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

Week-end Wrap – Political Economy – December 4, 2022

by Tony Wikrent


Professional Management Class war on workers

Railroading workers

[Popular Information, via Naked Capitalism Water Cooler 11-29-2022]

“The dispute boils down to one issue: paid sick leave. … Railroad companies have adamantly refused to include any short-term paid leave. That means rail workers must report to work, even when they are sick, or forfeit their pay. “It’s an insane and cruel system, and these guys are fed up with it,” Peter Kennedy, chief negotiator for the maintenance workers union, which rejected the deal, said. Rail workers say that some colleagues come to work with COVID because they can’t afford to take time off. The maintenance workers are seeking a deal with at least four paid sick days. The railroad companies, according to the union, are unwilling to negotiate.”


Biden Breaks His Promise, Betrays Rail Workers 

Matthew Cunningham-Cook, Andrew Perez, Rebecca Burns & Julia Rock, November 29, 2022 [The Lever]

In 2020, Biden called the lack of decent paid sick leave “a national disgrace” — now he’s siding with railroad barons to crush rail workers seeking those benefits….

With Democrats in full control of Congress for just a few more weeks, Biden could be using this moment to push lawmakers to pass the party’s landmark union rights legislation or implement a national paid leave policy. Instead, he is calling on Democrats and Republicans alike to side with highly profitable railroad companies and crush their workers.


Senators Help Donors Derail Paid Sick Days

Matthew Cunningham-Cook & Rebecca Burns & Julia Rock, December 1, 2022 [The Lever]

“In August, a federal report prepared by the Biden administration stated that the railroads contend that their enormous profits do not reflect “any contributions by labor.” The railroads, meanwhile, have waged a full-court press to have Congress implement an agreement negotiated by the Biden administration that only includes one day of paid sick leave, after refusing to agree to any paid sick days in three years of talks with unions. Buffett’s BNSF, a wholly-owned subsidiary of his nearly $700 billion conglomerate Berkshire Hathaway, raked in $1.4 billion in the last quarter… Another major rail operation, the Atlanta-based Norfolk Southern, reported $958 million in profits in the quarter ending September 30…. Union Pacific, based in Omaha, Nebraska, brought in $1.9 billion in profits in the quarter, up $200 million from the same period a year ago…. Jacksonville, Florida-headquartered CSX generated $1.1 billion in profits in the quarter ending on September 30, up $143 million from the same period the year before…. Canadian Pacific brought in $664 million in profits in the quarter — double the haul from the same period last year…. Finally, Montreal-based Canadian National brought in more than $1 billion in profits in the quarter, a 44 percent increase over the same period last year…. Railroad workers will return to the bargaining table again in 2025. Railway union sources told The Intercept Thursday that their next step would be to push for sick leave in an anticipated Biden executive order mandating a week of paid sick days for federal contract workers.



Steve Waldman [Interfluidity, via Naked Capitalism 12-3-2022]

The dispute is over how railworkers are treated. Which, in a word, is like shit. For decades, the rail industry has been achieving “efficiencies” by in large part by dumping nonfinancial costs onto its workforce. It’s great when productivity increases because of some new invention: A construction firm buys a steam shovel, and becomes genuinely more efficient. It accomplishes the same work with fewer workers. But it’s a different thing entirely when the same firm buys a whip, and then is able to accomplish the same work with fewer workers by beating the crap out of those desperate enough to remain. Both get scored as “productivity increases” by statisticians, but the second one is a regressive transfer from workers to shareholders, not a real efficiency gain. Railroads’ vaunted “precision-scheduled railroading” is the whip rather than the steam shovel. It puts ever fewer workers on ever longer trains, magnifying the responsibility and hazard each worker must bear. Railworkers are on call to be dragged from home for days or weeks 75% of their lives, and harshly penalized if life supervenes and they can’t show up. You try living that way.

The unions were asking for up to fourteen paid sick leave days, rather the one that the current deal provides. Fourteen was an opening bid. Had Congress actually done what Democrats only pretended they were trying to do, and included seven paid days in the Congressionally imposed deal, it would have been fine. Congress would have been taking away railworkers’ leverage to strike, but giving much of their very modest ask in compensation. Instead, Congress stole all of railworkers’ bargaining power and gave them nothing….


All is not lost. As Steven Greenhouse and Harold Meyerson point out, President Biden can remedy this just by eliminating an exemption for railroads in an executive orders that already requires Federal contractors to offer workers seven days paid leave. Embedding social desiderata in Federal contracting requirements is a bad way to do policy. It imposes an “efficiency” wedge” from customers’ perspective between the private and public sector, discrediting government action. But in this case, with the railroad industry consolidated into joint duopolies that already behave extractively towards customers, little would be lost. Certainly there’s no reason this rapacious sector of our economy should be exempt from an obligation of Federal contractors in every other sector!

If you want to save democracy, or just do the right thing, let Joe Biden know. Railroads that wish to transact with the Federal government must meet the same obligations that bind every other industry. That means seven days of paid sick leave. Right this wrong, conspicuously.

[TW: No sick days and being unable to see a doctor is a condition of feudalism. How has the USA economy come to be so wrecked and wretched? Let us recall that a great force behind the deregulation of the transportation industries was oeconomist Alfred E. Kahn, Alfred E. This is part of the oral history interview of Kahn conducted by the Carter Presidential Center:]

I’d love the Teamsters to be worse off. I’d love the automobile workers to be worse off. You may say that’s inhumane; I’m putting it rather baldly but I want to eliminate a situation in which certain protected workers in industries insulated from competition can increase their wages much more rapidly than the average without regard to their merit or to what a free market would do, and in so doing exploit other workers. I’d want to be able to tell the Ladies’ Garment Workers that they’re being exploited by the automobile workers, or the Teamsters. My first point is that there’s no way of making improvements for the consumer without limiting the monopoly profits of either the workers or the laborers—that’s the first side.

