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

Week-end Wrap – Political Economy – August 4, 2019

Week-end Wrap – Political Economy – August 4, 2019

This post is by Tony Wikrent


Strategic Political Economy

Jeffrey Epstein, Trump’s Mentor and the Dark Secrets of the Reagan Era

[MintPress, via Naked Capitalism 8-1-19]

Starting first with mob-linked liquor baron Lewis Rosenstiel and later with Roy Cohn, Rosenstiel’s protege and future mentor to Donald Trump, Epstein’s is just one of the many sexual blackmail operations involving children that are all tied to the same network, which includes elements of organized crime, powerful Washington politicians, lobbyists and “fixers,” and clear links to intelligence as well as the FBI.

Some of the worst memories of my community organizing days in the 1980s involve my trying to convince people that the US’s industrial base was being destroyed by takeovers largely financed with money from organized crime. People just did not want to hear the details. They especially did not want to hear that St. Ronnie’s political career had been promoted by the mob. Amazingly, the people most resistant to these facts were the “organized” leftists in CPUSA and SWP. The communists and socialists almost invariably dismissed the details of these organized crime connections, and wanted only to discuss impersonal theoretical forces like “historical materialism” and “capitalist accumulation.” I came to detest talking to them.
For three decades now, I have occasionally referred to this issue of organized crime taking over the US industrial economy, and hypothesized that one major effect has never been studied: Replacing competent industrial management with the criminal mentality and inclinations of the mob-financed corporate raiders. It was Jon Larson at RealEconomics who, about 15 years ago, pointed me to Thorstein Veblen’s (The Theory of the Leisure Class) explanation of how “Leisure Class” predatory elites are “barbarians: who gain power through force and fraud: ‘The traits which characterise the predatory and subsequent stages of culture, and which indicate the types of man best fitted to survive under the régime of status, are (in their primary expression) ferocity, self-seeking, clannishness, and disingenuousness — a free resort to force and fraud.’” Veblen explained how the rise of criminal predators to economic power creates a pecuniary culture.

GND – An Opportunity Too Big to Miss

[Bill Mitchell], via Naked Capitalism 7-30-19]

“At the basis of the [standard neoclassical microeconomics] ‘solution’ is the belief that there is a trade-off between, say, environmental damage and economic growth (production). And the market failure skews that trade-off towards growth at the expense of environmental health. So all that is needed is some intervention (a tax) that will skew the trade-off back to something more preferable. The problem is that the whole idea that there is a trade-off between protecting our environment and economic production is flawed at the most elemental level.

There is no calculus (which underpins this sort of microeconomic reasoning) that can tell us when a biological system will die. The idea that we can have a ‘safe’ level of pollution, regulated via a price system, is groundless and should not form part of a progressive response. Carbon trading schemes (CTS) are neoliberal constructs which start with the presumption that a free market is the best way to organise allocation.”

Lamber Strether adds: ““Worth repeating: Mark Blyth says that ‘Markets cannot internalize their externalities on a planetary scale. They just can’t. It’s impossible.’” “
“Green New Deal: Candidate Scorecards”
[Data for Progress, via Naked Capitalism 7-31-19]

“Using a rubric of 48 essential Green New Deal components, we identify where each candidate: (1) addressed a component with a proposed federal policy or action; (2) acknowledged a component but lacked clear policy details, or; (3) did not include a component.” With handy chart.

Just 10 percent of fossil fuel subsidy cash ‘could pay for green transition’
[Guardian, via Naked Capitalism 8-2-19]

A Turning Point For US Power Generation
Global Risk Insights, August 03, 2019 [, via Mike Norman Economics]

For the first time in US history, renewable energies briefly generated more electricity than coal in April this year, according to the Institute for Energy Economics and Financial Analysis. This development is significant for US clean energy champions, environmental advocates, and a coal industry that has anchored US energy for much of the 20th Century. Renewable energy potential merits review of trends and evolving dynamics in a dramatically changing US energy sector.

New innovations and technologies, including large-scale shale extraction, has led to an abundance of domestic oil and gas. The cheap price of natural gas enabled it to surpass coal as America’s primary power source in 2016. Now, renewable energy sources (e.g., wind, solar, hydroelectric, and bioenergy) have shown capable of outperforming coal and are projected to bump it to third place for the long-term.

Natural gas and renewable energies are proving to be more efficient, cleaner and more cost-efficient than coal. Furthermore, the average US coal plant is approximately 40 years old, requiring costly maintenance and repairs. New coal plants are more expensive to build than renewable and natural gas counterparts…. Since 2014, six of the top ten US coal mining companies have at one time declared bankruptcy.

The Failure of Establishment Neoliberal Economics

“Ex-Corporate Lawyer’s Idea: Rein In ‘Sociopaths’ in the Boardroom”
Andrew Ross Sorkin [New York Times, via Naked Capitalism 7-31-19]

“A longtime lawyer for the insurance giant American International Group, Mr. Gamble worked alongside Richard Beattie, Simpson Thacher’s chairman at the time, to advise A.I.G. during the financial crisis of 2008 and in the years of litigation that followed…. [Gamble] has concluded that corporate executives — the people who hired him and that his firm sought to protect — ‘are legally obligated to act like sociopaths.’ … “The corporate entity is obligated to care only about itself and to define what is good as what makes it more money,’ he writes in the essay. ‘Pretty close to a textbook case of antisocial personality disorder. And corporate persons are the most powerful people in our world.’… Companies, he suggests, should ‘adopt a binding set of ethical rules, approved by stockholders and addressing the key ethical dimensions of corporate life” … Once the rules are in place, he writes, ‘any shareholder could sue the board of directors for violating the ethical rules — just as any shareholder can today sue the board of directors for violating the maximize rule.’”

