Author: Tony Wikrent Page 33 of 48

by Tony Wikrent

Strategic Political Economy

[Twitter, via Naked Capitalism 6-11-21]

There is no competing with China without a competent state, and a state that cannot tax its powerful is not a competent state. https://t.co/lJoeLIYkkN

— Matt Stoller (@matthewstoller) June 10, 2021

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Vast Majority of Voters Want Higher Taxes on Wealthy, Corporations

[Americans For Tax Fairness, via Daily Poster 6-12-2021]

Nearly 7 in 10 voters support raising taxes on the wealthy and corporations, according to a new poll from ALG Research, Hart Research, and Americans for Tax Fairness. Moreover, voters become more supportive of President Joe Biden’s economic plans when they are told they will be funded by taxes on the wealthy and corporations.

The Global South has lost $152 trillion through unequal exchange since 1960
Dylan Sullivan [Progress in Political Economy, via Mike Norman Economics, June 7, 2021]

Dependency and world-systems theorists have long argued that “unequal exchange” is a key driver of global inequality. Since wages and natural resource prices are much lower in the global South than the North, poor countries must export many more units of embodied labour and resources than they import in order to achieve a monetary balance of trade. This creates a constant transfer of labour and ecology from the periphery to the core, developing the latter but impoverishing the former.

In a recent paper in New Political Economy that I co-authored with Jason Hickel from the University of London, and Huzaifa Zoomkawala, a data analyst based in Karachi, we quantify the value that has been appropriated from the South through unequal exchange since 1960. To do this, we use a method developed by the economist Gernot Köhler. Köhler proposes that we can use purchasing power parity (PPP) exchange rates constructed by the World Bank to value the South’s exports at the North’s price level. By subtracting the actual market price that the South received for its exports from this figure, we can measure the commodities appropriated by the imperialist states, in terms of the Northern price of those commodities.

Using Köhler’s method, we find that in 2017 the ‘emerging and developing economies,’ as defined by the IMF, lost $2.2 trillion worth of goods to the ‘advanced economies.’ This represents an enormous loss for the South. These resources could have ended extreme poverty 15 times over, but instead they were transferred gratis to the core. This windfall is of enormous benefit to the centres of empire. For instance, in 2017 the US gained $2,634 per person through unequal exchange, while the average Australian citizen received $3,116 from the South. Since 1990, the North’s annual gains from unequal exchange have sat at 5.2% of GDP, considerably higher than the North’s annual growth rate. In other words, if not for imperialist plunder, aggregate income in the North would have been declining for decades. The extraordinary levels of material consumption currently enjoyed in the North are predicated upon exploitation and poverty in the periphery.

Figure 1 shows total value transfer since 1960. All up, the South has lost $62 trillion (constant 2011 dollars), equivalent to 97% of its 2017 GDP. If this surplus had been available to the South, it could have been reinvested in domestic economic development. If we assume this surplus would have grown at the same rate as Southern GDP, it would now be equivalent to $152 trillion.…

And don’t forget the RAND study that found in USA alone, the one percent have taken over $50 trillion from the bottom 90 percent since 1975: Trends in Income From 1975 to 2018.

Global Investable Assets Reach Record $250 Trillion

[Institutional Investor, via The Big Picture 6-10-2021]

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Week-end Wrap – Political Economy – June 6, 2021

by Tony Wikrent

Strategic Political Economy

The Particular Psychology of Destroying a Planet” What kind of thinking goes into engaging in planetary sabotage?

Bill McKibben [The New Yorker]

….in a new book from the British psychoanalyst Sally Weintrobe. “Psychological Roots of the Climate Crisis” states its argument in its subtitle: “Neoliberal Exceptionalism and the Culture of Uncare.” Weintrobe writes that people’s psyches are divided into caring and uncaring parts, and the conflict between them “is at the heart of great literature down the ages, and all major religions.” The uncaring part wants to put ourselves first; it’s the narcissistic corners of the brain that persuade each of us that we are uniquely important and deserving, and make us want to except ourselves from the rules that society or morality set so that we can have what we want. “Most people’s caring self is strong enough to hold their inner exception in check,” she notes, but, troublingly, “ours is the Golden Age of Exceptionalism.” Neoliberalism—especially the ideas of people such as Ayn Rand, enshrined in public policy by Ronald Reagan and Margaret Thatcher—“crossed a Rubicon in the 1980s” and neoliberals “have been steadily consolidating their power ever since.” Weintrobe calls leaders who exempt themselves in these ways “exceptions” and says that, as they “drove globalization forwards in the 1980s,” they were captivated by an ideology that whispered, “Cut regulation, cut ties to reality and cut concern.” Donald Trump was the logical end of this way of thinking, a man so self-centered that he interpreted all problems, even a global pandemic, as attempts to undo him. “The self-assured neoliberal imagination has increasingly revealed itself to be not equipped to deal with problems it causes,” she writes.

