Week-end Wrap – Political Economy – September 5, 2021

 

Week-end Wrap – Political Economy – September 5, 2021

Strategic Political Economy

The Writing On The Wall 

[Heisenberg Report, via Naked Capitalism 9-1-2021]

Beijing’s regulatory crackdown is no flash in the pan and it’s not “limited” or “targeted” either. It’s an across-the-board effort to rein in the influence of capital, scrub society of perceived Western excess, reestablish discipline (broadly construed) and codify Xi’s “thought.” It is, apparently, a “profound revolution.”

The reality of this has yet to set in for Western investors and, frankly, I doubt it ever will. We live in a world where people don’t confront reality. Rather, they suspend disbelief indefinitely in order to avoid coming to terms with their own follies.

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[Twitter, via Naked Capitalism 8-29-21]

Lambert Strether: “Fascinating to watch a government that wants, and is able, to govern. Thread:”

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[Twitter, via Naked Capitalism Water Cooler 8-30-21]

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The Great American Science Heist

[The Intercept, via Naked Capitalism 8-31-21]

How the Bayh-Dole Act Wrested Public Science From the People’s Hands….

 

Federally Supported Innovations: 22 Examples of Major Technology Advances That Stem From Federal. Research Support (pdf)

The Information Technology & Innovation Foundation, February 2014

 

50 inventions you might not know were funded by the US government

[Stacker, December 9, 2020]

 

Report to Congress on the Subject of Manufactures

Alexander Hamilton, December 5, 1791

“The remaining objections to a particular encouragement of manufactures in the United States now require to be examined… One of these turns on the proposition, that Industry, if left to itself, will naturally find its way to the most useful and profitable employment: whence it is inferred, that manufactures without the aid of government will grow up as soon and as fast, as the natural state of things and the interest of the community may require….

“Against the solidity of this hypothesis, in the full latitude of the terms, very cogent reasons may be offered. These have relation to the strong influence of habit and the spirit of imitation — the fear of want of success in untried enterprises — the intrinsic difficulties incident to first essays towards a competition with those who have previously attained to perfection in the business to be attempted — the bounties premiums and other artificial encouragements, with which foreign nations second the exertions of their own Citizens in the branches, in which they are to be rivaled.

“To produce the desirable changes, as early as may be expedient, may therefore require the incitement and patronage of government… To be enabled to contend with success, it is evident, that the interference and aid of their own government are indispensable.”

 

[Twitter, via Naked Capitalism 8-29-2021]

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“The Emerging American Industrial Policy”

[American Affairs, via Naked Capitalism Water Cooler 9-2-21]

“This emerging American industrial policy is characterized by its focus on capabilities critical to national security, supported by resili­ent supply chains, and achieved through political consensus. Understanding its features will sharpen what has been, until now, a rather nebulous debate. Congress, in particular, has a significant role to play, but only if it is willing to take advantage of its window of opportunity.” Focusing on the first: “The best explanation for the emerging American industrial policy is the realization among policymakers that the nation has lost critical capabilities that create good jobs, spur innovation, and offer a com­parative advantage. This important concept warrants some explanation. A capability refers to collective know-how—the competence to perform a certain task that cannot be performed by an individual acting alone. Collective know-how is embodied in a manufactured good. In a 1958 essay, Leonard Read described a pencil as a simple object that, perhaps surprisingly, no single person knows how to make.10 Its existence reflects multiple competencies found along a global value chain and brought together by firms acting in their self-interest. The more complex the product, the more competencies are required to produce it, and the more important it is to economic growth and national wealth. For example, a passenger jet is more complex than a pencil—reflecting the involvement of a much larger number of competencies in its value chain and providing greater economic rewards.

An industrial policy that is not driven solely by national security concerns requires are revival of understanding the Constitutional mandate to promote the General Welfare. Instead, what we are getting is an intensification of conservative cultural warfare on the wedge issue of abortion, reviving Confederate principles of government.

 

[Twitter, via Naked Capitalism Water Cooler 9-3-21]

The carnage of mainstream neoliberal economics

[Twitter, via Naked Capitalism Water Cooler 8-30-21]

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“Goldman Sachs says 750,000 households could be evicted this year unless Congress acts”

[CNN, via Naked Capitalism Water Cooler 9-3-21]

“Goldman Sachs estimates that between 2.5 million and 3.5 million households are significantly behind on rent, owing a combined $12 billion to $17 billion to landlords. Those renters appeared to be safe from eviction until at least October until the Supreme Court last week struck down the Biden administration’s ban on evictions, indicating that further action must come from Congress. At the same time, most state-level restrictions on evictions are scheduled to expire over the next month, which the Goldman Sachs analysts noted in the Sunday night report. ‘The end of the eviction moratorium is likely to result in a sharp and rapid increase in eviction rates in coming months unless Emergency Rental Assistance (ERA) funding is distributed at a much faster pace or Congress addresses the issue,’ the report said. Without faster aid or new legislation, Goldman Sachs estimates 750,000 households will face eviction this fall and winter. The Wall Street bank noted that roughly half of all US eviction filings resulted in eviction between 2006 and 2016.”