[TW: Kahn’s views are openly hostile to the principles of civic republican political economy on which the USA was founded. This is clear when you compare Kahn’s ideas and beliefs with those of Benjamin Franklin. In 1783, the year after he had helped negotiate a peace treaty with Britain to end the Revolutionary War, Benjamin Franklin wrote an essay “Reflections on the Augmentation of Wages, Which Will Be  Occasioned in Europe by the American Revolution,” which was published in Paris in the Journal d Economie Puplique:]

….To desire to keep down the rate of wages, with the view of favoring the exportation of merchandise, is to seek to render the citizens of a state miserable, in order that foreigners may purchase its productions at a cheaper rate; it is, at most, attempting to enrich a few merchants by impoverishing the body of the nation; it is taking the part of the stronger in that contest, already so unequal, between the man who can pay wages, and him who is under the necessity of receiving them; it is, in one word, to forget, that the object of every political society ought to be the happiness of the largest number.


Full List of Senators Who Voted Against Giving Rail Workers Paid Sick Leave 

[The New Republic, via Naked Capitalism 12-2-2022]


Senate Blocks Sick Days For Rail Workers, Averts Strike by Forcing Biden Agreement 

[The Intercept, via Naked Capitalism 12-2-2022]

RAILROAD COMPANIES HAVE spent years softening legislators in preparation for such a moment. As the fight moves to the Senate, it will do so under a Congress whose members have been the recipients of at least $20 million in campaign cash from the rail industry over the past decade.


Restoring balance to the economy

Challengers Win Big in UAW Elections; Presidency Headed to Run-Off 

Jane Slaughter, December 02, 2022 [LaborNotes, via Jonah Furman on Twitter]

[TW: My first major defeat in political organizing was in the mid 1980s trying to mobilize UAW locals to get the UAW national leadership to make a real fight against NAFTA. ]

Reformers in the United Auto Workers are jubilant as they seem set to make a historic change in the top leadership of their union, ending 70 years of one-party top-down rule. As mail-ballot votes were counted this week, it appeared very possible that the UAW Members United slate would eventually take all seven of the seats it contested, out of 14 on the union’s executive board.

This is nothing short of an earthquake in one of the country’s largest manufacturing unions. The last time anyone was elected to the executive board in opposition to the ruling Administration Caucus was 34 years ago, when Jerry Tucker of the New Directions Movement became a regional director.

The Members United slate was created by the reform movement Unite All Workers for Democracy (UAWD), which formed in 2019 to fight for members’ right to vote on their top officers. Members voted a year ago to switch to that system, a result of the U.S. Justice Department’s monitorship that was installed to address the union’s egregious corruption.


Revolution at the UAW: And that’s hardly the only labor news in a tumultuous week.

Harold Meyerson, December 1, 2022 [The American Prospect]


Strategic Political Economy

It’s 2050. Does the United States of America as We Once Knew It Still Exist?

Michael Tomasky, December 1, 2022 [The New Republic]

We asked 12 writers for their predictions—and recommendations for how to save democracy.

The Greatest Threat to the Unity of the Country Is the Class Divide

Kim Phillips-Fein, December 2, 2022 [The New Republic]

[TW: Phillips-Fein is author of Invisible Hands: The Businessmen’s Crusade Against the New Deal (2010, W.W. Norton, New York, NY)]

But the division that matters most is one of class, not of region or even culture or political party. The gap between the phenomenally rich and the desperately poor, and between the rich and the middle, is the fundamental fact of our society today. It hovers in the background of almost all political conversations that appear to be about other things: inflation politics, the politics of crime, the struggles over who can be made to have children, the question of elections, and protection for voting rights. Sometimes, the issue appears in anodyne terms: the stagnation of middle-class living standards, the decline in expectations, the skills mismatch. But the reality it describes is one of desperate and frightening poverty that haunts even people who have managed to eke out stability for the moment, alongside wealth that affords a level of consumption, comfort, and power that most of us can barely imagine.

What is often characterized in terms of “polarization” and conceived in regional terms might better be described in terms of the increasing confidence, power, and vitriol of the far right. At the heart of this politics are ferocious denunciations of a cultural elite that is supposed to threaten and sap masculine vitality by disrupting the “natural order”—whether this fantasy is expressed in terms of antagonism toward immigrants, railing against critical race theory, denouncing women who decide to end pregnancies, or stirring up hatred for people who do not identify with their biological sex. What might look like cultural divisions—or regional ones—really reflect the growing power of the extreme right, the inroads its activists and organizers have been able to make among people disaffected from the social order. They reflect a long process of political organizing and agitation as much as sectional differences of culture, lifestyle, and belief. Private fortunes have played a key role in fostering a radical anti-government politics, but equally important is that the far right’s conspiracy-drenched politics has taken root against the backdrop of exploitation and inequality….

To this point, many business lobbying groups, corporate leaders, and financial titans—the old-style Republicans and Reaganites—have recoiled from the anti-elitism of the far right, and especially from its most forthright rejections of democratic norms. They are embarrassed by Donald Trump, and they didn’t like January 6.

But one has to wonder what these figures would do if they were ever confronted with a politics that more aggressively challenged the status quo—a politics that sought to upend economic hierarchy, or at least establish national health insurance. What would they do, what will they do, when confronted with a radical politics that treats climate change as the emergency that it in fact is? One can hope that they would adjust their own ideals and expectations and accept a new redistributive regime. But perhaps, under those circumstances, the Oath Keepers and MAGA-supporters who once appeared an uncouth mob might instead suddenly seem like a righteous group of avengers, those preserving the social order. This would be the moment when a far right could ally with parts of the social and economic elite to take power, with nightmarish results.


Improving American Democracy Means Working Locally for the Common Good

Nell Irvin Painter, December 2, 2022 [The New Republic]

[TW: Painter is author of a number of books, including Standing at Armageddon:
A Grassroots History of the Progressive Era
 (2010, W.W. Norton, New York, NY)]

I know people who fear civil war as ultimate disaster. Not me. I look back at the Civil War of 1861–1865, which killed at least 620,000 combatants, as a human calamity. But death is not the Civil War’s entire meaning. The Civil War got rid of slavery, and war was probably the only means of ending the crimes of enslavement. The Civil War also added three Amendments—the Thirteenth, Fourteenth, and Fifteenth—to the United States Constitution, thereby improving an American democracy that definitely needed improvement. American democracy, even though further improved since the mid–nineteenth century, can still stand improvement, so long as Republicans can lose the popular vote but still hold the presidency and appoint a majority of justices to the Supreme Court. The resulting Republican Supreme Court is about to finish off one of the twentieth century’s signal democratic improvements: the 1965 Voting Rights Act. Nonetheless, at no point can we look backward to a time when U.S. democracy was more robust or complete than it is now, threatened though it may be by the kinds of armed attacks and election denial not seen since the nineteenth century….

