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

Week-end Wrap – Political Economy – December 29, 2019

Week-end Wrap – Political Economy – December 29, 2019
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

99 GOOD News Stories You Probably DIDN’T Hear About In 2019
[via The Big Picture 12-23-19]

A giant among us has passed

William Greider – in memoriam – (1936 – 2019)

Tony Wikrent, December 28, 2019 [Real Economics]

William Greider, Journalist Who Focused on Economy, Dies at 83

[New York Times, via Naked Capitalism 12-27-19]
‘A Stark Loss for American Journalism’: Reporter and Author William Greider Dies at Age 83
[The Nation 12-27-19]

Strategic Political Economy

The Loss of Fair Play
Yves Smith, December 27, 2019 [Naked Capitalism 12-16-19]

This site regularly discusses the rise of neoliberalism and its consequences, such as rising inequality and lower labor bargaining rights. But it’s also important to understand that these changes were not organic but were the result of a well-financed campaign to change the values of judges and society at large to be more business-friendly. But the sacrifice of fair dealing as a bedrock business and social principle has had large costs.
We’ve pointed out how lower trust has increased contracting costs: things that use to be done on a handshake or a simple letter agreement are now elaborately papered up. The fact that job candidates will now engage in ghosting, simply stopping to communicate with a recruiter rather than giving a ritually minimalistic sign off, is a testament to how impersonal hiring is now perceived to be, as well as often-abused workers engaging in some power tit for tat when they can.

But on a higher level, the idea of fair play was about self-regulation of conduct. Most people want to see themselves as morally upright, even if some have to go through awfully complicated rationalizations to believe that. But when most individuals lived in fairly stable social and business communities, they had reason to be concerned that bad conduct might catch up with them….

Another aspect of the decline in the importance of fair dealing is the notion of the obligations of power, that individuals in a position of authority have a duty to those in their sway.

The abandonment of lofty-sounding principles like being fair has other costs. We’ve written about the concept of obliquity, how in complex systems, it’s not possible to chart a simple path though them because it’s impossible to understand it well enough to begin to do so. John Kay, who has made a study of the issue and eventually wrote a book about it, pointed out as an illustration that studies of similarly-sized companies in the same industry showed that ones that adopted nobler objectives did better in financial terms than ones that focused on maximizing shareholder value.

Imagining a World Without Capitalism
Yanis Varoufakis, December 27, 2019 [Project Syndicate, via Naked Capitalism 12-26-19]

Climate and environmental crises

In Asia Pacific the climate crisis is happening now, not in the future

[CNN, via Naked Capitalism 12-26-19]
“Lawyers are going to court to stop climate change. And it might just work”

[The Correspondent, via Naked Capitalism 12-24-19]

“[C]ourt cases involving climate change were rare until midway through the 2000s. Since then, dozens of cases have been initiated revolving around climate change, with new cases peaking in 2017. In most cases, the targets are governments, but companies, banks and investors are also being summoned to account for the inadequacy of their climate policy. The legal principles invoked by climate cases are essentially universal in (western) legal systems: the polluter pays; it is forbidden to unnecessarily endanger others; high-risk activities require adequate preventive measures. What’s new is that the law is now being used as a potential tool to break through political deadlock and entrenched interests to tackle climate change.” • See Naked Capitalism on Juliana v. United States.

Cattle have stopped breeding, koalas die of thirst: A vet’s hellish diary of climate change

[Sidney Morning Herald, via Naked Capitalism 12-26-19]

A South Florida town’s pioneering plan to fund retreat from sea rise

[Tampa Bay, via Naked Capitalism 12-28-19]It’s part of the town’s new comprehensive plan to address all aspects of climate change, from emissions to building codes to infrastructure. And the key to pulling it all off is explaining to its residents what’s happening, and how Surfside can — or can’t — help them.

When Prager first started to panic about the rising tides broaching her sea wall, she asked the town for help. Her sea wall is connected to a public one next door. Unlike all the surrounding sea walls, it hasn’t been elevated in decades.

She pushed the town to raise the public sea wall — and maybe hers, too. They’re evaluating raising the public wall, the last remaining city sea wall to be elevated.

Stanford Researchers Have an Exciting Plan to Tackle The Climate Emergency Worldwide
[ScienceAlert, via Naked Capitalism 12-28-19]

….Stanford researchers have come up with a plan.

Using the latest data available, they have outlined how 143 countries around the world can switch to 100 percent clean energy by the year 2050.

