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

Week-end Wrap – Political Economy – February 5, 2023

by Tony Wikrent


Russian Foreign Ministry Rejects Blinken and Nuland Proposals, Condemns Scholz for Reviving Hitler’s Plan to Destroy Russia 

John Helmer [Dances with Bears, via Naked Capitalism 1-29-2023]

The Russian Foreign Ministry has dismissed proposals issued this week in Washington by US Secretary of State Antony Blinken and his Under Secretary, Victoria Nuland. Ministry spokesman Maria Zakharova has confirmed that Russia’s military plan for the Ukraine will not be interrupted or delayed.

“It is not necessary to talk about what will happen if someone does something [in the Ukraine],” Zakharova said. “There is a situation on the ground that we are solving. Everything. This is not a question of guesswork, but of our assessment of what is happening. This is based on the situation on the ground and direct political statements by Western politicians. Given that all negotiations have been terminated by Ukraine, this issue will be resolved on the ground. Under pressure or on its own, Kiev has banned any negotiations with Russia at the government level. So that’s it. The rest is for the military experts.”

Russia has also dismissed German Chancellor Olaf Scholz as the successor of the Nazi Wehrmacht and the puppet of the US Government. Scholz, according to Zakharova,  is one of the Germans who “lack[s] the spirit to make the right choice, not to repeat the mistakes of their ancestors, for which the people of Germany, among others, paid a huge price… We remember well what German tanks are. These are machines which have become a symbol,  not just of death and deadly ideology, but of hatred of humanity — a global, existential threat to the entire planet…

[TW: Not the language of diplomacy. At all.]


Sanctions and Geography are Replacing the Russian Oligarchy With State Planning, Producing a Better Growth Rate than the US, Germany

John Helmer [Dances with Bears 1-31-2023]

There is nothing like facing the gun muzzles of the Germans, British and Americans to teach Russians what to do to correct their past mistakes.  The International Monetary Fund (IMF) would be the last US bank in the world to admit as much.

Nor would the IMF concede that everything it bribed the Kremlin to accept, when Boris Yeltsin was president and Anatoly Chubais and Alexei Kudrin were his economic ministers,  is now being reversed – at a speed unmatched since Joseph Stalin directed the relocation of heavy industry out of reach of German guns between August and December of 1941.

This time round, the IMF is reporting that after Russia recorded a 2.2% drop in real Gross Domestic Product (GDP) measurement in 2022 – 35% less than the IMF had been forecasting – by 2024, the second and third years of the war, the Russian growth rate will be more than double the US, British and Japanese rates; 33% better than Germany’s; 24% better than France; 29% better than Canada.

This is the first official acknowledgement by the US and international banks that the long war against Russia is being lost.


Concerning the arguments for ‘total defeat’ of Russia 

[Responsible Statecraft, via Naked Capitalism 1-29-2023]

Zealous advocates of Western support for the total defeat of Russia in Ukraine — including, if necessary, direct Western intervention and NATO-Russia war — base their case on a disparate set of arguments, almost every one of which turns out on examination to be either exaggerated or wholly mistaken.


Inside the global battle over chip manufacturing 

[The Verge, via Naked Capitalism 2-3-2023]

Chris Miller, Tufts professor and author of Chip War: The Fight For The World’s Most Critical Technology walked me through a lot of this, along with some deep dives into geopolitics and the absolutely fascinating chip manufacturing process. This one has everything: foreign policy, high-powered lasers, hotshot executives, monopolies, the fundamental limits of physics, and, of course, Texas….

EUV lithography uses light at a wavelength of 13.5 nanometers, an ultra-small light far smaller than the wavelength of visible light. You need really small wavelength light because the circuits you’re carving are very, very tiny; they themselves often measure just a couple of nanometers in dimension. Producing this type of light is really hard, because it’s right next to the X-ray spectrum. Production of it is complicated and the development of mirrors to reflect it is also very difficult.


Here’s how the process works. A ball of tin falls at a rate of several hundred miles an hour through a vacuum and measures around 30 millionths of a meter in diameter. It is pulverized by two shots from one of the most powerful lasers ever deployed in a commercial device and explodes into a plasma measuring several times hotter than the surface of the sun — several hundred thousand degrees Fahrenheit. This plasma emits EUV light at exactly the right wavelength of 13.5 nanometers, which is then collected via a series of about a dozen mirrors, which themselves are the flattest mirrors humans have ever produced. The mirrors reflect the light at just the right angle so that it hits the silicon wafer and carves the circuits on the chips that make your iPhone possible….

The US is thinking about next-generation military and intelligence systems that will increasingly rely on artificial intelligence. AI systems are trained in vast data centers that are full of sophisticated chips like GPUs, which are the type of chips that are used to train AI systems.

If you can’t mass manufacture cutting-edge chips, then you can’t get the data center capacity that you need to train AI systems. The US is ultimately trying to accomplish stopping China from developing advanced data centers. It’s using the machine tools as the choke point, preventing US firms, and also Japanese and Dutch firms, from transferring this equipment to China.

[TW: Obviously, very difficult to replicate by a survivalist or prepper using their bowie knife. Then the interviewer asked a question that screams out the disassociation from reality of the “free market” ideology of Western elites: ]

How did we even end up in a situation where there’s one Dutch company that we have to get a hold of in order to make sure China doesn’t gain these capabilities? Again, in a functional market, especially for something like chips, which are so important to everything, there would be multiple companies with multiple different approaches to making chips at the scale that modern chips are required to be made at the process nodes that we operate at now. Instead, there’s just one and it’s in the Netherlands. How did that happen?

Well, across the chip industry, over the last couple of years you’ll find that there has been a real trend to concentration, with in many cases just a handful and in some cases just one company capable of producing the types of software and machinery involved. There’s two reasons for that. One is that many parts of the chip-making process are just brutally capital-intensive. It’s extraordinarily expensive to make this machinery. That really disincentivizes competition, because a new entrant has to spend billions of dollars before they can see if their product even works.

