by Elliott Ash, Daniel L. Chen, Suresh Naidu, March 20, 2019, National Bureau of Economic Research. ]

 

Intel’s Multi-Billion Bait And Switch

Julia Rock, October 14, 2022 [The Lever]

Just a couple of months after Intel’s multi-million dollar lobbying effort succeeded in winning microchip companies billions of dollars in no-strings-attached corporate subsidies, Intel is reportedly planning to lay off thousands of workers.

The potential layoffs come only weeks after the company announced a shareholder dividend at the same rate as the previous few quarters — amounting to a total of about $6 billion in annual dividends.

 

Disrupting mainstream economics

“Cash Is Never Neutral: A Conversation on the Politics of Money”

[The Nation, via Naked Capitalism Water Cooler 10-12-2022]

…in his new book, The Currency of Politics: The Political Theory of Money From Aristotle to Keynes, Stefan Eich, an assistant professor of government at Georgetown University, shows how economic crises reveal the inherently political nature of money….

One purpose of my book is to spell out some of the ways in which money is not just an economic institution but also a measure of social value, a public good, a tool of governance, and a constitutional project. But this should immediately trigger the follow-up question: Why is this side of money so alien to us? How can we explain the forces of depoliticization that have left us with an impoverished conception of money? This question loomed ever larger for me, and it pushed me to grapple with the political nature of monetary depoliticization.

Money is, after all, the keystone for any depoliticization of the economy as such. If you manage to convince people that money exists outside of politics, that its value is a given fact of nature to which we have to submit, then you are more than halfway to your goal of shielding economic relations more broadly against the unpredictable forces of democracy….

Given this fact, how can money be made more democratic, especially since it is mainly produced by private banks too often cut off from democratic accountability? As a historian of economic and political thought, Eich looks to the past for answers. The Currency of Politics examines neglected theories of money in the thought of figures like Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes and offers a pathbreaking new intellectual history of monetary policy.

[TW: This is a very promising line of inquiry. But, I looked through the index of Eich’s book on Amazon, and he does not have any references to Benjamin Franklin ( A Modest Enquiry into the Nature and Necessity of a Paper-Currency, April 1729); Alexander Hamilton, who brilliantly detailed the workings of money in his major reports to Congress while serving as Treasury Secretary; Henry Carey, leading USA economist in the mid-1800s, who explained the need for “easy money” during and after the Civil War; Charles Macune and the populists of the late 1800s who fought for expansionary monetary policy and lost; Hyman Minsky, whose model of inherent financial instability has proven far more accurate than the standard equilibrium models of mainstream classical and neo-classical economists; and Stephanie Kelton, Warren Mosler, and L. Randell Wray, today’s leading proponents of Modern Monetary Theory; and Mehrsa Baradaran, author of The Color of Money: Black Banking and the Racial Wealth Gap, which brims with new and powerful insights into the politicization of money.]

 

Think About Minsky for a Moment 

Stephanie Kelton [The Lens, via Mike Norman Economics 10-11-2022]

Minsky rejected the classical description of the economy— from Adam Smith or Léon Walras—which holds that “the economy can best be understood by assuming that it is constantly an equilibrium seeking and sustaining system.” For Minsky, as for Keynes, capitalist economies are inherently unstable. You might get a stretch of relative tranquility, but every so often, something breaks. “Stability is destabilizing,” as Minsky liked to say….

Minsky rejected the idea that economics was primarily about “the allocation of given resources among alternative employments.” Like Keynes, Minsky took the central economic problem to be “the capital development of the economy,” which involved relying on a sophisticated financial system to facilitate the production of expensive capital assets.

[TW: Kelton includes some excellent short excerpts from Minsky fully explaining his ideas.]

 

Bernanke’s Odd Nobel Prize

Robert Kuttner, October 12, 2022 [The American Prospect]

In 1983, Bernanke was a 29-year-old junior economist at the Stanford Business School and the conservative Hoover Institution. He did one brave thing in the paper. Sounding almost Keynesian in his discussion of aggregate demand, Bernanke politely demolished what was then the reigning theory in conservative circles, the argument of Milton Friedman and Anna Schwartz that the Great Depression was mainly the result of a contraction in the money supply.