This plan could not only contribute towards stabilising our dangerously increasing global temperatures, but also reduce the 7 million deaths caused by pollution every year and create millions more jobs than keeping our current systems. The plan would require a hefty investment of around US$73 trillion. But the researchers’ calculations show the jobs and savings it would earn would pay this back in as little as seven years.

“Based on previous calculations we have performed, we believe this will avoid 1.5 degree global warming,” environmental engineer and lead author Mark Jacobson told ScienceAlert.

[Nature, via Naked Capitalism 12-27-19]

[MIT Technology Review, via Naked Capitalism 12-27-19]

So far, cleaner technologies have mostly met rising energy demands, not cut deeply into existing fossil-fuel infrastructure, as the charts that follow make clear….

(The analysis is based on the UN climate panel’s “middle-of-the-road” scenario, which assumes that economic growth, population patterns, and other trends generally follow historic patterns.) If we stick to the average rate of clean energy additions during the last five years, it would take about 360 years to build a system of that size, Breakthrough’s Seaver Wang found. If we did it at the fastest rate in the last five years, it’d still take nearly 260 years.


The Carnage of Establishment Neoliberal Economics

My “Pickup Truck Price Index” Crushes “CPI for New Vehicles
[Wolf Street, via Naked Capitalism comments 12-23-19]

For the 1990 model year, the base MSRP of the F-150 XLT was $12,986. In the 2020 model year, it’s $34,160. That’s a price gain of 163%.

Let that sink in for a moment. Over the same period, the CPI for new vehicles (green line, right scale in the chart below) rose just 22%:

Note that from 1990 through 1998, the CPI for new vehicles closely tracked the price increases of the F-150. But this surge in CPI was too disturbing, apparently, and so the CPI methodology was enhanced with aggressive hedonic quality adjustments and other methods to bring CPI down, and it actually fell from 1997 through 2009, even as new vehicle prices were soaring.

A commenter on Naked Capitalism added: “Note the inherent class warfare aspect of the dynamic here: Technological advances are inherently deflationary, in that they allow a manufacturing worker to produce ever-more value-add per hour. In a fair world, said workers would share in that increased value-add via salary gains, which would largely offset the price increases of the higher-value-add products they and others produce.”
‘Cutting Social Security Is Murder’: Flood of Public Outrage Greets Trump Proposal to Slash Benefits for Hundreds of Thousands
[Common Dreams, via Naked Capitalism comments 12-23-19]

The proposal received hardly any media attention when it was first published in the Federal Register in November. But recent reporting on the proposed rule change, as well as outrage from progressive Social Security advocates, sparked a flood of public condemnation and calls for the Trump administration to reverse course.

Backlash against the proposal can be seen in the public comment section for the rule, where self-identified physicians, people with disabilities, social workers, and others have condemned the change as monstrous and potentially deadly. The number of public comments has ballooned in recent days, going from less than 200 to more than 1,700 in a week.

The public comment period ends on January 17, 2020. Comments can be submitted here.

Latest Bid by France’s Macron to Quell Protests Over Neoliberal Pension Scheme Fails as Strikes Continue

[Common Dreams, via Naked Capitalism 12-26-19]

Trump’s trade war

The problem with world trade is not tariffs, but too much globalisation. Can Elizabeth Warren fix it?

Dani Rodrik [South China Morning Post, via Naked Capitalism 12-25-19]

Today’s impasse between [China and USA] is rooted in the faulty paradigm I call “hyper-globalism”, under which the priorities of the global economy receive precedence over the priorities of the home economy. According to this model for the international system, countries must maximally open their economies to foreign trade and investment, regardless of the consequences for their growth strategies or social models.

This requires that national economic models – the domestic rules governing markets – converge considerably. Without such convergence, national regulations and standards will appear to impede market access. They are treated as “non-tariff trade barriers” in the language of trade economists and lawyers. China’s admission to the World Trade Organisation was predicated on the assumption that China would become a market economy similar to Western models.

This has clearly not happened. Meanwhile, in the United States and many other advanced economies, hyper-globalism has left behind communities devastated by offshoring and imports – creating fertile ground for nativist political demagogues to thrive.