[TW: So, it all goes back to Alexander Hamilton’s argument that to break from the British model of imperial economics, you MUST have national economic development—which must be fostered, nurtured, and protected, by the national government. What tragic irony that it is now the United States that is intent on preventing national economic development and enforcing imperial economics. ]


The Lights Wink Out In Asia 

[The Scholar’s Stage, via Naked Capitalism 2-3-2023]

Japan’s 2022 National Security Strategy concludes with a dramatic pronouncement:

Ministry of Foreign Affairs Japan, prov. translation National Security Strategy of Japan (Tokyo, 16 December 2022):

“At this time of an inflection point in history, Japan is finding itself in the midst of the most severe and complex security environment since the end of WWII. In no way can we be optimistic about what the future of the international community will hold.

I find myself strangely affected by this document. There was once a dream that globalization might save the world….

I read the National Security Strategy of Japan with the same trepidation I read the Jake Sullivan’s speech on chip export controls.11 I believe the Japanese have judged correctly; I support the Biden administration’s attempt to blunt China’s technological edge. But it is difficult to see these things play out in real life and feel any sense of victory. We are sliding into a darker world order. The Chinese got there first; we should have followed long ago. There is little sense in keeping to old forms that do not match present realities. But the old forms will not go unmourned. It is always sad to watch a dream die.


[TW: A Chinese spy balloon? Seriously? I’m not even going to link to such nonsense.]


This is plutocracy, not capitalism

Amazon’s Endgame: The company is transitioning to become an unavoidable gatekeeper in all commerce.

David Dayen, February 3, 2023 [The American Prospect]

Amazon has long wanted to become not indispensable, but unavoidable. The key difference there is that a company is indispensable through quality of service and affordability; a company is unavoidable simply by being in the way. Amazon needed to try a lot of different strategies to create this unavoidability, and naturally some of them did not succeed. But their route to the main goal is coming into focus—and it should alarm anti-monopoly critics who believe (rightly in my view) that no company should be de facto mandatory for most consumers and sellers….

Over the holidays, Amazon added fees to its third-party fulfillment service, where it handles shipping and logistics for independent sellers. This is where much of its revenue comes from on the retail side: Seller fees give Amazon four times the margin of typical retail sales, according to a 2018 Morgan Stanley analysis. A December 2021 report from the Institute for Local Self-Reliance showed that Amazon took 34 cents out of every dollar in third-party sales that year, nearly double what it took seven years earlier.


Alarm bells, arrogance and the crisis at Wells Fargo. Chapter 2: “Rainbows and butterflies” 

[American Banker, via Naked Capitalism 2-2-2023]

Fake accounts. Executives who only wanted to hear good news. Tens of billions of dollars in damage. As the bank’s chief security officer, Michael Bacon spent years raising concerns about rampant sales abuses. In exclusive interviews, he details how the bogus-accounts scandal unfolded — and argues that it could have easily been stopped.

Part two of a five-part series.


The $109 Billion Bank Hustle 

Matt Stoller [BIG, via Naked Capitalism 2-1-2023]

“Interoperability isn’t just for telecom firms, email, and Facebook. In a high interest rate environment, it’s also how to stop banks from scalping businesses and consumers.”


Add 4,281 Hedge Fund Clients to What Makes JPMorgan Chase the Riskiest Mega Bank in the U.S.

Pam Martens and Russ Martens, January 30, 2023 [Wall Street on Parade]


A Wall Street Time Bomb 

David Sirota, February 2, 2023 [The Lever]

…Earlier this month, Pitchbook — the premiere news outlet for the private equity industry — declared that “private equity returns are a major threat to pension plans’ ability to pay retirees in 2023.”

With more than one in ten public pension dollars invested in private equity assets — and with states continuing to keep their private equity contracts secret — Pitchbook cited a new study finding that losses from the investments may be on the horizon for retirement systems that support millions of teachers, firefighters, first responders, and other government employees….

Signs of a doomsday scenario are already evident: Some of the world’s largest private equity firms have been reporting big declines in earnings, and federal regulators are reportedly intensifying their scrutiny of the industry’s writedowns of asset valuations. Meanwhile, one investment bank reported that in its 2021 transactions, private equity assets sold for just 86 percent of their stated value last year.

But while pensioners may be imperiled, Wall Street executives are protected thanks to their heads-we-win-tails-you-lose business model: Some of the firms managing pensioners’ money are reporting asset losses for investors, while raking in even more fees from investors and continuing to raise executives’ pay.


Civic republicanism is the underlying issue

I’m a corporate fraud investigator. You wouldn’t believe the hubris of the super-rich 

[Guardian, via The Big Picture 1-29-2023]

Generally, I’m looking for red flags: accounting abuses, yes, but also egregious business practices, such as failure to pay suppliers. We want to answer the question: is the business doing what it says it’s doing, to the standard it should be? And if not, can that company really be worth what the market believes it is?

I use a number of methods to do this. Some you might expect – financial reports, local filings, data sets – but others you might not, including social media. Recently I was deep in the Instagram account of a CEO whose company we believe is a house of cards. I gazed for a long time at a snap of a family member, posing on the steps of a private jet with champagne and a gun. If I had to paint a portrait called “hubris”, it would look something like that….

But while the fraudsters I’ve encountered are generally clever – or at least cunning – sooner or later something interesting happens: they get carried away. Drunk on their own genius, they concoct grander schemes, more flamboyant methods. They give large contracts to family members, who are themselves shareholders in the company. They fire their top-tier auditor and bring in a no-name firm….

The consequences of this hubris can be catastrophic. Investors risk losing money, of course, but people also risk losing their lives, perhaps because the company has made savage cuts in lifesaving equipment they use or sell, or through cheating their own emissions tests (Volkswagen), or pretending they can monitor cancer from blood samples (Theranos).

There is something unique to our era that encourages the charlatan. As well as investigating corporations, I am also a novelist, and I think we live in the age of the corporate fairy-tale: a magical land of unicorns and eternal growth. “What’s the story?” investors like to ask about the latest hot start-up, willing the narrative to be true even as they live the myth of their own absolute rationality….

