The horizon is not so far as we can see, but as far as we can imagine

Week-end Wrap – Political Economy – June 28, 2020

Week-end Wrap – Political Economy – June 28, 2020
by Tony Wikrent

The Epidemic

What To Look For In A Face Mask, According To Science
[, via Naked Capitalism 6-25-20]

Different researchers have set up devices that spray tiny droplets at fabric and then measured how much of it comes through the other side, while also measuring air flow to determine breathability. What they’ve found is that it’s less about the type of fabric — cotton, linen, silk — and more about the quality of fabric, according to Segal. Higher quality fabrics have a tighter weave and thicker thread that do a better job of blocking droplets from passing through.

But you also want the fabric to be breathable, according to Taher Saif, a mechanical engineer at the University of Illinois who has been researching face mask material. Saif said if breath can’t get through the mask, it will find another way out, allowing respiratory droplets to spread.

…. Segal offered a rule of thumb: hold the material up to a bright light. “Look at the light coming through the fabric,” Segal said. “If it outlines individual fibers and you can see the light through fabric, it’s probably not as effective. The less of that you can see, the better the filter.”

“Data map reveals the 23% of US counties that are currently seeing an uncontrollable growth in COVID-19 – as new model predicts Phoenix alone could see 28,000 new infections a DAY by July 18” [Daily Mail, via Naked Capitalism Water Cooler 6-26-20]

“Twenty three percent of counties across the United States are now seeing an uncontrollable growth in new COVID-19 infections, according to a data map… Phoenix could see 28,000 new cases a day by July 18…. large parts of the South and Southwest are showing an ‘epidemic trend’ or ‘spreading trend’ for new coronavirus infections…. Of the 3,141 counties across the country, 745 are currently experiencing an epidemic outbreak and 1,232 are seeing spreading trends, according to the data map. Nearly 670 counties are currently seeing a controlled trend in new coronavirus cases. According to the map, the entire state of Arizona is seeing either epidemic or spreading trends. ”

A link to the map

The unintended impact of COVID-19 on cancer
[The Hill, via Naked Capitalism 6-21-20]

In April 2020, the IQVIA Institute for Human Data Science published a report that shined a light on the unintended impact of our response to the treat of COVID-19. According to the report, it is estimated that the delay in 22 million cancer screening tests will result in an increased risk of delayed or missed diagnoses for 80,000 patients.

Strategic Political Economy

[Twitter, via Naked Capitalism 6-26-20]

Matt Stoller

American elite culture today is oriented around hostility to people who have unpopular but accurate observations. Our laws and rules incentivize cheaters, looters, and superficial intellectual frauds. Of course we can’t handle a public health crisis.


[Der Spiegel, via Naked Capitalism 6-25-20] An interview with Angus Deaton and Anne Case.

Deaton: The man who first compared the health-care industry to a tapeworm was Warren Buffett, the famous investor. There are many ways of figuring out what the health-care industry ought to cost and what it delivers. Take, for example, the comparison with Switzerland, the country with the second highest health care expenditures as a share of GDP: They spend 12 percent of GDP, but they live six years longer on average than Americans! If a fairy godmother were somehow to reduce the share spent on health care in America to the Swiss level, a lot of money would be available for other things. It would free up a trillion dollars….

DER SPIEGEL: They fall into poverty?

Case: Not necessarily. It’s more a disintegration of a way of life. One of the consequences is that, in those areas, there is a reduction of social integration. There are fewer marriages in the white working class, fewer people going to church, fewer people with stable home lives and a lessened sense of community. That puts these people at great risk.

DER SPIEGEL: And it contributes to those deaths of despair, as you have called them. What is behind this phenomenon?

Case: We were puzzled by the discovery that mortality rates are no longer sinking, but accelerating in the group of middle-aged whites with low education. They are dying from drug overdoses, alcoholic liver disease and suicide – all deaths by their own hand. And they have all risen dramatically since the early 1990s.

DER SPIEGEL: Why? What about the opioid epidemic?

Deaton: If despair due to the hollowing out of the white working class wasn’t there, the drug epidemic would be much smaller. The despair is smoldering in society, and this created an opportunity for the pharmaceutical industry, an industry that is not appropriately regulated, which made the situation with opioids much worse. At the height of it, there were enough prescriptions for every American to have a month’s supply. It was essentially legalized heroin.

Corporations Are Citizens — What Are We?
[Truthout, January 2010, via The LA Progressive 6-26-20]

Corporations are our new citizens. And you? If you’re lucky, you get to make a choice: consumer, warrior or prisoner.

Economic Armageddon: The COVID Collapsed Economy

[Bloomberg, via Naked Capitalism 6-26-20]The Second Great Depression
[The Atlantic, June 23, 2020]

Nearly 40 percent of low-wage workers lost their jobs in March. More than 40 million people lost their jobs in March, April, or May…. Economists expect that 42 percent of people recently let go will not return to their former employers….

….the PPP did not include much aid for businesses with significant nonpayroll overhead costs, such as restaurants in high-cost cities. This means that many businesses will fail, if customers fail to return. Already, an estimated 100,000 small companies have shut permanently….

A third factor behind a possible second Great Depression is the budget crisis facing states and cities. The federal government does not have to balance its ledger year to year, and perpetually spends more than it takes in. Yet every state but Vermont and most cities and towns are required to remain in the black. Right now, sales taxes, real-estate-transfer taxes, income taxes, fines and fees—they are all collapsing, leaving local governments with a budget gap expected to total $1 trillion next year. Without help from Washington, this will necessarily mean massive service cuts and job losses: namely, an estimated 5.3 million job losses….

