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

Week-end Wrap – Political Economy – June 13, 2021

by Tony Wikrent

Strategic Political Economy

[Twitter, via Naked Capitalism 6-11-21]


Vast Majority of Voters Want Higher Taxes on Wealthy, Corporations

[Americans For Tax Fairness, via Daily Poster 6-12-2021]

Nearly 7 in 10 voters support raising taxes on the wealthy and corporations, according to a new poll from ALG Research, Hart Research, and Americans for Tax Fairness. Moreover, voters become more supportive of President Joe Biden’s economic plans when they are told they will be funded by taxes on the wealthy and corporations.

The Global South has lost $152 trillion through unequal exchange since 1960
Dylan Sullivan [Progress in Political Economy, via Mike Norman Economics, June 7, 2021]

Dependency and world-systems theorists have long argued that “unequal exchange” is a key driver of global inequality. Since wages and natural resource prices are much lower in the global South than the North, poor countries must export many more units of embodied labour and resources than they import in order to achieve a monetary balance of trade. This creates a constant transfer of labour and ecology from the periphery to the core, developing the latter but impoverishing the former.

In a recent paper in New Political Economy that I co-authored with Jason Hickel from the University of London, and Huzaifa Zoomkawala, a data analyst based in Karachi, we quantify the value that has been appropriated from the South through unequal exchange since 1960. To do this, we use a method developed by the economist Gernot Köhler. Köhler proposes that we can use purchasing power parity (PPP) exchange rates constructed by the World Bank to value the South’s exports at the North’s price level. By subtracting the actual market price that the South received for its exports from this figure, we can measure the commodities appropriated by the imperialist states, in terms of the Northern price of those commodities.

Using Köhler’s method, we find that in 2017 the ‘emerging and developing economies,’ as defined by the IMF, lost $2.2 trillion worth of goods to the ‘advanced economies.’ This represents an enormous loss for the South. These resources could have ended extreme poverty 15 times over, but instead they were transferred gratis to the core. This windfall is of enormous benefit to the centres of empire. For instance, in 2017 the US gained $2,634 per person through unequal exchange, while the average Australian citizen received $3,116 from the South. Since 1990, the North’s annual gains from unequal exchange have sat at 5.2% of GDP, considerably higher than the North’s annual growth rate. In other words, if not for imperialist plunder, aggregate income in the North would have been declining for decades. The extraordinary levels of material consumption currently enjoyed in the North are predicated upon exploitation and poverty in the periphery.

Figure 1 shows total value transfer since 1960. All up, the South has lost $62 trillion (constant 2011 dollars), equivalent to 97% of its 2017 GDP. If this surplus had been available to the South, it could have been reinvested in domestic economic development. If we assume this surplus would have grown at the same rate as Southern GDP, it would now be equivalent to $152 trillion.…

And don’t forget the RAND study that found in USA alone, the one percent have taken over $50 trillion from the bottom 90 percent since 1975Trends in Income From 1975 to 2018.

Global Investable Assets Reach Record $250 Trillion

[Institutional Investor, via The Big Picture 6-10-2021]

Financial wealth rose significantly even amid the pandemic. That means asset managers have new opportunities among the high-net-worth and to bring alternatives like private equity to individuals.

Despite a year of economic uncertainty, financial assets, including stocks, bonds, and other investment funds, globally reached a record $250 trillion in 2020, according to a report by BCG released on Thursday. An additional $235 trillion was in real assets, led by real estate ownership, making up 48 percent of total global wealth….

Last year more than 6,000 people became “ultras,” individuals whose financial wealth exceeds $100 million. The segment now makes up a total 60,000 people worldwide with a combined $22 trillion in investable wealth or 15 percent of the world’s total. With $5.8 trillion in 2020, the U.S. topped the list as the most concentrated market for investable wealth; followed by Mainland China with $3.6 trillion, which was the fastest growing wealth market, increasing 26.5 percent between 2019 and 2020.