Predatory Finance

Goldman Sachs Federally-Insured Bank Loses $1.2 Billion in Interest Rate Derivative Bets
Pam Martens and Russ Martens, December 26, 2019 [Wall Street on Parade]

A week before Christmas when Americans were focused on either the impeachment proceedings or holiday preparations, the Office of the Comptroller of the Currency (OCC) quietly released its quarterly report on the trading and derivative activities of Wall Street’s casino banks. It contained a humdinger in, literally, red ink. The report showed that Goldman Sachs Bank USA, which is, insanely, a federally-insured bank backstopped by the U.S. taxpayer that is part of the Goldman trading colossus, had lost $1.24 billion trading interest rate derivatives during the third quarter of this year. According to the Federal Deposit Insurance Corporation, the bank only holds $149.8 billion in deposits while the OCC reports it has $49 trillion in notional derivatives (face amount). (See Table 7 in the Appendix at this link.)….

If you want to understand the relevant history on why the New York Fed is currently throwing hundreds of billions of dollars each week at Wall Street’s trading houses, here’s a quick tutorial on the rapid financial collapse on Wall Street in 2008.

Health Care Crisis

People hate shopping for health insurance

[Axios, via Naked Capitalism 12-25-19]
[New York Times, via Naked Capitalism 12-28-19]

Information Age Dystopia

New York City couldn’t pry open its own black box algorithms. So now what?

[Recode, via Naked Capitalism comments 12-22-19]

Algorithms and artificial intelligence can influence much of a city government’s operations. Predictive models and algorithms have been used to do everything from improving public school bus routes and predicting a home’s risk of fire to determining the likelihood of whether a child has been exposed to lead paint. In New York City, it’s publicly known that such systems have been used to predict which landlords are likely to harass their tenants, in the evaluation of teacher performance, and in the DNA analysis used by the criminal justice system, examples that were flagged by the research nonprofit AI Now.

The Rise of Biometric Authentication – The Rewards and Risks 

[Data Science Central, via The Big Picture 12-28-19]
[Vox, via The Big Picture 12-25-19]
[Recode, via Naked Capitalism 12-24-19]
[CBS, via Naked Capitalism 12-24-19]

“Workers at Amazon facilities are twice as likely to be injured on the job as others in the warehousing industry, and those sprains, strains and worse are especially prevalent during the holiday shopping season, according to a report by labor advocates. For every 100 workers at Amazon facilities, nearly 11 were injured on the job in 2018, making it three times as dangerous as employment across the private sector, and twice as dangerous as warehouse work in general, according to the study from a coalition of more than 40 groups, including the National Employment Law Center and United for Respect.”


Creating new economic potential – science and technology

40 Years Ago, Doctors Vaccinated a Group of Children in Africa. Then Something “Incredible” Happened.

[Mother Jones, via Naked Capitalism 12-27-19]

In 1979, Danish anthropologist Peter Aaby, in his mid-30s, was studying malnutrition in the small West African country of Guinea-Bissau when the outbreak hit—a measles epidemic of horrific proportions. At least 20 percent of children under 5 years old who got measles that year would die. He and his colleagues began vaccinating, hoping to save the remaining healthy children.

His team’s effort would lead to a remarkable discovery: The vaccinated children, about 1,500 of them, didn’t die—not from measles or any other condition. In a year, the kids’ mortality rate for all causes declined threefold compared to unvaccinated children. “This is strange,” he began to think. “Something incredible happened here.”

Decades of research and hundreds of studies later, Aaby and a growing community of scientists now hypothesize that some vaccines may help children fight more illnesses beyond the “target” infection. “Your immune system is so smart—it’s just like a brain,” explains Christine Stabell Benn, a professor of global health at the University of Southern Denmark, and Aaby’s partner both in life and in research. “It learns something from the event [of getting a vaccine] that it can use in other situations.” The pair have observed this knock-on effect in children in Guinea-­Bissau who’ve gotten vaccines for tuberculosis (BCG), smallpox, and polio.

World’s First 3D Printed Community Minimises Homelessness in Mexico

[ArchDaily, via Naked Capitalism 12-27-19]

The world’s first 3D printed community is currently underway in a remote area in Mexico. The printer has been created as a solution to minimise homelessness and provide safe and adequate shelter for individuals.

New Story, a not for profit organisation, which was founded five years ago, aims to provide adequate shelter/housing for people exposed to extreme poverty and unsafe housing. New Story, to date, have constructed 2,700 homes catering for 15,000 people located in areas such as Haiti, El Salvador, Bolivia and Mexico. For these homes they have used traditional construction methods and in the past two years have started to explore innovative construction solutions for faster building production that caters for the ever changing social housing sector and housing crisis.

