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

Week-end Wrap – Political Economy – June 21, 2020

by Tony Wikrent

Countering the surveillance state

IF YOU’RE TAKING to the streets to demand justice for the victims of police brutality and homicide, you may want to leave your phone at home. No matter how peaceful your behavior, you are at risk of getting arrested or assaulted by police. Cops might confiscate your phone and search it regardless of whether or not they’re legally allowed to, or they might try to break it, especially if it contains photos or video of their violent or illegal actions.\

At the same time, it’s a good idea to bring a phone to a protest so you can record what’s happening and get the message out on social media. Filming police is completely legal and within your rights, and it’s one of the few tools citizens have against police brutality. It’s also important to be able to communicate with others in real time or to find your friends in case you get separated….

If this is too expensive for you, you may have other options: If you have an old phone collecting dust in a drawer, as long as it still works and the battery still holds a charge, you can use this as your burner phone rather than buying a new one. You just need a new SIM card, like one that comes with prepaid cell service. Make sure to factory reset the phone before getting ready to protest….

The Markup published some good steps to take before bringing your primary phone into a protest, and the Electronic Frontier Foundation has a good guide as well.

How Police Infiltrate, Create Violence and Target Journalists

Lee Camp [via Naked Capitalism 6-20-20]

Where most of the world’s people live…

After Violent Clash, China Claims Sovereignty Over Galwan Valley for First Time in Decades

[The Diplomat, via Naked Capitalism 6-17-20]The writer of the New York Times article on this clash (which I do not link to) made no attempt to explain why this remote area with hardly any inhabitants would be disputed by the India and China. First, the glaciers of the Tibetan Plateau are the source of Asia’s major rivers: Indus and Satluj of Indus river water system, Arun, Ghaghra and Gandak of Ganges river water system, Manas and Brahmaputra of Brahmaputra river water system, Yellow River, Yangtze, Mekong and Salween rivers.

China suspends debt repayment for 77 developing nations, regions
[DefendDemocracy.Press 6-20-20]

China has announced the suspension of debt repayment for 77 developing countries and regions as the nation is working with other G20 members to carry out the G20 debt relief initiative for low-income countries, Chinese officials said at a press briefing at the State Council Information Office on Sunday…. China announced in May that it would provide $2 billion over two years to help other countries respond to the impact of the coronavirus pandemic…..

China has made multilateral donations to the World Health Organization (WHO) of $50 million, and has provided assistance to global organizations including the Global Alliance for Vaccines and Immunization. China also actively assisted in the fundraising event organized by the Solidarity Response Fund of the WHO in China.

Zero Hedge — Beijing Sounds Alarm About Dollar’s Reserve Status
[via Mike Norman Economics 6-19-20]

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, delivered a strong warning on the U.S. currency this week. He made four points in a speech at the Lujiazhui Forum in Shanghai:

  • A. The Fed is the de facto central bank of the world. When its policy targets its own economy without considering the spillover effect, the Fed is “very likely to overdraft the credit of the dollar and the U.S.”
  • B. The pandemic may persist for a long period of time, and countries keep throwing money at the problem with a diminished impact. “It is recommended that you think twice and reserve some policy space for the future.”
  • C. There is no free lunch. Watch out for inflation.
  • D. Financial markets are disconnected from the real economy, and such distortions are “unprecedented.” It’s going to be “really painful,” when the policy withdrawal starts….

Stunning graphic showing cases now skyrocketing in states and counties won by Trump in 2016
[Washington Post June 17, 2020, via The Big Picture 6-20-20]

David Dayen, June 19, 2020 [American Prospect]

One set of numbers has been pretty prominent: mortality. According to data from the APM Research Lab, Black Americans have died of COVID-19 at a rate of 61.6 per 100,000, compared to 26.2 per 100,000 for whites. Some studies put the death rate for Black people at 3.57 times that of white people (and nearly two times as much for Latinos).

There are a litany of reasons for this. Black Americans are overrepresented in the “essential” occupations, and more likely to have to come in to work rather than working from home. They live in worse environments and are more likely to have pre-existing health conditions.

But it goes much further than this. NPR reported last month that coronavirus testing sites in Dallas are over three times more likely to be found in white areas than in communities of color. More directly, the hospitals frequented by Black and Latino people are physically worse and subsequently offer less beneficial care.

A first-of-its-kind peer-reviewed study from researchers at Harvard and Princeton released yesterday found that funding for patient care at hospitals that primarily serve white people was between 50 and 60 percent higher ($8,325) than at hospitals serving the highest proportion of Black ($5,197) and Latino ($5,763) patients. And there was nearly twice as much funding for modernization and new equipment at white-serving hospitals. Out of 27 specialized services, 19 were less available at Black- and Latino-serving hospitals, things like cardiac surgery and catherization, computer-assisted orthopedic surgery, and weight-loss surgery. There was even more room to walk in hospitals that serve more white patients.

