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

Week-end Wrap – Political Economy – September 8, 2019

by Tony Wikrent

Economics as Cultural Warfare

A number of articles, stories, and commentaries have begun appearing the past month which indicate a growing understanding the murderous effects of conservative a.k.a. neoliberal economic ideology. Last week, I especially liked the direct, confrontational title of “Why Libertarianism Will Kill Us All”  by Nathan J. Robinson, in Current Affairs. In May, even Bloomberg was forced to acknowledge “Former Boeing Engineers Say Relentless Cost-Cutting Sacrificed Safety” in the 737 Max.

This week the number of articles along these lines merited a new topic subtitle, which I also used to link to an article I posted in March 2019 about the economic ideas of Adam Smith. As the title of a March 2019 article co-authored by Suresh Naidu — author of the post below about Robert Bork –states plainly: Ideas Have Consequences: The Impact of Law and Economics on American Justice. 
While I welcome this emerging new clarity about the bloody costs of conservative a.k.a. neoliberal economic ideology, I am troubled that the ideology of republicanism continues to be overlooked as the obvious answer. As I wrote in March 2019 (Liberals and the Left Fail to Notice – and Celebrate – the Intellectual Death of Conservatism), “The actual conception of civic virtue in a republic is by its very nature fundamentally contrary to the basic tenets of capitalism…republicanism will never be in harmony with market capitalism.” Almost all the proposals for reforming the USA economy –including by Senators Elizabeth Warren and Bernie Sanders — amount to the imposition of state regulation without fundamentally addressing the economic beliefs and ideology of elites. This is why I place such importance on the work of Ian Welsh, and why the Business Roundtable’s recent critique of the theory of shareholder value is an important indicator of elites’ thinking. Will elites actually change their thinking? Or are they merely beginning to formulate a response to the growing resistance to the economic ideology they have promoted for the past three quarters of a century to roll back the New Deal? Is it even possible for a leopard to change its spots? 

How Economic Decisions Are Made
Ian Welsh, September 5, 2019 []

….money is a social construction, and price signals are not given by God and nature: they are choices. Political choices. That isn’t to deny some physical reality behind them, but that reality has obviously been elided, when in America, the life spans of some demographic groups are dropping while super-yachts and luxury condos are hot to trot.

All systems have to do only one thing: whatever is required to keep the system in power.
That’s all they have to do. Whether or not human welfare is advanced or not; whether or not we care about animals or nature is irrelevant to the raw calculus of power and staying in power, until it effect staying in power.

If the hoi polloi can be kept from revolting or demanding (remember demands are based on “or else,” they are not requests) well then, the powerful will not do anything that does not increase their power or money. They will only care about human welfare outside of their own group if they feel they must, or if, as happens occasionally, they see their group as being something other than the elite group.

Right now elites don’t care about other humans enough to reshape the money and political systems (the same thing, ultimately) to prioritize human welfare, avoid a great-die-off, or stop climate change. This is clear. It is not arguable, it is a fact, based simply on their actions.

THE SCALE OF WHAT WE’RE UP AGAINST: A giant amount of money will be spent trying to convince you to disbelieve obvious truths…
[Current Affairs, via Naked Capitalism 9-6-19]

The Koch version of free-market capitalism, which is the one pushed at the American Enterprise Institute, the Cato Institute, the Heritage Foundation, the Foundation for Economic Education, FreedomWorks, the Hoover Institution, and the Heartland Institute, is a simple creed, one that goes as follows:

I believe that freedom is good and that people should be left to pursue their own ends as they see fit. The market knows best, and government regulation is a misguided attempt to second-guess people’s decisions about their own interest. People and corporations should pursue their self-interest under conditions of freedom, because in a marketplace of voluntary transactions, everyone’s interests will end up being served.

….It’s only when you think for a bit, and work out the implications, that you realize something that sounds perfectly innocuous actually has horrifying implications. What about child labor laws? Oh, well, that’s just the state stepping in to prevent a beneficial transaction between the child and the employer. We’re “taking away opportunity from children,” as libertarian economist Jeffrey Tucker put it in a Foundation for Economics Education article called “Let The Kids Work.” Oh, what about price gouging? Well, you’ll read in the Wall Street Journal that price gouging is Actually Good, because it’s a Mutually Beneficial Transaction between someone in desperate need of a thing and someone willing to part with it.

One of my favorite books for understanding the real nature of free-market capitalism is Walter Block’s Defending the Undefendable. Block, a right-wing libertarian, goes through various different categories of unpopular people, and shows how they are actually heroes performing a public service. Slumlords? They provide houses! Blackmailers? They’re merely offering the service of not disclosing information—would you rather they just released the damaging information? Drug dealers? It’s a product—you don’t have to buy it! Ebenezer Scrooge? He was investing his money and building the economy! Block concludes that these people “do not violate anyone’s rights, so they do not violate basic morality.”