‘Healthcare’ Is the Economy

[MedPage Today, via Naked Capitalism Water Cooler 6-10-21]

“If we learned anything in 2020, it should be that public health is not separate from economic health. “Healthcare” is the economy, a meta-market around which $142 trillion in global GDP is linked and flows. It’s ‘system value’ that matters. This is why China is moving away from gross domestic product (GDP) as a measure of strategic success, instead introducing the concept of ‘gross ecosystem product’ (GEP), the total value of final ecosystem goods and services supplied to human well-being, as a new standard. The organizing idea is not ‘cost,’ but the ‘production of health’ as a new narrative.

New Report by Corporate-Funded Think-Tank Reveals How Profit-Driven Motives Drive New Cold War against China

[Internationalist 360º, via Mike Norman Economics, June 6, 2021]

Neoliberalism: corporate profit as public purpose….

The United States might learn from China’s success in investing in high-speed rail and try and emulate it; however, according to the ITIF, China’s high-speed rail policies damage “innovation” by privileging domestic market development and state-owned enterprises over the interests of private, foreign firms primarily residing in the West. China is accused of employing a form of “mercantilism” to manipulate the global market at the expense of the superior capabilities of Western, Japanese, and American investors.

The term “mercantilism” has been used by big business interests in the U.S. and West to portray China’s policy of indigenous development as a high crime against the free market. In fact, the ITIF has been sounding the alarm about China’s prioritization of its own tech sector since 2013.

It lamented that China was no longer keeping its promise “to be a low-cost production platform for foreign multinational corporations (MNCs).” As if the Chinese government’s function was to serve the latter’s needs and not that of its own people.

The Pandemic

A Very Calm Guide to the Lab Leak Theory

[Slate, June 3, 2021]

The carnage of mainstream neoliberal economics

White House admits CIA involvement in “War on Corruption” which jailed Lula and elected Bolsonaro

[Brasilwire, via Naked Capitalism 6-6-21]

Will the Sacklers get away with it?

Patrick Radden Keefe [The Ink, via Naked Capitalism Water Cooler 6-10-21]

“[B]etween those two guilty pleas, in 2007 and 2020, all these lawsuits start to converge around Purdue. Every state in the union is suing the company. Half the states filed suit against the Sacklers themselves. But all the while, in the background, quietly, the family was pulling money out of the business. Three hundred million here. Four hundred million there. So the company is committing crimes, and the family is still very much calling the shots about what’s happening at the company, and the whole time those crimes are being committed, the family is siphoning money out. The Sacklers ultimately took more than ten billion dollars out of Purdue. They did this because they knew a day of reckoning was coming, and they wanted to be ready when it came. So in 2019, when the family had effectively looted its own company, the Sacklers said, “Too bad about all those lawsuits. The company’s got no money left! We’re kicking it into bankruptcy.” When Purdue filed for Chapter 11, all that litigation was put on hold, so the business could be restructured and hundreds of thousands of creditors could fight over the scraps. Now, the Sacklers have not declared bankruptcy. They still have all that money they took out of the company. But they want to use an exotic feature of the bankruptcy process to evade personal liability. What they’re hoping is that this federal bankruptcy judge in New York will give them a sweeping grant of immunity from any and all civil lawsuits related to the opioid crisis. And they’re ready to sacrifice the company to do it. Protect the family, at all costs.”

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax and Why We Are Publishing the Tax Secrets of the .001%

[ProPublica, via Naked Capitalism 6-9-2021]

Meager Rewards for Workers, Exceptionally Rich Pay for C.E.O.s

[New York Times, via Naked Capitalism 6-12-2021]

It’s the Worst Possible Time to Cut Unemployment Benefits

David Dayen, June 6, 2021 [The American Prospect]

Conservatives believe that comfortable lifestyles on the dole are to blame for workers declining to take low-wage positions that were recently COVID death traps. Liberals blame a lack of child care holding back mothers and fathers from re-entering the workforce, or lingering fears about contracting the virus making workers hesitant to return….

The bad news is that conservative-leaning states have decided on a premature solution to what doesn’t look like a long-term problem. Twenty-five states will cut off extended unemployment benefits starting as soon as next week, rather than letting them run through Labor Day as scheduled. Not only will the federal $300-a-week enhancement go away, but benefits for workers not normally eligible for unemployment, like gig workers and freelancers, will expire, leaving them with no assistance.

