Ian Welsh

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

Author: Tony Wikrent Page 42 of 48

Week-end Wrap – Political Economy – February 23, 2020

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On February 23, 2020

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The Oligarch Stage of the American Disease: Bloomberg Edition

[Ian Welsh, February 18, 2020]

The thing about Trump was always that he was a symptom of a disease. It’s hard to say exactly when the disease started, but serious symptoms started showing up after the elections of Reagan and Thatcher.  Rates of wage increases collapsed, stock markets and other asset prices rose much faster than inflation, regulations were gutted, people were thrown in jail at a ferocious rate and unions were smashed.

Inequality took off, and over time multiple billionaires were created. They used their money to buy politicians, and thru politicians to buy policy. Tax rates on corporations and rich people and estates and so on were slashed to the bone. Subsidies for the rich were increased, while subsidies for the poor and middle class were, in relative terms, cut.

The Federal Reserve (all of whose governors are political appointees), acted aggressively to keep wage increases at or under inflation, and targeted inflation rather than job growth. Good working class and many middle class jobs were off-shored and outsourced….

So the oligarchs, aided by the huge concentration of companies into oligopolies, have come to have or control vast amounts of wealth. They got money defined as free speech, and now that the political class has proven incapable of handling a left wing populist, an oligarch is stepping directly in because his class’s lackeys, like Biden and Buttigieg and indeed most of the field, are incompetent.

“Frederick Douglass Railed Against Economic Inequality” 

[Jacobin, via Naked Capitalism 2-21-20]

Douglass: “The Spartan lawgiver who discouraged the accumulation of wealth, because of its tendency to impair the liberties of his country, was fully justified in the extreme measures he adopted, by the universal experience of nations, and the fate of his own country; the fall of Spartan liberties dating from the introduction of wealth and consequent luxury of her citizens. His aim to exterminate wealth and refinement entirely, was, perhaps, not wise; it is not wealth of itself that produces the dreaded effects, but its accumulation in the hands of a few — creating an aristocracy of wealth, ready to be the tool of an aggressive tyranny, or to become aggressive upon its own account. With an increase of wealth comes an increase of selfishness, devotion to private affairs, and a contempt of public — unless politics can be made to minister to the all absorbing selfishness of the individual.”

Week-end Wrap – Political Economy – February 16, 2019

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On February 16, 2020

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

“The U.S. Military Is Not Ready for a Constitutional Crisis” 

[The Atlantic, via Naked Capitalism 2-13-20]

I spent nine years on active duty in the U.S. Navy. I served as an aircraft commander, led combat reconnaissance crews, and taught naval history. But the first thing I did upon joining the military, the act that solemnized my obligation, was swear an oath to support and defend the Constitution. How strange, then, that despite all of my training, the millions of taxpayer dollars devoted to teaching me how to fly, lead, and teach, not once did I receive meaningful instruction on the document to which I had pledged my life….

I had left the Navy and was in law school when news of the torture memo broke. This was the George W. Bush administration’s attempt to offer a legal justification for “enhanced interrogation.” I had been through Survival, Evasion, Resistance, and Escape (SERE) school, the military’s interrogation training program, from which these techniques had been adopted. I understood the “enhanced” methods described by the Bush-administration lawyers for what they were: torture.

At the time, I found it unconscionable that legal scholars would be complicit in underwriting our government’s disregard for the Geneva Conventions. But with the benefit of hindsight, though I still find the torture memo appalling, I can at least acknowledge that the Bush administration cared enough about the law to offer the pretense of legality.

The current administration is not even trying. President Donald Trump openly flouts laws at home, while threatening to destroy cultural sites abroad (a blatant violation of the Geneva Conventions).

How State Capacity Drives Industrialization
[Palladium, 2-12-20, via reader of RealEconomics]

These “tools that make the tools” are a crucial piece of modern supply chains, and most advanced manufacturing would be impossible without them. The ability to produce machine tools domestically is one of the foundations of a deep industrial base. Recognizing this, the South Korean state encouraged Hyundai, a chaebol which built the first all-Korean automobile in 1975, to begin making machine tools for the growing domestic market. Since then, the South Korean machine tool industry has grown steadily alongside the Korean economy as a whole. Production today is slightly larger than the machine tool industry of the United States, a country more than six times as populous….

Korea’s story may be more extreme than most, but this type of state-led economic development is how every wealthy country on Earth has industrialized. The sole exception is Britain during the original Industrial Revolution…. Only the state can coordinate many different industries to produce a transformation at the scale of industrialization.

Interesting: even some leading libertarians are beginning to admit society needs government to actively promote the general welfare, though of course, they won’t use such terms. Probably, the spectre of China building a 1,000 bed hospital in ten days has scared the living crap out of them. The USA, by contrast, and thanks in no small part to the popularization of libertarian ideology, can’t even maintain the infrastructure it already has. 