[New Republic, via Naked Capitalism 12-28-19]
This is a very misleading title. Much more accurate would have been: How the base of the Democratic Party was radicalized by Obama’s decision to side with the bankers against the people in the global financial crisis

[Politico, via Naked Capitalism 12-22-19]

Since the start of Biden’s campaign, he’s relied on a core group of half a dozen people…. But when the upper echelons of the Biden operation assemble at campaign headquarters in Philadelphia’s Center City, the group looks a lot like Biden: old and white and with long experience in Democratic party battles of a bygone era.

The average age of those six—Steve Ricchetti, Mike Donilon, Ron Klain, Valerie Biden Owens, Bruce Reed and Anita Dunn—is 62. They are the key to understanding the big things about the Biden campaign: its centrist ideology, its old-fashioned view of the Democratic electorate, how the campaign came together and how Biden might govern.

Like Biden, those advisers came up in politics during the Reagan revolution, when Democrats were often taught that they needed to be ideologically cautious to win. Like Biden, they are contemptuous of the revolutionary left. Like Biden, they like to think of the Democratic coalition as still anchored in the white working class….

Hey, hey! Heave ho! The establishment has got to go! 

Beginning with Biden and his crew of fuddy duddy obstructionists. 
Biden campaign’s dangerous “steaming pile of crap” theory
nbbooks (Tony Wikrent) December 27, 2019 [DailyKos]

Arguing that Trump is a temporary aberration is not much different than revisionist historians (mostly — surprise! — neo-confederates) who argue that the Civil War could have been avoided if only Lincoln had been more conciliatory. Either you’re ignorant of the decades of political history leading up to the event, or you’re pushing a hidden agenda. Worst of all, you have to completely ignore the increasingly brazen authoritarianism and bigotry of our political opponents. It’s no coincidence that “Counties that hosted a 2016 Trump rally had 226% more hate crimes than counties that did not.”


Glen Ford [Black Agenda Report 19 Dec 2019]

The catastrophic defeat of Jeremy Corbyn’s Labour Party in last week’s elections does, indeed, foreshadow what’s in store for Bernie Sanders if the U.S. ruling class believes the self-styled socialist has a real chance of winning the Democratic presidential nomination… a full-court, every-dirty-trick-and-lie-in-the-book campaign by British corporate media, working hand-in-glove with intelligence circles, the trans-Atlantic military industrial complex, and the pro-corporate wing of the [Democratic] Party….

The popular anti-corporate groundswell must be strangled in its cradle, the Democratic Party base. Corporate Democrats are, therefore, the first line of the oligarch’s defense….

Enemy Actions

Of the many impacts of the War on Christmas, Donald Trump’s decision to run for president seems the most consequential. In a 2016 interview, Eric Trump explained why his father ran for president (emphasis added):
He opens up the paper each morning and sees our nation’s leaders giving a hundred billion dollars to Iran, or he opens the paper and some new school district has just eliminated the ability for its students to say the Pledge of Allegiance, or some fire department in some town is ordered by the mayor to no longer fly the American flag on the back of a fire truck. Or, he sees the tree on the White House lawn has been renamed “holiday tree” instead of “Christmas tree.” I could go on and on for hours. Those are the very things that made my father run, and those are the very things he cares about.

The War on Christmas is the backdrop for a world in which “political correctness” will be forever running amok, the left’s goal will always be to “destroy everything that is wholesome in our country and in our Judeo-Christian civilization,” and Democrats will be stuck in a perpetual state of trying to ban your favorite hobbies and foods. Of course, none of this is true. The slightest resistance to right-wing culture creep will always be framed as a direct assault on their way of life, even if that resistance is just a defense of the status quo. What, if anything, has the left learned after 15 years?

This issue is not going to be solved by messaging alone. I think the answer lies, at least partly, in reviving the concept of republicanism, including the ideas of civic virtue, the responsibility of citizens to be educated and vigilant, and the dangers of demagoguery. And pointing out, the Republican Party of today, and conservatism in general, is the very antithesis of republicanism.


Open Thread


William Greider – In memoriam – (1936 – 2019)



    Nancy Pelosi and the Dems want Donald Trump elected again in 2020. Why? How could this be? The answer to that question is the answer to most of what ails us.