The study built on prior findings of worse nurse-to-patient ratios, more safety hazards, and higher readmission rates in hospitals serving communities of color. Hospitals serving white patients are simply more profitable, and that’s connected to their capital spending, and ultimately their results. “We need to reverse the structural racism that’s literally built into our hospitals,” said Kathryn Himmelstein, one of the co-authors of the study.
Race is a factor in a number of medical decisions as well, as a New England Journal of Medicine study highlighted this week.

The Law: “New Case Holds That COVID-19 Closure Order “Unambiguously” Triggers Force Majeure Clause”, via Naked Capitalism Water Cooler 6-19-20]

“A force majeure provision excuses a party’s breach of contract when certain, extraordinary events or superior forces specified in the party’s contract cause the party’s breach. Such events may include war, strife, labor strikes, acts of terrorism, natural disasters and disease. Most notably for our purposes, these clauses will also typically include some reference to unforeseen governmental action or regulation…. Just last week, in a case of first impression, a federal court in the Seventh Circuit—which covers Wisconsin, Illinois and Indiana—issued a decision that could help various businesses impacted by the pandemic and the governmental response to it. The case at issue—In re Hitz Restaurant Group—concerned a Chapter 11 bankruptcy in the Northern District of Illinois and a creditor’s attempt to hold the debtor to its obligation to pay rent…. added.) The restaurant group argued that the clause was triggered on the date Illinois’ governor issued an executive order addressing the COVID-19 pandemic and closing restaurants for on-premises consumption. Federal bankruptcy judge Donald R. Cassling issued the opinion of the court and, in conclusive language, held that the force majeure clause was ‘unambiguously triggered’ by the governor’s closure order. The Court found that the order ‘unquestionably constitutes both ‘governmental action’ and issuance of an ‘order’ as contemplated by the language of the force majeure clause.”


Black Lives Matter

[via Mike Norman Economics 6-18-20]

Something similar is happening now in the United States with the ideological impact of the Black Lives Matter movement. Many people thought that racial inequality was indeed an issue in the United States. But it was seen as an ancillary issue, in need of a solution, but not in itself detracting from the view of America as a land of equal opportunity and progress for all. Under the impact of the movement, racial injustice, and many other forms of injustices, are now seen, by many people who never thought so before, as systemic problems. They cannot be made aright by, as Cornel West dismissively and well said, “putting Black faces in high places”. They require a thorough rethinking of the essential features of capitalist societies. Moreover, BLM movement, by bringing into the focus the entire colonial history and Black oppression, has directed our attention to the things which were thought long gone and “solved”: King Leopold’s rule of the Congo, British use of and complicity in slave trade, American and Brazilian slaveries that extended late into the second half of the 19th century. It is very likely that similar issues will be raised soon in other countries: France, the Netherlands, Portugal, Spain, Russia. As we have just seen, the statues of Christopher Columbus are tumbling down.

This is a huge ideological change. We were, until a few weeks ago, witnessing the same events as now—racial discrimination and police brutality are not exactly new—but the ideological lenses through which we were seeing them were entirely different…

[NYT, via Naked Capitalism 6-14-20]


Friday is Juneteenth, the annual commemoration of the ending of slavery in the United States. This year, June 19 arrives amid historic anti-racism protests, a surge in support for the Black Lives Matter movement, and renewed efforts to reform and demilitarize policing in this country. Union members are urged to participate in the following celebrations, actions and events.

The International Longshore and Warehouse Union (ILWU) is celebrating Juneteenth by shutting down all 29 West Coast ports. Every port from Bellingham to San Diego will be shut down during the day shift in observance of Juneteenth on Friday.

“How to Mark Juneteenth in the Year 2020” 
[The Intercept (MCC), via Naked Capitalism Water Cooler 6-19-20]

“The Civil War, and therefore emancipation, was won for the Union in large part thanks to a mass ‘general strike’ of enslaved Black Americans, as revealed by Du Bois in his seminal 1935 work ‘Black Reconstruction,’ which historian Eric Foner has described as ‘a landmark of historical scholarship and essential reading for anyone seeking to understand the era of Civil War and Reconstruction.’ The book, which to this day has never been reviewed in the American Historical Review, the central organ of American historians, ran roughshod over the then-dominant white supremacist school of historiography, known as the Dunning school. The Dunning school saw the democratic explosion wrought by Reconstruction as a great historical crime and the participation of Black Americans in the war and Reconstruction as a sideshow at best. In taking apart the Dunning school, Du Bois posited that every army depends on its logistics. Soldiers do need food and medical supplies. World War II Admiral Lynde McCormick said that ‘logistics is all of war making, except shooting the guns, releasing the bombs, and firing the torpedoes.’ Using the same logic, Du Bois noted that ‘The Southern worker, black and white, held the key to the war; and of the two groups, the black worker raising food and raw materials held an even more strategic place than the white.’”

