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

Week-end Wrap – Political Economy – May 10, 2020

by Tony Wikrent

The Risks – Know Them – Avoid Them
[ErinBromage, via Mike Norman Economics 5-8-20]

We know most people get infected in their own home. A household member contracts the virus in the community and brings it into the house where sustained contact between household members leads to infection.

But where are people contracting the infection in the community? I regularly hear people worrying about grocery stores, bike rides, inconsiderate runners who are not wearing masks…. are these places of concern? Well, not really. Let me explain….

Remember the formulae: Successful Infection = Exposure to Virus x Time

….Ignoring the terrible outbreaks in nursing homes, we find that the biggest outbreaks are in prisons, religious ceremonies, and workplaces, such a meat packing facilities and call centers. Any environment that is enclosed, with poor air circulation and high density of people, spells trouble.

Some of the biggest super-spreading events are:

  • Meat packing: In meat processing plants, densely packed workers must communicate to one another amidst the deafening drum of industrial machinery and a cold-room virus-preserving environment. There are now outbreaks in 115 facilities across 23 states, 5000+ workers infected, with 20 dead. (ref)
  • Weddings, funerals, birthdays: 10% of early spreading events
  • Business networking: Face-to-face business networking like the Biogen Conference in Boston in March.

As we move back to work, or go to a restaurant, let’s look at what can happen in those environments.

Restaurants: Some really great shoe-leather epidemiology demonstrated clearly the effect of a single asymptomatic carrier in a restaurant environment (see below). The infected person (A1) sat at a table and had dinner with 9 friends. Dinner took about 1 to 1.5 hours. During this meal, the asymptomatic carrier released low-levels of virus into the air from their breathing. Airflow (from the restaurant’s various airflow vents) was from right to left. Approximately 50% of the people at the infected person’s table became sick over the next 7 days. 75% of the people on the adjacent downwind table became infected. And even 2 of the 7 people on the upwind table were infected (believed to happen by turbulent airflow). No one at tables E or F became infected, they were out of the main airflow from the air conditioner on the right to the exhaust fan on the left of the room. (Ref)

Workplaces: Another great example is the outbreak in a call center (see below). A single infected employee came to work on the 11th floor of a building. That floor had 216 employees. Over the period of a week, 94 of those people become infected (43.5%: the blue chairs). 92 of those 94 people became sick (only 2 remained asymptomatic). Notice how one side of the office is primarily infected, while there are very few people infected on the other side.


Strategic Political Economy

[The Big Picture, May 9, 2020]

SCREEN NEW DEAL: Under Cover of Mass Death, Andrew Cuomo Calls in the Billionaires to Build a High-Tech Dystopia
Naomi Klein, May 8 2020 [The Intercept, via Naked Capitalism 5-9-20]

It has taken some time to gel, but something resembling a coherent Pandemic Shock Doctrine is beginning to emerge. Call it the “Screen New Deal.” Far more high-tech than anything we have seen during previous disasters, the future that is being rushed into being as the bodies still pile up treats our past weeks of physical isolation not as a painful necessity to save lives, but as a living laboratory for a permanent — and highly profitable — no-touch future….

It’s a future in which our homes are never again exclusively personal spaces but are also, via high-speed digital connectivity, our schools, our doctor’s offices, our gyms, and, if determined by the state, our jails. Of course, for many of us, those same homes were already turning into our never-off workplaces and our primary entertainment venues before the pandemic, and surveillance incarceration “in the community” was already booming. But in the future under hasty construction, all of these trends are poised for a warp-speed acceleration.

This is a future in which, for the privileged, almost everything is home delivered, either virtually via streaming and cloud technology, or physically via driverless vehicle or drone, then screen “shared” on a mediated platform. It’s a future that employs far fewer teachers, doctors, and drivers. It accepts no cash or credit cards (under guise of virus control) and has skeletal mass transit and far less live art. It’s a future that claims to be run on “artificial intelligence” but is actually held together by tens of millions of anonymous workers tucked away in warehouses, data centers, content moderation mills, electronic sweatshops, lithium mines, industrial farms, meat-processing plants, and prisons, where they are left unprotected from disease and hyperexploition. It’s a future in which our every move, our every word, our every relationship is trackable, traceable, and data-mineable by unprecedented collaborations between government and tech giants.

We’re Not in This Together: There is no universal politics of climate change

[The Baffler, via Naked Capitalism 5-6-20]

Neofeudalism is also a steady-state economy—one in which growth is essentially nil or close to it—but characterized not by some harmonious socially sustaining socioeconomic life. Rather, it would be one in which the rate of return on “capital” lies at its historic norms of 4 to 5 percent for a rather much larger and much more comfortable ruling class than existed in pre-modern periods across the world, coupled with the conditions for at least a handful of distinct—if almost certainly overlapping—surplus populations: First, a massive number of socioeconomically expendable people (no longer needed for the basic stable reproduction of the sated and well-off) who face direct, permanent ecological adversity. (Think about the UN’s estimate of one to two billion who may “no longer have adequate water” if the world warms by 2 degrees Celsius.) And second, an over-large body—also facing severe economic and ecological constriction—of what one might term “neoserfs”: people who work in basic production and extraction, maintenance, and non-essential service functions. In between these groups and a ruling class would be a third mass: loyal retainers, if you will. Those who perform high level services, especially governance and security.

Billionaires Are Eating the Economy
[The New Republic, May 7, 2020]

Yet over a span of three weeks in March and April—right as hospitalizations and deaths were climbing sharply in the U.S.—the country’s billionaires managed to increase their combined net worth by about 10 percent. According to a report from the Institute for Policy Studies, during the same period that more than 22 million people lost jobs, the wealth of America’s billionaires rose by an astonishing $282 billion. “Already, the combined wealth of U.S. billionaires is higher than a year ago, according to our study,” institute scholar and study co-author Chuck Collins wrote. “At least eight of these billionaires have added another $1 billion to their wealth during the pandemic.” Among the billionaires who have gotten richer since the Covid-19 crisis began are a number of health care industry investors, Zoom founder Eric Yuan, and, of course, Amazon CEO Jeff Bezos.

Though $282 billion is a nearly incomprehensible sum of money, for some general context, consider the following: Last week, New York Governor Andrew Cuomo threatened to cut $10 billion in funding to public schools, health care services, and other programs. He also applied for a $4 billion loan from the federal government to replenish the state’s unemployment benefits, now strained by mass layoffs. In April, the postal service, an institution now embroiled in a bitter dispute with the Trump administration over funding, asked for $50 billion to stay afloat. Several states are now anticipating budget shortfalls ranging from $1.1 billion in Arizona to as much as $15 billion in New York. And in 2018, Supplemental Nutrition Assistance Program and other food assistance benefits cost $68 billion in total. Billionaires’ earnings on paper over the period of less than one month, in other words, could have covered all of these programs, with money left over.

[Naked Capitalism 5-5-20]

Auto dealerships in your local Chamber of Commerce are, as it were, over-ruling the pencil necks at the CDC and the NIH. Local oligarchs are filling the power vacuum left at the Federal level, and our globalist oligarchs are indifferent (denial) or favorable (eugenics). This outcome is consistent with declining life expectancy never having become a political issue, along with deaths of despair and the opioid epidemic. Benign or malign neglect, it comes to the same thing.