For Block, “respecting property rights” and “basic morality” are identical, meaning that I can be as nasty to you as I want so long as I don’t steal your furniture, and still be an upstanding person. Employers can mistreat employees—by sexually harassing them, belittling them, working them to exhaustion, and they haven’t done anything wrong, because it’s a Free Market Transaction that the employee could theoretically walk away from….

“Monopolist’s Worst Nightmare: The Elizabeth Warren Interview”
David Dayen [The American Prospect, via Naked Capitalism WC 9-3-19]

Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, it’s got a lot of different directions, but that’s the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. We’ve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And that’s started to change. And I think—So here’s my thinking: it’s because we’re focusing more on what’s wrong in this country. It’s not like somebody woke up and just said “antitrust”—we’re not that nerdy—but it’s about what’s wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that won’t get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.

But I want to make two other points. The first is current law gives the Justice Department and the FTC and the banking regulators a lot of power to move now. Even without Congress, a president who put a strong team in place could change antitrust enforcement in this country, without a single change in the laws from Congress.

Dayen: ….the sort of elephant in the room on this is the judiciary, which has a very particular theory and view of antitrust and even if you put in enforcers that want to take that in a different direction, you still have to argue that in court.

[To which Warren responded:] “Remember, it was the academics that got this started in the wrong direction, arguably.”
When we started this conversation, I said that I think the question is who government works for. I think much of the antitrust relaxation over time in the ’60s was confidence the government would handle this. Confidence that we had regulators who knew their stuff and who were technically adept and who had shown that they would be on the side of the American public. And when the big corporations started pushing back, started advancing the academic work that said, “No, let the giant corporations do whatever they want. What could possibly go wrong?”—That it’s taken a long time for people to see the implications of that. Look, for 40 years now, the mantra in Washington and in most of the Republican Party and a big chunk of the Democratic Party has all centered around Ronald Reagan’s “What are the nine worst words in the English language? I’m from the government and I’m here to help.” Ha ha ha. The idea that it’s government that poses the threat to all of the rest of America and must be held at arm’s length, and missing the fact that it’s government that balances out the power of these giant corporations. And without an effective government to enforce antitrust laws—and other laws—we’re all in trouble.

How Robert Bork Fathered the New Gilded Age

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

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

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

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

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

Phoenix: Thumbs Up for LRT, Thumbs Down for Koch
[Railway Age 9-2-19]

Voters in Phoenix, Ariz., delivered a resounding endorsement of their light rail line and a stinging rebuke to a plan that would have halted funding for rail expansion, stopping that idea dead in its tracks. Phonecians (as they call themselves) went to the polls on Tuesday, Aug. 27, in a special election. There were only two public questions on the ballot, and no candidates for office. Proposition 105 called for an end to funding for any expansion of Valley Metro’s LRT, including canceling extensions already approved by the voters, while Proposition 106 called for a cap on city spending until at least 90% of its pension liabilities are funded. The voters rejected both initiatives overwhelmingly….

KJZZ, the NPR (National Public Radio) station in the Arizona capital, ran the headline: “Early Phoenix Results: More Light Rail, Same Pension Funding.” Early reports indicated that the anti-light-rail initiative was losing by 37% to 63%, while the anti-spending proposition was going down by an even-wider margin; 33% to 67%, with about 180,000 votes counted. Many of those were cast through an early-voting process.

“How Slavery Hurt the U.S. Economy”
[Bloomberg, via Naked Capitalism WC 9-3-19]

“One school of thought argues that [1] slavery in general, and cotton in particular, was the driving force behind the development of America’s distinctive brand of capitalism. (The New York Times’s ambitious 1619 Project contains a good encapsulation of this argument.) But not only has this theory come under fire for inaccuracies, its central narrative is incorrect. The reality is that cotton played a relatively small role in the long-term growth of the U.S. economy. [2] The economics of slavery were probably detrimental to the rise of U.S. manufacturing and almost certainly toxic to the economy of the South. In short: The U.S. succeeded in spite of slavery, not because of it.”

Both sides, as presented here, miss the crucial larger fact that USA’s industrialization was the result of first Secretary of the Treasury Alexander Hamilton’s plan for creating an industrial, not agrarian, economy. And, the opposition to Hamilton and his plan for industrializing USA was centered in the southern oligarchy of slaveholders, led by Thomas Jefferson and James Madison. Very few historians of slavery and even fewer economists appear to understand what Hamilton actually accomplished, or the nature of the opposition to what he did. One of the few is Michael Hudson, who has written extensively on Hamilton’s American School of political economy. See, for example, Hudson’s 2010 book America’s Protectionist Takeoff 1815-1914.

