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

Week-end Wrap – Political Economy – December 11, 2022

by Tony Wikrent


“The People Cheering For Humanity’s End”

[The Atlantic, via Naked Capitalism Water Cooler 12-8-2022]

“From Silicon Valley boardrooms to rural communes to academic philosophy departments, a seemingly inconceivable idea is being seriously discussed: that the end of humanity’s reign on Earth is imminent, and that we should welcome it. The revolt against humanity is still new enough to appear outlandish, but it has already spread beyond the fringes of the intellectual world, and in the coming years and decades it has the potential to transform politics and society in profound ways…. The first is Anthropocene anti-humanism, inspired by revulsion at humanity’s destruction of the natural environment…. Transhumanism, by contrast, glorifies some of the very things that anti-humanism decries—scientific and technological progress, the supremacy of reason. But it believes that the only way forward for humanity is to create new forms of intelligent life that will no longer be Homo sapiens.” • I don’t use the phrase “death cult” that often, but perhaps I should start. The exact perspective we should expect from The Atlantic: “It’s easier to imagine the end of the world than the end of capitalism.” –Mark Fisher, Capitalist Realism: Is There No Alternative?


Global power shift

Robbing The Global South, Then Scorning Its Poverty: Notes From The Edge Of The Narrative Matrix 

Caitlin Johnstone [via Naked Capitalism 12-7-2022]


China’s Xi on ‘epoch-making’ visit to Saudi as Riyadh chafes at U.S. censure 

[Reuters, via Naked Capitalism 12-8-2022]


The semiconductor industry and the China challenge 

[Asia Times, via Naked Capitalism 12-10-2022]

“Part 2 at


[Twitter, via Naked Capitalism 12-10-2022]



Disrupting mainstream economics

Tackling inequality from the demand side 

Steve Waldman [Interfluidity, via Naked Capitalism 12-10-2022]

I don’t know whether, in some deep sense, we can make people want money less or not. But we can change the legal environment so that the things people do to augment their hordes come with lower payoffs and higher risks. The rich then come to behave as if they want money less.

The classic example is the 90%+ top tax rates that prevailed for much of the period between FDR and JFK. The most common critique of that policy is it didn’t raise a lot of money, as very few people ever paid those rates. Why did no one pay those rates? Because it was dumb to earn incomes into a tax bracket from which funds would just be confiscated. So the rich, so good at gaming to pay themselves more money, also proved adept at gaming to pay themselves less. They behaved as if they were less greedy, regardless of whether in some deeper sense they were or were not.

During this period, the wealthy left funds in firms rather than realizing incomes. With the funds that accumulated, managers bought perquisites and prestige research labs rather than endowing for shareholders huge personal balances at BlackRock. Workers find it easier to bargain for better wages and conditions when their firms are flush, rather than when they are kept “lean” or even leveraged by whisking cash flows to investors as soon as they are earned. Indeed, during the barbarism of the “shareholder-value revolution”, firms were advised to stay leveraged in order to discipline managers against the temptation they might be generous to workers rather than funders. With the knife of hard interest obligations at their throats, managers behave as if they are greedier than when they have a great deal of financial slack. Conversely, when investors let firms accumulate cash, managers behave as if they are less greedy, whatever generosity is or is not in their unobservable hearts.

So, one way to suppress inequality from the demand-side is just to have high top marginal tax rates. Similarly, high corporate tax rates can reduce firms’ demand for accounting profits, rendering shareholders more open to “expenses” that might build off-balance-sheet, long-time-horizon assets.



The carnage of mainstream neoliberal economics

Sick with “Shareholder Value”: US Pharma’s Financialized Business Model During the Pandemic 

[Institute for New Economic Thinking, via Naked Capitalism 12-7-2022]


In Clover 

London Review of Book, via Naked Capitalism 12-7-2022]

Review of When McKinsey Comes to Town: The Hidden Influence of the World’s Most Powerful Consulting Firm, by Walt Bogdanich and Michael Forsythe, Bodley Head, 354 pp., £20, October 2022


Predatory Finance

The Unavoidable Crash 

Nouriel Roubini, Project Syndicate, via Naked Capitalism 12-7-2022]

After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do about it….

Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200% in 1999 to 350% in 2021. The ratio is now 420% across advanced economies, and 330% in China. In the United States, it is 420%, which is higher than during the Great Depression and after World War II.

Of course, debt can boost economic activity if borrowers invest in new capital (machinery, homes, public infrastructure) that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy.

[TW: Debt to finance consumption is much smaller than debt to finance speculation and “risk management.” Exposure to financial derivatives is now multiples of total world GDP—see the stories below on the new numbers from the Bank of International Settlements. ]


Dollar debt in FX swaps and forwards: huge, missing and growing (PDF)

[Bank of International Settlements Quarterly Review, via Naked Capitalism 12-9-2022]


Secretary Yellen, We’ve Got a “Staggering” Problem: New Report Shows Foreign Banks Have Secret Derivative Debt that Is “10 Times their Capital”

Pam Martens and Russ Martens, December 6, 2022 [Wall Street on Parade]

… a stunning report authored by Claudio Borio, Robert McCauley and Patrick McGuire for the Bank for International Settlements (BIS).