Is corporate wrongdoing on the rise? Statistics certainly suggest so. The US Securities and Exchange Commission’s latest annual report on its whistleblower program showed a record 12,210 tips were provided in 2021 – a 76% increase against 2020, itself a record-breaker. The commission also made more financial awards to whistleblowers than in all previous years combined – in other words, the information given was real and significant enough to lead to real consequences.

[TW: One of the great lies we have been taught is the influence of John Locke’s ideas onthe creation of USA. Much more important was Algernon Sydney, and his 1680 masterpiece, Discourses Concerning Government.  Sydney explained the nature of man.

“Man is of an aspiring nature, and apt to put too high a value on himself. They who are raised above their brethren, though but a little, desire to go farther; and if they gain the name of king, they think themselves wronged and degraded, when they are not suffered to do what they please. In these things they never want masters; and the nearer they come to a power that is not easily restrained by law, the more passionately they desire to abolish all that opposes it.”

But I consider the greatest and most concise formulation of an oligarch’s mind is Milton’s Satan saying in Paradise Lost, “tis better to reign in Hell than serve in Heaven.”

Milton and Sydney, of course, are two of the preeminent theorists of civic republicanism. -end TW]


Is Liberalism Worth Saving? (forum)

by Patrick J. Deneen, Francis Fukuyama, Deirdre Nansen McCloskey, Cornel West [Harpers, February 2023]

[TW: West twice attempts to bring civic republicanism into the conversation: “But there’s a civic republican tradition that’s important for Lincoln here. We can’t allow liberalism to get credit for everything.”, but the other participants continued to conflate republicanism and liberalism. ]


“We’re Ruled By [glass bowls] Because We Have [glass bowl] Systems: Notes From The Edge Of The Narrative Matrix”

[Caitlin’s Newsletter, via Naked Capitalism Water Cooler 2-2-2023]

“People have a fairly easy time accepting that things are fucked because we are ruled by corrupt assholes. They have a much harder time accepting that we are ruled by corrupt assholes because our corrupt asshole systems will always necessarily elevate corrupt assholes to the top. It’s easier to blame our problems on oligarchs or the Deep State or a cabal of satanic pedophiles than it is to blame them on systems that we ourselves participate in and have lived our entire lives intertwined with and which have been continuously normalized within our culture. If the problem is just a few corrupt assholes then it’s not a very daunting problem, because all you have to do is remove those corrupt assholes and everything’s golden. If the problem is the systems around which our entire civilization is structured, it’s far more daunting. It’s easy to imagine a future without corrupt assholes. It’s almost impossible to imagine a future where human behavior is not driven by profit for its own sake, where we have moved from competition-based systems to collaboration-based ones where we all work together for the common good.” • Hence, the destruction of public health and, in fact, the very notion of a “public” (but maybe it was time for that?)

[TW: How can entire systems go bad? Because they adopt the wrong philosophy of governing. To be more precise: liberalism replaced civic republicanism, killing off the idea that individuals must balance their liberty (now mal-defined as the freedom to loot and accumulate, i.e. “shareholder value”) with their civic responsibility to each other and to society (mal-defined by conservatives and libertarians as “socialism”). ]


“Why they condemned socialism”

[Carl Beijer, via Naked Capitalism Water Cooler 2-3-2023]

“The reason our ruling class singles out socialism for condemnation is that they are specifically afraid of the socialist agenda. They aren’t worried about ‘progressives’ because they know that’s code for ‘liberals and socialists who won’t make socialism a priority.’ They aren’t worried about ‘populists’ because they know that’s code for ‘edgy centrists who want standard centrist reforms.’ But socialism terrifies the ruling class, because try as they have to redefine it, they still haven’t dissociated it from its core agenda. Socialists want nationalization, socialists want worker control of the means of production, socialists want the abolition of private property, socialists want the decommodification of necessities, and these are all things that the ruling class absolutely does not want. Make vague demands about ‘structural change’ or ‘draining the swamp’ and they can work with it; hell, most of our politicians run for office with slogans like this. But make the specific demands that socialists make and all they can say is ‘hell no.’”


How the Left Should Exercise Power Once They Have It

Thomas Neuburger, February 1, 2023 [God’s Spies]

In a piece called “Why the Left Keeps Losing and What They Must Do to Win,” Ian Welsh writes this about what happens when anti-Left governments take power….

“​​​​​​​The left, bless their hearts, tend to think that there are rules, and that they can play by them, win, and be allowed to rule. But all along the process, the left’s opponents do not and will never play by the rules when facing the left.”

[TW: The “left” has a fundamental philosophical flaw: leftists believe that human nature is inherently good, and can be perfected by changing the institutional structures of the economy and polity.

By contrast, the philosophy of civic republicanism on which USA was founded, begins by recognizing the defects and weaknesses of human nature, and demanding that political structures be built to guard against those defects and weaknesses by incorporating checks and balances in the political structure. As I have noted repeatedly the past few weeks, a number of republican theorists explained the nature of oligarchs as insatiable greed and lust for power (see the link on “Amazon’s Endgame”).

At the same time, civic republicanism recognized the capacity of human beings to do good, and demands that political structures also be built to nourish the human spirit and encourage the development and application of the powers of reason (reading the early 19th century debates on creating systems of public education is a mind-boggling exercise in realizing how impoverished and jaded our age’s political discourse has become). On this last point – the promotion of doing good – it is instructive to look at Hamilton’s policies for promoting manufacturing, the early commitment of the federal government to promoting science and technology, and the fundamental role of the national government in creating technological and economic progress. All the devices and technologies you are using to read this — whether on a personal computer or a cell phone — began as projects of the USA national government. —end TW ]


What Hungary’s Purge of Senior Military Officers Can Teach Us All

Ian Welsh, January 31, 2023

American elites, internally, operate by a simple rule that if a member doesn’t betray the class, they don’t go to prison and they don’t lose their cushy lifestyle, even if they lose their power. There’s been some movement to hold Trump to account, but it’s half-hearted, simply because elites don’t want “their” president to be the one on the chopping block next. They all do things which could be considered illegal, after all, they’re little better than Mafia dons.