    Against Donald J. Trump, House Speaker Nancy Pelosi wanted narrow impeachment charges, despite key House Committee Chairs’ arguments for broadening the impeachment charges. These veteran lawmakers, led by House Judiciary Committee Chair Jerry Nadler, urged Speaker Pelosi to include the ten obstructions of justice documented in the Mueller Report. These House Committee Chairs also wanted to add a count of bribery regarding Ukraine – a stance Pelosi took herself in a November 14, 2019 press conference. She then overruled her chairs and rejected the bribery count.

    If Russia was smart in this multi-dimensional game of geopolitical chess, they’d clandestinely slay the whistleblower and make it look like one of Trump’s hired mercenaries did it. But would that force Pelosi’s and the Dems’ hand? Would they finally have to commit to not only impeaching Trump on every charge for which he’s guilty but also ensure he goes to jail? Not on your life. Trump could murder in plain sight and the Dems and the national security state wouldn’t do anything about it. He could rape an infant on national television in the oval office and they still wouldn’t do a thing. That’s beyond teflon because Trump knows everything they would try to do to him will stick to them as well, so he has carte blanche to do whatever the hell he feels like doing at any given moment.

  2. Z

    In regards to the Loss of Fair Play article by Yves Smith of NakedCapitalism, at one point in time I felt that doing the right thing, being a good person and a good teammate paid off at work and in life in general. Any more though our rulers have us in such a precarious position, right where they want us, that people have become so much more selfish in order to “get theirs” and there is such a large delta between the winners and losers in our economy that being a good person has become synonymous with weak and it’s a sacrifice with little payoff to you that one bites the bullet for.

    If I had to place the biggest blame on one person for that, it would be Bill Clinton. If I had to tie it to events that had the biggest impact, it would be NAFTA that started the precariousness and then the Wall Street deregulation by the Clinton Administration that steroid-ized the greed is good I-deology.

    Lots of liberals want to lay it on Reagan and his presidency was a turning point in that direction no doubt, but as usual it took the democrats to cement it when it could have been turned back.

    Widespread amphetamine use in our society has turbo-charged it in the last ten to twenty years.


  3. Z

    Can Elizabeth Warren turn back globalization????!!!!

    No, she’ll hardly even try, if given the chance.


  4. bruce wilder

    Re: War on Christmas

    Of course, none of this is true.

    Are you really sure none of it is true? Nothing like it?

    The left seems to me too often to be in deep denial about the role it itself plays and the roles played about some its allies, left and center. “None of it is true” has become a mantra repeated about a lot of things, not just charges of p.c. cant.

    Back in the day, the Republicans seemed alone in having a Wurlitzer that could be cranked up in outrage about nothing — the war on Christmas being a prime example. But, now “both sides” do it, as they say.

    Fake news is produced by the NY Times and CNN.

    I have no sympathy personally for the birther-in-chief, but the comment demonstrates how disconnected from reality we have become. The Dem Wurlitzer cranked out the Russia,Russia,Russia narrative, which turned out to be a whole of nothing (“Of course, none of this is true”) the Dems want to make any resistance to that train of nonsense a crime. And, they end up impeaching Trump for mirroring Biden’s corrupt misconduct. And, the media will produce articles arguing that there was nothing wrong in Hunter Biden’s conduct or his father’s. “None of it is true”

    You cannot have a republic without 1.) agreeing to disagree, but still do things even if it for various reasons and 2.) being able to talk with reference to objective reality shorn of the meanings ascribed by sectarian narratives.

    It is possible, for example, to seriously report factual news. Not opinionated speculative garbage. The subversion of Organisation for the Prohibition of Chemical Weapons (OPCW) in service of false narratives regarding a cause of war could be reported. But the Wurlitzers are not tuned to those frequencies.

  5. bruce wilder

    I thought the Yves Smith essay on the importance of fair play and its eclipse by neoliberal propaganda would have to have a sharper edge to be as effective as it ought to be. She has written elsewhere and linked and republished articles by others that document how neoclassical economics has been used to build neoliberal ideology in ways that deprecate fairness.

    One source of weakness in her argument is her own attachment to noblesse oblige: the notion that responsible capitalists ought to rein in rapacious executive managers. She wrote:

    Another aspect of the decline in the importance of fair dealing is the notion of the obligations of power, that individuals in a position of authority have a duty to those in their sway.

    She really does not like the idea that paying executives vast sums was a brilliant power play in the war of capital on everyone else, and the key that unlocked the subversion of the professional-managerial class by psychopathic top executives delivering the big bucks to the capitalist class as well as to themselves.