[The Marshall Project, via Naked Capitalism 5-3-20]

The Ars COVID-19 vaccine primer: 100-plus in the works, 8 in clinical trials

[Ars Technica, via Naked Capitalism 5-4-20]

San Francisco study reveals 90% of people who tested positive for coronavirus had been leaving home to go to work

[Daily Mail, via Naked Capitalism 5-6-20]The Public Is Astonishingly United

[The Atlantic, via Naked Capitalism 5-7-20]

“A poll from The Washington Post and the University of Maryland released yesterday finds that eight in 10 Americans oppose reopening movie theaters and gyms; three-quarters don’t support letting sit-down restaurants and nail salons reopen; and a third or less would allow barber shops, gun stores, and retail stores to operate. An NPR/PBS NewsHour/Marist poll last week found similar numbers.”

2 Utah County businesses told staff to ignore COVID-19 guidelines, resulting in 68 positive cases Daily Herald, via Naked Capitalism 5-7-20] “The right to infect others shall not be infringed.”


[Vox, via Naked Capitalism 5-6-20]

“We have a federal government that is supporting provinces’ responses,” says David Fisman, an epidemiologist at the University of Toronto. “You have a chief executive who is directly undermining the public health response.”

There are a number of factors that have enabled Canada to perform at a higher level than the United States, including more consistent pre-virus funding for public health agencies and a universal health care system. But one of the most important seems to have been a difference in political leadership….

Third, and finally, every expert I spoke emphasized the value of Canada’s single-payer health care system at this crucial moment, especially when compared to America’s extremely expensive and low-capacity system.

David Sirota [Too Much Information, via Naked Capitalism 5-8-20]

The bipartisan ideology of “looking forward as opposed to looking backwards” is here again — it is designed to block efforts to hold Trump and his cronies accountable for their incompetence & malice….

The bipartisan move to prevent accountability began last month when Congress passed a grotesque corporate bailout without a recorded vote. The bill included provisions allowing the Federal Reserve to evade longstanding transparency rules.

[Atlantic, via Naked Capitalism 5-9-20]

The underlying assumptions of white innocence and black guilt are all part of what the philosopher Charles Mills calls the “racial contract.” If the social contract is the implicit agreement among members of a society to follow the rules—for example, acting lawfully, adhering to the results of elections, and contesting the agreed-upon rules by nonviolent means—then the racial contract is a codicil rendered in invisible ink, one stating that the rules as written do not apply to nonwhite people in the same way. The Declaration of Independence states that all men are created equal; the racial contract limits this to white men with property. The law says murder is illegal; the racial contract says it’s fine for white people to chase and murder black people if they have decided that those black people scare them. “The terms of the Racial Contract,” Mills wrote, “mean that nonwhite subpersonhood is enshrined simultaneously with white personhood.”

….The lives of workers at the front lines of the pandemic—such as meatpackers, transportation workers, and grocery clerks—have been deemed so worthless that legislators want to immunize their employers from liability even as they force them to work under unsafe conditions. In East New York, police assault black residents for violating social-distancing rules; in Lower Manhattan, they dole out masks and smiles to white pedestrians.

Donald Trump’s 2016 election campaign, with its vows to enforce state violence against Mexican immigrants, Muslims, and black Americans, was built on a promise to enforce terms of the racial contract that Barack Obama had ostensibly neglected, or violated by his presence. Trump’s administration, in carrying out an explicitly discriminatory agenda that valorizes cruelty, war crimes, and the entrenchment of white political power, represents a revitalized commitment to the racial contract.

[FT, via Naked Capitalism 5-5-20]

A Third of Americans Didn’t Pay Their Rent or Mortgage in May, Survey Says
[Vice, via Naked Capitalism 5-8-20]

“Perspectives from Main Street: The Impact of COVID-19 on Communities and the Entities Serving Them” (PDF)

[Federal Reserve Bank of Atlanta, via Naked Capitalism Water Cooler 5-6-20]

 “This report offers findings of a survey designed to collect information on the effects of COVID-19 on communities and the entities serving them.” n=3899 nonprofit organizations, financial institutions, government agencies and other community organizations. More: “Over one-third of respondents (35%) indicated it will take more than 12 months for their communities to return to the conditions prior to the disruption from COVID-19. … A quarter of respondents (25%) indicated their entity could operate for less than three months in the current environment before exhibiting financial distress.”

“The U.S. Labor Market During the Beginning of the Pandemic Recession” (PDF)

[Becker Friedman Institute, via Naked Capitalism Water Cooler 5-8-20] Business failures:

While the majority of the employment decline occurred among continuing businesses, measured business exit—or temporary suspension of operations—plays a substantial role in the overall collapse, particularly among smaller businesses. This is an alarming pattern which may have relevance for the pace of recovery. One would hope that many of the businesses we observe suspending activities will resume operations in the near future. If not, the jobs destroyed by exiting businesses are permanently gone, requiring extra growth among surviving businesses or extra business entry to replace them. Jobs and the associated personal toll of unemployment are not the only costs of business failure. From the perspective of business owners, the failure of a business means the loss of income and probably a large share of household assets. From the perspective of the macroeconomy, business failures mean the destruction of intangible capital and even the loss of some physical capital, particularly in light of costly capital reallocation. From the perspective of communities and neighborhoods, business failure means dramatic, sometimes irreversible changes to the local physical economic landscape. While some recessions see elevated failure of low-productivity businesses (thereby enhancing aggregate productivity), we have no reason to expect exit selection to function constructively in the current environment, where business revenue losses are determined by the rapid onset of a health crisis.

[mintpressnews, via Naked Capitalism 5-8-20]

The latest $484 billion “relief” bill which lacks funding for food aid, rent relief, and basic worker protections comes on the heels of the ironically named CARES Act which includes a tax break for those earning more than one million dollars per year. To be more precise, 82 percent of the tax benefits will go to roughly 43,000 taxpayers. This generous cut will cost $90 billion this year alone. That comes out to an average handout of $1.6 million to each millionaire or billionaire in 2020. To put that into perspective for all those who got a “stimulus” check, the CARE-ing tax break handout is worth 1,300 times as much as that $1,200 check. And that’s just one section of tax breaks. Big corporations are on track to get trillions from the Federal Reserve as the largest asset manager in the world (as well as a piggy bank for weapons manufacturers and the fossil fuel industry), Black Rock has been tapped to manage these bailout programs. As journalist David Dayen wrote in a recent article, “This is a robbery in progress.”

“Schumer, Pelosi set to unveil ‘Rooseveltian’ relief package” 

Lambert Strether reads between the lines:

Since there’s no mention of policy in the article, let me pull out the adjectives: “Big,” “bold,” “very strong,” “action here to help average folks,” and “Rooseveltian.” If only there had been somebody who had been advocating policies like that in the Democrat primary! And if only the Democrats had done this first, when they had some leverage, and nobody was muttering about “fiscal responsibility.” Anyhow, I hate to be too cynical, but liberal Democrats being who they are, I would bet that the bill will not be universal (“essential workers” enter by the front door, all others by the kitchen entrance), will include means testing, and be at least partially implemented through tax credits. It will also be complicated. The bill will certainly not resemble Tlaib’s proposal to give everyone relief through a card topped up on a monthly basis, and paid for by issuing The Coin. That would be Rooseveltian.

[Twitter, via Naked Capitalism Water Cooler 5-7-20]

We live in a failed state; a sick, sad society. We’re being asked to accept a whole 9/11’s worth of death every day for the foreseeable future & be OK with it. That’s depraved!And Democratic/progressive leaders & organizations are going ¯\_(ツ)_/¯ at this. Where’s the fury?