As long as we have a party of Republicans perceived as white and a party of Democrats perceived as Black, as we do now, politicized versions of race remain a threat to American democracy, especially given the well-armed and fanatically loyal nature of the Republican base. I can easily envision more anti-democratic actions from Republicans to come in the near future, for their hold on state, local, and national offices seems secure for now. It is also possible that massive climate-disaster induced migration will encourage the kind of anti-democratic responses that have occurred in Sweden (see the success of the Sweden Democrats) and eastern Germany (see the success of the Alternative für Deutschland, or AfD). At the same time, I see important countervailing tendencies in the United States that by 2050 could very well make this country’s democracy stronger than it is now.

I take my cues from Heather McGhee’s revealing 2021 book, The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together. Starting from the swimming pools that twentieth-century racist localities preferred to fill in rather than desegregate, McGhee reminds us that paved-over swimming pools penalized everyone, not just aspiring swimmers who were Black. Those bigoted actions deprived “the sum of us” access to a public good. In more recent years, McGhee finds something new, a recognition of that loss. She tells of people who have done something that seems hard in our racialized public sphere: overcome racial barriers to work locally toward results that benefit “us all.”

McGhee finds her examples in places like Lewiston, Maine; Richmond, California; and East Haven, Connecticut, where local actions, the foundation of democracy, provide a “solidarity dividend” that benefits everyone. Immigrants from several African countries regenerated the dying town of Lewiston, and the Maine People’s Alliance, founded in 1982 and now 32,000 members strong, spearheaded the ballot provision that brought Medicaid expansion to the state in 2017, after the governor had refused to do so. The environmental movement that began in the South in the 1980s gave rise to organizations such as Just Transition Alliance; the Poor People’s CampaignDallas Truth, Racial Healing & Transformation; the Florida Rights Restoration CoalitionFight for $15; California’s Richmond Progressive Alliance; and so many other local and statewide coalitions that work across racial and ethnic boundaries for public ends such as environmental justice and an expanded safety net….

Unfortunately, given the central role of entertainment value in U.S. news, it’s far easier to learn about QAnon, Oath Keepers, and election deniers than about peaceful, multiracial coalitions for the public good. One nationwide, multiracial, multiethnic coalition is in full view, however, and that’s the Democratic Party, which has won the popular vote in seven of the last eight presidential elections….


The Vanishing Community: A second conversation with Niccolò Machiavelli

Win McCormack, December 1, 2022 [The New Republic]

“Peccato!” he said. “Too bad! Still the political problems in your country?”

“Yes,” I said. “And they are getting worse. The conservatives—as they call themselves, although they are in actuality subversive radicals—are now talking about launching civil war.”

Guerra civile!” Niccolò expostulated. “Are they armed?”

“Yes, they are. The ones who are talking the most seriously about it are armed to the teeth. They are comparing themselves to the American patriots who started our Revolution in 1775.”

“And what of the patriots on your side of the fence? The liberals, ? Are you armed, or getting yourselves armed?”

I was reluctant to give Niccolò the answer to his question. We just looked at each other. Finally, his face contorted, and he said, “So, the radical reactionaries are armed, and the democratic liberals are unarmed. Sì? That is an unstable and dangerous situation.”

….“As you know,” Niccolò said, “civic republicanism has its origins in the concept of a group of people trying to live together as a community rather than leading separate, individual lives. It sounds as if that idea, for your country, has vanished. As in the case of the guns, it’s every man for himself.”


A Peculiar Form of American Madness — W. J. Astore 

[Bracing Views, via Mike Norman Economics 11-28-2022]

“America is touched by a peculiar form of collective madness that sees military action as creative rather than destructive, desirable rather than deplorable, and constitutive to democracy rather than corrosive to it…. “

Actually, the US is an empire (successor to the British empire) rather than the liberal democracy it presents itself as.

The difference between America and fascist states is that in fascist states corporations are at the service of the state and in the US the state is at the service of corporations, in particular the MICIMATT (Military-Industrial-Congressional-Intelligence-Media-Academia-Think-Tank complex).

This article is about the corrosive influence of the MICIMATT on the national interest and moral fiber of the country. It is echoed in many articles published recently.

This one is of particular interest in that it is by a retired career officer that served as a professor at the Naval Postgraduate School.


What America Can Learn From Donald Trump’s Greatest Accomplishment

Ryan Cooper, December 12, 2022 [The American Prospect]

If Donald Trump had one redeeming achievement as president, it was that he blithely welcomed the 2020 pandemic relief packages developed by House Democrats. The CARES Act was the most egalitarian economic policy in American history, and more ideologically conservative Republicans like Sen. Lindsey Graham (R-SC) absolutely hated its generosity to the poor. If an ordinary GOP guy had been in the Oval instead of Trump, we might be in a massive economic depression right now.

Over the long term, probably the most significant part of the CARES Act was a relatively tiny part of it—the $10 billion (or about 0.4 percent of the total, though this was later increased to $18 billion) that was allocated to Operation Warp Speed, which funded the development of the COVID-19 vaccines. This turned out to be a smashing success.

It’s worth emphasizing just how remarkable the mRNA COVID-19 vaccines are. The previous all-time speed record for vaccine development was about four years, and most of them took well over a decade. Going from discovery of a totally novel virus to designing a highly effective new vaccine with hitherto unproven technology to finishing clinical trials and getting emergency approval in less than a year is one of the most remarkable scientific accomplishments in human history. And it was all accomplished with roughly 2 percent of this year’s military budget.


Global power shift

[Twitter, via Naked Capitalism 11-28-2022]



Megalopolis: how coastal west Africa will shape the coming century

[The Guardian, via The Big Picture 12-2-2022]

By the end of the century, Africa will be home to 40% of the world’s population – and nowhere is this breakneck-pace development happening faster than this 600-mile stretch between Abidjan and Lagos….