[Jacobin, via Naked Capitalism 7-29-19]

“Billionaires are a politically active bunch…. Between 2001 and the end of 2012, 92 percent of the country’s hundred richest billionaires (combined wealth: $2.2 trillion) contributed to a political cause…. Yet they’re also eerily quiet…. As the trio of political scientists write, ‘many or most billionaires appear to favor, and quietly work for, policies that are opposed by large majorities of Americans’.”

Experts Say the DOJ Justification for T-Mobile/Sprint Merger Approval Is a Joke

[Vice, via Naked Capitalism 7-30-19]The Dangerous Austerity Politics of the Washington Post

Dean Baker [FAIR, via Naked Capitalism 7-30-19]

Predatory Finance


How Trump’s Political Appointees Overruled Tougher Settlements With Big Banks
[ProPublica, via Naked Capitalism 8-3-19]

GAO releases audit of Federal Reserve Board; now audit the New York Fed
Pam Martens and Russ Martens, August 1, 2019 [Wall Street on Parade]

On July 21, 2011 the investigative arm of Congress, the Government Accountability Office (GAO), released the first-ever government audit of the Federal Reserve in its 98-year history. The audit came about as a result of the determined efforts of Senator Bernie Sanders to force transparency on the secretive Wall Street bailout actions of the Federal Reserve during the 2008 financial crash and the years that followed….

Sanders issued a statement saying this on the day the findings were released:
“The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression…The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts….

But even after the GAO released its audit in 2011 showing that the Fed had sluiced over $16 trillion to a hodgepodge of Wall Street banks, foreign banks and hedge funds, there was still plenty of secrecy.

The GAO report notes on page two that the audit does not include the Fed’s loans made through its discount window during the financial crisis. Also, in a tiny footnote on page 2 of the GAO audit, there is this statement: “…this report does not cover the single-tranche term repurchase agreements conducted by FRBNY in 2008. FRBNY conducted these repurchase agreements with primary dealers through an auction process under its statutory authority for conducting temporary open market operations.” ….

The Levy Institute of Economics tried its hand at tallying up all of the Fed’s lending programs, including the single-tranche repurchase agreements (called ST OMO or single-tranche open market operations on the Street) and came up with a cumulative tally of $29 trillion.

“Goldman Sachs is spending $100 million to shave milliseconds off stock trades” 

[CNBC, via Naked Capitalism 7-30-19]

Lambert Strether: “No capital allocation issues in our economy, no sirree.”

Restoring balance to the economy

Applying the lessons from 1919 to today’s public banking movement
[Public Banking Institute 8-1-19]

Thomas M. Hanna and Adam Simpson write in In These Times that North Dakota’s triumphant story of a community determined to take control of its own economy holds many valuable lessons for today’s grassroots organizers. They highlight a key takeaway: the value of connecting the moral imperative — a more equitable and just world — to the desired outcome.

“In California and elsewhere in the country, public banking has very quickly moved from a fringe interest to a mainstream political issue. This is testament to both the long-term success of examples like the Bank of North Dakota and to the efforts of a new generation of activists and movement builders who, like their predecessors 100 years ago, understand how critically important control of finance and capital is to the hope of building a more equitable, just and democratic world.”

“When I joined my father on the building site, I saw a different side to him”
[Guardian, via Naked Capitalism 7-30-19]

“It was on those building sites that, for the first time in my life, I saw a different side to my father. At home, my mother was not only the main breadwinner but also did practically all the cooking, cleaning and organisation. She was the engine of the family: paying the mortgage, asking me about my homework, remembering my friends’ names, picking up discarded socks and cooking dinner every night from scratch. My father was, at times, little more than a lodger. But at work, he suddenly turned into something like a figure of authority: intelligent, in charge, hard-working, exacting. He knew about things I had never even heard of, such as building regulations, damp-proof courses, rendering, load-bearing walls and lintels. He was patient, informed. He may have lost his pencil, hammer, spirit level and saw every 30 seconds, but he knew what he was doing. As I watched him briefing a bricklayer or discussing some finer detail of a knocked-through dining room with a plasterer, I saw someone who rarely came home. Since then, I have often suggested to friends struggling with parental relationships that might feel disappointing and strained to try meeting that parent at work, to visit them in situ, have lunch on their territory, watch them in action, and try to find this other side to someone with whom you are so familiar… Being a young woman on a building site, I also learned that the class system is alive and well in modern Britain. People I knew from school would fail to recognise me as they walked past the building site… There is nothing innately superior about life with a boardroom or swivel chair. The income discrepancy between so-called white-collar and blue-collar work is unfounded. …. work is work is work is work.”

States With High Minimum Wages Are Doing Just Fine 

[Bloomberg, via The Big Picture 7-29-19]Trump’s cuts to food stamps are indefensible, economically and morally
[MarketWatch, via Naked Capitalism 8-2-19]
Oregon vowed not to become California — and passed sweeping housing crisis legislation

[Seattle Times, via Naked Capitalism 7-29-19]

“In Portland, we’re just trying not to become San Francisco,” said Tina Kotek, the speaker of Oregon’s House of Representatives.This year, Kotek and her colleagues advanced the most ambitious response to housing affordability challenges in the country. Lawmakers passed a first-in-the-nation cap on rent increases and, in an effort to spur new homebuilding, became the only state to eliminate single-family-only zoning in many of its residential neighborhoods….

The issue came to a head during last year’s election after a measure to expand rent control in Oregon stalled in the prior legislative session.

