Week-end Wrap – Political Economy – April 23, 2023

Week-end Wrap – Political Economy – April 23, 2023

by Tony Wikrent

Strategic Political Economy

The Democrats’ Appalling Failure to Confront the Rogue, Right-Wing Supreme Court

Simon Lazarus, April 21, 2023 [The New Republic]

…For decades, Democratic politicians have dodged challenging the ultra-right’s drive to junk the post–New Deal liberal Constitution, with made-up doctrines that, in the apt words of liberal Justice Elena Kagan, would make “most of government unconstitutional.” …[The] Democratic Party that has remained perversely tight-lipped in the face of the existential threat the Supreme Court poses to its aspirations. If Democrats want to change this dynamic, they will, at the very least, have to start talking about it.

In its first two terms following Biden’s ascent to the White House, the court’s right-wing justices have flaunted their zeal to validate Reagan Solicitor General Charles Fried’s 2020 warning that they would “take a constitutional wrecking ball to generations of Supreme Court doctrine.” In addition to their incandescent elimination of a half-century-old individual right to abortion, the reactionary justices have, with less notice, overridden explicit constitutional and statutory text to ax long-standing labor, consumer, health, safety, environmental, and civil rights regulatory and safety-net guarantees….

Biden, and most Democratic politicians, reacted to these body blows to liberal governance with little more than feckless press-release lamentations that treat these “retrograde rulings”—to use historian Jeff Shesol’s words—as “discrete events rather than the defining project of the court’s conservatives: to lay waste to the welfare state and the administrative state, the civil rights revolution, the underpinnings of an accountable, workable government.”

Conservatives don’t make these mistakes. They hoist the banners of “originalism” and “textualism,” as legal cover for yoking the courts to their policy and political agendas, even while ignoring originalist or textualist principles whenever they prove politically inconvenient. Right-leaning politicians, pundits, and policy advocates turn arguments developed by their academics, judges, and legal experts into slick talking points. When liberal politicians ignore the right’s fabricated claims that modern liberal governance flouts the Constitution, or that particular liberal measures disregard pertinent statutory text, the results can be devastating….

Liberals’ phobia about mastering and publicly messaging constitutional and legal claims is ahistorical. Not only do their current adversaries on the right assiduously wrap themselves in the Constitution and ignore the idea that certain discussions are somehow gauche; liberals’ own ideological predecessors did likewise. Icons such as Franklin and Theodore Roosevelt, Abraham Lincoln, and the original Framers, including Jefferson and Madison as well as Washington and Hamilton, crafted legally sophisticated but politically canny characterizations of the text and Framers’ design of the Constitution and relevant laws….

It was not always like this. Indeed, it was never like this. In the past, when the fundamental direction and structure of government was in play, great liberal leaders took their constitutional case directly to the public. Consider the messaging strategies deployed by FDR and his allies: Following the high court’s invalidation of the 1933 National Recovery Act, Roosevelt opened his next fireside chat by voicing “a hope that you have reread the Constitution [which] like the Bible, ought to be read again and again.” He delved into the Constitution’s text, quoted the dissenting opinions at length, and concluded by saying, “I want—as all Americans want—a Supreme Court that will enforce the Constitution as written, [not] amend the Constitution by … judicial say-so.”

Eight decades before Roosevelt arrived on the scene, Abraham Lincoln, as candidate as well as president, routinely furnished equally graphic examples of deep-dive constitutional messaging….

In an 1854 speech assailing the Stephen Douglas–sponsored Kansas-Nebraska Act, which repealed the 1820 Missouri Compromise that had banned slavery in new territories North of the Mason-Dixon line, Lincoln stressed that Thomas Jefferson, author of the Declaration, had also authored the Northwest Ordinance of 1787, which banned slavery in all new territories, arguing that the Framers intended “We the People” to include all people, not just whites. In his 1858 debates with Douglas, Lincoln acquired a national reputation through his compelling refutations of Douglas’s embrace of Taney’s whites-only Constitution. Unafraid of parsing the text in a political forum, Lincoln stressed that “nowhere in the Constitution, does the word ‘slavery’ or ‘negro race’ occur.” Lincoln argued that this textual silence meant that that the Framers’ “purpose was that [after slavery had, as the Framers expected, vanished] there should be nothing on the face of the great charter of liberty suggesting that such a thing as slavery had ever existed among us.”

Campaigning for the Republican presidential nomination, in his February 1860 speech at Cooper Institute in New York City, Lincoln documented that 21 of the 39 signatories of the Constitution supported federal control over slavery in the territories, and that most of the others were outspoken abolitionists, including Benjamin Franklin, Alexander Hamilton, and Gouverneur Morris. He also cited a letter from George Washington to the Marquis de Lafayette endorsing the prohibition of slavery in the Northwest Territories.

Democrats Struggle to Face the Illegitimate Court System

Ryan Cooper, April 21, 2023 [The American Prospect]

Last year, I argued against the principle of judicial review. For almost all of its history, the Supreme Court has been a reliable force for oligarchy and white supremacy—upholding slavery and Jim Crow, striking down child labor, minimum-wage, and civil rights laws, inventing corporate personhood and qualified immunity for police out of thin air, and on and on. Even on the rare occasions when it has expanded rights, it has commonly reversed itself later, as we saw with the Dobbs decision. Both of America’s greatest presidents, FDR and Abraham Lincoln, had to confront the Court head-on to deal with great crises tearing the nation apart.

[TW: I have written a number of times that “the left” has shot itself in the head by rejecting these lessons  of American history as just part of the “racist, patriarchal, elitist origins of America.” It has allowed the conservative and libertarian movements — without opposition or impediment from “the left” — to popularize half-truths and outright lies as constitutional interpretation, and then masquerade as patriotic defenders of the Constitution. ]

The Anti-Oligarchy Constitution: Reconstructing the Economic Foundations of American Democracy

Joseph Fishkin and William E. Forbath (Cambridge, Mass., Harvard University Press, 2022)

Confronting the present crisis will require liberals and progressives to reclaim many of their older [now forgotten] arguments about political economy and enact policies and laws that implement them. This is work for the elected branches. Much of the work is federal legislation. And nearly all of it is vulnerable to a constitutional attack by an emboldened conservative and legal movement that aims, as its predecessors did a century ago, to elevate an anti-redistributive vision of political economy into constitutional arguments to be enforced in court…. There is an American tradition of constitutional argument that directly addresses the central problems of oligarchy and inequality we now face…. Throughout the nineteenth and early twentieth centuries, generations of reformers argued that America was becoming a society with a “moneyed aristocracy” or a “ruling class”—an “oligarchy,” not a republic. These reformers were making constitutional claims. For them, circumstances resembling America’s today, in which too much economic and political power is concentrated in the hands of the few, posed not just and economic, social, or political problem, but a constitutional problem….

