All posts by Tony Wikrent

Week-end Wrap – Political Economy – March 19, 2023


Week-end Wrap – Political Economy – March 19, 2023

by Tony Wikrent

Global power shift

China Leads A Successful Middle East Summit

Ian Welsh, March 16, 2023

Something which has slipped past most people’s radar is that China recently acted as the intermediary for peace talks between Iran and Saudi Arabia. The two countries have been at each other’s throats for decades, funding and running operations and proxies against each other….

Now it’s obvious why the US couldn’t be involved: it hates Iran and doesn’t intend to change that any time soon. But that China was reached out to indicates that it has good relationships with Iran and Saudi Arabia and that it’s considered powerful and prestigious enough to be involved a region far from its core.

On the Saudi side this shows the continued movement away from being a US ally. It suggests continued movement towards China, and that the petro-dollar really is under significant threat.

For Iran, it suggests that the days of the US being able to coordinate sanctions over it are likely numbered. If the Sauds break out of the US bloc, one can expect the Gulf States to follow if Iran is also in the Chinese bloc: these are the regional and cultural great powers. As Chinese/Russian payments expand and with petrochemicals priced in Yuan or Rubles, and with the most important Middle Eastern powers friendly to China, the US is reduced to its core allies. 

The Key Factor in the Saudi-Iran Deal: Absolutely No U.S. Involvement 

Murtaza Hussain, March 15 2023 [The Intercept]

Ever since it pushed aside colonial Britain and France, the United States has prided itself on being the dominant outside power in the Middle East. That lofty image was shaken this past week by the surprise announcement that Saudi Arabia, a close U.S. partner, and Iran, a longtime enemy, had negotiated a normalization agreement on their own to restore diplomatic ties. The final meeting to conclude the agreement took place in the Chinese capital of Beijing.

Détente between Iran and Saudi Arabia raises hopes for steps towards peace in Yemen

[france24 3-16-2023]

China and Russia capitals connected on New Silk Road for first time

Chengfan Zhao [Rail Freight, via Mike Norman Economics 3-18-2023]

Linking Moscow and Beijing is of symbolic value, but the symbolism says a lot. The big news is that Sino-Russia trade is increasing and it is not just energy that formerly went to Europe heading East. China as "the factory of the world" is now supplying Russia directly with its output, further eroding the effect of sanctions. And the trade is being settled in RIB and CYN.

Bank crisis

US Officials Make Non-Bailout Bailout of Silicon Valley and Signature Bank and Continue Class Warfare

Yves Smith [Naked Capitalism 3-12-2023]

...It’s also not considered polite to point out that the activities of the Palo Alto ecosystem are in aggregate extractive. Start with the venture capital funds themselves. We’ve pointed out that private equity has not beaten the S&P 500 since 2006. The underperformance of VC is longer-standing, since the dot-com glory returns rolled off. And the positive side of that ledger came from a tiny number of companies delivering moonshot returns.

In a similar vein:


Moody’s Downgrades Entire U.S. Banking System; Credit Suisse Plummets. Welcome to Banking Crisis 3.0

Pam Martens and Russ Martens, March 15, 2023 [Wall Street on Parade]

SVB’s Lobby Groups Fought Proposal To Bolster Deposit Insurance 

Julia Rock & David Sirota, March 12, 2023 [The Lever]

Last year, bank lobbying groups mobilized against the Federal Deposit Insurance Corporation’s (FDIC) proposal to raise banks’ insurance premiums to shore up that deposit fund’s reserves, which had fallen below the minimum required by law.

Lobbying groups representing Silicon Valley Bank, or SVB, argued that risk of bank failures is low and insisted that requiring banks to pay more into the fund would harm financial institutions’ bottom lines….

At the time, the Deposit Insurance Fund (DIF) had less than $126 billion to insure the nearly $10 trillion of insured deposits in America, meaning the reserve ratio was below the statutory 1.35 percent minimum.

Nonetheless, soon after the bank industry’s letter, a group of senior Republican House lawmakers — including some of the chamber’s top recipients of banking industry campaign cash — parroted the financial industry’s rhetoric in their own missive demanding that regulators back off.

How Congress—Including Way Too Many Democrats—Created This Banking Crisis

Timothy Noah, March 16, 2023 [The New Republic] 2018 Congress weakened regulation of midsize banks under the 2010 Dodd-Frank law, the first major overhaul of banking regulations since the Depression.

The main thing the 2018 rollback did was to raise, from $50 billion to $250 billion, Dodd-Frank’s asset threshold for banks whose potential failure was deemed a threat to the whole banking system. These “systemically important” banks are subjected to stricter federal oversight. They must undergo annual “stress tests,” with the Federal Reserve assuming the role of cardiologist. They must keep more cash in reserve in the event that someone like, say, Peter Thiel should decide abruptly to pull all his money out. And they should prepare “resolution plans,” commonly referred to as a “living will,” in the event of bankruptcy.

If these Dodd-Frank provisions are worth a damn, and if President Donald Trump and Congress had left well enough alone in 2018, they would have kept Silicon Valley and Signature from making the well-documented mistakes that caused them to go belly-up. The Congressional Budget Office warned Congress that the rollback bill would “increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.” So did Bernie Sanders and Elizabeth Warren. Congress passed the bill anyway, 67–31 in the Senate and 258–159 in the House. Note the lopsided nature of the votes.

WATCH NOW: Meet The Champions Of Banking Deregulation. See who helped slash bank rules before Silicon Valley Bank’s collapse, what they said at the time, and what they’re saying now. (video)

[The Lever, March 16, 2023]

SV Bank and the Only Choice We Have: The super-rich will not walk away from power. How do we make them leave? 

Thomas Neuburger, March 15, 2023 [God’s Spies]

...It’s highly possible, one could even say likely, that those massive deposits — Roku alone kept almost half a billion dollars in a single account — were part of a corrupt set of practices by the bank itself and its big-dollar clients.

David Dayen, in an excellent, comprehensive piece, writes: “So you have depositors that either didn’t know the first thing about risk management, or were bribed by the bank into neglecting it.”

Keep in mind who these depositors are: the very very wealthy in the West Coast venture capital world. The corruption didn’t start just with the bank. The VCs often initiated it. As a friend and former Silicon Valley entrepreneur pointed out to me recently:

“SVB was a special case. VCs required the companies they funded to keep their cash there. So the companies (and their employees) really were victims, not incompetent at risk management. In exchange the VCs received various favors from the bank. This is how Silicon Valley works behind the scenes. I was in one deal where the lead VC for our funding required a secret kickback of a certain % of the company stock and that this arrangement be kept secret from the firm. This is typical.”


The second “where does that leave us?” leaves the financial realm and enters the political. If Saagar Enjeti is right (see the clip above), the rich decided that taking even a 10% loss (“haircut”) via the normal unwinding process was still too big an ask.

Meanwhile, in East Palestine OH where the working class makes its life, this went on: …. .

The point couldn’t be more simple. When the wealthy face losses, the government they control bails them out, within days if necessary.

When the rest of us face losses, we’re on our own. Neither the wealthy who caused the mess nor the government that represents “the people” will step up to the plate.

And it will be this way forever unless force is applied.

[Twitter, via Naked Capitalism Water Cooler 3-15-2023]



Silicon Valley Bank Was a Wall Street IPO Pipeline in Drag as a Federally-Insured Bank; FHLB of San Francisco Was Quietly Bailing It Out

Pam Martens and Russ Martens, March 13, 2023 [Wall Street on Parade]

The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank

Edward Ongweso Jr., March 13, 2023 [Slate, via The Big Picture 3-18-2023]

Remind me why, exactly, these guys have so much control over technological innovation?

….For over a decade, low interest rates have allowed venture capitalists to accumulate huge funds to give increasingly unprofitable firms with unrealistic business models increasingly larger valuations—one 2021 analysis found that not only were 90 percent of U.S. startups that were valued over $1 billion unprofitable, but that most would remain so. Give me tens of billions of dollars and a $120 billion valuation and someday, somehow, I will replace every taxi driver with gig workers paid subminimum wages—or robot taxis paid no wages—while charging exorbitant fares for rides, increasing pollution, and adding to traffic. Or not, and I will sell off all the science-fiction projects I’ve promised, but still fail to make a profit.

Over the last year, rising interest rates to combat inflation have meant less free money for science-fiction projects, pressuring investors to change their entire approach and actually fund realistic ventures at realistic valuations with realistically sized funds and deals. Drops in valuations meant smaller checks, which meant smaller deposits at Silicon Valley Bank, and more and more withdrawals as startups ran out of cash themselves. It also meant the bonds SVB bought were now worth less than when purchased, so they’d have to be sold at a loss to generate some liquidity, so that clients could withdraw their deposits.

Magical Monetary Thinking at the Fed Killed SVB 

L. Randall Wray and Stephanie Kelton [The Lens, via Mike Norman Economics 3-18-2023]

...So what is to be done? 

We see two routes for long-term solutions:

1. Continue to embrace the free market. Reduce government-provided backstops. Continue to rely on monetary policy for aggregate demand management: raise rates to fight inflation, and then lower them to ease the damage of recession. Allow the bank failures that rate hikes inevitably generate. Learn to live with periodic financial crises. And expect a great depression every generation—which was the norm before the New Deal with its regulation of financial institutions and tremendous increase of the size of government.

2. Stabilize interest rates—stop using them for demand management and instead focus on financial stability. Regulate and supervise financial institutions. Retain backstops like deposit insurance and lender of last resort when necessary to stop crises from spreading. And restore a proper role for fiscal policy in managing aggregate demand.

Goldman Sachs Eyes a Big Payout from Silicon Valley Bank Deal 

[New York Times, via Naked Capitalism 3-16-2023]

The Wall Street giant is likely to be paid more than $100 million for its role in a bond purchase that ultimately failed to save the California bank from collapse.

The Silicon Valley Bank Contagion Is Just Beginning 

[Wired, via Naked Capitalism 3-14-2023]

The second- and third-order impacts of startups hitting financial trouble or just slowing down could be more pernicious. “When you say: ‘Oh, I don’t care about Silicon Valley,’ yes, that might sound fine. But the reality is very few of us are Luddites,” Kunst says. “Imagine you wake up and go to unlock your door, and because they’re a tech company banking with SVB who can no longer make payroll, your app isn’t working and you’re struggling to unlock your door.”

Lambert Strether, as usual, posted a comment that cuts to the heart of the matter: “See, there’s your problem. These people — the tiny, incestuous in-group of 37,466 deposit customers at SVB — think you should need an app to open your front door. Worse, they think anybody who doesn’t buy into that “innovation” is a Luddite. And they think they’re entitled to an endless flow of stupid money. It’s froth. It’s deranged.”

What’s Going on with First Republic Bank? 

Adam Levitin [via Naked Capitalism 3-16-2023]

ANHD Statement on Signature Bank’s Closure 

[The Association for Neighborhood and Housing Development’ via Naked Capitalism 3-16-2023]

Signature Bank’s collapse comes as no surprise to the Association for Neighborhood & Housing Development (ANHD), who has long called out their faulty business model, which relied on predatory and speculative activities in New York City. Signature paved the way for thousands of tenants to suffer living in unsafe conditions, the victims of harassment, or displaced from their homes and communities. ANHD applauds the New York Department of Financial Services (DFS) for taking the significant and necessary steps of closing Signature Bank — marking the third largest bank failure in US History, with nearly $200 billion in assets and deposits in 2022.

“Barney Frank’s Signature Bank Compensation”

[The Rational Walk, via Naked Capitalism Water Cooler 3-14-2023]

“The disclosures reveal that Mr. Frank was granted a total of 15,857 shares worth $2.36 million on the date of the grants (including dividend reinvestments). Through a series of sales, Mr. Frank received cash of $1.56 million for 10,324 shares…. To be clear, there is no indication that Mr. Frank or the Signature Bank board of directors did anything illegal, and I am not alleging that they did. I am expressing the opinion that this entire arrangement was highly corrupt and utterly shameful. It’s unfortunate that we live in a society where shame is almost entirely absent.”

Crypto’s bedrock bank implodes 

Felix Salmon [Axios, via Naked Capitalism 3-12-2023]

The implosion of Silvergate Bank is an existential event for what remains of the crypto ecosystem. Silvergate underpinned almost every American crypto company; without it, it's hard to see how the industry can possibly thrive.

20 banks that are sitting on huge potential securities losses—as was SVB

[MarketWatch, via Naked Capitalism 3-13-2023]

I Was an S.V.B. Client. I Blame the Venture Capitalists 

[New York Times, via Naked Capitalism 3-17-2023]

I’ll keep my S.V.B. debit card as a souvenir, partly because the giant arrow logo points in the opposite direction that it’s supposed to go into a card reader — an example of a design that obviously went through no user testing. It’s also a reminder that successful people aren’t always the best decision makers.

“‘Meme stock in reverse’: SVB collapse portends new era of viral bank runs”

[Banking Dive, via Naked Capitalism Water Cooler 3-16-2023]

“‘We are entering a new era of a social media-driven run on banks,’ Solomon Lax, a former investment banker and venture capitalist who is now CEO of online lender Revenued, told Banking Dive in an email. “This is a meme stock in reverse.’ While SVB had been facing liquidity strains for the past year, the bank’s disclosure last week that it was raising capital after it had lost nearly $1.8 billion in the sale of long-term bonds, panicked the VC community. ‘I’ve seen a lot of emails floating around from large VC funds telling their portfolio companies to deposit their money in large banks,” said Rohit Arora, CEO of small-business financing fintech Biz2Credit.’ Prominent venture capital firms, including Peter Thiel’s Founders Fund, instructed their portfolio companies to pull cash from SVB, according to Bloomberg. Venture firms Coatue Management, Union Square Ventures and Founder Collective also advised startups to withdraw funds, the wire service reported. Founders and investors likely shared their concerns over the bank in private chat groups before word spread to social media, Jason Goldman, Twitter’s former head of product, told The Wall Street Journal. The bank’s situation was amplified by Twitter users with large followings, such as entrepreneur and internet personality Kim Dotcom and startup investor Jason Calacanis…. Meanwhile, the hashtag #BankCrash trended on Twitter throughout the weekend…. ‘It’s dangerous,’ [ Rohit Arora, CEO of small-business financing fintech Biz2Credit] said. ‘Everybody has a smartphone, everybody can just put anything on social media, there’s no filters, no authentication checks. And then everybody can go online today and withdraw the money.’… [T]he SVB’s accelerated collapse last week stunned the banking industry. ‘I was amazed to see how a bank of this size and pedigree failed in 36 hours,’ Arora said. ‘Even in 2008, it took quite a bit of time for these banks to go down.'”