Thy Neighbor’s Solar Panels: When our peers take actions to preserve the planet, we’re more likely to follow suit. How the human instinct to conform could help us address the climate crisis.
[The Atlantic, via The Big Picture 2-12-20]

Predatory Finance

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Week-end Wrap – Political Economy – February 9, 2019

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On February 9, 2020

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by Tony Wikrent

Strategic Political Economy

Altruistic food sharing behavior by human infants after a hunger manipulation
[Science, via Naked Capitalism 2-5-20]

From the abstract: “In a nonverbal test, 19-month-old human infants repeatedly and spontaneously transferred high-value, nutritious natural food to a stranger (Experiment 1) and more critically, did so after an experimental manipulation that imposed a feeding delay (Experiment 2), which increased their own motivation to eat the food. Social experience variables moderated the expression of this infant altruistic behavior, suggesting malleability.” dk asks: “But were the test subjects the babies of elites? At 19 months, some patterns may have already been acquired…”

The Carnage of Establishment Neoliberal Economics

WEALTH INEQUALITY: The richest 1% controls more wealth now than at any time in more than 50 years
[Twitter and Yourtube below, via Naked Capitalism 2-2-20]

WEALTH INEQUALITY: The richest 1% controls more wealth now than at any time in more than 50 years. But what does wealth inequality really look like?

@TonyDokoupil  turned America’s economic pie into a real one and asked people a simple question: Who gets what? Link here if pic missing below

Higher social class predicts increased unethical behavior

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Week-end Wrap – Political Economy – February 2, 2019

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On February 2, 2020

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Week-end Wrap – Political Economy – February 2, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

“Minimum wage would be $33 today if it grew like Wall Street bonuses have” 
[CBS, via Naked Capitalism 1-30-20]

“Wall Street employees saw their typical annual bonus slip
by 17 percent last year to $153,700, according to new data from the New
York State Comptroller. But don’t feel sorry for the banking set just
yet — even including down years like 2018, bankers’ bonuses have jumped
by 1,000 percent since 1985. By comparison, the federal minimum wage has
increased about 116 percent during the same period, according to an analysis
from the Institute for Policy Studies, a left-leaning research center
that used the comptroller’s latest data. If the minimum wage had grown
at the same pace as Wall Street bonuses, fast-food workers and other
low-wage workers would earn a baseline wage of $33.51 an hour, the group
said.”

The Carnage of Establishment Neoliberal Economics

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Week-end Wrap – Political Economy – January 26, 2020

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On January 26, 2020

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Why the New Silk Roads are a ‘threat’ to US bloc
Pepe Escobar [Asia Times, via The Big Picture 1-23-20]

Asia and Europe have been trading goods and ideas since at least
3,500 BC. Historically, the flux may have suffered some occasional bumps
– for instance, with the irruption of 5th-century nomad horsemen in the
Eurasian plains. But it was essentially steady up to the end of the 15th century. We can essentially describe it as a millennium-old axis – from Greece to Persia, from the Roman empire to China.

A land route with myriad ramifications, through Central Asia,
Afghanistan, Iran and Turkey, linking India and China to the Eastern
Mediterranean and the Black Sea, ended up coalescing into what we came
to know as the Ancient Silk Roads….

Rationalist hegemony in Europe progressively led to an incapacity to understand diversity – or The Other, as in Asia. Real Euro-Asia dialogue – the de facto true engine of history – had been dwindling for most of the past two centuries.

Europe owes its DNA not only to much-hailed Athens and Rome – but to Byzantium as well. But for too long not only the East but also the European East, heir to Byzantium, became incomprehensible, quasi incommunicado with Western Europe, or submerged by pathetic clichés.

The Belt and Road Initiative (BRI), as in the Chinese-led New Silk Roads, are a historical game-changer in infinite ways. Slowly and surely, we are evolving towards the configuration of an economically interlinked group of top Eurasian land powers, from Shanghai to the Ruhr valley, profiting in a coordinated manner from the huge technological know-how of Germany and China and the enormous energy resources of Russia. The Raging 2020s may signify the historical juncture when this bloc surpasses the current, hegemonic Atlanticist bloc.

Now compare it with the prime US strategic objective at all times,
for decades: to establish, via myriad forms of divide and rule, that
relations between Germany, Russia and China must be the worst possible.

No wonder strategic fear was glaringly visible at the NATO summit in
London last month, which called for ratcheting up pressure on
Russia-China. Call it the late Zbigniew “Grand Chessboard” Brzezinski’s
ultimate, recurrent nightmare….

Moscow and Beijing have come to the conclusion that the
US trans-oceanic strategic ring can only be broken through the actions
of a concerted block: BRI, Eurasia Economic Union (EAEU), Shanghai
Cooperation Organization (SCO), BRICS+ and the BRICS’ New Development
Bank (NDB), the Asia Infrastructure Investment Bank (AIIB).