But the last element is the true alpha and omega of our worst-case scenario: the catastrophe of the American government’s management of the novel-coronavirus pandemic.

Like many of its peer nations, the United States imposed shelter-in-place and social-distancing measures to curtail the spread of the virus. But it did so late, leading to the unnecessary deaths of tens of thousands of people. And it wasted the time these extreme measures bought, because the government failed to set up a strong test-and-trace regime. Countries including South Korea and New Zealand crushed the coronavirus. The United States merely patted it down. The country is reopening with the disease still spreading and maiming and killing, as several states experience a dramatic surge in caseloads.

Prod the Federal Reserve to save state and local governments

[Tony Wikrent, Real Economics, June 26, 2020]

Letter to Federal Reserve Chairman Jerome Powell, with contact information.

Fed’s Stress Tests Results Based on GDP Decline of 8.5 Percent; Atlanta Fed’s GDPNow Forecast Says GDP Will Decline by 46.6 Percent
Pam Martens and Russ Martens, June 26, 2020 [Wall Street on Parade]

We looked at where those projected losses were concentrated and, sure enough, they were concentrated at the biggest Wall Street banks. The breakdown was as follows: JPMorgan Chase, hypothetical losses of $64.4 billion; Citigroup, $47.7 billion; Wells Fargo, $47.4 billion; and Bank of America, $47.2 billion. In other words, the tally for just those four banks comes to $206.7 billion or 37 percent of the losses for all 33 banks.

The Fed really lost credibility, however, with these loss estimates for Goldman Sachs and Morgan Stanley, showing hypothetical losses of $9.8 billion and $5.3 billion, respectively, in the hypothetical “severely adverse scenario.” During the last financial crisis, one trader alone at Morgan Stanley, Howie Hubler, racked up $9 billion in losses.

Disrupting mainstream economics – Modern Monetary Theory

The Dangerous Myth of ‘Taxpayer Money’
Raúl Carrillo and Jesse Myerson [, via Mike Norman Economics 6-22-20]

Calling public money “taxpayer money” implicitly affirms that taxation is theft: If the money is taxpayers’ by right, what business does the government have using it for healthcare, jobs, or clean water? If we’re looking out for “taxpayers” and not the public as a whole, we are favoring wealthier groups over poorer ones—white people over Black people, men over women, U.S.-born people over immigrants, and so forth. We’re hiding how the economic order relies not merely on the sacrifices of “taxpayers,” but the contributions of debtors, tenants, workers, and countless other actors. We’re perpetuating the politics behind the 1970s California “taxpayer revolt,” the 1980s demonization of “welfare queens,” and the Make America Great Again movement—faux-populism that suggests the great majority rely on the wealthy, rather than vice-versa.

Not only is the “taxpayer money” frame damaging, it doesn’t reflect how public spending actually works. A household or a business may have to stash or borrow money before it can spend any, but we are users of the currency. The U.S. government, which is the issuer of the currency, works differently: Congress votes to spend “new money” on something, then the Treasury and the Federal Reserve credit the relevant bank accounts, and…that’s it. The government has spent new money into existence. Later, Congress may tax “old money” back out of existence, but it isn’t collecting money in order to spend it. It’s “offsetting” earlier spending. It may also offset spending by bumping student loan rates, policing for profit, or various other activities.

Book Review: The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton — Hans G. Despain
[London School of Economics Book Review Blog, via Mike Norman Economics 6-12-20]

In The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, Stephanie Kelton dispels six key myths that have shaped the conventional understanding of deficits as inherently bad, instead arguing that deficits can strengthen economies and lead to faster growth. This book is a triumph, writes Professor Hans G. Despain, shifting normative grounds of government spending away from the false and unproductive idea that deficits are irresponsible and ruinous towards the productive political activity of deciding which spending programmes should be prioritised.

I am convinced that MMT is of great value simply for its capacity to obliterate the arguments of deficit scolds. People clinging to an ideological belief that deficits are bad has literally crippled our ability to respond to social problems. And not just social problems: stopping epidemics, i.e., COVID19. What if, instead of being paralyzed and unresponsive, policy makers had shrugged off the cost of hiring a few hundred thousand more people to do testing and contact tracing? 

The Carnage of Establishment Neoliberal Economics

Why venture capital doesn’t build the things we really need
[MIT Technology Review, via The Big Picture 6-26-20]

…. venture capital had been America’s financial engine of innovation for years, and I wanted to see if that was still true. Many stats suggested it was: the number of venture capital firms in the US had risen from 946 in 2007 to 1,328 in 2019, and the amount of money they were managing had swollen from $170.6 billion in 2005 to $444 billion in 2019.

Not all the numbers were so positive, however. This largely white, largely male corner of finance has backed software companies that grow fast and generate large amounts of money for a shrinking number of Americans—companies like Google, Facebook, Uber, and Airbnb. But they don’t create many jobs for ordinary people, especially compared with the companies or industries they disrupt. And things have been slowing down. Recently, venture capitalists have found fewer and fewer ideas that fit their preferred pattern. By the end of 2019, the industry had $121 billion in “dry powder,” money in search of an entrepreneur or idea to invest in….

The image, however, doesn’t strictly match the history of the Valley, because it was “the system” that got everything started. After Sputnik launched the space race, the federal government poured money into silicon chip companies. Historian Margaret O’Mara documents this well in her book The Code: In the early 1960s, the US government spent more on R and D than the rest of the world combined. While that fire hose of cash flowed, the first venture capitalists found many winners to bankroll.

The link to government is still very much there in today’s technology companies. Google’s early work came out of the Clinton-era Digital Libraries project at Stanford, and the CIA was Palantir’s first customer in 2003—and its only one until 2008.