Bernanke wrote, “There is much support for the monetary view. However, it is not a complete explanation of the link between the financial sector and aggregate output in the 1930s,” adding disingenuously that his paper “builds on the Friedman-Schwartz work …”

In a section acknowledging other work on banking and economic collapse, Bernanke wrote, “Minsky (1977) and Kindleberger (1978) have in several places argued for the inherent instability of the financial system, but in doing so have had to depart from the assumption of rational economic behavior” (emphasis added). Damn right they did! Anyone who thinks the system behaves “rationally” in a banking panic is a fool. It was Hyman Minsky who deserved the Nobel.

 

Restoring balance to the economy

The broken US economy breeds inequality and insecurity. Here’s how to fix it 

James K. Galbraith [Guardian, via Mike Norman Economics 10-9-2022]

[TW: Galbraith is much more polite than I would be in prescribing an end to the predations, usury, and rent-seeking of the rich.]

 

Slash Child Abuse With One Simple Trick: Cash 

Caleb Brennan, October 14, 2022 [The American Prospect]

Child protective services is far less effective than the welfare state.

When the COVID-19 lockdown went into effect, child welfare advocates and pediatric experts feared that child abuse that would have otherwise been noticed would remain undetected. It was a logical enough fear, because sites where abuse is often discovered—schools, doctor’s offices, religious centers, and other community spaces—were closed. The economic stressors created by the ensuing explosion of unemployment would likely contribute to a spike in child maltreatment, it was thought. This theory was so strongly believed that even the absence of child abuse reports during the initial lockdown was seen as evidence that malicious treatment by parents was a cause for concern.

But with multiple years of data to comb over, the verdict has proven to be quite the opposite: Physical child abuse dipped substantially, according to a recent analysis of child abuse indicators and statistics published in a journal of the American Medical Association—in large part due to the substantial government investment in keeping families financially afloat during the economic shutdown.

It illustrates a major analytical error underpinning American child abuse policy. Appalling cases of beating or rape of children are a major political motivation behind child protective services (CPS) and their habit of “child separation,” or taking kids from their families and placing them into foster or group homes. But in reality, a large and growing majority of child abuse is simple neglect, which can be greatly ameliorated with the welfare state; and CPS actions are themselves often abusive.

 

Green New Deal – An opportunity too big to miss

The Climate Economy Is About to Explode

[The Atlantic, via The Big Picture 10-11-2022]

A new report suggests that the Inflation Reduction Act could be even bigger than Congress thinks.

 

Spanish Vineyards Use Solar Panels to Protect Wine Grapes 

[EcoWatch, via Naked Capitalism 10-12-2022]

 

Many scientists see fusion as the future of energy – and they’re betting big.

[National Geographic, via The Big Picture 10-11-2022]

A clean, plentiful fuel so efficient Earth’s entire annual supply could fit in a swimming pool. That’s the dream, but the science is there, too.

 

Climate and environmental crises

BlackRock Fund Bets Rich World Is Likely to Face a Water Crisis

[Bloomberg, via The Big Picture 10-11-2022]

With hurricanes, floods and other extreme weather, water security is no longer a problem just for the developing world.

 

 “BlackRock Gets Read the Right Wing’s Riot Act”

John Authers [Bloomberg, via Naked Capitalism Water Cooler 10-14-2022]

“This letter to Larry Fink, the CEO of BlackRock Inc., from John Schroder, Louisiana’s state treasurer, is well worth reading. In it, he explains why BlackRock’s espousal of ESG funds (although the money it runs for Louisiana is not on an ESG basis) has led the state to divest from all BlackRock funds. It expresses the philosophy of opposition to environmental, social and governance investing most eloquently. But the bottom line, I fear, is that it cedes an essential point to the backers of ESG. Fund managers are allowed to take the broader interests of their members into account, and not just the narrowly financial ones; and it is perfectly justifiable to base investment decisions on political ends or principles. Most of BlackRock’s funds are not run on an ESG basis, and Schroder accepts that the the company invests in plenty of energy companies. However, it is necessary to take this measure to protect the interests of people in Louisiana who rely on the oil industry.”

