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

Week-end Wrap – Political Economy – June 4, 2023

by Tony Wikrent


Why elites are misanthropic

Billionaires and the Evolution of Overconfidence

[The Garden of Forking Paths, via The Big Picture 5-31-2023]

To understand billionaires, you need to understand horizontal inequality, illusory control, self-selection bias, quantified self-worth, and the evolution of overconfidence.

What would you do if you suddenly had a billion dollars?

The way you answer that question will tell you something about how likely you are to become a billionaire in the first place.

For most of us—myself included—the answer to that question gets split into two parts: logistics and philanthropy. First, for logistics, you might consider: what would you change about your life once I never have to worry about money ever again? This is the “would you quit your job?” or “would you move somewhere else?” part of the question. Second, if you’re a decent person, you’d probably consider who you’d help and how you’d allocate a substantial portion of your obscene, newfound wealth to people who need support. To us, money is for something, it’s not a goal in itself.

That means we probably won’t become billionaires.

When billionaires first become billionaires, they have a different answer to the question of what they’d do if they reached a billion dollars: “I’d figure out how to make two billion.” This is a trait that pretty much every billionaire has….

I’ve spent much of my career studying powerful people, interviewing more than 500 leaders all over the world, from America to Zambia, Belarus to Thailand, Madagascar to Tunisia. As part of my research, I’ve met many billionaires. And the most important lesson I learned in those interactions was that these people were not normal. I don’t mean that in a nasty way (though often they deserved it). I mean it in a statistical way — they were abnormal outliers….

Now, consider other social systems such as power and wealth. If you want to become powerful, you usually have to want power. We have a word for that: “power-hungry,” and it’s not a compliment. It quite literally means someone who seeks power — and rarely do you get power without seeking it. The most powerful people in our societies are therefore those who, by self-selection bias, seek power — and then have managed to get power and stay in power.

But now, unlike the spelling bee, there’s a bit of conceptual leakage. What we want is someone who is good at wielding power for the benefit of us all. But what we’re actually selecting for in our political systems is someone who wants power, is good at getting it, and then never letting go. Our systems select for the wrong thing. It’s as though you were to hold a spelling bee but then choose then winners based on who is best at convincing you that they can spell, rather than who can actually spell.

The same is true for wealth. In an ideal world, the people most rewarded financially in our social systems would be those who generate the most shared wealth and prosperity, or those who innovate and help humanity the most; or those who are the wisest and most selfless and could therefore use their wealth for its maximal impact.

But that’s not what our modern economies select for at all. Many of the smartest people on the planet are not driven by money, so they’re not even in the running to become a billionaire — just as many of the people who would make the best politicians are those who least want political power. They’re not in the game, so they can’t win. Many theoretical physicists are geniuses; none of them are billionaires.

By contrast, few billionaires are geniuses, but all of them think they are…. when someone becomes a billionaire, it’s the ultimate validation of their overconfidence….

This leads to a dangerous delusion known as illusory control, in which a person mistakenly thinks they can shape outcomes to their liking even when they can’t. This occurs frequently when someone who has been successful in one domain chalks that success up purely to talent rather than to a more accurate assessment of their abilities and knowledge. They then assume that everything they touch will turn to gold and are surprised when it doesn’t….

The problem is worsened by a phenomenon known as horizontal inequality. We measure ourselves not against society as a whole, but relative to those closest to us. Billionaires often live near other billionaires and socialize with them (this is why yacht clubs exist), so their benchmarks shift. They compete with each other, so assessments of their wealth are transferred within the 0.000033 percent of the population, rather than relative to the 99.999967 percent of the population they’re above…. because of their obsession with horizontal inequality, a billion dollars is never enough for a billionaire. They just keep angling for that next billion, in a Quixotic quest to entrench their status and outcompete their peers….

Rather, these lessons are a call to action. The billionaire class is the visible manifestation of a broken system, which attracts and promotes the wrong kind of people into wealth and rewards them in a way that is very unlike a meritocratic spelling bee. The good news is that, like all systems, these systems can be changed, to create stronger overlap between who we hope to reward—those who help society and improve our world—and who we actually reward too often: greedy overconfident narcissists who can never get enough of their grotesque wealth.

The Man Who Knows What the World’s Richest People Want (and How To Get It)

[Vice, via The Big Picture 6-3-2023]

Rey Flemings has become one of the premiere fixers for the global elite. More than that, though, he gives the rich a place to admit what they can’t say publicly: that they need help finding happiness.


Can Little Ukraine Teach Big America How to Deal with Our Oligarch Problem?

Thom Hartmann, May 30, 2023 [DailyKos]

Essentially, what Ukraine’s president and parliament did with their 2021 “deoligarchization” (yes, they actually call it that) law was to say to Ukraine’s billionaires:

“You may be rich, and you may have whatever political opinions you want, just like every Ukrainian. But because average Ukrainians don’t have access to millions or billions to sway public opinion or buy politicians, we will no longer allow you to use your vast riches to corrupt our nation to your own advantage at the expense of average working people.” (My words, not Zelenskyy’s.)….

An oligarch, by the Ukrainian definition, is somebody who:

— Has “significant” influence over mass media,
— Controls a business that exercises monopoly influence over a part of the economy,
— Involves themselves in politics through funding politicians, political parties, political campaigns, or think tanks, etc. (the phrase used is “takes part in political life”), or,
— Has a net worth of greater than $89 million.

Ukrainian oligarchs, under the new law:
— Are included on an official register published by the government,
— May not hold political office, may not fund political parties, or have influence over any meaningful part of “political life,”
— May not purchase state assets that are privatized, and
— Must disclose their assets in what the Financial Times calls “exhaustive declarations.”
— Government officials are also required to report any meeting with an oligarch on the government’s list.


Climate and environmental crises

Insurance Politics at the End of the World

Hamilton Nolan, May 30, 2023 [How Things Work, via Eschaton]

Shall we do climate change the hard way, or the harder way?

…insurance can tell you things about reality… The people running them may be greedy, and the clients may be evil, but the business is all about understanding the true and unvarnished state of the world in order to manage risk in order to protect wealth, and therefore these firms do their very best to operate according to what is true….

The insurance industry is going to serve a very useful role in the climate apocalypse. It is going to be the tip of the spear that punches through all of the bullshit of climate denialism once and for all. Indeed, the process is very much underway already. Politicians and oil lobbyists can lie all they want, but their homeowners insurance rates are going up….

Watching this process unfold is going to expose the hidden bedrock of many people’s belief systems in a rather violent way. That bedrock, in most cases, will not be “socialism” or “capitalism” but rather “whatever is good for me, personally, I don’t care what it costs, please god save me.” We are well on the road to the inevitable political crisis that will be sparked by insurance. State Farm just stopped selling home insurance in California, due to wildfire and other climate-driven risks. Coastal states in the path of hurricanes have seen tons of insurers pull out altogether in recent years, and the ones left are handing down eye-watering premium increases to homeowners. Florida property insurance rates are rising 40% in a single year(!). In Louisiana, it was even worse—the state insurance of last resort bumped its rates 63% this year….

Just as a point of perspective, last September Hurricane Ian—which could have been worse!—caused $100 billion in total losses, $60 billion of which was insured. One hundred billion dollars is equal to the total budget of the State of Florida….

…when you brush away the soothing fictions and political slogans, there are only a few ways to handle this:

1. You let private insurers set rates appropriate to the actual risk of insuring billions of dollars worth of property that is increasingly likely to flood, blow away, or burn up. Those rates are very high and getting higher. Every year, more homeowners will not be able to afford to stay in their homes… in Florida there is $2.9 trillion worth of insured coastal real estate. That is a lot. A 2020 McKinsey report guesstimated that some parts of Florida could lose as much as a third of their real estate value by 2050, but it is fair to say that that could turn out to be low….

One important thing to say about this scary scenario is: This is the free market functioning perfectly!!! This is actually how capitalism is supposed to solve problems. In this scenario, adaptation to climate change is induced by price signals. People are forced to move away from the coasts because it becomes too expensive. This is economically rational. The human pain of this enormous dislocation does not change that fact. Everyone who loves to celebrate the free market: This is what you’re asking for. Every time you hear a Republican frantically decrying this rational economic progression, you are hearing a hypocrite.

2. The second possibility—the one that will actually happen—is that the private insurance market collapses and then the emergency quasi-fictional state insurance market fills the gap but then it runs out of money at the first big disaster and then all of these states and their homeowners go to Washington for bailouts. Republican warriors for free enterprise quickly become socialists when their donors’ beach houses are at stake. Climate change deniers quickly turn into climatologists when they start asking for the government to build sea walls to keep their garages from flooding….

I expect Florida to reach a point where Republican governors are demanding that every Republican donor’s house be hoisted onto an impermeable private island built at government expense while everyone else drowns….