The question of how African nations manage the fastest urbanisation in human history will certainly affect how many millions of its people seek to stay or leave. A recent continental survey by a South African foundation, for example, found that 73% of young Nigerians expressed an interest in emigrating within the next three years. But given its scale, this is a story with far larger implications than population movements alone, shaping everything from global economic prosperity to the future of the African nation state and the prospects for limiting climate crisis.

There is one place above all that should be seen as the centre of this urban transformation. It is a stretch of coastal west Africa that begins in the west with Abidjan, the economic capital of Ivory Coast, and extends 600 miles east – passing through the countries of Ghana, Togo and Benin – before finally arriving at Lagos. Recently, this has come to be seen by many experts as the world’s most rapidly urbanising region, a “megalopolis” in the making – that is, a large and densely clustered group of metropolitan centres….

But unlike that American super-region, whose population long ago plateaued, this part of west Africa will keep growing. By 2100, the Lagos-Abidjan stretch is projected to be the largest zone of continuous, dense habitation on earth, with something in the order of half a billion people.


Russia’s Reported Request For India To Scale Exports By 5x Is Strategically Significant 

Andrew Korybko [Institute of Strategic Studies and Predictions at the People’s Friendship University of Russia, via Mike Norman Economics 12-1-2022]

Russia isn’t “decoupling” from China, but is actively diversifying from it with the intent of sustainably averting the scenario of its potentially disproportionate dependence on the People’s Republic that was earlier offset by India serving as Russia’s alternative valve from Western pressure. Comprehensively expanding economic connectivity with India via the North-South Transport Corridor complements Russia’s related efforts with Iran to pioneer a New Eurasian Axis for accelerating multipolar trends….
India’s principled neutrality towards the Ukrainian Conflict, which is the top proxy war right now in the worldwide struggle between the US-led West’s Golden Billion and the jointly BRICS- & SCO-led Global South over the course of the global systemic transition, has been responsible for this South Asian state’s astronomical rise as a globally significant Great Power. Those readers who haven’t yet realized this should review the following analyses in order to get up to speed:
[MNE: “This is a fairly long post that goes into a lot of detail about the shift of trade to the Global South/East and its implications for the global economy and world order. The world is changing.]
Pepe Escobar [The Cradle, via Mike Norman Economics 11-30-2022]

The Eurasia Economic Union (EAEU) is speeding up its design of a common payment system, which has been closely discussed for nearly a year with the Chinese under the stewardship of Sergei Glazyev, the EAEU’s minister in charge of Integration and Macro-economy.

Through its regulatory body, the Eurasian Economic Commission (EEC), the EAEU has just extended a very serious proposal to the BRICS nations (Brazil, Russia, India, China and South Africa) which, crucially, are already on the way to turning into BRICS+: a sort of G20 of the Global South.

The system will include a single payment card – in direct competition with Visa and Mastercard – merging the already existing Russian MIR, China’s UnionPay, India’s RuPay, Brazil’s Elo, and others.

That will represent a direct challenge to the western-designed (and enforced) monetary system, head on. And it comes on the heels of BRICS members already transacting their bilateral trade in local currencies, and bypassing the US dollar.…

Brazil and Argentina Just Agreed to Use Local Currencies for Bilateral Energy Trade, In Yet Another Snub for US Dollar 

Nick Corbishley [Naked Capitalism, via Mike Norman Economics 11-29-2022]


The pandemic

[Twitter, via Naked Capitalism 11-28-2022]


The science behind masks and their use

[Chasing Normal, via Naked Capitalism Water Cooler 11-28-2022]

“The broad consensus of peer-reviewed and published science has been straightforward: masks work. The degree depends on issues like real world compliance, study design, type of masks, and other factors. Here is a list of 27 peer-reviewed and published mask studies. Of these, 22 studies find masks are effective, 1 is inconclusive, and 4 find masks generally ineffective. (It is important that we set standards on what studies to review, since there are libertarian and disinformation faux institutions attempting to cherry pick, or ‘publish’ skewed reviews of mask studies and evidence.) Those still debating whether masks work may claim that there are few if any Randomized Clinical Trial (RCT) studies. While there was a study in Bangladesh of villagers that found benefits with surgical masks, the more important point is this: you cannot force people in the real world to consistently wear masks or not wear masks in situation A, setting B, and infection risk level C. It would also be unethical to ask some people to not wear masks in a known contagious or higher risk setting. The closest we can really come is with controlled environment aerosol ‘mannequin’ experiments and carefully analyzed real world comparisons.


How to think like an aerosol scientist this holiday season to stay healthy

[Colorado Public Radio News, via Naked Capitalism Water Cooler 11-30-2022]

[Lambert Strether:] This is a really good wrap-up, worth reading in full. “Jose-Luis Jimenez, a chemistry professor at the University of Colorado Boulder, believes those worried about sicknesses ruining holiday plans could do one simple thing to reduce risk of infection — thinking about ventilation and airflow as you go about your day. ‘The basic concept is, think that everybody you are next to is smoking and imagine that they are exhaling this smoke and you wanna breathe as little of that as possible,’ Jimenez said. Throughout the pandemic, his constant companion (besides a well-fitted N95 mask) is an ordinary-looking, simple tool: a clear square box, which regularly posts a number in large black font. He takes a carbon dioxide monitor everywhere — his office at CU, museums, fast food joints, planes, trains, automobiles, along on his travels to his native Spain, and more. His goal is to promote awareness of aerosols in the transmission of illness, through the monitoring of carbon dioxide in indoor environments. High levels of carbon dioxide means a space is poorly ventilated, and there’s a greater chance of breathing in a virus someone else might be carrying. The general concept, he said, is summarized by a maxim in the aerosol research world: the solution to pollution is dilution. Jimenez said people are just starting to understand the risk of dirty air as similar to the way humans learned of the dangers of dirty water.”


Health care crisis

How Banks and Private Equity Cash In When Patients Can’t Pay Their Medical Bills

[Kaiser Health News , via The Big Picture 11-27-2022]

As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin.


[Twitter, via Naked Capitalism 11-28-2022]


Parasitic Private Equity is Consuming U.S. Health Care from the Inside Out 

Juan Cole , via Naked Capitalism 11-29-2022]


Predatory Finance

Credit Default Swaps Blow Out on Credit Suisse as its Stock Price Hits an All-Time Low of $2.82

Pam Martens and Russ Martens, December 1, 2022 [Wall Street on Parade]

That $4 billion capital raise that was supposed to shore up confidence in global banking behemoth Credit Suisse turns out to have been too little, too late. Yesterday, 5-year Credit Default Swaps (CDS) on Credit Suisse blew out to 446 basis points. That’s up from 55 basis points in January and more than five times where CDS on its peer Swiss bank, UBS, are trading.