[WaPo, via Naked Capitalism Water Cooler 6-18-20]

“[T]he activists spearheading unlikely assemblies in rural and conservative corners of the country have faced fierce online backlash and armed intimidation, which in some places is unfolding with the apparent support of local law enforcement…. The armed mobilization sheds light on the growth of anti-government militia groups, whose efforts — often coordinated on Facebook and other online platforms — have expanded since the onset of the coronavirus pandemic and the nationwide outburst of protests for racial justice. Militia activity has marked recent protests in places across the country, often driven by false online alerts about infiltration by antifa and other left-wing militants.”

Economists’ silence on racism is 100 Years in the making
[Newsweek, via The Big Picture 6-16-20]

…between 1990 and 2018, the five top journals in economics published 29 out of 7567 papers that explicitly addressed race/ethnicity. Put another way, less than half of one percent of all peer-reviewed top-five economics papers address race/ethnicity….

…the American Economic Association’s summer program, which has been essential in creating a pipeline of minority economists to different institutions and graduate programs, accounts for 2.7 percent of the annual program services budget for the American Economic Association. To put that in perspective, “website content, maintenance and management” accounts for 3.4 percent of the same budget. Essentially, the American Economic Association spends more money on website upkeep than on a program that has accounted for nearly 20 percent of all Ph.D.s awarded to minorities in economics.

Economics, Dominated by White Men, Is Roiled by Black Lives Matter
[New York Times, via The Big Picture 6-16-20]

A growing chorus of economists is seeking to dislodge the editor of a top academic publication, the University of Chicago economist Harald Uhlig, after he criticized the Black Lives Matter organization on Twitter and equated its members with “flat earthers” over their embrace of calls to defund police departments….

Black economists say the events have brought some progress to a field that has long struggled with discrimination in its ranks — and with a refusal by many of its leaders to acknowledge discrimination in the country at large. But the profession remains nowhere close to a full-scale shift on racial issues: On Wednesday, the director of the White House National Economic Council, Larry Kudlow, told reporters, “I don’t believe there is systemic racism in the U.S.”

In a survey of economists released by the American Economic Association last year, only 14 percent of black economists agreed with the statement that “people of my race/ethnicity are respected within the field.”

Who Benefits From Racism?
Robert Reich [via LA Progressive 6-18-20]

Meanwhile, behind the scenes, the CEOs who condemn racism lobby for and get giant tax cuts and fight off a wealth tax. As a result, the nation can’t afford anything as ambitious as a massive Marshall Plan to provide poor communities world-class schools, first-class healthcare, and affordable housing. The CEOs resist a living wage and universal basic income. They don’t want antitrust laws jeopardizing their market power, thereby requiring consumers pay more. They oppose tighter regulations against red-lining or prohibitions on payday lending, both of which disproportionately burden black and brown people.

Perhaps most revealingly, they remain silent in the face of Donald Trump’s bigotry. Indeed, many are quietly funding the re-election of a president whose political ascent began with a racist conspiracy theory and who continues to encourage white supremacists….

Since the start of the pandemic, the nation’s billionaires have become $565 billion richer, even as 42.6 million Americans have filed for unemployment benefits. Job losses have disproportionately affected black Americans, and America’s racial wealth gap continues to grow.

The oligarchy knows that as long as racial animosity exists, white and Black Americans are less likely to look upward and see where the wealth and power really has gone.

[Twitter, via Naked Capitalism Water Cooler 6-8-20]

🔎Julia Evans🔍 @b0rk
I just started reading Ibram X Kendi’s “Stamped From The Beginning” and it has an idea that’s really new to me — it’s not that racist ideas cause discrimination, instead it’s the other way around: racist ideas were invented to justify discrimination.