“‘They will learn nothing from this’: Tech leaders remain staggeringly oblivious to the true lessons of Silicon Valley Bank”

[Business Insider, via Naked Capitalism Water Cooler 3-16-2023]

“The end of a financial mania is, in essence, a crisis of trust. As the tech bubble has popped over the past year, that crisis has been visible all over the industry. Workers no longer trust that their employer is looking out for them, companies stopped trusting that employees were pulling their weight, and investors no longer trust that companies will deliver explosive returns. In this environment of suspicion, the very financial institution that facilitated the tech industry’s exuberance became unreliable. A few whispers from powerful VCs, like the leaders of Peter Thiel’s hyperinfluential Founders Fund, and the run was on. If there is a better real-life illustration for that utter collapse of confidence than a bank run, I don’t know what it is. ‘VCs rely on gossip as facts,’ one founder connected to the much-vaunted startup incubator Y Combinator told me. “They like to say they’re empirically minded — ‘Occam’s razor’ and ‘first principles’ — but when it comes down to it the greatest weapon and greatest tool they have is gossip. And last week was a brilliant case in which it went awry. Grown people with advanced degrees using gossip as gospel.’ Once the spark was lit, Silicon Valley’s hype machine took it from there. The faithless VCs ended up freaking out the founders of companies they were invested in, leading to startups yanking all of their cash as quickly as possible. One founder with 12 years of experience in the tech industry who was at the South by Southwest festival in Austin, Texas, told me some of the horror stories: Startup CEOs with tens of millions of dollars sitting in SVB scrambling to get some money out, fearful they would get only a fraction of it back. The VCs had told them to put their money in the bank, so they did — and now the same VCs were warning of an ‘extinction-level event.’ Or as the economic historian Adam Tooze put it in a recent newsletter: ‘This was not so much a classic large-scale bank run in which mass psychology played its part on a grand scale, but a bitchy high-school playground in which the cool thing to do was to bank with SVB until it no longer was.'”

Climate and environmental crises

Global Fresh Water Demand Will Outstrip Supply By 40% by 2030, Say Experts 

[Guardian, via Naked Capitalism 3-18-2023]

The world is facing an imminent water crisis, with demand expected to outstrip the supply of fresh water by 40% by the end of this decade, experts have said on the eve of a crucial UN water summit.

Governments must urgently stop subsidising the extraction and overuse of water through misdirected agricultural subsidies, and industries from mining to manufacturing must be made to overhaul their wasteful practices, according to a landmark report on the economics of water….

The report marks the first time the global water system has been scrutinised comprehensively and its value to countries – and the risks to their prosperity if water is neglected – laid out in clear terms.

The What, Why and How of the World Water Crisis: Global Commission on the Economics of Water Phase 1 Review and Findings (pdf)

[Global Commission on the Economics of Water, OECD Environment Directorate
Climate, Biodiversity And Water Division]

The carnage of mainstream neoliberal economics

A dog day afternoon in French politics as Macron uses ‘nuclear option’ to raise retirement age 

[France24, via Naked Capitalism 3-17-2023]

The Central Bank of Nigeria Just Paused Its Demonetisation Program After Visiting Untold Damage on Nigeria’s Economy

Nick Corbishley, March 17, 2023 [Naked Capitalism]

...Nigeria is the world’s first largish economy to launch a nationwide central bank digital currency, the so-called eNaira. So far, it has been a complete flop. One year in, just 0.5% of Nigerians had downloaded the eNaira app. Of those, only 8% were actually using it, according to the IMF’s 2022 staff report. So, the government and central bank doubled down on their strategy. In October, they unveiled plans to replace all high-denomination cash bills in the economy as well as restrict cash withdrawals. That, too, has been an unmitigated disaster.

This week, the Central Bank of Nigeria (CBN) finally postponed its demonetisation program, more than a week after the country’s Supreme Court ruled the program unconstitutional and more than a month after the Supreme Court called for it to be postponed due to the amount of chaos and hardship it was causing. In an editorial last Saturday, the online newspaper Premium Times called for the arrest of prosecution of CBN’s Governor Godwin Emefiele, arguing that the cash withdrawal limit imposed by the central bank is an infringement on the rights of the people….

The CBN began calling in old 200-, 500- and 1,000-naira notes in mid-December in a bid to mop up excess cash, rein in inflation, combat rising insecurity, curb vote buying and further “entrench” a cashless economy. But the central bank failed to print nearly enough new high-denomination notes to replace the old ones, leading to an acute shortage of cash in a still heavily cash-based economy. The result has been unnecessary hardship for millions of Nigerian citizens, countless business closures and significant all-round damage to the country’s already weak economy.

Nigeria’s nominal GDP could decline by as much as 7.6% in the first quarter, according to KPMG Nigeria Chief Economist Yemi Kale, the nation’s former statistician-general.

Fire the Fed 

Matt Stoller, BIG, via Naked Capitalism 3-17-2023]

The Austerity Train Wreck 

James K. Galbraith [Defend Democracy, via Naked Capitalism 3-15-2023]

A perfect storm of food-stamp cuts and low tax refunds is looming — and discount chains like Dollar General and Big Lots could feel the pain 

[Business Insider, via Naked Capitalism 3-18-2023]

At value chain Big Lots, where nearly 80% of shoppers have a household income under $100,000, "customers are pinched," CEO Bruce Thorn said during a recent investor call.

"At this point, 30% of that lower household income customer, their expenses today are greater than their income coming in. And 70% of them have curbed spending as a result of that," he said.

Thorn estimated that the tax refunds, though arriving earlier this year, are about 10% to 15% lower than last year, and when combined with the reduced SNAP benefits, it "further deteriorates lower household income spend." Those shoppers, he said, are "going through a tough time right now."

“Waking Up From the American Dream”

[Kirkus Review, via Naked Capitalism Water Cooler 3-16-2023]

“Two March books address the situation, poking holes in the flawed assumption that if you just work hard, you will succeed financially. In Bootstrapped: Liberating Ourselves From the American Dream (Ecco/HarperCollins, March 14), journalist Alissa Quart explodes the myth of ‘bootstrapping,’ which she describes as the ‘every-man-for-themselves individualism’ that underpins the free market system. This significant follow-up to Squeezed: Why Our Families Can’t Afford America, our reviewer says, delivers a forceful ‘contrarian rebuttal of the notion that wealthy Americans deserve everything they have and that the ‘poor are responsible for their own poverty.” In our late-stage capitalist democracy, too many people live paycheck to paycheck, often working multiple jobs while rent, food, and other expenses surpass wage increases. Quart ‘proposes a more meaningful safety net of cooperative work and mutual aid, whereby workers pool their capabilities and time to produce needed and sustainable things while being their own bosses,’ delivering an urgent ‘repudiation of gig-economy capitalism that proposes utopian rather than dystopian solutions.’ Any examination of wealth inequality in the U.S. would be incomplete without input from Matthew Desmond, the Pulitzer Prize–winning author of Evicted. His latest, Poverty, by America (Crown, March 21), is a dissection of the many dimensions of poverty in America, which differs from that in many parts of the world. In the U.S., it’s ‘not for lack of resources,’ the author notes, but rather what our reviewer describes as a lack of ‘compassion’ but also the lack of ‘a social system that insists that everyone pull their weight—and that includes the corporations and wealthy individuals who, the IRS estimates, get away without paying upward of $1 trillion per year.'”

“The U.S. Is Choosing Child Labor Over More Immigration”

Eric Levitz [New York Magazine, via Naked Capitalism Water Cooler 3-16-2023]

“In one part of the western hemisphere, there are too many well-paying jobs and too few workers. In another, there are too many workers and few good jobs. As a result, people in Central America are eager to seek work internationally…. On paper, this does not look like a difficult policy problem to solve…. There is no “skills” mismatch between economically desperate Central Americans and open U.S. positions. The U.S.’s labor shortage is concentrated in fields that do not require an extensive education. The U.S. needs more kitchen staff, construction workers, and delivery drivers. Central America is home to a large number of people with the interest in and capacity to perform those roles. Opportunities for ‘win-win’ policy-making are rarely so clear-cut. Yet U.S. policy-makers refuse to take the win. Instead, their answer to the twin problems of a U.S. labor shortage and Central American poverty crisis is, effectively, as follows: To close the gap between job openings and available workers, the Federal Reserve will simply raise interest rates until a critical mass of Americans become too poor to afford discretionary purchases, demand for labor drops, and, in all probability, the U.S. enters a recession. Meanwhile, to mitigate the poverty of those to our south, the U.S. has been allowing Central American children to enter our country, work illegally at brutal jobs, then send remittances home to their adult family members. Specifically, we have decided to let Central American kids do this if — and only if — they embark on a roughly 2,000-mile journey to the U.S. border without a parent or guardian.

U.S. Maternal Mortality Hits Highest Level Since 1965 

[Wall Street Journal, via Naked Capitalism 3-16-2023]

‘Net worth of median household is basically nothing,’ says Carl Icahn. 

[MarketWatch, via Naked Capitalism 3-16-2023]

February marks 23rd straight month of real wages decline for US workers 

[WSWS, via Naked Capitalism 3-16-2023]

They’re not capitalists — they’re predatory criminals

“Wealthy Executives Make Millions Trading Competitors’ Stock With Remarkable Timing”

[Pro Publica, via Naked Capitalism Water Cooler 3-16-2023]

“[D]ozens of top executives who have traded shares of either competitors or other companies with close connections to their own. A Gulf of Mexico oil executive invested in one partner company the day before it announced good news about some of its wells. A paper-industry executive made a 37% return in less than a week by buying shares of a competitor just before it was acquired by another company. And a toy magnate traded hundreds of millions of dollars in stock and options of his main rival, conducting transactions on at least 295 days. He made an 11% return over a recent five-year period, even as the rival’s shares fell by 57%. These transactions are captured in a vast IRS dataset of stock trades made by the country’s wealthiest people, part of a trove of tax data leaked to ProPublica. ProPublica analyzed millions of those trades, isolated those by corporate executives trading in companies related to their own, then identified transactions that were anomalous — either because of the size of the bets or because individuals were trading a particular stock for the first time or using high-risk, high-return options for the first time. The records give no indication as to why executives made particular trades or what information they possessed; they may have simply been relying on years of broad industry knowledge to make astute bets at fortuitous moments. Still, the records show many instances where the executives bought and sold with exquisite timing.”

“‘What Happens If I Just Don’t Pay My Taxes?'”

[New York Magazine, via Naked Capitalism Water Cooler 3-16-2023]

News you can use! ‘There are a couple of things to remember about the IRS. First of all, they’re stretched thin. Secondly, they just want you to pay your taxes, and something is always better than nothing. ‘They’re like a really nice mafia,’ says Rus Garofalo, the founder of Brass Taxes, a tax-preparation service that caters to artists and small-business owners. ‘They need their cut, but they don’t want to have to chase you, mostly because they don’t have the resources.’ One final piece of advice for the tax-averse: A lot of people — particularly freelancers — delay filing their taxes because they’re afraid they can’t afford them. But the penalty of late tax filing is actually much higher than the penalty for late payments, says Willets. ‘So even if you fall behind on payments, make sure to file on time,’ she says. In case you haven’t gotten the message by now, the IRS is just like anyone — it just doesn’t want to be ignored! A little bit of acknowledgment goes a long way.” 

Health care crisis

In nursing homes, impoverished live final days on pennies 

[Associated Press, via Naked Capitalism 3-16-2023]

Across the U.S., hundreds of thousands of nursing home residents are locked in a wretched bind: Driven into poverty, forced to hand over all income and left to live on a stipend as low as $30 a month….

Nearly two-thirds of American nursing home residents have their care paid for by Medicaid and, in exchange, all Social Security, pension and other income they would receive is instead rerouted to go toward their bill. The personal needs allowance is meant to pay for anything not provided by the home, from a phone to clothes and shoes to a birthday present for a grandchild….

Medicaid was created in 1965 as part of the Great Society programs of Lyndon B. Johnson. A 1972 amendment established the personal needs allowance, set at a minimum of $25 monthly. Unlike other benefits like Social Security, cost-of-living increases were not built into personal needs allowance rules.

Had it been linked to inflation, it would be about $180 today. But Congress has raised the minimum rate only once, to $30, in 1987. It has remained there ever since.

“Operators of upscale L.A. care facility charged in 14 COVID deaths”

[Los Angeles Times, via Naked Capitalism Water Cooler 3-15-2023]

“The employee and residents died during the outbreak, in which 45 employees and 60 residents were infected, according to the Los Angeles County district attorney’s office…. The facility was meant to be closed to visitors, prosecutors said, when it admitted a patient from a New York psychiatric unit. Silverado Beverly Place’s own protocols required it to not admit anyone from a high-risk area like New York City, which was considered an epicenter of COVID-19 at the time…. Prosecutors say the patient was not tested for the coronavirus when they were admitted and showed symptoms the next morning. But after they tested positive, they were not quarantined, according to the criminal charges. Management at the facility did not block visitors who traveled domestically or internationally within 14 days to areas where COVID-19 cases were confirmed, prosecutors allege.”

Lambert Strether: “Meanwhile, Andrew Cuomo is still on the street. I guess his victims weren’t “upscale”?”

Strategic Political Economy

Remembering Who The Nazis Killed First

Ian Welsh, March 14, 2023

It seems all we talk about is the tragedy of the Jews, but notice they weren’t killed first. First it was the socialists, then it was trade unionists.

This is because the Nazis first killed those who were an actual threat, then went on to kill those they hated (and who money they could steal without upsetting the majority of the population.)

Liberals always make deals with fascists or reactionaries who take over their countries. They generally do quite well out of them, corporate officers saw their incomes soar under Hitler. The argument between liberal and fascist is an argument over brothers about who should rule their father’s house: fascists treat capitalists and business well, they just need to know their place.

The left can’t make deals, because they are in fundamental opposition. This is true of fascists, who kill left-wingers, but it is also true of making deals with liberals. As Corbyn and Lula recently proved, even the mildest of leftists can’t cut a deal with liberals, because liberals don’t see the left as legitimate.

“The Era of Urban Supremacy Is Over” 

[New York Times, via Naked Capitalism Water Cooler 3-17-2023]

“Most of the nation’s major cities face a daunting future as middle-class taxpayers join an exodus to the suburbs, opting to work remotely as they exit downtowns marred by empty offices, vacant retail space and a deteriorating tax base. The most recent census data ‘show almost unprecedented declines or slow growth especially in larger cities,’ William Frey, a demographer and senior fellow at Brookings, emailed in response to my query. From July 1, 2020 to July 1, 2021, ‘New census data shows a huge spike in movement out of big metro areas during the pandemic,” Frey argues in an April 2022 paper, including ‘an absolute decline in the aggregate size of the nation’s 56 major metropolitan areas (those with populations exceeding 1 million).’ This is the first time, Frey continues, ‘that the nation’s major metro areas registered an annual negative growth rate since at least 1990.’ The beneficiaries of urban population decline are the suburbs. Even more damaging to the finances of major cities is the fact that the men and women most likely to move to the suburbs are among the highest paid, key sources of income and property tax revenues: workers with six-figure salaries in technology, finance, real estate and entertainment. Those least likely to move, in turn, are much less well paid, working in service industries, health care, hospitality and food sales.”