Politically, Hamilton is identified by historians as a Federalist. So, it is germane to note here that The Federalist Society, which has been a key agent in promoting the conservative / neoliberal law and economics doctrine, when it was first considering a name, was thinking of calling itself,  far more accurately, The Anti-Federalist Society. 

The Failure of Establishment Neoliberal Economics

RIP Shareholder Primacy

[Boston Review, via Naked Capitalism 9-1-19]

For the past fifty years, virtually all business leaders, many policymakers, and a great deal of voters have accepted Friedman’s argument that shareholder primacy is the “natural” law of the market. Yet shareholder-focused corporations are not laws of nature, nor does that governance model accurately reflect today’s business dealings. This misguided focus is the result of decades of flawed theory in economics and law. It stems from an incorrect analysis of the relationships between shareholders, employees, management, and the corporation itself. And it is based on a flawed theory of the underlying economy: that markets work perfectly, and the heavy hand of government must get out of the way.

This ideology has caused immeasurable harm. The singular focus on stock price means that wealth is extracted by a small number of shareholders while those who work to produce that wealth are squeezed to the bone. Large corporations operating in this way so dominate U.S. political, economic, and social life that it is difficult for most of us to remember that the rules that shape corporate governance are democratically determined—that we, the electorate, can actually change them….

First, as William Lazonick’s Theory of the Innovative Enterprise (2013) explains, shareholder primacy lacks a theory for how corporations actually develop new ideas for products, new marketing strategies, and new means of using resources. Innovation depends on financial resources, but it crucially also involves “strategic control and organizational integration” in social conditions that are “uncertain, collective and cumulative” in character. Put simply, successful corporations are human organizations that depend on the risky, longterm, creative collaboration of different kinds of participants. This is obvious to anyone in the business world but absent from a “nexus of contracts” view of the corporation. Investors buying and selling shares with each other in diversified portfolios are not walking the shop floor. They aren’t surveying customers to iterate successful products or competing with coworkers for the highest sales.

Lazonick’s arguments were far more eloquently stated by Hamilton and his supporters at the beginning of the American experiment in self-government. See, for example, Hamilton’s argument for limiting the total number of votes of any corporate shareholder to only thirty, no matter how many thousands or millions of shares they actually owned. 

CEO Compensation Increased 940% Between 1978 and 2018, Workers’ Only by 12%
Jerri-Lynn Scofield, September 2, 2019 [Naked Capitalism]

“Elite Failure Has Brought Americans to the Edge of an Existential Crisis”

[The Atlantic, via Naked Capitalism WC 9-5-19]

“In 1998, the Wall Street Journal and NBC News asked several hundred young Americans to name their most important values. Work ethic led the way—naturally. After that, large majorities picked patriotism, religion, and having children. Twenty-one years later, the same pollsters asked the same questions of today’s 18-38-year-olds—members of the Millennial and Z Generations. The results, published last week in the Wall Street Journal, showed a major value shift among young adults. Today’s respondents were 10 percentage points less likely to value having children and 20 points less likely to highly prize patriotism or religion…. This blanket distrust of institutions of authority—especially those dominated by the upper class—is reasonable, even rational, considering the economic fortunes of these groups were pinched in the Great Recession and further squeezed in the Not-So-Great Recovery. Pundits may dismiss their anxiety and rage as the byproducts of college-campus coddling, but it flows from a realistic appraisal of their economic impotency. Young people today commit crimes at historically low rates and have attended college at historically high rates. They have done everything right, sprinting at full speed while staying between the white lines, and their reward for historic conscientiousness is this: less ownership, more debt, and an age of existential catastrophe.”

Climate and environmental crises

“David Koch Is Dead, But His Legacy of Climate Denial Lives On” 
Interview of Michael Mann [The Real News Network, via Naked Capitalism WC 9-5-19]

Mann: “There was an unholy alliance that was reached during the campaign early on where the Koch brothers essentially said to the Trump campaign, “We will not oppose your campaign as long as you appoint our preferred people to all the key cabinet positions. In particular, climate change deniers. Appoint climate change deniers and fossil fuel lobbyists to the Secretary of State position, to the EPA administrator position.” And that’s exactly what they did. The various cabinet members of the Trump administration is a veritable who’s who of Koch Industries and Koch brothers-affiliated lobbyists….. So, we have to understand that as we’re distracted by the clown show that is Donald Trump, the circus act that is Donald Trump and his antics, meanwhile, a little bit more quietly, all of these Koch brothers-connected administration cabinet occupants are dismantling our environmental policies.”