But if the stakes are “I keep power or I lose everything” then the game changes. The problem is that knowing they essentially have immunity, crimes in the elite class  have become worse and worse over time.


Restoring balance to the economy

[Twitter, via Naked Capitalism Water Cooler 1-31-2023]


US Caterpillar-UAW workers authorize strike by more than 98 percent 

[WSWS, via Naked Capitalism 1-31-2023]


The Week CNBC Started to Panic

Matt Stoller [BIG, via Naked Capitalism 1-29-2023]

“The government filed an antitrust case to break up Google, and the Senate held a brutal hearing on Ticketmaster’s monopoly. Wall Street opinion leader Jim Cramer is officially freaking out.”

This issue I’m going to summarize an extraordinary week, with three major events taking place. Two represent progress for anti-monopolists. There was a groundbreaking Senate hearing on Ticketmaster’s monopoly, and the government filed a case seeking to break up Google. Wall Street is nervous at all the activity, which is why CNBC’s Jim Cramer went on a rant against FTC Chair Lina Khan.

The third event is more low-profile, but represents a major win for Big Tech. Ken Buck, the leading anti-monopoly Republican Congressman, just got fired from his position as the head of the antitrust subcommittee….

Tuesday morning, Ticketmaster got roasted. That afternoon, Attorney General Merrick Garland announced that the Antitrust Division, along with eight states, filed an antitrust suit to break up Google’s advertising business.

That’s a powerful one-two punch, and Wall Street reacted angrily. Live Nation is a beloved asset among financiers, because billionaire consolidator John Malone, who is an opinion leader in corporate America, has controlled it for years. And Google is one of the two most important stocks in the market, with many hedge funds leaning on the firm for reliable returns. To have both of these firms hit in one day by populists they used to be able to ignore is outrageous. Populists are supposed to be silly and harmless, not challenge bankers in their core competency.


Attacking the ‘You Are the Product’ Economy: The FTC takes action against GoodRx for sharing personal health data with advertisers.

David Dayen, February 2, 2023 [The American Prospect]

Consumer Reports broke the story in March 2020 that GoodRx sells customer data to over a dozen internet companies, including Google and Facebook. This allows tech firms to tie the names of the medications people research to their phone or laptop.

It also violates health privacy laws, which are among the strongest. The FTC has had a Health Breach Notification Rule in place since 2009, which requires companies with access to personal health records to explain to consumers when that data has been shared with others without their knowledge. In September 2021, under new chair Lina Khan, the agency warned health apps that they must comply with the rule. Yesterday, it took action against GoodRx, wielding the health breach rule for the first time.

The fine of $1.5 million was smaller than I’d have liked. But beyond that, the FTC prohibited GoodRx from sharing user data with any third parties for the purpose of selling ads, required it to seek user consent (in a straightforward manner, without deceptive user screens) for any sharing of health information whatsoever, forced it to get third parties to delete the data they have, and limited the time frame for GoodRx to retain that data. This is the first time a government agency has asserted that sharing health data for ads is illegal.


How Biden Can End Secretive Corporate Tribunals

Sarah Lazare, February 2, 2023 [The American Prospect]

But while foreign investors can sue governments, it doesn’t go the other way around; outside of certain narrow counterclaims, governments, people, unions, or groups impacted by those companies don’t have the ability to levy cases against companies. It’s as if there were a soccer match, and penalties could only be called against one team. “This is why we find it profoundly unjust,” Pérez-Rocha said. “Governments never win anything. They might not lose a case, but they don’t win anything. Companies don’t have anything to lose.”

Agreements typically allow companies to bring ISDS cases in response to violations of “fair and equitable” treatment. Melinda St. Louis, the director of Public Citizen’s Global Trade Watch, explains that corporations and some tribunals have interpreted this standard broadly. “When [corporate] expectations are different from what happened, they say it is unfair, even if domestic companies received the same treatment,” says St. Louis.

Another common standard is the protection against indirect expropriation, which has been interpreted by some tribunals as government actions or rule changes that reduce the overall value of an investment, or threaten expected future profits. “This asks taxpayers to fund the business risks of international investors,” says Ruth Bergan, the director of the Trade Justice Movement. “It puts private risk into public hands. It socializes risk.”


Class Warfare

Fear And Loathing Among The Union Busters

Julia Rock, January 31, 2023 [The Lever]

At a gathering of the National Restaurant Association’s legal arm, lawyers and executives grappled with a worker uprising.


“Nearly 36 Million Americans Who Tested Positive for COVID-19 Report Having Long COVID Symptoms — Including More Than 40% in Mississippi” 

[Value Penguin, via Naked Capitalism Water Cooler 2-3-2023]

Stunning and important chart.

41% of Americans with household income of less than $24,000 have Long COVID. For Americans with household income over $200,000 17% have Long COVID.


Radhika Desai and Michael Hudson Discuss the Causes and Politicization of Inflation

[Naked Capitalism 1-29-2023]


“Blackstone steps up tenant evictions in US with eye on boosting returns”

[Financial Times, via Naked Capitalism Water Cooler 1-31-2023]

“Blackstone has filed eviction lawsuits against hundreds of tenants across the US as it winds down one of the real estate industry’s most generous pandemic-era forbearance programmes, in a move that executives say will boost financial returns at the company’s redemption-hit real estate fund. Court records from Georgia and Florida show that companies owned by Blackstone have commenced legal proceedings against dozens of tenants every month since August, launching more cases in a typical week than the total for the first seven months of 2022. At the same time, consultants working for Blackstone have been calling local politicians in California to warn of a probable uptick in evictions in areas of the state that have significant numbers of delinquencies, said people familiar with the conversations. The outreach from Blackstone points to the delicate task confronting the private equity group, one of the biggest landlords in the US, as it seeks to maximise returns while operating under far more public scrutiny than local property owners in what has historically been a fragmented market. Blackstone bought billions of dollars worth of apartment buildings, suburban houses and other residential assets during the pandemic.” I would have thought they bought those assets after the Great Financial Crash. Oops. More: “Many of those acquisitions were made by Breit, a $69bn fund aimed at wealthy individual investors that last month imposed limits on withdrawals to curb a rush of investors trying to pull their money out.”