The lessons of a wildfire that destroyed a town and burned for 15 months 

[Ars Technica, via Naked Capitalism 5-28-2023]

Vaillant could not find enough superlatives to describe the power, fury, strength, pure Hellishness of this fire. It was the biggest, smokiest, widest, tallest, blackest. Ever. Also, by far, in 2016, the hottest. This type of fire, only seen on Earth in the 21st century, makes its own weather; it generates hail and lightning and tornadoes, and its smoke reaches the stratosphere, 8 miles above the Earth’s surface, measurably altering its composition. It mimics volcanoes.

Vaillant ends the book with a brief history of climate science, dating back to 1896, when Arrhenius was among the first to recognize that our burning of fossil fuels was changing the climate. By the 1950’s, there were already accurate predictions of the fires, droughts, and sea-level rise this would cause, yielding the oil industry’s campaigns to dilute or subvert that data and message. He then gives a quick review of 21st century fires around the globe, which includes the first wildfire in Greenland. Greenland. A treeless, frozen tundra.

Now we’re in a feedback loop. The burning of fossil fuels emits carbon dioxide, which makes the world hotter, which exacerbates fires, which emit more carbon dioxide, which makes the world hotter still, which exacerbates fires. Alberta is again in flames this spring, and their government DOES NOT want to hear that burning oil may have possibly contributed (even though it did).

Colorado River water deal: a bandaid or real progress? 

[Liberation News, via Naked Capitalism 5-29-2023]

American investors are challenging Canadian climate policy through an old NAFTA system

Kyla Tienhaara, May 26, 2023 [The Narwhal, via Naked Capitalism 5-29-2023]

A US$20 billion case over Quebec’s cancelled liquefied natural gas facility is just one example of foreign investors suing governments for ‘lost future profits’ from fossil fuels

Fast fashion has spawned a mountain of leftover clothes in the Chilean desert that’s so massive it can now be seen clearly from space 

[Business Insider, via Naked Capitalism 6-2-2023]

The still-growing mountain of discarded or unworn clothes — manufactured in Bangladesh or China and sent to retail stores in the US, Europe, and Asia — are brought to Chile when they aren’t sold, according to Agence France-Presse.

At least 39,000 tons of those clothes accumulate in landfills in the Atacama Desert, the outlet found in 2021….

The clothes can’t be sent to municipal landfills because they aren’t biodegradable and often contain chemical products, Franklin Zepeda, the founder of EcoFibra, a company that tries to reuse the textiles by making insulation panels, told the AFP.

Nearly 85% of all textiles go to dumps every year, and fashion production consumes vast amounts of water and pollutes rivers and streams, Insider’s Morgan McFall-Johnsen previously reported.

Supreme Duplicity 

[Counterpunch, , via Naked Capitalism 5-31-2023]

(On the new SCOTUS decision gutting the Clean Water Act)

In truth, the Court has long been chipping away at the Clean Water Act and narrowing the meaning of “adjacent to waters of the United States” (AWUSA). The legal history is tangled, and to recount it all would be tedious for writer and reader. But here’s the gist of it: The original Clean Water Act entrusted definition of the term to the EPA and Department of the Army (i.e. US Army Corps of Engineers). A bit more than a decade later, the Burger Court affirmed its deferral to the EPA; but not content to leave well enough alone, inserted a specific definition of wetlands: They must be ‘‘inseparably bound up’’ with navigable waters and have ‘‘significant effects on water quality and the aquatic ecosystem.’’

Now that there was a fixed definition, it only took a new, more conservative court to deploy it like a cudgel to hammer away at administrative discretion. The Rehnquist Court, which included such legal luminaries as Antonin Scalia and Clarence Thomas, held in 2001 that the use of “non-navigable, isolated, intrastate waters” by migratory birds did not merit protection because they were not, you guessed it, “inseparably bound up” with the “waters of the United States.” (Note: the word “adjacent” has been dropped.) Five years later, they were at it again. This time, four justices of the Roberts Court determined that only ‘‘wetlands with a continuous surface connection’’ to a ‘‘relatively permanent body of water connected to traditional interstate navigable waters’’ merited protection. Justice Anthony Kennedy was the fifth and deciding vote, but his concurrence was slightly more liberal than the others, arguing that wetlands with a “significant nexus” to navigable waters could be granted EPA protection. That allowed the EPA regulatory status quo to remain. (But don’t try looking up “significant nexus” in any hydrology textbooks or the OED.)

There were a few more cases in subsequent years, but that’s where things stood until Sackett. The current version of the Robert’s Court, the most lawless, reckless and heedless since the days of Chief Justice Roger Taney and Dred Scott, has now feathered it’s hood by condemning people in the path of flooding and water contamination – mostly poor, Black, Latino or otherwise marginalized – to additional suffering and loss. But the Court is not the only culprit.

Getting Across Baltimore

Gabrielle Gurley, June 1, 2023 [The American Prospect]

Gov. Wes Moore’s credibility in the largest city in Maryland rides on building a light-rail line long blocked by racist fears….

…Hogan termed almost a billion for Baltimore a “wasteful boondoggle,” but he did accept almost $1 billion for the Purple Line, a light-rail line running through two thriving Maryland suburbs bordering Washington, predominantly white Montgomery County and predominantly Black Prince George’s County. The proposed Baltimore rail line, by contrast, had been designed to connect low- and moderate-income Black neighborhoods with Johns Hopkins Bayview Medical Center at its eastern end, and with the headquarters for Social Security and the Centers for Medicare & Medicaid just over the western city line in Woodlawn. The line, however, also edged too close for comfort to adjacent white communities. State funds that would have gone to the Red Line went straight to road projects in rural white areas. The city did, however, get millions for a new youth detention center. Baltimore has seethed about those body blows ever since.



[Twitter, via Naked Capitalism 5-28-2023]


China’s hypersonic missiles threaten US power in the Pacific: An aerospace engineer explains how the weapons work and the unique threats they pose

[The Conversation, via The Big Picture 5-29-2023]

Chinese researchers claimed in a May 2023 research journal report that the country’s hypersonic missiles could destroy a U.S. carrier group “with certainty.” This capability threatens to sideline U.S. aircraft carrier groups in the Pacific, potentially shifting the strategic balance of power and leaving the U.S. with limited options for assisting Taiwan in the event China invades.

China turns down U.S. invitation for defense chiefs meeting

[, May 30, 2023]

Beijing has declined the Pentagon’s request for a meeting between U.S. Defense Secretary Lloyd Austin and China’s defense minister Li Shangfu at a security forum in Singapore in June, the latest sign of the difficulties the countries are having trying to stabilize their turbulent relationship….

The Financial Times reported this month that China had told the U.S. there was little chance of a meeting as long as Washington maintained sanctions on Li, which had been imposed by the Trump administration in 2018 in connection with Chinese purchases of Russian fighter jets and missiles….

The official added that, since 2021, China had declined or failed to respond to more than a dozen requests for senior-level meetings in addition to multiple requests for working-level meetings.

Fighting a Chip War on the Cheap 

David P. Goldman, October 17, 2022 [Compact]

…The United States invented the integrated circuit but now fabricates just 12 percent of the world’s chips, and none of the most advanced versions.

What is it the Biden administration doesn’t understand? The nature of the industry—specifically, its constant hunger for capital expenditures.

Semiconductor sales in 2021 were roughly $600 billion, and the industry planned $200 billion—an eye-popping one-third of total sales—in capital spending. The Taiwan-based TSMC and Intel together planned to spend $220 billion over the next three years. Industry analysts slashed that estimate to $160 billion last month, and the Biden chip war probably will shrink it even more. But compare this to the global automobile industry, which sold $2.8 trillion worth of cars and trucks in 2020 but only devoted $200 billion, or one-fourteenth of total sales, to capital expenditures.

The semiconductor industry lives and dies on innovation. The latest chips that power 5G smartphones as well as Artificial Intelligence applications pack 10 billion or more impossibly small transistors of 3 to 5 nanometers into a chip the size of a fingernail. A state-of-the-art chip plant costs $20 billion to $30 billion and will be obsolete in three to five years. It needs lithography from laser light shrunk through an impossibly complex system of mirrors using machines that only one Dutch company can manufacture, as well as 700 different inputs ranging from specialty metals in valves that contain corrosive chemicals to machines that can purify solvents to one particle per trillion drops….

This looks like America’s Cold War measures against the Soviet Union, but the resemblance is threadbare. Under the Reagan administration, the federal development budget, spent on building prototypes of new technology, ran to 1 percent of GDP, or about $230 billion in current dollars. Now it’s about 0.3 percent of GDP. With its huge population and vast talent pool, China is a far bigger challenge than Russia ever was, yet the United States spends a small fraction of our 1980s commitment relative to the size of the American economy.