Such as, for example, we cannot afford national health care or rebuilding inner cities because… deficit: 

Disrupting mainstream economics – Modern Monetary Theory

The Government Can Afford Anything It Wants
[The New Republic, June 19, 2020]

The important thing here is that the Federal Reserve does not dip its hand into a pot of “tax dollars” to pay military contractors, nor is it required to check some mythical account where tax dollars live before it wires the money. In fact, that account doesn’t exist. As former Federal Reserve Chairman Ben Bernanke once noted, when the government pays for things, it is “not taxpayer money. We simply use the computer to mark up the size of the account.” Alan Greenspan, Bernanke’s libertarian predecessor at the Fed further clarified, “There’s nothing to prevent the federal government from creating as much money as it wants and paying it to someone.” The implication is that if Congress can pass a bill that requires some form of spending, the Federal Reserve can and will spend that money without limit, as is the case with the military. This directly contradicts ideas about government money espoused by leading politicians. The most prominent example was in 2009, when a C-SPAN host asked President Barack Obama, “At one point do we run out of money?” to which he responded, “Well, we are out of money now.”

The Government Can Afford Anything It Wants — Robin Kaiser-Schatzlein
[Mike Norman Economics 6-19-20]

Even textbooks on money & banking are mostly inadequate in explaining matter like this. MMT economists have explained it in some detail in their work, and MMT economist Eric Tymoigne has written a book on money & banking as viewed through the MMT lens of institutional analysis and accounting. It was serialized as a draft at New Economic Perspectives, and is available through the navigation menu, along with a serialized draft of Randy Wray’s MMT primer. The latest draft of The Financial System and the Economy: Principle of Money and Banking (second draft, 2018) is available at Scribd.

Progressive Policies into the Breach

When a Crisis Hits, Public banks respond faster and better to crises than privately-owned banks.
[Public Banking Institute, June 18, 2020]

In times of crisis, public banks respond faster and better than private banks, as recent events have shown. Premiering today, this third short video in our public banking series demonstrates how the state-owned Bank of North Dakota has stepped up not only during the coronavirus crisis but throughout its history to provide swift, effective help to local communities facing disaster.  (2.00 minutes)

The Carnage of Establishment Neoliberal Economics

For the Rich to Keep Getting Richer, We Have to Sacrifice Everything Else

[Charles Hugh Smith, via Naked Capitalism 6-20-20]

The primary story of the past 20 years is the already-rich have gotten much richer, with destabilizing economic, social and political consequences. The Federal Reserve and its army of academic / think-tank / financier apologists, lackeys, toadies, apparatchiks and sycophants have several rather thin excuses to explain this away, including….

3. Gosh darn it, the Fed is just trying to help the little gal and guy by digitally printing $6.4 trillion and giving it to parasitic, predatory financiers, banks, corporations and speculators; we’re mystified how giving trillions to the already-super-wealthy somehow made them richer.

We’ve got hundreds of PhD economists working on some arcane mathematical models to help us understand the mystery of why giving trillions to the already-super-wealthy somehow made them richer. It’s a real puzzle, but we have our best people on it– yes siree, our best people.

4. We’re perplexed why so little of the trillions we’ve handed the already-super-rich has trickled down to the little gals and guys struggling to keep their heads above water. We thought the last big tax-cut giveaway would do the trick, but dang, we’re guessing it wasn’t enough….

What the well-paid army of apologists, lackeys, toadies, apparatchiks and sycophants never mention is that we as a nation have had to sacrifice everything else to ensure the rich will always get richer. Democracy was sacrificed so long ago there’s no cultural memory of a time when “democracy” wasn’t a pay-to-play bidding war between vested interests, insiders, billionaires, global corporations and political action 
committees pushing self-serving agendas….

Social cohesion has also been sacrificed, as there’s nothing binding the nation together except I got mine greed, narcissism and anger, all of which fuel a blood-soaked circus of fragmentation and disorder.

The systemic asymmetries are so vast, so glaring, so sinful, that the nation’s institutions have destroyed their credibility in their frantic efforts to justify the inequalities in wealth, income and power. Alarmingly, institutional insiders are completely tone-deaf when it comes to how their self-justifying bleating plays out in public.

The Rage Unifying Boomers and Gen Z
[The Atlantic, via The Big Picture 6-20-20]

Allen Matusow, the author of The Unraveling of America, a seminal history of the country during the 1960s, noted another key difference in an email: Back then, many of the protests grew out of an assumption of abundance after two decades of the nation’s post–World War II boom; young people today face more precarious prospects. While the white, college-attending component of the ’60s generation “assumed unending growth, abundant consumption, and good jobs when they were ready to take them,” young people now face “environmental degradation, rising sea level, [and] concentrations of wealth that threaten democracy,” among other challenges, said Matusow, who is also a fellow at the Baker Institute of Public Policy at Rice University….

At its peak in 1964, members of the Baby Boom represented 37 percent of America’s total population, according to Census figures provided by the demographer William Frey. Frey calculates that, at their peak in 2015, Millennials constituted a little less than one-fourth of the population. But Frey projects that, combined, Millennials and Gen Z will exceed two-fifths of the population from 2013 to 2035. They’ll fall only to slightly below that level through 2050.