Recovering this tradition involves recovering a different understanding of what a constitutional claim is—what it sounds like, to whom it is addressed, and how it relates to politics. It is conventional today, especially among liberals, to assume that the only real constitutional claims are the ones enforceable in court. From that perspective, constitutional claims are political conversation-stoppers; they constrain and set the boundaries of politics.

One of the core aims of this book is to help readers see beyond those assumptions….

The striking thing about most of the constitutional debates we explore in this book, from the founding era through the New Deal, is that all sides were making arguments about constitutional political economy. Southern proslavery constitutionalism, for instance, had its own well-developed vision of constitutional political economy. So did the advocates of the anti-redistributive, “laissez-faire” constitutional politics that crystallized into Lochnerism a century ago. That constitutional politics helped give shape to the modern conservative account of an America founded on rugged individualism, limited government, and private property. It is an account that continues to inspire citizens, lawmakers, and judges to act boldly on its behalf; it not only resonates with conservative values but helps define them. And it mobilizes the impulse of constitutional patriotism—of keeping faith with the Constitution as a root signifier of national identity.

Missing from our constitutional politics today is a comparably robust progressive account of what kind of community the Constitution promises to secure for all. This was not always so. Past generations of progressives offered an account of national community grounded in the democracy-of-opportunity tradition. They argued that the Constitution promises to build a national community with a democratic rather than oligarchic political economy: one in which all Americans enjoy a decent education, material security, and a genuine opportunity not only to earn a decent livelihood, but to do something with value in their own eyes—and also to engage in the affairs of their community and the larger society. This account, like the conservative one, mobilizes the impulse of constitutional patriotism; it shows how the Constitution can undergird, rather than impede, core commitments to a broad distribution of power and opportunity that progressives see as essential to a democratic society. (pp. 2-6)

Henry C. Carey – The Harmony of Interests: Agricultural, Manufacturing & Commercial (1851)

The object sought to be accomplished is the improvement of the condition of man. The mode by which it is to be accomplished is that of increasing his productive power. The more food a man can raise, the more and better food may he consume, and the larger will be the surplus that can be appropriated to the purchase of clothing, to the education of his family, to the enlargement of his house, or to the improvement of his machinery, and the greater Will be the amount of leisure that can be appropriated to the improvement of his modes of thought.

The better his machinery, and the more readily it can be obtained, the larger will be his production. Machinery consists chiefly of iron, and the more readily that can be obtained, the more rapid will be the increase of production and the improvement of the physical, moral, intellectual and political capacities of man. It is the great instrument of civilization. (p. 78)

In England, a large portion of the people can neither read nor write, and there is scarcely an effort to give them education. The colonial system looks to low wages, necessarily followed by an inability to devote time to intellectual improvement. Protection looks to high wages that enable the labourer to improve his mind, and educate his children. The English child, transferred to this country, becomes an educated and responsible being. If he remain at home, he remains in brutish ignorance. To increase the productiveness of labour, education is necessary. Protection tends to the diffusion of education, and the elevation of the condition of the laborer….

If we desire to raise the intellectual standard of man throughout the world, our object can be accomplished only by raising the value of man… throughout the world. (pp. 212-213)

The higher the degree of intellect applied to the work of production, the larger will be the return to labour, and the more rapid will be the accumulation of capital. If protection be “a war upon labour and capital,” it must tend to prevent the growth of intellect.

The more men are enabled to combine their efforts, and the greater the tendency to association, the larger is the return to labour, and the more readily can they obtain books and newspapers for themselves, and schools for their children. The object of the monopoly system is that of compelling men to scatter themselves over large surfaces, and into distant colonies, and thus to diminish the power of obtaining books, newspapers and schools. The object of protection is the correction of this error, and to enable men to combine their efforts for mental as well as physical improvement.
The greater the tendency to association, the greater is the facility for the dissemination of new ideas in regard to modes of thought or action, and for obtaining aid in carrying them into practical effect. The object of the English monopoly system is that of separating men from each other, and depriving them of this advantage. The object of protection is to enable them to come together, and being so, it would seem to be the real friend to both labourer and capitalist. (p. 209)

Of all machines, the most costly to produce is Man, and yet the duration of this expensive and beautiful machine is reduced to an average of twenty-five or thirty years, under the vain idea that by so doing pins and needles may be obtained at less cost of labour…. The English school of political economy treats man as a mere machine, placed on the earth for the purpose of producing food, cloth, iron, pins, or needles, and takes no account of him as a being capable of intellectual and moral improvement. It looks for physical power in connection with ignorance and immorality, and the result is disappointment. (p. 210)

R.L. Bruckberger, Image of America (New York: Viking, 1959), Chapter 17, “The Only American Economist of Any Importance”

“The ultimate object of all human effort,” wrote Carey, in a truly remarkable statement, “[is] the production of the being known as Man capable of the highest aspirations.” Here Carey took a decisive step of his own. Nowhere in the theoreticians of the capitalist school, nowhere in Marx and Lenin, can any such words as these be found. Basically, all that concerned Carey was man, and the process whereby man becomes more and more civilized. What Carey sought to create, beyond a theory of political economy, was a theory of civilization itself. For him, man was not only greater than the whole of nature, but even above the victory he won over it. With this victory civilization began, but it still had far, far indeed to go. It still faced the obligation to fulfill man’s “highest aspirations.” In the last analysis, therefore, Carey’s ambition was to construct a philosophy of civilization….