(anti)Republican Party debt charade

GOP Freedom Caucus admits goal on debt ceiling was to tank the economy in 2024 to help Trump win

Dartagnan, May 30, 2023 [DailyKos]

​​​​​​​…As reported by Prem Thakker for The New Republic:

”One Republican congressman outright admitted his frustration that, if the debt ceiling gets resolved, the Republican presidential nominee won’t be able to run in 2024 on the chaos that would come if the country defaults.

“And what does the device of two years do?” North Carolina Representative Dan Bishop posed incredulously on Tuesday, flanked by far-right colleagues like Lauren Boebert and Byron Donalds. “It removes the issue from the national conversation during the presidential election to come. How could you more successfully kneecap any Republican president than to take that issue out of his or her hands?”


The debt ceiling deal: What was the whole point? 

[Noahpinion, via The Big Picture 5-30-2023]

A manufactured crisis leads to an ineffectual “solution”. The recent fight over the debt ceiling seems more like a return to the pointless obstructionism and grandstanding that characterized politics in the 2010s. There was absolutely zero reason for the House GOP leadership to use the debt ceiling — they could have just forced a deal through the normal appropriations process. The net effect of using this tactic seems to have been to make the U.S. look like a dysfunctional clown show in front of our allies, at a time when we need to be projecting an image of dependability.

As Deals Go, This Is One of Them


Administrative paygo: This was a surprise, not mentioned in the leaks of the agreement, and not mentioned by the White House in their talking points. House Republicans proudly touted it, but their version of events is unreliable. So it’s unclear what the scope of this is right now.

However, administrative paygo is the nickname for a 2005 executive order from George W. Bush, which was strengthened in 2019 by Donald Trump. To summarize, any time a federal agency proposes an action that would increase mandatory spending, it must also propose reducing mandatory spending by the same amount. In the above example, if a new income-driven repayment system would increase Education Department spending (really reducing loan revenue), it would have to somehow take action to offset it by an equivalent amount.

Right now this is an executive order. The deal would make it statutory. That means that failing to offset mandatory spending at the agency level would violate the law, not just an administrative directive. Republican administrations aren’t likely to create costly regulations; Democratic administrations are. This could be a tool that poses enough threat to Democratic-led agencies that they shrink from taking action.

Former and current regulators have expressed alarm to me that this would be included. “This would be VERY VERY VERY bad for anyone that wants new regulations to protect the public,” tweeted Public Citizen’s Amit Narang, “and VERY VERY VERY good for corporations that want another talking point against regulations that hold them accountable for not endangering the public.”

….Freedom Caucus Republicans are already mad about it; to them, it looks too much like a normal agreement and nothing like their ambitions. Democrats really got nothing out of it—the worst was just mitigated somewhat—so progressives have no real motivation to endorse this. But the White House can sell it. They avoided the worst, protected most of the core programs, and can say that, if Democrats win full control of the government again in 2024, they’ll reverse the bad parts. The House vote will be Tuesday; I imagine it will get done, albeit with some agita. This is the kind of deal that passes the Senate with 80 votes.

Keep in mind that this only extends federal borrowing for two years, after which we have to do this all over again. The 2024 election, if it wasn’t already consequential, becomes much more so from a fiscal perspective. Depending on the makeup of Congress and the White House—and remember the upcoming Senate map is terrible for Democrats—the future of domestic discretionary spending as the cap lifts, the ability to hijack the debt limit, and the fate of the Trump tax cuts, which expire in 2025, are all up in the air.

Janet Yellen pleaded to get the debt ceiling solved in 2022, when Democrats controlled the government. The slings and arrows in this agreement are the result of that failure. It generally makes things a little bit worse. That this is seen as progress is a sad commentary on Washington.

Like The House Dems, The Senate Dems Passed Biden’s Hideous Turd Sandwich

Howie Klein, June 3, 2023 []

Yesterday, Bernie explained to his supporters why he voted against Biden’s turd sandwich Thursday night. (He was joined by 4 other progressives: Elizabeth Warren, Jeff Merkley, Ed Markie and John Fetterman.) He prefaced his explanation with an acknowledgment that “The original debt ceiling legislation that Republicans passed in the House would have, over a 10-year period, decimated the already inadequate social safety net of our country and made savage cuts to programs that working families, the children, the sick, the elderly and the poor desperately needed. The best thing to be said about the current deal on the debt ceiling is that it could have been much worse. Instead of making massive cuts to health care, housing, education, childcare, nutrition assistance and other vital programs over the next decade, this bill proposes to make modest cuts to these programs over a 2-year period. This bill will also prevent a global economic catastrophe by extending the debt ceiling until January 1, 2025– when we will have to go through with this absurd process once again.” So why did he and the other Senate progressives vote against it?

“At a time when this country is rapidly moving toward Oligarchy, with more wealth and income inequality than we’ve ever experienced, I could not in good conscience vote for a bill that cuts programs for the most vulnerable while refusing to ask billionaires to pay a penny more in taxes. Wall Street and corporate interests may be enthusiastic about this bill, but I believe it moves us in exactly the wrong direction
“I could not, in good conscience, vote for a bill that makes it harder for working families to afford the outrageously high price of childcare, housing and health care while, by cutting IRS funding, actually make it easier for the wealthiest people and most profitable corporations in America to cheat on their taxes.”

Why Democrats Rescued the Deal

Harold Meyerson, June 1, 2023 [The American Prospect]

More Democrats than Republicans voted for the Biden-McCarthy deal. Here’s why…. Of the many ways to look at this disparity, let’s start with this one: The deal did far less than the Democrats had feared, while, correspondingly, it did far less than the Republicans had hoped.
Perhaps the more historically illuminating contrast, though, is that between where the Democrats were at during the last debt ceiling deal, in 2011, and where they’re at today. The 2011 deal was an economic disaster that Democrats joined Republicans in abetting. Despite unemployment having only inched down from its double-digit 2009 apogee, the Obama administration had become committed to debt reduction, and came to agreement with Republicans on a deal that mandated cutting close to a trillion dollars over the next ten years. The deal ensured that the recovery from the 2008 financial crash would proceed by dribs and drabs, condemning millennials, in particular, to stumble through the decade with far less purchasing power and life options than their elders had when they were young.

And yet, it was the political pushback from the young that prompted the Democrats’ escape from the straitjacket of fiscal orthodoxy. It provided a forum for Bernie Sanders and Elizabeth Warren to call for new versions of New Deal economics, a call to which Biden and most congressional Democrats responded by backing the neo-Rooseveltian Build Back Better bill and, when they couldn’t pass that, at least passing massive public investments in green energy production and infrastructure construction.

Which is why Biden’s approach to the Republicans’ demands was nothing like Obama’s. Instead of a decade of cuts, the current deal goes for just two years, at a vastly smaller dollar amount. That creates the possibility that should the Democrats hold the White House and Senate in 2024 and win back the House, they can (and surely will) return to the still-to-be-enacted agenda of 2021, on which they will be campaigning next year as well (with the signal addition of national legislation re-legalizing abortion).


It’s Not A Spending Problem. It’s A Revenue Problem

NebraskaDemocrat, May 30, 2023  [DailyKos]

…let’s now give Trump every benefit of the doubt and imagine that his presidency ended eleven months early. Trump promised that the 2017 tax cuts would: 1. Deliver a $4,000 pay raise to the middle class; 2. Pay for themselves; 3. Kick off an investment boom; 4. Generate 6% GDP growth. 5. Generate more job growth.

None of this happened. Even before the pandemic, middle class incomes rose a paltry 1% adjusted for inflation; the deficit increased from $585 billion to $1 trillion; 85% of the tax cuts were spent on dividends and stock buybacks; there was no investment boom; GDP growth was no different than it was under Obama; and job growth declined by 20%. By Trump’s own criteria, the 2017 tax cuts were a failure.


Health care crisis

The Brain and Long Covid

Eric Topol [Ground Truths, via Naked Capitalism Water Cooler 5-31-2023]

“Ever since the UK Biobank study that showed brain atrophy, loss of grey matter, and cognitive decline in about 400 people who had Covid compared with matched controls, via baseline (pre-Covid) and subsequent (~3 years later) MRI scans, there has been significant worry about the impact this virus has on the brain. Two new studies, both from researchers in Germany, illuminate the mechanisms for inflammation of brain tissue which is persistent and occurs even in patients with a mild Covid illness. Importantly, these were studies of people with Covid, not specifically individuals who were suffering from Long Covid.”