    The unwillingness to see that uber wealthy capitalists have found a strategy in paying top executives fantastic sums, a strategy that works for them as the predators they are, makes the whole essay take on an air of impotent nostalgia for a big-time era that can never come again.

  6. Hugh

    What the political Establishment, as they pat themselves on the back over the growing hatred of Trump and Trump fatigue, can not even begin to imagine is that the public that hates Trump hates them every bit as much.

    bruce, I see it more in terms of social ethics. Whether you are a manager, an investor, or a worker, you have obligations both to the society and each other. It is the separation/elimination of social responsibility that fosters a system of billionaires and rampant inequality, toxic workplaces and underpaid workers, and predatory corporations that produce overpriced junk.

    Trump and Biden are pretty much mirror images of each other. Two inarticulate, doddering, self-entitled, old men who represent the interests of their class first and offer rhetorical crumbs to the rest of us.

    Any ideas on why there is such a large and continuing silence on the resistance to Macron’s neoliberalism in the American press?

  7. D.

    Damn, Bill Greider was one of the good guys. Maybe the first journalist to really hammer on the significance of Clinton killing Glass-Stegall for Citi.

  8. bruce wilder

    Any ideas on why there is such a large and continuing silence on the resistance to Macron’s neoliberalism in the American press?

    Neoliberalism has long worn a mask, pretending to be “nice” — rule of law, strong democratic institutions, professional and technocratic governance standards, etc. Macron’s brand, like Obama’s, is all of those things. But, the reality of what is going on in France is that Macron has taken off the mask. He is very authoritarian, very oppressive. The Media, completely tame, completely owned and operated by billionaires or giant media conglomerates, is under strict instructions to avoid any indication of what comes next for those of us to whom the future has not yet been distributed as it already has been in France.

    . . . social ethics. Whether you are a manager, an investor, or a worker, you have obligations both to the society and each other. It is the separation/elimination of social responsibility . . .

    Yes, a good way to look at it.

    We have let people of great power and wealth benefit from disinvesting in the society while remaining insulated from the consequences (or profiting from the consequences of disinvestment more like). And, they have paid apologists to defend their conduct and the consequences or distract from it.

    All of us know instinctively that we can benefit from cheating, ceteris paribus, but that we cannot benefit if everyone cheats (us as we cheat others). But contrary to that understanding, we have created a class of people who not only can get away with cheating, but will actually benefit from a society that deteriorates as everyone cheats or is forced by precarity to the position of a cheater.


    All of us know instinctively that we can benefit from cheating, ceteris paribus, but that we cannot benefit if everyone cheats (us as we cheat others). But contrary to that understanding, we have created a class of people who not only can get away with cheating, but will actually benefit from a society that deteriorates as everyone cheats or is forced by precarity to the position of a cheater.

    I agree completely. This is why Donald Trump is the perfect president for this time. He is a true and perfect reflection of the character of the America writ large. He is us and we are him and we are all together. Donald Trump is truly the face of America.

  10. bruce wilder

    Atrios at Eschaton summarizes the issue Yves Smith was addressing in her essay on the eclipse of fair play:

    . . . a healthy society requires a degree of trust, that every interaction or exchange is not a likely con, to function well and be pleasant. Avoiding be robbed and screwed can’t be a full time job, and that’s before we get to the fact that our legal system does not exactly empower everyone equally in these disputes.