[New York Review of Books, via Naked Capitalism 6-14-20]

Hari Kunzru reviews Masha Gessen’s Surviving Autocracy

The book is a snapshot of how far American public life has been degraded, how the vaunted democratic system of checks and balances has collapsed, and how the conventions of journalism and policy debate have hampered the task of holding power to account. To frame their analysis, Gessen uses a schema credited to the Hungarian sociologist (and former minister of education) Bálint Magyar, coiner of the term “mafia state,” described by Gessen as “a specific, clan-like system in which one man distributes money and power to all other members.”

The Trumps are nothing if not clannish. It’s now apparently unremarkable that in the Trump White House, the president’s demands for personal loyalty should supersede outmoded notions of service or patriotism. His family identifies its own interests with the national interest, and appears to see the presidency as a monetizable asset, or at least as a kind of force multiplier, a way to extract maximum profit from its existing portfolio. Judging by figures produced in a report about the security costs of their travel, the president’s adult children appear to be busy people, flying the world to further the interests of the Trump Organization before the clock runs down.

This is a family that was banned from running its own charitable foundation for illegally appropriating funds, but nevertheless has found it surprisingly easy to change established norms around using public office for private gain, not to mention using the White House as a platform for political campaigning. It seems almost quaint to remember that there was a time when people believed that pointing out obvious breaches of the so-called emoluments clause in the US Constitution would demonstrate the president’s unfitness for office and expedite his swift removal. Unless the Supreme Court rules against the president in a suit relating to the acceptance of foreign government money through his Washington, D.C., hotel, that clause is now surely a dead letter….

Gessen also warns against conspiratorial thinking, including an overreliance on the narrative of a corrupting Russian influence on an otherwise untainted American political scene: “Conspiracy thinking focuses attention on the hidden, the implied, and the imagined, and draws it away from reality in plain view.”

…. “The first three years have shown that an autocratic attempt in the United States has a credible chance of succeeding. Worse than that, they have shown that an autocratic attempt builds logically on the structures and norms of American government: on the concentration of power in the executive branch, and on the marriage of money and politics.”

….NPR’s commitment to avoiding an “angry tone”—a phrase used by an executive in an open letter about the network’s refusal to use the word “lie” to describe Trump’s many lies—is shared by other organizations and reveals a politics hidden in the supposed absence of politics. For a news organization, a commitment to unthreatening civility should surely be secondary to a commitment to civil rights and to truth, the foundational journalistic value. If reporting the truth clearly is replaced by some notion of “balance,” then it’s possible that your primary political commitments are not to that lofty objectivity mentioned in your mission statement but reside somewhere offstage, in a shared hinterland of class and culture that deserves interrogation. Your media organization may be susceptible to capture, perhaps doubly so if its source of funding rests in the hands of Trumpist politicians, or Trumpist shareholders and advertisers.

Predatory Capitalism in the Time of COVID19

As Goldman Sachs and JPMorgan Face Criminal Probes, Barr Fires Top Prosecutor; Tries to Replace Him with Banks’ Former Lawyer, Jay Clayton
Pam Martens and Russ Martens, June 20, 2020 [Wall Street on Parade]

Dirty Details Emerge as to Why Mnuchin Is Fighting Congress Over Releasing the Names of Recipients of PPP Loans
Pam Martens and Russ Martens, June 16, 2020 [Wall Street on Parade]

…. our search of filings at the Securities and Exchange Commission reveals that dozens of debt zombie companies that trade on Nasdaq got the loans. Dozens of publicly-traded companies with large credit lines from banks got the loans. Dozens of companies with a lot more than 500 employees got the loans. It’s beginning to look like tens of billions of dollars in PPP loans were simply funneled out the door rapidly with little oversight into who was getting the loans….

According to the SEC filing made by Flotek Industries, Inc. it received a $4.8 million PPP loan in April of this year. (The company makes technology products for oilfield service companies.) The same filing said that the company had also in April “filed a Form 1139 for a tentative tax refund of $6.1 million pursuant to the CARES Act that extended NOL [net operating loss] carryback provisions and recorded an income tax receivable of the same amount at March 31, 2020.” But what Flotek had on its mind was acquisitions, not survival. The same filing explains: “On May 18, 2020, the Company announced the acquisition of 100 % of the equity interests in JP3 Measurement, LLC (‘JP3’), a privately held leading data and analytics technology company, in exchange for cash-and-stock valued at approximately $34.4 million and the assumption of $1.3 million of debt.”