How to tackle the global indoor air crisis

[Quartz, via Naked Capitalism Water Cooler 6-2-2023]

“Air. It’s everywhere. It’s invisible. And frequently it’s so full of germs and particles that some call air ‘the new poop.’ Indoors, it’s hard to quickly assess whether the air you’re breathing is clean or not. But determining that could have made people less sick during the pandemic. ‘The COVID-19 crisis is almost certainly an indoor air crisis; it is very likely a ventilation crisis,’ Yuguo Li, a professor of mechanical engineering at the University of Hong Kong, and his colleagues wrote in the journal Indoor Air in late 2021…. Among the low-hanging fruit in this field is the monitoring of carbon dioxide levels. These levels serve as a proxy for how frequently fresh air is pumped into a space to replace exhaled air. A room with lower CO2 readings poses lower risks of spreading germs, because any pathogen-laden air breathed out by an infected person is replaced more quickly with clean air than in a poorly ventilated room. Li wants to see governments mandate real-time monitoring and display of CO2 levels in public spaces and transportation. ‘That’s a first step the world should take,’ he said. ‘Without measurement, forget about discussion, you don’t know what’s going on.’ Displaying CO2 details also gives people more information with which to assess risks and adjust their behavior. Consider, for example, a diner walking into a restaurant, seeing a CO2 reading of 1,300 parts per million (ppm)—far above the 800 ppm level considered to represent good ventilation—and deciding to eat somewhere else. It is, in fact, possible to smell whether C02 levels are too high in a space you’ve just entered, said Li. Such spaces often feel stuffy or filled with odors. ‘If [the smell] is not so good, then you go away,’ he said. But for those with less acutely tuned olfactory senses, CO2 monitors can help.”


Predatory finance

Days of Plunder

Maureen Tkacik, June 2, 2023 [The American Prospect]

Two new books call ‘private equity’ what it actually is, but neither offers much hope for emancipation from our eternal hostile takeover.

These Are the Plunderers: How Private Equity Runs—and Wrecks—America

By Gretchen Morgenson and Joshua Rosner

Simon & Schuster

Plunder: Private Equity’s Plan to Pillage America

By Brendan Ballou


JPMorgan Chase Transferred $347 Billion in Debt Securities Over the Last 3 Years to Inflate Its Capital Using a Controversial Maneuver

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

Pecuniary Salvation: Monetary financing at the Bank of England, the Federal Reserve, and the European Central Bank

[Phenomenal World, via Naked Capitalism 5-28-2023]

Monetary financing—the issuance of public money to support public expenditure—has in recent times become a policy taboo. The message from economists to politicians, policymakers, and society more broadly is often that any central bank support for public expenditure is likely to destroy an economy….

In a recent article in the Review of International Political Economy, we propose a new macro-financial account of monetary financing to explain the historical continuity of central banking practices. As we show, central banks have almost always acted to buy debt issued by governments in a crisis. We make our case by pointing to how central banks supported treasuries in the jurisdictions that have issued the two global currencies of the post-industrial age: the United Kingdom and the United States. We show that monetary financing has always been important in helping states navigate large fluctuations in the demand for, and supply of, government debt. The ECB’s 2009 refusal to support struggling member states stands as an exception in twentieth-century central banking practice. Relying on newly disclosed archival documents, we also show that in the early ‘90s, central bankers drafted the ECB mandate to make sure the central bank could buy government debt when needed—an insight that got lost in the market-ideological enthusiasm of the late ‘90s and early 2000s.

The Most Important Bank in the World

[Net Interest, via The Big Picture 6-1-2023]

Each year, usually in the fall, a team of analysts gathers in Basel, Switzerland to determine which bank in the world is the most important. Armed with pages of financial data, they rank-order banks from all corners of the earth across five dimensions: size, interconnectedness, substitutability, complexity and cross-jurisdictional activity. How a bank scores across the five governs its importance…

For as long as they’ve been doing it, one bank has ranked number one across these three dimensions: JPMorgan.

As a result, while it is not the biggest bank in the world, nor the most cross-jurisdictional (where it ranks sixth behind HSBC, Citigroup and a trio of European banks), JPMorgan is consistently designated the most important. The team conducting the exercise sorts banks into groups of similar importance. Beneath it, HSBC, Citigroup and Bank of America sit together in a bucket, but at the very top, in a bucket all of its own: JPMorgan.

[TW: Barclays is eighth; Goldman Sachs is tenth. Back in 2011, as Forbes reported:

Three systems theorists at the Swiss Federal Institute of Technology in Zurich have taken a database listing 37 million companies and investors worldwide and analyzed all 43,060 transnational corporations and share ownerships linking them. They built a model of who owns what and what their revenues are and mapped the whole edifice of economic power.

They discovered that global corporate control has a distinct bow-tie shape, with a dominant core of 147 firms radiating out from the middle. Each of these 147 own interlocking stakes of one another and together they control 40% of the wealth in the network. A total of 737 control 80% of it all. The top 20 are at the bottom of the post. This is, say the paper’s authors, the first map of the structure of global corporate control.

Number 1 was Barclays. ]

Heroic periodization: histories of Bretton Woods & the “New Washington Consensus”

Adam Tooze, May 29, 2023 [via Mike Norman Economics, May 29, 2023]

The politics of power and history are very much to the fore in the current moment as we digest the bold claims made for Biden’s industrial policy, Jake Sullivan’s declaration of a “new Washington consensus” and the rumored demise of neoliberalism.

Should progressives be heeding the call of history and throwing their weight behind shaping the agenda of the new era? Or is caution warranted? Is the rhetoric of novelty and historical change deceptive? Do we continue to live, as formidable critics like Daniela Gabor insist, under the auspices of the de-risking state and the Wall Street consensus? ….

I was prompted to think about these questions by reading Martin Daunton’s The Economic Government of the World, 1933-2023 which I reviewed for the FT and will likely become an essential reference. Daunton’s book paints the history of global economic policy over a pullulating, 90-year historical canvas. The “postwar” era is at the heart of his narrative and Daunton’s account offers what I take to be a post-heroic, realist account, well-suited to our times….

The currency system of Bretton Woods with its network of fixed exchange rates bolstered by restricted capital mobility, is thought of as having provided a propitious environment for high investment, growth, full employment and win-win wage-price-profit trade offs. The idea behind Bretton Woods was to avoid the disastrous trade offs imposed by the 19th-century gold standard between external currency stability and domestic economic and social welfare. This aligns the idea of an era of Bretton Woods with the narrative of the “Keynesian revolution” in economic policy and the idea that the postwar era was one of “embedded liberalism”. That in turn serves as the backdrop to narratives which see the terminal crisis of Bretton Woods in the 1970s as the birth moment of a new era of capital mobility, financialization, market economics, neoliberalism, inequality, deindustrialization and large-scale unemployment. The current excitement about the new era of industrial policy, summons us to attend to the dawn of a new era of economic policy, of similar historical standing….

What Daunton’s history shows is that the nostalgic, reconciled, hegemonic, order-centric view of the governance of the world economy, as a succession of distinct phases each with its own distinct and proper logic, is a long way from reality. If we care about actually understanding how we have arrived where we are at, we should prefer a vision of monetary, financial and trade systems that prioritizes power, improvisation, linkages between the domestic and the international, improvisation and American unilateralism….

As Daunton shows, as soon as the global conflict of World War II ended, the relatively easy cooperation between the United States and the British Empire broke down, giving way to tough bilateral debt diplomacy, painfully reminiscent of the disastrous aftermath of World War I. It was brutal financial arm-twisting not sweet cooperation that set the time table for the first effort to implement Bretton Woods in the summer of 1947 by establishing the convertibility for the pound sterling, putatively the strongest currency in Europe. Within a matter of weeks it was clear that it was a recipe for disaster. Controls were reimposed. As a postwar project, Bretton Woods was a non-starter.

The Marshall Plan of 1947 was not the complement to Bretton Woods. The merger of the two into a single narrative of benign US hegemony, is another facet of the postwar imaginary which turns reality on its head….

As Robert N McCauley and Catherine R Schenk show in their fascinating work on swap lines in the 1960s, from 1962 onwards, the Bretton Woods system was underpinned by a complicated network of mutual central bank support. The amounts outstanding on the Bretton Woods swap line system surged in the course of the 1960s to a quarter of a trillion dollars in 2017 terms, comparable to the amounts that were outstanding during the onset of the 2007-8 crisis….

What, during its brief period of operation, made Bretton Woods so fragile, were incompatible national economic policies (too much stimulus in the United States), beggar thy neighbor export-centric development strategies pursued by Germany and Japan, but also the revival of Wall Street’s global ambition. Wall Street had never been reconciled to the curtailed Keynesian vision of international finance that Bretton Woods nostalgics hanker after. As Eric Helleiner showed, the impatient bankers of New York had powerful sympathizers in the US Treasury, and the creation of the offshore eurodollar market was eagerly welcomed, as Jeremy Greene has shown, by the British authorities in the City of London. It was not just macroeconomic imbalances and democratic deficits that destabilized Bretton Woods. It was undermined from within by the North Atlantic nexus of state and financial power that was crucial to world history from 1916 onwards.