O’Mara says there isn’t anything wrong with tech companies’ being built through US research dollars. In fact, she argues, the most important decision of that era was for the government to pour money in without exerting too much control. But, she adds, a mythology has grown up that focuses on lone heroes and rule breakers rather than the underlying reasons for a company’s or technology’s success. “Hooray for the internet that it’s still cranking,” she says. “But you did not do this by yourself.”

…. Only just over 2% of VC money in the US went to female founders in 2017 and 2018.

…. it was hard not to think about the advantages wealth and connections offer. These benefits have been quantified by researchers who studied 1 million US patent holders and looked at their parents’ income. Low-income students who scored in the top 5% in math were no more likely to become inventors than below-average math students from affluent families, they found. Meanwhile, if women, minorities, and children from low-income families were to invent at the same rate as white men from families with incomes in the top 20%, the rate of innovation in America would quadruple….

In the United States, she says, 75% of venture capital goes to software. Some 5 to 10% goes to biotech: a tiny handful of venture capitalists have mastered the longer art of building a biotech company. The other sliver goes to everything else—“transportation, sanitation, health care.” To fund a complete system of innovation, we need to think about “not only the downstream invention itself, but what preceded it,” Dahl says. “Not only inspiring people who want to invent, but thinking about the way products reach us through companies.”

…. So how can that change? The government could turn on the fire hose again, restoring that huge spray of investment that got Silicon Valley started in the first place. In his book Jump-Starting America, MIT professor Jonathan Gruber found that although total US spending on R and D remains at 2.5% of GDP, the share coming from the private sector has increased to 70%, up from less than half in the early 1950s through the 1970s. Federal funding for R and D as a share of GDP is now below where it was in 1957, according to the Information Technology and Innovation Foundation (ITIF), a think tank. In government funding for university research as a share of GDP, the US is 28th of 39 nations, and 12 of those nations invest more than twice the proportion the US does.

In other words, the private sector, with its focus on fast profits and familiar patterns, now dominates America’s innovation spending. That, Dahl and others argue, means the biggest innovations cannot find their long paths to widespread adoption.

These numbers show how the financial system causes morbid illness in the rest of  the USA economy.  Venyure capital is hailed as the great driver of innovation (which this article makes clear is a myth or a lie — take your pick of words). So, compare a $270 billion increase in venture capital over 14 years (“$170.6 billion in 2005 to $444 billion in 2019”) to the “$230 billion of performance fees in 10 years” sucked out of the economy by private equity firms (mentioned by David Sirota in the article below). And that $230 billion does not include the management fees grabbed by private equity. And then there is the added hundreds of billions hoovered up by the Wall Street bankster racketeers. So, what venture capital can stake is a mere shadow of the immense looting by the rest of the financial system. 

The Supreme Court Has Given the Green Light to Bosses and Financial Managers to Steal From Workers

David Sirota [Jacobin, via Naked Capitalism 6-25-20]

….Supreme Court’s Thole v. U.S. Bank ruling….

The court precedent effectively says that workers and retirees cannot sue for damages as long as an employer or a financial firm managing pension money steals less than an amount that totally bankrupts a pension plan to the point where current retirees get their benefits cut. They have no standing to sue, even if the theft has destabilized the pension system for the long haul.

That’s like saying that if your local bank manager is slowly draining your savings account, you can’t sue him until there’s literally no money left in your account, because up until that point, you still at least have enough cash in there to pay your monthly bills.

“The Court’s reasoning allows fiduciaries to misuse pension funds so long as the employer has a strong enough balance sheet during (or, as alleged here, because of) the misbehavior,” wrote Justice Sonia Sotomayor in her dissent. “Indeed, the Court holds that the Constitution forbids retirees to remedy or prevent fiduciary breaches in federal court until their retirement plan or employer is on the brink of financial ruin.”

“Private Equity Abuzz Over Access to $6 Trillion 401(k) Market”

[Bloomberg, via Naked Capitalism Water Cooler 6-26-20]

“The Trump administration has cracked open the door for private equity funds to get into 401(k) workplace retirement plans. There’s roughly $5.6 trillion in such accounts, and the prospect of capturing even a sliver of it has the industry abuzz…. Lurking behind all this is a broader policy fight. Regulators in the Trump era have argued that retail investors should have broader access to a lot of investments previously limited to wealthy individuals and institutions. Democrats have generally sought more regulation of financial products, and some have been critical of private equity, blaming it for loading up companies with debt and causing layoffs and bankruptcies. The government’s approach could soon change with the presidential election less than five months away. As a harbinger, six Democratic senators and Bernie Sanders, the independent from Vermont, sent a letter to [Secretary of Labor Eugene Scalia] urging him to reconsider his decision.”

As Goldman Sachs and JPMorgan Face Criminal Probes, Barr Fires Top Prosecutor; Tries to Replace Him with Banks’ Former Lawyer, Jay Clayton
Pam Martens and Russ Martens, June 25, 2020 [Wall Street on Parade]

Shortly after 9 p.m. last evening, the U.S. Attorney General, William Barr, stunned prosecutors in the Southern District of New York with the announcement that their boss, Geoffrey Berman, was stepping down as U.S. Attorney in that District and would be replaced with the sitting Chairman of the Securities and Exchange Commission, Jay Clayton, who lacks even a shred of criminal prosecution experience. What Clayton does have is a lot of experience representing Wall Street’s largest banks, like Goldman Sachs and JPMorgan Chase, both of whom are currently under intense criminal investigations by the Justice Department. Clayton was a former partner at Wall Street’s go-to law firm, Sullivan and Cromwell, which is currently representing Goldman in the criminal case and representing JPMorgan in various matters….