The price of a Credit Default Swap reflects the cost of insuring oneself against a debt default by the bank. Who might be desperate to buy protection against a default by Credit Suisse and driving up the cost of that protection? The mega banks on Wall Street that are counterparties to its derivative trades come to mind, as well as hedge fund speculators.


Tipping Point: The Financial Fragility of the Big Four Global Audit Firms 

Francine McKenna, via Naked Capitalism 11-29-2022]


Dollar Dominance is Financial Dominance 

[Institute for New Economic Thinking, , via Mike Norman Economics 11-29-2022]

What Strategies can Break This Dependency? The dollar system has proven resilient in the face of recent extreme and unexpected shocks, but it has also failed to foster sustainable growth and prosperity. Can it survive its contradictions? Evidence from the latest Trade and Development Report of UNCTAD suggests better South-South and commodity producers-consumers agreements are needed, on the way to a more inclusive international monetary system.Measured but deadly critique of the Fed.


The Tragedy Of America’s $3.5 Trillion In ‘Extra’ Savings 

[Heisenberg Report, via Naked Capitalism 11-30-2022]


Inflation: how financial speculation is making the global food price crisis worse 

[The Conversation, via Naked Capitalism 12-1-2022]


Robot Landlords Are Buying Up Houses

[Vice, , via The Big Picture 11-29-2022]

Companies with deep resources are outsourcing management to apps and algorithms, putting home ownership further out of reach.


[Twitter, via Naked Capitalism 11-28-2022]


Investors Head for the Exits at Illiquid Funds: Blackstone Limits Withdrawals from Giant Real Estate Fund 

Pam Martens and Russ Martens, December 2, 2022 [Wall Street on Parade]

Gating a customer’s money is something that has rarely happened in the U.S. in recent decades – until the crypto cabal entered the investment arena. Now it’s becoming an almost weekly occurrence.

We put the phrase “halts withdrawals” into a Google news search box and up popped the following crypto names that had put up gates in the past eight months: FTX, Liquid Global, Genesis, Voyager Digital, Vauld, BlockFi, SALT, AAX, Gemini Earn, Celsius, and Terra (LUNA) network. For a number of those, the “gate” was the preliminary step prior to filing bankruptcy or liquidating.


Stephen Diehl: Crypto is the ‘commoditisation of populist anger, gambling and crime’ 

[Financial Times, via The Big Picture 11-27-2022]

The software engineer has denounced crypto assets as vehicles for pure speculation. But his views have made him a target of harassment — including death threats.


“Sam Bankman-Fried’s Truly Effective Philanthropy: Teaching”

Dean Baker [CEPR, via Naked Capitalism Water Cooler 11-28-2022]

“Recognizing the enormous waste and corruption in the financial sector, Bankman-Fried decided that the best way to attack it was by putting himself at the center of a scandal hitting finance at its most vulnerable point: the crypto craze…. The potential benefits here are enormous. If we can just downsize the financial sector by 10 percent, it will free up more than $300 billion a year for productive purposes. That comes to more than $2,500 a year for every family in the country. As the effective philanthropy folks say, you can buy a lot of mosquito netting with $300 billion a year…. So, Bankman-Fried knew what he was doing in running a Ponzi-scheme and making himself look like one of the most despicable people alive. He may spend a lot of time in prison and be viewed with universal contempt for the rest of his life, but if his crimes lead to a crackdown on finance, he will have provided a great service to humanity.”


How Capitalism—Not a Few Bad Actors—Destroyed the Internet 

[Boston Review, via Naked Capitalism 11-30-2022] From earlier this year, still germane.


Cigars, Booze, Money: How a Lobbying Blitz Made Sports Betting Ubiquitous.

[New York Times, via The Big Picture 11-27-2022]

The gambling industry and its allies got their way with lawmakers after showering them with donations, gifts and dubious arguments


Why Isn’t the Whole World Rich? 

[Asterisk, via The Big Picture 12-1-2022]

[TW: This is a perfect example of how stupid professional economists and financiers can be, best described as a circle jerk of statistical masturbation. Noticably absent is any attempt to even look at what South Korean leaders and economists themselves say they did: copy the “American system” policies of Alexander Hamilton, Henry Carey, and Friedrich List. See the two YouTube videos immediately below.]

The question of why some countries join the developed world while others remain in poverty has vexed economists for decades. What makes it so hard to answer?

…In 1968 the growth rate of GDP per capita in South Korea topped 10%. Throughout the 1970s, per capita GDP grew nearly 9% each year on average, slowing only slightly through the 1980s and 1990s. By 1995, South Korean GDP per capita had eclipsed Portugal’s. By 2008, it was ahead of New Zealand’s and just behind Spain’s. In 2020, GDP per capita in South Korea was nearly equal to that in the U.K. Not only is South Korea no longer developing; in many areas, it leads among developed nations….

Economists have been engaged in research for decades to understand what happened in South Korea and other countries that left extreme poverty behind. It turns out to be one of the trickiest questions in economics. On the surface, it seems like the answer should be obvious: “Do whatever South Korea did.” Or, more broadly, “Do whatever countries that grew rapidly did.” But what, exactly, did South Korea do?

Bad Samaritans: the myth of free trade and the secret history of capitalism: Ha-Joon Chang

[YouTube, 2020]

Free Trade Does Not Make Countries Richer

[Institute for NewEconomicThinking, YouTube, 2011]


Information age dystopia

A Peek Inside the FBI’s Unprecedented January 6 Geofence Dragnet 

[Wired, via The Big Picture 12-2-2022]

Google provided investigators with location data for more than 5,000 devices as part of the federal investigation into the attack on the US Capitol.


Climate and environmental crises

5 Billion People Will Face Water Shortages by 2050, U.N. Says

[Scientific American, via Naked Capitalism 12-2-2022]


Cheap natural gas is a thing of the past 

[Commonwealth Magazine, via Naked Capitalism 11-28-2022]

A cogent tweet earlier this month from Joseph LaRusso, an energy finance manager for the city of Boston, sketches out a narrative that explains how events have reshaped the domestic gas market since 2015. LaRusso cites a report from Public Citizen documenting the steady rise in the fraction of gas production sent abroad, which surpassed 20 percent this year.