Showing a remarkable nonchalance about this forced austerity, White House Press Secretary Jen Psaki said last Friday that Republican governors “have every right” to cut enhanced unemployment benefits early. The administration could have challenged the cuts under federal law….

According to the Century Foundation’s Andrew Stettner, about four million Americans will lose benefits in these states, and a total of $22 billion in federal dollars will not be issued. That’s a key number to keep in your head. Because while we’re all talking about labor shortages, the consequence of this and other looming expirations of federal support will be a drop in near-term aggregate demand. Not only is it immoral to leave millions of people with no help amid economic stress, but it’s counterproductive and will needlessly damage the economy.

Benjamin Franklin, 1783:

“….To desire to keep down the rate of wages… is to seek to render the citizens of a state miserable… it is, at most, attempting to enrich a few merchants by impoverishing the body of the nation; it is taking the part of the stronger in that contest, already so unequal, between the man who can pay wages, and him who is under the necessity of receiving them; it is, in one word, to forget, that the object of every political society ought to be the happiness of the largest number…. The low rate of wages, then, is not the real cause of the advantages of commerce between one nation and another; but it is one of the greatest evils of political communities. — “Reflections on the Augmentation of Wages, Which Will Be  Occasioned in Europe by the American Revolution”

If it’s not enhanced unemployment benefits, why are people turning down jobs?

[MarketWatch, via Naked Capitalism 6-7-2021]

But a recent poll of 1,000 unemployed workers by CNBC and Morning Consult told a different story. Respondents said the trickle-down effect of job openings had not reached them — at least, not yet. Some 87% said they had not received job offers in the last six months.

What’s more, 65% of those surveyed said unemployment benefits were not a factor in their rejecting a job. Instead, they cited too-low salary (36%), concerns about COVID-19 (35%) and the need to care for family (31%). In fact, 76% of those offered a new position said the proposed wages were lower than their prior job.

“Uber paid ‘incredible’ amount to avoid landmark judgment”

[Australian Financial Review, via Naked Capitalism Water Cooler 6-11-21]

“Uber paid a ‘life changing’ $400,000 to a driver so she would drop a legal challenge that could have forced the company to overhaul its business model and pay its workforce minimum pay and conditions. The Transport Workers Union used parliamentary privilege at a Senate inquiry on Thursday to reveal the confidential settlement the company’s on-demand delivery arm had made with terminated driver Amita Gupta shortly after three Federal Court judges made critical comments about its arguments at trial. The settlement, some 26 times more than what [Former UberEats driver Amita Gupta] was likely to receive under the law, revealed how far the company would go to avoid paying minimum wages, the union said. ‘The most telling feature of this settlement was the extent of the settlement,’ TWU national secretary Michael Kaine told the inquiry. ‘I think it’s very clear that UberEats wanted to ensure that there were no risks that its exploitative system would be overturned by the full court and they were willing to pay an incredible amount of money, a life-changing amount of money, to the Guptas to make sure that moment in time did not occur.”

Predatory Finance

She Exposed the Truth About ‘Dirty Money’: It’s Everywhere

Mark Schoofs, editor in chief of BuzzFeed News, June 10, 2021 [New York Times]

….a federal judge imposed prison time on Natalie Mayflower Sours Edwards, a former Treasury Department official who, by providing secret government documents to an investigative reporter, did more to bring transparency to the global financial system than almost anyone else in recent memory.

If Mr. Biden really wants to fight corruption and bring transparency to global finance, he should pardon Ms. Edwards. He should also demand that the Justice Department, when deciding whether to prosecute someone who provides journalists with sensitive information, take into account the public importance of what the disclosures reveal.

In Ms. Edwards’s case, the public importance of the information she provided was enormous….

The documents she provided ended up serving as the basis for hundreds of important news articles, including ones that exposed suspicious financial transactions made by companies linked to President Donald Trump’s former campaign chairman Paul Manafort as well as those involving Russian embassy employees. Most significantly, the documents Ms. Edwards provided lay at the heart of a collaborative investigation last year called the FinCEN Files, involving BuzzFeed News, the International Consortium of Investigative Journalists and 108 other news organizations that revealed financial corruption on a global scale.