Alaska’s Sea Ice Completely Melted for First Time in Recorded History

[TruthOut, via Naked Capitalism 9-4-19]

[Washington Post, via The Big Picture 9-6-19]US Beekeepers File Suit Against Trump EPA Charging ‘Illegal’ Approval of Insecticide Linked to Mass Die-Off 

[Common Dreams, via Naked Capitalism 9-7-19]

[Forbes, via Naked Capitalism 9-6-19]

But McKinsey issues its strongest warning when it comes to Germany’s increasingly insecure energy supply due to its heavy reliance on intermittent solar and wind. For three days in June 2019, the electricity grid came close to black-outs.

“Only short-term imports from neighboring countries were able to stabilize the grid,” the consultancy notes.

As a result of Germany’s energy supply shortage, the highest observed cost of short-term “balancing energy” skyrocketed from €64 in 2017 to €37,856 in 2019.
“It can be assumed that security of supply will continue to worsen in the future,” says McKinsey.

Renewables are causing similarly high price shocks in other parts of the world including Texas, Australia, and California.

And Britain and Australia have faced similar energy supply problems in recent years as they have attempted to transition to intermittent renewables

Class I freight heading towards a black hole, and that black hole is coal; Union Pacific cuts overall volume projections
[Railway Age 9-6-19]

Americans are using less coal, and Class I railroads are running down the track toward a wall. According to a report issued by Moody’s, freight railroad companies in North America are looking at $5 billion in lost revenues over the next few years as consumers turn more toward cheaper forms of power like natural gas and solar.

Creating new economic potential – science and technology

One Scientist’s Quest to Bring DNA Sequencing to Every Sick Kid

[Wired, via Naked Capitalism 9-2-19]

“Tesla Batteries Are Keeping Zimbabwe’s Economy Running” 

[Bloomberg, via Naked Capitalism 9-3-19]

“The installation of 520 Powerwall batteries, with two going into each base station, is the largest telecommunications project in which Tesla has participated to date, Moyo said. With Econet having about 1,300 base stations in the country and two other mobile-phone companies operating there, Distributed Power intends to install more batteries and could eventually roll the project out to other power-starved countries in Africa, such as Zambia, Lesotho and the Democratic Republic of Congo, he said. Base stations in Zimbabwe often use diesel-fired generators as backup, but fuel is also scarce in the country. The Powerwalls, which cost $6,500 each, will step in when solar panels aren’t generating enough electricity because it’s night or when heavily overcast. The lithium-ion batteries can power a station for as long as 10 hours, according to Econet. They are charged by the sun. Tesla is working with a number of telecommunications companies around the world and sees a combination of solar panels and battery storage as a good opportunity to expand its business in countries and areas where electricity supply is erratic or non-existent.”

Report: Europe could power the entire world with land-based wind

[BBC Focus Magazine online, via American Wind Energy Association 9-5-19]

Europe has enough land area and wind resources to power the entire world with renewables through 2050, if it added 11 million turbines, according to the University of Sussex and Aarhus University. “Obviously, we are not saying that we should install turbines in all the identified sites but the study does show the huge wind power potential right across Europe which needs to be harnessed if we’re to avert a climate catastrophe,” says the University of Sussex’s Benjamin Sovacool.

A Look Inside Amtrak’s Next-Gen Acela Express
[Railway Age 9-5-19]

Amtrak’s Acela Express, which replaced the iconic Metroliner service that helped define the Northeast Corridor for the better part of 30 years, is now approaching age 20 (kind of old for a train). The equipment, popular with customers but sort-of affectionately called “The Fast Pig” in railroading circles, will soon be replaced with new, lighter, sleeker and faster trainsets from Alstom.

UNEP predicts renewable energy investments to hit $2.6T this year
[The Guardian (London), via American Wind Energy Association 9-6-19]

Investments in renewable energy sources around the world will likely reach $2.6 trillion and nearly quadruple the world supply of renewable power by the end of 2019, according to a report from the United Nations Environment Programme. “Investing in renewable energy is investing in a sustainable and profitable future, as the last decade of incredible growth in renewables has shown,” says UNEP head Inger Andersen.

Q&A: New financing options needed to facilitate wind growth
[North American Windpower online, via American Wind Energy Association 9-6-19]

The wind energy Production Tax Credit effectively spurred US wind growth, but new financing options are needed to sustain the industry’s ongoing growth as the mechanisms phases out, says Wells Fargo executive Phil Hopkins. Wells Fargo provided US renewables projects with $1.5 billion in tax equity financing last year and expects to exceed that figure this year, he says.

MD-80: The Retirement of An American Airlines Icon
Lee Ann Shay, September 6, 2019 [Aviation Week and Space Technology]
On Sept. 4, 2019, American Airlines conducted its last McDonnell-Douglas DC-9 MD-80 revenue flight. The airline first began flying the MD-80s in 1983, and by 2001 had 362 in service. American will donate two to museums, use one for deicing training, and store the remainder at Roswell, New Mexico. The MD-80 was affectionately nicknamed Mad Dog.

