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

Week-end Wrap – Political Economy – September 22, 2019

by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Matt Stoller [Pro-Market, via Naked Capitalism 9-18-19]

Director is the key founder of what is now known as the Chicago School of law and economics, which reshaped the American approach to corporate power and political economy…. Director’s life was dedicated to setting free the power of concentrated capital, eliminating the power of labor, and undoing the New Deal. His success is so profound it is hard to describe, so embedded are we today in the world and rhetoric Director shaped.

Brahmin Left vs Merchant Right: Rising Inequality and the Changing Structure of Political Conflict (Evidence from France, Britain and the US, 1948-2017) (PDF)

Thomas Piketty [via Naked Capitalism 9-15-19]

…changing political cleavages in FR-US-UK 1948-2017 documenting the shift from class-based political conflict to multiple-elite (intellectual vs business elite) and identity-based political conflict.

Main empirical finding: the rise of multiple-elite politics

  • • In the 1950s-60s, the vote for left-wing (labour-socialist-democratic) parties in France-UK-US used to be associated with lower education & lower income voters: class-based political conflict (→ redistributive policies)
  • • It has gradually become associated since 1970s-80s with higher education voters, giving rise since 1990s-2000s to a multiple-elite party system: high- education elites vote left, while high-ncome/high-wealth elites vote right. I.e. intellectual elite (Brahmin left) vs business elite (Merchant right).

Keynes Was Really a Conservative
Bruce Bartlett [via Naked Capitalism 9-16-19]

Peter Drucker, a conservative admirer of Keynes, viewed him as not merely conservative, but ultraconservative. “He had two basic motivations,” Drucker explained in a 1991 interview with Forbes. “One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than [economist F.A.] Hayek!”

….Keynes completely understood the central role of profit in the capitalist system. This is one reason why he was so strongly opposed to deflation and why, at the end of the day, his cure for unemployment was to restore profits to employers. He also appreciated the importance of entrepreneurship: “If the animal spirits are dimmed and the spontaneous optimism falters … enterprise will fade and die.” And he knew that the general business environment was critical for growth; hence business confidence was an important economic factor. As Keynes acknowledged, “Economic prosperity is … dependent on a political and social atmosphere which is congenial to the average businessman.”

….Indeed, the whole point of The General Theory was about preserving what was good and necessary in capitalism, as well as protecting it against authoritarian attacks, by separating microeconomics, the economics of prices and the firm, from macroeconomics, the economics of the economy as a whole. In order to preserve economic freedom in the former, which Keynes thought was critical for efficiency, increased government intervention in the latter was unavoidable. While pure free marketers lament this development, the alternative, as Keynes saw it, was the complete destruction of capitalism and its replacement by some form of socialism.

We have yet to see an incisive critique of Keynes based on understanding he was a shameless oligarch with no regard for republicanism, if not outright antipathy to republicanism. Bartlett’s jab at the greatly idealized Keynes would be much more powerful if Bartlett understood the tensions and contradictions inherent between republicanism and capitalism.

The Trade War Spurs China’s Technology Innovators Into Overdrive

[Industry Week, via Naked Capitalism 9-17-19]

“In Shenzhen’s glitzy financial district, a five-year-old outfit creates a 360-degree sports camera that goes on to win awards and draw comparisons to GoPro Inc. Elsewhere in the Pearl River Delta, a niche design house is competing with the world’s best headphone makers. And in the capital Beijing, a little-known startup becomes one of the biggest purveyors of smartwatches on the planet. Insta360, SIVGA and Huami join drone maker DJI Technology Co. among a wave of startups that are dismantling the decades-old image of China as a clone factory — and adding to Washington’s concerns about its fast-ascending international rival. Within the world’s No. 2 economy, Trump’s campaign to contain China’s rise is in fact spurring its burgeoning tech sector to accelerate design and invention. The threat they pose is one of unmatchable geography: by bringing design expertise and innovation to the place where devices are manufactured, these companies are able to develop products faster and more cheaply.”

Lambert Strether adds: “Gee, didn’t we have this advantage once? Thanks, neoliberals!”

Jared Bernstein  September 13, 2019 [Vox, via The Big Picture 9-16-19]

For decades, the dominant strain of the profession has interacted with conservative politics on a project both sides shared: cutting taxes (mostly for the wealthy), deregulating business, and aggressively steering government interventions away from helping the economically vulnerable under the argument that to do so invited “inefficient” outcomes….

The good news is that there’s a new economics that’s increasingly ascendant, one that rejects the market-centric framework and its conservative policy tools on behalf of Appelbaum’s simple but profound conclusion: “Communities can decide what they want from markets.”…. the new economics isn’t arising just because we want “better” outcomes from our markets. It’s also arising because a lot of the old stuff has turned out to be just plain wrong….

This summary just scratches the surface of a new economics that rejects the supremacy of unfettered markets (and I could’ve named many more names — apologies to those I’ve left out). Exciting work in this spirit is well underway on antitrust, patent rules, minimum wages, union power, the environment, and even the fundamental measurement of growth itself….

Far more important, from my perspective, is seeing these ideas show up in the thinking of policy makers, including many of the Democrats running for office (as with Saez and Zucman’s help with Warren’s wealth tax). Many of the people and think tanks named above are offering informal guidance to various campaigns on inequality, labor markets, and trade.

Saudi Arabia shuts down about half of its crude production after drone strikes

[Middle East Eye, via Naked Capitalism 9-15-19]

….as I have written a number of times, drones are and always were going to be a weapon of the weak, and it is becoming harder and harder to defend against them. The American military was incredibly stupid to develop them, because ultimately they remove part of the monopoly of force from powerful countries….

Ages where elites can easily be killed tend to concentrate elite minds. In some places that will lead to even worse police states, but the other way to solve the issue is to make people’s lives pretty good. People with pretty good lives tend to have better things to do than political violence.