10:09 AM · May 5, 2020

Fed funds futures begin pricing in slightly negative fed funds rate in 2021 but U.S. Fed won’t take rates negative, say fund managers, economists

[Reuters, via Naked Capitalism 5-8-20]What do negative US interest rates mean?

[Macrobusiness, via Naked Capitalism 5-8-20]The Case for Deeply Negative Interest Rates

Kenneth Rogoff [Project Syndicate, via Naked Capitalism 5-8-20]

David Dayen [American Prospect, May 9. 2020]

Meatpacking plants, even without the pandemic, needed new safety standards anyway. Injury rates have spiked since 1980, and line speeds have accelerated along with it. Inspections are nearly non-existent. Wages have collapsed, and the industry is more consolidated than it was at the time of Upton Sinclair’s The Jungle. The largely immigrant workers being exposed at these plants quite literally aren’t thought of as people. “The surge was due to the meatpacking—that’s where Brown County got the flare. It wasn’t just the regular folks in Brown County,” said the chief justice of the Wisconsin Supreme Court on Thursday.

The line speeds, close quarters, and need for refrigeration (and therefore a small space to reduce the energy used to cool the space) makes meatpacking a hot spot for COVID-19 throughout the world. But America’s unique specialness is the consolidation, which makes the supply chain more vulnerable and makes shortages more likely, but in normal times (and even abnormal ones) makes meatpackers rich. Prices are soaring for meat consumers and dropping for farmers and ranchers. The middleman gets rich. By controlling the supply through the plants and both sides of the transaction, they can dial in profits in whatever scenario. It’s a function of the lack of competition.

“Coronavirus infects more than 1,600 workers at four Iowa meatpacking plants”

[Des Moines Register, via Naked Capitalism Water Cooler 5-5-20]

“More than 1,600 workers at four Iowa meatpacking plants have been infected with the coronavirus, state health officials reported Tuesday. The worst-hit factory is the Tyson pork processing plant in Perry, where 730 workers tested positive for the virus, the Iowa Department of Public Health reported. That means that 58% of the workers who were tested at the plant had the virus, Deputy Public Health Department Director Sarah Reisetter said at the state’s daily news conference about the pandemic. The plant in Waterloo had 444 workers test positive, which was 17% of those tested. The one in Columbus Junction has 221 workers test positive, which was 26% of those tested. At the Iowa Premium Beef plant in Tama, 258 workers tested positive, which was 39% of those tested, she said.”

[Bloomberg, via Naked Capitalism Water Cooler 5-7-20]

“On March 25 one of [Rafael Benjamin’s] daughters gave him a face mask to wear at the plant, where he operated boxing and loading equipment near the entrance and was often the first person to greet arriving co-workers. “He was always so respectful,” a shiftmate says. Two days later, Benjamin told his kids a supervisor had ordered him to remove the mask because it was creating unnecessary fears among plant employees.” • Benjamin died, naturally. More: “The meat industry’s failure to protect its employees from the coronavirus has triggered the most serious threat to U.S. meat supplies since World War II. In recent weeks, 115 meat and poultry plants have reported Covid-19 infections in the U.S., and about 5,000 workers, 1% of the industry’s workforce, have been confirmed sick, with 20 deaths, according to the U.S. Centers for Disease Control and Prevention. Outbreaks were so severe that at least 18 plants shut down…. Now it’s up to the meatpacking companies, with even less accountability than before, to adapt to the coronavirus while sustaining production and worker health. ‘It remains to be seen how we’re going to manage that dynamic between the health and emotional safety, and physical safety, of the workers in the plants and the executive order,’ David MacLennan, Cargill’s chairman and chief executive officer, told Bloomberg TV on April 28…. Trust among meatpacking workers and their communities, never high, has been shattered.”

“In less time than it takes a farmer to plant and harvest a head of lettuce, the nation’s entire food industry has been flipped on its head by the COVID-19 pandemic. An intricate system for matching supply with demand, established over decades, has been thrown out of whack just as unemployment and food insecurity are skyrocketing among families…. ‘The whole world is trying to figure out how to rebalance the supply and demand,’ said Chris Tang, a supply chain expert and professor at the UCLA Anderson School of Management. ‘We have so much food being wasted. The question is, how do you reduce the food waste so that the food will actually get to the people in need?’… [Tang] sees a new, nationwide online platform where those with food can immediately be paired up with those who need it.”

“Business relationships in global apparel supply chains are unraveling.” 
[Wall Street Journal, via Naked Capitalism Water Cooler 5-6-20]

High-stakes disputes between manufacturers and their customers have exploded across the garment industry… as payments are delayed and retailers cancel orders while they cope with closed stores and plunging sales” “Factories in Asia that have paid raw-material, labor and other costs say they have been left holding huge consignments of clothing or seen them disappear into distribution channels without payment. Many say they have little recourse as apparel contracts have shifted to give importers more flexibility. That is in part because many retailers have moved away from use of letters of credit, a once-common backstop guaranteeing payment through banks, and instead rely on an open-account system that is light on enforcement. The shift has been tough on apparel factories that often pay for labor and material costs out of pocket or with debt.”

Lambert Strether asked his readers: “[M]oved away from use of letters of credit” is a little light on agency.. Do we have any readers with insight on how this happened? ObjectiveFunction replied
May 7, 2020 at 3:01 am

1. It’s a profoundly discretionary market whose upstream is essentially commodities, largely the labor of young peasant women. And actual demand has abruptly tanked vs. forecasts, for reasons that should now need no explanation. So a lot of distributors are in a massive bind, paying huge freight and storage costs, and this is one of the ways some of them share the pain.

2. When the shoe’s on the other foot, e.g. PPE, with near infinite demand and limited supply, manufacturers feel free to use force majeure and other loopholes to buy themselves breathing space to catch up. Lots and lots on that at ChinaLawBlogs, and also here.

3. More macro, the Sibylla Bostoniensis blog gives a very well written and lay-accessible take on the fragility of modern arms length supply chains to abrupt forecast shocks (the Bullwhip Effect). As demonstrated in Jay Forrester’s infamous “Beer Game” which I myself played (and bombed at lol) in MBA school. As the initial demand shock reverberates and KPIs get blown, stressed out supply chain participants begin blaming each another for malfeasance and then ‘retaliating’ with massive overstocking orders. Or else by stopping payments, force majeure etc.

She also talks about this in the context of health care, which should greatly interest the commentariat here.

What Is Happening to Supply Chains
Sibylla Bostoniensis

The Carnage of Establishment Neoliberal Economics

[DailyBeast, via Naked Capitalism 5-4-20]

According to a study published in Clinical Orthopaedics and Related Research, the average hospital CEO’s salary increased 93 percent in the decade between 2005 and 2015. In the same time frame, the average health-care worker’s salary increased just 8 percent. The average hospital CEO made $3.1 million dollars a year in 2015, according to the study. The average nurse, meanwhile, made $75,510.

Matt Taibbi, May 8, 2020

A plan to help homeowners avoid foreclosure was good, in principle. In practice, it’s pushed the mortgage business toward yet another potential nightmare

[Common Dreams, via Naked Capitalism 5-3-20]
Deaths of Despair
[Boston Review , via Naked Capitalism 5-6-20]

Boston Review talks with Nobel Prize-winning economist Angus Deaton about COVID-19, the relationship between culture, financial hardship, and health, and why capitalism’s flaws are proving fatal for America’s working class.