 

The epidemic

[Twitter, via Naked Capitalism Water Cooler 10-10-2022]

.

“Nearly Half of Covid Patients Haven’t Fully Recovered Months Later, Study Finds”

[New York Times, via Naked Capitalism Water Cooler 10-13-2022]

“A study of tens of thousands of people in Scotland found that one in 20 people who had been sick with Covid reported not recovering at all, and another four in 10 said they had not fully recovered from their infections many months later. The authors of the study, published on Wednesday in the journal Nature Communications, tried to home in on the long-term risks of Covid by comparing the frequency of symptoms in people with and without previous Covid diagnoses. People with previous symptomatic Covid infections reported certain persistent symptoms, such as breathlessness, palpitations and confusion or difficulty concentrating, at a rate roughly three times as high as uninfected people in surveys from six to 18 months later, the study found. Those patients also experienced elevated risks of more than 20 other symptoms relating to the heart, respiratory health, muscle aches, mental health and the sensory system. The findings strengthened calls from scientists for more expansive care options for long Covid patients in the United States and elsewhere, while also offering some good news The study did not identify greater risks of long-term problems in people with asymptomatic coronavirus infections. It also found, in a much more limited subset of participants who had been given at least one dose of Covid vaccine before their infections, that vaccination appeared to help reduce if not eliminate the risk of some long Covid symptoms.”

 

Health care crisis

Health Insurers Get Government Cash, Then Jack Up Prices

David Sirota, October 11, 2022 [The Lever]

A new analysis from former health insurance executive Wendell Potter shows that six of the seven largest health insurers — Centene, CVS, Elevance, UnitedHealth, Humana, and Molina — now receive the majority of their health plan revenues from the federal government, while the seventh, Cigna, gets 42 percent of its revenue from the government. These revenues are fueled in large part by the growth of Medicare Advantage plans, the expensive privatized Medicare plans operated by private health insurers that often wrongfully deny care.

These figures do not even include the subsidies that insurers receive to help people buy individual insurance plans offered on state exchanges under the ACA. Under President Joe Biden, Democrats have twice expanded this ACA subsidy program, now until 2025. If Democrats move to authorize these subsidies yet again, the total ACA health insurance subsidy scheme would cost the public more than $800 million over the decade. Meanwhile, these plans deny nearly 20 percent of all in-network health claims.

All that government money, however, is not buying more affordable prices. According to new data from the Bureau of Labor Statistics, health insurers raised their prices by 24 percent in a single year. Earlier this year, the Biden administration announced an 8.5 percent spike in revenues paid to Medicare Advantage insurers after implementing the highest-ever increase to Medicare premiums, a decision Biden has partially walked back for next year.

The government largesse is inflating insurance industry profits, but it isn’t buying universal — or even very good — coverage: A new study from the Commonwealth Fund finds that 43 percent of Americans “are inadequately insured” — meaning they’ve had coverage gaps, they are insured but still cannot afford medical services, or they have no insurance at all.

 

Information age dystopia

Subjecting Workers To Webcam Monitoring Violates Privacy, Dutch Court Rules 

[The Verge, via Naked Capitalism 10-11-2022]

 

Collapse of independent news media

Suicidal thoughts, resilience in a small-town Iowa newspaper’s fierce last stand 

[The Iowa Mercury, via Naked Capitalism 10-13-2022]

 

Should Margaret Sullivan Have Been Tougher on the Media?

Jacob Bacharach, October 12, 2022 [The New Republic]

In her memoir, the former public editor of The New York Times surveys the ills of the news business.

 

Democrats’ political suicide

Dems Barely Messaging On Economic Issues

Andrew Perez & David Sirota, October 14, 2022 [The Lever]

Republican candidates and political groups have spent $44 million on TV ads focused on the economy and inflation since Labor Day, according to a tally from AdImpact, which tracks campaign spending throughout the country. In the same period, Democrats have spotlighted these issues in just $12 million worth of ads, less than 7 percent of the party’s total ad spending during that time. The party has put another $18 million into ads mentioning jobs and infrastructure — but overall, Republicans are significantly outspending them on messaging around economic issues….