The Fed’s Paycheck Protection Program Gave a Tiny NJ Bank $5.3 Billion – 9 Percent of all the Money It’s Spent Thus Far
Pam Martens and Russ Martens, June 17, 2020 [Wall Street on Parade]

The odd thing about those Fed reimbursements is that a stunning $5.3 billion in reimbursements, or 9 percent of the $57 reimbursed by the Fed, have gone to a tiny New Jersey bank, Cross River Bank. According to the SBA, as of May 30, there were 5,454 lenders that had made loans in the PPP program. Cross River Bank is just one of those 5,454 lenders and yet it received 9 percent of the Fed’s reimbursements. How does that make any sense?

….In December of last year, Antoine Gara, a finance writer and associate editor at Forbes, unraveled some of the mystery around this peculiar little bank. Gara described Cross River Bank’s headquarters’ office in Fort Lee, New Jersey as follows:

….“Cross River is on a lending tear. It is underwriting loans at the rate of more than $1 billion a month—some $30 billion worth in just nine years. But unlike in banks of yesteryear, virtually all Cross River’s lending officers aren’t human beings. They are apps. Cross River’s loans originate mostly from 15 or so buzzy venture-capital-backed financial technology startups, so-called fintechs, that go by names like Affirm, Best Egg, Upgrade, Upstart and LendingUSA. The fintechs provide the customers; Cross River provides the licenses and infrastructure. It holds 10% to 20% of each loan it issues, and the massive volume of fintech loans has propelled Cross River to $2 billion in assets, up from $100 million a decade ago.”

Emails Reveal Chaos as Meatpacking Companies Fought Health Agencies Over COVID-19 Outbreaks in Their Plants

[ProPublica, via Naked Capitalism 6-14-20]

US employers step up anti-unionization efforts as pandemic spurs activism Guardian, via Naked Capitalism 6-19-20]

Climate and environmental crises

[Los Angeles Times, via Naked Capitalism Water Cooler 6-18-20]

“The county was relying on the offset program as part of an ongoing push to approve a slate of housing projects on undeveloped land throughout unincorporated territory… Last year, the county sought to approve eight new projects totaling about 10,000 new units, but nearly all have been derailed or delayed by lawsuits. Many of those projects have been individually challenged in court by environmental groups. Those groups point to the tail-pipe emissions that would be created by additional traffic. Also, nearly all of the projects are located in wildfire-prone areas.”

“Rising Seas Threaten an American Institution: The 30-Year Mortgage”

[New York Times, via Naked Capitalism Water Cooler 6-19-20]

“Home buyers are increasingly using mortgages that make it easier for them to stop making their monthly payments and walk away from the loan if the home floods or becomes unsellable or unlivable. More banks are getting buyers in coastal areas to make bigger down payments — often as much as 40 percent of the purchase price, up from the traditional 20 percent — a sign that lenders have awakened to climate dangers and want to put less of their own money at risk. And in one of the clearest signs that banks are worried about global warming, they are increasingly getting these mortgages off their own books by selling them to government-backed buyers like Fannie Mae, where taxpayers would be on the hook financially if any of the loans fail…. now, as the world warms, that long-term nature of conventional mortgages might not be as desirable as it once was, as rising seas and worsening storms threaten to make some land uninhabitable. A retreat from the 30-year mortgage could also put homeownership out of reach for more Americans.”

Information Age Dystopia

eBay executives charged with cyberstalking
[Financial Times, via Naked Capitalism 6-16-20]

A flood of coronavirus apps are tracking us. Now it’s time to keep track of them.
[MIT Technology Review, via Naked Capitalism 6-18-20]

[The Register, via Naked Capitalism Water Cooler 6-17-20]

“Big Red co-founder, executive chairman and CTO Larry Ellison followed Catz with a review of new customers and a reprise of his vision of technical infrastructure unpolluted by people, in the form of the Oracle Autonomous Database. ‘Autonomous self-driving computer systems eliminate human labor and eliminate human error. There is nothing for humans to learn and nothing for humans to do,’ said Ellison. ‘Eliminating human labor dramatically lowers the cost of running an autonomous system. Eliminating human error dramatically increases data security and system reliability. All of the big data losses at Amazon were caused by human error. There is no opportunity for any human error if your data is stored in an Oracle autonomous system.’”

