by Tony Wikrent
Strategic Political Economy
Trump, Tax Cuts and Terrorism
Why has the Republican Party become a systematic enabler of terrorism?
Paul Krugman [New York Times, via DailyKos 8-6-19]
But racism isn’t what drives the Republican establishment…their exploitation of racism has led them inexorably to where they are today: de facto enablers of a wave of white supremacist terrorism.
The central story of U.S. politics since the 1970s is the takeover of the Republican Party by economic radicals, determined to slash taxes for the wealthy while undermining the social safety net.
With the arguable exception of George H.W. Bush, every Republican president since 1980 has pushed through tax cuts that disproportionately benefited the 1 percent while trying to defund and/or privatize key social programs like Social Security, Medicare, Medicaid and the Affordable Care Act.
This agenda is, however, unpopular. Most voters believe that the rich should pay more, not less, in taxes, and want spending on social programs to rise, not fall.
So how do Republicans win elections? By appealing to racial animus. This is such an obvious fact of American political life that you have to be willfully blind not to see it….
In effect, then, the Republican Party decided that a few massacres were an acceptable price to pay in return for tax cuts. I wish that were hyperbole, but the continuing refusal of G.O.P. figures to criticize Trump even after El Paso shows that it’s the literal truth.
If You Only Read One Thing Today, Read Paul Krugman: “Trump, Tax Cuts and Terrorism”
xaxnar [DailyKos 8-6-19]
One wonders why John Hickenlooper is still warning of the dangers of extreme leftist socialism. One wonders why Joe Biden still thinks the GOP will come to its senses if Trump is gone. One wonders when Nancy Pelosi and the rest of the Democratic leadership will realize we have a bigger problem than just Trump.
If you are prepared to read more than one thing, read Kevin Drum, who spelled this out a year ago at Mother Jones.
Today, the Republican Party exists for one and only one purpose: to pass tax cuts for the rich and regulatory rollbacks for corporations. They accomplish this using one and only method: unapologetically racist and bigoted appeals to win the votes of the heartland riff-raff they otherwise treat as mere money machines for their endless mail-order cons.
The Myth of Welfare Dependency
Rema Hanna, August 9, 2019 [Project Syndicate, via Mike Norman Economics]
In most countries, rich and poor people alike worry that social programs for low-income households end up weakening work incentives and create an underclass of indigents. In fact, recent research suggests just the opposite: the longer families receive stable and predictable support, the better they and their children do….
“Welfare helps people work” may sound like a strange and counterintuitive claim to some. But it is perfectly obvious when the word people in that sentence refers to low-income children in poor households. Poverty and lack of access to health care is a physical, psychological, and vocational burden for children. Poverty is a slow-motion trauma, and impoverished children are more likely than their middle-class peers to suffer from chronic physiological stress and exhibit antisocial behavior. It’s axiomatic that relieving children of an ambient trauma improves their lives and, indeed, relieved of these burdens, children from poorer households are more likely to follow the path from high-school graduation to college and then full-time employment.
The economy begins to stumble under Trump
“U.S. agricultural exports to China plummeted more than 50% last year to $9.1 billion as tariffs raised the cost of American soybeans, pork and other farm products. The exports dropped another 20% in the first six months of this year. The pain is rippling through agricultural supply chains. One forecast says tariffs could cost the sector as many as 71,000 jobs over the next two years” [Wall Street Journal, via DailyKos 8-7-19]
David Rosenberg: Signs of a looming U.S. recession are building, if you look beneath the surface
[Financial Post (Canada), via DailyKos 8-6-19]
• Container port shipments (Long Beach): -16.6 per cent
• Global semiconductor sales: -14.6 per cent
• Intermodal railroad traffic: -7.4 per cent
• Coal production: -6.3 per cent
• Cass freight shipping index: -6.0 per cent
• Lumber production: -5.6 per cent
• Electricity output: -3.7 per cent
• Railway carloadings: -3.5 per cent
• Corrugated paper production: -3.3 per cent
Heavy-Truck Orders Collapse Stunning 81%. Lowest Since 2010
Wolf Richter,Aug 3, 2019 [Wold Street]
Orders for Class 8 trucks – the iconic trucks that haul part of the economy’s goods across the country – collapsed by 81% in July compared to July last year, to 9,800 units, the lowest since 2010, according to FTR Transportation Intelligence on Friday. It was the ninth month in a row of year-over-year declines. But “declines” is not the right word. This year so far, these year-over-year “declines” ranged from -52% to -81%, which makes for a stunning collapse of the historic boom last year:
Orders for truck freight trailers have also collapsed, according to ZeroHedge:
A Decline in Capital Investment Reveals the False Promise of Trump’s Tax Bill
The Global Economy Lives in Wonderland Now
The Failure of Establishment Neoliberal Economics
Mark Blyth’s Incisive Post-Crisis Takedown: “A Brief History of How We Got Here and Why”
[Naked Capitalism 8-5-19]
Blyth argues that the world has been through three policy regimes, using computers as an analogy and arguing that like computers, capitalist systems all have the same major components and economic ideology is the “software”. The regime first was the gold standard, which allowed for international capital mobility without inflation, favoring capital over workers. That regime worked from roughly 1870 to World War I. As academics like Peter Temin described in detail, after the Great War, European economies tried to restore the gold standard, and Temin argues that those efforts produced the Depression. The Depression ushered in policy changes which eventually produced the next era, which started after World War II. The policy objective of this era was full employment. Cross-border capital flows were restricted, countries were more autarky-like than now, and governments were economic activists. Blyth quips that no one knew who central bankers were back then.