The takeaway is clear: Caught between a bad economy and not wanting to offend big donors, Democrats have not aired a unified populist message hammering the business profiteering fueling inflation. Instead, they have spent much of their resources — $67 million — on ads related to abortion rights, a topic of heightened significance after the repeal of Roe v. Wade, but one that does not raise the ire of their corporate sponsors nor generate as much interest from midterm voters this year, according to recent survey data.

The lack of focus from Democrats on the economy and inflation comes as recent polls from the Washington Post and Monmouth University found that the top two most important issues among voters are the economy and inflation — far outpacing abortion.

 

“Democrats shouldn’t focus only on abortion in the midterms. That’s a mistake”

Senator Bernie Sanders [Guardian, via Naked Capitalism Water Cooler 10-12-2022]

“But, as we enter the final weeks of the 2022 midterm elections, I am alarmed to hear the advice that many Democratic candidates are getting from establishment consultants and directors of well-funded Super Pacs that the closing argument of Democrats should focus only on abortion. Cut the 30-second abortion ads and coast to victory…. n poll after poll Republicans are more trusted than Democrats to handle the economy – the issue of most importance to people. I believe that if Democrats do not fight back on economic issues and present a strong pro-worker agenda, they could well be in the minority in both the House and the Senate next year…. None of what I am suggesting here is “radical”. It is, in fact, extremely popular. It is what the American people want. If we close this critical midterm campaign with a clear, unified vision to meet the needs of working families, to take on corporate greed, and protect a woman’s right to choose, we will begin to rebuild the trust between Democrats in Washington and the working families of this country. And we’ll win the election.”

 

“Why Biden’s SEC chief is enraging Wall Street”

[Politico, via Naked Capitalism Water Cooler 10-12-2022]

“The rules that Gensler is spearheading would revamp the stock market’s plumbing, partly in response to the 2021 meme stock saga in which Robinhood and other brokerages attracted scrutiny after they were overwhelmed by trading in shares of companies such as GameStop and AMC. Gensler, who has held leading regulatory roles in the Biden and Obama administrations, has questioned whether investors are operating in an environment that is ‘as fair and competitive as possible.’ He is expected to crack down on the complex web of payments and fees that exchanges, brokerages and trading firms share when processing investors’ stock trades. While the proposals have yet to be released, industry executives have already begun talking about suing the SEC over the plans. And a growing number of Hill Democrats are urging Gensler to proceed with caution, signaling a potentially treacherous political road ahead even among members of his own party — one that will become even more fraught if Republican critics gain a majority in Congress. ‘We have to be careful not to throw the baby out with the bathwater,’ Rep. Ritchie Torres, a New York Democrat on the House Financial Services Committee, said in an interview.”

 

“The Rise of Mandela Barnes”

[The Nation, via Naked Capitalism Water Cooler 10-12-2022]

“Like Fetterman, Barnes is a progressive who has broken the mold for Democrats running in the traditional battleground states of the Great Lakes region. Both candidates have made a point of fighting for votes in every county of their state, including those that backed Trump, and they are doing so with a firm embrace of working-class voters and the unions that represent them. There’s a logic to this approach. For Democrats to win in the Great Lakes battleground states, they need to run up their numbers in the big cities and college towns that are their partisan strongholds, keep their losses to a minimum in historically Republican rural areas, and renew their prospects in the midsize industrial cities and surrounding counties where Trump’s faux populism made inroads in 2016 and continues to attract support. ‘You need to make it clear to people in places like Kenosha and Racine and Oshkosh, who are worried about outsourcing and the loss of good union jobs, that the Republicans aren’t going to help them,’ says John Drew, former president of UAW Local 72 in Kenosha, where in 2010 Chrysler closed a sprawling engine plant that was once one of the state’s largest employers. ‘Mandela Barnes understands that.’ In Barnes’s case, Johnson has proved to be a perfect foil. While the Democratic challenger has emphasized his own working-class roots in his advocacy for the renewal of manufacturing, the wealthy incumbent has declared that he couldn’t care less about Wisconsin workers and their communities.”