    I read Tony’s point about the need for small-r republican virtue to be about the shared understanding of a public interest in a trustful society fully supported by its political small-c constitution and a shared committed among its polity to acting together to institute a just society in which cheaters do not prosper. So, a more sophisticated argument for institutionalizing a response to this very basic problem.
    In American politics, this basic point keeps getting buried under mountains of propaganda, neoliberal b.s. and the complacency that oozes out of the privileged professional and managerial classes like slime.
    There is a spirit of desperation about American politics built into the way this basic point keeps getting buried.
    Trump is a face of this. His own eagerness to run a con and to be associated with people who are running a con does make him representative.
    As fascinating to me, though, is the way Trump prompts the reveal that they (his nominal rivals in opposition among establishment Democrats) are also running a con. He’s like some weird MacGuffin put into the play, somehow unimportant in himself, to pull back the curtain and blow away the smoke.
    Part of it is that Trump, talking like an addled third-grader much of the time, drops the coded language that obscures much of what is said when regular politicians talk. He will express disgust with the corruption of politics . . . with the familiarity of a participant! And, the establishment is provoked — not by his corruption, mind — by his simpleton’s inability to follow the rules that in their minds create plausible deniability for their own corruption and betrayals of the country’s interests.
    This way that Trump the MacGuffin provokes the mainstream Media and the Democratic establishment and the so-called Intelligence community/the foreign policy Blob to put their cynical preoccupations with manipulation for manipulation’s sake front and center is a source of continuing amazement.
    I am afraid it still leaves me pessimistic about the future. Too few, so far, step forward to embrace realistic assessments, sound judgment and humane values. Even with absurdity after absurdity revealed in accusations that Trump has done what his Democratic rivals and predecessor have done, there are way too many people lost in the illusions and noise. Sanders and the other arguable (partial?) exceptions seem too likely to succumb to the onslaught.
    More people get on board with the various gambits put out there by the self-styled “resistance” to Trump than I think is consistent with a healthy relationship of public opinion to reality. Trump being clownishly ineffectual or nakedly ignoble never becomes an occasion to build public opinion for a better course because the political establishment just wants to preserve the status quo ante along with the illusion that the status quo ante wasn’t destroying much of the society.
    The country needs to come to terms with the imperative requirement to end empire and perpetual war, to depart radically from neoliberal trade, industrial and deregulatory policy, to respond to global warming with a rapid change in the energy basis of the economy and so on.
    The public discourse carried on the mainstream media is not about that though and therefore not very many people are thinking about any of those issues seriously. And, I fear, none who are thinking seriously will be anywhere near power when it next falls apart (which cannot be long now, given the instability evident in the world).


    bruce, they’re using Trump as much as he’s using them. Otherwise, he’d be Six Feet Under right now. I refuse to give legitimacy to Bannon’s view that Trump is necessary to strip the emperor of all his clothing. That’s a bullshit strategy. The emperor already had no clothing but now he’s clothed again in a clown suit.

    Fascists love chaos in order to fill the power vacuum and attain power. That was/is Bannon’s strategy. He wants a fascist government rather than a corporate totalitarian government like we have currently. His answer to that was to get someone like Trump into office who would shake the banana tree. Bannon’s strategy was/is Charlie Manson’s strategy of Helter Skelter. Bannon prefers a fascist government create and control a growth environment for corporations, not the other way around as it is now. Either way, it’s still tyranny. Bannon’s smart. He sensed the NeoLiberal agenda is failing and when countries begin to collapse, chaos will ensue and we get a revolution from the right or the left. Bannon’s out in front of this. He didn’t want to wait for the left to fill the void and exploit wealth disparity for political power. A number of the oligarchs are on board with Bannon’s fascist putsch.

    This is why the Dems will side with Trump over Sanders any day every day. They, all of them, Bannon and the Dems, represent the top 20%. It’s a joke when Trump refers to the Dems as “left” and “socialist.” The Dems are better Republicans than Richard Nixon ever hoped to be.

  12. Z


    In regards to Yves Smith and the notion that “uber wealthy capitalists have found a strategy in paying top executives fantastic sums”, which is undeniable, she may not have tied that into her article about fair play, but she’s addressed that in other essays I’ve read by her. She’s certainly not oblivious to that.



    What Yves is oblivious to though is that humanity has reached the end of growth so it’s whistling past the graveyard to lament where capitalism took a wrong turn and solicit for a kinder gentler capitalism. Capitalism is predicated on growth. We have surpassed peak growth and must now contract radically in order to avoid the worst apocalyptic ramifications fo climate disruption. This is the elephant in the room that former wall streeters fail to grasp and since they do fail to grasp it, it makes them look silly. The color of the drapes doesn’t ,matter much when the house is burning down.

    So we would likely agree that energy growth will not continue indefinitely. But two points before we continue: First, I’ll just mention that energy growth has far outstripped population growth, so that per-capita energy use has surged dramatically over time—our energy lives today are far richer than those of our great-great-grandparents a century ago [economist nods]. So even if population stabilizes, we are accustomed to per-capita energy growth: total energy would have to continue growing to maintain such a trend [another nod].

    Second, thermodynamic limits impose a cap to energy growth lest we cook ourselves. I’m not talking about global warming, CO2 build-up, etc. I’m talking about radiating the spent energy into space. I assume you’re happy to confine our conversation to Earth, foregoing the spectre of an exodus to space, colonizing planets, living the Star Trek life, etc.

