Month: May 2021

by Tony Wikrent

Strategic Political Economy

“Economic Warfare: What Can World War One Tell us about 21st Century Conflicts?”

Jonathan Kirshner is a Professor of Political Science and International Studies at Boston College, and the Stephen and Barbara Friedman Professor of International Political Economy Emeritus in the Department of Government, Cornell University. By the late 1920s France had Europe’s most powerful army, much of the world’s gold, and was an active and aggressive practitioner of economic warfare. Within a decade, however, tragically, and even shamefully, France could barely be roused to rise to its own self-defense. The stark difference between 1930 and 1940 is attributable to a radical polarization of French politics and an embrace of “the age of unreason” that paralyzed the country’s foreign policy practice. Kirshner explains how the shocking six week military collapse in autumn 1939 was prefigured by the destruction of French democracy in the six years before the German invasion. After the 1936 political collapse, the French upper classes openly opposed new Socialist Prime Minister Leon Blum with the slogan, “Better Hitler than Blum.” The United States today appears on a similar course of decline.

Capitalism versus Democracy: Sam Seder interviews Prof. Timothy Kuhner

Georgia State University Law Professor Timothy K. Kuhner author of  Capitalism v. Democracy: Money in Politics and the Free Market Constitution explains the history of campaign funding scandals, economic power and political exclusion, the choice between Milton Friedman and John Rawls in Buckley Valeo, why the right wing majority on the Supreme Court treats Thomas Paine the same as the Koch brothers, the function of the Supreme Court has been to protect private capital, restricting the scope of campaign finance regulation, bizarre free market ideology has run amok and campaign finance reform and overturning American oligarchy.

Predatory Finance

Financial Speculation Is About More Than GameStop Day Traders

David Dayen, May 4, 2021 [The American Prospect]

The real speculation is happening at the top of the market, through skyrocketing merger transactions and increases in the power of the biggest companies…. There is currently a frenzy of M&A activity, and while the SPAC craze did make this worse by increasing prices for private companies, deal making has continued even as SPACs tailed off. The first four months of 2021 saw $1.77 trillion in global transactions, higher than any other year in history. “It’s the busiest I’ve ever known it,” said one industry veteran to the Financial Times. Deals have surged among tech startups too, which in recent years has been a prelude to more mergers as those founders pursue an exit strategy. The Biden administration has provided little resistance to merger activity, which gives budding monopolists the signal that they will have no problems building their empire. In particular, private equity is thundering, with $1.6 trillion in spare capital to play with. Mega-deals of over $10 billion are rising, and major sales, like Apollo Global Management’s purchase of AOL and Yahoo from Verizon, have consummated in recent days.

Read More

Strategic Political Economy

“The Free Market is Dead: What Will Replace It?”

[Chris Hughes, Time, via Naked Capitalism Water Cooler 4-27-21]

Significant because it’s Time, of all places. 

But corporate America’s newfound support for more public investment is not a temporary phenomenon. We are witnessing the most profound realignment in American political economy in nearly forty years. President Ronald Reagan summed up the conventional wisdom that reigned from the mid-1970s onward in the United States: “Government is not the solution to our problem, government is the problem.” Economists, policymakers, and everyday Americans alike generally accepted that markets, unfettered and free, are the best way to create economic growth…. That ideology began to crack after the Great Recession, and in the wake of the coronavirus pandemic, it has collapsed. The rise of ethno-nationalism on the right and democratic socialism on the left testify to the growing disillusionment with the conventional wisdom of how government and economics are supposed to work. It’s not just the fringes questioning free market orthodoxy in a time of disease. Cross-partisan supermajorities of Americans want some of the biggest companies of America to be broken up, significantly higher minimum wages, a wealth tax on billionaires, and believe significantly more public investment is required to create economic growth. We have had regulations, public investment, and macroeconomic management to varying degrees throughout American history. What makes this moment different is that Americans across parties, class, and educational background are using a new framework to think about how we create prosperity.”

“What’s behind the growth slump? Takeaways from census data”

[Associated Press, via The Big Picture 4-28-2021]

“The U.S. population grew to 331 million, a 7.4% growth rate from the last time the Census Bureau counted every person in the country, in 2010. Those may sound like big numbers, but it’s actually the second slowest rate of population growth the census has ever recorded, just behind the 7.3% growth in the 1930s. That decade’s slowed growth was rooted in the Great Depression. Our past decade’s sluggish rate had similar beginnings in the long shadow of the Great Recession. The drawn-out recovery saw many young adults struggling to enter the job market, delaying marriage and starting a family. That dealt a blow to the nation’s birthrate. Then the pandemic hit last year and made matters worse. But while U.S. population growth recovered after the Great Depression, demographers are not optimistic it will pick up anytime soon. Most forecast even slower population growth in the decades to come. Americans are getting older — the median age in the U.S. is 38, up one year from 37 in 2010. Immigration had been dropping even before the pandemic effectively shut it down. And many Republicans have largely turned against the idea of immigration, legal or illegal, a new political barrier to the country adding more population quickly. ‘Unlike the Great Depression, it’s part of a process where we’re likely to keep having slow growth,’ said William Frey, a demographer at the Brookings Institution in Washington, D.C. That has potentially grim consequences for the nation’s future.”

“…we’re likely to keep having slow growth…” Why? Just because population growth slows down? What most people do not realize is that a transition to an economy free of fossil fuel dependencies — if done in time to meet the challenges of climate change — will require some of the fastest economic growth in recorded human history. What do you think it’s going to look like as we replace the 1.5 billion motor vehicles in the world with electric vehicles? Do you want to do that over 30 or 10 years, or over the next ten? Or sooner? In fact, the faster the growth, the faster will we be changing the economy to meet the challenge of climate change. Frey is obviously stuck in a old paradigm of economic thinking. A huge challenge is going to be to managing world-wide economic growth rates of ten to fifteen percent for about 15 or 20 years, then transitioning to near zero-growth rates after the world’s economy and transportation systems have been rebuilt on a carbon free basis. 

How Humanity Gave Itself an Extra Life

[New York Times, via The Big Picture 5-1-2021]

Read More