Even more problematic, Clayton’s family has ties to an opaque company called WMB Holdings, described by David Dayen in The Nation magazine like this:

“This company and its affiliated partners (Delaware Trust Co and CSC) are conduits for creating shell corporations and other sketchy vehicles used in tax evasion and money laundering. Public Citizen found apparent links between these companies and Mossack Fonseca, the notorious Panamanian law firm at the center of the Panama Papers scandal.”

How McKinsey Helps Companies Avoid Responsibility: The “best available advice” is usually what’s best for the C-suite.

[Slate, via The Big Picture 6-27-20]“The Secret Reason Billionaires Love a Pandemic”

[Lee Camp, Consortium News, via Naked Capitalism Water Cooler 6-22-20]

“Billionaires in the U.S. have seen their fortunes skyrocket, increasing by 12.5 percent since the pandemic began. The Institute for Policy Studies released a study “showing that, in the eight weeks between March 18 and May 14, the country’s super wealthy have added a further $368.8 billion to their already enormous fortunes.’ That’s a jaw-dropping-fall-over-and-have-a-seizure level of wealth, yet nothing new. … In a study covered in the Proceedings of The National Academy of Sciences, researchers found that higher social class predicted an increase in unethical behavior. They showed that the rich are more likely to make unethical decisions, steal from others, break the law while driving, and cheat in contests. And yet the rich are the ones who control our government and our economy. Not only should they be kept out of leadership positions, they shouldn’t even be out on the streets. We have to keep our kids safe, don’t we? The exorbitantly rich should be put in facilities where they can be monitored and receive the treatment they require.”

[American Prospect, June 24, 2020 ]

The Household Pulse is a weekly survey of between 75,000 and 130,000 respondents conducted by the Census Bureau, with all the rigor that the Bureau brings to such research. And it asks questions that reveal the true depth of the economic pain that the COVID-19 pandemic continues to cause, and how disparately that pain is being felt.

Based on the Household Pulse Survey results released on June 17, which examined responses between June 4 and June 9, almost one-third of all households expect to experience a loss of employment income over the coming four weeks. Fully 10 percent of American families—that’s 25 million, half of which have children at home—did not have enough food to eat in the prior week. Even more disturbing, one in five households—over 50 million in total—are doubtful that they will be able to afford sufficient food in the coming month. And of the nation’s 65,000,0000 renters, almost 20 percent were unable to pay their rent last month and an even higher percentage—close to 30 percent—doubt that they will be able to pay their rent in the coming month.

Communities of color are bearing a disproportionate share of this pain. The Pulse reveals that Black and Latino households are more than twice as likely as whites to be food insecure. Blacks and Latinos make up almost 45 percent of renters, and they are roughly twice as likely to lack confidence in their ability to pay the next month’s rent as white renters. Indeed, almost two in ten Black and Latino households report that they lacked sufficient food in the prior week, and almost four in ten lack confidence in their ability to pay the next month’s rent.

U.S. Ranked Worst for Workers’ Rights Among Major Economies Bloomberg, via Naked Capitalism 6-24-20]
[Forbes, via Naked Capitalism Water Cooler 6-26-20]

“House leader Nancy Pelosi just made sure that a vote to leave the World Trade Organization would not be taken up by this congress, going against other Democrats that think it’s time the U.S. considers leaving the multilateral trade body…. Before every vote in the House, a rule is passed for how bills will be voted on. In that rule, Pelosi slipped in the line saying WTO could not be brought up…. Republican Senator Josh Hawley was given a thumbs up to force Senators to vote on whether or not to stay in the WTO. No vote on membership has been held in around 15 years. The Senate will vote on membership in July. No date has been set.”

The Section 230 Fight Ended Six Months Ago
David Dayen, June 22, 2020 [American Prospect]

Lawmakers demanding an end to the liability shield for Big Tech should have thought about that when they enshrined it in the new version of NAFTA….

There are plenty of good reasons to alter the liability shield for Big Tech. For one, Section 230 is being extended by companies like Airbnb (claiming the home rentals of their users are “third-party content”) and Amazon (the same for the product sold by third parties on their marketplace) in ways that are downright dangerous, subverting consumer protection and safety laws. For another, the conspiracy theories, algorithmic discrimination and online hate speech are prospering due in large part to that shield. One interesting concept for reform is to tie Section 230 to the banning of targeted advertising, which I called for two years ago, in the hopes that eliminating a click-bait business model would make hosting valuable content the only path to success.

But it’s hard to invest much energy in what the optimal Section 230 framework would be, since Big Tech has already solved this potential problem—in a way only they can love. Years ago, they succeeded in getting a Section 230-style provision into the reworked NAFTA, the U.S.-Mexico-Canada Agreement (USMCA). And practically everybody now incensed by the Section 230 legal immunity willingly voted to implement it in that trade agreement. That makes it much, much more difficult to change it in any way.

I first wrote about Section 230 in the USMCA in July 2018. This was the first multilateral agreement that included such a provision, which isn’t standard outside the United States. By this point Big Tech already knew that its grip in Washington was loosening, so they managed to engage in a common tactic: implanting into a trade deal what they might lose if it were stand-alone legislation.