This era broke down with the 1970s inflation. But Blyth argues that the trigger was that the share of GDP going to labor had become intolerably high to businesses and investors. Inflation also favors labor over capital by eroding the real value of debt. The answer to that was the capital-favoring, globalist, inflation-hostile neoliberal era.
Blyth stresses that what happened after the 2008 financial crisis, which resulted from the failings of the neoliberal regime, the effort to restore the old system, is an unnatural response which will only lead to intensification of the underlying stressors, like rising levels of private debt, greater income inequality, and even more financialization.
I also highly recommend Blyth, but he commits one serious error of omission. Which is: Blythe accepts the “common wisdom” that the stagflation of the 1970s was caused by wage-push inflation. In fact, the far more important cause of inflation at the tine was the tripling and quadrupling of energy prices initiated by the Arab oil embargoes. Blythe thus misses the crucial underlying dynamic of our industrial economies having been designed and built — for over a century — to run on cheap energy supplies. But it WAS labor that was blamed.
Thus Blythe also misses — as does almost everyone else — the USA response of Kissinger’s negotiated agreement with the Saudis and others to recycle their dollars into purchases of US paper, thus creating the petrodollar market. If I recall correctly, this agreement is discussed by John Perkins in his bombshell book, Confessions of an Economic Hit Man.
Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back.
[Wall Street Journal, via The Big Picture 8-8-19]
“The invisible hand is more like a thumb on the scale for the world’s elites. That’s why market fundamentalism has been unmasked as bogus economics but keeps winning politically. Since the late 1970s, we’ve had a grand experiment to test the claim that free markets really do work best. This resurrection occurred despite the practical failure of laissez-faire in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of managed capitalism during the three-decade postwar boom. Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat. This revival proved extremely convenient for the conservatives who came to power in the 1980s. The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every aspect of managed capitalism—from progressive taxation, welfare transfers, and antitrust, to the empowerment of workers and the regulation of banks and other major industries. […] Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut, and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth is slower and more chaotic than during the era of managed capitalism. Deregulation has produced not salutary competition, but market concentration. Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration.”
[New York Times, via Naked Capitalism 8-7-19]
Report on the DSA convention.
“The zombie neoliberalism of the Wall Street Democrats created this crisis with their free trade, their austerity budget cuts,” Ms. Svart said in her opening speech, “and they are complicit in Trump’s shock doctrine against our communities.”
Restoring balance to the economy
Banks have the ability to create money in exchange for doing something: they decide who should get to do things. They give permission.
If a bank lends you 50 million, that’s the right to command 50 million dollars worth of other people’s labor: to hire them, or to buy the goods created by them. You get to choose what those people do.
Resources, especially people, aren’t infinite. Banks choose who gets to use them. The deal, spelled out is, “give us the right to create money, and we’ll choose the people who do the most good with society’s resources to control those resources.”
And they’ve failed. Over and over again they’ve failed. They don’t even, actually, make their returns (see 2007/8), let alone actually make good choices about how we should use our resources of people and other limited resources. I trust I don’t need to spell all of this out: look at ecological collapse, climate change and so on.
New PBI video captures the momentum of the public banking movement as it spreads nationally
[The Intercept 8-8-19]
TWO FOR-PROFIT prison companies have lost major contracts in Denver over their work in immigrant detention, as backlash to President Donald Trump’s immigration policy continues to mount.
The stunning $10.6 million rebuke to the two firms, CoreCivic and the GEO Group, was led by newly elected city council member Candi CdeBaca, who won in June on a radical platform backed by the Democratic Socialists of America. CdeBaca’s stand on Monday against the firms was her first major effort since being sworn in, and she expected to be a lone vote of dissent.
Instead, moved by the plight of those kept in camps run by CoreCivic and the GEO Group, and galvanized by opponents — organized by CdeBaca — at the public meeting, the council delivered an unexpected 8-4 rejection, ending the firms’ contracts to run halfway houses on behalf of the city.
Economics in the real world
Germany is in Serious Danger of Losing its Automobile Industry
[DailyKos 8-5-19]
As if the Diesel Scandal wasn’t costly enough to German automakers, the rapid rise of the electric vehicle maker Tesla, which first overtook the German big three in sales of large luxury cars in the U.S. market with its Tesla Model S, is now heavily cutting into sales of German automakers both in the U.S. and in Europe with the more affordable Tesla Model 3, which is now in full production. Despite the warning signs being clearly visible for numerous years, German auto executives completely dropped the ball and their companies are now lagging approximately five years behind Tesla in EV technology development and related industrial infrastructure.