Predatory Finance

Markets Are Starting to Play a Haunting 2007 Tune
[Bloomberg, via Naked Capitalism 9-18-19]

This week brought an epic spike in repo market rates in a replay of events that prompted the New York Fed to intervene twice back then for the first time in a decade.

Repo chaos tests Wall Street confidence in NY Fed’s Williams

[Reuters, via Naked Capitalism 9-19-19]NY Fed examines banks’ role in money market turmoil

[Financial Times, via Naked Capitalism 9-21-19]
Yves Smith of Naked Capitalism comments:

Short version: excess reserves concentrated at big banks (like JPM, Citi, BofA). Fed assumed they would lend it out to other banks. They didn’t.

A person at one US bank said that while it been “net lenders into the market” this week, they “have to make economic decisions for the company”. That means that the cost and return of deploying cash in the repo market is assessed relative to the cost and return of using funds for other things, like investing in currencies overnight.

So a reader yesterday was on the right track in wondering about the distribution of reserves but looking at the wrong actors. He thought the big banks might be short on reserves when it was the reverse: they were holding them back! And Nathan Tankus explains why.

[CNBC, via Naked Capitalism 9-17-19]

“Federal prosecutors on Monday accused three J.P. Morgan precious metals traders, including the global head of base and precious metals trading, of participating in a racketeering conspiracy in connection with a multiyear scheme to manipulate the markets and defraud customers. The alleged scheme saw the nation’s largest bank by assets profit handsomely, while investors suffered losses.”

[University of North Carolina Press, via Naked Capitalism 9-21-19]

[American Banker, via Naked Capitalism 9-16-19]

“A New Jersey pastor who was falsely arrested because of errors made by Wells Fargo employees may be forced to resolve legal claims against the bank in arbitration, renewing questions about banks’ use of the process. Jeff Edwards, the pastor of Parsippany United Methodist Church for the past 29 years, sued Wells Fargo in May to recoup costs related to his arrest, which was eventually dismissed after it became clear the bank had mistakenly identified the wrong person related to cashing fraudulent checks. But now the bank is seeking to move the case out of court, arguing that the pastor is bound by an arbitration clause he signed when he opened his account with First Union 22 years ago.”

We really need to abolish arbitration and let corporations again be exposed to the full force and fury of the rule of law. Otherwise we will never have enough deterrence — fear of justice — to make sure these errors are treated seriously and immediately, instead of letting corporate behemoths mindlessly destroy people’s lives. 

At Press Conference, Fed Chair Powell Refuses to Answer Whether Wall Street
Banks Are Too Big to Manage
Pam Martens and Russ Martens, September 19, 2019 [Wall Street on Parade]

Could Ultra-Low Interest Rates Be Contractionary?

[Project Syndicate, via Naked Capitalism 9-20-19]

“I’ve been saying this for years. 1. Takes low-risk interest income away from savers, leading them to cut spending and try to save more or at least not deplete capital. 2. Signals deflationary expectations. 3. Encourages borrowing only by those for whom the cost of money is their biggest expense item, ie, banks and leveraged speculators, aka rentiers, who are also bad for productive activity.”

Russia Has ‘Oligarchs,’ the US Has ‘Businessmen’

[FAIR, via Naked Capitalism 9-15-19]

In 150 NYT, CNN and Fox articles, ‘oligarch’ seems reserved for Slavic billionaires.

Information Age Dystopia

Matt Stoller [BIG, via Naked Capitalism 9-17-19]

….Google is probably the most important company in the world today. It is of course big and profitable, with roughly $120B+ of revenue and a market capitalization floating around $850 billion. The corporation knows what we think because we tell it, by searching for things, trillions of times a year. It has perhaps unprecedented power over the free press itself, monopolizing online ad revenue and dominating traffic to publishers. In some ways, it operates as the government of the internet, structuring technical and formatting norms of how we learn about the world around us. The company also has macro-economic impacts. It is a pace-setter for the rest of the economy; AT&T bought Time Warner in part as a defensive move against Google.

Google has also changed our politics. It is a significant player in political campaigns, being criticized by Presidential candidates like Tulsi Gabbard for censorship. It is a global player. For example, the company’s YouTube subsidiary unwittingly helped power a fascist movement in Brazil. In addition to its reshaping of the communications landscape, Google’s political operation has structured the debate over corporate power in D.C. and all over the world.

[TechCrunch, via Naked Capitalism 9-20-19]

“Silicon Valley held a secret fundraiser for Trump”

[Business Insider, via Naked Capitalism 9-19-19]

“President Donald Trump’s Silicon Valley donors traveled to a secret location in Palo Alto, California, on Tuesday to attend a fundraiser for the president where tickets cost as much as $100,000 a couple…. Attendees weren’t told in advance where the event would be or who would be hosting. Instead, they were asked to meet at a remote location before being shuttled to the host’s house — reported to be that of the Sun Microsystems cofounder Scott McNealy.”

Will establishment Democrats begin to back away from criticizing Big Tech to preserve their campaign cash cow?  It’s what they’ve done with Wall Street and Big Pharma. 

The Failure of Establishment Neoliberal Economics

[Los Angeles Times, via The Big Picture 9-17-19]


[New Republic, via The Big Picture 9-21-19]
There are many things I like about this article. It illustrates that problems arise not from evil, malicious people, but the ideologies in which they have been trained to think. It gives details of how Republican leaders in Congress at the very least bent the truth if not outright lied to prevent inquiry into what actually went wrong. It shows that labor unions were the only actors in this whole story that acted from a sense of promoting the public good — which is an implicit repudiation of conservatives’ and neoliberals’ demonizing of organized labor. It explicitly contrasts engineers with financially mindede managers. It explicitly attacks Jack Welch, the former CEO of General Electric, and shows why the public acclaim he has been given is entirely misplaced. Most of all, it is a perfect example of Thorstein Veblen’s analysis of the conflict between industry and business.