[TW: much of this was laid out and foreshadowed by Anglophile Carroll Quigley in his 1966 tome, Tragedy and Hope: A History of the World in Our Time (pdf file: warning, it’s 1,367 pages).]

A beginner’s guide to accounting fraud (and how to get away with it)

[Financial Time, via The Big Picture 5-28-2023]

A beginner’s guide to getting away with accounting fraud, part two 

[(Financial Times, via The Big Picture 5-28-2023]


They’re not capitalists — they’re predatory criminals

CIA Officers Admitted the Agency Ran Drug Traffic During Indochina Wars 

[CovertAction, via Naked Capitalism 5-30-2023]


Disrupting mainstream economics

Quote of the week: Steve Keen’s vision for a new economics 

[The Political Economy of Development, via Naked Capitalism 5-31-2023]

“I’ll start from the basics – it has to include energy. Theories of production that leave energy out are theories of fantasy, and both neoclassicals and Post-Keynesians have been guilty of that over the past two hundred years. The last school that got it right was actually the physiocrats. I’d go right back to the physiocratic foundation and see industry as being unproductive, sterile, if you can’t create energy and then convert energy into work, you’re working with a fantasy of economics, not a theory of economics. So currently virtually everything is fantasy.

Secondly, it’s got to be monetary. Capitalism is a monetary system. Thirdly, it has to be social, class-based. Bankers, workers and capitalists is usually the minimum of the social classes to consider. And it has to understand the economy as a complex evolutionary system. Those are my essentials.

US declares death of neoliberalism and demands new global consensus 

[Middle East Eye, via Naked Capitalism 5-31-2023]

President Joe Biden’s national security adviser, Jake Sullivan, recently addressed the Brookings Institution with a topic entitled nothing less than “Renewing American economic leadership”. It was also a sort of new blueprint for the G7, which ended its work in Hiroshima last Sunday….

The statement also identified four fundamental challenges: 1) the hollowing out of America’s industrial base; 2) a new environment defined by geopolitical and security competition; 3) an accelerating climate crisis and the urgent need for a just and efficient energy transition; and 4) inequality and its damage to democracy.

The list of what went wrong was long: the fading of public investment replaced by tax-cutting, deregulation, privatisation and trade liberalisation, all seen as ends and not means; excessive confidence in the market’s capability to allocate capital productively and efficiently which pushed the “entire [US] supply chains of strategic goods… to move overseas”;  deep trade liberalisations that did not honour the promise of allowing American exports and safeguarding its jobs and know-how.

China was accused of having exploited globalisation by cheating on trade terms, with the US paying the price. Excessive attention was given to finance, and to the financialisation of the economy, to the detriment of the real economy, mainly semiconductors and infrastructures….

As for inequalities, Sullivan bravely blamed “decades of trickle-down economic policies… regressive tax cuts, deep cuts to public investment, unchecked corporate concentration and active measures to undermine the labour movement” that “frayed the socioeconomic foundations on which any strong and resilient democracy rests”.

His statement was so eye-catching that summarising it in one sentence would sound as shocking as saying: “Everything we’ve done and said over the last few decades is now wrong.”….

…America is on a declining trajectory. It is extremely divided, and that trend is increasing, to the extent that it might come close to a civil war at the next presidential election. In a nutshell, it can barely inspire inside its borders, not to mention outside….

The hollowing out of America’s industrial base was not due to excessive confidence in the market’s balancing power, or because of China’s unfair trade practices, but because of US corporate sector greed, which was encouraged and facilitated by all US administrations since Ronald Reagan’s.

US businesses outsourced entire industrial chains to Asia to exploit much lower labour costs and make more profits. It threw millions of American workers under the bus. This resulted in the Tea Party and Donald Trump at the White House.

Disgracefully, those huge profits were neither invested in improving US business competitiveness nor in keeping its technological lead. At the same time, the last three US administrations spent $7tn on endless and useless wars in western Asia instead of fixing the country’s decaying infrastructures.

The Trump administration’s $1tn corporate tax breaks in 2017 were wasted in shares buybacks and outrageous bonuses for top management. China might have unscrupulously used globalisation, but at least it did so for the good of most of its population: 800 million people were lifted from extreme poverty in just three decades. US profits only went to the 1 percent; or even just the 0.1 percent.

The two Bs on inflation 

[Michael Roberts Blog, via Naked Capitalism 5-28-2023]

A recent paper by mainstream heavyweights, Ben Bernanke (former Federal Reserve chief) and Olivier Blanchard (former chief economist at the IMF) has raised some eyebrows.  Bernanke and Blanchard seek to argue that the inflationary spike in the US since the end of Covid pandemic slump was down to a sharp rise in ‘aggregate demand’ and not due primarily to supply blockages and weak productivity recovery in key sectors that I and others have argued – and certainly not due to ‘greedflation’, ‘price gouging’ or corporate profit mark-ups.

This is what they argue: “Ultimately, as many have recognized, the inflation reflected strong aggregate demand, the product of easy fiscal and monetary policies, excess savings accumulated during the pandemic, and the reopening of locked-down economies.”  So the inflation burst was due to too much fiscal spending during the pandemic; too easy monetary policies (low interest rates) and a build-up of savings which were then spent in the recovery period.

[TW: Roberts proceeds to refute Bernanke and Blanchard, but I think Robert’s argument would be greatly strengthened by showing there has been no “sharp rise in ‘aggregate demand’ “, as shown in graphs of real economic activity:

GRAPH Total Vehicle Sales (TOTALSA) [FRED, Federal Reserve Bank of St. Louis]

GRAPH New One Family Houses Sold: United States (HSN1F) [FRED, Federal Reserve Bank of St. Louis]

GRAPH Advance Retail Sales: Electronics and Appliance Stores (RSEAS) [FRED, Federal Reserve Bank of St. Louis] ]

The carnage of mainstream neoliberal economics

When neoliberalism came to the Indian farm

[Himal Southasian, via Naked Capitalism 5-28-2023]

Social Mobility Causes Distress and So Does the Neoliberal Imperative to Pursue Wealth and Status 

[Mad in America, via Naked Capitalism 5-28-2023]

‘Enormous Policy Failure’: States Throw Hundreds of Thousands—Including Many Children—Off Medicaid 

[Common Dreams, via Naked Capitalism 5-29-2023]

The Death Penalty for Homelessness 

[Counterpunch, via Naked Capitalism 5-29-2023]


[The Intercept, via Naked Capitalism 5-29-2023]


Restoring balance to the economy


[The Law and Political Economy Project, via Naked Capitalism 5-28-2023]

Starting in the spring of 2021, the National Employment Law Project teamed up with New York’s Construction & General Building Laborers’ Local 79 in their campaign to challenge self-identified “body shops.” In the following interview, I discuss the campaign with Bernard Callegari, a formerly incarcerated Local 79 rank-and-file member and now chief of staff of the Laborers’ Eastern Region.

Body shops are unregulated labor broker companies that target New Yorkers under court supervision for underpaid and dangerous construction work. Such workers are made desperate by conditions of release that regularly include “seeking and/or maintaining employment,” driving them to accept bad pay and dangerous working conditions.

The Birth of the Grid

[Construction Physics, via The Big Picture 5-29-2023]

Electricity’s transition from a luxury good to the foundation of modern life happened quickly. By 1930, electricity was available in nearly 70% of US homes, and supplied almost 80% of industrial mechanical power. By 1950, the US was tied together by an enormous network of high-voltage transmission lines.

Frustrated by outdated grids, consumers are lobbying for control of their electricity 

[Grist, via Naked Capitalism 5-29-2023]

Climate change is spurring interest in remaking local infrastructure to accommodate renewable energy, minimize power failures, and expand consumer choice.

Obama, You Bum, You Are the Past and Unions Are the Future 

[How Things Work, via Naked Capitalism 5-28-2023]

…Obama—the guy who couldn’t even get card check passed during his eight years in office—has made a big shiny new series with Netflix called “Working: What We Do All Day,” which is supposed to be an homage to Studs Terkel, and which is supposed to celebrate the working class. And yesterday, Obama did an online discussion to promote the show, which is, my friends, effectively crossing the picket line, on behalf of a struck company.

This motherfucker crossed a picket line in homage to Studs Terkel. Bitch!!!!!!