The real Lord of the Flies: what happened when six boys were shipwrecked for 15 months

[The Guardian, via The Big Picture 6-3-2021]

When a group of schoolboys were marooned on an island in 1965, it turned out very differently from William Golding’s bestseller, writes Rutger Bregman….

For centuries western culture has been permeated by the idea that humans are selfish creatures. That cynical image of humanity has been proclaimed in films and novels, history books and scientific research. But in the last 20 years, something extraordinary has happened. Scientists from all over the world have switched to a more hopeful view of mankind. This development is still so young that researchers in different fields often don’t even know about each other.

The carnage of mainstream neoliberal economics

Chris Hedges: “Dying for an iPhone”

[Scheerpost, via Naked Capitalism 6-1-2021]

Global capitalists have turned back the clock to the early days of the Industrial Revolution.  The working class is increasingly bereft of rights, blocked from forming unions, paid starvation wages, subject to wage theft, under constant surveillance, fired for minor infractions, exposed to dangerous carcinogens, forced to work overtime, given punishing quotas and abandoned when they are sick and old. Workers have become, here and abroad, disposable cogs to corporate oligarchs, who wallow in obscene personal wealth that dwarfs the worst excesses of the Robber Barons

Amazon Prime Is an Economy-Distorting Lie

Matt Stoller [BIG, via Naked Capitalism 5-31-2021]

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by Tony Wikrent

Strategic Political Economy

Long Slide Looms for World Population, With Sweeping Ramifications

[NYT, via Naked Capitalism 5-23-2021]

“1 big thing: The state of the world, according to me”

Dion Rabouin [Axios, via Naked Capitalism Water Cooler 5-27-21]

I find this very interesting because Rabouin implies that he is conveying the elite consensus he has gathered from his contacts and sources over the past years. The elites are well aware of the socio-economic problems afflicting average people: “Because consumers don’t have cash to spend, many companies struggle to generate real profits.” Then the bottom line: “But it doesn’t seem like there’s much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.”

As Ian Welsh explains in CDC Decides To Just Not Count All Covid Cases,

The people making decisions not only don’t care if you die, if you dying will make them richer or more powerful, they’ll go with the decision path that leads to you or mum or your best friend dying or winding up homeless. You aren’t nothing to them, you’re meat. A prey animal.

Welcome to late capitalism.

Rabouin:

This being my last Axios Markets newsletter, I figured I’d break from tradition and tell you what I really think. I’m not anyone important, but I read a lot of reports and I talk to a lot of smart people, so I’ve learned a thing or two.

I believe our country is in trouble. And it’s not about a loss of morality or religion or liberals or conservatives or the current president or the last president. It’s about a fundamental problem we have as a nation — a reckless imbalance of wealth. The people at the top have too much and the people at the bottom don’t have enough.

This is not a philosophical matter of doing what’s “right.” It’s a practical matter of doing what’s necessary to uphold and maintain a consumption-based economy…. We’re living in a world now where the wealthy have so much money they literally don’t know what to do with it…. Those who aren’t asset holders haven’t even benefited from the risk-asset inflation that’s accompanied housing, medical and education price inflation for the past decade because wage inflation hasn’t even come close….

This problem isn’t new. We’ve been lurching toward this imbalance for years as corporations busted unions, moved jobs offshore and muscled out independent small businesses, aided by politicians who rewarded them with tax breaks and no-bid contracts for doing it….

• Retailers can’t raise prices, so it is almost entirely a race to the bottom — nearly half of all new retail store openings announced so far this year are from Dollar General, Dollar Tree and Family Dollar.
• The obvious exception being luxury brands, which are selling products to the wealthy who have more money than they know what to do with.

New companies today almost universally either lose money, free-ride by offering a service that makes some other service cheaper, or sell something to large corporations or the government.