Socialism and the Argument against Race Reductionism

Adolph Reed [New Labor Forum, via Naked Capitalism 6-21-20]

….This circular, race-reductionist logic supports denunciation of programs centered on broadly egalitarian economic redistribution as either inattentive or inimical to black people’s particular interests and concerns. A common dodge that allows dismissing advocates of agendas of socialist redistribution without confronting their arguments is the charge that, in denying the supposedly transcendent power of racism, they are characteristically guilty of “class reductionism.” Class reductionism is the supposed view that inequalities apparently attributable to race, gender, or other categories of group identification are either secondary in importance or reducible to generic economic inequality. It thus follows, according to those who hurl the charge, that specifically anti-racist, feminist, or LGBTQ concerns, for example, should be dissolved within demands for economic redistribution.4

That no one with any significant voice on the left proposes such a view does not prevent opponents of a working-class politics from making the charge because the standard rhetorical move is to posit a simplistic claim about the past–for example, that the New Deal was racist—as commonly known to be true and then to assert through historical analogy that it is therefore true as well of similar-seeming utterances, stances, or policies in the present. Because its objective is not pursuit of historical or political clarity but use of the past as a prop for a contemporary claim, the interpretive move often produces assertions that are as wrong about earlier periods as they are about the present. Thus, the erroneous assertion that the New Deal did not benefit black Americans becomes a basis for asserting, also erroneously, that blacks would not benefit from universally redistributive policies today.

‘From Here to Equality’ Author Makes A Case, And A Plan, For Reparations

[NPR, via Naked Capitalism 6-21-20]

Economics in the real world

Warehouse demand signals long-term changes in supply chain strategies
[Wall Street Journal, via Naked Capitalism Water Cooler 6-22-20]

A short-term surge in warehouse demand could signal long-term changes in supply chain strategies. Industrial real-estate activity jumped 43% from April 15 to May 14 following a steep decline in the previous 30-day period…. Companies are now weighing how much of the online sales surge will continue as local economies reopen and consumers step out of lockdowns. Many are accelerating use of hybrid strategies, with fulfillment from stores expanding. The warehouse figures suggest they’re also spreading more inventory around the U.S. to ensure rapid delivery to consumers. CBRE notes there is strong growth in short-term leases, a sign that operators are hedging their bets and waiting to see how demand develops in the coming months before refashioning their supply chains for the long haul.”

[Freight Waves, via Naked Capitalism Water Cooler 6-26-20]

“International passenger terminals may have little traffic, but at some airports there is so much cargo that frustrated businesses can wait days for medical supplies and other imports arriving on big all-cargo planes. The unusually heavy cargo volume, driven by a surge in medical supplies to combat the coronavirus pandemic and e-commerce orders from homebound consumers, has exposed long-standing, systemic inefficiencies at major hubs in Chicago and Los Angeles, as well as John F. Kennedy International Airport in New York. For airport handling agents, the coronavirus is a double-edged sword. More business is pouring in, but COVID health precautions, changes in normal cargo flows, staffing shortages and the added complexity of handling cargo-only passenger planes are combining to create operational havoc. Nearly all cargo terminals at these gateways are overwhelmed, although some are handling the situation better than others, airfreight professionals say. ”

Climate and environmental crises

June snow in Siberia’s south as highest-ever Arctic heat is recorded in Russia’s coldest region

[Siberian Times, via Naked Capitalism 6-23-20]

Arctic records its hottest temperature ever

[CBS, via Naked Capitalism 6-21-20]
[Science, via Naked Capitalism Water Cooler 6-22-20]

“For more than a decade, Makarieva has championed a theory, developed with Victor Gorshkov, her mentor and colleague at the Petersburg Nuclear Physics Institute (PNPI), on how Russia’s boreal forests, the largest expanse of trees on Earth, regulate the climate of northern Asia. It is simple physics with far-reaching consequences, describing how water vapor exhaled by trees drives winds: winds that cross the continent, taking moist air from Europe, through Siberia, and on into Mongolia and China; winds that deliver rains that keep the giant rivers of eastern Siberia flowing; winds that water China’s northern plain, the breadbasket of the most populous nation on Earth. With their ability to soak up carbon dioxide and breathe out oxygen, the world’s great forests are often referred to as the planet’s lungs. But Makarieva and Gorshkov, who died last year, say they are its beating heart, too. “Forests are complex self-sustaining rainmaking systems, and the major driver of atmospheric circulation on Earth,” Makarieva says. They recycle vast amounts of moisture into the air and, in the process, also whip up winds that pump that water around the world. The first part of that idea—forests as rainmakers—originated with other scientists and is increasingly appreciated by water resource managers in a world of rampant deforestation. But the second part, a theory Makarieva calls the biotic pump, is far more controversial.”

[National Geographic, via Naked Capitalism 6-22-20]Scientists’ warning on affluence

[Nature, via Naked Capitalism 6-22-20]

For over half a century, worldwide growth in affluence has continuously increased resource use and pollutant emissions far more rapidly than these have been reduced through better technology. The affluent citizens of the world are responsible for most environmental impacts and are central to any future prospect of retreating to safer environmental conditions. We summarise the evidence and present possible solution approaches. Any transition towards sustainability can only be effective if far-reaching lifestyle changes complement technological advancements. However, existing societies, economies and cultures incite consumption expansion and the structural imperative for growth in competitive market economies inhibits necessary societal change.

COVID-19 is the quiz, climate change the final exam

[Yale Climate Connections, via Naked Capitalism 6-21-20]

The nonprofit Climate Science Legal Defense Fund (CSLDF) maintains a Silencing Science Tracker showing where government scientists working on the pandemic have been silenced.

As reported by the New York Times this week, the Trump administration’s antagonism towards climate science has pervaded the government, and is no longer limited to the people at the top. The article called attention to an inspector general’s report at the Environmental Protection Agency made public in May: It found that almost 400 employees surveyed in 2018 believed a manager had interfered with or suppressed the release of scientific information, but they never reported the violations.