Henry C Carey: A Study in American Economic Thought (1931) Excerpts, Part 1

Tony Wikrent [RealEconomics]

For about a century now, a faction of the USA elite -- which may be characterized as the financial rentier faction (or as Michael Hudson and Kevin Phillips have identified it, the Finance, Insurance and Real Estate (FIRE) sector -- has assiduously financed and promoted an academic falsification of USA economic history. This falsification  insists on the primacy of British classical economists, and the marginalization and deliberate disregard for the alternative, which actually guided USA's industrial development and struggle to suppress the legacy of slavery. In an October 2011 article, Hudson explained how this "American School" of political economy was targeted using the example of the fight between neoclassical economist John Bates Clark and "American School" progressive economist Simon Patten. The excerpts presented here are intended to help revive the "American School" of political economy and liberate us from the shackles of classical / neoclassical economics which has led us deeper and deeper into the morass of deindustrialization, financial depredation, worsening inequality, and political instability.

Restoring balance to the economy

Labor Developments in the Rust Belt: Michigan is one step closer to repealing right to work

Jarod Facundo, March 17, 2023 [The American Prospect]

“How one medical school became remarkably diverse — without considering race in admissions”

[STAT, via Naked Capitalism Water Cooler 3-14-2023]

“[O]ne school in California — the state with the country’s longest-standing ban on using race in admissions — has defied the odds. The University of California, Davis runs the country’s most diverse medical school after Howard, a historically Black university, and Florida International, a Hispanic-serving research university. What Davis, and its remarkably diverse class of 2026 demonstrates, is an alternative future for a post-affirmative action world, one where diversity might be achieved despite the many obstacles that stand in the way. The student body has gone from predominantly white and male in the years before California adopted its affirmative action ban in 1996 to one in which nearly half the current class comes from Black, Hispanic, and Indigenous populations — people who have been historically underrepresented in medicine, and sometimes mistreated by its practitioners… He started by diversifying the admissions committee and staff. ‘The reason things stay the same is because everyone involved is the usual suspects,’ he said. Because Davis had to use a race-neutral approach to admissions, Henderson focused on economics. ‘I’d call it class-based affirmative action,” he said. “Class struggles have a huge overlap with race — that’s how we skirted the issue.’ Applicants were given high marks if they had a ‘socioeconomic disadvantage score,’ shifting admissions criteria away, he said, from MCAT scores and GPAs to characteristics like grit, resilience, and perseverance.”

Climate and environmental crises

Farm Bureau Finds 2022 Weather Disasters Amounted to $21 Billion in Crop Losses 

[Daily Scoop, via Naked Capitalism 3-12-2023]

France’s groundwater situation is alarming, official report shows 

[Andalu Agency, via Naked Capitalism 3-14-2023]

Information age dystopia

The Role of Default Settings in Online Searches: Challenging Google Dominance

Francesco Decarolis, Muxin Li, and Filippo Paternollo. [VoxEU, via Naked Capitalism 3-14-2023]

This column measures the quantitative effects of a series of interventions aiming to curb Google’s dominance as a search engine by limiting its use as the default option on mobile phones. By exploiting the timing of interventions across Russia, Turkey, and the European Economic Area, the authors find significant variation in their effectiveness depending on the presence of a viable competitor, nuances in intervention design, user preferences, and the specific characteristics of local markets….

In Turkey, the intervention to limit the default role of Google was different. Rather than rely on choice screens, the Turkish Competition Authority (TCA) focused on relevant features of the contracts that Google offered to the mobile phone manufacturers (i.e. the original equipment manufacturers, or OEMs). In particular, the TCA required Google to remove any provision providing Google privileged access to the device’s search access points. The new contracts were designed to guarantee that the OEM would be free to set competing search engines on their devices, possibly selecting different search engines as the default for different search access points.

In FBI Case, the First Amendment Takes Another Bizarre Hit 

Matt Taibbi [Racket News, via Naked Capitalism 3-14-2023] The conclusion:

The style of the new anti-speech Democrat is clear: define all government critics as lacking standing to criticize, impugn their prior opinions and associations, imply that all their beliefs are conspiracy theory, define their lack of faith in the FBI’s judgment as treasonous, and declare their motivation to be financial. Lastly, when they invoke common constitutional rights, make a note that their activities exist in an uncovered carve-out.

This is the playbook, and we all better get used to it.

Ransomware Attacks Have Entered a Heinous New Phase 

[ars technica, via Naked Capitalism 3-15-2023]

Conservative / Libertarian Drive to Civil War

The Federalist Society Isn’t Quite Sure About Democracy Anymore 

[Politico, via Naked Capitalism Water Cooler 3-17-2023]

...To those who have followed the Federalist Society closely since its triumphs at the Supreme Court last year, the symposium’s focus on law and democracy may hardly seem incidental. Since its founding in 1982, the Federalist Society has championed “judicial restraint,” the notion that judges should limit their roles to interpreting the law as written, leaving the actual business of lawmaking to democratically elected legislatures.

That approach made sense for conservatives when they still saw the federal judiciary as a liberal force dragging the country to the left. But now that conservatives have secured a solid majority on the Supreme Court — and voters in several red states have soundlyrejected hard-line positions on abortion — a spirited debate is underway within the Federalist Society about the wisdom of deferring to democratic majorities as a matter of principle….

When I spoke with Blackman, the South Texas college of law professor, he noted that that tension was neatly captured in two of the headline-making decisions that went conservatives’ way in the last Supreme Court term. In the Dobbs ruling, the conservative majority returned the abortion question to state legislatures, limiting federal judges’ role in determining the extent of reproductive rights. Meanwhile, in New York State Rifle & Pistol Association, Inc. v. Bruen —  which struck down a New York law that set the requirements for individuals to receive a concealed carry permit for handguns — the Court trumped the decision of a state legislature in favor of conservatives’ preferred reading of the Second Amendment.

But Blackman’s assessment of the direction of the intellectual current within the Federalist Society was even more candid than Meyer’s.

“The norm that judges be restrained and moderate — that ship has sailed,” he said….

“Democracy is what philosophers call an ‘essentially contested concept,’” said Daniel Lowenstein, a professor of law emeritus at UCLA and an expert in election law, during a panel on Friday evening. “Differences that seem on their surface to concern the meaning of the word ‘democracy’,” he added, are actually struggles to advance particular and controversial political ideas.”

What democracy does not mean, Lowenstein argued, was “plebiscitary democracy,” or simple rule by democratic majorities. Citing the Federalist Papers — the namesake of the Federalist Society — Lowenstein suggested that governance based on simple mathematical majorities would enable “tyrannical domination of the minority by the majority.”

Behind me, somebody whispered, “We’re a republic, not a democracy” — a tongue-in-cheek slogan that some conservatives have adopted as a way to slyly signal their approval of minority rule.

[TW: Yes, “We’re a republic, not a democracy,” but I understand a republic as being hostile to concentrations of wealth as well as concentrated political power. Conservatives and libertarians believe that concentrations of wealth are the result of natural processes, and thus they can never correctly understand what a republic is supposed to be. Liberals and progressives, thus far (despite my, aargh, best efforts, remain oblivious to this issue.]

The New Anarchy: America faces a type of extremist violence it does not know how to stop

Adrienne LaFrance, March 6, 2023 [The Atlantic]

Openly white-supremacist activity rose more than twelvefold from 2017 to 2021. Political aggression today is often expressed in the violent rhetoric of war. People build their political identities not around shared values but around a hatred for their foes, a phenomenon known as “negative partisanship.” A growing number of elected officials face harassment and death threats, causing many to leave politics. By nearly every measure, political violence is seen as more acceptable today than it was five years ago. A 2022 UC Davis poll found that one in five Americans believes political violence would be “at least sometimes” justified, and one in 10 believes it would be justified if it meant returning Trump to the presidency. Officials at the highest levels of the military and in the White House believe that the United States will see an increase in violent attacks as the 2024 presidential election draws nearer….

For the past three years, I’ve been preoccupied with a question: How can America survive a period of mass delusion, deep division, and political violence without seeing the permanent dissolution of the ties that bind us? I went looking for moments in history, in the United States and elsewhere, when society has found itself on the brink—or already in the abyss. I learned how cultures have managed to endure sustained political violence, and how they ultimately emerged with democracy still intact.

Some lessons are unhappy ones. Societies tend to ignore the obvious warning signs of endemic political violence until the situation is beyond containment, and violence takes on a life of its own. Government can respond to political violence in brutal ways that undermine democratic values. Worst of all: National leaders, as we see today in an entire political party, can become complicit in political violence and seek to harness it for their own ends….

What happened in Portland, like what happened in Washington, D.C., on January 6, 2021, was a concentrated manifestation of the political violence that is all around us now. By political violence, I mean acts of violence intended to achieve political goals, whether driven by ideological vision or by delusions and hatred. More Americans are bringing weapons to political protests. Openly white-supremacist activity rose more than twelvefold from 2017 to 2021. Political aggression today is often expressed in the violent rhetoric of war. People build their political identities not around shared values but around a hatred for their foes, a phenomenon known as “negative partisanship.” A growing number of elected officials face harassment and death threats, causing many to leave politics. By nearly every measure, political violence is seen as more acceptable today than it was five years ago. A 2022 UC Davis poll found that one in five Americans believes political violence would be “at least sometimes” justified, and one in 10 believes it would be justified if it meant returning Trump to the presidency. Officials at the highest levels of the military and in the White House believe that the United States will see an increase in violent attacks as the 2024 presidential election draws nearer….

No one can say precisely what alchemy of experience, temperament, and circumstance leads a person to choose political violence. But being part of a group alters a person’s moral calculations and sense of identity, not always for the good. Martin Luther King Jr., citing the theologian Reinhold Niebuhr, wrote in his “Letter From Birmingham Jail” that “groups tend to be more immoral than individuals.” People commit acts together that they’d never contemplate alone.

“Inside the Trump world-organized retreat to plot out Biden oversight”

[Politico, via Naked Capitalism Water Cooler 3-16-2023]

“A group closely aligned with former President Donald Trump helped organize a “bootcamp” for GOP congressional staff this past February, training them on how to conduct aggressive oversight of the Biden administration, according to new disclosure forms filed with the U.S. House clerk’s office. The sponsor, the Conservative Partnership Institute, counts Trump’s former chief of staff Mark Meadows among its leaders and has been described as the “nerve center” for the MAGA movement and MAGA-aligned lawmakers. It was one of three organizations to host the gathering. The two-day event, which took place on Maryland’s Eastern shore, illustrates how Trump-allied activists are quietly shaping House Republicans’ investigations of the Biden administration right as Trump himself mounts another White House bid. Topics discussed at the bootcamp included tutorials on obtaining records and deposing and interviewing witnesses, according to a flier in the filings. Among those who briefed the congressional aides was a former Trump administration official, an energy lobbyist and a reporter from Epoch Times, a nonprofit media company tied to the Falun Gong Chinese spiritual community and known for its conspiratorial, pro-Trump views.”

A Palantir Co-Founder Is Pushing Laws to Criminalize Homeless Encampments Nationwide 

[Vice, via Naked Capitalism 3-14-2023]

“Virginia judge uses slavery-era law to argue human embryos can be considered property” 

[FOX, via Naked Capitalism Water Cooler 3-14-2023]

“A Virginia judge determined that frozen human embryos are legally considered property, using a 19th century law regarding the treatment of slaves as the legal reasoning for his decision…. The law at the heart of the case governs how to divide ‘goods and chattels.’ The judge ruled that because embryos could not be bought or sold, they couldn’t be considered as such and therefore Honeyhline had no recourse under that law to claim custody of them. But after the ex-wife’s lawyer, Adam Kronfeld, asked the judge to reconsider, Gardiner conducted a deep dive into the history of the law. He found that before the Civil War, it also applied to slaves. The judge then researched old rulings that governed custody disputes involving slaves, and said he found parallels that forced him to reconsider whether the law should apply to embryos.”


Henry C Carey: A Study in American Economic Thought (1931) Excerpts, Part 1


For about a century now, a faction of the USA elite -- which may be characterized as the financial rentier faction (or as Michael Hudson and Kevin Phillips have identified it, the Finance, Insurance and Real Estate (FIRE) sector -- has assiduously financed and promoted an academic falsification of USA economic history. This falsification insists on the primacy of British classical economists, and the marginalization and deliberate disregard for the "American School" alternative. The doctrine of the "American School"  calls for tariff protection of USA industries and workers; "internal improvements" infrastructure investment; a national bank able to hold speculation in check and stabilize the currency, while also democratizing finance by expanding access to credit; government programs to promote science and industrial and agricultural technology, such as the Coast and Geodetic Survey and metalworking technology sharing programs of the national armories; and a doctrine of high wages.  It was this "American School" not laissez faire or Adam Smith's "invisible hand" that actually guided USA's industrial development and struggle to suppress the legacies of slavery. In an October 2011 article, Hudson explained how this "American School" of political economy was targeted using the example of the fight between neoclassical economist John Bates Clark and "American School" progressive economist Simon Patten. The excerpts from 1931 presented here are intended to help revive the "American School" of political economy and liberate us from the shackles of classical / neoclassical economics which has sunk us deeper and deeper into the morass of deindustrialization, financial depredation, worsening inequality, and political instability. 

Henry Charles Carey: A Study in American Economic Thought

by A.D.H. Kaplan, Baltimore, The Johns Hopkins Press, 1931


...Professor Perry, writing in 1878, divided the economic treatises in America into two categories: those modelled after Adam Smith and those modelled after Carey. [1] Yet today it is difficult to find an American manual on economics containing a reference to Henry Charles Carey. Nor does the name of Carey, the outstanding advocate of the protective tariff when it had to fight for political recognition, come up in the debates of men who make the tariff acts in the United States in this day, when the protective tariff is taken for granted in national politics....

Chapter I. Life of Carey

Henry C. Carey's career as an economist began at the close of a successful career as a publisher; it is one of several respects in which the son followed the paths of his father, Mathew Carey.

The elder Carey, born in Ireland in 1760, came to the United States at the age of twenty-four as a political refugee. Mathew had in 1782 been banished from Ireland for his unbridled criticism of Britain's Irish policy; while in Paris the exile became interested in America through contact with Benjamin Franklin, whom he served as printer....