Why is the “Mad Dog” MD-80 still barking?
[Aerotime News 9-5-19]

American Airlines stated that the MD-80 was 37% more fuel-efficient than the Boeing 727-100, the aircraft it is replacing. In addition, the Super 80 added more capacity, because a typical seating of an American Airlines MD-80 was 142 passengers while the outgoing 727s seated 115. The aircraft became American’s savior….


Restoring Balance to the Economy

Sanders previews plan to cancel all past-due medical debt

[The Hill, via Naked Capitalism 9-2-19]
[Teen Vogue, via Naked Capitalism 9-1-19]
[New York Times, via Naked Capitalism 9-2-19]
[Rolling Stone, via Naked Capitalism WC 9-5-19]

“It’s day 38 of a nonviolent blockade of a Harlan County, Kentucky railroad track. During the occupation, union miners have stood with non-union miners, transgender anarchists have built solidarity with Trump-voting Republicans, and a 100-year-old labor movement has found a new generation of working-class leaders fighting to keep the region’s wealth where it came from: in workers’ hands and in the foggy hollers of central Appalachia.” And this:

Lill, who uses gender-neutral they/them pronouns, quit their job as a server and, along with a small crew of transgender anarchists, set about marshaling the blockade into an organized labor camp. They helped set up a camp phone line, a solar shower, and a kitchen capable of feeding dozens. The anarchists, who spent 27 days on the tracks with the miners, brought up questions the miners hadn’t yet considered: Who are you going to call if this gets you arrested? Who’s going to bail you out?

“I didn’t know who they were at first, but I kind of got used to them,” says Sarah Kelly, 43, the wife of a Blackjewel miner. “We haven’t had the support [from our church] we thought we’d have out of all of this. You don’t never know where your help is going to come from. You don’t know who’s going to be preparing your meals.”

The Blackjewel miners were strangers to the vocabulary of lefty direct action, but the area has a strong history of labor activism.

This Company Hired Anyone Who Applied. Now It’s Starting a Movement.

[Pocket, via Naked Capitalism 9-6-19]
[The Verge, via Naked Capitalism 9-3-19]

Harold Meyerson [The American Prospect, via Naked Capitalism 9-3-19]

“…the most important piece of legislation currently pending in any of the nation’s 50 state legislatures has seen something of a generational divide among Democrats. The bill, AB5, would conform California’s labor law to a ruling of the state’s Supreme Court that required employers to reclassify workers currently mislabeled as independent contractors into their correct classification as employees… Not surprisingly, the bill is the subject of a titanic battle between Uber, Lyft and other app-based driving services on one side, and their drivers, backed by the state’s labor movement, on the other. But it also has split the state’s Democrats. Many Obama-era Democrats, who have been flocking to Silicon Valley sinecures or received the Valley’s campaign contributions throughout the past decade, have lined up on Uber’s side… Responding, in part, to the labor-left militancy of today’s Democratic electorate, however, a host of Democratic presidential candidates have backed the bill, including Bernie Sanders, Elizabeth Warren, Cory Booker, Pete Buttigieg, Beto O’Rourke, and even Tony West’s sister-in-law, Kamala Harris. That’s every Democrat who polls in the top seven of the Democratic presidential field—with the single exception of the guy who polls first, Joe Biden.”

AOC Calls Out Barbara Boxer for Helping Lyft Fight Against California Labor Bill
Lambert Strether, September 1, 2019 [Naked Capitalism]

Information Age Dystopia

Amazon’s Next-Day Delivery System Has Brought Chaos And Carnage To America’s Streets — The World’s Biggest Retailer Has A System To Escape The Blame.

[Buzzfeed, via The Big Picture 9-7-19]

Amazon is the biggest retailer on the planet — with customers in 180 countries — and in its relentless bid to offer ever-faster delivery at ever-lower costs, it has built a national delivery system from the ground up. In under six years, Amazon has created a sprawling, decentralized network of thousands of vans operating in and around nearly every major metropolitan area in the country, dropping nearly 5 million packages on America’s doorsteps seven days a week.

Amazon drivers say they often have to deliver upward of 250 packages a day — and sometimes far more than that — which works out to a dizzying pace of less than two minutes per package based on an eight-hour shift.

The system sheds costs and liability, even as it grows at lightning speed, by using stand-alone companies such as Inpax to pick up packages directly from Amazon facilities and deliver them to the consumer — covering what’s known in the industry as “the last mile.” Amazon goes further than gig economy companies such as Uber, which insist its drivers are independent contractors with no rights as employees. By contracting instead with third-party companies, which in turn employ drivers, Amazon divorces itself from the people delivering its packages.

