Author: Tony Wikrent Page 44 of 48

Senate Democrats Join GOP to Back ‘Automatic Austerity’ Bill That Would Gut Social Programs, Hamstring Bold Policies [Common Dreams., via Naked Capitalism 11-15-19]

Ray Dalio [LinkedIn, via Naked Capitalism 11-6-19]

Modern Cities Breed Alienation. Insurgent Urbanists Are Pushing Back.

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Week-end Wrap – Political Economy – November 3, 2019

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

Strategic Political Economy

Neoliberalism Tells Us We’re Selfish Souls – How Can We Promote Other Identities?

[Open Democracy, via Naked Capitalism 11-1-19]

[Washington Post, via Naked Capitalism 10-24-19]

“Most Americans have to work to earn a living. But the rich are different: They get most of their income not from labor but from what they own — companies, stocks, real estate and the like. These income-generating assets are what economists call capital. And because capital is heavily concentrated among the rich, the U.S. government taxed earnings derived from capital at a higher rate than earnings made through labor for the entirety of the 20th century. But that’s no longer the case, according to economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley. In their new book, “The Triumph of Injustice,” they present data showing that in 2018, labor income was taxed at a higher rate than capital income for the first time in modern U.S. history.”

This could be the formal marker for when USA ceased being a republic and became a plutocracy, but I would argue for the Citizens United decision by the Supreme Court instead. 

The CBO Just Handed Us Two Trillion Dollars

In their most recent 10-year budget and economic forecast, the CBO made a big change, reducing their long-run forecast of the interest rate on government bonds by almost a full percentage point, from 3.7 to 2.9. (See Table 2.6 here.)

Most directly, the new, lower interest rate reduces expected debt payments over the next decade by $2.2 trillion.

[Wired, via The Big Picture 10-19-19]

….Mazzucato, an Italian-American economist who had spent decades researching the economics of innovation and the high tech industry, decided to look deeper into the early history of some of the world’s most innovative companies. The development of Google’s search algorithm, for instance, had been supported by a grant from the National Science Foundation, a US public grant-awarding body. Electric car company Tesla initially struggled to secure investment until it received a $465 million (£380 million) loan from the US Department of Energy. In fact, three companies founded by Elon Musk — Tesla, SolarCity and SpaceX — had jointly benefited from nearly $4.9 billion (£3.9bn) in public support of various kinds. Many other well-known US startups had been funded by the Small Business Innovation Research programme, a public venture capital fund. “It wasn’t just early research, it was also applied research, early stage finance, strategic procurement,” she says. “The more I looked, the more I realised: state investment is everywhere.”

Mazzucato included her findings in a 150-page pamphlet she submitted to UK policy think tank Demos. It was distributed to thousands of policymakers, and received coverage in daily newspapers. “It was obvious that it had touched a nerve,” she says. “The more I thought about it, the more I wanted to go straight to the core of the myths about innovation.” She decided to dissect the product that symbolised Silicon Valley’s engineering prowess: the iPhone.

Mazzucato traced the provenance of every technology that made the iPhone. The HTTP protocol, of course, had been developed by British scientist Tim Berners-Lee and implemented on the computers at CERN, in Geneva. The internet began as a network of computers called Arpanet, funded by the US Department of Defense (DoD) in the 60s to solve the problem of satellite communication. The DoD was also behind the development of GPS during the 70s, initially to determine the location of military equipment. The hard disk drive, microprocessors, memory chips and LCD display had also been funded by the DoD. Siri was the outcome of a Stanford Research Institute project to develop a virtual assistant for military staff, commissioned by the Defense Advanced Research Projects Agency (DARPA). The touchscreen was the result of graduate research at the University of Delaware, funded by the National Science Foundation and the CIA.

Liberalism in Theory and Practice:

[Luke Savage, via Avedon’s Sideshow 9-30-19]

Contemporary liberals are temperamentally conservative — and what they want to conserve is a morally bankrupt political order. […] No, that instinct owes much more to watching Barack Obama summon forth a tidal wave of popular goodwill, then proceed to invite the same old cadre of apparatchiks and financiers back into the White House to carry on business as usual despite the most punishing economic crisis since the Great Depression; to seeing the ‘war on terror’ become a permanent fixture of the global landscape long after its original architects had been booted from the halls of power, courtesy of supposedly enlightened humanitarians; to witnessing a potentially monumental hunger for change be sacrificed on the altar of managerialism and technocratic respectability. It comes from watching a smiling Nick Clegg stand next to David Cameron in the Rose Garden at Number 10 Downing Street before rubber-stamping a series of lacerating cuts to Britain’s welfare state and betraying a generation of students in the process; to seeing the dexterity by which Canada’s liberals gesture to the left then govern from the right; and from seeing the radical demands of global anti-austerity movements endlessly whittled down and regurgitated as neoliberal slam poetry to be recited at Davos by the hip young innovators du jour.