The literary record of the senior Carey is intimately associated with his patronage of domestic manufactures and championship of the "American System."  Mathew Carey founded the Philadelphia Society for the Promotion of National Industry in 1819, and was an active leader of the Pennsylvania Society for the Promotion of Useful Manufactures. [2] ....

His varied business and social contacts in themselves afforded Henry C. Carey a unique education. Carey has told how from the age of seven he would accompany his father on walks about Philadelphia, during which Mathew pointed out the local landmarks to his son and dwelt on their economic significance. The circle in which the elder Carey had moved included leading literary lights, captains of industry and statesmen of the city and nation. But the son far outdid the father in drawing about himself the outstanding citizens of his country and visitors from abroad. The gatherings at the Carey home in Philadelphia constituted what was considered to be the most distinguished salon in America....

The group which in this pleasant wise forwarded the education of Carey, and served as foils or adversaries in the process of crystallizing his thought, had variety as well as distinction. In his circle were orthodox free traders and teachers of classical economics, as well as good haters of Britain and cosmopolitan doctrine. Of the former school were C.C. Biddle, who had provided the introduction and notes for the American edition of J.B. Say in 1824; Condy Raquet, author-economist and editor of The Free Trade Advocate; Henry Vethake, professor of moral philosophy and political economy at the University of Pennsylvania. Against these and others who adhered to the British school were devoted disciples of Carey in defence of the American System. There was, for example, Judge William D. Kelly, Carey's mouthpiece in Congress, whose consistent championship of protection for Pennsylvania's leading industry earned for him the sobriquet of "Pig Iron Kelly"; Joseph P. Wharton, an associate in the iron and steel business, whose school of commerce was founded at the University of Pennsylvania to teach the virtues of protection for home industries. To them may be added the Rev. William Elder, Carey's literary executor and a tactician on economics; Rufus Griswold, editor of the American Whig Review; Robert Ellis Thompson, protectionist and editor of the Carey-backed Penn Monthly, to whom we are indebted for some intimate sidelights on the personality of Carey. From Stephen Colwell, Carey received correction as well as occasional endorsement of his views on currency and finance. From Peshine Smith he obtained the “law of the perpetuity of matter," on which Carey predicated a demonstration of the providential oversight of human propagation.  Politicians who occasionally sat in on the Carey Vespers included James G. Blaine; Ulysses S. Grant (as ex-president); the colourful General Robert Patterson, who dabbled in political and economic theories when he was not discussing his part in the strategy of Bull Run.[3] Morton McMichael, editor of The North American Review, Saturday Evening Post and other Philadelphia periodicals, was one of several literary lights who regularly graced Carey's round table; and Ralph W. Emerson is mentioned among the men of the day who made it a point, when visiting Philadelphia, to be with Henry C. Carey.

Carey visited in Europe during 1857 and 1859, the second time to participate in economic conferences at the invitation of his ardent admirer Eugen Duehring, and other friendly German nationalists like Max Wirth and Schultze-Delitsch. These visits afforded the American valuable contacts with men like John Stuart Mill, Humboldt, Cavour, Liebig, Ferrara, Chevalier and equally brilliant intellectual figures of the continent. Elder refers to a correspondence remarkable for its extent and regularity, which Henry Carey carried on with his contemporaries in Europe. Carey seems to have acquired an early facility in the use of French, and to have mastered German after he attained middle age. By and large, it cannot be said that any provincialism in Carey is traceable to an ignorance of world affairs or men of affairs....

Editorial comment on the passing of Henry Charles Carey, in the newspapers of the day, commonly referred to him as "America's most widely known private citizen."

Chapter II: Economics in Carey’s Day

Henry Carey entered the lists of economic authorship a year after the death of Malthus, twelve years after the passing of Ricardo. James Mill, then in his sixty-second year, shared with [John Ramsay] McCulloch - six years his junior - the acknowledged leadership of the British school. [Nassau William] Senior had just completed his celebrated Report of the Royal Commission on the poor laws, and was engaged in the preparation of his general treatise on political economy. The law of diminishing returns from land, the pressure of population on subsistence, the wages fund theory and Ricardian rent - these bulwarks of the classical structure had been effectively fixed into the framework of the science. Against the expositions of the elder Mill and of McCulloch neither [Thomas] Chalmer's refutation of the Malthusian "law" nor Richard Jones's vigorous criticism of Ricardian rent could command attention. Senior was content with a refinement of details in the orthodox synthesis. The Maltho-Ricardian system, credited with steering contemporary politics in the "right" direction, rested easy in respected authority.

In America, formal political economy maintained its respectability in the halls of learning by keeping close to the traditions of its European ancestry. In the Harvard (1825) and Yale (1827) catalogs, the treatise of J.B. Say [Traité d'économie politique (1803); in English, A Treatise on Political Economy; or The Production, Distribution, and Consumption of Wealth] was listed as the prescribed text. [4] Professor McVickar's Outlines of Political Economy (1825), which he used with his students at Columbia, was admittedly a reprint of McCulloch's article in the Britannica, supplemented by McVickar's notes and comments. Dr. Thomas Cooper, who as president of the South Carolina College had published Lectures on the Elements of Political Economy (1826), departed from the old world texts only in the greater emphasis that he placed on laissez faire and the evils of a protective tariff. In line with Dr. Cooper, Thomas R. Dew emphasized free trade in his lectures at William and Mary, his fame resting on the fact that as a southerner he attempted the economic defence of slavery in connection with an attack on the Tariff of 1828. By 1835 there had also been published the substance of Newman's lectures at Bowdoin (Elements of Political Economy, 1835) and Vethake's at the University of Pennsylvania (Introductory Lectures on Political Economy, 1831); neither of these is found, however, to be more than a restatement of McCulloch, supplemented by an occasional reference to American conditions. Indeed, little is to be found in the work of the professional academicians to have inspired the seeker after a key to the economic forces that were so swiftly driving the young republic toward a commanding position.

If one is to find forerunners of Henry Charles Carey among the Americans, he must look elsewhere than among the formal centres of learning, or the orthodox followers of the Smith-Malthus-Ricardo tradition.

Closer to the common experiences of American life, and more potent in steering contemporary American thought, were the pamphleteers who aired their reactions to immediate questions of public policy. Among these Benjamin Franklin was a pioneer. As early as 1729 he voiced the colonists' protest against the curtailment of their paper currency. He advocated expansion of the currency as a prerequisite for lower interest rates, higher wages and increased production, and as a means for the encouragement of immigration to the colonies.[5]  Taking a leaf from the book of the Physiocrats, he considered land a desirable collateral for the paper currency that he advocated. Against the British strictures on colonial manufactures, Franklin originally contended that the abundance of cheap land, permitting the average man to set up for himself as a farmer, prevented wages in America from falling to a level that would permit successful competition with English manufactures. Though the colonial population was being doubled every twenty years, he could see no prospect of rendering hired labor cheap or plentiful in so vast an area.[6]  After the Revolutionary War, Franklin subscribed to the now vaunted American position on the economy of high wages, asserting that well paid labor made for a higher level of skill, intelligence and alertness, paving the way to the use of more efficient methods and the employment of modern machinery.

Like his French contemporaries, Franklin espoused laissez-faire, and appears to have had little sympathy with tariffs for the protection or manufactures,[7] though he did question the validity of a prosperity that was based on foreign trade gained through the payment or low wages, wherein "half the nation must languish in misery."[8]  For the shifting of emphasis to American manufactures a more significant influence is that of Alexander Hamilton and his able assistant, Tench Coxe.

Hamilton, like Franklin, was exposed to the contemporary physiocratic doctrines; he also revealed a wide reading of Adam Smith and the more prominent members of the early British school. But the stress of practical problems to be faced called for an American departure. Britain had refused to make a commercial treaty with the United States, while France and Spain had set up a barrier of contempt for "the lowest and most obscure or the whole diplomatic tribe," as Jefferson complained. Hamilton's celebrated Report was thus in part a defensive proposal against the unfriendliness of nations from whom the new republic might otherwise have been content to obtain manufactured goods. Two considerations of parallel importance were the necessity for immediate revenue and the strengthening of the still soft bond or union among the states. These factors are all evident in the arguments advanced by Hamilton in the Report of the Secretary of the Treasury on the Subject of Manufactures, which he submitted to Congress in December, 1791. There he called attention to the damage inflicted upon the American manufactures fostered during the Revolutionary War, by the deluge of foreign goods upon the resumption of peace; and therefore urged the desirability of an economic policy designed to free the new republic from dependence on foreign powers for its essential supplies.

Following Adam Smith, Hamilton pointed to the possibilities of the new industrial era, with its marked efficiencies in the division of labor and wider use of machinery; like Smith, he denied to agriculture the exclusive role in the creation of national wealth. But Hamilton went further in suggesting peculiar advantages for the United States in the promotion of manufactures. Manufactures would provide employment for elements of the population not ordinarily engaged in production - women and children; the new employment opportunities would encourage immigration; the young nation would climb out of its primitive stage limited by agriculture, as it afforded greater scope for diverse talents and additional capital through the promotion of manufactures. Bounties and tariff protection would help new American industries through their infancy, until they were strong enough to meet foreign competition - after which time the ideal of unhampered international trade could be resumed. Finally, the establishment of manufactures would create a home market for the consumption of agricultural produce, thus contributing to the economic as well as political stability of the Union.[9]

Congress, while largely rejecting the suggestion of bounties, and to some extent frowning upon the violation of laissez faire traditions which was implicit in tariff legislation, nevertheless did impose import duties in aid of the national revenue. With that precedent Congress paved the way for a national system of protective tariffs. Little of the theory of the protective tariff in America has gone very far beyond the principles laid down by Hamilton in his Report. (Carey's attempted departures are reserved for later consideration.)

In fathering the national debt, and even identifying the public debt with productive capital, Hamilton gave effect to his desire to enlist support for the Union.[10]  Like Franklin, he advocated alleviation of the shortage of currency in the States: his program embraced a bi-metallic currency supplemented by note issues of the United States bank, not to mention the government bonds that he hoped might serve as an auxiliary medium of circulation.[11]

Mathew Carey frankly acknowledged the inspiration of Hamilton by copious quotations from the Report in his Essays on Political Economy (1822) and other tracts in which Carey served as crusader for the American System.

Closely allied with Hamilton in fostering a nationalistic economy was Tench Coxe. As assistant secretary of the treasury and commissioner of the revenue (1790-97) Coxe furnished the factual props for Hamilton's recommendations. The data which Coxe prepared on the commerce and manufactures of the country, though crude by present statistical standards, constituted the major survey of the American economic situation of the time. Economists of the succeeding generations, including the Careys, found them highly useful. [12]

In an earlier work, entitled An Inquiry into the Principles on Which a Commercial System for the United States of America should be Founded, etc. (1787), Coxe presented the neo-mercantilist view that the coasting trade of the United States be restricted to American vessels. His literary support to American manufactures was supplemented by vigorous activity in the founding of the Society for the Establishment of Useful Manufactures, which Hamilton sponsored, and the Pennsylvania Society for the Promotion of Manufactures, with which Mathew Carey and Friedrich List were both identified at a later date.

Thomas Jefferson during his ministry at Paris had become thoroughly imbued with Physiocratic views; in his campaign for the presidency he championed the agricultural frontier and the South against the capitalist interest in the North. But he, too, became a staunch friend of American manufacturers. As president he urged Congress to give protection to home industries, and even drew comfort from the Embargo Acts, in so far as they tended to stimulate the revival of American manufactures.[13]  The Embargo and the Non-Intercourse Acts did in fact precede a marked advancement of domestic crafts.

In Albert Gallatin, as secretary of the treasury, manufacturers who sought protective tariffs found a determined opponent. Not only did he thwart any increase in the tariff rates, while in Jefferson's and Madison's cabinets, but twenty years later we find him a leader in the opposition to the Tariff of Abominations.[14]  Yet he took evident satisfaction in reporting to the President, in 1809, that "the injurious violations of the neutral commerce of the United States, by forcing industry and capital into other channels, have broken inveterate habits, and given a general impulse, to which must be ascribed the great increase of manufactures during the last two years."[15]  Gallatin's deep interest in strengthening the economic fabric of the federal system was further exhibited when he formulated his celebrated scheme of internal improvements to be undertaken by the national government, including transcontinental highways, canals, and the improvement of inland waterways and harbors.

In the field of finance, Gallatin's chief contribution was the enforcement of thrift and careful budgetary control in the conduct of the treasury. Rigorously holding down the federal budget, even to the virtual elimination of a national army and navy, Gallatin kept expenditures below revenues and effected a substantial reduction of the public debt established by Hamilton. This he accomplished in spite of the Louisiana purchase in 1803 and the curtailment of customs revenue during the Embargo and Non-Intercourse periods, not to mention the expenditures under Madison in preparation for the war against Britain. His reports concerning the public revenues were models of clearness and accuracy. Gallatin's one point of agreement with Hamilton was in his appreciation of the value of the national bank to the government, "for the safe keeping of the public moneys, transmission of public moneys, collection of revenue, and loans." Taking issue with Madison and the Jeffersonian party, Gallatin favored the renewal of the bank charter, and regarded the failure to renew as a national calamity.[16]

The War' of 1812 was accompanied by the spread of a belligerent nationalism in the United States. Under the flood of European goods that followed the Peace of Vienna, defence of the domestic economy against foreign invasion became a burning issue, at times taking on a decidedly anti-British tinge. The 1820's are noteworthy in American economics for the appearance in rapid succession of several extended treatises on political economy. Written by laymen, they dwelt on the practical politico-economic questions of the day and in common they essayed a revolt against the cosmopolitanism of  the classical British school. The earliest of these [17] was written by Daniel Raymond, a Connecticut lawyer who settled in Baltimore. His book was conceived, the preface tells us, as "an humble effort to break loose from the fetters of foreign authority; from foreign theories and systems of political economy, which from dissimilarity in the nature of their governments, render them altogether unsuited to our country." Along with Raymond, two other natives of New England  - Alexander Everett [18] and Willard Phillips [19] - compose a triumvirate of lawyers who stand out in the pre-Carey decade as leaders of a literary revolt against the classical synthesis. Like John Rae [20] in Canada, and Friedrich List, who was then resident in the United States, [21] they distinguish between private riches and national wealth; and they share the view that the productive capacity of the nation is the true measure of its wealth.[22]  The national wealth is not confined to the physical productions of man that are privately owned and exchanged. It includes the character and skill of the population, the natural resources, and even the cooperation of government in stimulating high productive capacity and fostering an equable distribution of the national income.[23]  Since it is a function of government to encourage the harmonious development of agriculture with manufacture, tariff protection is favored as a means for that end.