German automakers aren’t just under pressure from Tesla, however.
China’s 2017 decision to introduce a California-style quota for electric vehicles left German Automakers in a bind, as they currently just plain do not have the capacity to produce the 10% quota of electric vehicles required by Chinese law.
[NYRB, via Naked Capitalism 8-4-19]
Predatory Finance
This morning, the Attorney General in Malaysia stunned Goldman Sachs with an indictment of 17 of its former and current executives. That came on the heels of criminal charges filed last December by Malaysian authorities in the same matter against three Goldman Sachs subsidiaries and two former Goldman employees, Tim Leissner and Roger Ng.
Indictments announced this morning included charges against Richard J. Gnodde, Goldman’s top international banker in London and former Goldman executive J. Michael Evans, who is currently president of Alibaba.
The charges stem from a Malaysia state development fund, 1Malaysia Development Bhd (1MDB) for which Goldman Sachs underwrote $6.5 billion in bonds in 2012 and 2013. Goldman made an outsized $600 million in fees on the deals. According to prosecutors, $4.5 billion in 1MDB funds have gone missing, of which at least $2.7 billion was stolen according to prosecutors.
How Lava Jato Destroyed Brasil’s Future
[Brasilwir, via Naked Capitalism 8-4-19]
The so-called corruption of the political system, while real and deserving of all the authorities’ commitment to its elimination or alleviation, is far from the main problem related to embezzlement and misappropriation of public funds. International studies show that the primary cause of the misuse of public money lies in the tax evasion mechanisms practiced largely by big business, especially financial capital and multinational corporations. According to World Bank estimates, corruption by public officials, through bribery and other mechanisms, drains between $ 20 billion and $ 40 billion a year from developing countries. It sounds like a lot, but it is only a small fraction of what these countries lose from illicit financial flows and the tax evasion or tax avoidance mechanisms practiced mostly by big corporations.
According to Global Financial Integrity (GFI), a US institute dedicated to studying these illegal financial flows, around $ 1 trillion leaves developing countries every year into tax havens or banks in developed countries, without paying taxes. Corruption by public agents in developing nations, including politicians, only represents about 3% of this flow.
It is noteworthy that such an estimate is conservative and partial, as it does not include the so-called legal tax evasion mechanisms, whereby large capital minimizes the payment of taxes due, based on the loopholes and omissions in national and international tax laws. Studies by economist Gabriel Zucman of the University of California, Berkeley, show that, based on a very conservative estimate, tax havens concentrate about $ 8.7 trillion, or 11.5 percent of the World’s wealth. According to Zucman, US multinationals alone avoided paying about $ 130 billion in taxes in 2016 thanks to “legal” financial transactions involving tax havens and offshore banks.Significantly, Lava Jato has completely ignored the actions of multinational corporations in Brazil – even those that had contracts with Petrobras – and their movements in the national and international financial system.
Private Equity LBOs Make More Companies Go Bankrupt, Research Shows
Healthy companies acquired by private equity firms through leveraged buyouts see their probability of defaulting on loans increase ten-fold, new research shows.
According to researchers at California Polytechnic State University, roughly 20 percent of large companies acquired through leveraged buyouts go bankrupt within ten years, as compared to a control group’s bankruptcy rate of 2 percent during the same time period….
Researchers Brian Ayash and Mahdi Rastad studied $50 million-plus deals in which U.S.-based publicly traded companies were acquired by private equity firms in leveraged buyouts between January 1, 1980, and December 31, 2006. In total, the sample comprised 467 leveraged buyout transactions, as well as a control group of companies that remained publicly traded during that time period.
“Our results show a sharp contrast between the bankruptcy rate of the LBO target firms and the control firms: approximately 20 percent of large LBOs go bankrupt within 10 years, while the matched control firms experience a bankruptcy rate of two percent,” the research said.
[The American Banker, via Naked Capitalism 8-5-19]
[ProPublica, via The Big Picture 8-5-19]
Health Care Crisis
Capitalism gone wrong: how big pharma created America’s opioid carnage
[The Guardian, via The Big Picture 8-5-19]
How an epic legal battle brought a secret drug database to light
[Washington Post, via The Big Picture 8-5-19]
Climate and environmental crises
Mekong River at its lowest in 100 years, threatening food supply Thmey Thmey Media, via Naked Capitalism 8-5-19]
‘People are dying’: how the climate crisis has sparked an exodus to the US
[Guardian, via Naked Capitalism 8-5-19]
[Bloomberg, via Naked Capitalism 8-7-19]
The Oil Giants Might Finally Pay for Pulling the Biggest Hoax of All
[Esquire, via Naked Capitalism 8-8-19]
On October 23, in a federal court in New York, opening arguments will be heard in one of the most important corporate malfeasance cases of the modern era, rivaled only by the tobacco litigations of the 1990s. The state of New York is suing ExxonMobil on charges that the energy goliath consistently misled its investors about what it knew concerning the climate crisis—essentially lying to them about what it might eventually cost the company in eventual climate-related financial risks, because the company knew better than practically anyone else what those risks were.