Taken together, the articles exposed a dark truth: “Dirty money” — terrorist financing, drug cartel funds, fortunes embezzled from developing nations, the profits from organized crime — flows so freely through the world’s most powerful financial institutions that it has become inextricable from the so-called legitimate economy.

The prosecution in Ms. Edwards’s case, however, didn’t see her disclosures as a valuable public service. It told the court that she had committed a crime of “colossal” magnitude. After she pleaded guilty to conspiring to unlawfully disclose financial documents, the judge sentenced her to six months in prison — the maximum under sentencing guidelines — and three years of supervised release….

A Treasury Department agency is supposed to sift through suspicious activity reports and alert law enforcement agencies if the transactions seem likely to be crimes. But sources told BuzzFeed News that officials didn’t even read most of the reports and rarely took action on them. Worse, filing the reports all but immunizes banks and their executives from criminal prosecution. Far from being a tool to root out financial misconduct, the reports effectively give banks a free pass to keep moving money and collecting fees.

Seven Years after Michael Lewis Described on National TV How the U.S. Stock Market Is Rigged, SEC Chair Gensler Says He’s Going to Tackle Market Structure

Pam Martens and Russ Martens, June 10, 2021 [Wall Street on Parade]

Notably, Gensler’s speech did not point the finger at the stock exchanges allowing just the richest trading houses to pay big bucks for preferential treatment and high-speed access to trading data through co-location services. Nor did Gensler indicate he thought the SEC should probe the clandestine trading practices of the Wall Street mega banks’ Dark Pools.

Gensler staked out a very narrow set of targets in his speech: payment-for-order flow, the gamification of markets and clearinghouses. (You can read his full speech here.)

If Gensler is just warming up in the bullpen, that’s one thing. But if he’s simply hoping to quiet Democrats in the Senate Banking and House Financial Services Committees (who have been holding hearings on Citadel’s payment-for-order flow and Robinhood’s gamification of markets) without ruffling the feathers of the big Wall Street banks and their Dark Pools and other market-rigging operations, then he’s going to face some uncomfortable questioning when he is called to hearings before these Committees.

Disrupting mainstream economics
Power Shifts, or Not?
Peter Radford. June 9, 2021 [The Radford Free Pressvia Mike Norman Economics]

Conventional economic models are based on economic liberalism (capitalism), a chief assumption of which parties produce for markets and consumers consume through markets in which quantities of scarce goods are rationed by price. Included in this assumption is that markets are “perfect” in the sense of completely symmetrical, no party having an advantage over others based on the ability to influence market forces. This includes information and power.

On the other hand, all competitors seek advantage and are thereby incentivized to encourage asymmetry that gives them an advantage. In the real world, asymmetries are endemic in socio-economics systems subject to politics where parties vie for political power owing this is incentive, for example. [Such as the results of the Powell memo, above!]

Economic liberalism is based on opportunity and incentive. For it to operate properly, opportunity must be relatively equal and incentives should not produce asymmetry. Neither are the case in contemporary systems. As a result, key assumptions of conventional economics is overly simplistic, which vitiates the application of the models to real-world conditions due to overly narrow scope.

This leads to the question, why are we doing this. The answer is that suggests itself is that this arrangement benefits those who gain advantage and it is they that support and promote it, and denigrate other approaches. It is part and parcel of capturing power to influence outcomes in the favor of some parties over others.

The other possibilities are stupidity or some combination thereof. Where ignorance does enter is in fooling the parties that are disadvantaged by controlling the narrative. This is a weakness of political liberalism (liberal democracy).

The conclusion would indicate either forcing reality to conform to the idealistic models, which is impossible to do, or else to give up the conventional approach as flawed. The conventional approach is trying to force reality to conform to the models, but selectively in a way that still favors the advantaged parties and further disadvantages the losers. This leads to social unrest as those that are disadvantaged by the resulting conditions get fed up and protest.