….Nearly two decades before Boeing’s MCAS system crashed two of the plane-maker’s brand-new 737 MAX jets, Stan Sorscher knew his company’s increasingly toxic mode of operating would create a disaster of some kind. A long and proud “safety culture” was rapidly being replaced, he argued, with “a culture of financial bullshit, a culture of groupthink.”

Sorscher, a physicist who’d worked at Boeing more than two decades and had led negotiations there for the engineers’ union, had become obsessed with management culture. He said he didn’t previously imagine Boeing’s brave new managerial caste creating a problem as dumb and glaringly obvious as MCAS (or the Maneuvering Characteristics Augmentation System, as a handful of software wizards had dubbed it). Mostly he worried about shriveling market share driving sales and head count into the ground, the things that keep post-industrial American labor leaders up at night. On some level, though, he saw it all coming; he even demonstrated how the costs of a grounded plane would dwarf the short-term savings achieved from the latest outsourcing binge in one of his reports that no one read back in 2002.*

Sorscher had spent the early aughts campaigning to preserve the company’s estimable engineering legacy. He had mountains of evidence to support his position, mostly acquired via Boeing’s 1997 acquisition of McDonnell Douglas, a dysfunctional firm with a dilapidated aircraft plant in Long Beach and a CEO who liked to use what he called the “Hollywood model” for dealing with engineers: Hire them for a few months when project deadlines are nigh, fire them when you need to make numbers. In 2000, Boeing’s engineers staged a 40-day strike over the McDonnell deal’s fallout; while they won major material concessions from management, they lost the culture war. They also inherited a notoriously dysfunctional product line from the corner-cutting market gurus at McDonnell.

…. much of the software on the MAX had been engineered by recent grads of Indian software-coding academies making as little as $9 an hour, part of Boeing management’s endless war on the unions that once represented more than half its employees. Down in South Carolina, a nonunion Boeing assembly line that opened in 2011 had for years churned out scores of whistle-blower complaints and wrongful termination lawsuits packed with scenes wherein quality-control documents were regularly forged, employees who enforced standards were sabotaged, and planes were routinely delivered to airlines with loose screws, scratched windows, and random debris everywhere. The MCAS crash was just the latest installment in a broader pattern so thoroughly ingrained in the business news cycle that the muckraking finance blog Naked Capitalism titled its first post about MCAS “Boeing, Crapification and the Lion Air Crash.”

Here, a generation after Boeing’s initial lurch into financialization, was the entirely predictable outcome of the byzantine process by which investment capital becomes completely abstracted from basic protocols of production and oversight: a flight-correction system that was essentially jerry-built to crash a plane. “If you’re looking for an example of late stage capitalism or whatever you want to call it,” said longtime aerospace consultant Richard Aboulafia, “it’s a pretty good one.”
There was one unmistakable harbinger of what was to come at Boeing in the saga of the GE90—an all-new, ultra-efficient engine inspired by a NASA project that General Electric’s pioneering chief of aviation Brian Rowe developed exclusively for the new plane. Market watchers referred to the development of jet engines, which make up 20 percent of an airplane’s purchase price, as GE’s “crown jewel,” because the margins were high once the company had eaten the ten-figure cost of developing and testing one. But in 1993, GE’s notorious downsizing CEO Jack Welch—by then well on his way to becoming the most grotesquely lionized character in American business—abruptly fired Rowe, along with several thousand other aviation engineers. The results were predictable: The engines failed their tests, often in spectacular fashion, replete with smoke and flames, over and over and over again. Things deteriorated to the point that the FAA sent Boeing a “letter of discontinuance” directing the company to cease flight tests until GE got its act together. A shrunken staff of engineers, working overtime to implement decisions by colleagues who had long since been laid off, finally got the engines approved more than a year past their scheduled delivery dates, and malfunctions continued to plague the engines for years thereafter.

Less than two years later, a layoff-happy Welch protégé named Harry Stonecipher, McDonnell Douglas’s former CEO, grabbed the reins at Boeing, and the same dysfunction took hold in Seattle.

The McDonnell Douglas engineers had seen it all before: In the name of RONA, Stonecipher’s team had driven the last nail in the coffin of McDonnell’s flailing commercial jet business by trying to outsource everything but design, final assembly, and flight testing and sales of the MD-11. In 2001, one McDonnell engineer wrote a scathing critique of the metric and its inevitable result, “Out-sourced Profits,” that went viral on Boeing’s intranet server. But Wall Street analysts dismissed the paper as a “rant,” and so the whole process was fated to begin anew under Stonecipher’s watch at Boeing.
The McDonnell Douglas engineers had seen it all before: In the name of RONA, Stonecipher’s team had driven the last nail in the coffin of McDonnell’s flailing commercial jet business by trying to outsource everything but design, final assembly, and flight testing and sales of the MD-11. In 2001, one McDonnell engineer wrote a scathing critique of the metric and its inevitable result, “Out-sourced Profits,” that went viral on Boeing’s intranet server. But Wall Street analysts dismissed the paper as a “rant,” and so the whole process was fated to begin anew under Stonecipher’s watch at Boeing.

Boeing might represent the greatest indictment of 21st-century capitalism
A link from the article above
Packed in the 737 fiasco are all the economic problems we face: crony capitalism, regulatory capture, offshoring…

Restoring balance to the economy

46,000 UAW workers go on strike against GM, America’s biggest automaker

[CNN, via Naked Capitalism 9-16-19]Why the Striking Autoworkers Need to Win Big

Harold Meyerson [The American Prospect, via Naked Capitalism 9-18-19]
[The Nation, via Naked Capitalism 9-16-19]

Health Care Crisis

Purdue Pharma, manufacturer of OxyContin, Files for Bankruptcy, Agrees to Settle Some Pending Opioids Litigation: Sacklers on Hook for Billions?