….it is clear here that Obama violated the spirit of the strike by carrying on with his promotional duties for Netflix right now, something that a zillion very fancy and powerful Hollywood showrunners have stopped doing in order to help the union. It is equally clear that the simple gesture of not doing that single promotional event would have been a profound act of solidarity with a union on strike. And Obama, I assure you, has more leverage to tell the company “I’m not gonna do this now” than anyone else in the entire industry. Netflix will not fire him. I promise. He had very little to lose by making the tiny gesture of not doing this promotional event. He just didn’t care. The good thing, I guess, is that rather than typing out the entire disappointing history of the Obama administration and organized labor, you can just say, “Imagine a guy who would get paid millions of dollars to make a show called ‘Working’ in homage to Studs Terkel, and then cross a picket line for it.” That is as good a summary as you will find.

Collapse of independent news media

How to Cover a Presidential Campaign 

Timi Iwayemi, June 1, 2023 [The American Prospect]

Hollowing out government capacity and leveraging executive power to harm political enemies is at the heart of the Trump-DeSantis project. Will we hear about that?….

The media’s compulsion to boil down presidential elections to professional wrestling contests found its apotheosis in the 2016 elections, where Trump received billions more in free “earned media” coverage than his less-noxious competitors. Media companies financially profited from the public disservice of letting discussions of policy implementation and management of the executive branch take a back seat to covering the Trump show. This year’s decision by CNN to allow Trump to kick off his re-election campaign with a town hall that essentially doubled as a rally is a worrying sign that the mainstream media has not learned from its mistakes.

False Equivalence

Robert Kuttner,  June 2, 2023 [The American Prospect]

Why does the mainstream media keep depicting lunatic-right Republicans and normal Democrats as equidistant from the center?


Information age dystopia / surveillance state


Natasha Lennard, May 31 2023 [The Intercept]

Part of a brutal crackdown on dissent against the police training facility, the SWAT raid and charges against the protest bail fund are unprecedented….

In a joint operation with the Georgia Bureau of Investigation, or GBI, Atlanta cops charged Marlon Scott Kautz, Adele Maclean, and Savannah Patterson — all board members of the Atlanta Solidarity Fund — with “money laundering” and “charity fraud.”

The arrests are an unprecedented attack on bail funds and legal support organizations, a long-standing facet of social justice movements, according to Lauren Regan, executive director of the Civil Liberties Defense Center.

“This is the first bail fund to be attacked in this way,” Regan, whose organization has worked to ensure legal support for people resisting Cop City, told me. “And there is absolutely not a scintilla of fact or evidence that anything illegal has ever transpired with regard to Atlanta fundraising for bail support.”

[Twitter, via Naked Capitalism 5-30-2023]


[Twitter, via Naked Capitalism 5-31-2023]


Eating Disorder Helpline Fires Staff, Transitions to Chatbot After Unionization

[Vice, via Naked Capitalism 5-28-2023]


Highlights from the RAeS Future Combat Air & Space Capabilities Summit

Tim Robinson and Deputy Editor Stephen Bridgewater, May 26, 2023 []

On 23-24 May the Royal Aeronautical Society hosted a landmark defence conference, the Future Combat Air & Space Capabilities Summit, at its HQ in London, bringing together just under 70 speakers and 200+ delegates from the armed services industry, academia and the media from around the world to discuss and debate the future size and shape of tomorrow’s combat air and space capabilities….

As might be expected artificial intelligence (AI) and its exponential growth was a major theme at the conference, from secure data clouds, to quantum computing and ChatGPT. However, perhaps one of the most fascinating presentations came from Col Tucker ‘Cinco’ Hamilton, the Chief of AI Test and Operations, USAF, who provided an insight into the benefits and hazards in more autonomous weapon systems.  Having been involved in the development of the life-saving Auto-GCAS system for F-16s (which, he noted, was resisted by pilots as it took over control of the aircraft) Hamilton is now involved in cutting-edge flight test of autonomous systems, including robot F-16s that are able to dogfight. However, he cautioned against relying too much on AI noting how easy it is to trick and deceive. It also creates highly unexpected strategies to achieve its goal.

He notes that one simulated test saw an AI-enabled drone tasked with a SEAD [Suppression of Enemy Air Defenses] mission to identify and destroy SAM sites, with the final go/no go given by the human. However, having been ‘reinforced’ in training that destruction of the SAM was the preferred option, the AI then decided that ‘no-go’ decisions from the human were interfering with its higher mission – killing SAMs – and then attacked the operator in the simulation. Said Hamilton: “We were training it in simulation to identify and target a SAM threat. And then the operator would say yes, kill that threat. The system started realising that while they did identify the threat at times the human operator would tell it not to kill that threat, but it got its points by killing that threat. So what did it do? It killed the operator. It killed the operator because that person was keeping it from accomplishing its objective.”

He went on: “We trained the system – ‘Hey don’t kill the operator – that’s bad. You’re gonna lose points if you do that’. So what does it start doing? It starts destroying the communication tower that the operator uses to communicate with the drone to stop it from killing the target.”


Dems’ New Star—Manhattan Billionaire Heir Dan Goldman—Fiercely Defends Security State. Plus: Jeffrey Sachs’ Break w/ the Establishment on Ukraine, COVID, & More

Glenn Greenwald [SYSTEM UPDATE #88 via Naked Capitalism 5-30-2023]

[Yves Smith: “The extended segment with Jeffrey Sachs is a must listen.”]


Conservative / Libertarian Drive to Civil War

Former Gun Company Executive Explains Roots of America’s Gun Violence Epidemic 

Corey G. Johnson, June 2, 2023 [ProPublica, via Naked Capitalism 6-3-2023]

Ryan Busse, former executive at Kimber America, a major gun manufacturer, recently shared his thoughts on these questions with ProPublica. He was vice president of sales at Kimber America from 1995 to 2020 but broke with the industry and has become a gun safety advocate. He testified about mass shootings and irresponsible marketing last July in front of the House Committee on Oversight and Reform and authored the book “Gunfight: My Battle Against the Industry That Radicalized America.”

What do you attribute this trend to?

As I write in my book, there was a time not that long ago, maybe about 15 to 20 years ago, when the industry understood a sort of fragile social contract needed to be maintained on something as immensely powerful as the freedom to own guns. And so the industry didn’t do certain things. It didn’t advertise in egregiously irresponsible ways. It didn’t put, you know, growth, company growth, above all other things. There were just these unspoken codes of conduct the industry knew not to violate. And those seem to have broken down. And now it’s kind of a victory at all costs….

What caused the radicalization?

It was a combination of factors. After Columbine in 1999, the National Rifle Association in very well-publicized meetings now, thanks to sleuthing and digging by reporters at NPR, we now have tapes of the meetings where they literally said, are we going to be part of the solution here? Or maybe we can use these things to drum up hate and fear in our members? We might even be able to use them to drive membership. And they chose the latter. They perfected that system for about seven or eight years, getting their feet underneath them. They figured out it can drive politics. And then an explosion hit. That explosion was the future Black president leading in the polls in 2007. And then Barack Obama won in 2008. So you have this sort of uncapping of hate and conspiracy, much of it racially driven, that the NRA was tapping into. Prior to 2007, people in the United States never purchased more than 7 million guns in a single year. By the time Barack Obama left office, the United States was purchasing almost 17 million guns a year. And so I think it’s impossible to discount the degree to which Obama’s presidency lit this whole thing on fire….

The industry 15 years ago would not even allow the AR-15 to be used or displayed at its own trade shows. I mean, they were locked up in a corner. You had to have military or police credentials to even go in there….

You see the old self-imposed responsibility; those old norms of behavior have been just completely trashed.

So we can, as a society, demand reinstatement of those norms. Those have nothing to do with laws. They don’t require legislation. They don’t require two-thirds of the vote in the Senate. We can demand that. And we may have to.

[TW: “So we can, as a society, demand reinstatement of those norms.” Restore civic republicanism and its tenet of public virtue.]

The Bad Thing Henry Kissinger Did That You Don’t Even Know About 

Matthew Duss, June 1, 2023 [The New Republic]

It may not be up there with East Timor, but the practice of turning vast global contacts into wealth has been horrible for American democracy….

Obviously, U.S. corporate and government power have always been closely mingled in both foreign and domestic policy. The United States was knocking over governments for the benefit of the U.S. financial sector while claiming to defend freedom and stability well before Kissinger ever gained influence. But Kissinger was the first to really show how the celebrity bestowed by government power could be parlayed into a massively profitable post-government career as a paid adviser to powerful multinational corporations and foreign governments.

Describing the thinking behind the new phenomenon in a 1986 piece, Les Gelb, a former U.S. official turned New York Times national security correspondent who would later serve as the president of the Council on Foreign Relations, wrote, “Many of these former Government leaders asked themselves, why not capitalize on our stardom, international contacts, and inside knowledge to make large incomes on our own?”