Creating new economic potential – science and technology

[PhysOrg, via Naked Capitalism 6-18-20]
[Berkeley, via Naked Capitalism 6-18-20]How America Was Built (HAWB)
ASME’s New Landmarks of Mechanical Engineering 2008-2009 (slideshow)
American Society of Mechanical Engineers [Machine Design Today 6-18-20]

  • Meonch’s Carpet Tufter (1928)
  • The 267 Janney Coupler (1873)
  • Princeton Plasma Physics Laboratory (1951)
  • Johannes Gutenberg’s Movable Type (1545)
  • The Thurston Collection of Laboratory Artifacts at Cornell University (1885)
  • The Antikythera Mechanism (200 B.C.)
  • West Point Foundry (1818)
  • Westinghouse Automatic Air Brake (1887)

Disrupting mainstream politics

“Wins by young progressives start reshaping establishment”
[The Hill, via Naked Capitalism Water Cooler 6-15-20]

“‘The millennial generation is historically liberal. There’s never been a generation, particularly of white voters, that has been as consistently Democratic,’ said Sean McElwee, who heads Data for Progress. ‘More and more, the typical always-shows-up voter is more progressive. They are urban professionals who are settling down, having kids and are not becoming conservative but instead are voting progressively in Democratic primaries.’”

The left wing of the Democratic Party may have lost the war over the party’s presidential nomination, but its members are quietly winning battles in states and cities across the country.

Progressive candidates have knocked off incumbent officeholders in places such as Philadelphia, Pittsburgh, Washington, D.C., and New Mexico in recent weeks in elections that are marking the end of an older generation of the political establishment.
Those elections may be a preview of the rest of the primary season, when long-serving Democrats find themselves the targets of well-organized campaigns to oust them.

“Exclusive: U.S. Democratic Party irked by council’s ‘insurgent’ climate plan – sources”
[Reuters, via Naked Capitalism Water Cooler 6-15-20]

“The Democratic National Committee’s council on climate change irked party leadership when it published policy recommendations this month that ventured beyond presidential candidate Joe Biden’s plan, according to three people familiar with the matter…. Members of the DNC Environment and Climate Crisis Council, formed last year, published proposals for the party’s four-year platform on June 4 in a press release, calling for up to $16 trillion in spending to shift the U.S. economy away from fossil fuels while banning hydraulic fracturing and oil and gas exports. The council’s proposals far exceed Biden’s current climate plan, which bans new oil and gas permits on public lands and dedicates $1.7 trillion to accelerate the transition to renewable energy, but allows continued fracking and exports in the meantime.”

Lambert Strether comments” “I don’t know how to get my head around the fact that $1.7 trillion comes from Biden, and $16 trillion from the DNC (!). Although I suppose that means that $32 trillion is the right amount….”

“Wall Street giants including the CEOs of Goldman and Blackstone are pouring money into the campaign to defeat AOC in a June primary” 

[Business Insider, via Naked Capitalism Water Cooler 6-19-20]

“Stephen Schwarzman, co-founder of Blackstone has donated $2,800 to Cabro-Cabrera’s campaign. A further five Blackstone employees have donated the same amount to her campaign as well. David Solomon, chief executive of Goldman Sachs also backed Caruso-Cabrera to the tune of $2,800, along with three other Goldman employees. Paul Tudor Jones, the billionaire founder of the Tudor Investment Corporation also gave $2,800 to Caruso-Cabrera’s campaign. A number of other donors to Caruso Cabrera’s campaign include staff at Wall Street firms including Evercore, Elliott Management, and Apollo Global Management. Caruso-Cabrera has raised just over $2 million so far, while Ocasio-Cortez’s campaign has received more than $10.5 million, FEC data shows…. The median size of Ocasio Cortez’ donations is around $10, according to a Financial Times analysis of FEC filings and the online fundraising platform ActBlue.”

Lambert Strether on Republicans compared to Democrats
[Naked Capitalism Water Cooler 6-19-20]

There is actually one frightening thing — as opposed to the darkly hiliarious things — about Never Trump Republicans joining the Democrat Party: Republicans like to get things done. Unlike liberal Democrats. This is probably bad.

How JFK Paved the Way for Donald Trump

[Politico, via Naked Capitalism 6-14-20]

The Dark Side

Roberts Wanted Minimal Competence, but Trump Couldn’t Deliver

[The Atlantic, via Naked Capitalism 6-19-20]Trump Has a Half Billion in Loans Coming Due. They May Be His Biggest Conflict of Interest Yet. Mother Jones, via Naked Capitalism 6-20-20]



Open Thread


As The Next Wave Of Covid Hits


  1. capelin

    wow. well done.

    what’s the answer? effective communication of key metrics to the larger populace via ketchy slogans? sliding scale devaluation of any assets over 1 million? standing to the side and planting a garden?

    thank you.

  2. S Brennan

    “Coronavirus has come to Trump country; Stunning graphic showing cases now skyrocketing in states and counties won by Trump in 2016 -Washington Post June 17, 2020”.