So far as I know, he never mentioned Marx, yet he was undermining Marx’s whole position by his constant attacks on the English capitalist school. It would be possible to go on quoting him indefinitely. His life work was actually one long, mercilessly documented and pitilessly honest indictment of the appalling system formulated by the English economists and swallowed hook, line, and sinker by Marx.…

…Such is the course of modern political economy [wrote Carey], which not only does not “feel the breath of the spirit” but even ignores the existence of the spirit itself, and is therefore found defining what it is pleased to call the natural rate of wages, as being “that price which is necessary to enable the laborers, one with another, to subsist and perpetuate their race without either increase or diminution” (Ricardo)-that is to say, such price as will enable some to grow rich and increase their race, while others perish of hunger, thirst, and exposure. Such are the teachings of a system that has fairly earned the title of the “dismal science.”

….But Carey rejected both the capitalist postulate and its Marxist corollary. He clearly understood the diversity of economic functions, a diversity which becomes greater and greater with the advance and extension of production, and he considered this diversity as necessary to social harmony as the various physiological functions are necessary to health, and in no way conducive to antagonism and class struggle. Refuting Ricardo and Malthus, he proved that it is not only possible but inevitable for the economic conditions of the workers to improve through the dynamic and fertile association of labor and accumulating capital. He thought of labor and capital as existing on the intellectual and spiritual planes as well as on the material plane; he saw them as much in terms of their continuity in time as of their extension in space. The ultimate objective of all human effort, according to Carey, was not just the accumulation of the things of this world, but the achievement of civilization itself, in other words, the creation of a more and more civilized mankind- “the production of the being known as Man capable of the highest aspirations.” The one way by which to achieve a higher civilization seemed to him, not by revolution (as in Marx), not by the fierce systematic exploitation of the poor by the rich (as in the capitalist system), but by the association of all men for this common purpose.

Held Down by Our Bootstraps

Kelly Candaele, April 18, 2023 [The American Prospect]

In Alissa Quart’s new book Bootstrapped: Liberating Ourselves From the American Dream, the author argues that the ideology of American individualism guides us all, whether we are conscious of it or not. If you are practicing individual “mindfulness,” Quart cautions that you might just be adapting to the “needs of the elites.” If you have embraced a punishing work schedule for Uber or Lyft, it’s likely that you are justifying it on the basis of “individual initiative” and “freedom.”

During the pandemic, when we were all at our most vulnerable and in need of a strong social institution, Quart was researching and writing Bootstrapped, to examine how our national myths of individualism contribute to economic inequality and political stalemate….

Q. It strikes me that structuring a politics around individualism increases the negative impacts of what we call “failure,” losing a job, not having health insurance, not being able to pay high rents or the enormous costs of education.

A. If you don’t acknowledge externalities like this and create institutions and policies to support people, then failure is a straight shot downwards. The ideology of individualism actually protects people who already have privilege.

 

[TW: The alternative to today’s dominant British capitalist economics, as Carey and Bruckberger explain, is based on the view that individuals must cooperate in society to increase and use their power over nature to build and improve civilization.]

 

Global power shift

Chinese Diplomacy Seen as Threat to US ‘Peace,’ ‘Stability’ 

[FAIR, via Naked Capitalism 4-21-2023]

Asia Power Snapshot: China and the United States in Southeast Asia 

[Lowy Institute, via Naked Capitalism 4-21-2023]

• The United States has lost influence to China in Southeast Asia over the past five years in all four categories measured by the Asia Power Index: economic relationships, defence networks, diplomatic influence and cultural influence.
• The United States is more influential than China in two countries: the Philippines and Singapore. China’s influence is strongest in Laos, Cambodia and Myanmar.
• Compared to China, the United States still has much stronger defence relationships with countries in Southeast Asia. But China increased its lead over the United States in terms of economic relationships with Southeast Asia.

Russia the mining and minerals titan of the future 

[Intellinews, via Naked Capitalism 4-18-2023]

“While the country is already a leading producer of gas and oil, it possesses vast geological resources, including significant deposits of diamonds, gold, platinum, palladium and coal, as well as reserves of iron, manganese, chromium, nickel, titanium, copper, tin, lead and tungsten ores. These resources are estimated to represent a total value equivalent to $75 trillion, potentially making Russia the world’s richest country,” according to a report highlighting Russia’s potential to become a major player in the global mining industry from the French Institute of International Relations (IFRI).

As Evgeniy Prigozhin sees it – FULL TRANSCRIPT 

Seraphim Hanisch [The Duran, via Mike Norman Economics, April 18, 2023]

Good analysis of the Russian position from a Kremlin insider

An Indian Diplomat Narrates A Behind-The-Scenes Account Of India-Pakistan Diplomacy 

[Madras Courier, via Naked Capitalism 4-21-2023]

The missile strikes that killed Israel’s deterrence

[The Cradle, via Naked Capitalism 4-19-2023]

War

[Twitter, via Naked Capitalism 4-19-2023]

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A New American Grand Strategy–Or The Same Old Grand Delusion?

Mark Wauck [Meaning In History, via Mike Norman Economics, April 18, 2023]

John Bolton has come out with an Op-Ed at the WSJ in which he calls for a “modern-day NSC 68”. Don’t worry, I wasn’t familiar with NSC 68, either. But now I’ve had a look at the Wikipedia version of NSC 68, which begins with this handy summary:

“United States Objectives and Programs for National Security, better known as NSC 68, was a 66-page top secret National Security Council (NSC) policy paper drafted by the Department of State and Department of Defense and presented to President Harry S. Truman on 7 April 1950. It was one of the most important American policy statements of the Cold War. In the words of scholar Ernest R. May, NSC 68 “provided the blueprint for the militarization of the Cold War from 1950 to the collapse of the Soviet Union at the beginning of the 1990s.” NSC 68 and its subsequent amplifications advocated a large expansion in the military budget of the United States, the development of a hydrogen bomb, and increased military aid to allies of the United States. It made the rollback of global Communist expansion a high priority. NSC 68 rejected the alternative policies of friendly détente and containment of the Soviet Union.”