Corporate America’s Second War With the Rule of Law: Uber, Facebook, and Google are increasingly behaving like the law-flouting financial empires of the 1920s. We know how that turned out.

Jerri-Lynn Scofield, via Naked Capitalism 10-7-19]The climate crisis and the failure of economics: Why our economic model fails to explain how we got here on climate.
Jared Bernstein  Oct 11, 2019, via Naked Capitalism 10-11-19]Historic step forward: Gov. Gavin Newsom signs the Public Banking Act into California law!
[Public Banking Institite 10-5-19]

Victory in California! Gov. Gavin Newsom’s signature has made AB 857 — the grassroots-generated, people-powered Public Banking Act — the law in California. The California Public Banking Alliance has been tireless in educating legislators, drafting language, and generating massive statewide public support. The strong leadership of the bill’s co-authors, Assemblymembers Miguel Santiago and David Chiu, generated 19 co-sponsors and support from several committee chairs, clearly demonstrating that the will of the people is behind banks that serve the public interest….

California gets it rolling [podcast]
As global climate strikes continue around the world this week, California has passed breakthrough legislation that sanctions municipal public banks to serve as public administration entities, a development with wide repercussions across the country. We talk with a couple of the citizen leaders, Marc Armstrong and Susan Harman, who were pivotal drivers of the effort, and what they think it means for the movement. Then Ellen speaks with an author and former US Treasury economist, Richard C. Cook, about why the extractive domination of private banks over the totality of civic life must be taken down if we wish to have an economy that works for all. Finally, we have another talk with Bank of North Dakota historian Mike Jacobs about why that bank has managed to avoid corruption and remain a robust example of why banks should be owned by the people.

The Carnage of Establishment Neoliberal Economics

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Chinese power today is a result of a large number of incidents similar to this one, the wholesale transfer of knowhow, technology, and physical stuff from American communities to Chinese ones. And the confused politics of China is a result of the failure of the many policymaking elites who participated in such rancid episodes, and are embarrassed about it. As we peer at an ascendant and dangerous China, it makes sense to look back at how Clinton thought about the world, and why he would engage in such a foolish strategy.

Broadly speaking, there were two catastrophic decisions Clinton made in 1993 that ended up eroding the long-term American defense posture. The first was to radically break from the post-World War II trading system. This system was organized around free trade of goods and services among democratic nations, along with somewhat restricted financial capital flows. He did this by passing NAFTA, by bailing out Mexico and thus American banks, by creating the World Trade Organization, and by opening up the United States to China as deep commercial partners.

The Clinton framework gutted the ability of U.S. policymakers to protect industrial power, and empowered Wall Street and foreign officials to force the U.S. to export its industrial base abroad, in particular to China. The radicalism of the choice was in the intertwining of the U.S. industrial base with an autocratic strategic competitor. During the Cold War, we had never relied on the USSR for key inputs, and basically didn’t trade with them. Now, we would deeply integrate our technology and manufacturing with an enemy (and yes, the Chinese leaders saw and currently still see us as enemies).

The second choice was to reorganize the American defense industrial base, ripping out contracting rules and consolidating power into the hands of a small group of defense giants. In the early 1990s, as part of the ‘reinventing government’ initiative, the Clinton team sought to radically empower private contractors in the government procurement process….

The empowering of finance friendly giant contractors bent the bureaucracies towards only seeing global capital flows, not the flow of stuff or the ability to produce. This was already how most Clinton administration officials saw the world. They just assumed, wrongly, that stuff moves around the world without friction, and that American corporations operate in a magic fairy tale where practical problems are solved by finance and this thing called ‘the free market.’ In their Goldman, McKinsey and Boston Consulting Group-ified haze of elitist disdain for actually making and doing real things, they didn’t notice or care that the Chinese Communist Party was centralizing production in China. They just assumed that Chinese production was ‘the free market’ at work, instead of a carefully state-sponsored effort by Chinese bureaucrats to build strategic military and economic power.