“Swimming in cash, Chevron plans a $75 billion slap in the face to drivers”

[CNN, via Naked Capitalism Water Cooler 1-31-2023]

“While many blue-chip companies reported lower profits last year, Big Oil was having a moment. Crude prices surged, thanks in part to high demand and reduced supply. All of that helped make Chevron the top-performing Dow stock of last year, with shares surging more than 50%. To be clear: It’s not that Chevron, or any of its peers, did anything special to earn their windfall profits last year. There was no big innovation or breakthrough — they just got rich off the price of oil shooting up. Chevron, which is expected to report Friday that profits for 2022 doubled to more than $37 billion, is essentially balking at calls from the White House and some members of Congress to funnel its extra cash into more drilling capacity to help reduce prices for inflation-weary customers. Instead, Chevron is buying $75 billion worth of its own shares, and jacking up its quarterly shareholder dividend. Chevron’s buyback package is so large, according to Bloomberg, that it could fund more than four years of drilling and other projects.”


The Billionaires Just Can’t Wait 

Jessica Wildfire [OK Doomer, via Naked Capitalism 2-1-2023]

Recently, I’ve started digging back through Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism. It’s come up a few times.

Klein describes a level of corruption you’d expect to see in a dystopian novel, but she’s only narrating and documenting American economic policy over the last several decades, as the rich and powerful impose their free-market solutions for everything on everyone and take advantage of disasters and tragedies to do it. As she reveals in extensive detail, an entire shadow network of billion-dollar companies have consistently strongarmed world governments into privatizing all public goods and services, especially education and healthcare. As just one example, she explains how Milton Friedman’s final stroke of evil genius before his death was to kickstart the privatization of New Orleans public schools after Hurricane Katrina. A slew of firms also descended on the city in the aftermath of the disaster. They made a fortune by turning public housing into condos.

Katrina’s just the beginning….

They originally intended to make a killing off vaccines. They didn’t want to stop transmission of the virus. They didn’t want masks or clean air. They didn’t want to eliminate Covid. That wouldn’t be profitable.

Here’s what they wanted:

They wanted the coronavirus to continue circulating and mutating. They wanted more variants. More variants meant more sales. That’s how disaster capitalists think. They don’t see things like pandemics as tragic events that should be stopped. They see them as opportunities to build wealth.

Everyone from Bill Gates to Charles Koch thought this:

Why end a pandemic, when you can manage it?

That was the plan.

The ownership class would preside over the continued mass infection of every other class, while keeping themselves safe with the latest vaccines on top of masks and air cleaning technologies. We got a peak of that at the World Economic Forum meeting in Davos.


Survey: Nearly two-thirds of Americans are living paycheck to paycheck 

[The Hill, via Naked Capitalism 1-31-2023]


The Crackdown on Cop City Protesters Is So Brutal Because of the Movement’s Success 

[The Intercept, via Naked Capitalism 1-30-2023]

“One protester was killed by police, 20 were charged under a ‘domestic terror’ law, and Georgia’s governor gave himself broad ’emergency’ powers.”


How a Drug Company Made $114 Billion by Gaming the U.S. Patent System

[NYT, via Naked Capitalism 1-29-2023]


Salve Lucrum: The Existential Threat of Greed in US Health Care 

[Journal of the American Medical Association, via Naked Capitalism 2-1-2023]

“Perhaps the demoralization of professionals, the conflicted consciences of many executives, and the anger of the public represent potential political energy that, with proper leadership, can become kinetic.”

[Lambert Strether notes this would be “ironic given that the AMA — rather, its hegomonic leadership who as usual are a mere synecdoche for the views of the membership — vehemently opposed single payer for many years.”]

Climate and environmental crises

Wind Turbines Taller Than the Statue of Liberty Are Falling Over

[Businessweek, via The Big Picture 1-29-2023]


Texas Breaks All-time Natural Gas Production Record in 2022

[, via Feedspot Today]


Geothermal Drinks Gas’s Milkshake

Lee Harris, February 3, 2023 [The American Prospect]

Over the course of the last decade’s shale boom, oil field drilling companies led a revolution in directional drilling and hydraulic fracturing (“fracking”) techniques. They perfected long, spindly pipes and fine-tuned self-adjusting diamond-cutter drill bits.

Those technologies, which can endure high temperatures and shoot water through rock, have already solved engineering challenges for geothermal. Rather than relying on places where there is a naturally occurring confluence of water, heat, and porous rock, geothermal developers now have the ability to drill into solid rock, inject water at high pressure, and collect the heated water.

Geothermal isn’t just a freak offshoot of the fossil fuel industry, however. They could be ongoing allies. Oil and gas companies, from oil field services firms to investor-owned utilities, are considering the advantages of a geothermal boom. Utilities could potentially retool gas pipelines as clean geothermal networks, and the oil field services industry could see reason to sell its proprietary technology to geothermal developers.

Dry oil fields could be repurposed as geothermal wells, and those oil fields, like many geothermal sites, are rich in prized minerals like lithium and manganese. That could help solve the up-front cost problem, as companies seeking those minerals will offer advance market guarantees.


Supercharging Green Public Power 

Ryan Cooper, February 3, 2023 [The American Prospect]

The president’s signature climate bill is a huge deal for publicly owned electricity. But it will take work to unlock its potential.