Opinion analysis: Unanimous court throws out “Bridgegate” convictions

[SCOTUSBlog, via Naked Capitalism 5-8-20]

In 2013, officials with ties to Chris Christie, then the governor of New Jersey, altered the traffic pattern on the George Washington Bridge in an effort to punish the mayor of nearby Fort Lee, New Jersey, for his failure to support Christie’s reelection bid. The change in the traffic pattern led to four days of gridlock on the streets surrounding the bridge before the original pattern was eventually restored. Two of the officials responsible for the change were found guilty of violating federal statutes prohibiting wire fraud and fraud from federally funded programs. But today the Supreme Court threw out those convictions. In a unanimous decision by Justice Elena Kagan, the court ruled that although the officials’ actions were an “abuse of power,” they did not violate the federal fraud laws because the “scheme here did not aim to obtain money or property.”

….The court stressed that accepting the government’s argument would allow the federal government to “use the criminal law to enforce (its view of) integrity in broad swaths of state and local policymaking.” The court did not endorse Kelly and Baroni’s actions: It noted that for “no reason other than political payback, Baroni and Kelly used deception to reduce Fort Lee’s access lanes to the George Washington Bridge—and thereby jeopardized the safety of the town’s residents.” But, the court concluded, “not every corrupt act by state or local officials is a federal crime.”

The justices have repeatedly pushed back against efforts by federal prosecutors to use federal fraud laws to combat public corruption, so today’s ruling was not necessarily a surprise.

How Neoliberalism Destroyed Capitalism
Ian Welsh, May 7, 2020

In 2007/8 financial crisis the Federal Reserve and other central banks printed trillions of dollars to support banks and big businesses. They prevented capitalism from working: while some firms that had nothing to do with the crisis should have been bailed out, those that caused the crisis by allocating money badly should have been allowed to go under.

This is because this is the virtue of capitalism: if people allocate resources (which we count with money) badly, they are supposed to lose the ability to allocate resources in the future. Those who allocate resources well are supposed to receive more resources. This has a lot of flaws (what makes money isn’t always what improves human welfare), but it’s at least a feedback loop.

It’s the GOOD thing about capitalism.

The Fed broke what was left of capitalism: there is very little that is good left when the allocation system doesn’t work even by the terms of capitalism.

It was clear that Central Banks had decided their primary purpose was to make sure that the rich stayed rich, no matter the cost to others. If they had let those firms go under, the economy would have fallen faster and recovered far better for over 90% of the population.

[RT&S, via Naked Capitalism Water Cooler 5-4-20]

“Frustrated by one delay after another, the builders currently working on Maryland’s Purple Line project say they will leave the project because the state is not paying for the delays and cost overruns. The project currently costs $2 billion.”

Lambert Strether: “Our failed state can’t even build a 16-mile light railway line.”

Progressive policies into the breach

The way to get universal health care during the pandemic.
David Dayen [American Prospect May 8, 2020

…in America, we have this lunacy that our health insurance is tied to our jobs. The last number I saw had 12 million people losing their health insurance as a result of the crisis, and that’s probably an undercount; one estimate sees it going as high as 43 million. That has to be a top priority if we’re going to get another pandemic response bill. And there are different ways of getting to it: putting the uninsured or Medicare or Medicaid (good), subsidizing COBRA (bad, that’s an insurance company bailout and it’s astronomically more expensive than it has to be).

Not for nothing, but the Trump administration could solve this problem right now, and not in the weird way they claimed, by vowing to pay hospitals to pay for uncompensated care for the uninsured. (There’s no real evidence that is happening, and it still leaves individuals vulnerable to getting the medical debt shakedown.) The government could, as Twitter gadfly Carlos Mucha pointed out all the way back in February, issue an executive order putting the uninsured on Medicare, due to an “environmental health hazard.”

This was brought into being to deal with the residents of Libby, Montana, whose town was devastated by airborne asbestos emanating from a vermiculite mine. Anyone exposed to asbestos in Libby has coverage through Medicare, under a provision of the Affordable Care Act. This was seen as an appropriate measure to handle a public health crisis.

Senator Bernie Sanders

[Forbes, via Naked Capitalism 5-9-20]
[The Hill, via Naked Capitalism 5-8-20]
[Washington Post 5-7-20]

Sens. Chris Van Hollen (D-Md.), Christopher A. Coons (D-Del.) and several colleagues introduced legislation this week to pay for 750,000 national service positions over the next three years. It’s a big number because it has to be: Experts estimate that the United States will require hundreds of thousands more public health employees to track cases, conduct tests and more. Contact tracing alone would call for almost 300,000 personnel to match the scale of successful efforts in Wuhan, China; more conservative estimates of what’s necessary still hover in the six-figure range.

“The Pandemic Is the Time to Resurrect the Public University” 

[Cory Robin, The New Yorker, via Naked Capitalism Water Cooler 5-7-20]

for all the talk of the poor and students of color at the Ivy League, the real institutions of mobility in the United States are underfunded public universities. Paxson may believe that ‘a university campus is a microcosm of any major city in the U.S.,’ as she told NPR, but cuny is no microcosm. With nearly two hundred and seventy-five thousand students and forty-five thousand staff—a population larger than that of many American cities—it is what the Latin root of the word “university” tells us higher education should be: the entire, the whole….

At City College and Baruch College, seventy-six and seventy-nine per cent of students, respectively, start out in the bottom quintile of the income distribution and wind up in one of the top three quintiles. For hundreds of thousands of working-class students, in other words, a cash-starved public university is their gateway to the middle or upper-middle class.

[NEJM, via Naked Capitalism 5-7-20]

….the Massachusetts Technology Collaborative (MassTech), a state economic-development agency with a mission of strengthening the Commonwealth’s tech and innovation economy, formed the Manufacturing Emergency Response Team (M-ERT). Within days, the M-ERT mobilized to help Massachusetts-based manufacturers open up new supply chains to start producing materials needed to fight the epidemic.

MassTech officials assembled a diverse group, with volunteers from university research-and-development and engineering departments, manufacturing companies, and health care institutions, that convened three times each week to develop new supply chains for vital materials. The barriers for manufacturers to begin producing these materials were high. Every device used in health care must comply with Food and Drug Administration (FDA) regulations and other specifications associated with its product code and classification that are designed to ensure safety and efficacy. These guidelines have rapidly evolved; the FDA has released multiple guidance documents and emergency-use authorizations in recent weeks to help manufacturers respond quickly to Covid-19 ( opens in new tab opens in new tab). Retooling, ordering new materials, and establishing markets for new products is risky and expensive, so companies needed guidance to address uncertainties regarding the level of demand to expect for products and the corresponding amount of capital investment required for new equipment and their workforce. The M-ERT also faced uncertainty about which materials were needed immediately and which manufacturers would be able to meet the most urgent needs in time to alleviate shortages.

The M-ERT tackled each of these problems. Frequent discussions with the FDA allowed team members to develop and share a data repository containing information on relevant emergency policies and regulations.