What would a “modern-day NSC 68” look like? That, of course, is what Bolton wants to tell us. His account is quite revealing—of the Neocon mentality and how we got into the fix we’re in currently, facing our global standing going south due mostly to hubris and overreach. Simplicius has his own take on Bolton’s article, John Bolton Declares Total War on Russia, but because I believe Simplicius gets a few things wrong I prefer to deal with the original (which Simplicius obligingly links):

A New American Grand Strategy to Counter Russia and China

 

They’re not capitalists — they’re predatory criminals

Top 10 hedge funds made £1.5bn profit from Ukraine war food price spike

[The Guardian, via Naked Capitalism 4-17-2023]

 

The Tide of Price over Volume 

Sam Rines, April 21, 2023 [The Big Picture]

Price over Volume remains a key theme this earnings season with PG’s earnings report the tip of the iceberg…

It remains early in the current earnings season. But the persistence of the [Price over Volume] narrative is becoming almost comical. The amount of price flowing through the system to consumers is rather obscene. Pushing 10% price at P&G with relatively little pushback on volumes (-3%??) makes for a difficult argument that there is a disincentive to continue finding that elasticity breaking point. And P&G does not appear to have found it yet….

And Pepsi – the one company that was not supposed to be able to raise prices because of the direct competition from KO – is one of the most obvious PoV culprits.

The acceleration in pricing all around – but particularly at Pepsi and the like – is astonishing. It is indicative of the current corporate mentality. There are very few chances to find the elasticity of demand. And – for the time being – there are ample excuses to figure it out.

There is a war. There is a labor shortage. Those are good excuses to raise pricing and not care about volume. And that is the world we are living in. Volume doesn’t matter. Price does.

[Twitter, via Naked Capitalism 4-22-2023]

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‘We may be looking at the end of capitalism’: One of the world’s oldest and largest investment banks warns ‘Greedflation’ has gone too far 

[Fortune, via Mike Norman Economics, April 20, 2023]

When costs go up, so do profits? That’s not how capitalism is supposed to work, but that is the recent trend. For over a year now, consumers and businesses, both in the U.S. and worldwide, have struggled with stubborn inflation. But the soaring costs haven’t prevented corporations from raking in record profits. The companies in last year’s Fortune 500 alone generated an all-time high $1.8 trillion in profit on $16.1 trillion in revenue….

Albert Edwards, a global strategist at the 159-year-old bank Société Générale, just released a blistering note on the phenomenon that has come to be called Greedflation. Corporations, particularly in developed economies like the U.S. and U.K., have used rising raw material costs amid the pandemic and the war in Ukraine as an “excuse” to raise prices and expand profit margins to new heights, he said. And the French investment bank isn’t just historic: It’s one of the select banks considered to be “systemically important” by the Financial Stability Board, the G20’s international body dedicated to safeguarding the global financial system.

Furthermore, Edwards wrote, in the Tuesday edition of his Global Strategy Weekly, after four decades of working in finance, he’s never seen anything like the “unprecedented” and “astonishing” levels of corporate Greedflation in this economic cycle. To his point, a January study from the Federal Reserve Bank of Kansas City found that “markup growth”—the increase in the ratio between the price a firm charges and its cost of production—was a far more important factor driving inflation in 2021 than it has been throughout economic history.

Credit Suisse Takeover in a Black Box – Untransparent Deal. Implications for the Failing Structures of Global Banking 

Peter Koenig, March 24, 2023 [Global Research, via PUBLIC BANKING INSTITUTE NEWS: APR 21, 2023]

Child labor returns to the United States: A society moving in reverse 

[WSWS, via Naked Capitalism 4-22-2023]

JPMorgan Chase CEO Jamie Dimon to be deposed in Epstein suit 

[ABC, via Naked Capitalism 4-19-2023] Judge Jed Rakoff in charge!

 

The carnage of mainstream neoliberal economics

America’s decline in life expectancy speaks volumes about our problems

[Los Angeles Times, via The Big Picture 4-17-2023]

Years of widening economic inequality, compounded by the pandemic and political storm and stress, have given Americans the impression that the country is on the wrong track. Now there’s empirical data to show just how far the country has run off the rails: Life expectancies have been falling.

Poverty in the U.S. should be considered a ‘major risk factor for death’ — and is associated with more fatalities than guns or homicides, study finds 

[MarketWatch, via Naked Capitalism 4-20-2023]

Many Older Americans Haven’t Saved Anything for Retirement 

[Bloomberg, via Naked Capitalism 4-18-2023]

The Repo Man Returns as More Americans Fall Behind on Car Payments

[Businessweek, via The Big Picture 4-21-2023]

Pandemic relief measures shielded many people from repossession, but that’s changing as interest rates and auto prices soar.

THE HIGH COST OF CHEAP PRISONS

[The Law and Political Economy Project, via Naked Capitalism 4-17-2023]

However, as Marie Gottschalk has recently pointed out, this new left-right consensus has so far produced underwhelming results. Penal optimists have celebrated the progressive decline in the number of people incarcerated, but that modest reduction – 11% between 2009 and 2019 – has hardly made a dent in the US prison population, which had grown by more than 700% over the previous three decades.

While it has done little to dismantle the carceral apparatus, the austerity-driven approach to criminal justice reform has opened the door to a slate of budget cuts and cost-saving measures. Since most correctional systems are reluctant to reduce prison beds or lay off staff, they are instead reducing basic services inside prisons and jails and shifting the cost for those services onto the incarcerated and their families. For instance, most states have slashed their budgets for prison food services. The Pennsylvania Department of Corrections, which spent $8.96 per day to feed an incarcerated person in 1996, now spends $2.61. Over the same period, Florida cut its daily prison food budget from $5.65 per inmate all the way down to $2.02. As states reduced spending, a multibillion-dollar prison retail industry emerged to fill the gaps in public provisions. Most incarcerated individuals now purchase extra food, clothing, hygiene, and other goods from external vendors who charge exorbitant rates for phone calls, money transfers, and commissaries. More broadly, almost all states now charge pay-to-stay fees, forcing incarcerated people to pay for their own confinement.

300 Years of ‘Too Big to Jail’ 

Robert Kuttner [New York Review of Books,April 20, 2023 issue]

Impunity and Capitalism: The Afterlives of European Financial Crises, 1690–1830

by Trevor Jackson

Cambridge University Press, 310 pp., $99.99

In Impunity and Capitalism, Trevor Jackson shows how, between about 1690 and 1830, financial crises stopped being crimes and were treated as everyone’s fault and no one’s.

