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

Week-end Wrap – Political Economy – July 24, 2022

by Tony Wikrent


Global power shift as USA self-destructs

Alfons Mais: “Russia has resources that are almost inexhaustible”

[Handelsblatt, via Naked Capitalism 7-20-2022] Original here.


[Twitter, via Naked Capitalism 7-21-2022]


Twitter, via Naked Capitalism 7-23-2022]


Record-breaking Chinese bridge clears hurdle to faster transport in border province 

South China Morning Post, via Naked Capitalism 7-19-2022]

PHOTO Luzhijiang Bridge in the southwestern province of Yunnan


China has built the world’s longest single-tower suspension bridge

[Interesting Engineering, July 17, 2022]

The 800-meter-long (2,625 feet) bridge is being built to improve the connection between China and Southeast Asia. It will drastically cut the travel time between the cities of Yuxi and Chuxiong from an hour and a half to only two minutes….

The Luzhijiang Bridge is also impressive because of the incredibly steep valley cliffs it rises out of. Drivers sticking to a 100 mph speed limit will come straight out of tunnels onto the 300-meter-tall bridge from either side. The steel cables used for the suspension bridge had to be secured by drilling a 100-meter tunnel for an anchor.

The bridge will also form part of a new 200 km (124 miles) expressway through Yunnan that will improve the passage to countries including Myanmar, Vietnam, and Laos. The expressway is part of the country’s Belt and Road Initiative, which is designed to improve connections with 140 other countries.


China Maritime Report No. 22: Logistics Support for a Cross-Strait Invasion: The View from Beijing (PDF)

[China Maritime Studies Institute, U.S. Naval War College, via Naked Capitalism 7-17-2022]


Coming Shift in Global Economic Power?

Barry Ritholtz, July 17, 2022 [The Big Picture]



Liberalism, conservatism and the lack of discussion of civic republicanism

Conservative Blocs Unleash Litigation to Curb Public Health Powers 

[Kaiser Health News, via Naked Capitalism 7-20-2022]

Galvanized by what they’ve characterized as an overreach of covid-related health orders issued amid the pandemic, lawyers from the three overlapping spheres — conservative and libertarian think tanks, Republican state attorneys general, and religious liberty groups — are aggressively taking on public health mandates and the government agencies charged with protecting community health.

“I don’t think these cases have ever been about public health,” said Daniel Suhr, managing attorney for the Liberty Justice Center, a Chicago-based libertarian litigation group. “That’s the arena where these decisions are being made, but it’s the fundamental constitutional principles that underlie it that are an issue.”

[TW: Remember that for these bastards, promotion of the General Welfare is NOT  a “fundamental constitutional principle.” To stop the conservative / libertarian shredding of the Union, we need to replace  (anti)Federalist Society “originalist” jurisprudence with John Marshall’s and Joseph Story’s understanding and defense of vigorous national AND state governments, as exemplified in the Munn and Granger cases]


[Twitter, via Naked Capitalism 7-18-2022]


From 21 months ago: 

[Twitter, October 20, 2020, via Naked Capitalism 7-17-2022]


The pandemic

[Twitter, via Naked Capitalism Water Cooler 7-20-2022]


[Twitter, via Naked Capitalism 7-23-2022]


The carnage of mainstream neoliberal economics

Free Markets, Besieged Citizens

Robert Kuttner [New York Review of Books, July 21, 2022 issue]

Why did Democratic presidents embrace an economic credo that annihilated their own public philosophy and its appeal to the electorate?

Reviewed: The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era

by Gary Gerstle
Oxford University Press, 406 pp., $27.95

….The term “neoliberalism” itself is confusing, because for at least a century “liberalism” in the United States has meant moderate left, not free-market right…. The term was also used to describe Senators Gary Hart and Paul Tsongas, among others. See Peters, A New Road for America: The Neoliberal Movement (Madison, 1985).

Neoliberalism in its current economic sense draws on the older meaning of liberalism, which is still common in Europe and which holds that free markets are the counterpart of a free and democratic society. That was the claim of classical liberals like Adam Smith and Thomas Jefferson….

Gerstle’s lens helps us appreciate the self-reinforcing power of neoliberalism. As government became a less dependable source of economic security, people were made to feel that they were on their own, thus internalizing an individualist rather than collectivist view of citizen and society. [TW: leading to the collapse of citizen’s understanding and appreciation of civic republicanism; this is why I decided that we had to go beyond a mere restoration of liberalism, and began promoting civic republicanism instead.]

….The neoliberal perspective, as first articulated in the 1930s by the Austrian economist Friedrich Hayek and by Henry Simons of the University of Chicago, holds that if we want entrepreneurs, financiers, and ordinary citizens to be liberated from state regulation, strong government rules must protect the market from the state. Milton Friedman, in a 1951 essay titled “Neo-Liberalism and Its Prospects,” agreed that this project went well beyond laissez-faire. Gerstle writes, “This strategy was built on a paradox: namely, that government intervention was necessary to free individuals from the encroachments of government.” The historian Quinn Slobodian, in his authoritative intellectual history of neoliberalism, Globalists (2018), goes further: “The neoliberal project was focused on designing institutions—not to liberate markets but to encase them, to inoculate capitalism against the threat of democracy.”

….Gerstle explains how the cultural left also found the libertarian and antibureaucratic aspects of neoliberalism appealing, weakening the New Deal order and its political coalition in yet another way. In the culture wars of the 1960s, the New Left rejected corporate cold war liberalism and unresponsive big government in favor of a wished-for “participatory democracy.” Some of this entailed challenging public institutions. “Both left and right, in their new incarnations, shared a deep conviction,” Gerstle writes, that the bureaucratized system “was suffocating the human spirit.” A few years later, Ralph Nader became convinced that several regulatory agencies had become hopelessly captured by the industries that they regulated and helped persuade Carter that the remedy was deregulation….

Neoliberalism not only protects the market from the regulatory state; more radically, it expands market principles to realms thought to be partially social. Whereas Polanyi, for instance, warned about the tendency of a market society to relentlessly “commodify” social relations, neoliberal theorists embrace this as a virtue, arguing that market measures can be efficiently applied to value everything from human life to the environment….