According to this report, the war in Ukraine only amplified a trend already well underway. As demand in Europe soared, the American Petroleum Institute began lobbying to replace embargoed Russian gas with North American LNG. Despite cautions from Sen. Ed Markey, Congress was receptive to gas industry interests advocating for expanding exports and extensive new infrastructure to support them.

For Big Oil and its Republican allies, the spike in LNG exports is more than an expedient measure to meet near-term fuel demand abroad. Instead, they see a new architecture in the global gas market. In the wake of the Republican takeover of the House of Representatives, the GOP is already touting measures to streamline LNG exports.

The report from Public Citizen makes the time frame evident, stating that the “drilling rigs, pipelines, and export terminals used to facilitate the flow of oil and gas abroad will lock in massive amounts of carbon and methane pollution.” In other words, the export boom is generating long-term investment (and debt) that the fossil fuel giants expect to be in play for decades….

Moreover, as LaRusso pointed out in an earlier tweet, gas scarcity in New England is a historical fact unrelated to how many pipelines are built. Demand chases supply like a dog chasing its tail. LNG has been in New England’s energy mix for 50 years — it’s not a recent response to pipeline constraints.

Scarcity will be eliminated when demand is destroyed. LaRusso suggests an ambitious program to retrofit homes with electric heat pumps as a means to do just that. This approach would free up more gas for power generation while leveraging the greater efficiency of heat pumps for home heating.


Why America Doesn’t Have Enough EV Charging Stations

[Wall Street Journal, via The Big Picture 11-30-2022]

Gas stations spar with utility companies, rural areas predict years of losses on chargers, spotty equipment threatens reliability: The U.S. EV charging network is a mess.


Creating new economic potential – science and technology

Unprecedented Detail: Researchers Capture How Genes Fold and Work 

[Sci Tech Daily, via Naked Capitalism 11-27-2022]


Two Minerals Never Before Been Seen On Earth Found Inside 17-Ton Meteorite 

[LiveScience, via Naked Capitalism 11-30-2022]


This is the first house 3D-printed from bio-based materials 

Mihai Andrei [ZME Science, via Naked Capitalism 11-28-2022]

We’ve seen 3D-printed houses in the past before, and we’ve even seen that they can already be cost-competitive with conventional houses. But those houses were 3D-printed with concrete. Meanwhile, researchers from the University of Maine….

The entire structure was printed in four modules and assembled on-site in a few hours. Electricity was installed just two hours after the assembly, and the house was essentially usable within a day after being brought on-site.

The house features 3D-printed floors, walls, and a roof that consist of wood fibers and bio-resins. The entire house measures 600 square feet (just under 60 meters) and is insulated with wood. The building process eliminated construction waste almost entirely, and unlike concrete houses (both conventional and 3D printed houses), this one can be fully recycled….

However, it’s not clear just yet how affordable this house would be. It’s still a prototype, and the researchers focused on creating it using recycled, locally sourced wood fiber feedstock. This makes it more resilient to disruptions from supply chains and worker shortages.

“Many technologies are being developed to 3D print homes, but unlike BioHome3D, most are printed using concrete. However, only the concrete walls are printed on top of a conventionally cast concrete foundation. Traditional wood framing or wood trusses are used to complete the roof,” said Dagher, ASCC executive director. “Unlike the existing technologies, the entire BioHome3D was printed, including the floors, walls, and roof. The biomaterials used are 100% recyclable, so our great-grandchildren can fully recycle BioHome3D.”


Disrupting mainstream politics

It really was young voters who did it for Democrats 

Ryan Grim [via Naked Capitalism 11-30-2022].

A faction of political strategists previously known as centrists but now rechristened as “popularists” worked in the days after the election to solidify a narrative that explained Democratic overperformance not as a matter of robust turnout among young voters and other progressives — which would suggest Democrats should lean into a progressive vision — but as the result of persuading independents and Republican-leaning voters to switch sides and vote Democrat.

Their narrative aligns with their politics, as they like to argue that Democrats ought to hew to a moderate center to win over swing voters, rather than stand for a progressive agenda.  The most vocal critic of the media’s credit to young voters for Democratic overperformance has been strategist David Shor.…

But the way Shor did his calculation obscures the explosion in voter turnout that Democrats have seen since 2014. I’ll explain that below, but first, I want to share a new chart provided to me by TargetSmart, the Democratic data firm that tracks turnout. We have full voting data in five states so far, and it shows quite clearly that turnout among young people was actually much closer to 2018 than 2014.


In Legislative Elections, Democrats Defied Recent History

[BOLTS, via Naked Capitalism Water Cooler 11-30-2022]

“Republicans were confident that they would build up power in statehouses and inflict a ‘bloodbath‘ on Democrats. Instead, they failed to win any new legislative chamber, their seat gains are minuscule by recent standards, and their strongest showings are concentrated in places they already dominate. Democrats, meanwhile, flipped four legislative chambers and allied with centrist Republicans to wrestle a fifth chamber away from the GOP. The results have deflated conservative ambitions to channel backlash against the sitting president to leap ahead in states, like they did in 2010 and 2014…. No such wave occurred in 2022. Republicans gained only 22 legislative seats this fall out of more than 6,000 that were on the ballot, according to Bolts’s review of the latest available results…. And it gets worse for Republicans. While they managed to net a few seats overall, their biggest gains came in chambers that they already massively control, such as the West Virginia or South Carolina houses, or else in New York, where they are deeply in the minority. By contrast, Democrats soared in closely-divided legislatures and seized four previously GOP-held chambers: Michigan’s House and Senate, Minnesota’s Senate, and Pennsylvania’s House. In addition, the GOP seems to have lost control of Alaska’s Senate; a group made up of centrist Republicans and Democratic senators announced on Friday that they would form a coalition to run the chamber. We may not know until 2023 if a similar coalition emerges in the Alaska House, or if the GOP can coalesce to win control of that chamber.”