#BigFacts: Because consumers don’t have cash to spend, many companies struggle to generate real profits.

• However, because interest rates are so low, if a company is big enough it can just keep issuing bonds to keep itself afloat.
• That’s why nearly a quarter of the largest public U.S. companies today are zombies — firms that don’t even make enough money to pay the interest on their debt.

….But it doesn’t seem like there’s much interest in finding an actual solution, just printing more money, adding more debt and putting more Band-Aids on the problem.

“U.S. aluminum tariffs have led to investment, jobs -think tank study”

[Reuters, via Naked Capitalism Water Cooler 5-25-21]

“U.S. tariffs on aluminum imports imposed by former president Donald Trump and continued by President Joe Biden have led to increased output, employment and capital investment by domestic producers, a new study from a left-leaning think tank showed on Tuesday. The Economic Policy Institute said the 10% aluminum tariffs, imposed in March 2018 under the “Section 232″ national security section of a Cold War-era trade law, have led to $6 billion in 57 downstream aluminum product manufacturing projects that will employ over 4,500 additional workers.”

Of course, the “free trade” ideologues are promoting the Reason Foundation paper that argues only eight percent of the “extra” cost of tariffs are being paid by the Chinese exporters, and the remaining 92 percent are being imposed on American consumers. Any simple review of actual economic history [pdf] shows that tariffs and preferences for domestic manufacturing have been the only means for a country to industrialize. Which is why mainstream neoliberal economists are not taught actual economic history. 

Austerity’s Hidden Purpose

Yanis Varoufakis [Project Syndicate, via Naked Capitalism 5-26-2021]

But if austerity is such a bad idea, sapping our economies of energy, why is it so popular among the powerful? …. But suppose for a moment, and for argument’s sake, that everyone agreed that printing another trillion dollars to finance a basic income for the poor would boost neither inflation nor interest rates. The rich and powerful would still oppose it, owing to the debilitating fear that they would end up like Peel in Australia: monied but bereft of the power to compel the less monied…. their most important interest is not to conserve economic potential. It is to preserve the power of the few to compel the many.

Signs of economic immiseration:

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by Tony Wikrent

Predatory Capitalism in the Time of COVID19

‘Government Money That’s Gone Into Vaccine Development Is Being Privatized by a Handful of Companies’

[FAIR, via Naked Capitalism 5-16-2021]

It Was The Government That Produced COVID-19 Vaccine Success

[Health Affairs Blog, via Naked Capitalism 5-16-2021]

“Who owns the covid vaccines?”

Cory Doctorow [via Naked Capitalism Water Cooler 5-17-2021]

““Behind every great fortune lies a great crime.” The true mRNA vaccines theft isn’t entrepreneur-inventors who face robbery by the public sector — rather, those “entrepreneurs” have enjoyed billions in public subsidies, and now insist they owe nothing in return….. Pharma’s claim that it doesn’t owe us anything in return makes no sense, even by the companies’ own logic. They say that markets produce wonders because they reward canny risk-taking with vast fortunes. By that logic, the public — who assumed the majority of the risk in developing vaccines — are the angel investors in this high-tech unicorn, and the pharma companies are the VCs who came in with some late capital to help scale up a sure thing.”

America Is Failing Its Moral Test on Vaccines
New York Times Editorial Board, May 14, 2021, via Naked Capitalism 5-16-2021]

The H.I.V. advocacy group PrEP4All estimates that for $4 billion — less than the country is spending per day on coronavirus response efforts — the federal government could build enough manufacturing capacity to vaccinate the entire planet against the coronavirus. It will cost much more to actually make the needed doses, of course. The nonprofit advocacy group Public Citizen estimates that a $25 billion governmentwide initiative would produce around eight billion doses of mRNA vaccine, or enough to vaccinate half the planet. That’s far less than the trillions that could be lost if the economy contracts further as the pandemic persists.

Cashing in on Our Homes: Billionaire Landlords Profit as Millions Face Eviction

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by Tony Wikrent

Strategic Political Economy

Insider view: the tragedy of the US Deep State

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

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

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

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

Tech-Tonic Shift in Sino-Russian Cooperation

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

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

Mark Blyth – Trailer Age of Economics

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

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.