The report focuses on the amount of derivative debt that is not being captured through regular statistical reporting because it is held off the balance sheet. These derivatives consist of foreign exchange swaps, forwards and currency swaps. The authors call this exposure “staggering” but focus primarily on the potential for upsets to dollar swap lines to settle it as it comes due. A greater concern, in our estimation, is this line from the report: “For banks headquartered outside the United States, dollar debt from these instruments is estimated at $39 trillion, more than double their on-balance sheet dollar debt and more than 10 times their capital.” Their on-balance sheet dollar debt is $15 trillion….

An equal concern for Yellen, Congress, and every engaged American is the fact that all it takes is one heavily interconnected global bank (foreign or domestic) to set off a wave of contagion in global financial markets. And, there is no question that the counterparties to a significant amount of that $39 trillion in off-balance sheet derivative debt at foreign banks are the big five derivative banks in the U.S.: JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America and Morgan Stanley.

How do we know that? Because the Office of the Comptroller of the Currency publishes a “Quarterly Report on Bank Trading and Derivatives Activities.” In the most recent report for the second quarter of this year, those five bank holding companies listed above represented $221.539 trillion in notional derivative exposures, or 84 percent of the derivative exposures of the largest 25 bank holding companies in the U.S. (See Table 14 in the Appendix of the OCC report linked above.)

Dethroning the Dollar: Why the Alternatives Are Not Ready for Prime Time 

Yves Smith, December 8, 2022 [Naked Capitalism]

First, let’s think at a high level about successor regimes. There are, broadly speaking, two ways this could go. One is that an existing currency could displace the dollar. We’ve seen that movie, with the dollar assuming the role of pound sterling. It took two World Wars and a Great Depression for that transition to take place. The second is to form some sort of new, non-national currency (some have suggested SDRs as a starting point).

As we’ll explain, for any non-national currency to be anything more than an intermittently-used gimmick, it will wind up impinging on the sovereignity of the states that participate. Is anyone willing to bet Eurozone 2.0 will be that much of a improvement on the original?


Living Through the Revenge of Capital 

Charles Hudson [via Naked Capitalism 12-5-2022]

Right now I think we are living through what I call the revenge of capital. I don’t know a better way to describe what I’m hearing in my conversations with GPs and LPs – it’s an abrupt, violent rebalancing back toward the preferences of capital providers up and down the stack. This rebalance isn’t purely rational – it’s being influenced by how people feel about the last few years and how they feel they were treated by people in the ecosystem on the way up to the peak. And how they feel about things during the current decline.

What’s the revenge of capital? It’s the release of all of the pent-up frustration, anger, angst, and anxiety that investors who invested in startup companies and LPs who invested in funds feel about the last few years….


Global income inequality: time to revise the elephant 

Branko Milanovic, Social Europe, via Naked Capitalism 12-5-2022]

This pattern of income growth did not however continue unchanged during the decade 2008-18, ending just before the pandemic. The new data show both continuity and change (the orange graph). The continuity is represented by high, even accelerated growth of real incomes in Asia; the change is represented by a significant slowdown in growth among the global top of the distribution.


Here Come the Crypto Hypocrites: Don’t believe anyone who says the FTX crash was the regulators’ fault.

(The Atlantic, via The Big Picture 12-6-2022]


CHART – FTX customers locations (via bankruptcy proceedings)

[@lmatsakis, via The Big Picture 12-5-2022]

[TW: Cayman Islands 22%; Virgin Islands 11%; Bermuda 5%; Bahamas 4%; Seychelles 3%; Jersey 1%. So nearly half of FTX’s crypto customers are from notorious hot money / money laundering locations that have long attracted criminals, intelligence agencies, and others seeking to avoid their home countries’ legal systems. And, probably with no sense of irony on their part, are now turning to legal systems in their moment of pain and loss. There is no good reason to let them keep “their” money — it was really never theirs to begin with.]


Credit cards as a legacy system 

Bits About Money, via Naked Capitalism 12-4-2022]

Much about credit card fraud “at scale.”


Student loans as a strategy for social control 

[Boing Boing, via Naked Capitalism Water Cooler 12-8-2022]


The monetary institutions are the same–but culture dictates the choices we make

Bill Mitchell [billy blog, via Mike Norman Economics 12-7-2022]