Jerri-Lynn Scofield [Naked Capitalism 9-12-19]

UK: Suicide rates surge 11.8% in a single year

[Al Jazeera, via Naked Capitalism 9-15-19]

Lambert Strether notes, “Everything’s going according to plan.”

Climate and Environmental Crises

What It’s Like Living in One of the Hottest Cities on Earth—Where It May Soon Be Uninhabitable

[NPR, via Naked Capitalism 9-17-19]

“In dozens of major U.S. cities, low-income neighborhoods are more likely to be hotter than their wealthier counterparts, according to a joint investigation by NPR and the University of Maryland’s Howard Center for Investigative Journalism…. NPR analyzed 97 of the most populous U.S. cities using the median household income from U.S. Census Bureau data and thermal satellite images from NASA and the U.S. Geological Survey. In more than three-quarters of those cities, we found that where it’s hotter, it also tends to be poorer. And at least 69 had an even stronger relationship than Baltimore, the first city we mapped. This means that as the planet warms, the urban poor in dozens of large U.S. cities will actually experience more heat than the wealthy, simply by virtue of where they live. And not only will more people get sick from rising temperatures in the future, we found they likely already are.” • Everything’s going according to plan.

Man vs. mosquito: At the front lines of a public health war 

[Center for Public Integrity, via The Big Picture 9-17-19]

Mosquito-borne illnesses like Zika have increased almost tenfold nationally from 2004 to 2016, according to the Centers for Disease Control and Prevention (CDC). That’s put local governments at the front lines of a contentious public health war ― one that climate change will only worsen.

A 2016 report by Climate Central found warming temperatures coupled with more humid days have elongated mosquito seasons. The insect’s range has also expanded. Aedes aegypti, the species that transmits Zika, dengue, yellow fever and chikungunya, has moved northward in the U.S. by roughly 150 miles per year. By 2050, researchers predict, almost half the world’s population will be exposed to at least one of two major disease-carrying mosquitoes. Scientists are also concerned about the growing threat of resistance, which undercuts the effectiveness of insecticides.

Mosquitoes are not a new enemy. Historian Timothy C. Winegard estimated in a 2019 book that the winged insects have killed more than 52 billion people ― making them humanity’s “deadliest predator” with far more casualties than all recorded wars combined. Malaria, now seen as a mostly tropical disease, was rampant in the U.S. until a federal program run by an early version of the CDC eliminated the illness domestically by 1951. That program made heavy use of DDT, a now-banned insecticide that is toxic to mosquitoes but also to birds, bees and humans….

Today, the herculean task of managing and tracking mosquitoes falls largely to local mosquito control districts. These little-known entities can operate as standalone agencies funded through special taxes or as divisions within health or agricultural departments. Vast differences in budgets, scientific expertise and policy mean mosquito control in the U.S. can vary widely from one location to the next.

“The Amazon’s Neocolonial Problem” 

[BrazilWire, via Naked Capitalism 9-16-19]

“The G7’s cursory offer of $22 million US dollars [to fight Amazon fires] is not money that Brazil actually needs, the country has $385 billion in reserves. The key failure of this thinking is the notion that the Amazon fires are some kind of tragic accident. It is not through oversight, incompetence or “failure to act” that the rainforest is in flames, it is a deliberate, planned and genocidal deforestation strategy, from which G7 companies are themselves in line to benefit. A leaked presentation by Washington DC lobbyists close to the Trump administration shows US companies being recruited to exploit the Amazon, from the Mining, Agribusiness and Gas/Chemical industries. A myriad of G7-based companies are already directly benefitting from the far-right Brazilian Government’s policies.”

[BrasilWire, via Naked Capitalism 9-17-19]

“Brazil is a country with a 500-year history of monoculture and mining commodity boom-and-bust cycles, which has always produced high levels of income inequality and poverty. This pattern only began to be broken under Workers Party President Lula, through the implementation of redistributive socioeconomic polices, most importantly through massive minimum wage and pension payment increases, which lifted 29 million people above the poverty line. It is absurd to imagine that a monoculture production-based approach tied to the international supply chain, using low labor-intensity activities such as cattle ranching and soy farming on indigenous reservations, will make up for the setbacks caused by the post–2016 coup’s dismantlement of successful poverty-fighting policies and gutting of labor laws, which have plunged millions of people into extreme poverty.”

Trump plans to revoke a key California environmental power; state officials vow to fight

[Los Angeles Times, via Naked Capitalism 9-18-19]USDA gives final approval for faster hog processing line speeds

[New Food Economy, via Naked Capitalism 9-18-19]“As line speeds increase, meatpacking workers are in ever more danger”

[USA Today, via Naked Capitalism 9-20-19]

 “One meatpacking worker I interviewed cried telling me how an industrial bag sealer seared away the flesh from her fingers. Another got emotional telling me about her supervisor’s constant screaming and the stress of keeping up. One told me that when she is on the line trimming chicken wings, she is terrified of breaking the cardinal rule that workers from meat and poultry slaughtering and processing plants across the United States shared with me: Don’t stop the line.”

Lambert Strether adds: “Not sure what W. Edwards Deming would think of a production line run on principles the exact opposite of the Andon System, but you’ll soon be eating the outcome of that philosophy.”

 GND – An opportunity too big to miss

How Can We Design a Green New Deal?

[The Real News Network 9-16-19]

1,400 people gathered to discuss how to build infrastructure—and movements—that support decarbonization and equity. We spoke to one of the event’s hosts, Daniel Aldana Cohen.