 

Why Nancy Pelosi Sabotaged Wildly Popular Bipartisan Legislation

[Slate, via Naked Capitalism 10-10-2022]

 

“Los Angeles reels from racist recording”

[Politico, via Naked Capitalism Water Cooler 10-11-2022]

“The overt racism on the tape drew the loudest condemnations, as you would expect after hearing an elected official mock and caricature a small child as a ‘parece changuito‘ (like a monkey) who deserves a ‘beatdown’ and is used like an ‘accessory.’ But the recording also illuminated, in the starkest way, how control of political representation is wielded like a blunt instrument to reward allies, punish foes and preserve or expand power. The officials talk about how to distribute economic ‘assets’ to ‘Latino districts.’ They mused about drawing a colleague’s district to dilute the power of renters and thus undercut the incumbent — putting her district ‘in a blender.’ Herrera emphasizes the need to ‘massage to create districts that benefit you all.’ The conversation also veered into ethnic fractures, underscoring some ugly realities in a city whose overwhelmingly Democratic government encompasses a multitude of subgroups. Martinez and de León talk about how District Attorney George Gascon was ‘for the Blacks’ and about white council members ignoring Latinos or being willing to ‘motherfuck you in a heartbeat.’ Martinez warns Black people could ‘come after us’ in an act of political reprisal. Campaigns and governance can turn on coalition-building, but politics can also become a zero-sum game in disputes about representation and resources. Racism is not new in Los Angeles, whose proud diversity coexists with a history of discrimination and where the confluence of a booming Latino population and a diminishing Black population has fueled political tension.”

 

Conservative / Libertarian Drive to Civil War

‘NYT’ reporter’s book is more frank about Adelson buying foreign policy for Israel than ‘NYT’ was 

[Mondoweiss, via Naked Capitalism 10-11-2022]

 

“How an urban myth about litter boxes in schools became a GOP talking point”

[NBC, via Naked Capitalism Water Cooler 10-14-2022]

“At least 20 conservative candidates and elected officials have claimed this year that K-12 schools are placing litter boxes on campus or making other accommodations for students who identify as cats, according to an NBC News review of public statements. Every school district that has been named by those 20 politicians said either to NBC News or in public statements that these claims are untrue. There is no evidence that any school has deployed litter boxes for students to use because they identify as cats. NBC News found one example of a school district keeping cat litter on campuses for students to use — but it had nothing to do with accommodating children who identify as animals…. In Colorado, GOP gubernatorial nominee Heidi Ganahl insisted in several recent interviews that students were dressing and identifying as cats, disrupting class, and the state’s schools were tolerating it. Some children, she alleged, would only communicate in barks and hisses. Her campaign declined to answer questions about Ganahl’s claims, but in one interview with a local Fox affiliate, she suggested ‘there’s a lot of this going on’ in Jefferson County. The Jefferson County school district disputed Ganahl’s claims and said its dress code prohibits costumes at school. The district — where Columbine High School is located — has been stocking classrooms with small amounts of cat litter since 2017, but as part of “go buckets” that contain emergency supplies in case students are locked in a classroom during a shooting. The buckets also contain candy for diabetic students, a map of the school, flashlights, wet wipes and first aid items.”

 

I Voted for Trump and DeSantis—and Now Regret It. Here’s How Democrats Can Appeal to Voters Like Me. 

Rich Logis, October 13, 2022 [The New Republic]

There are plenty of conservatives willing to join an alliance to put the GOP out of its misery and preserve democracy….