In discussions about the significant differences that we have observed over the last 30 odd years between the conduct of economic policy in Japan and elsewhere, the usual response from mainstream economists, when challenged to explain the outcomes in the former nation, is that it is ‘cultural’ and cannot be applied elsewhere. I always found that rather compromising because mainstream economics attempts to be a one-size-fits-all approach based on universal principles of maximising human behaviour. So, by admitting ‘cultural’ aspects to the discussion, this is tantamount to admitting that the ‘market-based’ micro founded approach to macroeconomics is incapable of explaining situations. That is the first black mark against the veracity of mainstream theory. But when one prods further, it becomes clear that the term ‘culture’ is fairly vacuous and blurred in this defense of the mainstream framework. I respond by pointing out that essentially the monetary system dynamics in Japan are identical to the way the system works elsewhere. The institutions might have subtle variations but essentially the operations are so similar that the ‘culture’ bailout doesn’t help resurrect the appalling lack of predictive accuracy when it comes to examining the macroeconomics of Japan. Cultural aspects, however, are crucial to understanding the differences. The trick is understanding how these monetary and fiscal institutions are managed. This is where the cultural aspects impact. And, while I have learned a lot about Japanese cultural nuances, some of the more important ‘cultural’ drivers are transportable to any nation – if only we cared enough and valued people in the same way….
A key aspect of culture is the value system of the culture. Cultures transmit value systems that provide the moral structure of ideologies.


Climate and environmental crises

Puerto Rico Files Historic Climate Lawsuit

Ricardo Gomez, December 10, 2022 [The Lever]

Sixteen Puerto Rican municipalities are suing Chevron, ExxonMobil, Shell, and other Big Oil corporations for damages from the 2017 hurricane season exacerbated by planet-heating fossil fuel emissions.

The lawsuit accuses fossil fuel giants of colluding to profit by misleading the public and denying the catastrophic effects of fossil fuel emissions. Specifically, the towns argue that the companies coordinated a multibillion-dollar “fraudulent marketing scheme” to convince consumers that fossil fuel products have no climate effects, and that their campaigns ran contrary to corporation-led studies showing their products accelerate climate change, resulting in more deadly storms.

Puerto Rico’s groundbreaking climate lawsuit is the first of its kind to use the Racketeer Influenced and Corrupt Organizations (RICO) Act — a federal statute designed to combat organized crime and corrupt conduct — against the fossil fuel industry. In the past, RICO efforts have been effectively used to hold the tobacco industry accountable for lying about the adverse health effects of tobacco products.


Coal and tobacco industries kill more Americans each year than they employ

[BigThink, February 24, 2019, via Thom Hartmann, December 09, 2022, How To Kill and Get Away With It, DailyKos]

3. Human law should give corporations the right to exist if they are beneficial to humanityCorporations are human constructs created by law to benefit humanity. Thus, in the simplest possible case, corporations can be viewed as good as they create profit and jobs, unless their operation interferes with the right to life of humans they are meant to benefit.

“If we know that life trumps employment because you have to be alive to work,” Pearce tells Michigan Tech News, “then for a company or industry to exist it must employ more people than it kills in a year. What this paper has done is set the minimum bar for industry existence.”….

Of the coal- and tobacco-industry case studies his new research scrutinized, Pearce says, “After running the numbers, the results are shocking. Every coal mining job in the U.S. demands literally one American life every year. For tobacco jobs, it is four times worse. The study concludes both industries warrant corporate death penalties.”


Fossil fuel industry dupes media, quietly funds non-profits to block renewable energy 

Popular Information, via Naked Capitalism 12-5-2022]


Make ecocide an international crime and other legal ideas to help save the planet 

Steven Donzinger [Guardian, via Naked Capitalism 12-4-2022]


Green New Deal – An opportunity too big to miss

Nature-based solutions can generate 20 million new jobs with right policies: UN report 

[Anadolu Agency, via Naked Capitalism 12-10-2022]

Information age dystopia

How Web Platforms Collapse: The Facebook Case Study 

Ted Gioia, The Honest Broker, via Naked Capitalism 12-5-2022]

I can actually explain the problem in one sentence:

Instead of serving users, the dominant company decides it’s better to control them.

….In the early days of Facebook, I would simply scroll through my friends’ posts in reverse chronological order—starting with the newest. This was intuitive and easy to manage, but Facebook announced one day that it would improve the order in which I see posts….

The company claimed they would give me the most interesting stuff first—but the real story here was that priority on a feed can be monetized. That’s the same reason why Google fills up page one of the search results with so much crap. They brag how smart their algorithms are at deciding what to prioritize, but this hides the deeper truth—namely that they don’t want you to control your feed….

The management team at Meta actually worries more about surveillance than the user experience.

Do you think I’m exaggerating? Trust me, the people who run the company believe in 24/7 surveillance as the single most important feature on the platform. They absolutely must monetize your participation, and can’t do that without putting you under observation (as law enforcement officials call it.)

….They don’t talk much about this, but it permeates their attitudes and business strategies. The main reason why they don’t care about serving users is because the user is not the customer at Facebook. The users (you and me) are the product sold to the actual customers….

Web platforms don’t fail because of the competition. They don’t self-destruct because they are weak. The collapse comes because they are strong. They lose the thread because of their dominance and power, which gives their leaders the mindset of authoritarian rulers.

The solution is simple: Serve the users, instead of manipulating them.

The rulers of these capitalist fiefdoms haven’t learned that lesson because they see themselves as masters of the universe. Serving others is a humbling experience, and they prefer to skip that part of their job.