Wind Turbine Database highlights evolution of US wind
[Indiana Environmental Reporter, via American Wind Energy Association 9-20-19]

The US Wind Turbine Database has been created so users can view the location and details of almost 60,000 turbines in the US. The Energy Department, American Wind Energy Association and US Geological Survey worked together to create the database, which is updated continually.

Sen. Sanders: Green New Deal to create 20 million jobs
[The Hill, via American Wind Energy Association 9-20-19]

The Green New Deal will result in 20 million new jobs, creating many opportunities for workers displaced by the nation’s shift away from goal, says Sen. Bernie Sanders, I-Vt., of his proposal. The proposal aims to establish “millions of good, high-wage jobs and ensure prosperity and economic security for all people of the United States.”

Creating new economic potential – science and technology

Robot Investment Reaches Record 16.5 billion USD – IFR presents World Robotics Industrial Robots
[International Federation of Robotics 9-18-19

The new World Robotics report shows an annual global sales value of 16.5 billion USD in 2018 – a new record. 422,000 units were shipped globally in 2018 – an increase of 6% compared to the previous year. IFR forecasts shipments in 2019 will recede from the record level in 2018, but expects an average growth of 12% per year from 2020 to 2022.

IFR also reported

Sales value of service robots for PROFESSIONAL USE increased by 32% to 9.2 billion USD. Logistic systems such as autonomous guided vehicles (AGVs) represent the largest fraction in the professional service robot market (41% of all units sold). The second largest category is inspection and maintenance robots, (39% of all units sold). These two segments account for 80% of total market share.

Disrupting mainstream politics

For the first time in my life, I’m frightened to be Jewish

David Graeber [Open Democracy, via Naked Capitalism 9-15-19]

[Below via Naked Capitalism 9-15-19]
This is how Democrats used to campaign in the south. Notice how they are like ‘here’s how your life is better.’


View image on Twitter

“Sanders or Warren: Who gets more support from working-class donors?” 

[Open Secrets, via Naked Capitalism 9-19-19]

“In the battle for working-class donors, however, there is a clear winner between the [Sanders and Warren]. An OpenSecrets review of campaign contributions — including those giving small amounts through the fundraising service ActBlue — reveals that among the 2020 Democrats, Sanders gets the most support from Americans in typically working-class jobs — and it isn’t close. The Vermont senator is the top recipient among farmers, servers, social workers, retail workers, photographers, construction workers, truckers, nurses and drivers, among several other groups. Each of those professions — which don’t typically provide much campaign cash — earn near or below the median income, according to data from the Bureau of Labor Statistics. Sanders has raised $46 million in total, far more than his primary opponents, so it’s no surprise he leads among the most professions. But it’s his margin of victory that stands out. Of all the money going to 2020 Democrats from servers — one of the lowest-paying jobs in the country — more than half went to Sanders alone. As the first major presidential candidate to propose eliminating student debt, Sanders took in one quarter of all students’ contributions to Democratic presidential hopefuls.

“The Changing Shape of the Parties Is Changing Where They Get Their Money”
[Thomas Edsall, New York Times, via Naked Capitalism 9-19-19]

“Money is the mother’s milk of politics, as the old saying goes, and the slow motion realignment of our two major political parties has changed who raises more money from the rich and who raises more from small donors. First: Heading into the 2020 election, President Trump is on track to far surpass President Barack Obama’s record in collecting small donor contributions — those under $200 — lending weight to his claim of populist legitimacy. Second: Democratic candidates and their party committees are making inroads in gathering contributions from the wealthiest of the wealthy, the Forbes 400, a once solid Republican constituency. Democrats are also pulling ahead in contributions from highly educated professionals — doctors, lawyers, tech executives, software engineers, architects, scientists, teachers and so on.”

“A GOP pollster said $2 billion would be spent in the 2020 election on convincing 6% of voters which party to vote for”
[Business Insider, via Naked Capitalism 9-15-19]

“Luntz specified that the 6% included people who were ‘conflicted, the ones that liked aspects of the Trump presidency, but not all of it, or the ones who disliked much of what he’s done,’ not those who could flatly deny a candidate. The slice of voters Luntz thinks candidates will be spending big on has ‘never been that small,’ he said. ‘I don’t think more money will be spent with more effort and more intensity on a smaller group of people than what will happen in this election,’ Luntz said. ‘Because in the end, if you’re undecided in Texas or California or New York, you don’t matter. So it’s 6% who are undecided in 20% of the states that could actually move.’”

“Manufacturing Consent — How Democratic operatives are undermining Bernie Sanders 2020 candidacy”
[Ashok Koyi], via Naked Capitalism 9-20-19]

An organization called Focus on Rural America — that’s founded by someone who worked for Bill Clinton, ran paid campaigns for Obama — that’s advised by someone who worked as State director for Hickenlooper — that’s chaired by someone who has apparent allegiance to one of the Democratic primary candidates — specifically — Elizabeth Warren — publish just memo of the poll where Bernie is getting lower vote share than Pete Buttigieg.

These polls are conducted by ex-Obama pollster — with a staff member whose father worked for Obama as chief strategist — publishes just memo of the poll — with numbers that are complete outliers — with no information on the methodology/demographic breakdown — which then are picked-up by mainstream media — use this poll to push free propaganda for Warren & other corporate dems — while undermining Bernie’s campaign — till this propaganda becomes reality in the minds of undecided voters.


Open Thread


The Democratic Ethics of Brexit


  1. Tom

    Ok, time to ban private schools, private colleges, and overhaul entirely the academic system to an apprenticeship system. Next bribery must be a death penalty offense for both briber and bribed.

  2. Herman


    Be careful what you wish for. A “real” meritocracy would likely be horrible for the people at the bottom of the social totem pole since they would be seen as deserving their lowly social condition. Michael Young pointed this out when he popularized the term in his 1958 book. Unfortunately many people thought that his fictional dystopia would be a utopia. Young discussed his disappointment with how people interpreted his book in a 2001 article.