China: How science made a superpower
[Nature, via Naked Capitalism 10-2-19]

Three Big Things: The Most Important Forces Shaping the World

[Collaborative Fund, via The Big Picture 10-5-19]

The three big ones that stick out are demographics, inequality, and access to information.

The Carnage of Establishment Neoliberal Economics

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[TechDirt, via Naked Capitalism 9-27-19]The Culmination of Republican Decay
Sean Wilentz [New York Review of Books, October 10, 2019 issue]

Book review of American Carnage: On the Front Lines of the Republican Civil War and the Rise of President Trump, by Tim Albert

….After Barack Obama was elected president, the Koch brothers and the Donors Trust of dark money funders (to which the Kochs were leading contributors) would mobilize and subsidize the Republican base in the so-called populist revolt they named the Tea Party…. when Trump seized control of the GOP in 2016, he reaped the populist whirlwind that Richard Nixon began sowing nearly half a century earlier and that the Bush administration—their administration—had whipped to hurricane force….

By the time Alberta’s account gets underway, most of the political dynamics behind the events he describes were long established and extremely powerful. Some of the book’s major figures, like former House Speaker John Boehner (who was also one of its principal sources), were remnants from earlier phases of the party’s strife, and developments like the growth of the Tea Party or the uprisings of the House Freedom Caucus make sense only as outgrowths of previous internecine battles. Most importantly, by 2008, the Republican Party had already become what the political scientists Thomas E. Mann and Norman J. Ornstein would call “an insurgent outlier” in American politics: “ideologically extreme… scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.” Alberta has written, in short, a book that is more denouement than drama, detailing the fall of a hollow GOP establishment that, having abandoned normal party politics in favor of relentless polarization, was already teetering. While American Carnage describes the outcome of the party’s radicalization, it completely misses—indeed, fundamentally misunderstands—a major impetus behind Trump’s ascendancy: the destructive presidency of George W. Bush….

[Alberta’s account] cannot explain how Trump could so swiftly capture virtually an entire political party. A plausible answer to that puzzle is hiding in plain sight in Alberta’s book. Although Trump came into office with majorities in both houses of Congress, and although, as Alberta notes, the White House ceded control over domestic legislation to Senate Majority Leader McConnell and Speaker Paul Ryan, the Republicans had terrible difficulty scoring legislative wins. Most galling to Trump as well as the party’s congressional leadership was the failure to repeal Obamacare, one of the GOP’s core campaign pledges since the program began. On two fronts, though, Republicans moved with absolute assurance: the approval by the Senate of right-wing nominees to the federal bench, including Supreme Court justices Neil Gorsuch and, after a brutal, unexpected fight, Brett Kavanaugh; and the rapid approval of a fiercely regressive tax bill in 2017. Control of the courts for the Christian right and the Federalist Society, tax windfalls and deregulation for the donor class: these were the causes that truly stirred the GOP majorities in Congress. It’s not simply that the recumbent Republicans are intimidated by the party base that Trump has captured; they are motivated chiefly by right-wing dogma and their own baseness, which Trump understands and manipulates.

The Problem With Impeachment

Chris Hedges [Truthdig, via Naked Capitalism 9-28-19]

Impeaching Donald Trump would do nothing to halt the deep decay that has beset the American republic. It would not magically restore democratic institutions. It would not return us to the rule of law. It would not curb the predatory appetites of the big banks, the war industry and corporations. It would not get corporate money out of politics or end our system of legalized bribery. It would not halt the wholesale surveillance and monitoring of the public by the security services. It would not end the reigns of terror practiced by paramilitary police in impoverished neighborhoods or the mass incarceration of 2.3 million citizens. It would not impede ICE from hunting down the undocumented and ripping children from their arms to pen them in cages. It would not halt the extraction of fossil fuels and the looming ecocide. It would not give us a press freed from the corporate mandate to turn news into burlesque for profit. It would not end our endless and futile wars. It would not ameliorate the hatred between the nation’s warring tribes—indeed would only exacerbate these hatreds.

Impeachment is about cosmetics. It is about replacing the public face of empire with a political mandarin such as Joe Biden, himself steeped in corruption and obsequious service to the rich and corporate power, who will carry out the same suicidal policies with appropriate regal decorum.

GND – A problem too big to solve, or an opportunity too big to miss?

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