Why North Dakota Has the Best Internet in the United States

[Vice, via Naked Capitalism 5-7-20]

new report by the Institute For Local Self Reliance (ILSR) found that more than two-thirds of rural North Dakotans have access to fiber broadband, compared to less than 20 percent of rural U.S. residents elsewhere. Rural North Dakotans are also more likely to have access to gigabit fiber broadband that’s spottily available in many urban areas.The roots of the state’s broadband success originate in the 1990s, when a coalition of local communities banded together in frustration over US West, a then dominant network provider created by the 1982 breakup of AT&T. Like many modern telecom giants, US West didn’t believe that serving rural America was worth the expense.

Locals obviously disagreed, and a coalition of 15 local cooperatives and small businesses bought US West’s neglected network assets, incorporating them into their own networks—paving the way for the fiber networks of today….

US West was long ago swallowed up by CenturyLink, which, much like its predecessor, has been repeatedly criticized for failing to upgrade its aging DSL networks. Despite receiving millions in poorly-tracked taxpayer subsidies, countless U.S. telcos have simply let their networks fall apart, resulting not only in spotty broadband coverage, but a more potent Comcast monopoly.

Frustrated by this dysfunction, more than 750 communities across the United States have built their own alternatives. Data routinely indicates these networks provide better, faster, and cheaper service than regional incumbents. It’s a major reason why ISPs like AT&T have lobbied for nearly two-dozen state laws prohibiting such efforts.

Predatory Finance

U.S. Financial System “Monitor” Failed to Flash Warning as Fed Pumped $6 Trillion Emergency Liquidity into Wall Street
Pam Martens and Russ Martens, May 8, 2020 [Wall Street on Parade]

On September 17, 2019, liquidity was so strained on Wall Street that the Federal Reserve had to step in and began providing hundreds of billions of dollars per week in repo loans. By January 27, 2020 (before one death from coronavirus had been reported in the United States) we reported that the Fed had pumped in a cumulative total of $6.6 trillion in liquidity to the trading houses on Wall Street.

And yet, take a look at the OFR’s heat map above. Contagion Risk, Funding/Liquidity Risk, Solvency/Leverage Risk, and Credit Risk failed to flash red through either the third or fourth quarter of last year. The extent to which federal regulatory and monitoring agencies have been dis-empowered from doing their jobs is becoming a critical concern to Americans in a time of both a health and financial crisis.

Congress Sets Up Taxpayers to Eat $454 Billion of Wall Street’s Losses. Where Is the Outrage?
Pam Martens and Russ Martens: May 7, 2020 [Wall Street on Parade]

JPMorgan, Wells Fargo, Citigroup and Fossil Fuel Industry Get Bailed Out Under Fed’s “Main Street” Lending Program
Pam Martens and Russ Martens: May 4, 2020 [Wall Street on Parade]

Inside the Biggest Oil Meltdown in History
[Institutional Investor, via The Big Picture 5-7-20]

In all of market history, this had never happened in a standardized, exchange-traded contract, let alone the most heavily traded benchmark crude oil contract in the world, representing the lifeblood of the world’s industrialized nations.

In the minute between 2:08 p.m. and 2:09 p.m., 83 futures contracts for West Texas Intermediate light, sweet crude oil, scheduled for May delivery to the oil hub of Cushing, Oklahoma, rapidly exchanged hands at $0 a barrel. With each contract consisting of 1,000 barrels, this meant that, at least on paper, 83,000 barrels — or 3.5 million gallons of oil — effectively went off the market for free. That same minute, oil prices, encountering little resistance, jackknifed lower to trade at minus 1 cent a barrel, touching off an unprecedented freefall into negative territory.

“We’d been hearing about the possibility of negative oil prices for weeks,” says Bob Iaccino, chief market strategist for Path Trading Partners, a trading analytics firm in Chicago….

In March — nearly a month to the day before oil’s collapse on April 20 — Citigroup global head of commodity research Edward Morse projected that oil prices might turn negative. On April 8, CME Group — which hosts the West Texas Intermediate crude oil futures contract — sent out a notice stating it had “a tested plan to support the possibility” of negative prices in its major energy contracts. Still, it wasn’t until the wee hours of the morning on April 20 that the canary in the coal mine appeared: The premier of Alberta, Canada, Jason Kenney, tweeted the warning, “Western Canadian Select oil is now trading at negative prices.” (The oil, which derives from Canada’s tar sands, usually trades at a discount to West Texas Intermediate crude oil futures, which were tanking.)

….In all, 14,913 crude oil contracts exchanged hands at negative prices on April 20, according to CME data. In other words, on average, sellers were paying buyers to take oil off their hands at a rate of more than 31 million gallons a minute.

KKR Raked in Management Fees as Funds Lost Value[Institutional Investor, May 6, 2020]

KKR & Co. collected $426 million of fees during the first quarter, benefiting from income that kept flowing even as the value of its funds fell. About 75 percent of that total came from management fees….

While KKR padded its pockets with fees, the coronavirus pandemic hit the value of firm’s $207 billion in assets as of the end of March. KKR’s private equity portfolio fell 12 percent in the first three months of this year, while its alternative credit funds lost 16 percent and the real estate vehicles declined 1 percent, according to the report.


Grover Norquist’s Dismantled State Struggles to Respond

How Profit and Incompetence Delayed N95 Masks While People Died at the VA

[Pro Publica, via Naked Capitalism 5-5-20]
[Vice, via Naked Capitalism Water Cooler 5-6-20]

“[I]f unprecedented unemployment is a five-alarm national emergency, then our backlogged unemployment insurance system should be treated as a true national scandal—an unnecessary and wholly avoidable extra crisis at the worst possible time… But to wave off what’s happening as an expected consequence of an unprecedented situation papers over the fact that our dilapidated unemployment insurance system was deliberately designed to keep certain people from accessing benefits, long before coronavirus came around…. Our country’s social programs have long been built around an ethos of framing people either as ‘deserving’ or ‘undeserving’ of benefits [or, as we say today, “essential” (and not essential]. It’s a racist trope furthered by Ronald Reagan’s welfare queen myth and the Bill Clinton era of welfare reform… This ethos can be seen throughout an unemployment insurance system that, like most of our welfare state, is built to prioritize rooting out “fraud” rather than get benefits quickly to the people who need them.” • This is worth reading in full. I don’t know what the heck’s happened to Vice, that it’s suddenly worth reading.

“There Is Only One Way Out of the COVID-19 Economic Crisis” 

Daniel Carpenter and Darrick Hamilton [Slate, via Naked Capitalism Water Cooler 5-6-20]

“The current recession is steep and severe, and even under optimistic scenarios, millions of the jobs now lost are not coming back. Meanwhile, any successful test-fueled rush to “reopen” the country and get back to the America of January 2020 will only return us to a world in which, despite low official unemployment rates, four in 10 Americans reported that they could not readily meet an emergency $400 expense, millions were reliant upon gig work without benefits, our infrastructure crumbled, and our government was caught flat-footed in the face of a public health crisis. Such a rush will also likely lead to mass death on a scale beyond what we’ve already seen and is most likely simply impossible to succeed in returning us to the old normal. January 2020 is not a status quo to which we can or should try blindly to return. Instead, like President Franklin Roosevelt did in the 1940s, we call for a federal job guarantee that would create millions of jobs, end involuntary unemployment, and build out necessary and resilient public infrastructure. Unlike the stimulus ideas that have dominated Washington to date, a direct government hiring initiative would address inequality; build robust capacity in public health, conservation, education, and infrastructure; and provide not just stable jobs, but government capacity to meet the current pandemic and economic crisis as well as the next one.