[Weather Underground, via Naked Capitalism 8-7-19]
Challenges to natural and human communities from surprising ocean temperatures
[PNAS, via Naked Capitalism 8-7-19]
17 Countries, Home to One-Quarter of the World’s Population, Face Extremely High Water Stress
The United States is #71 on the list, but averages conceal. AZ, CA, CO, NM, and UT are all High or Extremely High stress.
Climate Could Be an Electoral Time Bomb, Republican Strategists Fear
[New York Times, via The Big Picture 8-9-19]
In conversations with 10 G.O.P. analysts, consultants and activists, all said they were acutely aware of the rising influence of young voters like Mr. Galloway, who in their lifetimes haven’t seen a single month of colder-than-average temperatures globally, and who call climate change a top priority. Those strategists said lawmakers were aware, too, but few were taking action.
“We’re definitely sending a message to younger voters that we don’t care about things that are very important to them,” said Douglas Heye, a former communications director at the Republican National Committee. “This spells certain doom in the long term if there isn’t a plan to admit reality and have legislative prescriptions for it.” ….
President Trump has set the tone for Republicans by deriding climate change, using White House resources to undermine science and avoiding even uttering the phrase. Outside of a handful of states such as Florida, where addressing climate change has become more bipartisan, analysts said Republican politicians were unlikely to buck Mr. Trump or even to talk about climate change on the campaign trail at all, except perhaps to criticize Democrats for supporting the Green New Deal….
The polling bears out Mr. Heye’s prediction of a backlash. Nearly 60 percent of Republicans between the ages of 23 and 38 say that climate change is having an effect on the United States, and 36 percent believe humans are the cause. That’s about double the numbers of Republicans over age 52….
Alex Flint, executive director of the Alliance for Market Solutions, a conservative nonprofit group that advocates for a carbon tax, hit play on a video of 11 Trump voters around a hotel conference table in Florida discussing climate change. Government can’t be trusted to solve climate change, the focus group agreed. But like Mr. Bagley, they also all agreed that climate change is real. “Republican orthodoxy is changing,” Mr. Flint said. “You’re safe saying you acknowledge climate change…. It’s a matter of honesty,” he said. “Voters believe it is happening, at the very least, they want their politicians to acknowledge reality.”
Information Age Dystopia
“When police partner with Ring, Amazon’s home surveillance camera company, they get access to the ‘Law Enforcement Neighborhood Portal,’ an interactive map that allows officers to request footage directly from camera owners. Police don’t need a warrant to request this footage, but they do need permission from camera owners. Emails and documents obtained by Motherboard reveal that people aren’t always willing to provide police with their Ring camera footage. However, Ring works with law enforcement and gives them advice on how to persuade people to give them footage. Emails obtained from police department in Maywood, NJ—and emails from the police department of Bloomfield, NJ, which were also posted by Wired—show that Ring coaches police on how to obtain footage. The company provides cops with templates for requesting footage… Ring suggests cops post often on Neighbors, Ring’s free ‘neighborhood watch’ app, where Ring camera owners have the option of sharing their camera footage.”
“The [Australian Competition & Consumer Commission (ACCC)]’s most important contribution to the debate is to say, unvarnished, that Google and Facebook have exceptional amounts of market power and the incentive to use it to manipulate and exploit publishers, businesses, and users. Over the past fifteen years, Google and Facebook have become, as Sims put it in his press conference, “essential gateways for consumers and businesses.” The consequences of this shift are the killing of the free press and the mass manipulation of users….”
Creating new economic potential – science and technology
From first light on this Southern Hemisphere autumn day, a bank of 33 rooftop solar panels has been capturing the sun’s energy. At times, the electricity is directed back to the local grid. But mostly it’s funneled into the garage and stored in Powerwall units, in the same type of rechargeable cells that fuel the automaker’s vehicles. The batteries—as tall as refrigerators, as thin as flat-screen TVs—will power this unusually energy-hungry villa deep into the evening.
But not all night. The solar array and batteries meet just half of Amileka’s average energy needs. So after a few hours, the 25-acre, $1,160-a-night miniresort that Tesla Inc. uses to promote its products must tap into the local electricity grid….
By 2050 solar and wind will supply almost half the world’s electricity, bringing to an end an energy era dominated by coal and gas, according to forecasts by BloombergNEF, Bloomberg LP’s primary research service on energy transition.
It can’t happen without storage. The switch from an electricity system supplied by large fossil fuel plants that run virtually uninterrupted to a more haphazard mix of smaller, intermittent renewable sources needs energy storage to overcome two key hurdles: using power harvested during the day to supply peak energy demand in the evening and ensuring there’s power available even when the wind drops or the sun goes down.
“We think storage can be the leapfrog technology that’s really needed in a world that’s focused on dramatic climate change,” says Mary Powell, chief executive officer of Green Mountain Power Corp., a utility based in Colchester, Vt., that’s worked with Tesla to deploy more than 2,000 residential storage batteries.