Democrats’ political suicide

[Twitter, via Naked Capitalism 11-30-2022]

“…identity politics is fundamentally a weapon of the Democratic party to derail, deflect, and diffuse a radical class-based politics.”


[Twitter, via Naked Capitalism 11-27-2022]


Civic republicanism

[Twitter, via Naked Capitalism Water Cooler 11-29-2022]


Conservative / Libertarian Drive to Civil War

In Texas, members of LGBTQ community arm themselves to fight right-wing extremists 

[The Globe and Mail, via Naked Capitalism 11-28-2022]


How Jessica Logan’s Call for Help Became Evidence Against Her

[(ProPublica, via The Big Picture 11-27-2022]

After her baby died in the night, a young mother called 911. Police thought they could read her mind just by listening. Now she’s haunted by the words she chose….

Five months earlier, he had taken a two-day law enforcement training course called “911 homicide: Is the caller the killer?” that was held at a nearby community college. The instructor, who is the chief architect of the discipline, promises those who attend his classes they’ll leave with the power to solve murders by listening to a 911 call.

For more than a decade, the training program and its methods have spread across the country and burrowed deep into the justice system, largely without notice. Pitched exclusively to law enforcement, others in the justice system, including defense lawyers and judges, often learn police have used the technique for the first time in the courtroom.

Today there are hundreds of police officers, prosecutors, coroners and dispatchers nationwide who have taken the course and could now present themselves as experts, able to divine truth and deception — and guilt and innocence — from the word choice, cadence and even grammar of people reporting emergencies.


The postliberal crackup: The GOP’s post-midterm civil war starts with the New Right

[Salon, via Naked Capitalism Water Cooler 11-29-2022]

….conservative conference at Ohio’s Franciscan University of Steubenville, a center of U.S. right-wing Catholic thought. The speaker (and conference organizer) was Sohrab Ahmari, a Catholic writer best known for his 2019 polemic against conservatives insufficiently committed to the culture wars. The conference, “Restoring a Nation: The Common Good in the American Tradition,” was a showcase for the modestly-sized but well-connected Catholic integralist movement, part of the broader current of conservative thought known as postliberalism.

Over the two-day conference, 20 speakers, including then-Ohio Senate candidate J.D. Vance, hammered home the argument that the same faith used to justify abortion bans and curtail LGBTQ rights also demanded a different approach to the economy, one that might plausibly be called socialist. Laissez-faire capitalism, speakers said, wasn’t the organic force conservatives have long claimed but the product of state intervention; ever-expanding markets hadn’t brought universal freedom but wage-slavery and despair; Franklin D. Roosevelt’s New Deal — demonized on the right for generations — was in fact a “triumph for Catholic social thought”; social welfare programs were good….

…the public split signified by the two meetings comes after months of less visible infighting over questions only hinted at in headline Republican politics….

Others called on Republicans to actualize their claim to be the new party of the “multiracial working class.” The ecumenical religious right journal First Things exhorted conservatives to join picket lines. The conservative policy think tank American Compass unveiled a comprehensive “New Direction” economic agenda, repurposing lyrics from the Clash to propose things like realigning financial markets with the common good.

[TW: I think it is inevitable that if conservatives look at the actual historical record of how the Western industrial economies were built — using the ideas of Benjamin Franklin, Alexander Hamilton and Henry Carey, not John Locke, Adam Smith and Edmund Burke — they will be forced to cut ties with libertarians and “anti-statism.”]


What Does Peter Thiel Want?

Damon Linker, November 30, 2022 [Persuasion]

a 2009 essay for the libertarian Cato Institute in which he proclaimed he no longer believed that “freedom and democracy are compatible.”

Another Thiel friend and confidante discussed at length in Vanity Fair, neo-reactionary Curtis Yarvin, takes the idea of disrupting the liberal order even further, suggesting various ways a future right-wing president (Trump or someone else) could shake things up, shredding the smothering blanket of liberal moralism, conformity, rules, and regulations, thereby encouraging the creation of something approaching a scientific-technological wild west, where innovation and experimentation rule the day. Yarvin’s preferred path to tearing down what he calls the liberal “Cathedral,” laid out in detail on a two-hour Claremont Institute podcast from May 2021, involves a Trump-like figure seizing dictatorial power in part by using a specially designed phone app to direct throngs of staunch supporters (Jan. 6-style) to overpower law enforcement at key locations around the nation’s


Friend or Foe: Analyzing Amicus Briefs in Moore v. Harper

[Democracy Docket, November 14, 2022]

LIVE UPDATES: U.S. Supreme Court Hears Moore v. Harper

[Democracy Docket, November 30, 2022]


The Corruption of the Legal Profession 

Brad Miller, December 1, 2022 [The American Prospect]

A new book shows how corporate law firms bear great responsibility for the degradation of the rule of law.

Servants of the Damned: Giant Law Firms, Donald Trump, and the Corruption of Justice

By David Enrich

Jones Day, one of the world’s largest and most powerful law firms, disgraced itself in its work for Donald Trump. The firm bears much of the responsibility for Trump’s destruction of the norms upon which democracy depends…. Enrich also reports the role of Jones Day and other giant law firms with giant clients—“BigLaw,” in the lingo—in the destruction of norms on which America’s rule of law depends. It is difficult to imagine Trump as more than a minor vanity candidate if those norms still held….

The ’70s were the end of the Great Compression, a period when wealth and income inequality closed significantly as a result of government policies—highly progressive taxation, union contracts, minimum-wage laws, and tighter business regulation. Many corporate leaders accommodated themselves to those policy changes. Some corporations embraced “stakeholder management” that balanced the interests of shareholders, employees, customers, creditors, communities, and the public good.

But others never accepted the policies, and thought demands from the left for even more would never end unless they were challenged and defeated. The famous Powell Memo in 1971 rallied big business to the fight. Economists like Milton Friedman and corporate leaders like Jack Welch argued that the only proper purpose of corporations was the maximization of profits for shareholders. In 1982, conservative and libertarian law students formed the Federalist Society to challenge supposedly leftist influence in American law. McGahn, a member since law school, used the Federalist Society to vet his picks for judicial appointments.