Information age dystopia

[Twitter, via Naked Capitalism Water Cooler 2-1-2023]


Democrats’ political (and now medical) malpractice

“Biden’s Ending of the Covid Emergency Is a Public Health Disaster”

Gregg Gonsalves  [The Nation, via Naked Capitalism Water Cooler 2-2-2023]

“[T]wo recent decisions—by a Democratic Congress and the Biden White House—represent harmful action rather than harmful inaction. Let’s start with the omnibus bill signed in December…. In 2020, Democrats and Republicans—yes, in bipartisan fashion—allowed people on Medicaid to continuously stay on the rolls until the public health emergencies that had been declared at the beginning of the pandemic were lifted. This was a momentous decision and a wise one. According to the Kaiser Family Foundation, ‘Total Medicaid/CHIP enrollment grew to 90.9 million in September 2022, an increase of 19.8 million or more than 27.9 percent from enrollment in February 2020.’ That represents close to a third of all Americans who were protected from losing their health insurance for the past three years. However, Senate majority leader Chuck Schumer, then-House Speaker Nancy Pelosi, and President Biden decided to do the inexplicable [No, it’s not] just in time for the holidays: They put a measure into the bill to delink the continuous enrollment provision in Medicaid from the public health emergency and end it as of March 31, 2023. According to Kaiser, ‘between 5 million and 14 million people will lose Medicaid coverage once the continuous enrollment provision ends.’ But the Democrats weren’t finished. On Monday, the White House announced that it will let the Covid-related public health emergency declarations expire on May 11, 2023… [T]he numbers don’t lie. As Alyssa Bilinski and Kathryn Thompson from the Brown School of Public Health, along with Ezekiel Emanuel from the University of Pennsylvania’s Perelman School of Medicine, wrote in a letter to the Journal of the American Medical Association in November: ‘The US continued to experience significantly higher Covid-19 and excess all-cause mortality compared with peer countries during 2021 and early 2022, a difference accounting for 150,000 to 470,000 deaths.’ Last week, more people died of Covid than perished in the Twin Towers on 9/11.” • Once you accept that the Democrat policy is mass infection without mitigation, these decisions are not “inexplicable” at all. They’re not bugs. They’re features. Features that make Pfizer very happy!


“Hunter Biden converted Delaware house with classified documents into home office”

[New York Post, via Naked Capitalism Water Cooler 1-31-2023]

“Hunter Biden apparently turned his father’s Wilmington, Del. mansion into a high-powered and possibly compromised home office, wheeling and dealing with some of the same nations whose names have turned up in classified documents recently discovered at the home, according to experts and leaked cellphone texts. Hunter Biden listed the idyllic Wilmington home as his address following his 2017 divorce from ex-wife Kathleen Buhle — even claiming he owned the three-bed, four-and-a-half-bath lakefront property on a July 2018 background check form as part of a rental application. The home is also listed as his billing address for a personal credit card and Apple account in 2018 and 2019. At least 12 classified documents — some dating back to President Biden’s career in the Senate — were found on its premises in recent weeks. Some of the classified material found at the home, as well as the roughly 10 items of classified pages found at the Penn Biden Center, related to nations Hunter Biden had extensive business entanglements in — such as Ukraine.”


(anti)Republican Party

“Inside the GOP’s “Save the kids” strategy”

[Axios, via Naked Capitalism Water Cooler 2-2-2023]

“The fractious Republican Party is consolidating around a ‘Protect the children’ platform for 2024 that aggressively targets school policies on gender identity and how racial issues are taught. A year before presidential primaries begin, Republicans see this as a winning formula that can fire up their base and attract some independents, pointing to the recent electoral success of Florida Gov. Ron DeSantis and Virginia Gov. Glenn Youngkin. Much of the battle is being fought at the state and local levels, giving an edge to GOP officials such as DeSantis and Youngkin — both potential presidential candidates who recognized the potency of educational issues early on.”


“The press versus the president, part one”

Jeff Gerth  [Columbia Journalism Review (and twothree, and four), via Naked Capitalism Water Cooler 2-2-2023]

[Lambert Strether writes: “I’m still reeling from this. Within 24 hours after Mueller goes down in flames before Congress — and the very expectant press — Trump picks up the phone and makes a call to get dirt on Joe Biden* — from a CIA asset: Volodymyr Zelenskyy. I’m sure the Big Z couldn’t believe his good luck, and immediately sold Trump to his handlers. In so many ways, Trump comes across as… well, as a little child. An innocent in a world of malevolent grownups (which, given Fred, was certainly true, at least for a short time in Trump’s life). If you have the time to sit down with this, it’s really worth it, just to get the incredibly grotty timeline straight.]


Open Thread


Lean Into The Good


  1. Raad

    NC is trying hard to plaster “civic republicanism” over anything that fits and it looks like it includes you too Ian!

  2. Trinity

    I didn’t make it far before the outrage hit, heh. “Chip War: The Fight For The World’s Most Critical Technology”: critical to whom? To monopoly manufacturers who insert chips into everything so they can both spy on us and force us to buy new ones every five years? Do our children really need to spend all their time playing video games? Does my washing machine really need 15^2 different wash options, and play a little song when the cycle is finished? Exactly how many people need a refrigerator that orders milk? And exactly where are the recycling centers?

  3. GrimJim

    Not quite proper food riots yet, but we’re getting there…

  4. VietnamVet

    There is not a whit of difference Western or the allied Chinese/Russian Empires. Each is a merged corproate state that have enough nuclear weapons to destroy the other.

    The global economic/political system is a plutocracy run by and for corporations to enrich autocrats. Each realm is at the other’s throat to remain or become the new top dog. Corporate marketing hides it but basically business has been monopolized. They are above the rule of law — too big to fail. Prices are hiked, at will, to increase profits. Insulin and chip etching machines are good examples.

    The current low unemployment rate is just the statistics not counting millions with Long-COVID who are unable to work. If the Black Plague experience replays, the remaining workers will see wage hikes down the road if a degree of civilization is preserved. Revolts and a new Reformation are assured.

    The only alternative to the thousand years old traditional oligarchies is the restoration of democracy and government that works for the people. Government contracting out for a new supply of insulin for the VA health system, Medicare, and outside buyers would automatically add competition and lower prices for all who need the medicine to stay alive.

    Since 2014, the Deep State and its Democrat Party decided to go to war with Russia to gain corporate control of Eurasia’s resources. The Obama Administration also tried to pivot to Asia but Joe Biden made it a reality. Simply put, the current western economic system will crash if Russia/China/India/Brazil/South Africa create a gold-based commodity currency outside the fiat US Dollar hegemony.