In Raymond there is special emphasis on the moral considerations believed to affect the national economy, notably on the evils of slavery.[24]  Paper money, banks, and banking he regarded with the utmost suspicion, as mysterious instruments of the rich for the economic enslavement of the masses.

(This sentiment was not uncommon, of course, in an age of peasant proprietorship and small-scale enterprise; it was to such suspicion of bankers, one might recall, that Andrew Jackson appealed in his veto of a re-charter for the United States Bank.) Phillips, however, presenting by far the best balanced treatise of the three, gave a clear analysis of the banking function and of credit paper.[25]  In his treatment of value, Phillips foreshadows the view later emphasized by the psychological school: "The desire to obtain any particular thing gives it its value. As value is created by this desire, so it is limited by its intensity." Neither Raymond, who evinced a distaste for theoretical analysis, nor Everett, whose prime concern was population, devoted any appreciable attention to a theory of value.

Land was treated characteristically as a form of capital, subject to earnings like interest and profits. Raymond says: "Some writers, and especially Mr. Malthus, have taken great pains to establish a distinction in principle between rent paid for the use of land and the price paid for the use of commodities or personal property. . . when in fact no such distinction exists, except in name."[26]  Phillips denies the existence of no-rent land, referring to the "somewhat metaphysical and now almost-exploded theory which has a temporary popularity in Great Britain" that rent arises from the necessity of cultivating inferior soi1.[27]  Characteristic of his dynamic view of economic progress is the observation that "nothing is more erroneous than this supposition, so frequently made, of a stationary amount of capital and industry." [28]

Though these national economists occasionally parted company on other aspects of economic thought, they were one in their vigorous opposition to the Malthusian view of population - the subject to which Everett's work was largely confined, and to which they all gave special consideration. In that respect there may be joined with them the name of Jacob Newton Cardozo, [29] a Charleston editor whose southern patriotism did not permit him to look with favor upon the protective tariff. Aside from their abhorrence for a doctrine which, according to Phillips, would "hail famine as a deliverer and pestilence as a subject of thanksgiving," they laid stress on the increase of skill and productive ability that accompanied the increase of numbers.[30]  Everett went so far as to insist that while population increased in geometric figures, the increased productivity made possible by the increase of manpower was of logarithmic proportions (1,10,100, etc.).[31]  The law of diminishing returns was tacitly discounted. In line with Franklin's view, they urged that the rapidity with which population increased was regulated by the economic environment, and adjusted itself thereto. In a new country the doubling of the population every twenty-five years was hardly sufficient for a rapid development of its untapped resources. In an older country in which social organization has already reached a high state of development, the increase of population is correspondingly less. The increase of population, according to Cardozo, " depends on the extent of the improvements in agriculture, and the inferior land is laid down in tillage exactly in proportion as these improvements extend. This is the reverse of the new theory which connects the augmentation of population and produce with the increased difficulty, instead of the increased facility of production."[32]

In summarizing the literary contribution of America to economic science, as of 1835, we may say that the work of the academicians in the new country added nothing to the economic doctrines of the British classical school. The budding American school of public-minded laymen, reflecting the optimism of a new, growing country, produced no work to command general attention, either in America or in the old world; but at least it expressed a virile reaction to the contemporary economic environment. It is to the latter company of literary pioneers that Henry C. Carey belongs. It was his function to synthesize the various phases of the American outlook into a system of political economy.

Chapter III. Development of Carey's Economic Thought.

The Carey who entered upon a career of economic literature at the age of forty-two displayed little of the diffidence of the novice. When he wrote the Essay on Wages (1835) he had acquired an evident familiarity with the work of Adam Smith, Malthus, Ricardo, James Mill, and McCulloch, and had done some critical reading of Senior, Richard Jones, and Jacob.

In Adam Smith's emphasis on improving production as the key to economic betterment, Carey readily acquiesced. But though he retained a special reverence for Smith, he found it difficult to reconcile the dismal, post-Napoleonic outlook of the Classical school with the facts of the life about him. The economy of Malthus and Ricardo suggested that population, driven by biologic forces, must press against a diminishing supply of natural resources, even as man's efforts to make nature yield her produce were meeting with increased resistance. But Carey's United States was at the very time engrossed in the conquest of her untapped resources, the development of which would tax the energies and ingenuity of an increasing population for an indefinite period. Land was plentiful; labor was scarce. The wages of the American worker increased as population increased; indeed immigration was actively encouraged, to speed up the process. To give universality to the system of Malthus and Ricardo, in the face of American experience - when every addition to the family was hailed as a victory for the homestead in the battle against the labor shortage - was seemingly to build economic doctrine upon myth.

The Neo-classicists noted the tendency to increasing returns with the extension of manufactures; but why, an American would ask, reserve a special law of diminishing returns for land? Land carried no halo in the United States when squatters were pouring into the Ohio-Mississippi valleys and land sold for the labor of clearing them to receive a new wave of settlement. The disposition of land was as readily effected as that of personal property. The hired farmer of yesterday was the tenant of today and the proprietor of tomorrow - and perhaps again the hired worker of the day after. Land was treated like any other form of capital, and the economic implications of its earnings suggested little distinction from the economics of capital in general.

The British school assumed a fixation of the classes, landlords, capitalists, laborers, with interests mutually opposed. In American experience the barriers of caste were commonly trespassed; there was no strongly intrenched tradition of aristocracy, nor of inherited occupation. The rise from humble beginning to high estate was an accepted phenomenon. Limitations on individual freedom and individual enterprise were sharply resented. Landlords exchanged manual labor with each other, as they participated in the construction of each other's buildings and in the harvesting of each other's crops.

The United States, in a period of rapid growth and exuberant national consciousness, coloured the economic outlook of Americans even as the conditions faced by the England of 1800 accounted for the pessimistic economics of Malthus or Ricardo. This was strikingly illustrated by Friedrich List. When he came to the United States in 1823, he had been steeped in the classical economics taught in his native Germany. Of the revolutionizing effect of the new land on his outlook he could say:

. . . .when afterwards I visited the United States I cast all books aside - they would only have tended to mislead one. The best work on Political Economy which one can read in that modern land is actual life. There one may see wilderness grow into rich and mighty states; progress which requires centuries in Europe goes on there before one's eyes. That book of actual life I have earnestly and diligently studied and compared with the results of my previous studies, experience, and reflections. . . and the result has been (as I hope) the preparing of a system which. . . is not founded on bottomless  cosmopolitanism but on the nature of things, the lessons of history, and on the requirements of the nations. [33]

The revolution in List's outlook, it will be recalled, was measurably inspired by his association with that very circle of Philadelphians of which Mathew Carey was a centre. It was under the patronage of the Philadelphia Society for the Encouragement of Manufactures that List had published his Outlines in support of a national economy and tariff protection. It were strange if Henry Carey, born into and a part of the very environment that so deeply moved List, did not prove equally reluctant to accept the pessimistic teachings of the British school.

Indeed we shall find that in the course of his progress as an economist, Carey's views, likewise, undergo a noteworthy transition. Entering as a comparatively respectful student of classical theory, and an admirer of Adam Smith, he passes through a period of doubt and emerges as an iconoclast among his contemporaries. He abandons laissez-faire as too cosmopolitan (if not too British), and pins his faith on a national economy. The crusader spirit of the elder Carey crops out in the writing of his son, who evolves an American System in protest against the gloomy economists of the Old World. He discards the brazen law of wages, diminishing returns, Malthusian principle of population, and Ricardian distribution. In Carey's social philosophy man and nature are part of a divine Harmony of Interest - a system in which man gains progressively by association with other men, increasing his power over nature as he learns to acquire with diminishing sacrifice the generous bounties of nature. Carey strove for a teleological economics in which land, like other forms of capital, yields to the growing effectiveness of labor; in which labor acquires an increasing share of an increasing total product, while all elements in the economy share together in the rewards of economic improvement.


[1] Perry, A.H., Elements of Political Economy, p. 52.

[2] The Pennsylvania Society was organized through the efforts of Tench Coxe and Alexander Hamilton in 1791, as the Society to Establish Useful Manufactures; it was under the patronage of this Society that List published his "Outlines" in 1825.

[3] Though Carey did not seek political office, he was high in the councils of the Republican party from its inception, until he joined the Greenback Party.

[4] Seligman, E.R.A. - Early Teaching of Economics in the U. S., in Economic Essays in Honor of John Bates Clark (J.H. Hollander, Ed.) pp. 307 and 315.

[5] "Modest Inquiry into the Nature and Necessity of a Paper Currency" (1729). Cf. Wetzel, Benjamin Franklin as an Economist, p. 9 (J.H.U. Studies in Historical and Political Science, Series 13, ix).

[6] "Observation concerning the Increase of Mankind" (1751). Franklin's figures on population in America were utilized by Adam Smith, Godwin and Malthus (Wetzel, op. cit., p. 12).

[7] Wail of a Protected Manufacturer (1789).

[8]  Reflection on the Augmentation of Wages, etc. See Wetzel, p. 23.

[9] Report on Manufactures; American State Papers, I, 124-127.

[10] As early as 1781 Hamilton wrote: "A national debt, if not excessive, will be to us a national blessing. It will be a powerful cement to our Union" (Quoted in Rabbeno, p. 295).

[11] A pet argument of Hamilton's in support of encouraging manufactures, was that manufactures and plentiful currency went hand in hand. Thus: "the uniform appearance of an abundance of specie as the concomitant of a flourishing state of manufactures, and of the reverse where they do not prevail, afford a strong presumption of their favourable operation upon the wealth of a country." (From the Report on Manufactures, p. 284, in A.H. Cole, "Industrial and Commercial Correspondence of Alexander Hamilton.")

[12] Coxe's principal contributions to the economic literature of his time were (I) "A View of the United States of America, in a series of papers, written at various times between the years 1787 and 1794." (2) "Examination of Lord Sheffield's Observation on the Commerce of the United States," (3) "A Statement of the Arts and Manufactures of the United States of America, far the year 1810."

[13] See Jefferson's Message to Congress, November 8, 1808.

[14] Gallatin prepared the memorial to Congress from the Free Trade Convention held in Philadelphia in September and October, 1831, which proved influential in the repeal of the Tariff of 1828.

[15] American State Papers, Finance II, 430.x

[16] Charles A. Conant, History of Modern Banks of Issue, 19,27, p.340.

[17] Thoughts on Political Economy, Baltimore, 1820.

[18] New Ideas on Population: with remarks on the theories of Malthus and Godwin (Boston, 1823).

[19] A Manual of Political Economy, with particular reference to the Institutions, Resources, and Condition of the United States, Boston, 1828, available at University of Pennsylvania, Online Books by Willard Phillips.

[20] Statement of Some New Principles on the Subject of Political Economy, Exposing the Fallacies of the System of Free Trade, and of some Other Doctrines maintained in the Wealth of Nations, Boston, 1834. [Rae "identified technological innovation (rather than sheer capital accumulation) as the key to economic development," according to the brief biography of him on The History of Economic Thought website.]

[21] List's Outlines of American Political Economy was written and published in Philadelphia, 1827.

[22] Charles P. Neill, "Daniel Raymond: An Early Chapter in the History of Economic Theory in the United States," Johns Hopkins University Studies in Historical and Political Science, XV, 239.

[23] Turner, op. cit., pp. 23, 24, 32, 36, 37.

[24] Neill, op. cit., p. 225.

[25] Phillips, Manual, chs. x and xi. Phillips even takes occasion to say: "In a comparison of government paper and bank paper as currency, there can hardly be a doubt that the bank paper is preferable." P. 261.

[26] Raymond, Thoughts, Second Edition, I, 184; quoted in Turner, p.28.

[27] Phillips, op. cit., p. 108.

[28] Ibid., p. 171.

[29] Notes on Political Economy (1826).

[30] Phillips, p. 106.

[31] New Ideas on Population, Second Edition, p. 26.

[32] Cardozo, Notes on Political Economy, p. 35. Quoted in Turner, p.77.

[33] Quoted in Gide and Rist, History of Economic Doctrines, pp. 96. 97.

Week-end Wrap – Political Economy – March 12, 2023


Week-end Wrap – Political Economy – March 12, 2023

by Tony Wikrent

Strategic Political Economy

“Marianne Williamson: ‘Anything Is Possible'” (interview) 

[The Nation, via Naked Capitalism Water Cooler 3-10-2023]

Your background is different from the typical presidential candidate. You’ve run for office before, but you’ve gained notoriety as someone who helps people explore their experiences, often from a spiritual perspective. Do you see that as a challenge or an advantage?

[WILLIAMSON]: It is key to my strength here and I’ll tell you why: I have dealt in my 40-year career with helping people both endure crises, and transform them. That is exactly what this country needs now: someone who can help us both endure and transform the trauma of these times. The chaos is external, but the trauma created by the chaos is internal. Secondly, because of my experience with all kinds of personality types and all kinds of people, I have a deep understanding of what a sociopath is. A sociopath is someone who simply doesn’t care.… It is because of that that I recognize as deeply as I do that an economic system—namely hyper-capitalism, namely neoliberalism—has at its root a deep spiritual darkness. It does not care. It is a sociopathic economic system that prioritizes short-term profit maximization for these huge corporate entities. It is a destructive force. And the political establishment, at its best right now, only tries to stave off its worst aspects. That’s what corporatist Democrats do. They recognize the disease to some extent, and they try to help people survive it. But they refuse to challenge the underlying corporate forces that make the return of all that pain and all that trauma inevitable.

The permanent recession that never arrives

[Axios, via The Big Picture 3-7-2023]

According to public opinion, the U.S. is seemingly in a semi-permanent recession, and the Fed has failed to improve matters….

  • In reality, the economy is hot, unemployment is at record lows, and there's no sign of a downturn any time soon.

[TW: Not sure if it’s stupidity or cupidity, but it remains astonishing how many journalists, academicians, politicians, and other elites continue to cling to national income accounting that clearly no longer captures what is actually happening in the economy. There can’t be a stronger signal that our economic statistical tools are misleading at best, useless at worst, than collapsing life expectancy.

Furthermore, if you reject the doctrine of mainstream classical neoliberal economics that there is no place for normative judgement and policy preferences in economics, you can easily see that world industrial productions needs to be vastly increased if we are to meet the challenges of climate change and environmental destruction. The rub, of course, is that this increase in industrial production must not occur under the reigning doctrine of “economic efficiency” as measured by lowest “price,” but by full and unhesitating investment in complete environmental protection and remediation, including, for example, designing for disassembly and recycling. [See Jon Larson’s Elegant Technology: Economic Prosperity from and Environmental Blueprint.]

From this perspective, we need at least an order of magnitude increase in electric vehicle sales and manufacturing, while ceasing entirely manufacture of internal combustion engine vehicles.  