Frustrated tenant activists and union leaders set their sights on Rod Monroe, a three-term Democratic state senator from eastern Portland and landlord who opposed the renter bill. They protested outside his home, hung banners advocating his ouster from highway overpasses and promoted former state Rep. Shemia Fagan to take his place.

Fagan, who on the campaign trail discussed visiting her homeless mother as a child, defeated him in the Democratic primary by more than 40 percentage points.

“This is a message election,” Fagan told the Willamette Week newspaper on election night. “And the message is that Oregonians are ready to deal with the housing crisis.”

Economics in the real world

“The Situation Is Crazy” – US Manufacturing PMI Plunges To 10-Year Lows
[Zerohedge, via Mike Norman Economics 8-1-19]

US manufacturing has entered into its sharpest downturn since 2009, suggesting the goods-producing sector is on course to act as a significant drag on the economy in the third quarter. The deterioration in the survey’s output index is indicative of manufacturing production declining at an annualised rate in excess of 3%.

Age of the housing stock 

[Twitter, via Naked Capitalism 7-30-19]

The age of the housing stock gives a fascinating insight into the development of settlement across the US. The predominance of pre-1939 settlement in North/Eastern corridor is striking.…

Over half of USA housing is over 37 years old. This means there is enormous pent-up demand once we break the stranglehold of the one percent on the economy. It actually all comes together quite nicely: To stop climate change, one major task is to rebuild or replace every building to be carbon neutral. That puts tens of millions of people back to work. People who now have good paying jobs can afford to buy homes. Homes that are environmentally friendly. That restores the tax base of states and municipalities, allowing us to address the destruction caused by a half century of conservative / libertarian / neoliberal economic austerity. Climate change is NOT a problem too big to solve. Climate change is an opportunity too big to miss. 

Korean and Chinese shipyards merge to form largest shipbuilder in world
[Wall Street Journal, via Naked Capitalism 8-1-19]

“The world’s biggest shipyards are forging a new landscape for buying and building ocean vessels. The impending mergers of the shipbuilders in South Korea and in China will create two behemoths that will control around 46% of the global market among the world’s top 10 yards…. That will give the combined Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. and the merged China Shipbuilding Industry Corp. and China State Shipbuilding Corp. weightier control of the global market for ships over smaller competitors.”

South Korea’s shipbuilding industry is a clear example of the smashing success of ignoring the standard “free trade” theories of western economists, and following instead a national industrial policy. Simply put, South Korea was one of the world’s poorest agrarian economies after the Korean War and simply had NO capacity for building ships. Then the South Korean government decided it needed to build a steel industry — and a shipbuilding industry to use the steel. By the 1980s, this deliberate government policy of “picking winners and losers” had succeeded brilliantly, and initiated spillover effects in many other areas of the South Korean economy, including electronics and auto-making.

Climate and environmental crises

Heatwave: think it’s hot in Europe? The human body is already close to thermal limits elsewhere

[The Conversation, via Naked Capitalism 7-29-19]
[The Wire, via Naked Capitalism 7-28-19]Living without water: the crisis pushing people out of El Salvador
[Guardian, via Naked Capitalism 7-31-19]Ethiopia Plants 350 Million Trees in a Day To Help Tackle Climate Crisis
[Guardian, via Naked Capitalism 7-30-19]

The private sector would never be able to do something like this. Just one reason: who’s going to pay for it? You want to save the planet, it requires collective action. That means government. And the Kochs can go to hell. Another example of how the Green New Deal is going to put tens of millions of people to work. 

America is drowning in garbage. Now robots are being put on duty to help solve the recycling crisis
[CNBC, via Naked Capitalism 7-30-19]

The U.S. is facing a recycling crisis that is burying cities and towns in tens of millions of tons of garbage a day. The problem began last year when China, the world’s largest recyclable processor, stopped accepting most American scrap plastic and cardboard due to contamination problems, and a glut of plastics overwhelming its own processing facilities. Historically, China recycled the bulk of U.S. waste.

Contamination in the U.S. is high since recyclables are often dumped into one bin instead of multi-streamed or separated from the source. Now China has strict standards for recycling materials it will accept, requiring contamination levels in a plastic bale, for example, contain one-tenth of 1%….

To tackle this environmental catastrophe, U.S. companies and researchers are developing AI-assisted robotic technology that can work with humans in processing plants and improve quality control. The goal is to have robots do a better job at sorting garbage and reduce the contamination and health hazards human workers face in recycling plants every day. Sorting trash is a dirty and dangerous job. Recycling workers are more than twice as likely as other workers to be injured on the job, according to a report at the University of Illinois School of Public Health. The profession also has high fatality rates.

“Boom Goes the Plastics Industry”
[Sierra Club, via Naked Capitalism 8-2-19]

“Facing intensifying global efforts to curtail the use of oil and gas for transportation and energy—and at the same time seeking markets for the torrent of oil and gas from the US fracking boom—the fossil fuel industry is looking to plastics as a lifeline. Today, 14 percent of oil and 8 percent of gas is used for the manufacture of petrochemicals, the essential feedstock of plastic production. The International Energy Agency predicts that by 2050, 50 percent of the growth in oil demand will be related to petrochemicals… ExxonMobil and Saudi Aramco, among the world’s largest fossil fuel companies, are betting big on plastics. … The American Chemistry Council reports that since 2010, plans for 333 new chemical-manufacturing projects have been announced in the United States, representing more than $200 billion in capital investments; the industry association notes that “much of the investment is geared toward export markets for chemistry and plastics products.’”