Restoring balance to the economy

State Of The Unions

Matthew Cunningham-Cook, December 11, 2022 [The Lever]

…The entrenched “Administration Caucus” of the storied United Auto Workers (UAW), which has controlled the union for more than 75 years, fell to defeat during the union’s first-ever “One Member, One Vote” elections, as opposed to past indirect elections, in which delegates were far more likely to be supportive of the establishment candidates.

In a landslide, upstart reformers aligned with the Unite All Workers for Democracy movement won the union’s second-most powerful role, the Secretary-Treasurer’s office….

It’s difficult to overstate the importance of this development. The UAW is the classic definition of a sleeping giant. Down to slightly more than 370,000 active members from a high of 1.5 million in 1979, the UAW still occupies a central role in the country’s economy as the primary union in the auto industry, which is responsible for 3 percent of the country’s gross domestic product. But the union’s current leaders — in addition to being immersed in a far-reaching corruption scandal that has sent two former UAW presidents to prison — have been unable to organize the new foreign-owned auto plants in the South over the past two decades.


Democrats’ political malpractice

“Hakeem Jeffries and the Railroad Workers”

[Black Agenda Report, via Naked Capitalism Water Cooler 12-8-2022]

“The Black Agenda Report team is proud to have coined the phrases “Black misleadership class” and “Black political class.” These words cannot be uttered and written too often because they name and shame the people who work alongside the neoliberal and imperialist order in the United States while also pretending to act on behalf of Black people, whose needs are antithetical to those of the oligarchy. Congressional Black Caucus member Hakeem Jeffries is the Black politico of the moment and his rise is a cautionary tale which must be followed closely…. If Biden wanted the railroad workers to have sick days, there was a simple way to go about doing that. He could just sign an executive order. In 2015 Barack Obama signed such an order requiring all federal contractors to provide paid sick time but railroad workers were specifically excluded. All Biden has to do is sign a new one which requires that railroad workers be included in this rule… Jeffries loves the theater as much as the rest of his colleagues. Taking a knee at all the appropriate photo opportunities while serving the interests of police or the Israeli state or railroad barons made him the perfect candidate for a leadership position. Nancy Pelosi’s time was up. A new face was needed, a younger face, and yes a Black one from a big city. Who better to give the impression that change was afoot when it actually wasn’t. Jeffries will be ready the next time his services are needed to crush workers or do something else that the ruling class requires of him. The Black first is all too often a person who is co-opted or who is simply ambitious and knows how to play the game.”


Bernie to Biden: You Can Give Rail Workers Sick Days 

David Dayen and Harold Meyerson, December 9, 2022 [The American Prospect]

The Vermont senator leads over 70 members of Congress urging the president to sign an executive order extending sick days for federal contract workers to the rail industry.


How Biden and Buttigieg Could Deliver Sick Leave To Rail Workers

Rebecca Burns, Julia Rock & Matthew Cunningham-Cook, December 7, 2022 [The Lever]

…the administration has several possible avenues it could pursue to try to deliver those protections. Biden could try to expand an executive order requiring federal contractors to provide sick leave, Buttigieg could robustly enforce existing rail safety laws to challenge harmful attendance policies, or the administration could use the last few weeks of Democrats’ control of Congress to push for the passage of a national paid sick leave bill languishing in committee after being reintroduced 10 times in the last 15 years.


“Biden Is Putting South Carolina First. I Won’t Vote for That.”

Faiz Shakir, New York Times, via Naked Capitalism Water Cooler 12-6-2022]

“The 2020 caucuses in Iowa — the state that has been first on the calendar for decades — were a disaster.” No, it wasn’t. It was theft, for which, ironically, Iowa Democrats were not rewarded. More: “We all know why South Carolina got the nod. President Biden, Representative Jim Clyburn and many of his top supporters were buoyed by their campaign’s comeback in February 2020 when the state delivered Mr. Biden his first victory of the season — and a big one at that…. South Carolina is not a battleground state: Mr. Trump carried it by double digits in 2020. It is way more ideologically and culturally conservative than our party and our nation. And the state is not trending in any way toward the Democratic Party.”

[Lambert Strether comments: “Shakir does understand that making SC first is a payoff to Clyburn. Shakir either does not understand or cannot say that (a) the Black Misleadership Class, as embodied by Clyburn and the Congressional Black Caucus, is deeply corrupt and reactionary, (b) that Biden is rigging the primary for Harris, and (c) that Biden, and liberal Democrats in general, are making sure that another Sanders does not emerge, ever again.”]


“Biden and Sanders worlds are again at loggerheads over South Carolina” [Politico, via Naked Capitalism Water Cooler 12-6-2022]

““Zero tolerance — ZERO for any disrespect or dismissal of Black voters,” Democratic National Committee Chairman JAIME HARRISON wrote on Twitter while retweeting a similar critique. PATRICK DILLON, a Democratic strategist whose wife, JEN O’MALLEY DILLON, is Biden’s deputy chief of staff, tweeted Shakir’s piece with this comment: ‘Had to read this twice just to confirm that it does not mention Black voters even once.’ Shakir, in our interview, was unmoved by his critics. ‘It’s a very insulting approach to suggest that somehow we don’t care about Black voters because we think South Carolina shouldn’t go first. Come on. Get real.’ He added that he’d support Georgia going first, pointing out that it is more diverse and has a higher percentage of Black voters than South Carolina. He said he would rather see Nevada at the head of the pack but would prefer any of the other first five in Biden’s plan — which also includes New Hampshire, Michigan, and Georgia — to go first over South Carolina.” Plenty of Black voters in Michigan and Georgia. But Biden needs to pay off Clyburn. ““And making sure that the Democratic party’s most loyal voters — Black voters — are at the front of the line and not at the back of the bus feels like something no one should be arguing about.”