That means when things go wrong, as they often do under the intense pressure created by Amazon’s punishing targets — when workers are abused or underpaid, when overstretched delivery companies fall into bankruptcy, or when innocent people are killed or maimed by errant drivers — the system allows Amazon to wash its hands of any responsibility.

Amazon Pushes Fast Shipping but Avoids Responsibility for the Human Cost

[New York Times, via Naked Capitalism 9-7-19]

His Mother Was Killed by a Van Making Amazon Deliveries. Here’s the Letter He Wrote to Jeff Bezos. 

[ProPublicas, via Naked Capitalism 9-7-19]
[Industry Week, via Naked Capitalism 9-6-19]

“With Amazon retraining its workforce to the tune of $700 million, nearly a third of the company’s U.S. workers will become accustomed to more tech-intensive responsibilities. This effort—one of the most historically forceful on Amazon’s part—sets the stage for the company to figure out whether its stated mission of ditching its own human workforce in favor of smart robots is a go. The tech behemoth has made no secret of its desire to go fully automated: It’s been investing in automation technology for years…. So it came as a bit of a shock earlier this month when the company said that full automation is at least a decade away…. For now, Amazon’s 600,000-plus employees will work alongside the robots, which—surprisingly—perform only a fraction of tasks, mostly limited to moving large stacks of products in the warehouses. They simply lack the higher-order cognitive abilities, like applying insight and making decisions, that are required for more precise, nuanced work.”

Enemy Actions

The neoliberal attack on Bernie Sanders’ Green New Deal is a clear and present danger
[Alternet, via Naked Capitalism 9-3-19]

Exxon Mobil Is Funding Centrist Democratic Think Tank, Disclosures Reveal
Kate Aronoff [The Intercept 9-7-19]

THE PROGRESSIVE POLICY Institute, a centrist Democratic think tank that grew out of the party’s pro-business wing in the 1980s and ’90s, received $50,000 from Exxon Mobil in 2018 via its parent organization, the Third Way Foundation, according to the oil giant’s 2018 Worldwide Giving Report….

The Intercept’s Akela Lacy has also found that PhRMA — the Pharmaceutical Research and Manufacturers of America — has annually donated between $25,000 and $75,000 to the Third Way Foundation since 2009, upping its donation to $265,000 in 2016….

This all dovetails well with a centrist approach to climate politics that’s long sought common ground with industry and harbors both temperamental and ideological opposition to big, confrontational proposals like the Green New Deal. The upshot is that they’ve started to sound a lot alike. Carbon capture, R&D, and carbon pricing — while not mutually exclusive with the Green New Deal framework that the Sunrise Movement, Rep. Alexandria Ocasio-Cortez, and others have begun to flesh out — have reliably been wielded as a cudgel by establishment types against calls for more sweeping action.

The chief economic strategist of PPI is Michael J. Mandel, who wrote a book entitled Rational Exuberance: Silencing the Enemies of Growth and Why the Future Is Better Than You Think. That was in 2004. The world financial system imploded three years later. 

The current president of PPI is Will Marshall, was a board member of the Committee for the Liberation of Iraq, an organization chaired by former Senators Joe Lieberman (I) and John McCain (R) designed to build support for the invasion of Iraq. Marshall is also a former speechwriter for Governor Jim Hunt of North Carolina.

Predatory Finance

Why Is JPMorgan Chase Always in the Middle of Scandalous News? Fake Gold Anyone?

[Wall Street on Parade, via Naked Capitalism 9-6-19]
Pam Martens and Russ Martens, September 6, 2019 [Wall Street on Parade]

Three years ago we reported on President Obama’s press conference of March 7, 2016 where Obama overtly misled the American people about how Wall Street banks were complying with the 2010 Dodd-Frank financial reform legislation that mandated that the banks’ trillions of dollars in dangerous derivatives be centrally cleared rather than traded as opaque private contracts between two counterparties.

President Obama stated during this press conference that “you have clearinghouses that account for the vast majority of trades taking place.” That wasn’t true then and it’s still not true, nine long years after the Dodd-Frank legislation was signed into law.

[Bloomberg, via Naked Capitalism 9-6-19]

“Central banks and Basel III have more or less removed price discovery from the credit markets, meaning risk does not have an accurate pricing mechanism in interest rates anymore. And now passive investing has removed price discovery from the equity markets. The simple theses and the models that get people into sectors, factors, indexes, or ETFs and mutual funds mimicking those strategies — these do not require the security-level analysis that is required for true price discovery. This is very much like the bubble in synthetic asset-backed CDOs before the Great Financial Crisis in that price-setting in that market was not done by fundamental security-level analysis, but by massive capital flows based on Nobel-approved models of risk that proved to be untrue.”