Disrupting mainstream economics

IMF demonstrates mainstream economics has ossified but remains dominant

William Mitchell [Modern Monetary Theory, via Mike Norman Economics, April 17, 2023]

Last week (April 11, 2023), the IMF released their half-yearly update – World Economic Outlook: A Rocky Recovery, April 2023 – which excited the headlines in the media with predictions of gloom and calls for fiscal austerity and more interest rate hikes. The only good thing about these reports every six months is the accompanying datasets, which allows for fairly quick comparative analysis across nations. Other than that, the textual narratives are pure mainstream economics Groupthink and demonstrate how if one starts from a particular and flawed set of principles, everything else that follows undermines the stated goal. This is a recurring story – we have seen this with these multilateral agencies over and over again. The point to understand is not to try to interpret these IMF reports as being knowledge-based or compiled as if they are pursuing knowledge. They are parts of the ideological weaponry that seeks to sustain and advance neoliberalism and the power relations inherent in that ideology while purporting to be expert commentary.…

Beyond GDP: Three Other Ways to Measure Economic Health 

[Federal Reserve Bank of St Louis, via Naked Capitalism 4-20-2023]

The United Nations created the Human Development Index (HDI) to provide an alternative indicator that emphasizes people and their capabilities, instead of economic growth alone, for assessing the development of a country.

The HDI consists of three categories: health, education and standard of living, as the United Nations Development Program states in an overview of the index on its website. “The health dimension is assessed by life expectancy at birth, the education dimension is measured by mean [average] of years of schooling for adults aged 25 years and more and expected years of schooling for children of school entering age,” according to the website….

The Better Life Index (BLI), created as part of the Organization for Economic Cooperation and Development’s (OECD’s) Better Life Initiative, provides a comparison of the ingredients for people’s well-being across 11 “topics” for 41 countries.

Topics the OECD identified as essential to well-being relate to material living conditions (housing, income, jobs) and quality of life (community, education, environment, governance, health, life satisfaction, safety and work-life balance)….

The Genuine Progress Indicator (GPI) is designed to measure the well-being of a country by taking into account economic, environmental and social factors, as described by Gross National Happiness USA, a network of activists, analysts and advocates.

The factors for each aspect might vary depending on the entity using or creating a GPI. The version shown on the Gross National Happiness USA website, for example, is different than that used by Hawaii’s Department of Business, Economic Development and Tourism. The economic aspect may include variables such as personal expenditures and income inequality. For the environmental aspect, the index mostly includes factors such as ozone depletion and climate change. Crime, family breakdown, and more are included in the social aspect.

Why DSGE models are worse than useless 

Lars P. Syll [via Mike Norman Economics, April 19, 2023]

The most damning critiques that can be levelled against DSGE models are the following two:

(1) DSGE models are unable to explain involuntary unemployment

In the basic DSGE models the labour market is always cleared – responding to a changing interest rate, expected lifetime incomes, or real wages, the representative agent maximizes the utility function by varying her labour supply, money holding and consumption over time. Most importantly – if the real wage somehow deviates from its ‘equilibrium value,’ the representative agent adjusts her labour supply, so that when the real wage is higher than its ‘equilibrium value,’ labour supply is increased, and when the real wage is below its ‘equilibrium value,’ labour supply is decreased.

In this model world, unemployment is always an optimal choice to changes in the labour market conditions. Hence, unemployment is totally voluntary. To be unemployed is something one optimally chooses to be….

Obviously, it’s rather embarrassing that the kind of DSGE models ‘modern’ macroeconomists use cannot incorporate such a basic fact of reality as involuntary unemployment. Of course, working with representative agent models should come as no surprise. The kind of unemployment that occurs is voluntary since it is only adjustments of the hours of work that these optimizing agents make to maximize their utility….

(2) In DSGE models increases in government spending lead to a drop in private consumption

In the most basic mainstream proto-DSGE models, one often assumes that governments finance current expenditures with current tax revenues.  This will have a negative income effect on the households, leading — rather counterintuitively — to a drop in private consumption although both employment and production expand. This mechanism also holds when the (in)famous Ricardian equivalence is added to the models.

Economists We’ll Be Talking About: Wassily Leontief 

[Building a Ruin, via Naked Capitalism 4-21-2023]

Despite these longer structural patterns, in the past few decades, I think there has been a bit of technological disruption in how economics and economic ideas move into action. A few years ago, I coined the term “posting to policy pipeline” to describe how the econ blogosphere and Twitter have become key sites of idea making. Before the advent of these new forums, the top economic journals really dominated everything and painted the conventional wisdom as having some scientific validity. After the advent of social media, one could not only call Larry Summers an idiot to his face without being invited to an exclusive meeting but also explain to a large audience precisely why he was an idiot.

Like all technical changes, the emergence of the posting-to-policy pipeline had a strong social component. In the wake of the 2008 crisis and the great recession, a whole cohort of people became interested in the economy who would never would have entered the field before. In the late 1980s and 1990s, economics seemed a “settled” discipline from the outside and associated, fairly or not, with free market dogma. After 2008, younger scholars who would have reason to be critical of such dogma rediscovered economics and economic thought more broadly. I think this effect created not only a cohort that was ready to act when the COVID crisis came but re-invigorated some traditions in economic literature. In particular, macroeconomics was reborn in a more directly Keynesian tone. In the wake of 2008, we all began re-reading Keynes and his more radical counterpart, Kalecki, as a primary source, not just a modeling tradition. What we discovered was that what was called Keynesian macro had little to do with the economics of Keynes.

Like an underground stream that bursts through the surface, the Keynesian revival really gained traction after the 2016 election of Trump, as even mainstream thinkers began to accept that the Obama recovery had gone horribly wrong and searched for a grounded, implementable agenda.

Railroad Workers United: “We Would Never Concede Our Right to Strike”

[Jacobin, via Naked Capitalism 4-16-2023]

A response to Dems, such as AOC who said she was acting on the wishes of RWU when she voted to break the strike.