I’ve come to believe that the Republican Party’s chief political expression—perhaps its only political expression—is doling out trauma toward its base, to keep them angry and partisan and to encourage the dehumanization of its political enemies. I am an ex–DeSantis and Trump voter myself; a onetime champion of their ideas. It was watching DeSantis up close that finally allowed the scales to fall from my eyes. There was a time I truly believed that he was an earnest, purple-state Republican with a nose for policy and politesse. His performance during the pandemic shook me of that notion and helped me realize just how much the Republican Party’s regular dose of trauma had affected me.

I’m no longer registered with any party, but I intend to vote Democrats straight down the line—not because I want to become a convert but because I believe it is in the national interest to submit this current form of the GOP to a political mercy-killing.

There are, perhaps, some Republican elites capable of exhibiting sincere care for others; most on the right, however, understand that displays of empathy will more often than not incur the ire of Fox News, Breitbart, and the Alex Jones set (though Jones may have bigger problems now). The right-wing media’s function is to keep pumping the trauma, and they’ll gleefully turn on their idols and transform them into outcasts if they stray too far from being reliable demonizers….

The revisionist histories of the GOP enforce the inaccurate assertion that America is not a democracy but a republic; we are both, and the Framers instituted a complex form of majority rule to potentially safeguard against a tyranny of the majority. It’s also a political party that understands that it’s not actually in the mass appeal business anymore: To the GOP, you are either a traumatized convert or an outsider to be treated with malice….

Nowhere in our Constitution—or any of our founding documents, or the Founders’ writings—will one find a singular syllable championing the alleged features and benefits of what the GOP actually wants: permanent minority rule.

This is why the traumatization of its own base is so critical: It conditions them to accept these illiberal arrangements as just, by making them susceptible to the belief that the revocation of democracy is the beginning of liberty.

 

The Moment the Republican Party Lost Control

Claire Potter, October 11, 2022 [The New Republic]

…the media-driven partisanship that dominates U.S. politics today is hardly new. Since advertising professionals entered the political consulting business in the 1950s, political messaging has been designed to translate ill-formed, often unconscious, ideological predilections into conservative voting majorities by ever more intense appeals to voters’ emotions and grievances….

The nature of campaigning in the 1950s and ’60s required hiding extremism’s dark side. Television and radio ad buys on channels governed by the Fairness Doctrine made it not just possible, but almost compulsory, to court voters outside the party: A successful campaign could not purposely make itself noxious, as campaigns do today. And although alternative political media provided platforms for extremism, mainstream news outlets did not….

…Reagan and George H.W. Bush followed suit: They crafted coded slogans designed to bring those partisans to the polls and persuade them that the GOP cared about their grievances. During these decades, the Republican Party engaged in a dance with the devil, in which the GOP promoted its own electoral success through Goldwater’s populist descendants—Patrick J. Buchanan, Sarah Palin, libertarian Ron Paul, and the Tea Party—while believing that party leaders could contain the ambitions of the “pitchfork politics” voters they promoted.

Nicole Hemmer’s new book, Partisans: The Conservative Revolutionaries Who Remade American Politics in the 1990s, is about the moment the Republican Party lost its ability—or desire—to keep its fringe at bay….

Though the shadow of Donald Trump hangs over Partisans, Hemmer does not focus on the last president. Instead, she shifts the lens to a set of much bigger questions. How did one of America’s two major parties become dominated, not just by vicious, public attacks that used to be the province of undercover dirty-tricks specialists, but by a proud rejection of democracy itself? How did virulent nativism, homophobia, and racism spread from the far-right, where the Republican Party successfully contained it for decades, to take over a whole political party? When did culture wars, promoted between both right-wing pundits acting like politicians and right-wing politicians acting like pundits, stop simply motivating voters and shift the center of gravity in the GOP to conspiracism and illiberalism?

….As Hemmer argues, the opening for populists to make their case was the strategic vacuum created by the end of the Cold War in 1989: Republicans no longer had the fight against communism to unify conservatives of many different tendencies. Reagan had also laid the groundwork for a new kind of presidency, one that promised disruption. Yet, although he attended to traditional conservative values—defunding the welfare state and spending lavishly on the military—Reagan largely avoided divisive cultural issues. Right-wing anger festered as it became clear in the 1980s that eliminating abortion and affirmative action, and restoring school prayer, were nowhere on the Republican Party’s agenda. A young congressman named Newt Gingrich complained that Reagan had not polarized the country enough. “He should have been running against liberals and radicals,” Gingrich wrote in a journal published by the conservative Heritage Foundation after the 1984 election….