This has indeed been the dominant set of beliefs behind the policies of the past four decades. Was it a success or a failure? That depends on who you are. For economic elites and the Republican Party, it has been a splendid success. For the Democratic Party, the neoliberal order has been a catastrophe, eviscerating the core claim of progressives since FDR that government can serve the common people. Neoliberalism has thus been both antidemocratic and anti-Democratic….

…during the neoliberal era, productivity growth has been no better than it was in the postwar period. Health insurance became more costly and less reliable as both insurance companies and hospitals were increasingly transformed into for-profit institutions, avoiding unprofitable patients. Retirement security was weakened, as guaranteed pensions were shed by corporations in favor of marketized 401(k) accounts that shifted all the risk and most of the cost to workers. The deregulation of financial markets led to innovations, but they mainly served speculation by insiders and resulted in the financial collapse of 2008.

Politically, the consequence was a broad loss of confidence in Democrats as the party that championed the interests of working people, and in government as an instrument of broad public benefit….

The new regime was codified in the World Trade Organization (WTO), which has far greater enforcement powers than the GATT. As Rodrik has written, this new form of globalization has made capitalism more impervious to regulation and to national democratic accountability. Globalization has become a prime instrument of neoliberalism, both ideologically and institutionally. Gerstle omits this aspect of the story almost entirely.


Unsatisfactory Musings on the Rise of the Neoliberal Order

Brad DeLong, via Naked Capitalism 7-18-2022]

[TW: DeLong tries to deal with Kuttner’s review of Gerstle. I include DeLong here, because it is both amusing and informative to see how a self-described “Davos Man” still clinging to a belief in free trade, tends toward incoherence without civic republicanism as a firm foundation. ]

“Trying to come to grips with the fact that post-World War II Global North social democracy failed its sustainability test.”

[TW: Lambert Strether asks: “Did it fall, or was it pushed?” hinting at the massive role played by USA plutocrats in developing and lavishly funding the libertarian and conservative movements, as well as the neoliberal thought collective. But the other factor to consider is how organized crime began to rise in the 1970s to influence much of Wall Street, international banking, corporate raiding, and private equity in the 1990s.]


The investment drought of the past two decades is catching up with us 

[Financial Times, via Naked Capitalism 7-20-2022]…

France and the US have invested nearly two percentage points of GDP less this century than in the 1970s and 1980s; Germany and Italy about 4.5 points less; the UK and Japan 6 and 10 percentage points less respectively. These are huge numbers. The G7 accounts for about $45 trillion in annual GDP. Restoring their investment ratios could fill nearly half of the global deficit to the $4 trillion the International Energy Agency demands in annual investments in clean technology if we want to hit net-zero by 2050.

Those are total investment numbers, but a similar story only applies to the public sector. In the US, net public investment (after taking into account the depreciation of the existing public capital stock) declined by nearly two-thirds in the decade to 2014, when it fell to 0.5 percent of GDP.


“The Pete Buttigieg Fake Governing Problem”

Matt Stoller [BIG, via Naked Capitalism Water Cooler 7-22-2022]

“The reality is that our industrial systems are breaking down because our government isn’t constraining the powerful people who run them according to short-term profit maximizing goals. That’s why the airlines, for instance, are a mess. Despite consumer complaints about the industry being up 300% since 2019, and $5-15B of tickets that went un-refunded during Covid, the airlines are unchastened. And the reason is that Secretary of Transportation Pete Buttigieg has created an environment ripe for cheating by having his agency issue a record low number of aviation enforcement orders….. The airlines cheated people during the initial stages of the pandemic, but so did banks. Bank of America, for instance, froze people’s accounts who were getting unemployment help. But unlike with airlines, there is a real regulator on consumer protection for banks – the Consumer Financial Protection Bureau Director Rohit Chopra. And the CFPB forced Bank of America to refund customers, and on top of that fined the bank $100 million for “botching the disbursement of unemployment insurance.” Another bank regulator followed the CFPB and issued a separate $125 million fine. The difference between Chopra and Buttigieg is stark…. There are also quieter levers useful to governing. There’s a lot of carping about bad judges of late, and for good reason. But enforcers can also shape how judges think about the law. For instance, the Department of Justice Antitrust Division, run by anti-monopolist Jonathan Kanter, just issued a ‘statement of interest’ in a private lawsuit opposing trucking firms that agree with one another not to hire truckers from each other. The Antitrust Division not only enforces the law directly, but shapes the law through these kinds of briefs. Kanter is trying to create a legal prohibition against these ‘no-hire’ agreements. It isn’t flashy, it isn’t instant, but it restructures markets.”


An Economy of Overfed Middlemen 

Matt Stoller [BIG, via Naked Capitalism 7-22-2022]

Today, this middleman model is so pervasive that venture capitalists are now promoting investment models based on explicit violation of antitrust laws. Take a seed fund called Equal Ventures, launched a few years ago with a specific thesis of looking for middlemen monopolist. In a Medium post, one of the founders noted that his venture invests in monopolization, which, though it feels quaint to say this, is literally outlawed by the Sherman Antitrust Act. I’ve bolded the relevant parts because it’s just so stark.

“A big part of our belief in transforming legacy markets is understanding the economics of those industries and determining the opportunity for the company to carve out a “moat” in that industry’s value chain. While companies never have a moat on Day One, we try to evaluate their “moat trajectory”, which is the long-term sustainable advantage they can have over competitors IF everything goes according to plan. Generally this means the company has the ability to monopolize a segment of the value chain and sustain it given a flywheel inherent in their business model.

“Generally speaking, we want to see the ability to monopolize a $1b+ segment of a total addressable market (margin, not revenue). We can get comfortable with smaller TAM segments provided that 1) there is a near-term path to achieving that (will discuss this shortly) and 2) we believe the segment lends itself well to monopolization, rather than many players.

“Ultimately, we want companies capable of generating long term FCF, and that requires a defensible moat position in the market, not a leaky bucket with lots of revenue.”