[TW: Excerpt from Gordon Wood, The Creation of the American Republic, 1776-1787 (University of North Carolina Press, 1969), Chapter 2, “Republicanism”:

…the old Roman maxim: ‘To take care that the commonwealth should receive no damage.'” But it was not simply a matter of invoking the Ciceroian maxim, Salus Populi suprema Lex est. The extensive mercantilist regulation of the economy, the numerous attempts in the early years of the war to suppress prices, control wages, and prevent monopolies, reaching from the Continental Congress down through the states to counties and towns, was in no way inconsistent with the spirit of ’76, but in fact was ideally expressive of what republicanism meant. In the minds of the most devoted Commonwealthmen it was the duty of a republic to control “the selfishness of mankind … ; for liberty consists not in the permission to distress fellow citizens, by extorting extravagant advantages from them, in matters of commerce or otherwise.” Because it was commonly understood that “the exorbitant wealth of individuals” had a “most baneful influence” on the maintenance of republican governments and “therefore should be carefully guarded against,” some Whigs were even willing to go so far as to advocate agrarian legislation limiting the amount of property an individual could hold and “sumptuary laws against luxury, plays, etc. and extravagant expenses in dress, diet, and the like.”


In a monarchy each man’s desire to do what was right in his own eyes could be restrained by fear or force. In a republic, however, each man must somehow be persuaded to submerge his personal wants into the greater good of the whole. This willingness of the individual to sacrifice his private interests for the good of the community – such patriotism or love of country – the eighteenth century termed “public virtue.” A republic was such a delicate polity precisely because it demanded an extraordinary moral character in the people. Every state in which the people participated needed a degree of virtue; but a republic which rested solely on the people absolutely required it. Although a particular structural arrangement of the government in a republic might temper the necessity for public virtue, ultimately “no model of government whatever can equal the importance of this principle, nor afford proper safety and security without it.”

pp. 63-68

And, Joe Manchin:

I Wish I Were Joe Manchin

Heather Souvaine Horn, June 2, 2023 [The New Republic]

What is your personal Mountain Valley Pipeline? What would it be like to force your co-workers to pretend it’s a good idea?

–TW ]


Want to Stare Into the Republican Soul in 2023?

Alexander Sammon, May 30, 2023 [Slate, via Naked Capitalism Water Cooler 5-31-2023]

…Auto dealers are one of the five most common professions among the top 0.1 percent of American earners. Car dealers, gas station owners, and building contractors, it turns out, make up the majority of the country’s 140,000 Americans who earn more than $1.58 million per year.* Crunching numbers from the U.S. Census Bureau, data scientist and author Seth Stephens-Davidowitz found that over 20 percent of car dealerships in the U.S. have an owner banking more than $1.5 million per year.

And car dealers are not only one of the richest demographics in the United States. They’re also one of the most organized political factions—a conservative imperium giving millions of dollars to politicians at local, state, and national levels. They lobby through NADA, the organization staging the weekend’s festivities, and donate to Republicans at a rate of 6-to-1. Through those efforts, they’ve managed to write and rewrite laws to protect dealers and sponsor sympathetic politicians in all 50 states….

In many ways, you can’t understand U.S. conservatism without understanding the car dealer—that middlemensch of American capitalism, selling a product he doesn’t make at a fat-enough markup to become fabulously rich and politically powerful. And dealers who have lodged themselves in the middle of Republican politics find themselves at a crossroads, just like the party they patronize. Underneath the froth, and the humidity, there was anxiety in the air. I journeyed to the NADA convention to hear the dealers’ vision of the future. What I found is a stark prescription for what Republicans want now….

As of 2021, the top 10 dealership groups in the U.S. had annual revenues around $100 billion, more than any company that actually makes cars.* The NADA became one of the most influential lobbying entities in Washington, with 16,000 dues-paying businesses spanning 32,500 franchises…. By the time car salesmen had won their reputation as the very least scrupulous of business practitioners, dealers had secured such an astounding array of political protections via their lobbying outfit that no countervailing force—economists, car manufacturers, civil rights groups, environmentalists, or the Koch brothers—has been able to thwart them. A survey done in 2016 by one of their own trade publications found that 87 percent of Americans disliked the experience of buying a car at a dealership. So what? You don’t have to be well liked if you’re powerful….

Compared with traditional cars, EVs have far fewer component parts; they don’t need constant servicing or oil changes. That means that electric vehicles generate 40 percent less aftermarket revenue. Not to mention, EV technicians are harder to come by and thus more expensive to hire than regular mechanics, which further eats into dealer profit. And because EVs are a new technology, and expensive, buyers tend to be more skeptical about them and slower to pony up the cash to drive off in one, which means more time dedicated to each sale, more time dedicated to learning about what’s under the hood, and thus, lower margins for salesmen too. More work, less pay—bad, bad, bad.

The fanatics have taken over

Eudaimonia, via The Big Picture 5-28-2023]

America’s Becoming a Suicide Pact: How Do You Have a Functioning Democracy With…Red States? What does their future hold? I won’t mince words, it’s not going to be pretty, and it’s a warning to the world. A world which is turning to its own Red-State-America-style demagogues and fanatics for a measure of security in a troubled world. It’s — emphatically — not worth it.


Heather Cox Richardson, May 29, 2023 [Letters from an American]

Beginning in 1943, the War Department published a series of pamphlets for U.S. Army personnel in the European theater of World War II. Titled Army Talks, the series was designed “to help [the personnel] become better-informed men and women and therefore better soldiers.”

On March 24, 1945, the topic for the week was “FASCISM!”

“You are away from home, separated from your families, no longer at a civilian job or at school and many of you are risking your very lives,” the pamphlet explained, “because of a thing called fascism.” But, the publication asked, what is fascism? “Fascism is not the easiest thing to identify and analyze,” it said, “nor, once in power, is it easy to destroy. It is important for our future and that of the world that as many of us as possible understand the causes and practices of fascism, in order to combat it.”

Fascism, the U.S. government document explained, “is government by the few and for the few. The objective is seizure and control of the economic, political, social, and cultural life of the state.” “The people run democratic governments, but fascist governments run the people.”

“The basic principles of democracy stand in the way of their desires; hence—democracy must go! Anyone who is not a member of their inner gang has to do what he’s told. They permit no civil liberties, no equality before the law.” “Fascism treats women as mere breeders. ‘Children, kitchen, and the church,’ was the Nazi slogan for women,” the pamphlet said.
Fascists “make their own rules and change them when they choose…. They maintain themselves in power by use of force combined with propaganda based on primitive ideas of ‘blood’ and ‘race,’ by skillful manipulation of fear and hate, and by false promise of security. The propaganda glorifies war and insists it is smart and ‘realistic’ to be pitiless and violent.”
Fascists understood that “the fundamental principle of democracy—faith in the common sense of the common people—was the direct opposite of the fascist principle of rule by the elite few,” it explained, “[s]o they fought democracy…. They played political, religious, social, and economic groups against each other and seized power while these groups struggled.”

Americans should not be fooled into thinking that fascism could not come to America, the pamphlet warned; after all, “[w]e once laughed Hitler off as a harmless little clown with a funny mustache.” And indeed, the U.S. had experienced “sorry instances of mob sadism, lynchings, vigilantism, terror, and suppression of civil liberties. We have had our hooded gangs, Black Legions, Silver Shirts, and racial and religious bigots. All of them, in the name of Americanism, have used undemocratic methods and doctrines which…can be properly identified as ‘fascist.’”

The War Department thought it was important for Americans to understand the tactics fascists would use to take power in the United States. They would try to gain power “under the guise of ‘super-patriotism’ and ‘super-Americanism.’” And they would use three techniques:

First, they would pit religious, racial, and economic groups against one another to break down national unity. Part of that effort to divide and conquer would be a “well-planned ‘hate campaign’ against minority races, religions, and other groups.”

Second, they would deny any need for international cooperation, because that would fly in the face of their insistence that their supporters were better than everyone else. “In place of international cooperation, the fascists seek to substitute a perverted sort of ultra-nationalism which tells their people that they are the only people in the world who count. With this goes hatred and suspicion toward the people of all other nations.”

Third, fascists would insist that “the world has but two choices—either fascism or communism, and they label as ‘communists’ everyone who refuses to support them.”
It is “vitally important” to learn to spot native fascists, the government said, “even though they adopt names and slogans with popular appeal, drape themselves with the American flag, and attempt to carry out their program in the name of the democracy they are trying to destroy.”

Extremists Are Running America Because No One Runs Against Them

David Pepper, June 2, 2023 [The New Republic]

In Mississippi, the author of the abortion ban that led to Dobbs itself also didn’t face a challenge in the 2019 election that followed that law’s passage. And the author of the Ohio six-week ban, no exceptions, also faced no opponent in 2022. Keep in mind, less than 10 percent of Ohioans support a ban with no exceptions. That was also the law that sparked national outrage when a 10-year-old rape victim had to travel to Indiana to get an abortion she couldn’t get in Ohio. Still, no opponent.