“Climate Change in a Coastal County: Think Global, Act Hyperlocal” 

[Pew Trusts Stateline, via Naked Capitalism 7-29-19]

“[T]oday, sea level rise in Dare County [North Carolina] is among the most precipitous in the nation, an average 0.18 inches a year in some parts, enough that scientists come from around the world to study the land… The resilience projects will carry the community only so far. Beach nourishment, for example, typically lasts five to seven years — though a single hurricane this fall could wipe out all the millions of dollars of new sand laid this summer. At some point, Nags Head and other Dare County communities will hit a tipping point and decide the return isn’t worth the investment. ‘I don’t know when that day is,’ said [Mayor Ben Cahoon, a Republican], the mayor. ‘But it’s out there.’ When that happens, [Reide Corbett, a coastal oceanographer and geochemist] said, communities will have to approach a final step in coastal resilience: retreat. Just move folks inland and out of danger entirely.”

EDGI: The New Digital Landscape: How The Trump Administration Has Undermined Federal Web Infrastructures For Climate Information (pdf)

[Environmental Data & Governance Initiative (EDGI), via Internet Archive 7-30-19]

U.S. federal government websites are a key component of an infrastructure that supports environmental awareness and decision-making. The Trump administration has undermined environmental governance by disinvesting in website maintenance and restricting access to content on issues such as climate change. These website changes actively erode the digital bridge by which publicly-funded research is contextualized and shared with those in need of information, including the general public and decision-makers in state, local, and tribal governments.

GOP Florida Governor enlists new officer to prepare state for rising sea level
[The Hill, via Mike Norman Economics 8-2-19]

Health Care Crisis

“Cancer patients are being denied drugs, even with doctor prescriptions and good insurance” 

[Fresno Bee, via Naked Capitalism 8-2-19]

“Norma Smith was diagnosed with stage-three cancer in December… Smith, a retired special education teacher in Fresno, and her husband, Rodney, a retired school psychologist and director of special education, consider their ‘very expensive’ health insurance coverage to be ‘the best.’ But that insurance didn’t ensure Smith would get the drugs she needed when facing CVS Specialty Pharmacy – the pharmacy their insurance required them to use. Cancer drugs prescribed by Smith’s oncologist were denied because they didn’t follow the standard protocol sequence of medications that Smith’s pharmacy benefit manager, CVS Caremark, had in their guidelines. That means pharmacy benefit managers have the authority to trump a doctor’s medical judgment without seeing patients or knowing their full medical history, and without accountability for the consequences of what happens to sick people. Smith is among thousands of documented cases of patients who have been denied needed medications in this way. Doctors and other medical professionals say these denials are only expected to get worse as the country’s largest health insurance companies and pharmacies are increasingly joining forces. These elusive middlemen with the authority to deny doctors’ prescriptions based on company policies are sometimes referred to as PBMs for short. ”

An ObamaCare navigator speaks

[Twitter, via Naked Capitalism 7-29-19]

When did you become radicalized by the U.S. health care non-system?
When I got a job as an ACA ‘navigator’ to help people who’d never had it sign up for & use health insurance, and the vast majority of them (myself included) could only afford the lowest-tier, most bare bones plans. Just disappointing people all day long.

The “When did you become radicalized by the U.S. health care non-system?” is an important archive of horror stories.

75% of rural hospitals have now closed in states that chose not to expand Medicaid
[Twitter, via Naked Capitalism 7-30-19]

NEWS: 75% of rural hospitals have now closed in states that chose not to expand Medicaid. 

Original Medicare took only a year to implement, back in the era of steam:
[Twitter, via Naked Capitalism 7-30-19]

Michael Beschloss




Harry Truman’s application card for Medicare, co-signed by Lyndon Johnson on same day he signed Medicare bill at Truman Library, today 1965:
View image on Twitter

Private Equity: The Perps Behind Destructive Hospital Surprise Billing

[Naked Capitalism 8-1-19]

…co-director of the Center for Economic and Policy Research Eileen Appelbaum explained in an editorial in The Hill in May how private equity firms have bought specialist physicians’ practices to exploit the opportunity to hit vulnerable patients with egregious charges.

[Twitter , via Naked Capitalism 8-1-19]

In 1980, life expectancy was the same in the US, UK, Germany, and France.Now it’s 3-4 years lower in the US, and it is falling.

That’s in a country that spends almost twice as much on health care than every other nation.


Creating new economic potential – science and technology

Lithium Industry Buildup Is Outracing the Electric-Car Boom
[Bloomberg, via Naked Capitalism 7-30-19]

Wind, solar provide N.C. farmers with stability
[The Robesonian (Lumberton, N.C.), via American Wind Energy Association 7-31-19]

Farmers across North Carolina are hosting wind and solar projects as a way to offset volatile agriculture prices, weather concerns and other trends that hinder farming, writes Helen Livingston, a farmer in Robeson County. “Adding clean energy grows tax revenues and creates jobs for counties that need it the most,” she writes.

Total wind only requires .01% of US’ landmass
[CleanTechnica, via American Wind Energy Association 7-29-19]

Wind farms could power 100% of the nation’s primary energy needs while operating at 40% efficiency using a space of 470 square miles–or .01% of the nation’s landmass, writes TFIE Strategy Chief Strategist Michael Barnard. No one is suggesting the US switch entirely to wind, but the data shows how easily the feat could be accomplished, he writes.

Researchers Develop Speedy Soft Robot That’s More Robust Than a Cockroach

[IEEE, via Naked Capitalism 8-1-19]

This prototype robot measures just 3 centimeters by 1.5 cm. It takes a scanning electron microscope to actually see what the robot is made of—a thermoplastic layer is sandwiched by palladium-gold electrodes, bonded with adhesive silicone to a structural plastic at the bottom. When an AC voltage (as low as 8 volts but typically about 60 volts) is run through the electrodes, the thermoplastic extends and contracts, causing the robot’s back to flex and the little “foot” to shuffle. A complete step cycle takes just 50 milliseconds, yielding a 200 hertz gait. And technically, the robot “runs,” since it does have a brief aerial phase.