The Hill, via Naked Capitalism 5-6-20]

[Media Lite, via Naked Capitalism 5-6-20]

The complaint details Bright’s concerns about the U.S. response to the coronavirus pandemic early on and how at one point in January when Bright “began urgently pressing HHS officials to provide necessary resources to begin vaccine, drug and diagnostic development to combat COVID-19… HHS leadership criticized him for his efforts and removed him from meetings going forward.”

Bright also apparently spoke with Peter Navarro on multiple occasions, and Navarro sent out a number of urgent internal memos urging immediate actions, some of which were “implicitly criticizing HHS leadership for its failure to act.”

Capitalism in the time of COVID19

“COVID-19 Crisis Capitalism Comes to Real Estate”
[Boston Review, via Naked Capitalism Water Cooler 5-7-20]

“By proptech we mean technical products and platforms that have facilitated the merging of the technology and real estate industries in novel ways…. The proptech industry ballooned following the 2008 subprime mortgage crisis, when racist lending practices and government response dispossessed hundreds of thousands of mainly black and Latinx property owners. This era saw over 240,000 black residents lose their homes, erasing most of the gains made since the 1968 passing of the civil rights era Fair Housing Act. Wall Street investment firms such as Blackstone, Invitation Homes, Colony, Waypoint, and Starwood—which have all now consolidated into one mega-firm—swept in to purchase foreclosed homes at auction, ushering in the age of the corporate landlord. Today the conglomerate of Blackstone comprises the largest landowning firm globally and is the biggest landlord in the United States. Hundreds of large investment companies followed Blackstone’s lead, forming massive landlord monopolies in various cities and regions across the United States. These mega-landlords generally acquire new properties through limited partnership (LPs) and limited liability company (LLCs) shell companies, a practice that makes it difficult for tenants to know who their landlords really are, and thus serves to stymie tenant organizing and collective action.”

Economics in the real world

“Rail Week Ending 02 May 2020 – Rail Contracted 21.2% In April”

[Econintersect], via Naked Capitalism Water Cooler 5-7-20]

“Total rail traffic has been mostly in contraction for over one year – and now is taking a hit from coronavirus. The carloads intuitive sector’s rolling average again worsened this week and now is historically low. Intermodal has a serious contraction due to the logistic headwinds of the coronavirus…. Intermodal and carloads are under 2013 levels. Whilst container exports from China are now recovering, container exports from the U.S. continues to slow.”

[ProPublica, via Naked Capitalism Water Cooler 5-7-20]

“There are three ways climate influences emerging diseases. Roughly 60% of new pathogens come from animals — including those pressured by diversity loss — and roughly one-third of those can be directly attributed to changes in human land use, meaning deforestation, the introduction of farming, development or resource extraction in otherwise natural settings. Vector-borne diseases — those carried by insects like mosquitoes and ticks and transferred in the blood of infected people — are also on the rise as warming weather and erratic precipitation vastly expand the geographic regions vulnerable to contagion. Climate is even bringing old viruses back from the dead, thawing zombie contagions like the anthrax released from a frozen reindeer in 2016, which can come down from the arctic and haunt us from the past.”

Dismantling the rules
[New York Times 5-7-20]

Shortly after taking office, President Trump and congressional Republicans found an innovative way to reduce business regulations, one of their top policy priorities. They began using a 1996 law — called the Congressional Review Act, and rarely used before — that allowed them to reverse rules enacted by the Obama administration in its final few months.

Now that Trump’s first term is winding down, administration officials realize that the same law could undo some of their policies — if the Democrats win in November. So the administration has been hurrying to finish as many regulations as possible this spring, to make sure they are not vulnerable to reversal under the Review Act.

And the administration has been particularly focused on the environment. As Nadja Popovich, Livia Albeck-Ripka and Kendra Pierre-Louis of The Times report: Trump’s drive to dismantle major climate and environmental policies is now mostly complete….

The Times, working with academic researchers, has created a graphic with all 64 of Trump’s environmental rollbacks, as well as an additional 34 in progress.

Restoring Balance

California Sues Uber And Lyft For ‘Cheating’ Drivers And Taxpayers

[NPR, via Naked Capitalism 5-6-30]

Creating new economic potential – science and technology

“Making commodity chemicals requires fossil fuels. New devices could do it with renewables” [Nature, via Naked Capitalism Water Cooler 5-6-20]

“As windmills and solar panels multiply, the supply of renewable electricity sometimes exceeds demand. Chemists would like to put the excess to work making commodity chemicals, such as the raw materials for fertilizer and plastics, which are now produced with heat, pressure, and copious fossil fuels. The electrochemical cells that can harness renewable electricity to make these compounds have been too slow to be practical. Now, two groups report redesigning the cells to achieve a dramatic speedup—perhaps enough to put green industrial chemistry within reach…. One research group uses carbon dioxide (CO2) as its starting material to make ethanol, a fuel, and ethylene, a starting point for plastics; the other turns nitrogen (N2) into ammonia (NH3), a key component in fertilizer. Both owe their progress to advances in the catalyst-coated electrodes that drive chemical reactions between gases and liquids.”


Disrupting mainstream politics

“The coronavirus is invading the battleground states”

[Greg Sargent, WaPo, via Naked Capitalism Water Cooler 5-7-20]

“William Frey of the Brookings Institution, who is one of the country’s best-known demographers, has been tracking the spread of the novel coronavirus by county each week. The last time we checked in on Frey’s data, he had found that the virus had spread into outer-suburban and small-metro counties, and counties carried by Donald Trump in 2016. That undermined the conventional wisdom that the coronavirus has been almost entirely the scourge of Democratic-leaning urban areas. Frey’s new top-line finding is that since March 29 — that is, in the past five weeks — some 1,103 counties across the country have newly achieved what Frey calls “high-covid status,” and 813 of them voted for Trump in 2016, while 290 voted for Hillary Clinton.”

“The Democratic Socialist Constituency” 

[The Organizer, via Naked Capitalism Water Cooler 5-7-20]

The electoral left in the United States boasts its strongest position in at least a century, if not ever, due in large part to the Sanders campaign. Sanders’s successes and failures illuminate a clear path toward mobilizing a majoritarian working-class coalition to shift the balance of power between capital and labor. The past five years have achieved vastly more electoral success for the left than a century of attempts at building a competitive third party or achieving realignment.

“Build Your Own Machine”
[Discourse Blog, via Naked Capitalism Water Cooler 5-7-20]

“Take over your local party apparatus, or build an alternative to it. Build your own machine to take out the one that doesn’t work anymore…. In some ways, taking control of the unions, whether locally or nationally, is more immediately pressing than winning elections…. Finally, progressives have to unite in some way…. On their own, these groups find themselves competing with each other for the attention of politicians. As a singular unit, they can drag the politicians who need their support towards the right position. All of this isn’t just about winning elections. It’s about giving working people a voice in the political process.”

Democratic Party leadership insists on suicide

“The Agony of Joe Biden”

[Back-Country Populist, via Naked Capitalism Water Cooler 5-6-20]

“Like 2016, the Democrats are completely failing to read the room. The Democratic Party- the historic defender of rural, far-flung corners of the country and the longtime champion of the working class- has become a country club dominated by wealthy, white progressives. And while Democrats continue to perform among the lowest earners, it is more affluent, credentialed, and urban than ever before. After all, beginning in 2012, the wealthiest 4% of Americans have overwhelmingly voted Democratic. The richest 15% of House districts today are represented by Democrats and as Hillary Clinton infamously observed, those counties that voted for her in 2016 account for 64% of the nation’s GDP. Trump and his Republican insurgents, on the other hand, are transforming the GOP into the party of America’s working-class by capitalizing on the growing unhappiness and anger bubbling up in America’s middle class.”