Wall Street’s Trading Secrets: This U.S. Senator Wants to Keep You in the Dark
Pam Martens and Russ Martens: September 4, 2019  [Wall Street on Parade]

According to the Federal Election Commission, employees of Elliott Management Corporation (EMC), a hedge fund founded by Paul Singer, have made over $57,000 in contributions to Senator Kennedy, who was only elected to the Senate in 2016. (Prior to that, Kennedy was state Treasurer of Louisiana for five terms, where he had oversight of the state’s multi-billion-dollar investment portfolios — another link to Wall Street.)
Singer remains as President and Co-CEO of Elliott Management and wields enormous power over Republican Senators through his astronomical campaign finance spending.

According to receipts we accessed at the Federal Election Commission, in just the past eight months, Singer has showered Republican candidates and committees with more than $3.8 million of his own personal wealth – which according to Forbes, is now $3.5 billion. Among the eye popping donations were the following: $1 million to the Republican Congressional Leadership fund on April 4; $1 million to the Republican Senate Leadership fund on March 27; $500,000 to the WFW Action Fund on April 4; $248,000 to the National Republican Congressional Committee on March 29; $213,000 to the National Republican Senatorial Committee on March 29; $224,200 to a committee called Defend the Senate on March 29; $253,500 to the McCarthy Victory Fund on March 29 (Kevin McCarthy is the Republican Leader in the House). There are numerous others amounts listed.

SourceWatch reports that Singer “is consistently among the top individual contributors to federal political campaigns in the United States.”

Singer is also Chairman of the Board of the Manhattan Institute for Policy Researchwhich has ties to the Koch Brothers, Big Tobacco and blocking action on climate change.

Disrupting mainstream politics

[BelowTwitter, via Naked Capitalism WC 9-3-19]
Black Lives Matter of South Bend calls for ⁦@PeteButtigieg⁩ to resign as Mayor. This letter from BLM is outstanding. Well worth the read. …

The 10 counties that will decide the 2020 election

[The Hill, via Naked Capitalism 9-5-19]


Collapse of Independent News Media

Ralph Nader, September 5, 2019 [TruthDig, via Naked Capitalism WC 9-7-19]

Brit Hume, before he went over to Fox, once told me that the real purpose of the Sunday shows was to let the Washington politicians have their say so they stay off the back of the networks. That was his way of explaining why the questions put to them were not as tough or deep as they could be.


Open Thread


Britain’s Ongoing Brexit Drama


  1. S Brennan

    Tony, while you may view your ideas in regard to economics as ground breaking, many of us, including myself, we having speaking to this issue for over 40 years…since the days of Carter.

    That said; your clever interpolation, to blindly, to solely blame [R]’s and in so doing, exculpate [D]’s is the very deception by which we have arrived at this sorry state. Jimmy Carter started the long march away from FDRism, not Reagan.

  2. Willy

    Every POTUS since Carter has expanded on those ideas. Somebody here has said it was aided by the successful “selfishization” of common american voter culture by owners of consumer capitalist corporations.

    Personally, I was happier with less, and the people around me were “more”.

  3. nihil obstet

    It’s become trendy of late to blame Jimmy Carter for the rise of neoliberalism. I suspect that it’s right wing efforts to maintain the image of Ronald Reagan. I’d note a few things. In the late 70s, both inflation and unemployment were high and wages were stagnating. The income of the majority of Americans had started to fall. Gerald Ford had floundered around with economic policy as well. Essentially, the New Deal economic policies hit a very rough spot, and there appeared to be a need for other experimentation.

    Carter went the route of deregulating. However, in terms of ideas, he never preached selfishness. He advocated energy conservation and a renewed sense of public virtue. He spoke for honesty and openness in government at home and human rights overseas. He sought to cut the military budget. Given time to see what did and didn’t work in the economic realm, Carter might have done better than continuing along the neoliberal path. He has criticized it since leaving the presidency. Ideas and narrative matter. He set up a framework that could have served as the “this is having bad results, let’s do something else” approach instead of the Reaganite “greed, greed, greed, nothing but greed”.

    The Democratic Party since at least 1988 have been ghastly enablers of very bad economics. I understand the need to overcome a partisanship that says “Us good, them bad”, but there’s also an issue with “both sides are equally guilty.”

  4. S Brennan

    “It’s become trendy of late to blame Jimmy Carter for the rise of neoliberalism.”

    Uhm, no that isn’t what I said or inferred, so, no to your phony strawman argument and the political hacksterism that underlays it’s foundation. What I did say was; both party’s have eagerly participated in the rise and maintenance of neoliberalism I prefer to identify it, gilded-age policies sans mercantilism.