    The Earth has only one mechanism for releasing heat to space, and that’s via (infrared) radiation. We understand the phenomenon perfectly well, and can predict the surface temperature of the planet as a function of how much energy the human race produces. The upshot is that at a 2.3% growth rate (conveniently chosen to represent a 10× increase every century), we would reach boiling temperature in about 400 years. [Pained expression from economist.] And this statement is independent of technology. Even if we don’t have a name for the energy source yet, as long as it obeys thermodynamics, we cook ourselves with perpetual energy increase.

  14. Willy

    At the end of the day, Steve Bannon’s in it for Steve Bannon. As is Mitch the Bitch and Fancy Nancy.

    If we’re pretty much down to planting seeds, make them viable ones. Others of dysfunctional cultish or apathetic thinking will inevitably fall down. And if done right, they’ll have more than just corporate media brainwashing to work with.

  15. ‘Muirkkka does not have a “far left movement”. Our “far right” are fascists. Our “center-right” are extremist nationalists – NAZIs. The “center-left” are classic conservative, and the “far-left” moral centrist moderates. A real “far-left movement”, real “socialism”, would be advocating the radical redistribution of wealth and assets, perhaps even life and liberty. Emphasis on radical.

    The closest we’ve got to “far-left” is “ewww, putting kids in cages is sooooo distasteful.

  16. bruce wilder


    Her somewhat tendentious narrative of how corporate America went bad does not feature the end of growth, but Yves Smith is not oblivious to global resource constraints, climate change, ecological collapse et cetera. I think she has been quite good on some key points that most people and the Media gloss over — the necessity of deep energy conservation to meet goals for limiting additions to the carbon cycle, for example. Her finance background has contributed to her questioning the fracking boom. And, naked capitalism features many stories about micro-plastics pollution.

  17. Ten Bears

    The problem in three parameters*, five-oh? Civilization is predicated upon survival, which is in turn predicated upon growth, yet resources are finite.

    *Does not translate well

  18. bruce wilder

    Re: Exponential Economist Meets Finite Physicist

    The standard fallback position for the economist is to define “economic growth” in terms of the economic welfare properties ( “utility”) of output instead the physical consumption of inputs aka resources.

    It is weasal’s way out.

    In important ways, though, wiggling out like that exposes the extent to which mainstream economic theory occupies an Alice-in-Wonderland dreamscape where nothing makes sense and words mean exactly what the economists say they mean, no matter how frequently definitions change.

    Economists have failed to explain the industrial revolution, failed to analyze its components, failed to develop a theory of production. (Yes, mainstream economics has no theory of production — kind of a glaring omission, wouldn’t you think?)


    Yes, mainstream economics has no theory of production — kind of a glaring omission, wouldn’t you think?

    Indeed it is. Economics is illegitimate. It’s a connivance. Its purpose is to rationalize and justify the rampant consumption of the planet and downplay, or worse, ignore the implications of that rampant consumption.

    The irony is not lost on any of us commenting here that civilization which was set in motion as a survival mechanism is now a threat not only to the survival of human but also a threat to the survival of much of the living planet.

    Heretofore, rewards within civilization have been accumulation based. More land. More productive crops. More production period. More money. More shiny objects. More of everything which also equated to more power. How do we reward people in a newly created economy of contraction to a steady state considering rewards within civilization heretofore have always been accumulation based? What incentive can be provided to get people, en masse, to engage in endeavors that contract the economy and clean up the environment we’ve despoiled? The stick wont’ work. It cannot be coercive and yet be successful. What incentive, the carrot versus the stick, can be provided that isn’t accumulation based?

  20. nihil obstet

    There are two main supports for the growth necessary for capitalism. First, there’s advertising. It specifically works to create the constant desire for more. It’s hard to see hundreds of ads a day as most people do, ads that use psychological research, without being seriously affected. We can’t have that level of drive directed towards wanting “more” and then expect a rational explanation that you shouldn’t want more to have much effect.

    Second, there’s the ideology of meritocracy. The best should rule. How do you know who’s best? The ones who accomplish the most. And by accomplish, we mean make the most money. That determines your value. So how valuable are you? How much rule, even of yourself, should you have? You have to get more money, necessarily involving growth. Again, we can’t have a definition of people based on how much they have and then expect a rational explanation that you shouldn’t try to get more to have much effect.

    The whole economic system in most of the world for most of history has been based on scarcity. We need something else for a society where there is sufficiency.

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