Restoring balance to the economy

“Alabama’s Coal Miners Are Striking for Their Lives”

[Kim Kelly, The Nation, via Naked Capitalism Water Cooler 6-11-21]

“The Warrior Met picket line is really a grouping of 12 small outposts, stationed in front of each entrance to the sprawling mines. Many of the mine entrances are isolated, set down wooded country roads with no cell-phone service; there are never more than a few people out there, because the company finagled a court injunction limiting the number of people allowed on the line at a time. It also called in both state and local police as well as its own private, armed security to surveil the pickets and enforce the cap, which began as a paltry six but was bumped up to 10 following an appeal. Both the company and the union fly drones overhead to keep an eye on the lines, and police are a constant presence at the larger entrances. It’s a recipe for tension, especially when the scabs and supervisors pass in and out and the community is small enough for folks to know exactly who has sold them out by crossing that line. At the end of May, after leading 300 miners on a march, 11 UMWA leaders were arrested for blocking the entrance to Mine #7 and refusing to leave; they were taken to the Tuscaloosa County Jail and kept overnight. The company’s silence at the bargaining table has grown deafening, and those escalating tensions have recently reached a fever pitch, as the UMWA alleges that company employees have begun waging blatant acts of violence against the striking miners. Thanks to the watchful eye of the UMWA’s drone, footage of a brazen vehicular attack surfaced earlier this week.” • What a concept, actual labor reporting. This is a must read.

New York State to Revolutionize Antitrust

Matt Stoller [BIG, via Naked Capitalism 6-7-2021]

What Politicians Took Away from the Amazon HQ2 Fiasco…. The most important critic of Amazon’s HQ2 stunt was a leader of the New York state Senate, Michael Gianaris, who represents parts of Queens. Gianaris worked to block the deal, saying Amazon was trying to “shake down governments to get its way” rather than “seriously engage with the community they proposed to profoundly change.” When Amazon pulled out, Gianaris argued that it was time for “a national dialogue about the perils of corporate subsidies,” and more broadly, the problem of corporate power.

That dialogue is now here. And it is starting with a bill Gianaris is pushing through the state legislature to take on corporate monopolies…. Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard.

How Robert Bork Fathered the New Gilded Age

[Pro-Market, via Naked Capitalism 9-6-19]

(Sandeep Vaheesan is the legal director at the Open Markets Institute. He previously served as a regulations counsel at the Consumer Financial Protection Bureau, where he helped develop and draft the first comprehensive federal rule on payday, vehicle title, and high-cost installment loans.)

Creating an equitable society requires nothing short of wholesale reform of our antitrust law and policy and renouncing the ideology and prescriptions of Robert Bork….

As conservative attacks on the New Deal gained traction starting in the mid-1970s, antitrust was an early target. Corporate executives resented how antitrust law and New Deal regulations in general restricted their freedom of action. For the corporate class seeking to overthrow these public rules, Robert Bork, a law professor at Yale, would be a savior. He had been concocting the theories by which corporations would overthrow the antitrust fetters of the postwar period.

Bork offered a radical reinterpretation of antitrust law. Inventing a legislative history out of whole cloth, he argued that Congress enacted the Sherman Act only to protect “consumer welfare” and not to control the broader economic and political power of corporations. Further, based on hypotheses with little or no empirical support, he asserted that mergers and trade restraints allowed businesses to lower costs and improve services and thereby benefit consumers.

Green New Deal – An opportunity too big to miss

Can Elites Start the Climate Revolution?

Adam Tooze [Foreign Policy, via Naked Capitalism 6-6-2021]

I am skeptical, but Tooze has been an insightful analyst and critic of neoliberalism.

Will the spring of 2021 prove to be a pivotal moment in the climate crisis? Last week, the management of both Exxon Mobil and Chevron lost battles with green activist shareholders. A third oil major, Shell, was ordered by a Dutch court to dramatically step up its climate effort. This followed a damning judgment in April by the German supreme court on Berlin’s plan for decarbonization. The International Energy Agency (IEA), formerly a bastion of the fossil fuel industry, laid out a demanding path to net-zero greenhouse gas emissions. And to cap it all off, Ford launched its F-150 electric truck.

It is hard to exaggerate the symbolic significance of these events….