The text of the Sherman Act bars ‘monopolization,’ so to write that one is trying to build firms that can ‘monopolize’ is, well, remarkable. Equal Ventures organizes its investments by putting money into what it thinks will be middlemen monopolies, like an AirBNB for child care or an eBay for excess inventory. These are reasonable business ideas, but the goal here isn’t merely to deliver some useful matching service and make money, but to ensure dominance. Such investment strategies end up pushing risk or production off to others, while seizing control of a key link in a supply chain. That’s not just my view, it is literally what the investors say they are doing when they state they want investments where the “company has the ability to monopolize a segment of the value chain.” ….

One core problem we have with our economy is that our business people are focused on controlling what others produce, instead of producing themselves. If we simply got rid of the legal arrangements fostering this business model, then we would have a very different set of commercial arrangements.


The Hidden Fees Making Your Bananas, and Everything Else, Cost More 

[Pro Publica, via Naked Capitalism 7-17-2022]


When Austerity Is a Bigger Problem Than Inflation 

John Authers [Bloomberg, via Naked Capitalism 7-18-2022]


What to do about the present inflation 

[Joseph Stiglitz, Lars. P Syll, via Naked Capitalism 7-21-2022]


Trickle down. Remember that. The evidence base continue to reject the notion as a scam 

Bill Mitchell [via Naked Capitalism 7-23-2022]

Trickle down. Remember that? This was the idea that if we redirect real income towards capital by boosting profits via real wage suppression and/or corporate tax cuts, as if by magic, corporations will start investing the largesse in productive capital, which stimulates economic growth, and, the benefits ‘trickle down’ to the workers who made the initial sacrifices. The evidence base has never supported the idea yet it still resonates. I read two interesting articles yesterday, which are related even if at first blush they may not appear to be. The first reveals the shocking decline in productive investment by both private and public sectors and the long-term damage that that will have for our capacity to meet the climate challenge. The second shows that the arguments that cutting corporate taxes is good for economic growth is false.


They’re not capitalists – they’re a criminal predatory class

Switzerland, Playground of Russian Oligarchs, Emerges as Sanctions Weak Link 

[Wall Street Journal, via The Big Picture 7-17-2022]

Ownership shuffles and tradition of secrecy thwart efforts by Alpine financial haven to punish billionaire allies of Vladimir Putin

[TW: At least one Ukranian has figured out a different means of punishing the bastards: ]

The Haves and the Have-Yachts

[New Yorker, via The Big Picture 7-20-2022]

And yet the marina in Palm Beach was thrumming with anxiety. Ever since the Russian President, Vladimir Putin, launched his assault on Ukraine, the superyacht world has come under scrutiny. At a port in Spain, a Ukrainian engineer named Taras Ostapchuk, working aboard a ship that he said was owned by a Russian arms dealer, threw open the sea valves and tried to sink it to the bottom of the harbor. Under arrest, he told a judge, “I would do it again.” Then he returned to Ukraine and joined the military. Western allies, in the hope of pressuring Putin to withdraw, have sought to cut off Russian oligarchs from businesses and luxuries abroad. “We are coming for your ill-begotten gains,” President Joe Biden declared, in his State of the Union address….

In Palm Beach, the yachting community worried that the same scrutiny might be applied to them. “Say your superyacht is in Asia, and there’s some big conflict where China invades Taiwan,” Denison told me. “China could spin it as ‘Look at these American oligarchs!’ ” He wondered if the seizures of superyachts marked a growing political animus toward the very rich….

In a candid aside to a French documentarian, the American yachtsman Bill Duker said, “If the rest of the world learns what it’s like to live on a yacht like this, they’re gonna bring back the guillotine.” The Dutch press recently reported that Jeff Bezos, the founder of Amazon, was building a sailing yacht so tall that the city of Rotterdam might temporarily dismantle a bridge that had survived the Nazis in order to let the boat pass to the open sea. Rotterdammers were not pleased. On Facebook, a local man urged people to “take a box of rotten eggs with you and let’s throw them en masse at Jeff’s superyacht when it sails through.” At least thirteen thousand people expressed interest. Amid the uproar, a deputy mayor announced that the dismantling plan had been abandoned “for the time being.”

Alex Finley, a former C.I.A. officer who has seen yachts proliferate near her home in Barcelona, has weighed the superyacht era and its discontents in writings and on Twitter, using the hashtag #YachtWatch. “To me, the yachts are not just yachts,” she told me. “In Russia’s case, these are the embodiment of oligarchs helping a dictator destabilize our democracy while utilizing our democracy to their benefit.” But, Finley added, it’s a mistake to think the toxic symbolism applies only to Russia. “The yachts tell a whole story about a Faustian capitalism—this idea that we’re ready to sell democracy for short-term profit,” she said. “They’re registered offshore. They use every loophole that we’ve put in place for illicit money and tax havens. So they play a role in this battle, writ large, between autocracy and democracy.”

….[Captain] O’Shannassy once worked for an owner who limited the number of newspapers on board, so that he could watch his guests wait and squirm. “It was a mind game amongst the billionaires. There were six couples, and three newspapers,” he said, adding, “They were ranking themselves constantly.” On some boats, O’Shannassy has found himself playing host in the awkward minutes after guests arrive. “A lot of them are savants, but some are very un-socially aware,” he said. “They need someone to be social and charming for them.” Once everyone settles in, O’Shannassy has learned, there is often a subtle shift, when a mogul or a politician or a pop star starts to loosen up in ways that are rarely possible on land. “Your security is relaxed—they’re not on your hip,” he said. “You’re not worried about paparazzi. So you’ve got all this extra space, both mental and physical.”

O’Shannassy has come to see big boats as a space where powerful “solar systems” converge and combine. “It is implicit in every interaction that their sharing of information will benefit both parties; it is an obsession with billionaires to do favours for each other. A referral, an introduction, an insight—it all matters,” he wrote in “Superyacht Captain,” a new memoir. A guest told O’Shannassy that, after a lavish display of hospitality, he finally understood the business case for buying a boat. “One deal secured on board will pay it all back many times over,” the guest said, “and it is pretty hard to say no after your kids have been hosted so well for a week.”