[Nikkei Asian Review, via Naked Capitalism 8-7-19]
Deloitte: 75% of companies have renewables procurement targets
Seventy-five percent of businesses in the US have targets for renewables procurement and many want to use such energy sources to both reduce their energy consumption and environmental footprint, according to Deloitte. The trend, in part, is due to consumer demand, with 67% of consumers reporting they’re concerned about climate change and the environment.
[Transportation Today, via American Wind Energy Association 8-9-19]
A bill reintroduced in the House proposes channeling more than $1 trillion toward renewing infrastructure and developing clean energy while imposing a carbon-pollution tax. Rep. John Larson, D-Conn., says funding in his America Wins Act would be spread over 10 years and would cover “all types of needed infrastructure, from transportation to clean water, while also dedicating significant funding to clean energy and climate change-related programs.”
US wind poised to surpass hydro by year’s end
[Power Technology, via American Wind Energy Association 8-8-19]
Wind will likely surpass hydro to become the nation’s leading source of renewable energy by the end of 2019, says the Energy Information Administration. The wind industry is expected to generate 335 billion kilowatt-hours of energy in 2020, up from 295 billion kWh in 2019.
[Into the Wind blog, via American Wind Energy Association 8-7-19]
Everyone likes a nice, round number, and American wind power is approaching a big one: 100 gigawatts of installed capacity. AWEA’s just-released US Wind Industry Second Quarter Market Report shows record-breaking, continued growth for the US wind industry. The country added 736 megawatts of wind capacity to the grid as developers commissioned four new wind farms in the second quarter.
Fund, workers union launch renewables apprenticeship program
[North American Windpower online, via American Wind Energy Association 8-6-19]
The Power for America Training Trust Fund and Utility Workers Union of America have launched a new apprenticeship program to prepare workers for jobs in offshore wind, land-based wind, solar and battery storage. “These are the jobs of the future, and if we’re going to remain on the cutting edge of the energy industry, the skills we teach must reflect those of the ever-changing energy industry,” P4A Executive Director Jon Harmon says.
Global wind industry employed 1.1M people in 2018
[CNBC, via American Wind Energy Association 8-7-19]
More than 1.1 million people worked in wind jobs worldwide in 2018, with most jobs coming from the US, China and Germany, according to International Renewable Energy Agency data. Renewables employed 11 million people last year, IRENA says.
Company Uses NASA Technology to Make Healthy Food ‘Out of Thin Air’ Using Only CO2, Water, and Solar Electricity
[goodnewsnetwork.org, via Naked Capitalism 8-9-19]
The engineers at Solar Foods have succeeded in making a protein powder using only CO2, water, vitamins, and renewable electricity. The powder, which they have called Solein, was created using technology that was developed by NASA. It reportedly looks and tastes just like wheat flour, except it is made up of 50% protein.
Since the single-cell protein can be produced in an indoor environment, it is completely independent of weather and land conditions.
“Conventional food production wastes water at unsustainable and unreasonable levels. We wanted to fix that,” reads the Solar Foods website.
“Solein is 100 times more climate-friendly than any animal or plant-based alternative. Unlike conventional protein production, it takes just a fraction of water to produce 1 kilogram of Solein,” it continues. “As with water use, the same game-changing effect applies to land use efficiency as well, with Solein being 10 times more efficient than soy production by a metric of usable protein yields per acre.”
National Labs Explore Hydrogen and its Reactions with Metals and Polymers
[Machine Design Today, 8-8-19]
The United States produces about 10 million metric tons of hydrogen every year, primarily for refining petroleum and making ammonia. But the use of hydrogen is growing in the transportation field where thousands of fuel cells power forklifts and other vehicles….
A common problem for industries that use hydrogen is that the metal structures that store or transfer it—such as valves, pumps, fuel tanks, and storage vessels—must be made of expensive alloys of aluminum and steel. Hydrogen damages these alloys given enough exposure. To avoid unexpected failures, metal components exposed to hydrogen are routinely inspected and taken out of service after a set number of years. But the actual mechanisms of interactions between hydrogen and metals at the nano and microscale levels are not well understood, so component lifetimes are challenging to estimate. Even less is known about how hydrogen affects polymers, which are used in plastic pipes and rubber seals that get exposed to hydrogen.
To get a better understanding of how hydrogen reacts with materials, researchers at Sandia and Pacific Northwest national laboratories will work together in the Hydrogen Materials Compatibility Consortium (H-Mat). It will focus on how hydrogen affects polymers and metals used in various industrial sectors, including fuel-cell transportation and hydrogen infrastructure. Researchers at Oak Ridge, Savannah River, and Argonne national laboratories, as well as in industry and academia, will also be included in the consortium. The effort supports DoE’s H2@Scale initiative, which aims to advance hydrogen use for energy production and storage as well as industrial processes.