 

“Eviction is over (if we want it)”

Cory Doctorow [Pluralistic, via Naked Capitalism Water Cooler 9-3-21]

“Americans owe $12-14b to their landlords, and Congress has authorized $46.5b in rental assistance that could make all of those landlords whole several times over. But the states have only distributed 11% of the money!…. Why are the states having so much trouble handing out money? Bureaucracy. You know, the thing whose supposed absence was cited as the source of America’s moral and economic superiority to the USSR. What’s the source of this bureaucracy? Means-testing. The endless red-tape, so beloved of conservatives, that is meant to ensure that the “undeserving poor” don’t get any of the money earmarked for “hardworking poor people.’”

 

Cutting Unemployment Benefits Does Not Increase Employment

Barry Ritholtz​​​​​​​, September 1, 2021 [The Big Picture]

This should come as no surprise: As we have detailed here, those pushing for early benefit termination 1) used an outdated, misguided model of lower-wage workers; 2) ignored data about the state of the labor market; 3) assumed a positive impact on labor shortages that was highly unlikely.

Start with a lack of available child care and concerns about Covid so often cited by economists. That only gets you part of the way to why those ending UI had little or no impact. There are myriad underlying reasons driving this phenomenon — and if you understand these, you will understand a lot more about what is going on today….

There are two key data points that support this idea:

1) New business formation has been substantial; in 2020 it was near record-breaking pace.

2) The Quits Rate is not only above pre-pandemic levels, it reached an all-time high at 2.7%.

We’ve never had more gainfully employed people quitting their jobs to do something else, and we never have had more people starting up new businesses than ever before….

To get this right, all you need to do was look at the data without outmoded, ideological, and yes, racist views of the bottom quartile of the labor market.

 

“35 Million People Will Lose Unemployment Income on Sept 6”

[People’s Policy Project, via Naked Capitalism Water Cooler 9-3-21]

“In today’s report, we learn that 9.2 million people are currently receiving benefits from either the Pandemic Emergency Unemployment Compensation (PEUC) program or the Pandemic Unemployment Assistance (PUA) program. Another 0.1 million filed an initial claim for PUA in the last week. According to the Census Household Pulse Survey, the average household that is receiving UI benefits has 3.8 members in it. This means that around 35 million people (10 percent of the US population) live in households that are scheduled to lose unemployment income in just 4 days.”

 

How Big Telecom Killed Rules That Would Have Prevented Hurricane Ida Outages

[Vice, via Naked Capitalism 9-1-2021]

 

Predatory Finance

Quietly, JPMorgan Chase Has Been Battling Another Felony Charge – This Time for Tax Fraud in France. Its Defense Is Its “Human Rights” Have Been Violated.

Pam Martens and Russ Martens, September 1, 2021 [Wall Street on Parade]

 

Disrupting mainstream economics – Modern Monetary Theory

“Modern Monetary Theory Has a New Friend in Congress”

[New York Times, via Naked Capitalism Water Cooler 9-3-21]

“If you happened to be watching C-SPAN’s “Washington Journal” on June 17, you saw a remarkable display of Modern Monetary Theory’s political influence. Representative John Yarmuth, Democrat of Kentucky, who is the chair of the House Budget Committee, gave a full-throated defense of the deficit-friendly theory to Washington’s sometimes skeptical viewership. ‘Historically, what we have done is said, ‘What can we afford to do?’ The right question is, ‘What do the American people need us to do?’’ he said. He added, ‘If we relied on taxation, purely on taxation, to fund the government, then a lot of people would suffer very seriously, because we could not provide nearly the services that the American people want us to provide.’ I am surprised that Yarmuth’s appearance hasn’t gotten more attention. He is not some anonymous backbencher. He runs the House committee that, in collaboration with its counterpart in the Senate, prepares an annual framework for the federal government’s revenue and spending levels. He is a big fiscal deal and he is on board with Stephanie Kelton, a Stony Brook University economics and public policy professor who has become a leading voice for Modern Monetary Theory. She told me that Yarmuth’s C-SPAN appearance was ‘pretty remarkable.’ ‘Unquestionably he is the most important member of Congress when it comes to just having a very good command of what it is that I and others in the M.M.T. community are arguing,’ Kelton said. ‘He’s not getting anything wrong. He’s done the hard work.’” • Now all Biden has to do is leave a horse’s head in Manchin’s bed. Or maybe we could shred the Big Tent and strangle him with a piece of it. Kidding!

 

Time to Stop Believing Deficit Bullshit

Barry Ritholtz, September 3, 2021 [The Big Picture]

 

Climate and environmental crises

America’s Climate-Change-Prone Areas Are Seeing Their Populations Swell

[Redfin, via The Big Picture 8-31-2021]

The U.S. counties with the largest share of homes facing high heat, drought, fire, flood and storm risk saw their populations grow from 2016-2020 due to migration.

 

All the Biggest Environmental Risks Facing the World’s Biggest Cities

[BusinessWeek, via The Big Picture 9-3-2021]

From landslides and extreme heat to insect infestations and airborne diseases, these are the most worrying hazards in urban areas with more than 1 million people.