There Are Three Separate Cases in Federal Court Accusing JPMorgan Chase of a Culture of Fraud 

By Pam Martens and Russ Martens, July 19, 2022 [Wall Street on Parade]


Exclusive: Hyundai subsidiary has used child labor at Alabama factory 

[Reuters, via Naked Capitalism 7-23-2022]


The nonstop scam economy is costing us more than just money 

[Washington Post, via The Big Picture 7-17-2022]

Relentless waves of sophisticated phone and online scams are impacting people’s mental health.


Complaints to Government Show Americans’ Slow Descent Into Madness Over Spam Calls 

[Vice, via The Big Picture 7-19-2022]

People at the limit of their patience with spam calls have been emailing the chairwoman of the Federal Communications Commission, Jessica Rosenworcel, in a desperate attempt to make the unwanted calls from scammers and robocallers stop. Emails paint a picture of desperate people who just want the phone to stop ringing.


Celsius lawyers claim users gave up legal rights to their crypto 

[Cointelegraph, via Naked Capitalism 7-20-2022]

[TW: ha ha ha — so much for property rights. This is kharma kicking libertarian ass.]


Revealed: oil sector’s ‘staggering’ $3bn-a-day profits for last 50 years

[The Guardian, July 21, 2022, via DailyKos “If only they had told the truth” 7-22-2022]


Big business goes after another Regulator for doing his job, which is protecting consumers 

[Los Angeles Times, via The Big Picture 7-17-2022]

Chopra isn’t cut from that cloth. As CFPB chair, he has taken aim at credit card late fees and bank overdraft fees, which he quite rightly calls “junk fees” through which “large financial institutions feast on their customers,” leaving them feeling “gouged,” as he said in a January news conference announcing an inquiry into these charges.


How Uber won access to world leaders, deceived investigators and exploited violence against its drivers in battle for global dominance 

[The International Consortium of Investigative Journalists, via Naked Capitalism 7-17-2022]


Hubert Horan and Izabella Kaminska: Can Uber Ever Deliver? Part Thirty: The “Uber Files” Are Not the Uber Exposé You Are Looking For

[Naked Capitalism, July 21, 2022]

A point often overlooked in Uber media coverage is that in 12 years of operation the ride-hailing app is yet to produce a dollar of positive cash flow. As of the end of 2021, Uber’s ongoing car and delivery services had produced GAAP net losses of $31bn. [8]

The other too frequently untold truth is that rather than being a beacon of transportation progress, Uber is actually a substantially less efficient, higher-cost producer of urban car services than the traditional taxi operators it has driven out of business. Uber’s business model has never had any ability to profitably produce very large-scale operations at prices the market is willing to pay.

Uber’s rapid growth and ability to drive competitors out of the marketplace have never had anything to do with superior productivity driven by technological breakthroughs. They were driven entirely by tens of billions in unsustainable and predatory subsidies provided by investors who had hoped that some combination of network and scale economies would allow Uber to achieve global dominance of the car service industry. [9]

The major problem with The Guardian’s “Uber Files” series is that it totally ignores the economics of Uber’s business model. Uber’s massive losses are never mentioned. Nor does the series mention the staggering and totally unprecedented $20bn in investor funding, 2300 times the pre-IPO funding Amazon required.  It makes no attempt to explain how Uber’s investors thought they might eventually generate sustainable profits, much less returns on that level of investment.

In the grand scheme of things, Uber has contributed absolutely nothing to overall economic welfare. Thus there was never any tradeoff of bad behaviour versus benefits produced to consider. The short-term consumer gains it claimed to deliver (lower prices/increased service) were always unsustainable. In reality, the model did not improve the overall productivity of urban taxi services, which means its stock price never had anything to do with future profit potential. Uber’s efforts to suppress driver compensation and steamroll local officials trying to enforce longstanding regulations were purely destructive. So too was its effect of driving more efficient competitors out of business, increasing congestion and diverting traffic that weakened local transit systems.


Restoring balance to the economy

The wreck of Bidenomics: Fortunately, we have a good idea of where to go from here.

[Noahpinion, via The Big Picture 7-19-2022]

But the failure actually goes a lot deeper than Manchin. One reason is that what I thought of as the first pillar of Bidenomics — cash benefits — turned out not to be as popular as many had hoped. The idea was that because the expanded child allowance was quasi-universal, it would garner broad support like Social Security did. Initial broad support for the policy seemed to validate that hope. But then, surprisingly, most Americans didn’t want to make the child benefit permanent. Whether that’s because Americans are in a stingy mood, or because they believe that government benefits should come with work requirements, or because they’re worried about the inflationary effects of cash benefits is not yet clear. But what is clear is that cash benefits failed to get the broad popular buy-in that FDR’s social insurance or Reagan’s tax cuts secured.

Climate investment ran into a similar problem. Despite accelerating heat waves, wildfires, and floods, Americans place a pretty low priority on climate action….

But there’s a third big reason Bidenomics failed, and it’s that substantial parts of the program didn’t actually address the needs of the nation as much as I thought they would….

The problem here is the macroeconomic situation. In the Great Depression, our economic problem was unemployment, as it also was during most of the Obama administration. In 2022 our problem is definitely inflation. And whether or not the cash benefits handed out during Covid were a major cause of the current inflation, it’s definitely true that cash benefits are inflationary. This is because poorer people spend a lot more of their income than rich people, so giving poor people a bunch of money means a boost in spending, whether or not you pay for it with taxes on rich people. If you don’t pay for it with taxes, and just borrow to pay for the benefits, it’s even more inflationary….

All of this leaves us with the big question: Where do we go from here? As I see it, the answer has to be some form of what Ezra Klein calls “supply-side progressivism” and Derek Thompson calls “the abundance agenda”. America isn’t dealing with a crisis of jobs right now; we’re dealing with a crisis of costs, both in the macroeconomic inflation sense, and in the long term everything-costs-too-damn-much sense. Making life less expensive for regular Americans is a mission that fits the times we’re in.

Government investment — and encouragement of increased private investment — has got to be a big part of this. High-quality infrastructure and public goods like R&D funding are important for boosting growth in real incomes. And a big push for abundant green energy — whose costs are already lower than fossil fuels and falling by the day — is key to making all kinds of things cheaper.