The question raised by the events of last month is whether oil is about to go the way of tobacco. In the 1990s, the American cigarette business was upended by giant lawsuits that resulted in a settlement figured in the hundreds of billions of dollars. The oil majors certainly have enough skeletons in their closet. Since the 1980s, their own scientists have been warning them about the risks of their business model….

It would be churlish to deny the scale of the shift. In Europe and in large parts of public and business life in the United States, climate protection is now mainstream. That matters. Expectations of the future are formed collectivity. The more widely the expectation of net-zero by 2050 is shared, the more credible individual commitments to that goal become. So long as politicians are committed, decarbonization becomes a one-way bet for markets and investors. The more private money is committed, the easier it becomes for politicians to sign up, too. Energy transition becomes a self-sustaining collective movement, backed up by legal measures, political will, big money, and rapid technological change, which makes green solutions cheap and popular.

Conservative / Libertarian Drive to Civil War

How America Fractured Into Four Parts

George Packer [The Atlantic, via Naked Capitalism 6-9-2021]

Packer’s essay in The Atlantic is the best explanation of USA politics and its underlying dynamics resulting from social and economic divisions I’ve seen since Stirling Newberry’s “Three Polar Politics In Post-Petroleum America” in July 2009, during the crest of the global financial and economic crisis.

Near the end, Packer has one reference to “the republic,” but does not attempt any exploration or discussion of classic civic republicanism, other than noting a number of times the universal appeal of certain ideas such as justice and liberty, and how the massive elite failures of the Iraq and Afghanistan wars and the GFC have resulted in a discrediting of these ideas. As I’ve written many time before here, I believe that a revival of classic civic republicanism and its universal ideas and ideals are key to solving most of the huge problems now confronting us, and I’ve been troubled by the rejection of these ideas and ideals by “the left.” Packer precisely explains how and why this rejection has occurred. The fourth “chapter” or section is a superb explanation of cancel culture — and Packer never even uses that term.

This failure to consider the founding principles of civic republicanism seriously limits the utility of any explanation of how we have arrived at this point, because it ignores the outsized role the Southern slaveholders, and later the reactionary rich is funding and orchestrating the usurpation and replacement of civic republicanism by liberalism based on the primacy of personal property and individualism. This has come close to annihilating the concepts of public virtue and mutual civic responsibility that embrace and affirm the universality of out humanity.

Movement conservatism and libertarianism have been carefully and assiduously funded and cultivated by the reactionary rich, going back to FDR’s New Deal that shifted the Gilded Age balance of power back in favor of workers instead of capital. There are only a handful of people who have pointed out that conservatism and libertarianism are basically rejections of the Enlightenment and the civic republicanism on which the USA was founded:

Corey Robin, author of The Reactionary Mind: Conservatism from Edmund Burke to Donald Trump

Philip Mirowski, author of books on the “Mont Pelerin thought collective” and this article, “Hell is Truth Seen Too Late” (pdf)

Ganesh Sitaraman, author of The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens our Republic

Heather Cox Richardson, author of How the South Won the Civil War: Oligarchy, Democracy, and the Continuing Fight for the Soul of America, is a bit weak on republicanism, but her explanation of the Confederate roots of modern American conservatism and libertarianism is extremely important to understand.

Packer’s essay is lengthy, but worth the time and effort to read it in its entirety, studded with gems of insight and brilliant wordcraft.



The Lewis Powell Court

Ken Melvin, June 9, 2021 [AngryBear]

Senator Sheldon Whitehouse, RI, has recently begun giving a series of speeches on the Senate floor in ref. dark money and the effect on the Supreme Court. The two so far have centered on Lewis Powell’s secret memo to the US Chamber of Commerce in 1971 just before his appointment to the US Supreme Court. The two speeches go a long way toward explaining the present makeup of the Court, how we got to this point, how capitalism works in America, southern aristocracy, our aristocracy, … . Herewith, for your perusal, are links to the videos of both the speeches along with copies of their transcripts.

It’s important to also remember that Powell was a lawyer for the big tobacco companies — even serving as a board member of Philip Morris — and was a life-long Democrat, even though he was nominated to the Supreme Court by Richard Nixon to replace hardcore New Deal Democrat Hugo Black.