The Lords and Ladies of Discipline: An Interview with Matt Stoller
[Naked Capitalism, January 21, 2020]

…Matt Stoller is referring to the contemporary incarnation of mainstream economics, which is neoclassical economics. It is worth remembering that neoclassical economics started being formalized in the late 19th century by thinkers like Leon Walras, Carl Menger, and William Jevons. One of the reasons their ideas took hold was first, that they aspired to establish that economics was a science that could be described in mathematical terms. Second, to do so, they had to assume ergodicity, which in layperson terms means that the system has a propensity to achieve a stable equilibrium. This typically hidden assumption produced results that were very useful in beating back idea promoted by Marx and other pro-labor forces, that modern economies were unjust and needed reforming. The counter-story was that if left alone, as in in the hands of businessmen, they were naturally self-correcting….

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Week-end Wrap – Political Economy – January 19, 2020

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On January 19, 2020

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by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Seattle city council bans most political spending by ‘foreign-influenced corporations’

[The Hill, via Naked Capitalism 1-13-20]

We’re in an age of manufactured nihilism: How misinformation overwhelmed our democracy
(Vox, via The Big Picture 1-17-20]

The issue for many people isn’t exactly a denial of truth as such. It’s more a growing weariness over the process of finding the truth at all. And that weariness leads more and more people to abandon the idea that the truth is knowable.

I call this “manufactured” because it’s the consequence of a deliberate strategy. It was distilled almost perfectly by , the former head of Breitbart News and chief strategist for Donald Trump. “The Democrats don’t matter,” Bannon reportedly said in 2018. “The real opposition is the media. And the way to deal with them is to flood the zone with shit.”

…The press ideally should sift fact from fiction and give the public the information it needs to make enlightened political choices. If you short-circuit that process by saturating the ecosystem with misinformation and overwhelm the media’s ability to mediate, then you can disrupt the democratic process.

Too damn bad the Vox author does not realize this is exactly the political process of demagoguery warned about by Hamilton, Madison, Adams and others at the beginning of the republic. And more – they warned that this process was likely to be initiated  by the rich, such as Leon Black (see below).

Green New Deal – An opportunity too big to miss

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Week-end Wrap – Political Economy – January 12, 2020

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On January 12, 2020

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Week-end Wrap – Political Economy – January 12, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

The End of Economic Growth? Unintended Consequences of a Declining Population (PDF)
Charles I. Jones, [Empty Planet, via Naked Capitalism 1-8-20]

To sustain a constant population requires a total fertility rate slightly greater than 2 in order to compensate for mortality. The graph shows that high income countries
as a whole, as well as the U.S. and China individually, have been substantially below 2 in recent years. According to the U.N.’s World Population Prospects 2019, the total fertility rate in the most recent data is 1.8 for the United States, 1.7 for China and for High Income Countries on average, 1.6 for Germany, 1.4 for Japan, and 1.3 for Italy and Spain. In other words, fertility rates in the rich countries of the world are already consistent with negative long-run population growth: women are having fewer than two children throughout much of the developed world.

“Americans’ happiness is correlated with spending on public goods”

[Boing Boing, via Naked Capitalism 1-9-20]

“Baylor University political scientist Patrick Flavin’s forthcoming study in Social Science Research finds that people in states with higher public goods spending (on ‘libraries, parks, highways, natural resources and police protection’) report higher levels of happiness. It’s not clear whether they are happier because they have better services, or whether people who choose to live in places where they don’t have to pay for their neighbors’ kids’ education, parks, etc, are selfish, miserable f*cks.”

The Carnage of Establishment Neoliberal Economics

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New Hope for a New Year

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On January 6, 2020

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This post is by Tony Wikrent.

I do not remember the New Deal, even though it’s probably what has had the greatest impact on my political memory. I’m 63 now, so I wasn’t even alive during the First Great Depression and the presidency of Franklin Roosevelt. For me, memory of the New Deal was transmitted by those who had lived it and embodied it: My foremost, formative experience of government was John Kennedy beckoning the nation to put men on the moon.

In Chicago, the Democratic Party took pride in getting things done. The construction of O’hare Field was completed while I was a toddler, as well as the Kennedy expressway connecting ORD to the Loop downtown. Construction of a new home for the University of Illinois at Chicago began in 1963; the 244 acre campus opened two years later. Today, UIC is the largest university in the Chicago area, with more than 33,000 students enrolled in 16 colleges. As a kid, I got to watch construction crews working to extend the CTA subway line down the middle of the Kennedy to O’Hare.

John Kennedy said, “The American, by nature, is optimistic. He is experimental, an inventor and a builder, who builds best when called upon to build greatly.”

Unlike conservatives and libertarians, I have always had faith that government can be an active force for good.

But over two thirds of my fellow citizens are younger than I. They have not had the same experiences. They have not, I fear, the same long-term optimism, which I think may have been the greatest achievement of the New Deal. In the world I grew up in:

  • Interest rates were strictly regulated
  • The average holding period in the stock market was eight years.
  • There was no retail means for investing in foreign economies.
  • The only futures contracts in existence were based on physical commodities.
  • Foreign exchange trading was only for individuals actually traveling overseas, paying the US military and for base leases, and companies importing and exporting.
  • the Cayman Islands were basically unknown: there were no tens of billions of dollars of dirty money scrambling around the globe for a place to hide.

In other words, well over 200 million of the 327 million Americans alive today have no idea what a well regulated financial and monetary system looks like.

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