Much of American business felt a renewed sense of entitlement to seek maximum profits without restraint or consequence. If a law firm said no when the corporation wanted to hear yes, the corporation could easily find law firms that would say yes. Many old-school law firms did not survive the change. In 1994, The New York Times reported that “in the last four years, more than a dozen firms, ranging from 30 to 250 lawyers, have folded, merged or been acquired to become the New York branches of giant firms with home offices in other cities.” As a partner in one firm said, “The coin of the realm ceased being loyalty, predictability and continuity, and became money, money and money.”

Enrich tells an important story of the gradual corruption of the rule of law, and of the broader corruption of our society. A nation in which victims of wrongs by the powerful must endure endless scorched-earth legal tactics to seek justice is a different nation from the one in which the victims of the East Ohio explosion and fire in 1944 received prompt and fair compensation. A nation in which wide swaths of law are unenforced because government lawyers see the corporations that violate the law as potential future clients is a different nation from one in which government lawyers vigorously enforce the law to protect ordinary Americans.



Open Thread


The Decline Of the European Garden


  1. StewartM

    I tire of hearing about “identity politics” when the most striking and omnipresent form of the genre involves white heterosexual evangelical Christian people.

    In most uses of the current term, identities originate when a group is threatened with persecution or discrimination, almost always a persecution or discrimination that they didn’t start. Without persecution or discrimination, there is no “identity” or “us” and “them”. When the disadvantaged band together in self-defense, then we start hearing about engaging in “identity politics”.

    However, there is one exception to this rule–the original “us” who started labeling the “thems”. That “us” in the US is white heterosexual Christians. Yet I never seem to hear that the R party has a problem with “identity politics”, or “cancel culture”, at least not using that terminology. Yes, ultimately it all boils down to ‘infrastructure’ (‘economic’) issues, but “identity politics” often includes economic inequality arguments.

  2. StewartM

    Insofar as the rail strike was concerned–that’s a no-win situation for the Democrats, at least with the current deal. Unless the Biden administration actually had the power to take over the rail companies and impose the conditions (and actually only 15 days sick leave is not really enough, I would grant everyone far more, at least 6 months)–something I heartily would favor–any disruption of rail service, or even if we succeeded in forcing the rail companies to grant sick leave–would result in a spike in transportation costs (which the rail companies would do, given there isn’t much competition in this market). Sadly, most of the US public has already abandoned ‘civic republicanism’ and has bought in the notion of atomized individualism and would gladly sacrifice the rail workers in order to avoid any pain on their end.

    The only way to achieve this is to do something unheard of in 50 years, or more–make Wall Street take the hit. And there, I’m sure the current (anti-Federalist) courts would block it, just like they blocked Truman in the Korean War. (Hey, even a war isn’t enough of a national emergency when Wall Street profits are concerned).

    I am very lucky compared to most, as I do have a full year’s sick leave. However, even this good deal isn’t what it pertains to be–as you can get punished if you use it. Even good benefits in the US aren’t good when you look at the fine print.

  3. NR

    I do think the Democrats could have done more for the rail workers. However, as I said in the comments to Ian’s post about it a few days ago, eight out of the twelve rail unions voted to accept the contract; only four voted to reject it. Given this split, with more unions in favor than opposed, I can understand why there wasn’t more political pressure to fight for the sick days. If the unions were more united, I could see more of an impetus for politicians to insist on changes to the contract.

    But the unions couldn’t achieve that, likely because the contract offers a lot of money to workers–a 24% raise by 2024, and an immediate $11,000 payout per worker upon adoption of the contract. A lot of rail workers probably looked at that and decided that the money was guaranteed, while it’s not certain they would need the sick days, and so decided to support the contract. Of course in an idea world they shouldn’t have to choose between the money and the sick days, but as I’m sure everyone here is aware, we don’t live in an ideal world.

  4. bruce wilder

    No we live in an less-than-ideal world where the Democrats stage a Potemkin vote for sick days so we can pretend the Dems are an alternative to the Republicans, an opposition to plutocracy when of course the Dems merely style their corruption, their subversion of democracy, ceaseless war-mongering and elaboration of the predator state in ways that give them the perennial excuse that they “lost”. We lose, when we conveniently forget or overlook the betrayals and go along with The Narrative that keeps us railing against The Other Party.

  5. Willy

    I’ve tried and tried telling the white heterosexual evangelical Christian people that if they don’t want to have that epiphany, the one where they realize the store they’ve been happily shopping at for years is suddenly crawling with all these little brown people speaking jibberish, that they need to blame the big corporate MBAs and their cheap labor fetish.

    Sure, their Republican tribal overlords speak loudly and carry a big schtick. But they sure as shit aint gonna cure “woke”. If they think endless drug ads depicting upper-middle gay mixed-race couples are bad, just wait til the ads show doughy rednecks coupled with little brown people speaking jibberish. And then the camera pulls back to reveal the redneck wearing a skirt and heels.

    Scapegoating AOC only makes our corporate MBAs laugh with glee, knowing that they themselves are becoming “too big to fail”.

  6. BC Nurse Prof

    New Zealand government suppressed COVID testing to keep infected people at work:

  7. js

    The rail issue was an obvious sellout of the rail workers by the Dem party. The squad claims the unions wanted them to vote that way, that is dubious, but they have made the point that this is the deal Biden pushed forward, that this is ultimately on Biden, they don’t equivocate about that. Personally, I have doubts the squad is quite that innocent, but it would pass regardless of how they voted, and regardless this is Dem party politics. Like obviously this is what Biden wanted. They had months to negotiate, they could have leaned on the rail companies.

    Oh well at least Warren Buffet gets richer, vote blue.

  8. NR


    The workers could have leaned on the rail companies too. Or on Biden, for that matter. But they didn’t, two-thirds of them voted to accept the contract.

    Let me guess, MAGA would have gotten them everything they wanted, right?

  9. bruce wilder

    but “identity politics” often includes economic inequality arguments.

    If they didn’t, the arguments of the woke would not work as political sabotage against the left. That much of this is “own goal” messing up only aided by more cynical manipulators merely reinforces the point.

  10. bruce wilder

    NR: The workers could have leaned on the rail companies too.

    Somehow, I think Congress passing a law prohibiting a strike might have been designed to limit the ability of the unions to “lean on the rail companies”. Just sayin’. Was not that the point?

  11. NR


    The workers voted to accept the contract before Congress acted. Not all of them, of course, but a large majority of them.

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