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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]

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by Tony Wikrent

Strategic Political Economy

Plato, Aristophanes and Aristotle on Money-Lust, 399-380 BC
Michael Hudson, April 23, 2021 [Naked Capitalism]

Delphi’s warning that lust for monetary silver (philarguria) was the only thing that could destroy Sparta was echoed by Plato, Socrates and other philosophers accusing wealth addiction of leading to greedy and hubristic behavior that impoverished society at large. Creditors were singled out for reducing debtors to bondage and taking their land.

Near the outset of Plato’s Republic (1 at 331c-d, written c. 380 BC), Socrates (who was put to death nearly twenty years earlier, in 399) discusses the morality of repaying debts in circumstances where this would lead to anti-social consequences. Cephalus, a businessman living in the commercial Piraeus district, states the typical ethic that it is fair to pay back what one has borrowed. Socrates asks if it would be just to return weapons to a man who has become a lunatic. If a madman is intent on murder, Socrates asks, will not returning his weapon to him enable him to commit unjust acts? In view of the likely adverse social consequences, paying back such a creditor would be the wrong thing to do. It all depends on what creditors will do with their returns, and how their actions affect society. Book 8 of the Republic elaborates upon this discussion, describing how wealth leads its owners to act in ways detrimental to society.

Howard University’s removal of classics is a spiritual catastrophe

Cornel West and Jeremy Tate, April 19, 2021 [Washington Post]

Academia’s continual campaign to disregard or neglect the classics is a sign of spiritual decay, moral decline and a deep intellectual narrowness running amok in American culture. Those who commit this terrible act treat Western civilization as either irrelevant and not worthy of prioritization or as harmful and worthy only of condemnation.

Sadly, in our culture’s conception, the crimes of the West have become so central that it’s hard to keep track of the best of the West. We must be vigilant and draw the distinction between Western civilization and philosophy on the one hand, and Western crimes on the other. The crimes spring from certain philosophies and certain aspects of the civilization, not all of them.

‘Divisive’: How Corporate Media Dismiss Ideas Unpopular With Elites

[FAIR, via Naked Capitalism 4-19-2021]

The carnage of mainstream neoliberal economics

Capitalism as a Suicide Cult

[CounterPunch, via Naked Capitalism 4-24-20]

…the problems causing such widespread social misery are systemic, means that the solutions need to be so as well. To understand why, the difference between socialism and social welfare liberalism is that socialism requires a redistribution of power— from corporate executives and capitalist owners, to workers. A transfer of power, if not ownership, is what the New Deal accomplished. Conversely, welfare state liberalism subsidizes capitalism. One third of the recipients of food stamps (SNAP) who work, work at Walmart. Seventy percent work. SNAP is a subsidy of low wage employers, not its recipients.

The transfer of power of the New Deal was accomplished 1) through reforms that constrained business in its ability to rob people and crash the economy, and 2) through building public institutions that redistributed power from oligarchs and executives to workers. The Glass-Steagall Act of 1933 separated investment from commercial banking, thereby leaving investment banks to speculate with their own money. This effectively ended the financial mania that cascaded into the forced sales of bank ‘assets’ in the early years of the Great Depression. As readers know, Glass-Steagall was repealed in 1999. The result: a world-historical residential real estate bubble and the Great Recession.

“Local Economic and Political Effects of Trade Deals: Evidence from NAFTA” (PDF)Jiwon Choi, Ilyana Kuziemko, Ebonya Washington, Gavin Wright [National Bureau of Economic Research, via Naked Capitalism Water Cooler 4-22-21]

From the Abstract: “We show that counties whose 1990 employment depended on industries vulnerable to Mexican import competition via the 1994 North American Free Trade Agreement (NAFTA) suffer large employment losses (relative to the bottom quartile of counties, counties in the top quartile of NAFTA exposure see 5-8 log-point declines in employment by 2000). Despite large employment losses, we can reject even modest population declines. Trade-adjustment-aid relief rises, but covers a tiny share of the job losses we document, and Disability Insurance in fact displays a much larger response. Exposed counties (many in the upper South) begin the period more Democratic in terms of votes in House elections, but as NAFTA is debated in 1992-1994 they shift in the Republican direction and by 2000 vote majority-Republican in House elections. We show with a variety of microdata, including 1992-1994 respondent-level panel data, that opposition to free trade predicts shifts towards Republican party identification.” • Bill Clinton, good job.

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