Disrupting mainstream politics

The Difference Between ‘left’ And ‘liberal’ – And Why Voters Need To Know

John Broich | Associate Professor, Case Western Reserve University [The Conversation, via Mike Norman Economics 8-1-19]

Begins with a nice short explanation of the mid-1800s British origins of liberalism, which favor markets over governments. 

Democratic presidential candidate Joe Biden is squarely liberal in the mode of the Clintons. He was a supporter of NAFTA and championed the market-based Affordable Care Act over universal health care.

Other major contenders remain a bit of a mystery on where they stand on the liberal-left divide. Some observers thought Kamala Harris avoided tipping her hat in her recent biography; while Pete Buttigieg is also hard to pin down.

Bernie Sanders and Elizabeth Warren are left-leaning. They’re both in favor of a national health insurance, and call for an end to private health insurance to make the system work. They’re both for tax changes that would take more income from the wealthy in order to bolster Social Security and other welfare. They’re both for greater regulations on the banking and lending industry and the creation of post office banking.

Voters need to understand the fundamental differences between liberalism and leftism. It’s the difference between a candidate who believes capitalism, with just a little refereeing, will eventually provide what working people need, versus a candidate who believes serious intervention in the capitalist economy is necessary.

“DCCC in ‘complete chaos’ as uproar over diversity intensifies” 

[Politico, via Naked Capitalism 7-29-19]

 “POLITICO reported last week that black and Hispanic lawmakers are furious with Bustos’ stewardship of the campaign arm. They say the upper echelon of the DCCC is bereft of diversity, and it is not doing enough to reach Latino voters and hire consultants of color. In addition, several of Bustos’ senior aides have left in the first six months of her tenure, including her chief of staff — a black woman — and her director of mail and polling director, both women.”

“What the Left Must Do” 

Jeremy Toback [Medium, via Naked Capitalism 8-2-19]

“Sanders is building his campaign around a clear commitment to transformative universal policies, which create the solidarity necessary to win them. The others are not. Sanders is using his campaign infrastructure and volunteers to create solidarity on the ground with workers and unions. The others are not. Sanders is coalescing the movement necessary to win the fight against powerful, monied interests. The others are not. None of the DEM candidates allegedly in Sanders’s lane exhibit even the most rudimentary understanding of the scale of this fight or the political power needed to win it. Sanders has made political revolution a mantra.”

“The old Democratic trade paradigm is collapsing. Good riddance.”

[The Week, via Naked Capitalism 8-2-19]

“Democratic presidential candidate Elizabeth Warren is now proposing a bold overhaul of how the U.S. conducts its trade negotiations. It’s only a matter of time before the old trade paradigm dies an ignoble and well-deserved death…. [Warren] would replace the current wildly business-slanted negotiation process with one that is carried out in the open, and prioritizes “labor rights, human rights, environmental protection, combating climate change, heading off international tax avoidance…. Critically, Warren would also include the welfare of other countries as part of the considerations.”


Open Thread


The Unfolding of Climate Change Catastrophe


  1. bruce wilder

    Substituting natural gas for coal is less than a big fat zero as far as climate change is concerned and propagandists who celebrate this non-transition cannot be trusted. Warning labels should have attached to those links.

    And, more notice should be taken of the financial disaster which is the fracking boom: the financial disaster reflects an economic mistake of the first order.


    Amazingly, the people most resistant to these facts were the “organized” leftists in CPUSA and SWP. The communists and socialists almost invariably dismissed the details of these organized crime connections, and wanted only to discuss impersonal theoretical forces like “historical materialism” and “capitalist accumulation.” I came to detest talking to them.

    That’s my impression of a handful of commentators at this venue. Ignoring elephants in the room for lengthy abstract theoretical analysis.

    Thanks for that link about Epstein, Anthony. As I’ve said many times now, Epstein is a rabbit hole of deep corruption and disfunction.


    This makes my blood boil. Both FBI goons/thugs and goons/thugs from the Palm Beach County Sheriff’s department intimidated these young girls. What a bunch of cowardly maggots. This is the Praetorian Guard. What should their punishment be once the tables are turned if ever? Remember, there can be no progress without justice. The sins of the past, especially the recent past, must be reconciled. The perpetrators and their enablers must be held to account.

    In addition, former FBI Director Louis Freeh would be hired by Alan Dershowitz, who is accused of raping girls at Epstein’s homes and was once a character witness for Roy Cohn, to intimidate Epstein’s victims.

  4. bruce wilder

    Begins with a nice short explanation of the mid-1800s British origins of liberalism, . . .

    John Broich’s thumbnail history struck me as very poorly conceived.