“Amid Pandemic, Billionaire Donors Swarm To Biden, As Trump’s Support Falters” 

[Forbes, via Naked Capitalism Water Cooler 5-6-20]

“As the coronavirus pandemic took hold of America, a record number of billionaires backed Joe Biden, putting him ahead of Donald Trump in terms of support from America’s wealthiest. Thirty-two billionaires and their spouses backed Biden in March versus 14 who gave to President Trump that same month. Altogether 94 billionaires have now donated to Biden versus 90 who have given to Trump since he started fundraising in 2017. Biden has the momentum. The former vice president received contributions from 27 billionaires or their spouses for the first time in March; contributions from 13 of them came after Trump declared the coronavirus pandemic a national emergency on March 13, 2020, according to the Federal Election Commission filings. (Contributions to super PACs were not included in this analysis.

“How ‘Never Trumpers’ Crashed The Democratic Party”

[FiveThirtyEight, via Naked Capitalism Water Cooler 5-7-20]

“When Sanders did well in the early primaries and seemed like he could win the Democratic nomination, ‘Never Trump’ conservatives turned into a ‘Never Bernie’ coalition.

Lambert Strether observes: 

“What’s really remarkable is that the Never Trumpers “unique experience and insight” consists in losing. So naturally, the Democrat Establishment would elevate them. And a sliver of Republicans has more influence than 30%-40% of the Democrat electorate (who comprise the future of the party, if you believe the demographics).”

“Two Weeks of Democrats’ Pathetic Attempts at Opposition”
[The New Republic, via Naked Capitalism Water Cooler 5-4-20]

Following a bill of particulars of the Democrats ridiculous last two weeks: “The most puzzling thing about the Democrats’ most recent spell of turning Republican is that GOP policies are more unpopular than they’ve been in a long while, and the president remains largely distrusted by the American public. Why wouldn’t the Democrats take advantage, for instance, of the current enthusiasm for Medicare for All to create a better-functioning health care system both for the current crisis and beyond, rather than dangling a tepid plan to dump yet more money into the hands of private insurers? Perhaps, after all, there’s still one crucial difference between the two parties, captured perfectly by the old aphorism: Republicans fear their base, and Democrats hate theirs.” • I’m not sure that’s true anymore. The working class is not the Democrat base, and the Democrat Establishment wants to get rid of it entirely, and make suburban Republicans part of their base.

[The New Republic May 6, 2020]

Politicians and pundits are always lamenting the division in Washington. Well, Congress came together to address the coronavirus crisis—and failed.

Beneath the disarray of the White House’s response and amid all the uncertainty the crisis has brought about, we’ve been treated to a legislative process straight out of a grade-school civics book. Democrats came into each negotiation with broad and expensive asks on relief programs and other priorities but compromised to get money out the door to the American people quickly. Republicans opposed to broadening eligibility for full stimulus payments and the generosity of the CARES Act’s unemployment benefits voted unanimously for the bill anyway. For the first time in a very long time, Democrats and Republicans sat down, agreed to policy compromises a little disappointing to both sides, and passed a series of massive bills addressing significant problems facing the American people.

[But] the bipartisan bills Congress has passed are pitiful—too meager and poorly designed to stop our plunge toward chaos and economic oblivion. Spending and investment across major sectors of the economy have collapsed and will remain deflated as long as the virus is circulating and discouraging normal economic activity. The Congressional Budget Office has projected that gross domestic product won’t return to pre-pandemic levels until 2022 at the earliest. Our 30 million unemployed are struggling to wring benefits from intentionally complex and unprecedentedly overburdened state unemployment systems. One in four Americans is expected to go hungry. Minorities who saw their wealth disproportionately destroyed by the recession just over a decade ago will see it destroyed again.

The Dark Side

Propaganda, the President, and the ‘Reopen’ Protesters
[Derfenseone, via Naked Capitalism 5-5-30]

Here we are, once again watching TV images of extreme-right militia dudes kitted up with AR-15s and Sig Sauers, ill-fitting tactical vests, wraparound sunglasses, goatees, and Hawaiian “Boogaloo” shirts. Usually they’re rallying for the Second Amendment, or the Confederate flag, or white power, or protesting against the latest thing that they feel is impinging on their right to be idiotic, and vowing to defend themselves from the next King George. Or Abraham Lincoln.

This week, they brought their guns to Lansing, Michigan, where they pledged allegiance to President Donald Trump while protesting the government’s (any government, pick a government) mandate that — *squints* — humans should stay socially distant and wear personal protective equipment until the global pandemic passes us by. They rose up against the tyranny of face masks.

Jane Mayer’s in depth profile of Mitch McConnell from April 20
Jane Mayer [The New Yorker, April 20, 2020]

The Republicans’ 2017 tax bill was a case in point: it rewarded the Party’s biggest donors by bestowing more than eighty per cent of its largesse on the wealthiest one per cent, by cutting corporate tax rates, and by preserving the carried-interest loophole, which is exploited by private-equity firms and hedge funds. The legislation was unpopular with Democratic and Republican voters alike. In order to win elections, Hacker and Pierson explain, the Republican Party has had to form a coalition between corporatists and white cultural conservatives who are galvanized by Trump’s anti-élitist and racist rhetoric….

David Jones, the late co-founder of the health-care giant Humana, backed all McConnell’s Senate campaigns, starting in 1984; Jones and his company’s foundation collectively gave $4.6 million to the McConnell Center. When Jones died, last September, McConnell described him as, “without exaggeration, the single most influential friend and mentor I’ve had in my entire career.”

….Stephen Schwarzman, the chairman and C.E.O. of the Blackstone Group, who, according to the Center for Responsive Politics, has, since 2016, donated nearly thirty million dollars to campaigns and super pacs aligned with McConnell….

For months, I searched for the larger principles or sense of purpose that animates McConnell. I travelled twice to Kentucky, observed him at a Trump rally in Lexington, and watched him preside over the impeachment trial in Washington. I interviewed dozens of people, some of whom love him and some of whom despise him. I read his autobiography, his speeches, and what others have written about him. Finally, someone who knows him very well told me, “Give up. You can look and look for something more in him, but it isn’t there. I wish I could tell you that there is some secret thing that he really believes in, but he doesn’t.”

….McConnell’s book does not mention that his father, who worked in the human-resources department at DuPont, was deposed by lawyers for the N.A.A.C.P. Legal Defense and Educational Fund in a historic racial-discrimination case. Kerry Scanlon, one of the lawyers, told me, “The leadership at that plant seemed to define racism. There was a plantation system in which the black employees did the hardest jobs, like working in front of these open fires where they got burned—and they got the worst pay. There was a systemic pattern of racism.” After years of litigation, the company settled the case, for fourteen million dollars.

….he became friends with the sister of the Deputy Attorney General, Laurence Silberman, and in 1976 he used the connection to get a job working for Silberman in D.C., as Deputy Assistant Attorney General. The experience appears to have influenced his thinking about money in politics and much else. He became an acolyte of Silberman and two other towering figures of conservative jurisprudence then at the Justice Department: Robert Bork and Antonin Scalia…..