Public Transit Projects Cheaper Than Uber’s $5.2 Billion Q2 Losses, Ranked
[Jalopnik, via Naked Capitalism 8-9-19]
Uber announced a $5.2 billion loss last quarter, bringing the company’s total losses to $16.2 billion since 2016. In completely, totally unrelated news, here are some public transportation projects currently under construction in the United States that cost less than $5.2 billion individually:
- Chicago Red and Purple Line Modernization Project ($2.1 billion)
- Los Angeles Regional Connector ($1.76 billion)
- LA Metro Purple Line Extension Phase 1 ($3.2 billion)
- Minneapolis Southwest Corridor/Green Line Extension ($1.86 billion)
- Seattle East Link rail extension ($2.8 billion)
- Washington, D.C. Purple Line ($2.1 billion)
- Seattle Lynnwood Link ($3.07 billion)
Combined, these seven major public transportation projects are projected to cost $16.89 billion, or about four percent more than Uber’s cumulative losses since 2016.
Organized Labor
CWA’s Morton Bahr Was A Labor Icon
[LaborPress.org 8-5-19]
Communications Workers of America (CWA) President Emeritus Morton Bahr passed away. Bahr was an iconic leader in the American labor movement whose innovation and dedication will be felt for many years to come…. Bahr’s tireless efforts on behalf of working people led to his election as president of CWA in 1985, becoming only the third president in the union’s history. He would win re-election to the position and remained president for 20 years. During this time, he also became an AFL-CIO vice president and Executive Council member.
The year before he was elected, the AT&T Bell System was broken up and the shakeup meant the telecommunications industry was in turmoil. Bahr created new bargaining and campaign strategies to help workers survive the turbulent times. One major strategy was to expand beyond telecommunications to include high technology, media, the airline industry, electronics, manufacturing, public service and more.
Bahr became an expert on the nexus of technology and the workforce, and he championed groundbreaking education and training programs that would help transform the labor movement.
“Labor Puts Candidates On Notice: ‘Let’s Be Honest About The Democratic Party’s Record’”
[Huffington Post, via Naked Capitalism 8-6-19]
“Trumka went on, ‘More often than not, the Republican Party is bad for workers. This president is bad for workers. But let’s be honest about the Democratic Party’s record.’ He singled out the North American Free Trade Agreement and the Trans-Pacific Partnership as Democrat-backed trade deals that were tilted against the working class.” [With Perez in the audience.]
[Twitter, via Naked Capitalism 8-6-19]
Some of us remember how Obama failed to deliver on the one real promise he made to unions when he had the power to do so:
Also, Biden just said the reason the Obama admin couldn’t pass the Employee Free Choice Act, the pro-unionization bill labor has been trying to pass for years, is because the GOP had taken over the House. But it was introduced in 2009, when Dems controlled both houses of Congress
Disrupting mainstream politics
[Twitter, via Naked Capitalism 8-7-19]
In the year 2000, Congress voted to grant China upgraded trade status, helping it become world’s most powerful dictatorship.Bernie Sanders voted against. He stood next to Pelosi at Dem presser and blasted Bill Clinton. “Let me tell you where he got his money,” Sanders intoned.
#1 Pete Buttigieg: 23 billionaire donors
#2 Cory Booker: 18 billionaire donors
#3 Kamala Harris: 17 billionaire donors
#4 Michael Bennet: 15 billionaire donors
#5 Joe Biden: 13 billionaire donors
#6 John Hickenlooper: 11 billionaire donors
#7 Beto O’Rourke: 9 billionaire donors
#8 Amy Klobuchar: 8 billionaire donors
#9 Jay Inslee: 5 billionaire donors
#10 Kirsten Gillibrand: 4 billionaire donors
#11 John Delaney: 3 billionaire donors
#12 Elizabeth Warren and Steve Bullock: 2 billionaire donors each
#13 Tulsi Gabbard, Andrew Yang, and Marianne Williamson: 1 billionaire donor each
#14 Bernie Sanders, Julian Castro, Bill De Blasio, and Tim Ryan: 0 billionaire donors
It’s their approach to party politics—not policy—that truly sets the progressive senators apart. […] There’s only so much a Democratic majority could accomplish as long as the party’s institutions are ridden with hedge fund managers, defense contractors, pharmaceutical lobbyists, and other actors whose interests are in diametric opposition to the progressive reforms that Sanders and Warren champion. In the two years since Trump’s inauguration, the leadership of the Democratic Party has invested far more time and energy into curbing potential opposition from its left than it has to resisting the total acquisition of America’s political institutions by the far right. Sanders intimately understands this. Warren, irrespective of her personal beliefs, does not operate as if she does, and that could prove a major impediment to achieving her policy goals.”
The Dark Side
Meet The Right-Wing Consultant Who Goes From State To State Slashing Budgets
[Talking Points Memo, via The Big Picture 8-4-19]
Business Group Spending on Lobbying in Washington Is at Least Double What’s Publicly Reported
Andrew Perez, Abigail Luke, Tim Zelina [The Intercept 8-8-19]
Billions of dollars are being spent in the dark on “advocacy,” “consulting,” “contributions,” “coalitions,” “consortiums,” “government affairs,” “communications,” and “memberships.”