HOW THE COURT IS PITTING WORKERS AGAINST EACH OTHER 

[The Law and Political Economy Project, via Naked Capitalism 4-16-2023]

Why most of America’s 2 million long-haul truck drivers aren’t unionized

Rachel Premack, April 20, 2023 [freightwaves.com]

Trucking salaries have decreased by as much as 50% since deregulation, according to economist Michael Belzer. Unionization rates are far lower, too, falling from about 50% of all truckers to under 20%. And by doing away with regular routes and hours, employers can take far more advantage of drivers….

As it turned out, the free enterprise system wasn’t particularly kind to the trucking industry — at least in those first few years. Hundreds of large trucking firms went bankrupt or consolidated. The ATA counted 338 trucking companies with annual revenues exceeding $1 million in 1974, according to a 1982 New York Times article. By 1982, only 208 remained.

Many of the firms that went bankrupt were unionized ones. The drivers who lost their jobs following deregulation were almost always rehired by nonunion firms. In the early 1980s, a third of Teamsters truck drivers were on “long-term layoff.” This gutted a key part of the Teamsters’ membership base and its funding.

Further, when truck drivers no longer had to respect picket lines, it meant strikes of all types became less powerful. In 1980, the last year of regulated trucking, nearly 800,000 workers participated in strikes. That number had fallen to 80,700 by 2021.

“Deregulation in the 1980s is clearly one massive blow to organized labor and the Teamsters,” Hamilton said.

 

Restoring balance to the economy

Banking Crisis 3.0: Time to Change the Rules of the Game

Ellen Brown,  March 23, 2023 [ScheerPost, via PUBLIC BANKING INSTITUTE NEWS: APR 21, 2023]

The Failed Banks Were Not Nationalized, But Maybe They Should Have Been
One option that was debated in the 2008-09 crisis was actual nationalization.  As Prof. Michael Hudson wrote in February 2009:

“Real nationalization occurs when governments act in the public interest to take over private property. … Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies.”

Renters’ unions are successfully resisting evictions around the UK

[The Canary, via Naked Capitalism 4-18-2023]

Can Movements Stop Politicians From Selling Out? 

[Dissent Magazine, via Naked Capitalism 4-16-2023]

‘A gamechanger’: this simple device could help fight the war on abortion rights in the US

[The Guardian, via The Big Picture 4-21-2023]

Only a tiny fraction of primary care physicians provide abortion care. Dr Joan Fleischman believes that training them in a simple and easy abortion method might be the best way to offset the war on access.

 

The Dark Side

Dominion Was Never Going to Save Our Democracy From Fox News 

Peter Maass, April 18 2023 [Intercept]

With a $787.5 million settlement for its election lies, Fox News has avoided the legal and moral punishment of a court verdict….

But Dominion does not exist to serve the public interest or liberal magazines. It is a for-profit company owned by Staple Street Capital, a small private equity firm. Staple Street has fewer than 50 employees and claims $900 million of assets under management (a modest amount in its industry). It was founded in 2009 by Hootan Yaghoobzadeh and Stephen D. Owens, who previously worked at Carlyle Group and Cerberus Capital Management, giants in private equity. Yaghoobzadeh and Owens graduated from Harvard Business School and have no records of political donations or political activity; they are business people, not pro-democracy agitators.

The size of the settlement represents a windfall on Staple Street’s investment in Dominion: Its controlling stake cost just $38.3 million in 2018, according to a filing in the case. While Dominion’s lawsuit has attracted an enormous amount of attention, it’s actually not a large company, as the market for its vote-counting services is limited; its expected revenues in 2022 were just $98 million, according to the filing.

Fox Can Claim Tax Writeoff For Defamation Settlement 

Julia Rock, Rebecca Burns & Matthew Cunningham-Cook, April 19, 2023 [The Lever]

Thanks to an arcane line in the tax code, Fox can deduct that settlement payment from its income taxes, according to a company spokesperson and tax experts consulted by The Lever. That’s because federal law allows taxpayers to write off many legal costs, providing that they are “ordinary and necessary” business expenses. The IRS has repeatedly affirmed that for major corporations, paying out settlements is just part of the cost of doing business.

Rupert Wins Again

[Politico, via The Big Picture 4-21-2023]

For the media mogul, the massive Dominion settlement fee is just the cost of doing business…. A hundred million here, a hundred million there, might crimp your finances. But in the Murdoch universe, paying such settlements is just the cost of doing business Murdoch-style. The alternative to settling with Dominion for telling a series of lies about voting fraud would have been a painful and long courtroom drama. A stream of ugly would have been on the Fox image, day after day, as Dominion made its case. Even after the case concluded and went to appeals, the Fox brand would have been further stigmatized, and shame and disparagement would have been leveled at Murdoch, Fox executives and Fox hosts Sean Hannity, Tucker Carlson, Maria Bartiromo, Laura Ingraham and Bret Baier, all of whom Dominion planned to put on the witness stand. Getting out from under all of that hurt for $787.5 million is a kind of bargain for a company with a market cap of $17.3 billion. Fox has $4.1 billion in cash and warrants on hand, says the New York Times.

Fox News Lost the Lawsuit but Won the War

[The Atlantic, via The Big Picture 4-19-2023]

Dominion’s choice to settle comes as a great disappointment to many critics of Fox, and is also probably a smart financial decision. For the critics, this case was about democracy and disinformation and provided an opportunity to hold Fox accountable for years of broadcasting hogwash. For Dominion, it was primarily about business. No matter how lofty the language its spokespeople used, the company didn’t sue to fix the American media landscape.

 

Information age dystopia / surveillance state

The Press is Now Also the Police

Matt Taibbi [Racket News, via Naked Capitalism 4-18-2023]

House Democrats Have Lost Their Minds 

Matt Taibbi [Racket News, via Naked Capitalism 4-21-2023]

Today’s must-read. Here is the nub, or rather the nubbin, of the matter:

I did in a tweet conflate the Center for Internet Security (CIS) with the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA), saying that CISA was so close to Stanford’s Election Integrity Project (EIP) that Twitter staffers didn’t really distinguish between them.