It’ll also mean a big push for cheap housing and better transit. That will include lots of upzoning and other deregulation, but also a push for government-constructed housing. The YIMBY movement shows the way ahead here; with cities all around the country following coastal hubs into unaffordable territory, this needs to be a nationwide movement.

It will also mean establishing a national health insurance system. This should not be an expansive single-payer system like the plan advanced by Bernie Sanders, focused on eliminating out-of-pocket costs; instead, it should be a system where the government pays some portion of every medical bill and leaves the rest to private insurance. That’s the system used in Japan and South Korea, and it’s very good at keeping costs down


Governments Can No Longer Afford To Leave Energy Security To Market Forces

Alex Kimani [Oilprice, via Mike Norman Economics 7-21-2022]

Russia’s invasion of Ukraine has created an energy crisis in Europe and global energy markets will never be the same.
The new world energy order will be defined by government intervention on a scale not seen in recent memory.
European governments will have to work hard to avoid excessive government interventions in energy markets that might exacerbate the energy crises
Actually, the increasingly threatening effects of climate change were a more significant wakeup call than war, although historically war has justified increased government intrusion in the economy. Now the world is facing a dual threat, either of which could lead to extinction or at least mass culling of the population and realignment of the ecosystem.

The dual threat implies that the world’s leaders are caught in a double-bind trying to address both at once. Climate change requires concerted action, while war places the highest priority on ramping up use of existing energy sources, which are chiefly carbon-based.


France to pay $10 billion to take full control of EDF 

[Reuters, via Naked Capitalism 7-20-2022]

PARIS, July 19 (Reuters) – France’s government is offering to pay 9.7 billion euros ($9.85 billion) to take full control of EDF (EDF.PA), in a buyout deal that gives it a free hand to run Europe’s biggest nuclear power operator as it grapples with a continent-wide energy crisis.


Conservative / Libertarian Drive to Civil War

“Half of Americans expect a civil war ‘in the next few years’”

[The Hill, via Naked Capitalism Water Cooler 7-22-2022]

”A study released Wednesday found that about half of all Americans expect a civil war to occur ‘in the next few years.’ Researchers from the University of California-Davis Violence Prevention Research Program and the California Violence Research Center reported that 50.1 percent of survey respondents said they at least somewhat agree that a civil war will happen soon, while 47.8 percent disagreed. About 14 percent said they ‘strongly’ or ‘very strongly’ agree that a civil war is imminent, while 36 percent said they somewhat agree…. Two-thirds of respondents said there is a ‘serious threat’ to the country’s democracy, and almost 90 percent said it is ‘very’ or ‘extremely’ important for the United States to remain a democracy. But more than 40 percent said having a ‘strong leader’ for the country is more important than having a democracy. Almost 1 in 5 said they agreed ‘strongly’ or ‘very strongly’ with that statement.”


Trumper screams “Bolsheviks!”

Heather Cox Richardson, July 20, 2022 [Letters from an American]

In a webcast after his testimony, Garrett Ziegler, an aide to trade advisor Peter Navarro who appears to have been the person who admitted Trump allies to the White House for the shocking meeting of December 18 where they discussed martial law, continued to claim that the 2020 election was stolen.
As for the January 6 committee: “They’re Bolsheviks,” he said, in an echo of Republican rhetoric calling all opponents communists, “so, they probably do hate the American Founders and most White people in general. This is a Bolshevistic anti-White campaign. If you can’t see that, your eyes are freaking closed. And so, they see me as a young Christian who they can try to basically scare, right?” He attacked the women who have cooperated with the committee with offensive language.


Growing support for political violence raises alarms 

[The Hill, via Naked Capitalism 7-17-2022]


Steve Bannon found guilty of contempt of Congress for defying House January 6 committee 

[Business Insider, via Naked Capitalism 7-23-2022]


“independent state legislature doctrine”

Heather Cox Richardson, July 18, 2022 [Letters from an American]

The case, Texas v. Pennsylvania, argued that those four states, whose voters had chosen Biden and whose electoral votes would give Biden the presidency, had violated the novel “independent state legislature doctrine,” which says state legislatures alone have the right to determine election procedures. This doctrine defies history by saying that when the Framers of the Constitution said that “[t]he Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of chusing [sic] Senators,” they literally just meant the legislatures, without any check by the state constitutions or courts. This would enable a legislature to override the will of the people entirely, but, its adherents insist, that was the Framers’ plan.

In fact, the Framers were so leery of state legislatures’ oversight of elections that James Madison insisted on giving Congress the power to overrule them. Since the Civil War, until very recently, the word “legislatures” has been interpreted to mean the state government, so that a state’s legislature cannot, for example, act in ways that the state courts find violate the state constitution. But since the 2000 Bush v. Gore case, in which the Supreme Court overruled the Florida Supreme Court to stop a recount of the votes in four Florida counties when Chief Justice William Rehnquist suggested limits to the power of state judges, those interested in reducing the power of the voters in favor of the state legislatures have focused on honing this argument.


What really drives anti-abortion beliefs? Research suggests it’s a matter of sexual strategies

[, via Naked Capitalism 7-20-2022]

The crux of this argument is that, for sexually restricted people, other people’s sexual freedoms represent threats. Consider that sexually restricted women often get married young and have children early in life. These choices are just as valid as a decision to wait, but they can also be detrimental to women’s occupational attainment and tend to leave women more economically dependent on husbands.

Other women’s sexual openness can destroy these women’s lives and livelihoods by breaking up the relationships they depend on. So sexually restricted women benefit from impeding other people’s sexual freedoms. Likewise, sexually restricted men tend to invest a lot in their children, so they benefit from prohibiting people’s sexual freedoms to preclude the high fitness costs of being cuckolded.

According to evolutionary social science, restricted sexual strategists benefit by imposing their strategic preferences on society—by curtailing other people’s sexual freedoms.

How can restricted sexual strategists achieve this? By making casual sex more costly.

For example, banning women’s access to safe and legal abortion essentially forces them to endure the costs of bearing a child. Such hikes in the price of casual sex can deter people from having it.