    Carter policies, exhibited in his first year of his office, [read the article] belies the “trendy” idea that it’s only [R]’s that are to blame for the rise of neoliberalism an argument as phony as, 2016’s primary argument, “only Hillary can beat Trump”.

  5. DMC

    Am I the only one here who questions Forbes’ ability to handle the topic of renewable energy source objectively?

  6. Herman

    @nihil obstet,

    Good points. The post-war Keynesian consensus was in trouble by the 1970s and the conservatives were ready with answers to the problems of the time. They had built up a network of think tanks, publications and intellectuals to bolster their ideas while the left seemed to be all out of ideas. I think Carter was mistaken to support deregulation and other neoliberal policies but it seems to me that the left was caught flat-footed by the economic problems of the 1970s.

    Also, I agree that Carter was right about the general moral problems of the times. Carter is still the only modern American president to preach against consumerism and he was right to try to make human rights a more important aspect of American foreign policy. The “crisis of confidence” speech was spot on in many ways but Americans saw it as a sign that Carter was a weak leader who was blaming the public for his own failures. Ronald Reagan told Americans that he would fix their problems, he was charismatic and funny and thus he beat Carter.

  7. Hugh

    Libertarians, like the rest of us, owe 99.999% of who and what they are to our society. Their idea of freedom is to ignore what they owe the rest of us. And their take on freedom for the rest of us is to go die in a ditch of our own choosing. In a medical context, this would be a textbook case of sociopathy.

    Foundational milestones of American kleptocracy instituted during Carter’s Presidency

    1978 Airline Deregulation Act deregulating the airlines
    1978 Civil Service Reform Act set up the Federal Labor Relations Authority to oversee collective bargaining with federal workers. It was this entity which Reagan used to decertify Patco (the air traffic controllers union) in 1981
    July 25, 1979 Pal Volcker nominated to head the Fed. His efforts to fight inflation turned into the Fed’s 40 year war on workers’ wages
    1980 The Depository Institutions Deregulation and Monetary Control Act repealed usury limits on what banks could charge in interest
    Motor Carrier Act of 1980: deregulated trucking

    I should add that the income share of the lower 80% of American households peaked earlier in 1968, the last year of the Johnson Administration.

    Re the Pam Martens stuff, pretty much all the big banks are criminal enterprises. Todd-Frank was classic kayfabe. It was designed to look like government was doing something while actually doing as little as possible to change the practices that created the 2008 financial meltdown. Most derivatives should be banned because in a major crisis their risk can not be netted out. That is pro and con positions don’t cancel out because those down the food chain on the losing side of these bets quickly go bankrupt and these inabilities to pay cascade upwards. Clearinghouses were supposed to add transparency to the process and that’s lost. But they were pretty much paper tigers from the start because they were, if memory serves, to be run by the banks, the banks would remain big buyers and sellers of derivatives, and on top of everything else losses would be made good by the clearinghouses, that is the banks. So the risk would end up back where it did in 2008, and the question would be would the Fed bail them out again whether it is supposed to or not.

    Re elites, they never failed us. It was active and premeditated betrayal and looting.

  8. KT Chong

    Inside America’s Meddling Machine: NED, the US-Funded Org Interfering in Elections Across the Globe (by Max Blumenthal):

    P.S. oh no, not Yeonmi Park as well, but she looks so innocent and purty and believeable!

  9. Willy

    For many years economic libertarians tried to sell a flat tax. It was about the best they could do – few average folks took them seriously. Then under Carter they saw their chance. The US ended the Bretton Woods system, cheaper and more efficient overseas heavy industry like steel and auto were coming online, American corporations wouldn’t reinvest to keep up with new competition, and then OPEC did its thing. When it was all too much for Carter to handle he brought in Volcker, who was listed as a Democrat and wound up being used well past retirement age by Obama.

    Reagan did shift investment to military, but got amazingly lucky with his overall timing – the collapse of communism, materialist and military culture making a comeback, and the start of the American tech boom. And paradoxically, offshoring jobs and technology went from ‘unpatriotic national insecurity’ to ‘good business strategy’.

    And Carter is seen by conservative culture as a failed president compared to the almighty Reagan.

    It seems like the business hallmark of the entire 70s-90s era was a very short term profit focus. I’m thinking that without a threatening Soviet Maoist rival forcing competency, and Freidman being hailed some kind of Einsteinian genius, the sociopaths took control of corporate culture and tipped the balance. I know a few companies created by guys who built them for the sole purpose of quickly creating something sellable, then selling it. There was no vision of building some kind of legacy empire for their progeny.

    Sure seems like all this was about creating a fertile ground for sociopathic corporatism (as if it wasn’t sociopathic enough).

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