[Lambert Strether comments: The Democrats aren’t putting Black voters “at the front of the line,” which they could do with Georgia, a swing state, just as well. They’re putting Clyburn in the driver’s seat of the bus, and his reactionary and corrupt political machine in the driver’s seat for the forseeable future. It’s a payoff and a way to cripple the left, to the extent there is a left. So naturally the liberals get all huffy and start preening. ]


Coalition Asks: Where Is Biden’s NLRB?

David Dayen, December 9, 2022 [The American Prospect]

There were high hopes when a Democratic majority returned to decide labor law, but more than a year in, critical rulings have not been issued, a group of labor lawyers and organizers say.


A Democratic Judicial Makeover Depends on Blue Slips 

Miles Mogulescu, December 8, 2022 [The American Prospect]

…In Biden’s first two years, he has confirmed one Supreme Court justice (Ketanji Brown Jackson), 26 circuit court judges, and 61 district court judges, which is not a bad start. With a Democratic president and Senate majority for the next two years, Democrats have the opportunity to rebalance the federal courts. As Russ Feingold, president of the American Constitution Society, a progressive judicial advocacy group, told me, “As of November 30, 54 nominees await Senate confirmation. At the same time, there are 115 current and known future vacancies on the federal courts, and there are at least an additional 175 judges who are eligible or will become eligible to take senior status over the next two years. In sum, the Senate should expect an abundance of new nominations in the new year, making it all the more urgent that it prioritizes existing nominees during the lame duck.”

…Under President Biden, the Senate has continued McConnell’s practice of not requiring blue slips for circuit court judges, but so far has continued to require them for district court judges, even though such requirements could be ended unilaterally by the Judiciary Committee chair, Sen. Dick Durbin (D-IL).

As a result, while there have been 37 district court vacancies in states with two Republican senators, Biden has only managed to get one confirmed. This tilts the balance in red states toward Republicans and creates inviting avenues for venue-shopping, where corporate litigants can file suit in district court where they are virtually assured of drawing a conservative judge and can be reasonably confident of a favorable opinion.


The Dark Side

“Fear Was More Powerful Than Anger This Year”

Charles Cook [Cook Political Report, via Naked Capitalism Water Cooler 12-9-2022]

“As veteran Republican consultant Bruce Mehlman put it to me this week, “Voters were angry at Democrats and Biden, but afraid of Republicans and Trump. … They went with the folks who pissed them off rather than those who scared them, especially given the past three years.” Yes, many were upset about the inflation that spiked under Democratic rule. But as powerful an emotion as anger is, fear is even stronger. Anger is about the past; fear is about the future…. One does not have to be a Democrat or a liberal, an independent or a moderate, to see that things have taken a turn in this country. Now, Republicans are seeing it as well, albeit reluctantly. They know there’s a problem, but they remain hesitant to file for divorce, to end a relationship that’s costing them not only elections, but their very identity as a party. Voters seemed to realize this and acted on it, in almost every case. The specific choices of Republican nominees, coupled with the more general convergence of the Republican brand and that of the MAGA movement, may have cost them winnable Senate contests in Arizona, Nevada, New Hampshire, and Pennsylvania, not to mention at least a half dozen gubernatorial seats, dozens of congressional races, and a slew of contests for attorney general and secretary of state in any number of states. It is far too early to write former President Trump’s political obituary, but judging by signs from some of the party’s biggest donors, some of his traditional allies on Fox News, in the New York Post, and the editorial pages of The Wall Street Journal, something seems to be happening. The mostly winner-take-all nature of the Republican presidential nomination process works to his advantage, but he has to get from here to there, and that path looks anything but clear. Maybe the MRNA (“Make Republicans Normal Again”) movement will give MAGA a run for its money.”

How the Right Turned “Freedom” Into a Dog Whistle

Eric Herschthal, December 8, 2022 [The New Republic]

A new book traces the long history of cloaking racism in the language of resistance to an overbearing federal government….

But where most see George Wallace as injecting something new into modern conservative politics, the historian Jefferson Cowie sees Wallace as tapping into something very old. Since the nation’s founding, he argues in his outstanding and urgent new book, Freedom’s Dominion: A Saga of White Resistance to Federal Powerone common understanding of the term freedom has been the “freedom to dominate others,” especially against a tyrannous federal government.