    If there is no Reformation, the alternative, anarchy will ultimately end human habitation on earth. There are thousands of nuclear weapons that need to be guarded and maintained in safe condition for as long as they exist. Also, nuclear plants need to be decommisioned and entombed. Not to mention, the aftereffects of himan pollution of the ground, air and water.

  5. Ché Pasa

    Re: Housing price inflation

    There are essentially no rentals available out in the wilderness where we live, so I was checking For Sale listings. Wow. I don’t think I’ve ever seen so many properties on the market out here. Almost 50. That’s stunning. About a dozen are listed as “Pending.” More than 20 are “New Construction” — meaning “new placement” as only one is stick-built on land. The rest are manufactured, somewhat nice, even close to high end. Properties range up to 40 acres, but most are in the 2-10 acre range. Prices have doubled since the outset of the pandemic, as more and more people — apparently — want to get out of the city. That’s fine if you can work remotely, but the commute can sometimes be horrendous. Especially after a sudden snow storm. We try to say “Be prepared,” but nobody really is.

    I haven’t seen any price decline since the increase in interest rates. In fact, real estate prices out here keep going up. Not much recently, but nevertheless inching, inching higher. What gives? Part of it, I’m sure, is an appeal to cash buyers who don’t have to care about interest rates. And part is not just an appeal to individuals with cash but to institutional buyers. Of which, we’re told, the market is flooded. I don’t know about that, but it may be.

    There is one large farm for sale, the one I think I mentioned here a while back. Still $2M for the whole outfit and 160 acres. The family is still there and still farming so I guess they’ve put off moving north to the Safe Place for the Christianist Saved. I haven’t been able to talk to them, so I don’t know what’s going on.

    There is also one smaller farm (45 acres) for sale, listed as “Pending,” for under $500,000. A bargain in my view (as long as it has water rights). The rest are mostly “ranchettes.” A few acres to sit out whatever’s coming. And we know that’s going to be something.

  6. anon y'mouse

    some questions, not expecting answers but for pondering:

    how is “job opening” defined and how are they counted?

    if “job opening” is carefully defined similar to being employed/unemployed (you can work for one hour every week and still be considered “employed”, not that you will get far paying your bills on it) and “job openings” are listings on popular websites, then i have more questions.

    what was the “number of job openings” prior to the pandemic vs now?

    my guess has been this for ages, as a person who occasionally looks at online “job openings”—lots of these places don’t really intend to hire anyone and constantly list a “job opening” just in case. then they take people through months of interviews and in the end decide they don’t really want anyone hired “at this time” for whatever reason. i know a number of people who have tried to get a job and been strung along in this way.

    when i took business courses in college, the instructor said that the goal (my translation of his speech: the goal of MBA management) was to constantly fire the worst-performing ten percent of the workforce. which means creating intentional turnover. which means running constant ads for replacements.

    all while forcing your current employees to work harder because they know you are suffering from insufficient staff. and we all know that businesses who can get away with making the current employee do the work for 2-3 employees will continue to do so, all while having their perpetual “job opening” listing to look for the next desperate person to slot in on the treadmill for when their present overworked staff members move on from burnout.

    job openings are bullshit. even front line service position companies have this mentality towards “overhiring” and basically letting their “underperforming” (according to sales metrics) staff go by diminishing hours such that they hope the person gets the hint and moves along. i know this last fact from observing it personally.

    there was a rumour going around that PPP loans would be forgiven under certain conditions, and one of those was not able to obtain enough staff to earn enough surplus to pay them back. i haven’t tracked down whether that “conspiracy theory” was true, but if so then……

  7. Willy

    I’ve noticed the IBM “Let’s Create” ads, telling us we need to let them create solutions to security problems which they helped create. Seems there’s never a smart enough chipset.

    Maybe our critical chips will be needed for our Helping Hands robots, coming soon to a Best Buy near you. They’ll drive you places your Tesla cannot. And after 5 years they’ll suddenly quit working until you buy the “new and improved” chipset, to resolve little glitches like them Amazoning 50 gallons of milk and thousands of dollars worth of video games after you’ve taken away their driving privileges.

    My own personal solution has been to limit my own consumption. Now if I could get my old computer to quit telling me I need some MS software update, after I’ve tried shutting down every flippin auto software update option I could find in the so-called “control panel”.

  8. different clue


    I remember reading somewhere the interesting observation that many of our current technologies are still the good old analog technologies which were invented to solve reality-based problems in a reality-based way. The big difference now is that most of our analog technologies have been infested on purpose with digital cooties and have various digital lampreys attached to their faces. And we are charged for every digital cootie and digital lamprey. And the technologies are mal-designed so that if a cootie or a lamprey fails, the whole item stops working until you buy a new cootie or a new lamprey to insert or attach.

    For example, a digital-cootie infested “smart refrigerator” is still a good old dumm refrigerator full of digital cooties and covered with digital ticks and lampreys. I begin to suspect that at some future point, so many people will become so disgusted with all the digital cooties, ticks and lampreys in and on their smart fridges that they will look for refrigerator decontaminators who know how to take out all the cooties and remove all the ticks and lampreys and make your fridge dumm again.

    We live in a world of analog lake trout appliances and devices with digital sea lampreys stuck to their bodies.

    I will never live in a smart house. I am smart enough for me and my house. I can’t trust a house which is smarter than I am. What if it turns against me?

    ( I make exception for computers like this, which are genuine digital communication/information/entertainment tools in their own right. A computer has to be digital or it won’t compute. But a refrigerator can very well be analog and still refridgerize. A car can be analog and still drive. A toaster can be analog and still make toast.)

  9. different clue

    I will offer the basic gist of a comment I made once before. When the AmeriGov decided to try banning HuaWei devices from America so as to create a space for America’s own 5G chip-facilitative industry, my personal response was that in a perfect world, we would ban 5G from within the borders of America completely and totally.

    I would let China lead the world in 5G and 5G chips and stuff and see how it works out for them over the next 50 years.

  10. Curt Kastens

    I find it funny that the leadership of the United States would at this point expect any country to negotiate with them. The United States has a 400 year history of not negotiating in good faith going back all the way to when the United States was part of the United Kingdom.