    The commitment to social mobility and meritocracy as opposed to outcome egalitarianism is how we ended up with the Brahmin Left discussed in another link above. Personally, I don’t care if people use private schools, tutors, nepotism and other things to obtain advantages for their children. For one, I think there is a legitimate freedom argument here regarding raising your children and trying to help them. Let’s be honest, ordinary people do the same thing as the rich, just on a smaller scale. Everyone wants to give their children advantages. The sooner we accept that this is part of human nature the better.

    True equality of opportunity is probably impossible to achieve without totalitarian educational methods (raising children in state institutions) and biological engineering that would eliminate any innate differences between people. I find these “solutions” to be repulsive and affronts to human dignity and freedom so it is better to try to make society more egalitarian through more traditional methods like strong labor unions, full employment and similar methods to reduce inequality of outcome.

    It will be tough to get people to move from the widespread belief in equality of opportunity to accepting more equality in outcome. However, as Ian has written on this blog, there is a lot of evidence that inequality is bad for almost everyone in society. There is a strong argument to be made that we should strive for more equality in outcome just to make the world a better place to live in.

  3. nihil obstet

    The problem with social mobility as a goal is that it doesn’t mean that everybody can improve their relative status; every new entrant into a higher status displaces a person who drops into a lower status. Some factors can disguise this — heavy immigration because the natives can move up while the immigrants take the lower status on the promise that their children will move up in the next wave; rapid machinization of unpleasant work so that it seems like progress if daddy plowed with a mule and son plows with a tractor or works white collar.

    But finally you get too many people trained for jobs at the top and too few jobs for all the people with legitimate expectations of being rewarded for their training. (Suggest that a Ph.D., an M.D., or a J.D. for example should have pay and benefits similar to a housekeeper or practical nurse. You’ll see some really serious outraged defense of inequality).

    We need to imagine a society without hierarchical differences in how each of us can live.

  4. bruce wilder

    James Michener used to tell a story about an earnest young officer in the South Pacific in WWII, who systematically recommended for awards and promotion every man under his command who had distinguished himself by his performance. He was thorough and unbiased as well as unflagging, but he was eventually relieved of command as his unit’s morale sunk below the floorboards as everyone remaining realized they “deserved” the neglect they received.

    There has to be some reward for simple loyalty and maybe even some tolerance for thinking the system unjust — even making the system unjust by some cheating that may or may not be punished — if only to give people somewhere to hide. In a way, it is about privacy.

  5. bruce wilder

    @nihil obstet

    While I have little use for the pretensions of rank, which reactionary conservatives love so much, I have also been to Cuba, and it is NOT so easy to do away with hierarchy in economic life. Pretending utopia is no guide to politics.

  6. bruce wilder

    Re: Keynes as conservative

    As commenters pointed out under an earlier post, the actual, historic Keynes was a capital-L Liberal, which in practice meant conservative of social and economic hierarchy generally (as well as clueless about the drivers of practical politics).

    I do not understand how Keynes became either a socialist saint or devil, but if you want to understand the nuance of economic policy controversy, Schumpeter, Galbraith (father or son), Minsky, Leijonhufvud all have insights into who Keynes was and what his General Theory might have been in more capable hands. For me, I think the letter he wrote to FDR in which he tried to persuade that fiscal expansion to rescue the economy ought to take priority over the effort underway under the New Deal to reform the structures and regulatory apparatus is a clear expression of Keynes’s own political outlook and desiderata.

    Schumpeter, who had a rare perspective on the sheer variety of regimes and context possible thru long disequilibrium cycles, very gently pointed out how the General Theory seemed rooted in a very particular and personal opinion about the state of England’s economy. Ultimately, the General Theory fails, I think — I have read it several times and much of it is muddled and unreadable precisely because Keynes cannot or will not pull himself from the quicksand of neoclassical theory and its contemporary innovations (eg national accounting). The most successful advocates for the Keynesian vision were those who simplified it into something coherent, and yet still business-friendly in its sloganeering.

    Whether we can hold Keynes responsible for what those who came after did is a nice question. I think we can, to the extent they exploited the poor qualities of his arguments. But, in his favor, we should allow that the success of those who came after was due in many cases to a certain lack of intellectual integrity aligning them with reactionary forces. Even if Keynes might well have leaned in similar directions, blame for what happened after in ideas after 1946 is not primarily his fault, but that of his self-appointed followers. When Milton Friedman called himself Keynesian, surely all was lost beyond redemption.

  7. nihil obstet

    @bruce wilder

    The Cuban revolution produced a lot of successes (literacy, health care, life expectancy) and failures. I can fully believe that they haven’t established utopia. I don’t know if they pretend to utopia more than we do.

    Let’s remember what Col. Thomas Rainborowe said back in 1647, “The poorest he that is in England hath a life to live as the greatest he.” I’m trying to reject the use of economics to enlarge or restrict our social lives. A large complex task will demand planning and oversight functions to organize and carry out the task. The functions don’t have to turn into status. In fact, I think a great failure of American organizations over the past 40 years anyway is that management has ceased to be a function and become instead a status.

    The powers of command necessary in accomplishing a task should not carry over into other tasks or areas of life. And for most tasks, there’s probably a good argument to be made for choosing the commander by lot. It produces better management than the current hiring and promotion practices.

    We couldn’t do any of this now — every way of organizing and living our lives demands a culture of common desires, assumptions, beliefs, reactions. Now, our culture says that people’s value is synonymous with their wealth, and while each of us may exclaim, “Well, I don’t believe that,” it is our way of thinking. We need to focus on alternatives to prepare for a better society, or after the revolution, we’ll just recreate this one.