How conservatism conquered America — and corrupted itself 

Zack Beauchamp [Vox, via The Big Picture 7-17-2022]


The right-wing smear campaign against a doctor who helped a 10-year-old rape victim 

[Popular Information, via The Big Picture 7-17-2022]

An editorial published in the Wall Street Journal on Tuesday evening called it a “fanciful tale that was too good to confirm.” Ignoring first-hand accounts, the editorial claimed there is “no evidence the girl exists.” The piece criticizes not providing details that could expose the identity of the 10-year-old, calling it a hoax. Fox News said supporters of abortion rights invented a “fake” rape victim.


Unimaginable abortion stories will become more common. Is American journalism ready?

[Nieman Lab, via The Big Picture 7-17-2022]

In America after the end of Roe v. Wade, one brave source, on the record, is often the best we are going to get. Countless other stories will never be told.


Just 3 Weeks Post-Roe, The Stories Emerging Are Worse Than Anyone Imagined

[Jezebel, via Naked Capitalism 7-19-2022]


“The Abortion Vote In Kansas Looks Like It’s Going To Be Close”

[FiveThirtyEight, via Naked Capitalism Water Cooler 7-21-2022]

“On Aug. 2, Kansans will vote on a state constitutional amendment that would clarify that the state’s bill of rights does not protect Kansans’ right to an abortion. And even though the state leans Republican, new polling and fundraising numbers suggest it’s a close race. The proposed amendment, as its supporters are quick to point out, wouldn’t ban abortion, but it would remove one of the biggest obstacles to making abortion illegal in Kansas. In 2019, the state Supreme Court ruled that the right to bodily autonomy in the state’s bill of rights includes the right to abortion — separate from any rights guaranteed (or not guaranteed) by the U.S. Constitution…. If the amendment passes, on the other hand, the Kansas constitution would no longer protect abortion and more restrictions are likely, particularly if Republicans take back the governor’s mansion in the midterm elections. The vote will be an early bellwether for how Americans are thinking about abortion in the lead-up to the midterms….. Regardless of the outcome, the vote in Kansas will tell us something important about how the public is reacting to the U.S. Supreme Court’s decision to overturn Americans’ constitutional right to abortion. The court’s decision wasn’t popular — but now we’ll get our first chance to see if the ruling will actually spur voters into action.”


As professionals flee antiabortion policies, red states face a brain drain  

[Los Angeles Times, via The Big Picture 7-21-2022]

Early indications, however, are that they may raise new obstacles to recruiting workers whose skills and qualifications allow them to choose from multiple job opportunities.


Information age dystopia

[Twitter, via Naked Capitalism 7-21-2022]


A wide range of routers are under attack by new, unusually sophisticated malware 

[Ars Technica, via Naked Capitalism 7-17-2022]


IRS refuses to fix controversial ‘math error’ notices that have baffled millions of taxpayers 

[Fast Company, via Naked Capitalism 7-17-2022]


The Slow Erosion of Amazon’s Power 

Matt Stoller [BIG, via Naked Capitalism 7-17-2022]


Nearly half of Gen Z is using TikTok and Instagram for search instead of Google, according to Google’s own data 

[Business Insider, via Naked Capitalism 7-17-2022]


Climate and environmental crises

At Peak of Its Wealth and Influence, Arizona’s Desert Civilization Confronts A Reckoning Over Water 

[Circle of Blue, via Naked Capitalism 7-18-2022]

The most revealing and menacing evidence of that fact has emerged on the Colorado River, which supplies 36 percent of the state’s water. The river’s flow is 20 percent lower than it was in the 1990s. The country’s two largest reservoirs — Lake Mead, which opened in 1934, and Lake Powell, in 1963 — are on the river and were designed to hold 55 million acre-feet of water. (One acre-foot equals 325,852 gallons.) At 30 percent of capacity combined, they now hold less water than at any time since soon after they were opened. In total, 36 million acre-feet, or nearly 12 trillion gallons, of storage space is empty….

State lawmakers and business executives have anticipated the confrontation for nearly a decade and insist that there is no immediate crisis. More than 13 million acre-feet of water — a nearly two-year supply — has been purposefully stored in underground reserves specifically for use in emergencies. Republican Gov. Doug Ducey has convened expert committees. He’s also urging the Legislature to establish a new state agency, the Arizona Water Authority, and commit over $1 billion to a new strategy for securing additional sources of water, like building desalination plants and harvesting flood waters from the Mississippi River. Arizona and the six other Colorado River Basin states have a 2026 deadline to reach a new agreement on sharing the river’s water.


[Twitter, via Naked Capitalism 7-21-2022]


John Phipps: Why Can’t the U.S. Figure Out a Way to Move Water From the Great Lakes to the West? 

[AgWeb, via Naked Capitalism 7-21-2022]


Governments Are Ignoring An Easy Climate Fix

[The Lever, July 18, 2022

To reduce methane emissions, U.S. and European officials recently suggested targeting livestock and agriculture in Asia and Africa — but ignored oil and gas emissions on their home turf.


Democrats’ political suicide

“Democrats’ Problems Go Beyond Joe Manchin”

Ross Barkan [The Atlantic, via Naked Capitalism Water Cooler 7-18-2022]