[Lambert Strether adds: “In other words, Taibbi conflated — he is far too nice — an organ of state security (CISA) with an NGO within civil society (CIS). However, as Gramsci writes somewhere, state and civil society are separable only as (academic) objects of study. In reality, there is a single ruling class, of which state and civil society are different aspects (granted, with some institutions having more relative autonomy than others). In the state of exception declared by Democrats after Trump’s victory in 2016, Gramsci’s claim has become more and more self-evidently true: Wedel’s Flexians — there are countless examples in The Twitter Files — are increasingly running the show, “dissolv[ing] the particularities of office” (“Old Man Yells at Mush-Mouth Verbiage“). “ ]

Inside the Surveillance State’s Propaganda Machine 

Jacob Silverman, April 13, 2023 [The New Republic]

Kerry Howley’s new book shows how the government distorts reality to turn whistleblowers into public enemies.

US charges 4 Americans, 3 Russians in election discord case 

[Associated Press, via Naked Capitalism 4-19-2023]  comments):

Now you can be arrested for not agreeing that America is the greatest country in the world? Indicted for “sowing discord” ? WTF I assume all you people on here on NC are next on the list.

Snowden and Texeira: Ten Years of Disaster 

Craig Murray [via Naked Capitalism 4-18-2023]

After infiltrating Standing Rock, TigerSwan pitched its ‘counterinsurgency’ playbook to other oil companies 

[Grist, via Naked Capitalism 4-16-2023]

A War Crimes Team Investigated the Portland Police. The Results Are Damning

[Rolling Stone, via Naked Capitalism 4-18-2023]

Hochul’s Top Court Pick Represented Chevron in Climate Case Against Steven Donziger

[New York Focus, via Naked Capitalism 4-18-2023]

 

Climate and environmental crises

The Vietnamnese Climate Trap

[Globe and Mail, via The Big Picture 4-22-2023]

As rising seas ruin crops, Mekong Delta farmers are moving to big cities, straining their finances and families. Climate change is displacing a million farmers in Vietnam’s Mekong Delta – but for most, migration is not an option. Their stories challenge conventional wisdom on what ‘climate refugees’ look like and where they go….

If anyone in the world might be described as a climate migrant, it is Kim Phuong. For half his life, this compact, muscular 44-year-old man was a rice farmer, his days spent working his family’s paddies around a tranquil village in southern Vietnam’s Mekong River Delta, where the confluence of the great river’s nine branches creates one of the most fertile places on Earth – and a place whose average elevation is less than a metre above sea level, making it extremely vulnerable to the effects of climate change.

A decade ago, his family’s crops began to fail more frequently as destructive salt-water floods, longer dry seasons and an unprecedented series of droughts struck the Delta, slashing the family’s agricultural income and forcing them into debt. Phuong had to sell his land and, like hundreds of thousands of other farmers across the region, take to the road.

The 100-year-old mistake that’s reshaping the American West: What happens if the Colorado River keeps drying up?

[Vox, via Naked Capitalism 4-20-2023]

What might Colorado River cuts mean for states and their water supplies? 

[NBC News, via Naked Capitalism 4-18-2023]

Phoenix hopes to turn wastewater into drinking water by 2030 

[AZFamily, via Naked Capitalism 4-18-2023]

The Elephant on the Banks of the Colorado River 

[Counterpunch, via Naked Capitalism 4-18-2023]

Arizona vs. Navajo Nation.

Urban water crises driven by elites’ unsustainable consumption 

[Nature, via Naked Capitalism 4-16-2023]

These laws have formed a foundation to fight climate change 

[World Economic Forum, via Naked Capitalism 4-20-2023]

Defending Earth’s terrestrial microbiome (PDF)

[Nature Microbiology, via Naked Capitalism 4-21-2023] From the Abstract:

[T]here is an emerging realization that Earth’s microbial biodiversity is under threat. Here we advocate for the conservation and restoration of soil microbial life, as well as active incorporation of microbial biodiversity into managed food and forest landscapes, with an emphasis on soil fungi. We analyse 80 experiments to show that native soil microbiome restoration can accelerate plant biomass production by 64% on average, across ecosystems. Enormous potential also exists within managed landscapes, as agriculture and forestry are the dominant uses of land on Earth. Along with improving and stabilizing yields, enhancing microbial biodiversity in managed landscapes is a critical and underappreciated opportunity to build reservoirs, rather than deserts, of microbial life across our planet. As markets emerge to engineer the ecosystem microbiome, we can avert the mistakes of aboveground ecosystem management and avoid microbial monocultures of single high-performing microbial strains, which can exacerbate ecosystem vulnerability to pathogens and extreme events. Harnessing the planet’s breadth of microbial life has the potential to transform ecosystem management, but it requires that we understand how to monitor and conserve the Earth’s microbiome.

 

Creating new economic potential – science and technology

What If Your Tesla Could Run on Sodium?

[Wall Street Journal, via Naked Capitalism Water Cooler 4-20-2023]

“If sodium is the new lithium, investors may need to rethink a favorite energy-transition trade. One of the most potentially disruptive snippets of news to come out of the Shanghai auto show this week wasn’t from Tesla or one of its flashy Chinese competitors but from a company that doesn’t make vehicles at all: CATL. The world’s largest battery producer said its first sodium-ion battery would power electric vehicles built by Chinese brand Chery, though it didn’t say when. This adds to a drip-drip of signals that cheaper sodium-ion battery chemistry is moving out of the science lab and onto streets. Another one: Chinese EV leader BYD on Tuesday launched a hatchback, the Seagull, one variant of which may run on a sodium-ion battery, according to some reports that the company hasn’t confirmed. If the Seagull doesn’t use the new chemistry, other coming BYD models likely will… New technologies usually seep into the car industry from the top end, where consumers can afford the latest gadgets. Battery innovations, where the big goal is reducing cost, are shaping up differently…. The new technology is less powerful than the latest lithium batteries. But it matches the older generations of lithium batteries that are in EVs today, so consumers might not care. And it has other advantages—being less fire-prone and more capable in freezing temperatures.”

How did solar power get cheap?