“Planet of the Humans backlash” 
[Yves Engler, via Naked Capitalism Water Cooler 6-22-20]

“It is a statement of fact that environmental groups have deep ties to the corporate set. Almost all the major environmental groups receive significant cash from the mega-rich or their foundations. Many of them partner directly with large corporations. Additionally, their outreach strategies often rely on corporate media and other business mediated spheres. It beggar’s belief that these dependencies don’t shape their policy positions. A number of the film’s points on ‘renewable’ energy are also entirely uncontroversial. It’s insane to label ripping down forests for energy as “green”. Or turning cropland into fuel for private automobiles. The film’s depiction of the minerals/resource/space required for solar and wind power deserves a far better response than ‘the data is out of date’. The green establishment’s hyperventilating over the film suggests an unhealthy fixation/link to specific ‘renewable’ industries.

Why the World’s Most Advanced Solar Plants Are Failing
[Popular Mechanics, via Naked Capitalism 6-24-20]

Information Age Dystopia

Facebook Loses Antitrust Decision in Germany Over Data Collection
[New York Times, via Naked Capitalism 6-24-20]

[NBC, via Naked Capitalism 6-27-20]

Google’s Promise to Delete Your Data Has a Major Loophole

[Gizmodo, via Naked Capitalism 6-26-20]

Creating new economic potential – science and technology

Researchers Control the Movements of Living Cells Using Electric Fields
Stephen J. Mraz, June 26, 2020 [Machine Design]

Biomedical researchers at Princeton University have developed a device that remotely controls the movement of living cells by manipulating electric fields to mimic those found in the body during healing. The device, called the Spatiotemporal Cellular HErding with Electrochemical Potentials to Dynamically Orient Galvanotaxis (SCHEEPDOG), could open new possibilities for tissue engineering, including approaches wound healing, repairing blood vessels and sculpting tissues….

Editor’s Note: Click here for some microscopic views of SCHEEPDOG in action.

“Five Foods You Can Substitute For Garden Fertilizer” 
[Modern Farmer, via Naked Capitalism Water Cooler 6-22-20]

“Plants thrive on a number of micronutrients, but the three common ingredients found in store bought fertilizer include nitrogen, phosphorus and potassium—otherwise known as NPK. And all of these essential nutrients can likely be found right in your home. If you don’t want to leave your house to purchase plant food, chances are you don’t have to. We’ve put together a list of five foods likely in your kitchen that you can use instead of making a trip to your garden store for fertilizer. ”

Lambert Strether adds: “Coffee grounds, egg shells, milk, fish, banana peels. I’ve had good luck with the first two, never tried the last three! Basic idea: Let nothing organic leave the property.”

Ugandan government approves US$376MM for Malaba – Kampala railway

[Railway Age 6-22-20]

The Ugandan government has approved a Shillings 1.4 trillion (US$376 million) investment to reconstruct the 215km Malaba – Kampala railway, with the intention of improving freight connections between the capital city and Uganda’s eastern border with Kenya. An additional investment of Shillings 48 billion has been approved to purchase eight locomotives for the line, and a further Shillings 9.5 billion for routine repairs across the network. Full Article

Disrupting mainstream politics

The next generation of US voters that will be replacing the boomers.
[Fast CompanyMike Norman Economics 6-25-20]

Open Letter to Vice President Biden from the children and grandchildren of FDR and his New Dealers
[Medium, June 23, 2020]

Dear Vice President Biden:

We are descendants of the men and women who designed and implemented President Franklin D. Roosevelt’s New Deal policies during the Great Depression of the 1930s, the worst economic decline of the 20th Century.

We are tremendously heartened to hear of your recognition that today’s crises — health, economic, and social — are so enormous as to “eclipse what FDR faced,” and that you believe your presidency “must be more ambitious than FDR’s.”

We agree, and urge you to champion a 21st Century New Deal that will restore belief in a government that works for all Americans. While the original New Deal remains the foundation of U.S. domestic policy, the COVID-19 crisis vividly demonstrates where our federal government has failed to live up to its responsibilities.

Just as the Great Depression laid bare the inherent cruelty of a passive, hands-off federal government, the last several months have made the failures of a “limited government” philosophy impossible to ignore. It is a moral outrage that millions of Americans are left to fend for themselves in these times of unprecedented personal, economic, and health crisis, while our federal government has the power — and the first-hand experience from the New Deal — to help….  The idea that the government should sit idly by while the American people suffer must be soundly rejected, and replaced with a vision for government in which every individual is able to live his or her life prosperously and securely, safe from the fear of utter destitution. To that end, we strongly support your demand that the federal government enact bold and dramatic reforms that guarantee Americans the jobs, the income, the health care, and the sustainable environment they need to live productive and healthy lives.

FDR and his New Deal allies, including our forebears, responded to the crisis of their time with proactive governmental solutions to help everyday Americans — to serve the forgotten many rather than the wealthy few. We ask you to do the same.

Henry Wallace, American Visionary — Jeremy Kuzmarov
[Counterpunch, via Mike Norman Economics 6-12-20]

Over fifty years after his death, Henry A. Wallace, America’s Vice President from 1941-1945 and an independent candidate for president in the 1948 election, continues to evoke strong emotions. On the left, Wallace remains a figure of veneration for his progressive ideals and promotion of world peace, while among conservative and centrist Democrats, he is considered a naïve dupe of communists who underestimated the Soviet “threat.”

John Nichols’ latest book, The Fight For the Soul of the Democratic Party: The Enduring Legacy of Henry Wallace’s AntiFascist, Antiracist Politics(Verso, 2020) offers a convincing case that those on the left were correct: that Wallace was indeed a visionary who was ahead of his time in warning about a right-wing drift in American politics and danger of corporate fascism and whose policy of cooperation with the Russians might have averted the Cold War.