[Atlantic, via Naked Capitalism 8-8-19]
Mississippi’s path was instructive: While GOP nominees had won less than 25 percent of the state’s vote in 1956 and 1960, Goldwater took a whopping 87 percent in 1964….
Kevin Phillips studied these returns obsessively, concluding that many white voters in the Southwest and in the suburbs shared with the white voters of the South an uneasiness with civil-rights advances and growing African American political power. The “principal cause of the breakup of the New Deal coalition,” according to Phillips, was the “Negro problem.” If Republicans could capitalize on that racial tension, their party would profit.
Phillips called for uniting the South and West, as Goldwater had hoped, while also appealing to another group: the growing suburban electorate. The key to wooing white voters in the Sun Belt, according to Phillips, was taking advantage of “group animosities” and exploiting racial tensions—once again, knowing “who hates who” and acting on it. “Ethnic and cultural animosities and divisions exceed all other factors in explaining party choice and identification,” Phillips observed….
Phillips used his research to frame a Goldwater-like strategy that indirectly appealed to racial resentment through criticism of the federal government and an emphasis on law-and-order politics. “The fulcrum of re-alignment is the law and order/Negro socioeconomic syndrome,” Phillips wrote in one 1968 campaign-strategy memo. “[Nixon] should continue to emphasize crime, decentralization of federal social programming, and law and order.”
….
The administration deliberately “furnish[ed] some zigs to go with our conservative zags,” the domestic-policy chief John Ehrlichman reminded the president. He pointed to the administration’s support for affirmative action in the “Philadelphia Plan” as an example. On the surface, Nixon’s support seemed out of step with his campaign promises; the Philadelphia Plan stemmed from one of LBJ’s most aggressive civil-rights policies. But Nixon’s aides saw it as a way to fracture the New Deal coalition by pitting civil-rights organizations and labor unions against each other. “Before long,” Ehrlichman later chuckled, “the AFL-CIO and NAACP were locked in combat over one of the most passionate issues of the day, and the Nixon administration was located in the sweet and reasonable middle.”
Abstract This article uses more complete state panel data (through 2014) and new statistical techniques to estimate the impact on violent crime when states adopt right‐to‐carry (RTC) concealed handgun laws. Our preferred panel data regression specification, unlike the statistical model of Lott and Mustard that had previously been offered as evidence of crime‐reducing RTC laws, both satisfies the parallel trends assumption and generates statistically significant estimates showing RTC laws increase overall violent crime. Our synthetic control approach also finds that RTC laws are associated with 13–15 percent higher aggregate violent crime rates 10 years after adoption. Using a consensus estimate of the elasticity of crime with respect to incarceration of 0.15, the average RTC state would need to roughly double its prison population to offset the increase in violent crime caused by RTC adoption.
[Politico, via The Big Picture 8-8-19]
willf
The central story of U.S. politics since the 1970s is the takeover of the Republican Party by economic radicals, determined to slash taxes for the wealthy while undermining the social safety net.
I see Krugman still has his Blue-blockers™ on. That sentence would be more accurate if it read:
The central story of U.S. politics since the 1970s is the takeover of the both political parties by economic radicals, determined to slash taxes etc.
steeleweed
Garrett Glass aka Numerian (In Mankind’s Image) has been saying for quite some time and in painful detail that the Republican Party needs to be utterly destroyed, root and branch.
I do belieive Michael Collins was correct in calling Dem/GOP as two wings of the Money Party. Certainly, the “mainstream” Dems are simply GOP Lite. They’ve abandoned their traditional base and it’s been a long time since Democrats got their heads cracked on a picket line or actually worked for the general public.
However, I haven’t given up hope that if the GOP goes down in flames and its demise and the cause(s) thereof are obvious to all, the Dems might take a lesson from that and recover their original purpose. Of course, they just might pick where the GOP left off and without any competition.
The fall of an empire is always messy – and they did broke.
nihil obstet
In 2008, not all that long ago, the Republican Party was totally discredited. The failure to prevent the 9/11 terrorist attack, the disastrous Iraq war, the explosion of the deficit after the 2001 tax cuts, and the financial crisis had all become public knowledge. The Democrats had the largest majority in both houses of Congress of any party in a generation. It was time to throw the Republicans an anchor to help them sink. Instead, Obama set to work rescuing the Republicans. He refused to use the Congressional majority to pass legislation. He insisted that everything had to be “bipartisan” to insure unity in the country. So the Democrats betrayed their voters and earned their distrust. I am convinced that the Democratic Party did not want to make anything better for the majority of the country, because it was all just fine for the rich whom they served.
The DNC now wants to fund raise off how vulgar and gross Trump is, but they do not want to propose real social/economic policy. If the Republicans are discredited again, the Democrats will devote themselves to rehabilitating them anew.
Tom
https://www.youtube.com/watch?v=pu__97bVyOc
More sense from this guy. In a world of increasing automation, at a time when we can’t give jobs to 15% of the population anyway as they lack the knowledge competency to perform, we have a serious problem to solve or we will perish as a society.
It is again an argument for an UBI.