“[Manchin’s] clout, however, is a greater reminder of Democratic failure. It didn’t have to be this way. The 50-50 Senate could have been a 51-49 Democratic Senate or even 52-48. In the last two election cycles, Democrats lost winnable races with flawed candidates or struggled, in the case of Bill Nelson of Florida, to defend an incumbent in a blue-wave year. Manchin agita is better reserved for the disastrous campaign of Sara Gideon, the Maine Democrat who spent more than $63 million to lose to Susan Collins and still had almost $15 million left in her account after the election. Gideon’s 2020 loss was galling because Joe Biden ran strongly in Maine, beating Trump 53 to 44 percent. Collins, a moderate Republican, was one of the few candidates anywhere to manage an effective ticket-splitting bid, winning over many Biden voters. Gideon’s uninspiring and overtly nationalized campaign was an ill fit for Maine, emblematic of all the ways Democrats in D.C. have failed to connect in rural America. Beyond Maine, Democrats’ missed opportunities in Florida and North Carolina will probably haunt them for years to come. While Florida has become, since 2020, a foreboding state for left-of-center candidates, 2018 was a rare opportunity for Democrats to at least defend their gains. As Republican Ron DeSantis very narrowly defeated Andrew Gillum, Florida senator Bill Nelson fell to Governor Rick Scott, a GOP arch-conservative. Nelson lost by just 10,033 votes, an absurdly close margin…. Unlike Maine, North Carolina was not a Biden state in 2020: Trump won it by just a single percentage point. A strong Democratic contender, however, could have run ahead of the presidential ticket and won a slim victory. Roy Cooper, North Carolina’s Democratic governor, accomplished this twice. But the national Democrats’ choice of Cal Cunningham, a moderate former state senator, to take on Republican Thom Tillis would backfire when news of an extramarital affair broke shortly before Election Day. The affair, though, did not doom Tillis alone. The Cunningham campaign was a milquetoast, insipid endeavor, offering little in the way of a compelling policy or vision. Had Schumer and the Democratic Senatorial Campaign Committee been more encouraging to a young, energetic state senator named Jeff Jackson, it’s possible Democrats would be holding the seat today. None of this should spare Manchin criticism. Rather, it’s a reminder for activists and ordinary Democratic voters that one senator from West Virginia does not encompass all that is wrong with the party.”


‘The Art of Losing the Abortion War,’ for our dear American leaders

[Washington Post, via Naked Capitalism Water Cooler 7-19-2022]

It’s not just the abortion war. “The art of war is of vital importance, Sun Tzu once said, ‘a matter of life and death,’ a ‘subject of inquiry which can on no account be neglected.’ His goal was to teach leaders how to secure victory in battle. But securing defeat is also an art. Here is how American leaders can elegantly lose to their opponents and confidently expose our nation to danger.” A few of the items: “2. All losing in warfare is based on falling for deception,” “3. Self-deception is also key to defeat,” “16. Above all, do not react quickly,” “20. In war, always practice disorder. Drain the motivation of your supporters and give confidence to your opponent, and the fruits of political defeat will be yours.”


The Good, the Bad and the Omitted in the Electoral Count Act

Harold Meyerson, July 21, 2022 [The American Prospect]

If ever there was a piece of legislation that embodied the words “necessary but not sufficient,” it’s the Electoral Count Act, which a bipartisan group of 16 senators announced yesterday that they had agreed upon its terms and were introducing into the Senate.

The proposed act addresses much that’s wrong with our Electoral College setup, except the Electoral College itself. And the timing of its release—on the eve of a primetime hearing telling us more about Donald Trump’s culpability for the January 6th insurrection – appears to be a Republican attempt to upstage the hearings and its devastating revelations….

To be sure, the proposed legislation, which already has nine Republican senators supporting it and thus needs just one more to get past the filibuster, fails to stop Republican-run states from doing all they can to make it hard for citizens they fear may vote Democratic—chiefly minorities and the young—from voting.


“Glenn Ivey wins a Maryland Democratic House primary seen as a proxy fight over Israel”

[New York Times, via Naked Capitalism Water Cooler 7-21-2022]

“Glenn Ivey, a former state’s attorney for Prince George’s County, rode a wave of support from pro-Israel groups to win the Democratic nomination to represent a House district in the predominantly Black middle-class suburbs north and east of Washington, according to The Associated Press. Mr. Ivey defeated Donna Edwards, the first Black woman elected to the House from Maryland, who left the seat to run unsuccessfully for the Senate in 2016 and had hoped to return. The district is heavily Democratic, meaning Mr. Ivey will almost certainly win the general election this fall. The race, dominated by Mr. Ivey and Ms. Edwards, was not an ideological contest. Both candidates are progressive Democrats and Black lawyers. Instead, it became a proxy fight over Israel between the American-Israel Political Affairs Committee’s new super PAC, the United Democracy Project, and progressive groups led by J Street, a liberal Jewish organization pushing for change in the static conflict between Israelis and Palestinians. The United Democracy Project and another group, the Democratic Majority for Israel, spent more than $6.3 million to defeat Ms. Edwards, over her early support for a nuclear deal between Iran and five industrial countries, including the United States, and votes she took in the House that were seen as critical of Israel.”


“Democrats spend millions on Republican primaries”

[Open Secrets, via Naked Capitalism Water Cooler 7-21-2022]

“Political groups and nonprofits aligned with the Democratic Party have spent nearly $44 million on advertising campaigns across five states’ Republican primaries to boost the profile of far-right candidates in California, Colorado, Pennsylvania, Illinois and Maryland. Democrats strategy is rooted in the belief that these candidates — many of whom spread unfounded claims that the 2020 presidential race was stolen from former President Donald Trump — will be easier to defeat in a general election. Democratic spending has helped secure Republican nominations for candidates in Illinois and Pennsylvania. In Maryland, Democrats are spending on a Republican gubernatorial primary that is still ongoing and is viewed as a tossup. But in California and Colorado, Democrats spent money elevating the profile of candidates who did not advance to the general election.” • It’s as if the Social Democrats were spending money on the Nazis. Amazing to see the Democrats doubling down on the Pied Piper strategy after it failed catastrophically in 2016. Perhaps they think their current candidates are a lot better than Clinton? Trust me, they’re not — at least not the candidates the brain geniuses at DNC are funding. Granted $44 million isn’t all that much, but it’s not nothing, especially in a primary.

Disrupting mainstream politics

Protecting Rights Threatened by Clarence Thomas

Robert Kuttner, July 20, 2022 [The American Prospect]

Yesterday the House took the first step, passing the coyly titled Respect for Marriage Act, which codifies the Court’s 2015 Obergefell decision protecting same-sex marriage. The strategy of splitting Republicans worked beautifully….

Even better, as my colleague David Dayen pointed out, several Republicans facing close re-election races in swing districts voted no. This strategy is a template for 2022. Democrats should move other legislation codifying basic rights under threat by the current court, as well as measures popular with voters such as bills to drastically cut drug costs, and dare Republicans to vote against them.

All of this moves the 2022 midterm elections to a terrain where Democrats can win, and takes the spotlight off things like gas prices and Biden’s personal popularity. It reminds voters just how extreme most Republicans are.