Graph: New vehicle sales, by type ]

Government and the Economy: Studies of the "Commonwealth" Policy in Nineteenth-Century America

Harry N. Scheiber, The Journal of Interdisciplinary History, Vol. 3, No. 1 (Summer, 1972), pp. 135-151

Commonwealth: A Study of the Role of Government in the American Economy: Massachusetts, 1774-1861. By Oscar Handlin and Mary Flug Handlin (Cambridge, Mass., Harvard University Press, I969; rev. ed; Ist ed. 1947) 314 pp. $12.50

A landmark of American historical scholarship is a group of mono- graphs published in the I940s and early I950s that subjected the question of government's role in the nineteenth-century American economy to intensive re-examination and re-evaluation. Taken as a whole, as Lively suggested, these monographs "invite[d] a new view of American capitalism in its formative years." Charting an "unfamiliar land," the new literature portrayed a landscape in which the elected public official replaced the individual enterpriser as the key figure in the release of capitalist energy; the public treasury, rather than private saving, became the major source of venture capital; and com- munity purpose outweighed personal ambition in the selection of large goals for local economies….

...the two studies offered a portrayal of a society that found proper and congenial (as the Handlins stated) "a conception of government prominent in the direction and management of productive enterprise" (242). The whole colonial and township tradition of Massachusetts reinforced a widely shared belief "in the Commonwealth as an active force in the economy" (6I). This general belief-which the Handlins termed "the primordial concept of common interests" (I30)….

The very multiplication of corporations, which had begun even before I820, impaired the state's "capacity to direct production through judicious bestowal of the privilege" (I80). Yet, "there was no counterpart in America of the transatlantic tendency to transpose objections against privilege into objections against government regulation. In the United States the people who favored reform were not held back by a fear of the state; the people were the state" (243). In short, the laissez- faire ideology was born in Europe and not carried here until the Civil War years; it was left to the Social Darwinists to complete the transfer. Lively responded in a critical vein to the Handlins' version of the belief system that legitimated intervention, objecting that they had substituted a new myth for the laissez-faire shibboleth by dint of their "exercises in intellectual history"—that their "image of the positive state" was built largely upon an incomplete basis of evidence from statutory law and men's political rhetoric. Still needed was a testing of this "image" against the harder data that required rigorous investigation of the actual administrative record of government, and also an analysis of the actual economic impacts of the policies….

How the Social Darwinists injected laissez- faire ideology into USA is detailed by Michael J., Thompson in his 2007 book, The Politics of Inequality: A Political History of the Idea of Economic Inequality in America (Columbia University Press), including “liberalism and its opposition to republicanism” (pp. 163-199).

[William Graham] Sumner's aim was to strip moral and "sentimental" impulses from soda analysis and to show that the status quo of American society—and here he specifically meant to focus on the class inequalities of his day—best for the realization of human liberty. Reversing George's dictum that progress and poverty were opposite sides of the coin of economic development, Sumner also wanted to claim that the interference with the activity of capita was the cause of social misery and poverty, not the reverse. Society as a whole progressed and increased its standard of living as capital was freed to unfold and operate according to its own logic and the logic of its owners. It was only when the economy was allowed to work freely that liberty could be realized since liberty was conceived as a set of laws and institutions that "create great organs of civil life which can eliminate, as far as possible, arbitrary and personal elements from the adjustment of interest and the definition of rights.”31 For Sumner, liberty was to be emphasized over democracy; the former was a greater value than the latter because it accorded with the rational distribution of the fruits of labor, talent, and skill. To assume equality among individuals was sheer nonsense. Just as Jeremy Bentham had mocked the idea of natural law theory in the eighteenth century by calling it "metaphysics on stilts," Sumner was equally critical of natural law doctrines, preferring a positivist interpretation of political and legal categories. (p. 122)….

Herbert Spencer's work The Man Versus the State, published in 1884, laid out the firm argument that state intervention was opposed to liberal individualism; state interference was inherently opposed to the idea of liberty. The state stood for coercion, and any extension of the state's role beyond enforcing contracts—what Spencer referred to as "anarchy plus the constable"—amounted to the erosion of liberty in economic affairs and, in the American interpretation of things, the elimination of freedom itself. (p. 124)….

In this way, thinkers such as Sumner, and even Calhoun before him, did more than privilege the interest of one particular class over another; this is far too simplistic. What they were able to achieve was the purging of ethical and moral categories from social theory and analysis. They were able to reinterpret liberty and the entire American brand of liberalism itself as a radical individualism that was—when framed in the context of a capitalist economic framework—conducive to progress. It was not an ideology that embraced the past or a conservative ideology that sought to prevent progress and modernity. Sumner and others who followed his ideas were different from George, Lloyd, and even Bellamy in the sense that they saw moral categories as obstructing social progress. (pp. 124-125)

Henry Charles Carey, The Unity of Law, as Exhibited in the Relations of Physical, Social, Mental, and Moral Science (pdf)

Henry Charles Carey (1872, Philadelphia, Henry Carey Baird]

Adam Smith having assumed that the work of cultivation commenced always with the richest soils, Mr. Malthus adopted the idea as basis for a law of population requiring that large numbers of men, women, and children should "regularly die of want." Mr. Ricardo next perfected the system, furnishing a theory of rent by means of which he sought to establish that precisely as it became necessary to cultivate the poorer soils, and as labor became less and less productive, the landlord's share of the products increased, leaving steadily less and less for the unfortunate laborer; the tendency toward absolute enslavement of the latter becoming necessarily greater with each successive hour. From that time forward, all the distress, all the pauperism, of England, was treated as natural result of a necessity for cultivating the "inferior soils." So far indeed was this idea carried out, that it was not unfrequently suggested that the remedy for existing difficulties would be found in throwing out of cultivation all such soils.

The time arriving, however, when the theory was shown to be wholly without foundation, it came then to be discovered, that this fundamental question—as important in furnishing a stand point in Social Science as had been that of Copernicus in the astronomical one—was wholly unimportant, and might be left entirely unconsidered; the essence of the RicardoMaithusian doctrine being, however, still retained in that assumption which constitutes the basis of the existing system…. (Preface, p. xi)

Competition may be for the SALE of human force, physical or mental, or its products; or, it may be for the PURCHASE of each and all of these. The first increases as societary positives and negatives become more widely separated; as labor becomes less productive and more controlled by capital; and as matter thus obtains power over mind. The second grows as positives and negatives are brought into more intimate connection each with every other; as labor becomes more productive, and as the laborer of the present grows in power as compared with the accumulations of the past; mind thus obtaining increased control over matter. In the one case the tendency is in the direction of inequality of condition, growing selfishness and barbarism, and daily diminished societary force. In the other it is toward equality of condition, growing self-respect, civilization, and daily growing societary force.

The British system looks to annihilation of competition for purchase of labor or its products elsewhere than in Britain. The resistant one looks to production of such competition throughout the world. Hence it is, that while the former tends everywhere toward subjection of mind to matter, and toward the subjugation of labor to capital, the latter tends equally toward perfect freedom of thought, speech, and action among all mankind. (pp. 377-378)

[TW: I strongly suspect that anyone who spends some time reading Carey, the foremost American economist of the 19th century, will never again be able to tolerate mainstream classical neoliberal economics. Today’s economics textbooks make no mention of Carey, or Benjamin Franklin, or Alexander Hamilton, but have pages and pages of material on Smith, Ricardo, Marx, von Hayek, and Friedman. Look in some textbooks and see for yourself.]

Restoring balance to the economy

Interview: Auto Workers Region 9 Winner on Rebuilding a Fighting Union 

[Labor Notes, via Naked Capitalism 3-11-2023]

Reform challenger Shawn Fain appears poised to win the presidency of the United Auto Workers, defeating incumbent Ray Curry for the union’s top leadership spot. With more than 137,000 votes counted, Fain has a lead of 645 votes; the counting of the remaining challenged ballots will resume March 16.

If Fain wins, challengers to the ruling caucus will hold not only the presidency but also a majority on the union’s international executive board. UAW Members United ran on a platform of no corruption, no tiers, and no concessions.

It’s a watershed after nearly 80 years of the Administration Caucus’s stranglehold on power—defined by corruption scandals, diminished bargaining power, and a multi-tier wage system that wrecked worker solidarity.

Who was Oliver Harvey? 

[Scalawag, via Naked Capitalism 3-5-2023]

Oliver Harvey worked for decades at Duke, but not as a professor, administrator or coach. He was a janitor. His struggle to organize Duke's non-academic employees made him a civil rights and anti-poverty leader and a role model for many students. He was a fierce critic of Duke's treatment of workers, especially African Americans, and a veteran antagonist of the university administration. But by pushing to create a more equitable workplace, he brought about meaningful change to Duke's labor policies and practices….

How did an African American janitor at an elite, almost all-white university in North Carolina force change and capture the imagination of students in the 1960s? We set out to answer that question by interviewing former students, digging through university archives, and searching for Harvey's descendants in North Carolina and beyond. The portrait of Harvey that emerged was that of a solitary figure absorbed in the struggles of his times, a gentle personality who was not shy about confronting powerful people and institutions, and a student of protest and organization who became an influential teacher. And yet part of Harvey's mystery endures, not just in the gaps of his story, but in its improbability.

Michigan Rights Wrong, Beginning the Repeal of ‘Right to Work’ 

Harold Meyerson, March 10, 2023 [The American Prospect]

 A newly Democratic state government votes to restore some democracy in the workplace.

The American Rescue Plan’s Hidden Triumphs 

David Dayen, March 10, 2023 2023 [The American Prospect]

Medicaid expansion in North Carolina and Eli Lilly’s insulin price cuts are largely due to the March 2021 law….

But there’s another factor. Medicaid prevents drug companies from raising list prices above the rate of inflation. Any company that does so must pay Medicaid a rebate, which includes a 23.1 percent discount of the average manufacturer price, and an additional rebate in the event of price spikes. These rebates can be incredibly large if price spikes are high. But since 2010, this rebate has been capped at 100 percent of the cost of the average purchase price of the medication, so drug companies wouldn’t have to essentially pay Medicaid whenever their product is used.

That changed in a little law called the American Rescue Plan. Starting in 2024, the Medicaid rebates become uncapped. And the biggest loser in that policy change is Eli Lilly. According to a 2019 study from drug pricing analyst Sean Dickson, 38 percent of the reduced rebate for the entire program due to the cap was attributable to Lilly’s Humalog insulin. If the rebate had been uncapped in 2017, Dickson estimates, Lilly’s revenues would have fallen by $1.7 billion that year. Put another way, if Lilly had the same list price for Humalog next year, they would have had to pay Medicaid $150 for every vial used, according to a Stat News estimate.

So Lilly instead reduced the list price by 70 percent, to get out of the Medicaid penalty. Notably, the price cut won’t take effect until the fourth quarter of 2023, just in time for the cap changes in the first quarter of 2024.

Federal policy in the ARP, then, forced Eli Lilly to atone for its historical practice of jacking up the price of insulin. Slashing that price back will save all patients and health plans, not just Medicaid, billions of dollars. Contrary to the conventional wisdom that the “bully pulpit” encouraged Lilly to make this change, it was policy affecting its bottom line that likely did the trick.

Biden turns to austerity

The covid response showed the U.S. how to solve childhood hunger. Why are we backtracking? 

[Grid, via The Big Picture 3-5-2023]

Special pandemic aid programs pushed child hunger to historic lows, even as schools and businesses closed — and many U.S. kids could now face a “hunger cliff” as these covid-era measures end.

The Incredible Shrinking Power of Joe Biden’s Welfare State 

[Slate, via Naked Capitalism 3-8-2023]

On March 1, the federal government shut off enhanced SNAP benefits for 32 states, D.C., Guam, and the U.S. Virgin Islands. SNAP, colloquially known as food stamps, gives monthly food stipends to low-income Americans, and was expanded as part of the COVID emergency response, increasing benefits for the program’s 42 million recipients.

Now, with those emergency allotments cut off, the average recipient will get about $90 less per month in food aid than they’d been getting for over two years; a family of four could see their monthly benefit cut by about $328 a month; and seniors could see their benefits drop from $281 a month to just $23. An estimated 31 million Americans have now been thrown off what’s been called “the hunger cliff.”


How Quickly The West Forgot It Was Their 2020 Regime-Change Project That Drove Belarus Into Russia’s Arms – OpEd 

Mark Ames [Asia Review, via Naked Capitalism 3-6-2023]

In race to arm Ukraine, U.S. faces cracks in its manufacturing might 

[Washington Post, via Naked Capitalism 3-10-2023] 

NC contributor Resilc: “There is no manufacturing might. We cannot make complete systems of anything without global components.”

Brigadier General of the 43rd Brigade Oleg Shevchuk

[, via The Big Picture 3-11-2023]

Jaw-dropping throughout. How Ukraine’s army leveraged social media against Russia’s invasion. “We called civilians and asked: ‘Do you see this section of road? If a shell hits in a minute and a half, can you tell us roughly where it exploded?’ The person would describe the place of the explosion, we would open a Google map and see: Yes, there is such a place behind the vegetable garden.” ( Use Chrome translate to read in English, or go to WarTranslated

Liberalism / libertarianism vs. public health

Parental Nonadherence to Health Policy Recommendations for Prevention of COVID-19 Transmission Among Children 

[JAMA, via Naked Capitalism 3-7-2023]

From the Abstract: “One hundred fifty participants (25.9%) reported misrepresentation and/or nonadherence in at least 1 of 7 behaviors; the most common behaviors were not telling someone who was with their child that they thought or knew their child had COVID-19 (63 of 263 [24.0%]) and allowing their child to break quarantine rules (67 of 318 [21.1%]))…. The most common reason was wanting to exercise personal freedom as a parent.”

Lambert Strether: “So, and unsurprisingly, living with Covid involves a lot of lying. Really, can you imagine not telling the parents of a child playing with your child that your child was infected? As I’ve said for some time: “‘Freedom’ is how a libertarian says ‘f*ck you.'” “

[Twitter, via Naked Capitalism Water Cooler 3-9-2023]



“Covid backlash hobbles public health and future pandemic response”

[Washington Post, via Naked Capitalism Water Cooler 3-9-2023]

“When the next pandemic sweeps the United States, health officials in Ohio won’t be able to shutter businesses or schools, even if they become epicenters of outbreaks. Nor will they be empowered to force Ohioans who have been exposed to go into quarantine. State officials in North Dakota are barred from directing people to wear masks to slow the spread. Not even the president can force federal agencies to issue vaccination or testing mandates to thwart its march. Conservative and libertarian forces have defanged much of the nation’s public health system through legislation and litigation as the world staggers into the fourth year of covid. At least 30 states, nearly all led by Republican legislatures, have passed laws since 2020 that limit public health authority, according to a Washington Post analysis of laws collected by Kaiser Health News and the Associated Press as well as the Association of State and Territorial Health Officials and the Center for Public Health Law Research at Temple University.”