“Trump-inspired death threats are terrorizing election workers”

[Reuters, via Naked Capitalism Water Cooler 6-11-21]

“While reports of threats against Georgia officials emerged in the heated weeks after the voting, Reuters interviews with more than a dozen election workers and top officials – and a review of disturbing texts, voicemails and emails that they and their families received – reveal the previously hidden breadth and severity of the menacing tactics….. The ongoing harassment could have far-reaching implications for future elections by making the already difficult task of recruiting staff and poll workers much harder, election officials say.”

Lambert Strether comments: “This is “night rider” stuff. Let’s not forget that fascism was invented here in the good ol U.S. of A, in the post-Reconstruction South. This scares me a lot for than symbolic stuff, and even legislation. Maybe we should make threatening an election worker a Federal crime, and string a few of these clowns up. (FBI involvement seems to be limited to voters, and doesn’t include election officials. Federal election offenses seem to be categorized as election fraud, patronage crimes, campaign financing crimes, and civil rights crimes.)”


Open Thread


The Lords of Hell (and Their Slaves)


  1. bruce wilder

    Matt Stoller continues his crusade, featured this week in highlighting legislation proposed in New York State. Quoting from the quotations above, “. . . the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard.”

    The ‘consumer welfare ‘ standard, whose most cited proponent was the troglodyte, Robert Bork, was indeed deceptive misdirection, though hardly invented by Bork, it was in a long Chicago School tradition shaped importantly by George Stigler, of critiquing antitrust and public utility regulation (they tackled both together and destroyed both with the same intellectual hammer) as incoherent. The Chicago School argument was always nominally pro-competition — in their rhetoric, they wanted “competition” to substitute for governmental regulation and application of the countervailing power (Galbraith’s famous phrase) of the state to champion the broad public interest. It was rhetorical jiu jitsu to call for Bork to label his conceptual apparatus, a “consumer welfare standard”.

    My problem with Stoller’s critique — and I absolutely support his intention and his identification of the overwhelming economic and political power of giant business corporations as an urgent problem — is that he keeps coming back to the analysis of “market power” and “market concentration”. It is true that narratives of “market concentration” and “market power” dominated the economics subfield called Industrial Organization in the 1950s and 1960s. The staff of the Federal Trade Commission and the Antitrust Division of the Justice Department was swimming and often drowning in that language back in the 1970s, when the Chicago School finally triumphed. Bork’s attack on antitrust policy as paradoxical and incoherent found ripe targets, really ripe targets — example after example of antitrust cases that looked ridiculous in retrospect, huge wastes of resources, drowning in language that made little to no sense when applied to facts. “Market concentration” was never a concept that could be used to conjure an objective fact in evidence; “market power” was consequently a nebulous thing seen in the distance but disappearing like a mirage the more lawyers squinting, try to approach for a closer inspection.

    There was a Big Lie in Bork’s analysis, but it wasn’t that the government should direct its attention to consumer welfare or efficiency — it should, but that is just endorsing a platitude, when the practical problem of law is identifying the crime or the tort and who is committing that crime or tort.

    I know I have harped on this in comments before, but it is key: there are very few actual markets, so when you say, “market power” or try to assess “market concentration” you are, more than likely, pursuing a fantasy creature. You might as well look for fairies in the garden. That rhetorical frame, though hoary, is a fatal poison to any serious analysis.

    Power — in Hannah Arendt’s sense of political power generated by the social organization of a bureaucracy — is certainly involved, as are the games played in by businesses, financiers and lobbyists in trying to manipulate the “rules of the game” that govern employment of labor, product warranties and liability, asymmetric information, the domination of one business corporation over a managed ecosystem of other dependent vendors, contractors, distributors, the manipulative terms of finance, and on and on.

    The problem of “Big” in the neoliberal era has been the building of economically oppressive structures by concentrating strategic control of networks of what should be independent firms in different, but related businesses. “Market concentration” is no useful measure of the evil that Disney, Amazon, Google, JPMorganChase do when they operate or dominate every element of complex networks. The allocative efficiency so beloved by economics is almost completely irrelevant to what is going on in the corruption that replaces independent risk-taking and management of operations in those networks, when the sheer scale required to secure “too big to fail size” for a Citibank also requires an algorithm in place of a banker’s judgment or a Disney eliminates risk-takin by creative talent in pursuit of profit from ip and so produces re-makes and prequels and sequels ad nauseum.