 

Economics in the real world

“Sailing Stormy Waters: Mega Containerships”

[Hellenic Shipping News, via Naked Capitalism Water Cooler 8-31-21]

“To put this into perspective, in 2005 the container fleet in total was under 2,000 vessels, the largest vessel capacity was 11,078 TEU with a Deadweight (dwt) value of 115,700 tonnes. By close of 2020 it had rocketed to 5,234 vessels, with some boasting a capacity of 23,964 TEU and 232,606 dwt. This has driven overall Compound Annual Growth Rate (CAGR) by 42%, from 44K TEU in 2005 to 8.82 million TEU in 2020. Various factors have driven the growth notably economies of scale vs transportation costs, a dominant Asia Europe trade lane fuelling enough cargo, and fierce competition amongst owners. All have played into the burgeoning desire for more of what have become known as ‘mega’ container ships.”

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Institutionalists = Obstructionists

Will They Hold Out?”

David Sirota [Daily Poster, via Naked Capitalism Water Cooler 8-31-21]

“America has a feudal economy built on devastating inequality and on a form of climate ecocide that threatens the survival of the planet’s ecosystem. What’s unfolding in Congress is a last-ditch legislative attempt to modify that awful reality, and the fate of that effort will hinge on the answer to three fairly simple questions… Question 1: Will Progressives Hold Out?…. 2. Will Corporate Democrats Convince Republicans To Break With Trump?…. 3. What Does ‘Robust” Actually Mean?

 

Ben Rhodes’ Book Proves Obama Officials’ Lies, and His Own, About Edward Snowden and Russia

Glenn Greenwald [via Naked Capitalism 9-1-2021]

 

[Twitter, via Naked Capitalism Water Cooler 8-31-21]

This is classic Leisure class thinking. Lambert Strether adds: “Do remember that former MTA President Andy Byford only discovered what was wrong with the New York Subway system’s signalling by asking the workers. The “smart guys using their minds” weren’t all that smart and didn’t use their minds all that much, did they.”

 

The Dark Side

ALEC Lied About Its Work on Election Suppression Bills

[The American Prospect, 9-3-2021]

ALEC, a pay-to-play operation where legislators and corporate lobbyists meet behind closed doors to adopt and promote model legislation on a broad range of public policy issues, has in fact played a major role in this year’s voter suppression drive by GOP-controlled legislatures.

In April, CMD identified more than 100 Republican politicians connected to ALEC in just six battleground states who are lead sponsors or cosponsors of those voter suppression bills. ALEC is also pushing to loosen restrictions on poll watching activities that historically have been used to intimidate Black voters, and its national board treasurer is leading the controversial Cyber Ninjas “audit” circus by pro-Trump conspiracy theorists in Maricopa County, Arizona.

 

“The Density Divide and the Southernification of Rural America”

Will Wilkinson [Model Citizen, via Naked Capitalism Water Cooler 9-1-21]

Deck: “The Old North/South Split Lives on in the Urban/Rural Divide.” This is a reformulation of the Blue State/Red State trope into Urban/Rural From the body: “I suppose I shouldn’t find it surprising, then, that the distinctness of Iowa, Minnesota, and Missouri’s rural white cultures have faded, too. But I do find it striking. When I tour the hustings these days, that’s what strikes me: it seems so much the same wherever you go. I didn’t understand this when I was a kid, but the lived experience of growing up halfway between Branson and Lake Woebegone gave me my cultural bearings — supplied the contrasts that defined a distinct and salient Iowan identity. As those contrasts have faded, so have these distinct regional, rural identities. Everywhere it’s the same cloying pop country, the same aggressively oversized Ford F-150s, the same tumbledown Wal-Marts and Dollar Generals, the same eagle-heavy fashion, the same confused, aggrieved air of relentless material decline. Even the accents are more and more the same, trending toward a generalized Larry the Cable Guy twang. (Larry the Cable Guy is from Nebraska, FWIW.)”

Lambert Strether added: “That “relentless material decline” sentence really lets the cat out of the bag, though. Does Wilkinson really think Larry the Cable Guy orchestrated the deindustrialization of the Rust Belt? Because he didn’t. That was down to the “optimistic, diverse, dynamic, moving forward” (ODDMF) urbanites who are the Democrat party’s base.”

 

[Twitter, via Naked Capitalism 9-1-2021]

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Top defense firms spend $1B on lobbying during Afghan war, see $2T return

[Responsible Statecraft, via Naked Capitalism 9-4-2021]

 

Killing the Kraken: Federal Judge Sanctions Trump’s Big Lie Lawyers

[(The Bulwark, via The Big Picture 8-31-2021]

The Federal Rules of Civil Procedure governing litigation in federal courts require attorneys to certify through their signatures that any filings in court have a good faith basis in fact and law, and that they are not being filed for an improper purpose.

 

Mother refuses to get COVID shot, so judge strips her of visitation rights [Updated]

[ars technica, via Naked Capitalism 9-1-2021]