The idea that freedom has been closely tied to racial domination in American history is hardly new. But Cowie, one of the nation’s leading labor historians, has found a novel way to tell that story. Rather than an intellectual history that charts an abstract idea across space and time, Cowie gives us a visceral, flesh-and-blood narrative rooted in a very specific place: Barbour County, Alabama. Few have probably heard of it, but this rural southeastern county that borders Georgia—population 25,000, largely split between Black and white residents—was not only the birthplace of George Wallace but home to at least six other Alabama governors. Perhaps more importantly, Cowie convincingly argues, Barbour County’s history—from the ethnic cleansing of its Indigenous inhabitants to the enslavement, segregation, lynching, and disenfranchisement of its Black population, to the suppression of its labor unions, all in the name of freedom from federal intervention—encapsulates much of America’s history too.


Why Is Marjorie Taylor Greene Like This? On the ground in the Georgia congresswoman’s alternate universe

[The Atlantic, via The Big Picture 12-10-2022]

Marjorie Taylor Greene arrived in Congress in January 2021, blond and crass and indelibly identified with conspiracy theories involving Jewish space lasers and Democratic pedophiles. She had barely settled into office before being stripped of her committee assignments; she has been called a “cancer” on the Republican Party by Senate Minority Leader Mitch McConnell; and she now has a loud voice in the GOP’s most consequential decisions on Capitol Hill because her party’s leaders know, and she knows they know, that she has become far too popular with their voters to risk upsetting her.


The (Anti)Federalist Society Infestation of the Courts

Court seems unwilling to embrace broad version of “independent state legislature” theory 

[SCOTUSblog, via Naked Capitalism 12-9-2022]


The Supreme Court’s Most Conservative Justices Got Outplayed on Wednesday

MARK JOSEPH STERN, December 07, 2022 [Slate, via The Big Picture 12-9-2022]

After three hours of oral arguments at the Supreme Court on Wednesday, only one thing is certain: If the justices want to blow up federal elections, they will have nothing to hide behind—not history, not logic, and certainly not the Constitution. The three lawyers defending democracy methodically dismantled the “independent state legislature” theory from every conceivable angle, debunking each myth, misreading, and misrepresentation deployed to prop it up. They bested the conservative justices who tried to corner them, identifying faulty reasoning and bogus history with devastating precision.

Those of us who’ve been ringing the alarm over this dangerous theory—and who’ve been disgusted by the campaign to drag it from the far-right fringe all the way to the Supreme Court—can take solace knowing that these capable lawyers exposed it as an utter fraud….

…it’s worth reiterating the cross-ideological consensus that the ISLT is bunk. A number of conservative legal luminaries filed briefs in Moore v. Harper opposing it, including Thomas Griffith, a former judge appointed by George W. Bush; J. Michael Luttig, a former judge appointed by George H.W. Bush; Steven Calabresi, a co-founder of the Federalist Society; Ben Ginsberg, a renowned GOP election lawyer; and Charles Fried, Ronald Reagan’s solicitor general. In an unprecedented move, the chief justices of all 50 states’ Supreme Courts urged SCOTUS not to adopt the theory for fear of confusion and mayhem at every level of the judiciary.


Q&A: Justice on the Brink

Gabrielle Gurley, December 8, 2022 [The American Prospect]

Linda Greenhouse, the doyenne of Supreme Court journalism, considers the crisis of confidence that has marred the Court’s legitimacy….

What are your observations about the affirmative action cases? Is affirmative action dead, too?

It’s unlike the voting rights case, which for technical procedural reasons they had to take. The Voting Rights Act is unusual law. The kinds of cases that come up under the Voting Rights Act go directly to a special three-judge federal court, composed of two district judges and one appeals court judge. Appeals from those go directly to the Supreme Court. There’s no intermediate stop; they fall with what’s called the Supreme Court’s mandatory appellate jurisdiction.

That means the Court has to do something with them. They can’t just deny cert, which the court does thousands of times a year to ordinary cases. The court is under no obligation to take most cases, but is under an obligation to take a voting rights case.

But on affirmative action, there’s no conflict in the circuit courts. The two lower courts in the Harvard case ruled for Harvard. The high court was so eager to take the University of North Carolina case that it took it in what’s called “cert before judgment.” It took the case without waiting for the Fourth Circuit Court of Appeals to hear it, it’s just direct from the district court. Even to agree to hear these cases was a very aggressive act in service of the agenda that they have. They’re going to find some way to carry out that agenda….

How do you size up the GOP’s long march to the Dobbs v. Jackson Women’s Health Organization decision?

Abortion has been the ultimate organizing tool for the Republicans. They actually had nothing else other than tax cuts to bring to the table during these decades. They had no affirmative agenda. There were times in the march toward Dobbs when the Republicans overreached. The most obvious was Planned Parenthood v. Casey in 1992. The winning hand in Casey was dealt by three recently appointed Republican justices, Sandra O’Connor, Anthony Kennedy, and David Souter. That was a real blow to the right. In the 2016 Whole Women’s Health case, which struck down hospital admitting privileges in Texas, the law was aimed at shutting down abortion clinics and it managed to shut down half of them. The Court said, no, you can’t do that. So it’s a complicated story of fits and start, but the Republicans never took their eyes off the ball.