...the Cochrane implosion…

Lambert Strether [Naked Capitalism Water Cooler 3-10-2023]

Again, it’s the review’s authors — and their funders and allies at the Brownstone Institute — who are going round making this “interpretation.” They not only need to revise the papers, they need to stuff the authors back in their boxes, and get them off any other reviews they’ve got going (along with anyone else their funders fund). This “Statement” is extremely weak tea. (For example, in my own piece on “Physical Intervention, “New, Buzzy Cochrane Study Sets the ‘Fools Gold’ Standard for Anti-Maskers“, and gosh, was I right [does happy dance], I show that the Review had an unlisted and uncredited author, Carl Heneghan, also — and I know this will surprise you — from the Brownstone Institute, against Cochrane Library standards. That calls for a revision. Will Soares-Weiser make it? Or will she try to sweep Brownstone Institute’s involvement under the rug?

“Top World Health Organisation COVID-19 Advisor Bankrolled by Great Barrington Declaration Successor Organization”

[Byline Times, via Naked Capitalism Water Cooler 3-10-2023]

“A top World Health Organization (WHO) advisor and grant recipient researching COVID-19 transmission and respiratory viruses is on the payroll of a successor organisation to the Great Barrington Declaration (GBD)…. The advisor, who plays a key role in helping set the agenda for the WHO’s funding of external scientific research on COVID-19 while also being a beneficiary of WHO funding is Dr Tom Jefferson, a British epidemiologist who works with the Cochrane Collaboration. He is currently receiving WHO funding to provide an updated Cochrane review of physical interventions to interrupt the spread of respiratory viruses, as well as to participate in a systematic review of COVID-19 transmission by the Centre for Evidence-Based Medicine at Oxford University run by Professor Carl Heneghan. He is also a member of the WHO Infection Prevention and Control Research and Development Expert Group for COVID-19 (IPCRDEG-C19), which advises the WHO on how it should commission external research.” 

Lambert Strether comments: “Ka-ching. Does make you wonder if these guys had anything to do with WHO’s horrid positions on airborne transmission and masks.”

“Almost Half of All Public Health Workers Left Their Jobs Over the Past 5 Years”

[MedPage Today, via Naked Capitalism Water Cooler 3-9-2023]

“Nearly half of all public health workers in state and local agencies left their positions over the last half-decade, a new study found. Comparing public health agency staff lists from 2017 with those of 2021, researchers led by Jonathon P. Leider, PhD, of the University of Minnesota in Minneapolis, discovered that 46% of workers were no longer present in 2021. Importantly, more than 100,000 workers — which amounts to half of the total governmental public health workforce — could leave by 2025 if current trends continue, the group detailed in Health Affairs. Their study tracked intent to leave as well as actual separations of 150,000 workers at close to 100 agencies participating in the Public Health Workforce Interests and Needs Survey (PH WINS) in 2017 and 2021. ‘Even though we’ve had so many people already leave, we still have 40% plus of the workforce saying, ‘I’m thinking about leaving,'” Leider told MedPage Today. ‘These are the people that are more educated in public health science than ever before, in pandemic crisis management than ever before. How do you replace people like that?'”

Lambert Strether added: “You don’t. That’s the plan.”

“Long Covid patients face medical debt after insurance denies claims” 

[NBC, via Naked Capitalism Water Cooler 3-9-2023]

“In order for the care a patient receives to be deemed medically necessary by an insurance provider, there has to be substantial research or evidence that shows that it works, she said. That’s ‘a key issue for long Covid,’ she said, because the illness is so new and still poorly understood. ‘Research, just like everything with Covid, is all new,’ she said. ‘Nobody really quite knows what works and nobody really understands why some people have it longer than others.’ To be sure, as of 2021, there are diagnostic codes for long Covid — key tools used by doctors to characterize medical diagnoses for insurance coverage, said Dr. Alan Kwan, a cardiologist at Cedars-Sinai Medical Center in Los Angeles. Those codes, however, don’t always cover the myriad health problems linked to long Covid, he said. Doctors may work hard to get a patient a formal diagnosis for long Covid to help with insurance, though there isn’t an official test for long Covid and the testing that is done may not be covered by insurance.” 

Lambert Strether added: “First the killing, then the billing.”

“Long COVID Now Looks like a Neurological Disease, Helping Doctors to Focus Treatments” 

[Scientific American, via Naked Capitalism Water Cooler 3-10-2023]

“The most common, persistent and disabling symptoms of long COVID are neurological. Some are easily recognized as brain- or nerve-related: many people experience cognitive dysfunction in the form of difficulty with memory, attention, sleep and mood. Others may seem rooted more in the body than the brain, such as pain and postexertional malaise (PEM), a kind of “energy crash” that people experience after even mild exercise. But those, too, result from nerve dysfunction, often in the autonomic nervous system, which directs our bodies to breathe and digest food and generally runs our organs on autopilot. This so-called dysautonomia can lead to dizziness, a racing heart, high or low blood pressure, and gut disturbances, sometimes leaving people unable to work or even function independently. The SARS-CoV-2 virus is new, but postviral syndromes are not. Research on other viruses, and on neurological damage from the human immunodeficiency virus (HIV) in particular, is guiding work on long COVID. And the recognition that the syndrome may cause its many effects through the brain and the nervous system is beginning to shape approaches to medical treatment. “I now think of COVID as a neurological disease as much as I think of it as a pulmonary disease, and that’s definitely true in long COVID,” says William Pittman, a physician at UCLA Health in Los Angeles, who treats Ghormley and many similar patients.”

Oligarchy and system legitimacy

[Twitter, via Naked Capitalism 3-5-2023]



[Twitter, via Naked Capitalism 3-5-2023]



The Rich List: The 22nd Annual Ranking of the Highest-Earning Hedge Fund Managers

[Institutional Investor, via The Big Picture 3-8-2023]

Altogether, the top 25 made $21.5 billion in 2022, making last year’s total the third highest, after 2020 and 2021. This works out to an average of about $860 million each….

The top earner was Ken Griffin, founder of multistrategy giant Citadel. He personally made $4.1 billion — the most any hedge fund manager has ever earned in the history of the Rich List…. Griffin was followed by multistrat rival Izzy Englander of Millennium Management, who made $3.2 billion. Altogether, Englander has earned more than $10 billion over the past three years….

$1.9 Billion
Steven Cohen
Point72 Asset Management

$1.2 Billion
David Tepper
Appaloosa Management

$1.1 Billion
James Simons
Renaissance Technologies

Jamie Dimon Is Fighting a Deposition in a Devastating Lawsuit Charging JPMorgan With Being the Cash Conduit for Jeffrey Epstein’s Sex Crimes

Pam Martens and Russ Martens, March 6, 2023 [Wall Street on Parade]

The Attorney General’s office of the U.S. Virgin Islands (USVI) has filed a First Amended Complaint against JPMorgan Chase that has less redactions than an earlier version. The complaint makes devastating and detailed charges. It charges that the bank sat on a pile of evidence that Jeffrey Epstein was running a child sex trafficking ring as it continued to keep him as a client; accept his lucrative referrals of wealthy clients; and provided him with large sums of cash and wire transfers to pay off victims – one of whom was a “14-year old sex slave.”

Attorneys for the bank are now resisting allowing Chairman and CEO Jamie Dimon from being deposed under oath in the matter as to what he knew and when he knew it.

The case is USVI v JPMorgan Chase Bank N.A. (22-cv-10904) in U.S. District Court for the Southern District of New York….

“ “In January 2011, JP Morgan’s AML [Anti Money Laundering] compliance director requested re-approval for the bank’s relationship with Epstein from JP Morgan’s then-General Counsel ‘in light of the new allegations of human trafficking . . .’ Another JP Morgan employee responded: ‘I thought we did that in approving a $50 million new line of credit last month?’ ” “

Biden set to appoint mass foreclosure cheerleader to the Fed 

Cory Doctorow [Pluralistic, via Naked Capitalism 3-7-2023]

While the Democrats' anti-corporate wing got to drive the administration's competition agencies, the corporate wing has enjoyed near-total dominance over finance regulations (with notable exceptions, e.g. Rohit Chopra), starting with Trump's Jerome Powell, a bloodletting monster happy to shovel workers into their bosses' crushers all day long:

Corporate Dems continue to flex their muscle. A seat has just opened up on the Federal Reserve Board, and the WSJ is pretty sure the seat is going to Janice Eberly, a corporate ghoul who helped Obama Treasury Secretary Timothy Geithner steal Americans' houses on behalf of the bankers who destroyed the world economy in 2008:

A quick refresher: Obama inherited the Great Financial Crisis, a massive global asset crash that followed from a decade of real-estate and derivatives deregulation that saw the world's largest banks issuing mortgages they knew would fail, and then placing massive bets on "collateralized debt obligations" that were supposed to offset the risk.

The banks gambled trillions, nearly destroyed the world's economy, and then blamed it all on reckless borrowers….

“Tax Avoidance Continues to Fuel School Privatization Efforts”

[Institute on Taxation and Economic Policy, via Naked Capitalism Water Cooler 3-8-2023]

“Lawmakers in several states are discussing enacting or expanding school voucher tax credits, which reimburse individuals and businesses for ‘donations’ they make to organizations that give out vouchers for free or reduced tuition at private K-12 schools. In effect, these credits allow contributing families to opt out of paying for public education and other public services. New data—published here for the first time—reveal that wealthy families are overwhelmingly the ones using these credits to opt out of paying tax to public coffers. In all three states providing data, most of the credits are being claimed by families with incomes over $200,000. Wealthy families’ interest in these programs is being driven partly by a pair of tax shelters that can make ‘donating’ profitable. These shelters hinge on stacking state and federal tax cuts and are being advertised in the states as a way to get a ‘double tax benefit’ and ‘make money’ in the process. This kind of language is a far cry from most nonprofit fundraising pitches and gives some sense of the supersized nature of the tax benefits being offered for private and religious K-12 schooling. Voucher tax credits are without merit and should be repealed. Short of that, states can end their use as profitable tax shelters with straightforward reforms. A national solution to this problem, however, will require action by the IRS.”

The carnage of mainstream neoliberal economics

Sellers’ Inflation, Profits and Conflict: Why can Large Firms Hike Prices in an Emergency? 

[UMass Amherst Political Economy Research Institute, via Naked Capitalism 3-5-2023]

From the abstract: “We argue that the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices. Such firms are price makers, but they only engage in price hikes if they expect their competitors to do the same. This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks.”

How ‘Excuseflation’ Is Keeping Prices — and Corporate Profits — High

[Bloomberg, via Naked Capitalism Water Cooler 3-9-2023]

A growing body of analysts and researchers see a pattern playing out across Corporate America, with companies using the unusual disruptions of recent years as an excuse to raise prices, and expand their profit margins.

“Silicon Valley Bank Collapses Following Run on Deposits” 

[Wall Street Journal, via Naked Capitalism Water Cooler 3-10-2023]

“Silicon Valley Bank collapsed Friday in the second-biggest bank failure in U.S. history after a run on deposits doomed the tech-focused lender’s plans to raise fresh capital. The Federal Deposit Insurance Corp. said it has taken control of the bank via a new entity it created called the Deposit Insurance National Bank of Santa Clara. All of the bank’s deposits have been transferred to the new bank, the regulator said. Insured depositors will have access to their funds by Monday morning, the FDIC said. Depositors with funds exceeding insurance caps will get receivership certificates for their uninsured balances. Once a darling of the banking business, Silicon Valley Bank collapsed at warp speed after it announced a big loss on its bondholdings and plans to shore up its balance sheet, tanking its stock and sparking widespread customer withdrawals. The bank is the 16th largest in the U.S., with some $209 billion in assets as of Dec. 31, according to the Federal Reserve. It is by far the biggest bank to fail since the near collapse of the financial system in 2008, second only to the crisis-era shutdown of Washington Mutual Inc. The bank’s parent company, SVB Financial Group, was racing to find a buyer after scrapping a planned $2.25 billion share sale Friday morning. Regulators weren’t willing to wait. The California Department of Financial Protection and Innovation closed the bank Friday within hours and put it under the control of the FDIC. SVB, based in Santa Clara, Calif., earlier this week surprised investors by announcing that it lost nearly $2 billion selling assets following a larger-than-expected decline in deposits. The stock has lost more than 80% since then, and tech clients rushed to pull their deposits over concerns about the bank’s health.”

Fed Hawkishness, Crypto Implosion, and Private Equity Subscription Lines of Credit Imperil Silicon Valley Bank and Freak Out Bank Stock Investors

Yves Smith, March 10, 2023 [Naked Capitalism]

SVB Chief Pressed Lawmakers To Weaken Bank Risk Regs 

Rebecca Burns, David Sirota, Julia Rock & Andrew Perez, March 10, 2023 [The Lever]

Bank Stocks Plummet as Bank Runs in the U.S. Gain Momentum at Federally-Insured, Non-Traditional Banks

Pam Martens and Russ Martens, March 10, 2023 [Wall Street on Parade]

Silicon Valley Bank Fails, With Deposits of Many Venture-Backed Companies Frozen. How Bad Will the Fallout Be?

Yves Smith, March 11, 2023 [Naked Capitalism]

FDIC Investigators Are on the Premises of Collapsing Federally-Insured, Crypto Related Bank, Silvergate: It’s Not a Friendly Visit

Pam Martens and Russ Martens, March 8, 2023 [Wall Street on Parade]

For starters, “FDIC examiners” are not investment bankers from Goldman Sachs or Perella Weinberg Partners. They don’t arrange mergers and acquisitions. If bank examiners from the Federal Deposit Insurance Corporation are on the premises of Silvergate Bank, it is because officials of that bank put a big red target on their bank for the Feds on March 1 when it made a filing with the Securities and Exchange Commission that stated that the bank had concerns about its “ability to continue as a going concern.”

The SEC filing also indicated that record-keeping at the bank is so suspect that it can’t even file its annual report for the full year of 2022 (Form 10-K) on time; and it needs more time to “record journal entries.” Equally troubling was the phrase that “its independent registered public accounting firm” will require more time “to complete certain audit procedures, including review of adjustments not yet recorded and the evaluation of the effectiveness of the Company’s internal control over financial reporting.”

And if all that weren’t enough, it added for good measure that it was under multiple investigations from regulators, Congress and – oops – those folks with criminal prosecution powers – the U.S. Department of Justice.

So, to summarize, that devastating information was released seven days ago and yet, yesterday, Bloomberg News’ reporters think that the Feds are on the premises of Silvergate to “salvage” the bank.