  8. Hugh

    Even in the face of overpopulation and climate change, we have the wherewithal to assure every member of our society the basics for a decent and meaningful life: good food, housing, education, healthcare, meaningful work, and old age free of fear, and to do all these things in a sustainable fashion. Do this and the justification for large inequalities disappears. You can have some inequality, but with clear limits on how much. The surgeon can get paid more than the fastfood worker, but the multiple between the highest paid worker and the lowest should be less than ten. (You decide the figure you are comfortable with.) And the transmission of wealth and/or privilege across generations should be effectively prohibited.

  9. bruce wilder

    My idea of political egalitarianism as desirable has to do with how we treat each other and cooperate with one another — that we do so in a spirit of mutual respect for personal autonomy. That is how I read Thomas Rainsborough’s famous peroration.

    It is not that “we” (the polity in general) think as a matter of culture that wealth is virtue, but that the official keepers of political culture systematically overlook the extent to which wealth (in present U.S. society) is predatory or parasitic and actively try to prevent popular movements that might act politically to do something about it.

    In the last Democratic Presidential primary debate, the celebrity journalists tasked with asking questions took it upon themselves to demand a sound-bite from candidates favoring “Medicare-for-all” admitting that their proposals would result in increased taxes, full-stop. Any qualification in making such an “admission” was treated as evasion.

    The making of such propaganda makes our political culture stupid and depends for its effectiveness on a political culture of stupid — it is a vicious circle in which American democracy is trapped and made powerless to get the political classes to respond to or govern in the general, public interest.

    This state of idiocracy not a given of political consciousness or culture; it is a product of politics as a process structured and managed by a political class that does not really care about the nation or the public or any concept of a general interest.

  10. bruce wilder

    seconding Hugh:

    and to do so, we have to find the political will and means to constrain the ability of a very few to immiserate a great many as a means to their own enrichment.

  11. Tom

    “Since the present era of American conflicts began with the invasion of Afghanistan in 2001, the U.S. military is estimated to have emitted a staggering 1.2 billion tons of carbon into the atmosphere. For comparison, the entire annual carbon emissions of the United Kingdom is roughly 360 million tons.

    That massive additional burden on the planet might be justifiable were it all being done in the name of vital national security interests, but the biggest components of the U.S. military’s carbon dioxide footprint have been in wars and occupations that were almost entirely unnecessary. To put it crudely: The U.S. poisoned the planet for vanity projects.”

    Well, no way around this. The wars must end. Rome’s constant warfare is what undid it in the end.

  12. Hugh

    American banks are criminal enterprises. It has been swept down the memory hole that they were responsible for the largest interconnected frauds in human history leading to the great financial meltdown of 2008. The banks, not their victims, were bailed out. Nobody went to jail. Bank “reforms” like Dodd-Frank were kayfabe.

    Boeing and the 737 Max is a story of the banality of evil. It is about anti-unionism and cutting corners everywhere in an industry where even one could, and did, cost hundreds of lives. Boeing’s reputation has been trashed, and Dennis Muilenburg, Boeing’s president, CEO, and chairman of the board? Still there and Boeing’s lethal culture along with him. Of course, compared to the tens of thousands the Sacklers have killed, this is small potatoes.

    Can’t say I’m surprised about Keynes. Most modern economics has been about producing justifications for and defenses of a class of rapacious looting rich.

    Speeding up hog processing brings back memories of Upton Sinclair’s 1906 indictment of the meatpacking industry, The Jungle. Plus ça change…

  13. Stirling S Newberry

    Who do you want as the next Labour leader?

    I ask because “remain” has to get rid of Corbyn, who has a distinct air of rankness about to him.

  14. nihil obstet


    I’d rather be a surgeon than a fast food worker. Does anyone want to be a fast food worker? Does anyone do it for anything other than money? Do people choose to be surgeons just for the money? What does it say about our respect for each other if people doing the least desirable jobs receive the least in access to resources throughout their lives?

    OK, so everyone gets the means for a decent and meaningful life. The surgeon gets 10 times more than the fast food worker. What will the surgeon do with the it? Will her choices give privilege to her children that serves them well in the next generation? Will she be happy if they become fast food workers rather than high status professionals? If not, what does that say about the transmission of wealth/privilege between generations.

    What actually does inequality mean? I’m all right with a number of scenarios that result in “You get a Rolls Royce, and I get a Kia”, but considerably less with those that result in “You have autonomy and self-actualization across your life, but I need to shape my time, efforts, and family to your benefit.” And I’m having trouble figuring out what inequality that is limited to difference in expense of toys would look like.

  15. QQ120

    It seems to me that there is frequently a lot of dishonest ″motte-and-baily″-style argument in discussions of meritocracy. Bluntly, ″meritocracy″ should not be conflated with the merit principle itself. What precisely are we arguing about here?

    ″Surgeons should be selected based on their ability to do surgery″


    ″People who can do surgery should rule over people who can′t″?

  16. Ian Welsh

    More accurately:

    “should people who have more money rule over those who has less money.”

    Money, in our society, is considered a proxy for “merit.”

  17. Herman

    @nihil obstet,

    My understanding is that in the old Eastern Bloc countries there was not that much inequality between the average worker and members of the elite nomenklatura class of officials. Members of the nomenklatura might have access to superior consumer goods, better cars, better housing and other perks but the difference in lifestyle was not huge. This apparently caused resentment among members of the nomenklatura and helps explain why members of the nomenklatura elite eventually supported a return to capitalism. One anecdote I read was about a Soviet official complaining that his dacha was not much better than a truck driver’s dacha.