Open Thread


Politics Series: Government


  1. bruce wilder

    Noahopinion citing Ezra Klein is just neoliberalism updated. You all know that, right? Right? Just checkin’ cause it worries me that this drivel retains its seductive power even after all we’ve been through.

  2. NR


    Government investment — and encouragement of increased private investment — has got to be a big part of this. High-quality infrastructure and public goods like R&D funding are important for boosting growth in real incomes. And a big push for abundant green energy — whose costs are already lower than fossil fuels and falling by the day — is key to making all kinds of things cheaper.

    It’ll also mean a big push for cheap housing and better transit. That will include lots of upzoning and other deregulation, but also a push for government-constructed housing. The YIMBY movement shows the way ahead here; with cities all around the country following coastal hubs into unaffordable territory, this needs to be a nationwide movement.

    It will also mean establishing a national health insurance system. This should not be an expansive single-payer system like the plan advanced by Bernie Sanders, focused on eliminating out-of-pocket costs; instead, it should be a system where the government pays some portion of every medical bill and leaves the rest to private insurance. That’s the system used in Japan and South Korea, and it’s very good at keeping costs down.

    I don’t understand your complaint. None of what he’s suggesting here is neoliberal.

  3. anon y'mouse

    bruce wilder–it will never die as long as a requirement for graduation from college is ECON 101/102 which ingrains simplistic market “beliefs” in everyone passing through the building.

  4. different clue

    . . . ” It will also mean establishing a national health insurance system. This should not be an expansive single-payer system like the plan advanced by Bernie Sanders, focused on eliminating out-of-pocket costs; instead, it should be a system where the government pays some portion of every medical bill and leaves the rest to private insurance. That’s the system used in Japan and South Korea, and it’s very good at keeping costs down. ”

    Permitting the private profiteer insurance companies to insert themselves into any National Health Care or National Health Coverage system is exactly neo-liberalism and is designed specifically and only to preserve their racketeering toll-gate choke-pointing profit-taking as now. Pointing to “Japan” and “Korea” is only a diversionary bright shiny squirrel object designed to hide the goals of the private profit insurance rackets and their well paid hasbarists.

    The very least we can do is National CanadaCare Coverage, like they have in Canada.

  5. bruce wilder

    NR: I don’t understand your complaint. None of what he’s suggesting here is neoliberal.

    I kind of feel this defines your politics, NR.

    You hear “national health insurance system” and nod approvingly and completely ignore that he is rejecting single-payer or a policy aimed at reducing out-of-pocket expenses in favor of a (“public-private partnership”) re-insurance scheme to subsidize private health insurance with government funds. Nevermind that that is pretty close to what Obamacare is now and it sucks (i.e. costs continue to inflate and outcomes in health and life expectancy are terrible).

    Neoliberal ideology is all about government intervening to support private, for-profit business participation in everything and especially where it corrupts. Health care is a prime example. Honest economic analysis exposes plainly why for-profit health insurance is a bad idea and for-profit organization of many aspects of health care is also a bad idea (Pharma). We have run the experiment and the data are in.

    But, here Noah is, endorsing yet another scheme to subsidize business in a sector where it predictably performs badly. Sure he covers his ass with off-hand reference to Japan and Korea, but only to endorse their use of private insurance. Japan’s single-payer price-setting goes unmentioned as is that no country other than the U.S. uses specifically for-profit insurance extensively. (The U.S. did not 30 years old either.)

  6. NR

    You hear “national health insurance system” and nod approvingly and completely ignore that he is rejecting single-payer or a policy aimed at reducing out-of-pocket expenses in favor of a (“public-private partnership”) re-insurance scheme to subsidize private health insurance with government funds.

    Actually I was looking at the entirety of what he wrote, not just cherry-picking one item. If we briefly summarize what Noahpinion suggested, here is what we have:

    – Government investment in high-quality infrastructure. This is not neoliberal.
    – Government investment in public goods such as research and development. This is not neoliberal.
    – A push for abundant green energy. This is not neoliberal.
    – A push for cheap housing and better transit, including government-constructed housing. This is not neoliberal.
    – A national health insurance system. Noah does say that private insurance will have a role here, but crucially, he also says that the government would pay a portion of every medical bill, not subsidize insurance the way Obamacare does. So this one is, perhaps, half neoliberal and half not.

    So out of five things he suggests, 0.5 of them are neoliberal. I don’t think it’s fair to take this and say he’s pushing for neoliberal ideology. In fact nowhere did he suggest giving more money to rich people or implementing austerity measures, which are the core tenets of neoliberal ideology.

  7. bruce wilder

    His endorsement of public investment is qualified by “encouragement of increased private investment”

    His “big push” on housing “will include lots of . . . deregulation”

    I am also somewhat familiar with Noah’s larger body of work, and where he is coming from and where he is going to with his arguments is . . . neoliberal, in a word. Like Ezra Klein he is all wonky and earnest, and will pitch aspirations of the left but the proposals are always neoliberal schemes to make more money for financial institutions while solving no real problems of ordinary people suffering under the corruption he advocates oh so prettily.

    He will forever be returning from the field of politics regretfully concluding such-and-such idea just wasn’t “popular” and it is back to the wonky blackboard to devise some new Rube Goldberg workaround full of complications, income qualifications or scheme to “leverage” private capital, all to never solve any problem.

  8. bruce wilder

    Noahopinion’s “green energy” push may be the most egregiously neoliberal thing in his essay. Of course, he gleefully proclaims utopia: renewables are already “cheaper” (Mr Market says so in market prices, so it must be true — it is hard to get more neoliberal than that!) but somehow despite being “cheaper” a big push from the state is needed.

    Two points from an honest economist (me): 1.) renewables as and in a system of energy production and distribution are not cheaper than fossil fuels for which the world remains desperate; 2.) all energy production and use entails entropy and thus waste and damage to an environment whose capacity to assimilate that waste is being overwhelmed. If the human race is to head off climate change, ocean ecology collapse, plastics pollution and any number of related problem, the vampire economics of financialization and globalization that Noah remains so enamoured of will have to give way to a realization that humans must embrace not endless growth for profit, but restraints on all energy use in a transition to a regime of radical conservation.

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