A Rare Inside Look at Our Corrupt Supreme Court

Garrett Epps, November 28, 2022 [Washington Monthly]

Rob Schenck, the evangelical pastor turned spymaster, has unearthed how the high court really works and highlights the need for Congress and the public to rein in the rogue justices….

Last week, in interviews with The New York Times (with documents to support his account), Schenck revealed what he had given the covert name “Operation Higher Court,” a brilliantly successful exploit aimed at penetrating the U.S. Supreme Court. Under Schenck’s tutelage, his agents (actual American millionaires of pious inclination whom he recruited for this purpose) gained special seats at oral arguments, prayer sessions and dinners with the justices, and opportunities to vacation with them.

Schenck has revealed that as long ago as 2014, three conservative justices—Samuel Alito, Clarence Thomas, and the late Antonin Scalia—were in such close and constant contact with one of his cat’s-paws, a wealthy donor named Gayle Wright, that she seemed to complain in an email to Schenck about the feverish pace of the operation: “Lunch with CT on Monday, Sam [Alito] on Wednesday, dinner at court on Monday, Dinner with Maureen [Scalia] on Wednesday.”



Open Thread


2022 Fundraiser


  1. bruce wilder

    Reports on the accumulation of debt derivatives on top of burgeoning debt — and let’s be clear: derivatives are the colorful, super-sweet frosting layered onto the debt cake, banks have baked for us — try to hook our attention with the hyperbolic “notional” value of derivatives, a number that no one can explain (at least no one ever does try to explain what “notional” means, if anything).

    Money finance is score-keeping for the economic gameplay by households and business. For the system to work as an information system, the information embedded in the “scores” — the prices, rates, and accounting — has to remain roughly accurate and dynamically vary (aka, correct) as new information about business income results and expectations emerges.

    Derivatives re-distribute the risk of debt default, and in doing so, they change the information-content of the numbers associated with the debt. Banks do this, first, because they can charge fees for creating derivatives, but also so that they can pump more and more debt into the system (not incidentally charging more fees). A highly leveraged system of household and business debt is at higher risk of bankruptcy, default and, ultimately, dissolution. But, derivatives can be used to change the default risk of such additional debt, changing the numbers associated with adding debt, to change a no-go lending decision into a nominally “safe” go decision. It may be that the bank is making its own balance sheet sweeter with the frosting of derivatives, but it is more likely that they are passing on the incorrectly scored debt (incorrectly scored because of the promises known as derivatives) to insurance companies and pension plans and to their own “off-balance-sheet” entities and public institutions. Banks are able to pass incorrectly scored debt to entities (including their own lovely selves) that would be theoretically constrained against lending on such risky terms, because the derivatives theoretically siphon that default risk off into the ether somewhere.

    “Somewhere” !? Location becomes a fall-back metaphor, as if money in our digital age has a locale or travels and when that money “leaves” one place and travels, the destination can become an impenetrable mystery when convenient. (see FTX and the now supposedly poor SBF)

    The bottom line should not be this mystified. The system has accumulated too much debt, in part because too-big-to-fail, self-dealing universal banks have thoroughly corrupted the system of money finance. It is a dollar system, with a huge reservoir of dollars in banks essentially untethered to any nation-state’s government, not that governments have been effective regulators of banks for at least a generation.

    Milton Friedman famously said,

    “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

    I don’t see anyone — and I am looking leftward, so I am probably overlooking the inevitable right-wing gold bugs — who is articulating a policy program of sensible reform. Why is that? The crisis will come and what? We will get more “quantitative easing”? The collapse of the dollar as a reserve currency? (that seems plausible to me)

    In 2006-9, even something as obvious as breaking up the universal banks, especially the super-huge big five or six that have dominated U.S. banking ever since, could find no effective advocates that I saw. Those mega banks are corrupt and grossly inefficient and the hazard posed by concentrating risk in too-big-to-fail institutions was recognized, but no one was honest enough to insist on the obvious, effective remedy.

    When the crisis comes — and it may not be far-off — “the sky will be falling” and it will take political nerve to let the fire burn down the barn while the remedies for the last crisis fail to extinguish the new blaze, but it will take a plan to establish institutions that work for the common good in the aftermath. I don’t see anyone with ready ideas.

  2. different clue

    The New Deal period featured good ideas that worked for the common good. Those ideas and the history of their application and results could be more widely revealed and discussed than they are now.

    And the history of the upper class’s careful disantlement and burn-down of the applied results of those ideas could also be discussed. The upper classes and their political front-people could not function without safeguards until they got the safeguards torn down and removed.

    Perhaps a diffuse Occuppy 2.0 movement could hold teachins all over everywhere about the history of the New Deal and then the Anti New Deal.

  3. VietnamVet

    “Fear of the future outweighs the anger of the past” sums up the situation in the West.

    The current exploitative global dollar financial system is head over heels in debt propped up derivative “insurance” that failed before in 2008 for home mortgages. But this time Russia, China and others are trying to establish a gold based alternative currency to the US Dollar. The Ukraine proxy world war was intentionally triggered to speed the West’s collapse, stop NATO’s provocations, and to keep Vladimir Putin in power.