According to Nichols’, Wallace’s removal from the Democratic Party ticket due to back-door machinations at the 1944 Democratic Party convention in Chicago, was a major turning point in American political history. It began the Democratic Party’s trajectory away from the progressive ideals underlying Franklin D. Roosevelt’s New Deal, and towards the embrace of neoliberalism. Nichols in turn believes that the time is ripe for a new generation of Democratic Party leaders to reclaim Wallace’s legacy, and revitalize his political platform, which centered on promoting racial and gender equality and the interests of American working people, and advancing a peaceful foreign policy….

Perhaps the sharpest blow to the US strategically in the past hundred year was the replacement of Henry Wallace with Harry Truman in what would be FDR’s last term in office. There is a temptation to view America’s “problems” as recent. They began back then and now are coming to a head with nuclear war looming abroad and incipient civil war brewing at home. Neither the Cold War nor the Civil War ever actually ended.

So, add replacing Wallace with Truman as one of Franklin Roosevelt’s worse strategic blunders, along with his failure to prosecute the “Business Plot” would-be-coup leaders exposed by Marine Corps General Smedley Butler. One of the signers of the open letter to Biden (above) is Wallace’s grandson, Henry Scott Wallace.“Why Biden Is Rejecting Black Lives Matters’ Boldest Proposals” 
[Politico, via Naked Capitalism Water Cooler 6-26-20]

“The expected revolt of white suburbanites against the protests hasn’t materialized. Instead, they’ve joined them. ‘This is no longer a traditional wedge issue because all of a sudden white Americans, particularly college educated whites, understand that racism is real,’ said Cornell Belcher, a veteran Democratic pollster who worked for Barack Obama. ‘Those white suburban women now understand that they have skin in the racism game as well. And that changes everything.’… ‘I think Democrats didn’t know what to do at this moment and that’s typical,” said Maurice Mitchell, national director of the Working Families Party and a social movement strategist. ‘Movements operate with different prerogatives than traditional electoral politics. Mass movements always lead—they come up with new ideas and surface problems that aren’t new but the surfacing of the problem makes visible something that had been invisible because we’ve tolerated it for so long and the problem has become woven into the fabric of the country.’ From this perspective, the fact that Biden is a relatively nonideological politician who has continuously shifted with the political tides to remain close to the consensus view of his party might be a feature, not a bug.

“What’s behind Joe Biden’s mystique?” 

Thomas Frank [Guardian, via Naked Capitalism 6-22-20]

And in the presumptive Democratic nominee Joe Biden, that conventional wisdom would seem to have found its man: he stands on behalf of no great causes, just a return to the consensus days of yore.

The flaw in this viewpoint is that the consensus days of yore were a dreadful time. What bipartisan centrism meant, in Biden’s heyday, was deliberate, state-sponsored cruelty on a scale so vast it is difficult to comprehend. It meant baked-in racial discrimination. It meant imprisoning enormous numbers of our fellow citizens for using drugs – especially crack cocaine, whose users (disproportionately African American) were singled out for horrendously harsh retribution. It meant three-strikes laws. Mandatory minimum sentencing. Unlimited funding for police departments. A boom in prison construction. And, as it pleased Joe Biden to say on the worst of these occasions, “the truth is, every major crime bill since 1976 that’s come out of this Congress – every minor crime bill – has had the name of the Democratic senator from Delaware, Joe Biden, on that bill.”

The Dark Side

The Unfathomable Stupidity of Rich White Men
[DailyKos 6-24-20]

Trump (R)(1): “The Week It Went South for Trump”
[Peggy Noonan, via Naked Capitalism Water Cooler 6-26-20]
Lambert Strether: “This is brutal.”

His long-term political malpractice has been his failure—with a rising economy, no unemployment and no hot wars—to build his support beyond roughly 40% of the country. He failed because he obsesses on his base and thinks it has to be fed and greased with the entertainments that alienate everyone else. But his base, which always understood he was a showman, wanted steadiness and seriousness in these crises, because they have a sense of the implications of things.

He doesn’t understand his own base. I’ve never seen that in national politics.

Some of them, maybe half, are amused by his nonsense decisions and statements—let’s ban all Muslims; let’s end this deadbeat alliance; we have the biggest, best tests. But they are half of 40%, and they would stick with him no matter what. He doesn’t have to entertain them! He had to impress and create a bond with others.\

The other half of his base is mortified by his antics and shallowness. I hear from them often. They used to say yes, he’s rough and uncouth and unpolished, but only a rough man can defeat the swamp. Now they say I hate him and what he represents but I’ll vote for him because of the courts, etc. How a lot of Trump supporters feel about the president has changed. The real picture at the Tulsa rally was not the empty seats so much as the empty faces—the bored looks, the yawning and phone checking, as if everyone was re-enacting something, hearing some old song and trying to remember how it felt a few years ago, when you heard it the first time….

‘This is a war’: Republicans ramp up bid to control election maps for next decade

[Guardian, via Naked Capitalism 6-24-20]

The Republican State Leadership Committee (RSLC) – which held the key to the GOP’s political takeover a decade ago – launched the Right Lines 2020 campaign last September, taglined: “Socialism starts in the states. Let’s stop it there, too.” It’s hoping to meet a $125m investment goal in an effort to retain 42 state legislature seats that the group says are key to holding power in the House of Representatives in battleground states including Wisconsin, Texas, Florida and New York.

“There’s a decade of power and a decade of dominance that’s truly on the line,” RSLC president Austin Chambers, a 24-year-old Republican operative, told Sean Spicer on his Newsmax show in March. The group recently appointed party strategist Karl Rove and ousted White House chief of staff Reince Priebus to its board….