[Construction Physics, via The Big Picture 4-18-2023]

Solar photovoltaics (PV) have become one of the cheapest sources of electricity. Lazard’s estimate of unsubsidized levelized cost of energy (LCOE), the average cost of electricity generated over a plant’s lifetime, has utility scale solar PV cheaper than anything except completely depreciated natural gas plants and wind in the very windiest locations.

Why 21 cm is the magic length for the Universe

[Big Think, via The Big Picture 4-19-2023]

Photons come in every wavelength you can imagine. But one particular quantum transition makes light at precisely 21 cm, and it’s magical.

New Map of Dark Matter Validates Einstein’s Theory of Gravity

[Gizmodo, via The Big Picture 4-19-2023]

Researchers can “clearly see features of this invisible world that are hundreds of millions of light-years across.”

 

Institutionalists = Obstructionists

“Are you now or have you ever been a supporter of Jeremy Corbyn?” 

[The Left Berlin, via Naked Capitalism 4-16-2023]

Corbyn remains an obsession for Starmer and his cabal of right wing sensibles. Socialists are being purged from the party and he is the big one; the dragon that must be slain by Sir Starmer. They remain horrified that he did unexpectedly well on a social democratic platform in 2017 and that his ideas about helping each other spoke to the future generation of voters. This was doing politics wrong. The adults were not in charge. How dare this upstart talk about ridiculous things like ending homelessness and funding social care and education so that no one is left behind?

How dare he propose investment in council housing, properly funding the NHS and free nursery places for all 2-4 year olds? What a monster. Thankfully, now the adults are back in charge and are creating racist attack ads claiming that Sunak does not support convicted paedophiles going to prison, as well as putting out social media posts on combatting fly tipping and nuisance phone calls.

 

Conservative / Libertarian Drive to Civil War

U.S. Supreme Court empowers bids to curb authority of federal agencies

[Reuters, via Naked Capitalism 4-18-2023]

Red states are trying to make their own rules.

[The Atlantic, via The Big Picture 4-18-2023]

The Tennessee Expulsions Are Just the Beginning: Red states are trying to make their own rules.

Why Republicans Want to Keep Free Money Out of Their Districts

Kate Aronoff, April 21, 2023 [The New Republic]

So why do Republicans want to cut off the spigot? The simple answer is that they’re not accountable for what happens in their districts. Very few politicians are: 84 percent of congressional districts, after all, were either uncontested or won by margins of 10 percent or more in 2022. Thanks to decades of aggressive gerrymandering, GOP lawmakers are accountable to a smaller, more radical base of voters and far-afield corporate donors. All that means that despite the sizable amounts of money flowing into red states from the IRA, Republicans feel pretty empowered to tear the law apart.

The alarms are finally blinking red about the GOP in the media – some of it at least.

xaxnar, April 19, 2023 [DailyKos]

Jack Goldstone, a professor of public policy at George Mason University, made a parallel argument by email:

Jack Goldstone, a professor of public policy at George Mason University, made a parallel argument by email:

One of the odd and scary things about American politics, more reminiscent of the 19th century than anything in the post-World War II period, is that when the Republicans lost the presidential election in 2020 and did much worse than expected in 2022 (even worse than in a normal midterm contest), they did not abandon the leaders and policies that produced these results. Instead, they have doubled down on even more extreme and broadly unpopular leaders and policies, from Trump to abortion and guns.

Goldstone believes that this development

is a sign that normal politics have been replaced by extreme polarization and factional identity politics, in which the extremes grow stronger and drain the center. As a minority seeking to exercise control of government, it is actually necessary that the Trumpist G.O.P. suppress democratic procedures that normally produce majority control.

If enough voters, Goldstone wrote,

are deeply anxious or frightened of some real or imagined threat (e.g. socialism, mass immigration, crime, threats to their religion, transgender takeover), they may well vote for someone who promises to stand up to those threats, even if that person has no regard for preserving democracy, no regard for the rights and freedoms of those seen as “enemies.” If such a leader is elected, gets his or her party to control all parts of government, and wants to turn all the elements of government into a weapon to attack their enemies, no laws or other organizations can stop them.

How these Republicans intend to solve mass shooting problem 

[BBC, via Naked Capitalism 4-19-2023]

Oklahoma county leaders caught on audio talking about killing reporters and complaining they can no longer lynch Black people 

[NBC, via Naked Capitalism 4-19-2023]

“Full audio released of Oklahoma sheriff discussing killing journalists”

[The Oklahoman, via Naked Capitalism Water Cooler 4-21-2023]

“A southeast Oklahoma newspaper has released the full audio recording it captured of county officials talking about killing journalists and lynching Black people. The McCurtain Gazette reported that the new audio includes more talk of harming journalists, as well as discussion of intimidating the local prosecutor. The Gazette published a summary in its Thursday edition, which hit newsstands Wednesday night. The newspaper does not have a web edition. The entire recording, which was captured March 6, lasts three hours and 37 minutes, the newspaper said. The Gazette said it is publishing the full audio to be transparent and to show the importance of public records.”

Florida to allow death penalty with 8-4 jury vote instead of unanimously 

[Reuters, via Naked Capitalism 4-22-2023]

“So What Could Congress Actually Do To Hold Clarence Thomas Accountable?”

[Slat, via Naked Capitalism Water Cooler 4-20-2023]

“An easy first step could be for Congress to extend the Judicial Conduct and Disabilities Act to apply to the Supreme Court. That’s a code of conduct that details standards of behavior that all federal judges in lower courts across the country must adhere to. It bans judges from accepting gifts or engaging in any and all behavior that would hurt public confidence in the integrity and impartiality of the judiciary, and any violations incur steep fines. It also allows the public to submit complaints if they believe a federal judge has engaged in behavior detrimental to the court or is unable to execute duties of the judicial office…. As eager as Congress may be to step in and hold Thomas accountable for his questionable ethics, the Supreme Court is a self-governing body, and there are limitations on what legislators can do. All the experts I spoke to said that having the court choose to implement reforms of its own accord is one of the strongest solutions. The most obvious starting point would be for the court to adopt an ethics code.”

The day the book banners lost in Pennsylvania’s culture wars

[Philadelphia Inquirer, via The Big Picture 4-18-2023]

A right-wing move to keep a young-adult climate change novel out of a Kutztown middle school backfired in spectacular fashion.