Finally this lecture by him: https://www.youtube.com/watch?v=ewvqEqIXdhU
Where again he provides Women a primer to recognizing how biology shapes their abilities and psychology and how to use it to their advantage while avoiding being exploited.
It is also yet another argument for an UBI of $2,000 a month to give people, especially women, fuck you power to wield against elites. If bosses can’t exploit you, they have to meet your terms for employment and you are in full power as you can walk away.
But getting there means recognizing hard limits and having an adult conversation on the issue without attacking your allies with SJW bullshit that drives them right back into the arms of the elites.
We aren’t at that point yet as SJW bullshit has poisoned the well and set natural allies apart in a civil war while the elites sit back and laugh.
The end result is Trump and Marriane Williamson who are both Burn the House Down candidates who demonstrate the corruption eating the soul out of America only to demonstrate how incapable we are at fixing it s we are too fixated on SJW bullshit rather than tackling the real underlying issues.
Chiron
“With the arguable exception of George H.W. Bush“
I see GHWB as the last true WASP President, he was a CIA spook but at least looks for the real American interests and openly confronted the Israeli lobby after Desert Storm.
Hugh
“This [New Deal] era broke down with the 1970s inflation. But Blyth argues that the trigger was that the share of GDP going to labor had become intolerably high to businesses and investors. ”
Total BS. The labor share of income for the lower 80% peaked in 1968. Nixon installed Arthur Burns at the Fed to pursue an easy money policy to juice the economy going into the 1972 Presidential election in the face of the costs of the Vietnam War and Johnson’s new social programs. And then of course, there were also the oil shocks.
Jeff Wegerson
Look Ian, I really wish you’d get your book out there. Out here. Where ever. Maybe it will be a disappointment for me as my views are slowly changing, evolving I hope.
The point is that you have been for me an economic philosophic anchor. Of sorts, of course. And I know too that you have thoughts about MMT that may or not be significant. I also know that when expressed here on the blog, they draw, from my perspective again, at least, some of the best commentary.
So lacking clear, or at least clearer, direction from you and our commenters here, I am having to fend for myself and my own thinking about economics. And as a perhaps poor substitute for your and our commenters’ here thoughts I find I am following more closely MMT thinking.
I am at the point where when I see Bernie Sanders refer to using tax revenues from say a Wall Street transaction tax to fund say government provided college education I want to scream. “Aren’t you even listening to even your own advisor Stephanie Kelton’s words that taxes don’t fund government programs? Why are you still using language like that?”
OK so I get it that Sanders has a million people telling him stuff and that at this point he is pretty much on auto-pilot. My real concern right now is Matt Stoller. He likes and respects Sanders. He has constructive criticism of and for Sanders, like the role of hospital over-charging theft and how without dealing with it, things like Medicare for All are likely to founder on those rocks. But Stoller’s economic understanding seems to me to be seriously lacking. He is likely in need of your understandings. I’m going on and on. Sorry.
Stoller admits his deficiency. In his most recent “Big” blogpost he says:
I don’t know. We all can only do so much. Thanks for the rant space.
Hugh
Taxes don’t fund government spending is an MMT mantra, but like most things MMT it means a lot less than it appears. Money is used to move resources around a society. It is no different for government. Almost all money creation in the US occurs through the regional Feds so in practice, government spending at the Federal level IS funded through taxes and borrowing. Even if the Treasury took back the power to create money, MMT really doesn’t bother where the money from government spending ends up –invariably with the rich. Under this regimen, taxes would not be needed to fund government but they would be needed to extinguish unproductive wealth. That is even under MMT you still need to keep accounts more or less in balance so that resources actually go where you want them to go.
Jeff Wegerson
@Hugh Yes, of course, MMT does not change the underlying economics. It’s goal for politicians like Sanders and political commentators like Stoller is to open the door to the political trap set by the rich called “government deficits and debt.” If I weren’t afraid of being taken for a troll I would tweet Kelton and tell her to remind Sanders to not fall into the trap. That’s one of her jobs.
So what do I do instead? I rant on Ian, knowing full well that while it is not his job to school Stoller maybe his influence will somehow seep onto Stoller. Actually it very likely might were Ian to actually publish his book. In my humble opinion.
different clue
MMT ( Magical Monetary Thinking) is the Cargo Cult dream theory over at Naked Capitalism and if you make fun of it enough, you will get banned or driven out.
The MMTers claim that “federal taxes don’t fund federal spending” but then admit that federal taxes are necessary to retrieve and destroy the MMT-issued dollars fast enough to prevent an un-erased flood of them from inflating and lowering the value of each new round of issued money. Then the MMTers pretend that this distinction-without-a-difference really is a very real difference.
They then claim that MMT is not a mere “theory” at all. It is a real true description of how federal money-handling actually works. Only taxes are not really-truly raised enough to retrieve and erase the emitted MMT dollars after they have been spent on federally-selected targets. So the magical money builds up and inflates the prices of stocks, bonds, art, mansions and other things of interest to the OverClass which is receiving all of the MMT money.