    First of all, liberalism originated in the 17th century British civil wars and Glorious Revolution. The division of the political classes into Tories and Whigs took place during the struggle by Charles II to secure the succession of his Catholic brother to the throne, but drew on ideas like contract theory of government and egalitarian citizenship breached during the Civil Wars. Those ideas went abroad to drive the American and French Revolutions, while a kind of stalemate persisted between Whigs and Tories thru the Napoleonic Wars when liberalism hid from association with French reforms. That stalemate on constitutional issues dating to the Glorious Revolution — religious tolerance and parliamentary representation chief among them — ended with a series of reforms in the late 1820’s, culminating in the Great Reform Bill of 1832. The expanded franchise changed politics, as more of the commercial classes and landed gentry joined politics and the management of Parliament and elections required organized Parties and Party discipline. The Tories became Conservatives and the Whigs became Liberals. Both were composed of very wealthy, propertied people, just a larger and somewhat more diverse number as Catholics and dissenters joined the ranks. The Left, as we would understand the politics of people defending the interests of the working and merely middle classes, remained out-of-doors, participating in the Great Reform mostly as rioters and protestors, a threat to be stymied by judicious reform in pro-reform Whig rhetoric. The Left were thoroughly screwed in the Great Reform, as historians looking closely have documented, despite their role as dramatic foil in allowing the Whigs to finally realize the Whig agenda of 1680.

    The key figure in the transformation of British political ideological alignment was Robert Peel, a Tory whose Tamworth Manifesto (1834) marks the founding of the Conservative Party. His father was a wealthy textile manufacturer. As Home Secretary, he initiated a number of institutional reforms, most famously founding the London metropolitan police service in the 1820s. He was a key factor in removing legal disabilities on dissenters and Catholics. It was his support for the Repeal of the Corn Laws that triggered his faction of Tories — the Peelites — to migrate to the other Party, securing a presumptive majority for the Liberals down to Gladstone’s first attempt to institute Home Rule for Ireland, when Liberal Unionists began to move back.

    Peel, the Tory who could change his mind, became the template for liberal reform by conservative policy enactments and institution-building. Disraeli would follow a similar formula in the Second Reform (1867), as would Salisbury in respect to Ireland and to some extent with respect to trade unions. During the whole 19th century, the Left would remain mostly agitators and organizers out-of-doors. Chartalists in the 1840s. Irish land reformers. Trade unionists. Cooperative societies (often neglected in memory, but an important element in the Labour Party).

    The entry into electoral politics of socialist figures and ideas in the 1880s not just in the UK, but in France and Germany and other countries with emerging liberal institutions was a significant event and represented a split of sorts among the Left. The reformist Left grew rapidly in influence where elections seemed to mean something. Liberalism was also being split as some liberals began to incorporate ideas for social and economic reform and institution building, while others embraced rigid principles that we might see as libertarian or doubled down on their nationalism (liberal nationalism was the mainstream of 19th century liberal philosophies).

    In Britain, the Liberal Party out of power at the end of the 19th century tried to encompass socialist reform ideas and won a landslide election in 1906 on a platform promising deep and far-reaching constitutional and economic reform. It was against the background of Liberal majorities struggling against reactionary vetos and the temptation to betray principle that the Labour Party became viable on the strength of greater credibility.

  5. Hugh

    When I was following it at the time, there was something like $27+ trillion in activity passing through the Fed’s emergency programs. There were, however, lots of caveats: how much the Fed was paying out for “assets” it was taking on to its balance sheet and what it was charging other central banks in its currency swaps program. More importantly, the Fed as far as I know never revealed the activity through its regular programs, like the discount window. This was quite likely very large and very important. For example, in the weekend following the Lehmann blowup and the onset of the Great Financial Crisis, both Goldman and Morgan Stanley were declared banks so they could access the discount window. But they were investment banks and the discount window was for commercial banks. In the case of Goldman, Bernanke and Paulson decided that since Goldman owned some small no name commercial bank in some place like South Dakota the whole Goldman operation qualified as a regular bank.

    Also outside the Fed, it was never revealed what if anything the Treasury did in its backstopping of the money markets. For those who have forgotten when Lehmann went bust, it defaulted on its short term paper which money markets held. This caused a couple of them to break the buck or lose money. In turn, the other money markets stopped lending and the financial system froze up because it was highly dependent on this gray, as in not regulated by the Fed, banking sector. This caused cascades of defaults down the line which triggered CDS and synthetic CDOs which multiplied the crisis exponentially (because these were essentially bets sold on the performance of assets and pretty much anyone could place a bet). It didn’t help that the underlying collateral had often been muliply (and fraudulently) pledged. It also showed the emptiness of “netting” a practice that still occurs. This is where banks have nominally large, as in the trillions, of derivative positions, but they argue that as the difference between their bets for a position and against it are much smaller only this net amount matters. However, in a big crisis what happens is that the holders of the wrong side of these positions (who are often highly leveraged) quickly go belly up. And a bank suddenly has huge obligations to meet and no one to collect from. As I said, this is still going on.

  6. bruce wilder

    more important than just totalling the trillions let loose by the Fed is the recognition of consequences:

    i don’t know to my own mind what those consequences have been, but i can guess that a lot of malinvestment followed. the rental scooters i see scattered on the sidewalk. the frakking boom. uber. tesla. so-called “private equity” taking over marginally profitable enterprises and then looting them until they fail: Hostess bakery, toys-r-us, Sears, and a long list of others.

    bank lending strategies relying on human judgment do not scale well, so the big banks — which are now very, very large indeed — turned to computer algorithms and “scores”, which I suspect are not without fault and certainly not immune to gaming. when you are too big to fail, you are too big to prosecute and in a low rate of return environment, what are scams seem like possibilities and basically criminal projects can begin to seem merely “risky” investments. this will not end well.

  7. bruce wilder – Thank you for the brief history of liberalism. I included Broich because I’ve been wondering how historically accurate it is to say USA was founded as a liberal democracy. The democracy part I dismissed many years ago, because USA was clearly founded as a republic. This assertion is unpopular, but I sometimes ask skeptics if they really thought democracy was a good idea in Georgia or Mississippi circa 1880s to 1950s. I would like to see some historian someday explain that the Civil War was Congress fulfilling the Article IV guarantee of a republican government in each state by using military force to break the power of the slaveholding oligarchs.