    The alternatives are dire; 1) A human extinction event, 2) the Kremlin regime change does takes place, or 3) an armistice, like Korea, is signed and a new multi-polar world is created where the West must live within its means and contest the Second Cold War with depleted resources and outsourced industry. In addition, the current western ruling class is unable to ration, plan or share. Similar energy crises in the 1970’s gave rise to the New World Order in the first place.

    The fear is directly caused by this. “There is no alternative”.

  4. anon y'mouse

    “they” already have a plan. that’s why they are not trying to hold this system together anymore.

    i think it’s called live in pods, eat bugs, own nothing and be “happy”, or else. you know, like a Foxconn factory.

    it will probably look a lot like auschwitz, without a gate to delineate the forced workers from the rest (because we will all be the forced workers).

    meanwhile, the ruling classes will still live sci-fi lives of the future, 20 years longer than the rest of us.

  5. Willy

    Modern leftism is like modern music. There’s still a lot of quality stuff being made, but they can’t get corporate sponsors to popularize it the way they used to. And so it’s up to us to find these things.

    I’m hoping that in the more esoteric circumstances, such as economic philosophy, somebody would volunteer to be like that lady standing off to the side of a TED talk doing sign language, interpreting our go-to guru for the deaf and dumb masses.

    But what about people wanting humanity to end? They say the real reason conservative evangelicals have been championing Israel isn’t because Jews are the preferred proxy warriors against satanic Islam, or even that Jews (real Jews) make better dancers (, but because it’ll get God off his lazy ass to hasten the coming apocalypse.

    Some have suggested that we ally with those people to build a better economic future. But as Tony’s links to their general nuttiness suggests, it’d be like bringing crazy uncle Bob to a Greenpeace meeting. Not only does Bob get thrown out but you too for bringing him. Maybe it’d be more strategic to get uncle Bob riled up against those “satanic ruling classes”, while we popularize some TED talks.

  6. DMC

    The derivatives market has been the elephant in the room for some years now. Conservative estimates run north of a quadrillion dollars theoretically represented by existing derivatives. To make things worse, only a handful of people even pretend to understand how they actually work. My father in-law, a 20 year veteran of the Treasury Dept and IRS and consulting futurist, used to recount a meeting of the Federal Reserve board at which they had a derivatives expert come and explain how they worked. After about an hour on the topic, the speaker concludes and one board member asks another “How much of that did you get?” And the other says “He lost me after the first 15 minutes.” If these financial instruments are so complex the Federal Reserve board can’t understand them, what are the odds that they’re actually doing what they are purported to do and not some kind of fraud, like so much of bit coins are turning ing out to be.

  7. bruce wilder

    I look back at my first comment here and I wish I had focused more on the implications of the vast pool of dollars “outside” the U.S. — that is, the vast pool of foreign dollar-denominated debt that has built up, the holding of which is predicated on nearly infinite liquidity supplied from the U.S. This pool is an important means by which elites abroad bet against the countries where they originate — a means of predation thru volatility, if you will. And, it is — as the linked articles try to make clear — a crisis waiting to happen. I think such a crisis might be how dollar domination of international trade ends rather suddenly and dramatically.

    In the course of the 19th century well after the Napoleonic Wars, a gold standard emerged led by the pound sterling and French franc. World War I wrecked the gold standard by giving the U.S. all the gold. The dollar emerged as a reserve currency during WWII as a deliberate remedy to the inability to run a gold-exchange standard in imitation of the 19th century gold standard, which so exacerbated the problems of the inter-war period. There was never a time when pound sterling stood on its own apart from gold; it could be a fiat currency as it was during the Napoleonic Wars but after 1824 it was all about parity with gold.

  8. StewartM

    Steve Waldman points out the first step to healing the country–bring back the 90 % + tax rates. Waldman recites all the reasons why this is a both a good thing for redistributing wealth as well as building true, sustainable, wealth (as when the rich are punished for paying themselves, then firms have more cash not only to pay workers, but also modernize plant and do R&D).

    Finally, just raising taxes would do a lot to clean up corruption in our politics. For instance, I recall in 2012 Sheldon Aldeson (worth about $30 billion at the time) was quoted as willing to sink $400-plus million dollars to win victories for R candidates. If you’re familiar with our current investment-friendly tax policies, you realize there are tricks that allow people do pull off such stunts with a quite low tax burden.

    But what if we had actually a 95 % tax policy in place, taxing investment withdrawals the same (or higher at the top levels) than wage income? Ooops, then to sink $400 million plus into elections someone like Aldeson would have had to actually liquidate some 8 TRILLION dollars of his net wealth (25 %!) because of the tax burden.

    Think he would have done something that drastic? I think not.

    And let’s make automatic tax withholdings apply to everything, not just wage income. Say, for hedge fund managers and for private equity firms. Want your money?…file your tax returns to claim it. I’d wager you’d see IRS funding increase markedly as those guys don’t like having to wait on an understaffed service any more than we peons do.

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