RSLC contributors Citigroup, Chevron, and Dominion Energy are one of a number of companies aligning themselves with the Black Lives Matter protests, though not always directly. Altria and Dominion Energy have both pledged $5m to fight “racial and social inequality”. But these words can ring hollow.

“They can look moderate or woke to the public, even though they don’t spend their money to pursue those issues politically the same way they pursue their narrower [interests],” said Jake Grumbach, an assistant professor of political science at the University of Washington.

The Guardian reached out to the RSLC’s top five corporate donors in 2019, most of which disclose their political contributions on their websites. Chevron, Dominion and Reynolds all replied that companies contribute in a bipartisan, transparent manner according to their business interests, and declined to answer questions about Redmap. Altria and BNSF did not comment. Ultimately, Freed said, companies don’t consider the consequences of their political spending. “Corporations either turned a blind eye or they didn’t pay attention, but they’re responsible through their spending.”

Book Publishing’s Next Battle: Conservative Authors
[The New Republic, June 12, 2020]

The publishing landscape in 2024, however, may look rather different. A large, long-overdue reckoning is afoot in the industry. On Monday, thousands of workers conducted a work stoppage—an unprecedented action in an industry with little union representation—in support of the Black Lives Matter movement and in protest of publishing’s staggering lack of diversity, both in terms of the industry’s workforce and the types of books it publishes. Meanwhile, #PublishingPaidMe, a hashtag with hundreds of entries, has drawn attention to the low advances paid to writers, particularly women and writers of color.

These have been issues for a long time—Lee Kamp; Low has been releasing figures that showcase the industry’s lack of diversity for years—but major publishers, including three of the Big Five, have made commitments that suggest something might actually change. And increased scrutiny is now being paid not just to what publishers aren’t publishing, but to what they are: Namely, the conservative bestsellers that have been cash cows for years….

…The lack of fact-checking in corporate publishing remains a scandal, but there are few signs that any conglomerate publisher plans on making the expensive decision to apply basic scrutiny to its books any time soon.

Fact-checking would, it’s also worth pointing out, make it impossible to publish a great many conservative books. Donald Trump Jr.’s Triggered contains a number of factual inaccuracies. What a fact-checker would make of something like Corey Lewandowski’s Let Trump Be Trump or Nick Adams’s Trump and Churchill: Defenders of Western Civilization is anyone’s guess. Even the more “respectable” side of conservative publishing would have problems. I’m not sure how a book like Jonah Goldberg’s Liberal Fascism would fare in the environment that Burns suggests.


Open Thread


Being Held Hostage by the Cost of Insurrection


  1. nihil obstet

    I am convinced that MMT is of great value simply for its capacity to obliterate the arguments of deficit scolds. People clinging to an ideological belief that deficits are bad has literally crippled our ability to respond to social problems.

    What people claim to be arguing against and what they’re actually arguing against are not necessarily the same. If there was ever a question about the arguments of deficit scolds, it was obliterated in 2008 when Congress came up with $14 trillion to make sure that Jamie Dimon and Lloyd Blankfein would get their obscene bonuses after bankrupting their firms. That was necessary, you see, as opposed to saving the lives of peasants with health care and general security. The trillions going to bail out cruise ships, airlines, and other corporations that spent every dime to buy back their own stock and goose management looting is a mere post script. Over the past 40 years, more than a political generation, deficits haven’t stopped the rich and their courtiers from anything they wanted. As Dick Cheney said during the second Bush administration, “Reagan proved that deficits don’t matter.”

    Where I see success for the deficit scolds is in convincing the left to fight on abstruse and confusing grounds rather than directly for the society that most people want. The few people that will be encouraged by a theoretical obliteration of deficit scolds don’t need the argument. It’s just a distraction for everybody else. Do we want health care? Hell, yes! Can we do it? Well, let’s take what we’re spending on a war place that can’t take off in the rain and use it for Medicare. Let’s tax some rich folks.

    Incidentally, on “taxpayer money”, the authors cited the California tax rebellion. MMT didn’t apply there — states are not sovereign in their own currency; they have to balance their budgets. Do we really want to spend our time explaining different public policies like that, that the proponents of MMT can’t even keep straight in their thinking?

  2. Zachary Smith

    Amazingly good set of links. Many of the best ones were stories I hadn’t seen at all.

    Now for a few remarks of my own:

    “What’s behind Joe Biden’s mystique” My answer to this: Advertising Excellence coupled with selective forgetfulness.

    “‘From Here to Equality’ Author Makes A Case, And A Plan, For Reparations” IMO the author is mostly wrong, but that’s just me. Paying money to the great-great grandson of a slave is going to be extremely divisive, and doesn’t involve any kind of “justice”. What about two or three generations of fully funded college education for those who can maintain a grade of “C” or better? Oh, and also dismantling the Prison Industrial Complex – starting with the first-contact Police.

    “COVID-19 is the quiz, climate change the final exam “ When climate change really begins to kick in, we’ll dream of the “Good Old Days” of covid 19. Indeed, the Black Death Pandemic will begin to look mighty good by comparison.

    “Why the World’s Most Advanced Solar Plants Are Failing” For starters, that title appears to be deliberately misleading. Lots of people are going to deduce “Solar” is foundering, and I suspect that’s the reason for the way it was all laid out. “The Solar Power Towers are an old scheme which dates back at least 40 years. It wasn’t a good idea then, and it isn’t now. The basic idea isn’t nearly as bad (dangerous) as nuclear power plants, but it’s not a ‘winner’ either.

    Except for the Covid-19 link, I’m not going to remark about all the great ones – there are just too many!

Powered by WordPress & Theme by Anders Norén