    And, there is has been a lot of historical work done on the classical republican ideas that informed the founding of USA. See Pocock, Bailyn, Wood, etc.

    I had the good fortune of coming into possession of some railroad company annual reports from New England states from the 1850s, and the ideas of management of that era certainly reflected republican ideals, not shareholder value. I especially remember one report in which the officers of the company boasted to shareholders that there were not excessive profits, because of the capital improvements that had been undertaken.

    Now, what about liberalism? The first breakthrough for me came in a reading some of Charles Beard’s work after his Economic Interpretation of the Constitution. Beard pointed out that the British had popularized political liberalism during World War One, when they were forced to massively increase the franchise to vote because of the need to assure popular acceptance of military service and the sacrifices imposed on the home front. So, the obvious question is: how widespread was support for Peel’s liberalism?

    There are a number of other things I’ve read that cause me to wonder whether “liberalism” is actually an organic ingredient of USA political history. Someday I will have to gather together the many references I’ve seen that most Americans in the late 1700s and early 1800s rejected much of the thought of John Locke. I’ve already posted on how Adam Smith was not the basis for the creation of the USA economy by Alexander Hamilton.

    In short, I’m wondering if liberalism isn’t actually the response of British elites to the success of USA in creating a republic?

    I think we must revive the ideas of classical republicanism, with its emphasis on civic virtue, and emphatic focus on promoting the general welfare. This is why I am so excited by Robert Hockett’s work on explaining “a producer’s republic.” (see Hockett is an economic adviser to Representative Alexandria Ocasio-Cortez.

    Besides Hockett’s work, I also want to point people to these scholars also working to restore the ideas of classical republicanism to political economy:

    Joseph R. Blasi – Rutgers School of Management and Labor Relations
    The Citizen’s Share: Reducing Inequality in the 21st Century

    Jeffrey Sklansky, associate professor of history at the University of Illinois at Chicago. The Soul’s Economy: Market Society and Selfhood in American Thought, 1820-1920

    Mehrsa Baradaran – University of Georgia School of Law
    The Color of Money: Black Banks and the Racial Wealth Gap

    I discovered these three scholars by watching some of the videos of a conference at Harvard University in which Hockett participated earlier this year:

    Money as a Democratic Medium

    Here are the videos of all the presentations at the Money as a Democratic Medium conference. I highly recommend, at a minimum, watching the presentations from Baradaran, Blasi, and Sklansky. Note they are not always the first speakers, but the entire video is usually worth watching.

    Videos are at

  8. Hugh

    The federal government waged the Civil War under Article 1, Section 8: “The Congress shall have Power . . . To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions.”

    According to the 1880 Census, a little democracy would have been useful in Mississippi seeing as whites numbered around 479,000 while the “colored” (the Census term) population was 652,000.

    page 598.

  9. Well, Hugh, that’s not the interpretation given by the leader of the Radical Republicans in the Senate, Charles Sumner of Massachusetts. Which leaves me to wonder how much the proponents of The Lost Cause have been able to deform American historiography.
    The Project Gutenberg eBook, Charles Sumner; His Complete Works, Volume X
    (of 20), by Charles Sumner

    “That, in dealing with the Rebel War, the National Government is
    invested with two classes of rights,–one the _Rights of Sovereignty_,
    inherent and indefeasible everywhere within the national limits, and
    the other the _Rights of War_, or belligerent rights, superinduced by
    the nature and extent of the contest; that, by virtue of the Rights of
    Sovereignty, the Rebel and belligerent region is now subject to the
    nation as its only rightful government, bound under the Constitution
    to all the duties of sovereignty, and by special mandate bound also
    to guaranty to every State a republican form of government

    and, further

    “This sovereignty is further proclaimed
    in the solemn injunction, that “the United States shall guaranty to
    every State in this Union a republican form of government, and shall
    protect each of them against invasion.” Here are duties of guaranty and
    protection imposed upon the United States, by which their positiosn is
    fixed as the supreme power. There can be no such guaranty without the
    implied right to examine and consider the governments of the several
    States, and there can be no such protection without a similar right to
    examine and consider the condition of the several States, subjecting
    them to the rightful supervision and superintendence of the National

    Note here that Sumner is positing a very proactive stance by the national government in judging whether an individual state has a republican form of government or not. This, of course, directly contravenes the conservative / libertarian notion of “states rights.” 1890s Talladega, Alabama mayor William H. Skaggs used the same formulation as Sumner in Skaggs’ 1924 book, The Southern Oligarchy: An Appeal in Behalf of the Silent Masses of Our Country Against the Despotic Rule of the Few. Skaggs’ effort, I believe speak directly to your assertion that “a little democracy would have been useful in Mississippi,” which is undoubtedlt correct in principle, but does not meet the historical challenge to actually “examine and consider the governments of the several States” as Sumner demanded.