    Yep, I, like almost every other rural county, saw record city-crowds during the Memorial day week-end…and nary a mask between them in the grocery stores and other indoor venues. Judging from the article one would guess that those D’ers [and by extension Tony Wikrent] are proud that they have spread Covid-19 through out the country. As was said almost a hundred years ago…

    “They were careless people, Tom and Daisy- they smashed up things and creatures and then retreated back into their money or their vast carelessness or whatever it was that kept them together, and let other people clean up the mess they had made.”― F. Scott Fitzgerald, The Great Gatsby 10 April 1925

    In my youth such people were despised..and today? Well, it’s all such good fun to spread disease to those that don’t agree with the Wilsonian D That special kind of hatred of today’s “liberals” proudly display, is that a winning strategy, does a story like that rile the D base and get them to vote? Dunno, but it sure riled up the locals here.

  3. Hugh

    Fiat money is a valid concept. It was put into practice during the American Civil War and the 14th Amendment made it part of the US Constitution. MMT is garbage and equates to more trillions for the rich. Progressives’ embrace of MMT simply undercuts their ideas or that they know or can be trusted with anything financial or economic.

    Good to see though that the Chinese don’t understand monetary policy either. They are right, however, that the Fed is the central bank to the world, a function it poorly performs but still much better than the Chinese would ever do it. They are delaying payments on billions. Shoring up the international financial system back in 2008 took trillions. Anyone seeing the Chinese doing or capable doing anything similar?

  4. Hugh

    My take on Republicans vs. Democrats (as usual)

    Both promote the looting of the rich. Beyond that, the Democrats stand for nothing, and the Republicans for even less. In power, the Democrats govern badly, and the Republicans don’t govern at all.

  5. Z

    Charles Hugh Smith gets to the ludicrousness of Jerome Powell of the Fed claiming that inflating financial assets doesn’t increase inequality.

    Uncle Alan and Helicopter Ben are much more responsible for where we are than Powell, but Powell also has about $50M in personal wealth, most of it I’d imagine invested in financial assets and apparently a fair bit of it in Blackrock, the firm that the Fed is engaging in a curious private-“public” partnership with by directly giving them trillions of dollars to invest for the Fed.

    Not a bad arrangement, huh Jerome?

    The game that gets played on us is this. The Fed, an unelected entity outside of Congress with the power to create an infinite amount of money, is always there to backstop and grow our rulers’ part of the economic pie. They do it by supporting the markets and it comes from a separate account that the citizens don’t have any access to. And then Congress is always there to shrink our slice of the pie via choreographed conflict and budget discipline when it comes to economic matters that benefit the worker.

    Talk about privilege. The rich got the greatest privilege of all: an unaccountable Fed that will print up as much money as needed to maintain their wealth, power, and status.

    That dynamic needs to be broken for substantial change for the better to happen for the vast majority of this country.

    The Fed: the devil’s den of our vicious economic system.


  6. bruce wilder

    Hari Kunzru’s review of Masha Gessen’s Surviving Autocracy in the NY Review of Books attracted my attention for its weird attachment to self-titillating narrative combined with a studied reluctance to acknowledge reality, past or present.

    I feel vaguely nauseated, like I have been at sea in a small boat rocked by chaotic waves. I cannot relate to these people — Kunzru or Gessen. The feeling of sea sickness is more than metaphor — I cannot seem to get right with their worldviews; their points of view — this is an hypothesis, a guess as I puzzle out my reaction — are so wrapped up in their subjectivity and narcissism that my usual attempts to orient myself to their perspectives on a common, shared reality are defeated. They are not sharing.

    Masha Gessen’s schtick is to present Russian politics as analogy to American politics — to an American audience abysmally ignorant of Russian government and politics and therefore incapable of questioning the conceit. Kunzru, an Englishman and a novelist in a privileged milieu, pays particular attention to Gessen’s concern for standards of journalism, but in Kunzru’s account of Gessen’s analysis, there is not much to pay attention to — no insight, no acquaintance even with the current state of play in American political journalism.

    I am thinking there is some code being used in Kunzru’s essay and in Gessen’s book as well perhaps, a code that gives meaning to a reader inside the . . . ? club, cocktail party circuit? If not, it is just embarrassing to see people expose their own cluelessness, their own inability to think without self-consciously posing as some kind of idpol hero.

  7. Hugh

    I can’t see why Gessen who lived for decades in Russia watching Putin build his dictatorship there would use Russia as a point of comparison in any of his writing, especially with regard to the degeneration of the American political scene or Trump’s autocratic tendencies. Since Russia and Putin are sacrosanct to some, maybe if he had just said “banana republic” instead of Russia it would have been OK.

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