    I fear Stoller has to lose “market concentration” and “market power” and disabuse others of that obsolete nonsense, or his crusade will come to naught, even when the political coalitions come together to take down an unruly Facebook or Amazon.

  2. Watt4Bob

    A year and a half before Michael Lewis described how the stock market is rigged, I posted a description of the crime at Firedoglake.

    The following is from October 9th 2012;

    “Proponents of high frequency trading would have us believe that they are simply analyzing the news faster than the rest of us and that our only disadvantage in the market is our slower ability to understand what’s going on, and to react in such a way as to profit from that understanding.

    They also encourage us to believe that the advantages of HFT mostly involve a very special species of programmed trading, whose essential features are complicated computer programs that analyze data from trading as it happens, and execute tactically advantageous, and complicated trading strategies based on that analysis.

    This far from a complete picture, this is also far from the truth.

    IOW, this is a lie.

    Rather than analyze market data as completed transactions are reported, high frequency trading firms leverage their direct access to the exchanges OMSs (Order Management Systems) to analyze the whole stream of orders as they are coming in to the exchange, this is possible because exchanges allow certain investors access to a system called DMA (Direct Market Access) which gives them a ‘window’ into the OMS itself, which, coupled with the HFTs’ high-speed analysis and direct access to the execution desk, a sort of ‘fast track’, effectively allows them to front-run the market.”

    The whole post here;


  3. Mark Level

    I thank Mr. Wikrent for a wide array of interesting links, as usual.

    I’m glad that the Old Gray Lady (aka NY Times) exposed some Predatory Finance data on that poor whistle-blower who’s in jail (shifting into a lane they rarely inhabit). I hope other readers are aware of a New York City story the Times has refused to even touch, that of the private/ corporate prosecution of Attorney Steven Donziger, who won a massive judgment against Chevron for the people of Ecuador (mainly indigenous Amazon residents) poisoned by Chevron, and then was forced by a formerly Chevron-linked judge into well over a year (& counting) of house arrest and prosecution by a judge appointed and paid by Chevron, over the Manhattan D.A. directly refused Chevron’s request to prosecute Donziger. I include a Jacobin link, first heard about the case from Chapo Trap House a year or so ago but the Intercept and many other “left” websites have covered it. Quite interesting that the NYT has entirely blacked this local story out–

  4. Plague Species

    The powerful are the state. This is what Stoller fails to acknowledge and that’s by design. He has the Twitter check afterall. Does anyone really think true change could possibly be inspired by one of their own? Get back with me about Stoller and the revolution when he’s sucking back Woolite in a back alley in Manchester.

  5. Purple Library Guy

    I found George Packer’s “Four Parts” thesis interesting. But it has flaws. The key one for me is that apparently, non-whites don’t get a Part, and don’t seem to get to be a member of any of them, not even the one operating sort of “in their name”. It’s like they don’t exist; apparently there were blacks, even ones with agency, back in the 60s, but now there aren’t any–there are just a bunch of storefront dummies painted black, who exist solely to create moral debates among white people. They are objects of the “Real America” group’s racism, and objects of the “Just America” group’s antiracism, but are not themselves actual Americans who might be involved in any way in the fabric of American politics. And the Injuns? Forget it. They got a look in as extras being massacred by Andrew Jackson, but it’s not like they’re, oh, intervening in the politics of pipelines, environmentalism and global warming, or anything.
    So for him, although racism is mostly a bad thing, it’s something to be settled among whites. Blacks are important to the politics of America, but as a thing that whites argue over.

  6. someofparts

    B Wilder –

    “Market concentration” was never a concept that could be used to conjure an objective fact in evidence”

    “The problem of “Big” in the neoliberal era has been the building of economically oppressive structures by concentrating strategic control of networks of what should be independent firms in different, but related businesses.”

    So what would be the concepts that could be used to identify “the crime or the tort and who is committing that crime or tort. ” ? How would you frame it to make it functional?

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