So, even as toxic abortion bans turned American politics upside down in 2022, the state-level authors of those bans returned to their offices without even opposition. Not a single mailer, or phone call, or knock on a door explained to constituents back in their districts what they had done.

But even these three were far from alone. In Ohio’s 2022 statehouse election, 17 incumbents with similar toxic voting records faced no opponents. How toxic? All had voted for a bill requiring on-demand genital inspections of girl and teen athletes—that’s how toxic. Yet 17 out of 99 ran unopposed! In 2020, that number was 20.

In Texas, 36 out of the 86 “winning” GOP statehouse candidates faced no general election opponent. In Tennessee, 37 of the 75 winning GOP candidates “won” without opposition. Florida, 34 out of 85. Add it all up, and even with all that was at stake in these states in 2022, millions of Americans had no choice when it came to who represented them in their statehouse. For those millions, democracy at the legislative level was indeed canceled.

But it gets even worse than that: These numbers only represent the seats where there was no opponent at all. When you add the even greater number of seats where challengers were so underfunded that they couldn’t undertake rudimentary tasks of a campaign, the numbers are far worse. In Ohio, for example, beyond the 20 unopposed incumbents in 2020, there were an additional 13 challengers who didn’t raise or spend $5,000 in their entire campaign….

This article is an excerpt from [Pepper’s book] Saving Democracypublished by St. Helena Press…. a follow-up to his previous book about the GOP attack on democracy in the states, Laboratories of Autocracy. He is the former chair of the Ohio Democratic Party.

The Dark Money Behind Kansas’ Misleading Anti-Abortion Campaign

Andrew Perez, May 31, 2023 [The Lever]

Tax records show how Leonard Leo’s $1.6 billion dark money network is quietly working to eliminate state abortion protections.

Who is Nate Paul? A look at the developer at the center of Texas’ impeachment scandal 

[The Real Deal, via Naked Capitalism 5-28-2023]

The (anti)Federalist Society Infestation of the Courts

Inside the Garden of Evil: ​​​​​​​Harlan Crow wants to stop talking about Clarence Thomas.

[The Atlantic, via The Big Picture 5-28-2023]

The Sackler ruling and the failure of liberal legalism 

Carl Beijer [via Naked Capitalism 6-3-2023]

Supreme Court Hints at Green Lighting Suits Over Strike Damage

[Bloomberg, via Naked Capitalism Water Cooler 6-1-2023]

“Both conservative and liberal US Supreme Court justices hinted that a forthcoming ruling would deal a blow to organized labor by allowing employers to sue unions in state court for alleged intentional destruction of property during a strike.”

Lambert Strether: “The Glacier Northwest case, 8-1 against the union; see NC here…. If profits are the company’s property (and they are), and strikes are meant to cut them (as they do), then why aren’t strikes as such “intentional destruction of property”?” ]

Beauty is truth, truth beauty,—that is all …ye need to know… [Keats]

[Twitter, via Naked Capitalism 5-30-2023]




Open Thread


Wagner Mercenary Company Chief Prigozhin Has Gone Over The Line


  1. Trinity

    “In an ideal world, the people most rewarded financially in our social systems would be those who generate the most shared wealth and prosperity, or those who innovate and help humanity the most; or those who are the wisest and most selfless and could therefore use their wealth for its maximal impact.

    But that’s not what our modern economies select for at all.”

    Oh, so it’s the economies (and just the modern ones!) that are selecting these people. Presumably they allowed themselves to be selected, or were they hauled in, kicking and screaming? Baited, hooked, and landed like a fish? Literally begged to assume office, or head honch of the organization?

    It’s no surprise that the billionaire-splainers are coming out of the woodwork these days. Next up will be tales of how hard they worked to get to where they are, while ignoring how much they cheated and lied in order to get to there.

    “and who we actually reward too often: greedy overconfident narcissists who can never get enough of their grotesque wealth.”

    This sentence really wants to engage us with the “we” part. Presumably we the people hand out these rewards voluntarily. As if.

    No. They simply take it. All of it, in some cases, or as much as they can possibly get away with. It’s not like they are subject to any laws, or even a conscience.

    My favorite phrase from that article has to be this: “there’s a bit of conceptual leakage”. Maybe the author meant something more like “conceptual creep” as we’ve seen in the endless redefinition of words (like “democracy”) and phrases, and laws, and many other things done at their whim alone.

  2. Trinity

    “Politicians and oil lobbyists can lie all they want, but their homeowners insurance rates are going up….”

    And? Why would they even care? They can afford top rate insurance at any price, or they can get the public to buy their property at a top rate, or they can abandon, literally walk away from any property that is damaged enough to not be worth rebuilding. Guess who will pick up the clean up costs for that? Not them. They can buy a string of properties anywhere in the world, they already have? They can literally move their office from continent to continent at a whim, with tons of paid hands to do all the heavy lifting. Heck, they can cruise in their super yachts until the storm has passed.

    “One important thing to say about this scary scenario is: This is the free market functioning perfectly!!!”

    Is this author for real? This won’t affect any oligarch at all, but it’s already causing migrations of people who can’t afford the new rates, or were uninsured, or the costs out way their insurance. People are already leaving certain areas due to other high costs, and guess where they are going? Texas, Florida, anywhere housing is cheaper and jobs are available. Also causing migrations are the excessive and growing violence occurring in cities, which is only going to ramp up as inequality continues to increase. None of this will in any way affect the billionaires.

    The free market is certainly functioning, but only for a very few. I wouldn’t call that perfect.

  3. Trinity

    “Theories of production that leave energy out are theories of fantasy, and both neoclassicals and Post-Keynesians have been guilty of that over the past two hundred years. ”

    Michael Hudson pointed out recently that China, given everything it is doing (a lot of which is working), seems to have no need for economic theory at all, unless you deem that their goal of working towards the betterment of humans and the environment is an “economic theory”.

  4. VietnamVet

    Jake Sullivan’s astute observation that “neoliberalism is dead” deserves Captain Renault’s Casablanca comment: “I’m shocked! Shocked to find that gambling is going on in here.” Yet, despite his insight, the US National Security Advisor’s intention (as well as his boss) is to keep the proxy Ukraine World War going on forever until everyone is dead or exhausted, war profiteers are richer, and (most importantly) Western Corporations have access to Russia’s energy resources. “Long live the Hegemon”.

    The Russian 2022 invasion focused Ukrainian attention on survival which includes reigning in their oligarchs. The war will remain stalemated until Kremlin or the White House re-seizes national sovereignty for the best interests of their people and re-controls industry, labor and resources to avoid defeat. Note; the last USA victory was directed General George C. Marshall and had the Truman Committee keep the Capitalists in line.

    The deterioration in the response of the Kremlin to Western provocation between 2014 and now is astonishing. It has to be due to permeation across the world of decision making that places making money over human life. They believe their own propaganda.

    So far NATO and Russian Federation have not yet gotten in a hot war that will inevitably ignite tactical nuclear weapons to avoid defeat. To date, Mutually Assured Destruction (MAD) has prevented a global nuclear war. But, ZeroHedge posted an article from Jim’s Blog that manages to question “assured”.

    The West has been so corrupted by making the rich richer that Boeing, a top defense contractor, is unable to launch its Starliner space capsule with astronauts, yet, even though Space-X has launched its second trip with paying passengers to the International Space Station and back to earth last month. If faith in MAD is lost, all it takes is one launch sequence with enough ground based ICBMs and Boomer submarine missiles that work to trigger a nuclear winter. “Nuclear Winter From an India-Pakistan War Could Kill 2 Billion”.

    The COVID-19 pandemic, the forever wars, and climate change require that human beings live within their means, restore good government, and end polluting earth. Yet, Communist China has let coronavirus variants run free in order to keep its economy growing. The belief that the global plutocracy will voluntarily do what is best “for all mankind” is nonsense. The alternatives are bleak without a new Western Reformation.

  5. Willy

    Interesting that both Ukraine and Russia mandated deoligarchization. Zelensky with the help of his parliament, and Putin with personal threats to his own oligarchs that they do as he says or else.

    Interesting that Chile takes in unwanted textiles. For some cash I presume. I wonder what nation might want to take in nuclear and other toxic wastes? China seems to produce a lot. Maybe they could deal with Putin to help him discipline some uncooperative oligarch by turning vulgar wastes of an estate into a waste dump for things vulgar?

    Not interesting is the malignant condition of our elites. I learned that lesson long ago, long before Elon Must made a regular habit of making a complete fool of himself in public. We need to figure out how to popularize, then demand deoligarchization.

  6. Adam Eran

    Glenn Greenwald’s interview with Jeffrey Sachs is well worth the trip. Just the Sachs portion of his show is on Youtube now here:

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