John Cheves, a reporter for the Lexington Herald-Leader, has described a class that McConnell taught in the seventies, at the University of Louisville. On a blackboard, he wrote down the three things he felt were necessary for success in politics: Money. Money. Money…. in 1993, McConnell married Elaine Chao, an heiress, who is currently serving as Trump’s Secretary of Transportation…. Her father, James Chao, is the founder and chairman of the Foremost Group, a family-owned maritime shipping company, based in New York, which reportedly sends seventy per cent of its freight to China…. One of James Chao’s schoolmates was Jiang Zemin, who later became China’s President. According to the paper, James took a stake in a state-run company closely associated with Jiang. James and his daughter Angela, the chairman and C.E.O. of the family business, have also been on the boards of directors of some of China’s most powerful state-run businesses, including the Bank of China. Moreover, both Angela and her father have been on the board of a holding company that oversees China State Shipbuilding, which builds warships for the Chinese military…. Angela Chao was married to the investment banker Bruce Wasserstein, who died in 2009, and she’s now married to Jim Breyer, a billionaire venture capitalist with huge financial interests in China. In 2016, Breyer joined the board of directors of Blackstone, giving McConnell a brother-in-law at a company that financially supports his campaigns, and that manages more than half a trillion dollars….

In 1984, McConnell ran for the Senate against the Democratic incumbent, Walter (Dee) Huddleston. McConnell later admitted that he’d begun planning his campaign the moment he’d been sworn in as county judge / executive. Nobody expected an unprepossessing, little-known local official to defeat Huddleston, but in the final weeks of the campaign McConnell surged to an upset victory, thanks, in large part, to a television ad created by Roger Ailes, the Nixon media adviser who later became the mastermind behind Fox News. Ailes was helped by Larry McCarthy, a virtuoso of negative campaign ads who later made the racially charged Willie Horton ad, attacking the 1988 Democratic candidate for President, Michael Dukakis.

Why the media in UK and US has moved beyond manufacturing consent, and why that has led to a war about reporting COVID-19

[Mainly Macro, via Naked Capitalism 5-7-20]

The point I want to make here is that in the UK and US we have moved well beyond manufacturing consent. What is new is that they are now joined by what I will call the directed propaganda (DP) media, which includes Fox News in the US and most of the right wing press in the UK. DP-media provides biased and misleading information, or sometimes straight lies, that support a political viewpoint.

MC media is about filtering out news or opinion that challenges the system. DP outlets filter news that challenges a particular party or viewpoint within that system, and is happy to report lies that support its position.

Why do I call it directed-propaganda? Why not (when the favoured party is in power) state-media, or right wing media (there are no left wing DP outlets in the MSM)? The reason is that DP-media is a reliable supporter of the government of the right nearly all of the time, but not in all circumstances. It has a mind of its own, or rather the mind of the owner who directs it (hence directed propaganda). The most obvious example was Brexit, where the DP media in the UK effectively replaced one right wing administration with another that shared its own view on Brexit. For the Sun and Telegraph in particular, the current UK government is its government.

If that seems quite an achievement, it required help from the MC-media. In the UK the broadcast media had strict codes of balance, even if it meant balancing knowledge with lies.

The Conservative War on Liberal Media Has a Long History
[The Atlantic, January 17, 2014]

Roger Ailes’s success at Fox News is unique, but the project of creating a right-leaning alternative to established media stretches back to the 1940s.

“Trump Is Really Aiming to Take Down Fox”: A Group Associated With Donald Trump Jr. Is Buying a Major Stake in OANN

[Vanity Fair, May 6, 2020]

In private, Trump reminds friends that Fox tried to derail his campaign during the 2016 Republican primary, and he vents that Fox owes its record ratings to him. “At the end of day, Trump thinks he owns Fox. He thinks he made them,” said a Republican who discussed Fox with Trump. Trump’s frustration with Fox has only intensified during the coronavirus pandemic. As the nation’s COVID-19 death count rises, and Trump’s poll numbers slide, Fox executives have sidelined the network’s most flagrant coronavirus deniers. In late April Fox cut ties with MAGA stars Diamond and Silk after the duo promoted bizarre COVID-19 conspiracies, including speculation that the virus was man-made or that New York state was inflating deaths totals to hurt Trump politically.

Trump’s view that Fox is insufficiently loyal has motivated him to look for a more reliable media partner. On April 26, he tweeted: “The people who are watching @FoxNews, in record numbers (thank you President Trump), are angry. They want an alternative now. So do I!”

Trump now is on the verge of having that alternative. According to sources, an investor group aligned with his son Don Jr. and the Dallas-based Hicks family is in negotiations to acquire a major stake in One America News Network, the fledgling conservative cable-news channel that features hosts like Jack Posobiec, a chief promoter of the Pizzagate conspiracy. “[RNC co-chair] Tommy Hicks and Don Jr. have been looking to buy a station for Trump TV,” said one source briefed on the talks. “This is all about building a Fox competitor. Trump is really aiming to take down Fox,” the person briefed on the deal told me.

Donald Trump is igniting a cold war with China to win the election

Patrick Cockburn [Independent, via Naked Capitalism 5-3-30]


May 9th US Covid Data


May 10th US Covid Data


  1. Stirling S Newberry

    Glad to see someone has taken-up the Recessions graph, it was one of my best inventions.

  2. bruce wilder

    there are no left wing DP outlets in the MSM

    Like most of what Simon Wren-Lewis writes, this strikes me as (self-)delusional.

    Not in “both sides do it” kind of way, but because he is side-stepping around the role of what used to be called, “journalistic ethics”.

    If you are going to contrast DP with MC on the basis of a distinction between the “lies” of DP and the selective truth and false or corrupted balance of MC, you really need some kind of professional standard of epistemology to function amidst what you are calling, MC or mainstream Media.

    I cannot see the case being made. Wren-Lewis probably rarely sees U.S. domestic CNN, which runs to a much lower standard than CNN International. But, I do not see the case for thinking the NYT or the Washington Post or are not DP outlets. But, even if I were to concede that they are not DP, by some criteria, respect for factual, objective truth is not a distinguishing characteristic of either outlet. Wren-Lewis seems to think the BBC was merely fearful of Corbyn as a subversive, but didn’t that fear lead the BBC to report falsely on Corbyn?

    “Mainstream” outlets in the U.S. went stupid forty years ago. “Stupid” is how we got Whitewater and Gennifer Flowers and “Al Gore invented the internet”. That wasn’t Fox News; that was the New York Times, home of Maureen Dowd and Tom Friedman.

    I do not even think Fox News lies any more than its slightly more centrist counterparts. Roger Ailes packed the place with rants and “personalities” but he always took actual news reporting straight from AP. He did not waste money on his own reporters.

    Even the Guardian, now a neoliberal rag, is not notably scrupulous about facts or truth. Is it better on that score than, say, the Telegraph? I think it would be hard to prove.

    Of course, I do not think there are any “left-wing” outlets in the MSM. Where are these chimera? But, Wren-Lewis implies they are a thing.

  3. Willy

    Sean Hannity called his political rival Alan Colmes a “dear friend” and was “heartbroken” when he died. Rachel Maddow was shocked at the loss of her “friend and mentor”, Roger Ailes. Apparently, partisan politics is more than just a job for these people. It’s a means towards deep and lasting friendships. If only the rest of us could get along so well despite our political differences.

    Of course it’d help if we all had political hack jobs that made us filthy rich.

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