    If I were in Putin’s place I would (try to) destroy the world before I negotiated with the treacherous US and or any treacherous NATO country.

    I figure that if the Russians and Chinese can overcome the American “sabotage” of their nuclear arsenals the US will quickly start backing down on their support of the Ukraine.

    There is no need to fear a nuclear war. One should fear an American victory.

    Better dead than ruled by either the American Democratic or Republican Party.

    Does that make me sound like the mirror image of Barry Goldwater? Well at least for those of you odd enought to know who he is, was?

    That is because I AM what I AM. A George Carlin Thomas Paine Mischling.

  11. different clue

    @Curt Kastens,

    When you typed ” odd” enough to know or remember Goldwater, did you mean “old” enough?

    I was very young at that time. But years after it all I remembered reading a sour little saying about the pre-engineering of electoral choice.

    ” They told me that if I voted for Goldwater, I’d get a land war in Viet Nam. Well, that’s what I did. And that’s what I got.”

  12. Curt Kastens

    Last night a some what odd thing happened after I wrote my post about the US being an unreliable negotiating partner.

    I put my computer on Ruhestand. That means is was not quite completely turned off.
    Then when I turned my computer back on it started pinging every 5 seconds. I got a warning that the battery was low and that the battery was not charging. Such information did not make any sense because my computer had not been moved.
    I checked all of the connections and found nothing wrong. None the less the computer appeared to shut down. I punished the on button and it started right up. My computer is old. Normally it takes quite a while to start up. So I tried to go to my email and and the problem started all over again. This time I did a restart on the computer and the problem went away. Such a thing has never happened to me or this computer before.
    Dumb shits who do not believe in con-piracy theories will of course just chalk this up to some sort of coincidence or as a lie of my own creation. That is why the proper name for such people is coincidence theorists. I understand this event as either a threat or as encouragement to continue talking about how the US has neutered Russia and China’s nuclear capability. And or to keep talking about why the US and its allies are not worth negotiating with. I do admit though that I do not really know whether it is a threat or encouragement. I do not know who did it. But my first bet would be the Germany authorities. My computer messages have to pass through their lines first.
    I respond much better to bribes than to threats. Though I understand that i should not be to predictable.
    Canadians should also understand that this war in the Ukraine is also a US and NATO war against the German people and all of humanity, not only against Russians. The Amis has been trying to sabotage energy cooperation between Germany and Russia for a long time. Destroying the pipeline in the North Sea could not have been done without NATO de facto permission. The Russians had no motive to destroy it as they simply had to turn a handle to stop gas from flowing through it.
    This war is also a US-NATO war against the entire planet because know to replace Russia and a German energy source new infrastructure has to be built. This unneccessary work will now add even more CO2 in to the atmosphere. It is more evidence that the ruling elites of the west have many many priorities that Trump trying to limit let alone stop global warming and resource deplition and pollution.
    Now a final point about conspiracy theories. If a person does not speculate about what is really going on in the world by figuring out what the stories behind the reported stories are a person has ZERO chance of knowing what thier enemies are up to. If a person does speculate a person has about as much chance of understanding what is going on as finding a needle in a pile of cow shit after the barn has been shoveled out and piled up. The odds are still very small. But percentage wise much much greater than only believing things that have been reported by someone.
    The difficulty with learning the truth is that the waters are muddled by those manipulating history. For example lots of people believe that JFK was killed as part of a conspiracy. But does not mean that one has to accept the multiple gunmen theories. Lee Oswald clearly had the capability to carry out the assassination on his own. As long as no one stopped him. Or take 9-11. The idea that that any of the towers were brough down by a controlled demolion is easily debunked. Yet it gets repeated over and over again. But the idea that people in the highest levels of the US government knew about the 9-11 attacks ahead of time is a completely different story.
    Anyways writing about these things will not raelly change anything. To change something one would need to mount a massive conspiracy to change the world. The only way that could even get started is if the conspirators had a way to communicate without being detected. That does not exist.
    People who live in a nursing homes not only have a lot of time on their hands they are often suffer from dementia and memory loss as well.

  13. anon y'mouse

    so i have been looking at the Bureau of Labor Statistics website, which supposedly comprises the “job openings” stats.

    and it’s a government poll of 21k businesses. of course, like every other government poll, i have never met anyone who was asked to fill one of these things out. i am sure someone, somewhere does but i have never met any person that does. not for ANY of these governmental statistical poll type thingies. i have seen more action from the CDC asking people for stuff than any other gov’t department.

    they have a disclaimer that they run a number of models, and then make up the monthly numbers based on respondents and then supplement from their models for the non-respondents.

    so, if their charts on non-respondents is correct, they could be “making up” 60% of the data. if i can count correctly, which i don’t count on myself to do.

    another thought: not only did the job openings HAVE TO bounce back up farther than the trendline from before the pandemic necessarily (due to temp layoffs) but we are experiencing one of those shifts in employment and the economy overall. the pandemic changed what people are doing, where they are doing it and how they are doing it. that requires “new” positions everywhere to do slightly different things than before.

    so, this employee shortage is not a shortage in the sense that we just have too many jobs and not enough people. it’s that the entire economy and its activities is shifting over to a new model—the home delivery, work at home, etc model. the “touchless” model. the remote, robotified model.

    so the people (or lack thereof of people) and their desire for higher wages (who wouldn’t need them with 8% inflation?) are being blamed for a changeover in the structure of jobs entirely and the need to hire for those slightly different types of positions. i would liken it to when i started working, at the beginning of the changeover from typewriters and word processors and carbon copies, to the “paperless” office.

    that is my theory. you would need a REAL poll that didn’t have an up to 70% non-response rate supplemented by made-up models, to figure out whether this theory is correct. a deep poll asking why these positions are suddenly open, what the job tasks are, whether they’ve changed, etc. poking around the BLS site, i can’t seem to locate the actual questionnaire but i’m sure it’s somewhere so i will keep poking.

    again, the citizens are always blamed for the problems that capitalism creates for itself. there is always, always an attempt to drive responsibility and liability downwards to the individual.

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