    Even in the post-World War II West there was a certain equality between average workers and professionals and managers, if not the owners. A professional might have a better car, a better house with better furnishings and take more expensive vacations than a factory worker but the difference was not as large as it is today. Of course this is not taking into account large pockets of poverty like Appalachia or some inner city neighborhoods and important gender and racial divides but the West after World War II was certainly more economically egalitarian than it is today.

    So I think we do know what a more egalitarian society could look like. The tough part is getting there. 20th century egalitarianism only came about after war, revolution and economic depression. Today the divide between the affluent and everyone else is not just about consumer goods, it has gotten so bad that there are now big life outcome differences when it comes to family formation and stability, health, access to housing, education and other basics.

    Elites will not give up their advantages easily. As you pointed out above, you will see some outraged defense of inequality if you start to suggest that we should lessen the inequality between professionals and ordinary workers. This is the group that loves to criticize the super-rich elite but is not too keen on recognizing that they are also part of the problem. They represent the political and intellectual base for neoliberalism and rationalize their elite position in the system via meritocratic selection through education.

  18. Willy

    I used to discern another’s personality by how they defined the word “asshole”. To somebody with empathy it’s a cruel person. To somebody with ethics it’s an evil person. To someone coldly ambitious it means a non-cooperator or somebody in the way.

    Today most people agree that it pretty much means anybody who doesn’t care about anybody but themselves. But in our current mixed culture this is either a good thing or a bad thing depending on personal philosophy.

    People don’t seem to agree on what’s good or evil anymore. And as always, I think this may be more by design than as resulting from own confusion in turbulent times.

  19. nihil obstet


    It’s not hard to imagine a hierarchical society that’s more egalitarian than ours, even though the years when the New Deal culture ruled were not quite as rosy as you remember — there was a reason that Johnson launched the War on Poverty. The question is whether we have to have a society in which certain people live pretty much their whole lives with autonomy in their own lives and authority over the circumstances in which others live. It’s better if the lifelong lower class has the means to a decent and meaningful life and the lifelong upper class isn’t too egregiously privileged. But the fact remains, very few people would choose to be part of the lower class, other than those with a religious calling to improve the lives of the unprivileged. Is it good enough to have a society where most people have less full lives than the few throughout their lives? I think we should try to envision something else.

  20. Hugh

    We are stewed in class conceptions so that it is hard to think beyond them. Who is more important in my life: the guy who picks up my garbage or a thoracic surgeon? People in my family have remarkably few heart or lung problems. So it is my garbageman hands down. And even if I needed surgery, it doesn’t mean my garbageman doesn’t make my life a hell of a lot better on a weekly basis.

    And if everybody gets a good education, how much more can the surgeon finagle for his/her kids? As Herman says, a bigger house, more expensive vacations, but what else of any importance, especially if most gets taxed back at his/her death? That’s why the differential between the highest and lowest paid can be less than 10. If everyone gets the basics, and by this I mean more than the minimum, people don’t need to, and it is socially negative, for them to amass large amounts of unproductive wealth.

  21. nihil obstet

    The garbageman is more important in your life than the thoracic surgeon. Who would you pay more?

  22. Hugh

    I would make sure that both got the basics for a decent and meaningful life. I would see that the work of both was respected. After that, the differential between the two should be less than 10. Being a thoracic surgeon takes more training, technical and manual expertise, but don’t discount the garbagemen and women. They serve a socially useful function and save many lives by keeping our communities clean. Society could last longer without thoracic surgeons than it could without garbagemen.

  23. nihil obstet

    I’m reminded of one of the early studies of gender discrimination. Two of the statements that respondents were asked to agree or disagree with were: “Women have finer manual skills than men, which make women naturally better seamstresses” and “Men have finer manual skills than women, which make men naturally better surgeons.” Most respondents agree with both statements. Frequently, when we claim we’re paying for skills, we’re actually supporting status.

    The training issue is another one. I spent years getting advanced degrees. I enjoyed it. I’m sure I enjoyed reading good books more than the cleaning staff enjoyed mopping floors and emptying trash cans. So after five years in which I enjoyed my work more than the cleaning staff enjoyed theirs, I now think that I should get more than they do for a more pleasant job for the next 40 years? How does that make sense?

    The real issue here is that money should not be the measure of value, but we’re all writing about egalitarianism and hierarchy as though the only measure and outcome is who gets paid what. And I’m finding the things said about it interesting. As, for example, the reluctance to simply state which task we think should get paid more.

  24. anon y'mouse

    the problem with our system is that merit can actually be bought. and it can be genuine, even though bought. although i am also sure that there are many examples of people who were just there to get the stamp on their forehead and don’t have anything inside of their forehead.

    but the people for whom it was bought believe that they did it through their own hard work, when that was just necessary but not sufficient to result in the merit that they have. then they set up all of this credentialing and “hard work” as the sign that you are worthy to join them. also, one must admit that a pyramid has a certain shape.

    and then we basically allow that caste system to continue. and it is naturally done, because everyone with means will invest them into their children.

    what i think you would to do is not only to provide a meaningful life for everyone, but remove impediments to obtaining meaning in the lives of everyone. so, dignity and stability in work even if menial, and then a lot (ok, a crap ton) of free public services outside of that. libraries, museums, parks and recreation, free and usable (by everyone, not people who have all day to get somewhere as it is now) public transit, food co-ops for growing and distributing healthy food. essentially remove the profit motive and the ability of the upper classes to turn a profit on every single thing that all of us need. to provide the objects of maximum benefit to everyone who goes looking and not hide them behind labyrinthine eligibility requirements and fulfilling the ideology of rich grant funders. and this means absolutely free educational enrichment to everyone at every stage of life, as long as they can be there to engage with the process and not disrupt it.

    in other words, remove the price (and profit) premium on the things that the wealthier people have that allow them to get their longer, more fulfilling lives. of course, status-seeking being what it is, they will just refocus around other things perhaps and then we will play this scene again in 40 years.

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