    More from Sumner:

    “That, in the process of “Reconstruction,” it is not enough to secure
    the death of Slavery throughout the Rebel and belligerent region
    only; that experience testifies against Slavery wherever it exists,
    not only as crime against humanity, but as disturber of the public
    peace and spoiler of the public liberties, including liberty of the
    press, liberty of speech, and liberty of travel and transit; that, in
    the progress of civilization, it has become incompatible with good
    government, and especially with that “republican form of government”
    which the United States are bound to guaranty to every State; that from
    the outbreak of this Rebel war, even in States professing loyalty, it
    has been an open check upon patriotic duty and an open accessory to
    the Rebellion, so as to be a source of unquestionable weakness to the
    national cause; that the defiant pretensions of the master claiming
    control of his slave are in direct conflict with paramount rights of
    the nation; and that, therefore, it is the further duty of Congress, in
    the exercise of its double powers under the Constitution, as guardian
    of the national safety, to take all needful steps for the extinction
    of Slavery, even in States professing loyalty, so that this crime
    against humanity, this disturber of the public peace, and this spoiler
    of the public liberties shall no longer exist anywhere to menace the
    general harmony, that civilization may be no longer shocked, that the
    constitutional guaranty of a republican form of government to every
    State may be fulfilled, that the Rebellion may be deprived of the
    traitorous aid and comfort Slavery has instinctively volunteered, and
    that the master claiming an unnatural property in human flesh may no
    longer defy the nation.”

    And finally,

    “…the action of Congress may be with the
    coöperation of the Slave-Masters, or even without their coöperation,
    under the overruling law of military necessity, or the commanding
    precept of the Constitution to guaranty a republican form of

    Here Sumner clearly bases action against the slave power on BOTH the military necessity implied in Article 1, Section 8 you cite, AND on the Constitutional guarantee to each state of a republican form of government.

    Is this just a debate over ideas and semantics? I think not. I think the precepts of republicanism will have to be firmly grasped and ruthlessly wielded to defeat the well matured efforts of movement conservatism to redefine the nature and purpose of government, such as what the Federalist Society is doing in packing the state and federal benches with conservative and libertarian ideologues. In fact, when the founder of the Federalist Society were considering a name, one of the first suggestion was actually the “Anti-Federalist Society.” I do not think most on the left (hmm, there’s that damn term again) are ideologically equipped to wage this fight. I think Sumner and his allies would have had no problem explaining why Federalist Society jurists are domestic enemies and ought be impeached and removed from the bench.

    Now, if I can find these quotes from Sumner in a brief 15 minute search of the internet (at least I knew to look for his speeches), I’m sure there is a substantial amount of material extant from others such as House Radical Republican leader Thaddeus Stevens to provide the type of history book I’d like to see.

  10. Hugh

    I would simply note that Lincoln did not sign the Emancipation Proclamation until January 1, 1863 and that, even so, this proclamation did not free all slaves, just those in states in rebellion. Slavery was not officially abolished in the United States until December 6, 1865 with the passage of the Thirteenth Amendment.

    “Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

    Section 2. Congress shall have power to enforce this article by appropriate legislation.”

    This amendment also changed the text of Article IV, Section 2:

    “No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party to whom such Service or Labour may be due.”

    That is fugitive slaves could not escape servitude by crossing state lines into a free state and indeed must be returned into servitude.

    Art. IV, Section 2 was revised to read:

    “A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on Demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.”

    Basically covering interstate flight. So in citing Article IV, Section 4: “The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened), against domestic Violence,” Sumner was rather picking and choosing the bits and pieces of the Constitution he agreed with and giving them his interpretation.

    My problem with the Constitution is that it was written as both a slave document (upholding and defending slavery) and a class document (dividing up power and wealth among the rich and elites and making sure the rest of us, short of revolution, could not contest their monopoly).

  11. Perhaps the most successful gaslight in gaslight history is this Puritan myth ‘Muirka was founded as a christian nation, a shining city on the hill, completely ignoring the landless younger sons (and daughters) of England’s bloated royalty who were establishing baronial estates on massive land grants in Virginia and the Carolinas a hundred years before the Mayflower’s sailors ran out of beer and patience and dumped “the pilgrims” at Plymouth Rock. These Cavaliers brought with them a lifestyle that they couldn’t bring enough peasantry with them to sustain, and when the First Americans proved unsuitable to the task(s) the “peculiar institution” was born, with it the couple’a three hundred years of machinations so wonderfully detailed, so thoroughly enjoyably detailed, above.

    If any “religion”, ‘Muirka was founded as a Masonic Nation. But that’s another gaslight.

    Really, for bits n’ bytes you really ought to have more patience.

  12. 600

    Also, freeing the enemy\’s slaves in war wasn\’t a particularly novel idea.

  13. Tom

    I am upping the chances of Marianne Williamson winning this. Pressed on her views by Anderson Cooper, she threw it right back in his face.

    She is a scrapper, she will leave blood on the floor. She is still a Burn-the-House-Down candidate like Trump, but damnit, we fell so low with Lesser Evils that we now have Burn-the-House-Down Candidates because the voters are sick and tired of having the Establishment screw them.

    I think she has this as she is getting googled more than all the other candidates combined and she is getting more free advertising by the media as she is a cash cow for them.

    And like Trump, dirt isn’t sticking to her and she returns fire immediately.

  14. Ten Bears

    Seriously? Marianne Williamson is at zero in the Quinnipiac poll. She is at 1% in a post-debate national poll from Morning Consult. She’s at 0.6% in a post-debate New Hampshire poll from The Boston Globe and Suffolk University. She’s at 0.4% in a post-debate Texas poll from the Dallas Morning News and Emerson. She isn’t gonna’ make the stage at the next debate.

  15. Tom

    @Ten Bears, so was Trump, then he started winning.

    So why are you even relying on polls?

  16. bruce wilder

    The phrase, “liberal democracy”, strikes me as having little application being an apparent contradiction in terms.

    The core liberal notion is of government by abstract rules. It is the political philosophy of bourgeois lawyers essentially.

    Liberals want the rules to be rational or rationalized, adopted and implemented deliberately and disinterestedly. For this, deliberation by intelligent, well-educated people with deep stakes in the community are necessary. But, not democracy, per se; democracy threatens corruption and the irrationality of the mob, in the strictly liberal view.

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