…As economic journalist William Greider wrote in December 1984, a few weeks after Reagan thumped Democrat Walter Mondale by 18 points, the president cruised to victory on a gauzy cloud of lies and obfuscation. Even journalists had “yielded to the techniques of mass propaganda,” Greider wrote, “large lies told through the calculated repetition of soothing imagery and potent symbolism. The harsh facts of contradictory realities were no match for it.” If the recent election “describes the future,” he continued, “then Americans are being reduced to a nation of befogged sheep, beguiled by false images and manipulated ruthlessly.”

…Most important, Buchanan put the elites in his own party on notice, while Perot’s third-party run gave both sides cause for concern—his 18.9 percent of the popular vote may have defeated Bush, and certainly put Bill Clinton in the White House with less than a majority. In the wake of this defeat, the GOP determined to grab the populist tiger by the tail, which it did in the 1990s. Now under the direction of House Speaker Newt Gingrich and accompanied by thunderous support from a new generation of conservative pundits like Rush Limbaugh, Ann Coulter, and Laura Ingraham, the GOP invented and refined the politics of “no”—or as Limbaugh liked to put it, “Hell, no!”

…Gingrich’s most important legacy was, in the words of Thomas Schaller, “Do not cooperate, do not compromise, do not seek bipartisan solutions—ever, on anything.” This partisan style not only remained influential but expanded its reach, as populists and libertarians turned on party politics itself as the province of callous political and cultural elites who disregarded the welfare of the people in favor of enriching themselves….

It was also at the turn of the last century that accusations of election fraud—a charge that had largely been leveled at Black Democratic voters in the South and the urban North—began to accompany Republican defeats everywhere. When Michael Huffington lost his California Senate race to Dianne Feinstein in 1994, Hemmer notes, “he refused to concede, alleging overwhelming voter fraud in the form of mass noncitizen voting.” Similarly, in 1996, Bob Dole “charged Democrats with flooding the country with immigrants” who would vote for Bill Clinton and alleged that at least a tenth of these fraudulent voters were “criminals.”

 

Reagan’s Reelection: How the Media Became All the President’s Men

William Greider, December 20, 1984 [Rolling Stone]

The politics of 1984 describe a future in which Americans are lied to and manipulated by ruthless political propaganda

In 1984, the networks, including Arledge’s, yielded to the techniques of mass propaganda — large lies told through the calculated repetition of soothing imagery and potent symbolism. The harsh facts of contradictory realities were no match for it. In a sense, the networks lost control of their own news programs. If the politics of 1984 describes the future, then Americans are being reduced to a nation of befogged sheep, beguiled by false images and manipulated ruthlessly.

Arledge, in other words, may be dangerous for democracy, probably more dangerous than his competitors at NBC and CBS, because he is so sophisticated and original. Arledge not only understands the potential power of television; he is not afraid to use it. His choice of what to show his audience is not designed to control government or even to propagate his own ideology. As a network executive, his essential purpose is amoral: whatever entertains, whatever draws a crowd, that is what Arledge wants to put in our living rooms.

 

Trump ‘wanted people to die’ so he could invoke the Insurrection Act and stay in power

Dartagnan, October 14, 2022 [DailyKos]

Yhere is a reason, former Department of Homeland Security chief of staff Miles Taylor explains, why Trump did nothing on Jan. 6 to stop the insurrection at the U.S. Capitol. The reason is simple: Trump gleefully watched the sordid events unfold on television while his aides panicked and pleaded with him fruitlessly to do something because he wanted people to die.

As Taylor points out, the more deaths that occurred (especially deaths to members of Congress) the better justification Trump would have for invoking the Insurrection Act, declaring martial law, and ultimately preventing the peaceful transfer of power.

[Youtube, via DailyKos 10-14-2022]

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