Silicon Valley Is Destroying the World (transcript)

[The New Republic, via Naked Capitalism 3-9-2023]

“How Stanford University turned optimization into the global capitalist credo.”

Leaked audio reveals US rail workers were told to skip inspections as Ohio crash prompts scrutiny to industry 

[Guardian, via Naked Capitalism 3-6-2023]

The Case for Nationalizing the Railroads 

[In These Times, via Naked Capitalism 3-6-2023]

High interest rates, car prices lead to record loans, debt 

[The Car Connection, via Naked Capitalism 3-6-2023]

The Fed is Breaking Things (and it could get worse) 

Barry Ritholtz, March 10, 2023 [The Big Picture]

After People on Medicaid Die, Some States Aggressively Seek Repayment From Their Estates 

[Kaiser Health News, via Naked Capitalism 3-6-2023]

“Indoor air is full of flu and COVID viruses. Will countries clean it up?”

[Nature, via Naked Capitalism Water Cooler 3-8-2023]

“In March 2022, the US government launched a Clean Air in Buildings Challenge to spur building owners and operators to improve their ventilation and indoor air quality. In October last year, the state of California passed a law requiring all school buildings to provide clean indoor air. And in December, the White House announced that all federal buildings — some 1,500 in total — would meet minimum air-safety requirements. Also in December, the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE) — a construction-industry body whose recommendations are adopted into law through local building codes in the United States and elsewhere — announced that it would be developing standards that take infection risk into account by June 2023…. Specialists in indoor air quality are buoyed by the prospect that the pandemic could bring lasting improvements to the air we breathe indoors. … ‘There’s never been, in history, so much action about indoor air quality,’ says Lidia Morawska, an aerosol scientist at the Queensland University of Technology in Brisbane, Australia…. Researchers say it will take time to lower the infection risks inside buildings. ‘We are looking at 30 years,’ says Morawska. ‘But we are talking about the future of our society.'”

[Twitter, via Naked Capitalism 3-5-2023]



[Twitter, via Naked Capitalism Water Cooler 3-8-2023]



Chris Hedges: Lynching the Deplorables 

Chris Hedges, Scheer Post, via Naked Capitalism 3-7-2023]

Legal Observer Hit with Terrorism Charges After Mass ‘Cop City’ Arrests 

[Daily Beast, via Naked Capitalism 3-7-2023]

John Kiriakou: The Threat to Journalism 

[ScheerPost, via Naked Capitalism 3-7-2023]

Climate and environmental crises

Why North Dakota is preparing to sue Minnesota over clean energy 

[Grist, via Naked Capitalism 3-6-2023]

Oil companies line up for billions of dollars in subsidies under US climate law 

[FT, via Naked Capitalism 3-7-2023]

When Suburbs Go to War With Transit

[CityLab / Bloomberg, via The Big Picture 3-6-2023]

A battle over building a housing development near a Baltimore light rail station illustrates why it’s so hard to make viable public transportation in the suburbs. 

Information age dystopia

Inside the Suspicion Machine 

[Wired, via Naked Capitalism 3-7-2023]

Wired got hold of a social credit algo from Rotterdam. A sample: “The comment field in the Rotterdam system, for example, where caseworkers are asked to make general observations, is binary. Any comment is converted to a “1,” while a blank field is converted to a “0.” This means negative and positive comments affect the score in the same way.” And much else like that.

How to Take Back Control of What You Read on the Internet

[The Atlantic, via The Big Picture 3-8-2023]

Social-media algorithms show us what they want us to see, not what we want to see. But there is an alternative. 

ACLU Obtains Docs Detailing FBI, Pentagon Development of Facial Recognition Tech 

[Common Dreams, via Naked Capitalism 3-9-2023]

Democrats Band Together to Try Yet Another Federal Facial Recognition Ban 

[Gizmodo, via Naked Capitalism 3-9-2023]

How Comrades Revealed the Existence of COINTELPRO 

[Black Agenda Report, via Naked Capitalism 3-9-2023]

“Commentary: Cory Doctorow: End to End”

Cory Doctorow [Locus, via Naked Capitalism Water Cooler 3-8-2023]

“Here’s something I think we should all agree upon: when a willing speaker wants to say something to a willing listener, our technology should be de­signed to make a best effort to deliver the speaker’s message to the person who asked to get it. I hope this is self-evidently true. When you dial a phone number, the phone company’s job is to connect you to that number, not to someone else. When you call Tony’s Pizza, you expect to be connected to Tony’s Pizza – not to Domino’s, not even if Domino’s is willing to pay for the privilege. When you use your TV remote to tune into CNN, you don’t want your cable operator to show you Fox instead – not even if Fox will pay them to do so. If you follow someone on social media, then the things that person says should show up in your timeline. That is not a radical proposition, but it is also not the case today. Facebook, Twitter, TikTok, YouTube and other dominant social media platforms treat the list of people we follow as suggestions, not commands. When you identify a list of people you want to hear from, the platform uses that as training data for suggestions that only incidentally contain the messages that the people you subscribed to. There are various reasons for this, but they all boil down to the platform shifting value away from its users to its shareholders. Obviously that is the case with ads: the volume of ‘‘sponsored posts” that enshittify your feed is titrated to be just below the threshold where the service becomes useless to you. But there’s another group of people who can pay to reach you – the people you’ve chosen to follow. When you subscribe to a performer, or a news outlet, or a political group, they have to pay to ensure that the things they publish show up for you. The platforms have cute names for this danegeld (‘‘boost­ing,” etc), but it boils down to the phone company telling Tony’s Pizza, ‘‘If you don’t pay us extra, then every time someone calls Tony’s, we’re going to connect them to Domino’s.” Thus the enshittification of your feed is only partially about showing you ads: it’s also about making the people you want to hear from pay to reach you. This shouldn’t be allowed. The services should make their best effort to deliver messages from willing senders to willing receivers. This principle can be generalized to other kinds of online services. When you search for a product on Amazon, the first result should be the product you searched for, not an Amazon own-brand clone of that product, or the product of a rival that paid for the privilege of being at the top of the results.”

Democrats' political malpractice

The Democrats Have Lost the Plot 

Matt Taibbi [Racket News, via Naked Capitalism 3-11-2023].

“There are no more pockets of Wellstones and Kuciniches who were once tolerated and whose job it is to uphold a constitutionalist position within the larger whole. That crucial little pocket of principle is gone, and I don’t think it’s coming back.”

“My Statement to Congress”

Matt Taibbi [Racket News, via Naked Capitalism Water Cooler 3-9-2023]

“The original promise of the Internet was that it might democratize the exchange of information globally. A free internet would overwhelm all attempts to control information flow, its very existence a threat to anti-democratic forms of government everywhere. What we found in the Files was a sweeping effort to reverse that promise, and use machine learning and other tools to turn the internet into an instrument of censorship and social control. Unfortunately, our own government appears to be playing a lead role….. In a free society we don’t mandate truth, we arrive at it through discussion and debate. Any group that claims the “confidence” to decide fact and fiction, especially in the name of protecting democracy, is always, itself, the real threat to democracy. This is why ‘anti-disinformation’ just doesn’t work. Any experienced journalist knows experts are often initially wrong, and sometimes they even lie. In fact, when elite opinion is too much in sync, this itself can be a red flag. We just saw this with the Covid lab-leak theory. Many of the institutions we’re now investigating initially labeled the idea that Covid came from a lab “disinformation” and conspiracy theory. Now apparently even the FBI takes it seriously. It’s not possible to instantly arrive at truth. It is however becoming technologically possible to instantly define and enforce a political consensus online, which I believe is what we’re looking at. This is a grave threat to people of all political persuasions.”

[TW: Taibbi raises very troubling questions. But, how should we deal with misinformation, such as on vaccines and the efficacy of masking in an epidemic?]

The man who launched the vaccine wars

[UnHerd, via The Big Picture 3-5-2023]

[Andrew Wakefield’s] first “finding” would echo down the decades like machine-gun fire in a cathedral. For eight of the 12 (aged from three to nine), the paper said their parents, quizzed by doctors running the tests, recounted a terrifyingly similar experience: a son or daughter was developing normally, received a shot of the three-in-one “live virus” MMR, and showed autistic symptoms within days.

The paper further claimed discovery of a new medical “syndrome” of both brain and bowel disease in the children. All but one, it reported in text and tables, had developmental issues plus “chronic enterocolitis” — inflammation of both the large and small intestine. “It’s a moral issue for me,” Wakefield told his audience, calling for MMR to be suspended in favour of single shots for measles, mumps, and rubella. “I can’t support the continued use of these three vaccines, given in combination, until this issue has been resolved.” The dean equivocated, but the professor backed Wakefield. And so was born an intractable controversy as the paper was leveraged to launch a crusade: first against this vaccine, then later another… and another… all the way to SARS-CoV-2.

“It’s not a vaccine at all,” Wakefield would rail against the latter at the height of the Covid pandemic. “It’s actually genetic engineering.”….

Our first report splashed in February 2004, almost exactly six years after the press conference. “Revealed: MMR research scandal,” was the front page, igniting a new media firestorm. We had discovered a monstrous conflict of interest that Wakefield kept hidden, then denied. For two years before his “moral issue” surfaced — and before any of the children set foot in the hospital — he had been payrolled by a small-town solicitor named Richard Barr to help lead an attack on MMR. Unlike expert witnesses, who give advice and opinions, the doctor was delegated to arrange the tests, building pressure for a speculative lawsuit.

“I have mentioned to you before,” Barr wrote to Wakefield, six months before the Royal Free event, “the prime objective is to produce unassailable evidence in court so as to convince a court that these vaccines are dangerous.” Barr filed the lawsuit at the Royal Courts of Justice eight months after the breathless press conference. Wakefield claimed fees of £150 an hour (about £254 an hour at late 2022 values), drawn from the government’s legal aid fund. So, as he recruited the children and wrote the paper, he had a financial incentive not only to trigger a client-grabbing furore, but to keep it going for as long as he could.

Those clients poured in — nearly 1,600 families — as journalists were duped to fuel the scare. And by late 2003, when Barr’s lawsuit collapsed, Wakefield had. been handed £435,643 (about £738,000, or nearly US $900,000, at last year’s values), plus expenses, in taxpayers’ money. But as he gazed into the glare of TV lights, his legal deal was only one of his secrets. As he’d made his call for a switch to single vaccines, he forgot to mention that eight months previously he’d filed a confidential claim at the London Patent Office for his own, supposedly safer, single vaccine.

The (Anti)Federalist Society Infestation of the Courts

Conservative Witness Admits Potential Chaos From CFPB Court Case

David Dayen, March 10, 2023 2023 [The American Prospect]

Rep. Andy Barr (R-KY), chair of the Subcommittee on Financial Institutions and Monetary Policy that held the hearing, tried to temper Watkins’s remarks by asking witnesses to “address these sky-is-falling concerns” that the upcoming Supreme Court ruling “would call into doubt the other federal bank regulators.” But Watkins was insistent, replying that “it isn’t just the CFPB. There are other agencies out there that do have non-appropriated funds, and Congress should review those as well and think about how to return those agencies to congressionally funded appropriations process as well.”

At issue is a ruling from the conservative Fifth Circuit Court of Appeals in a case involving payday lenders, claiming that Congress has “exclusive power over the federal purse,” and that the CFPB’s funding from the Federal Reserve, which gets its funding from bank assessments, is “double insulated” from congressional appropriations, since it gets money outside the process from an agency that gets money outside the process.

CFPB, in a statement when the ruling was announced, also noted that numerous mandatory programs, including Medicare and Social Security, are funded outside the appropriations process, and a rigid ruling about Congress’s exclusive power could throw those into question as well. 

The (anti)Republican Party

The Deep Archeology of Fox News

Josh Marshall [Talking Points Memo, via The Big Picture 3-10-2023]

The evidence emerging from the Dominion lawsuit against Fox News has the quality of liberal fever dreams. What’s the worst you can possibly imagine about Fox? What’s the most cartoonish caricature, the worst it could possibly be? Well, in these emails and texts you basically have that. Only it’s real. It’s not anyone believing the worst and giving no benefit of the doubt. This is what Fox is.

The Backlash Against ESG Faces Its Own Backlash

[Institutional Investor, via The Big Picture 3-10-2023]

Pension funds in red states say culture-war policies are interfering with the market and could cost retirees and taxpayers billions.

The attack on the fundamental principle of American democracy, the idea that all people are created equal.

Heather Cox Richardson, March, 10, 2023 [Letters from an American]

...Make no mistake: this attack on transgender people represents a deadly attack on the fundamental principle of American democracy, the idea that all people are created equal.

CPAC and its representatives have become increasingly close to Hungarian president Victor Orbán as he has asserted autocratic power in his own country. Orbán has explicitly rejected the liberal democracy that his country used to enjoy, saying that its emphasis on multiculturalism weakens national cultures while its insistence on human equality undermines traditional society by recognizing that women and LGBTQ people have the same rights as straight white men. The age of liberal democracy is over, he says, and a new age has begun.

In place of equality, Orbán advocates what he calls “illiberal democracy” or “Christian democracy.” “Christian democracy is, by definition, not liberal,” he said in July 2018; “it is, if you like, illiberal. And we can specifically say this in connection with a few important issues—say, three great issues. Liberal democracy is in favor of multiculturalism, while Christian democracy gives priority to Christian culture; this is an illiberal concept. Liberal democracy is pro-immigration, while Christian democracy is anti-immigration; this is again a genuinely illiberal concept. And liberal democracy sides with adaptable family models, while Christian democracy rests on the foundations of the Christian family model; once more, this is an illiberal concept.” ….

Once you give up the principle of equality, you have given up the whole game. You have admitted the principle that people are unequal, and that some people are better than others. Once you have replaced the principle of equality with the idea that humans are unequal, you have stamped your approval on the idea of rulers and subjects. At that point, all you can do is to hope that no one in power decides that you belong in the lesser group.

In 1858, Abraham Lincoln, then a candidate for the Senate, warned that arguments limiting American equality to white men and excluding black Americans were the same arguments “that kings have made for enslaving the people in all ages of the world…. Turn in whatever way you will—whether it come from the mouth of a King, an excuse for enslaving the people of his country, or from the mouth of men of one race as a reason for enslaving the men of another race, it is all the same old serpent.”

Republicans are systematically destroying democracy — and replacing it with strongman authoritarianism 

Thom Hartmann, March 08, 2023 [Rawstory, via DailyKos]

For some unfathomable reason, Democrats insist on calling their Republican colleagues their “friends.” They are not friends. With few exceptions, they are systematically destroying American democracy with the clear objective of replacing it with strongman authoritarianism, a new and American version of what Benito Mussolini called fascism....

Trump had previously proclaimed his desire to change the nation’s libel and slander laws so he could sue or imprison his political opponents and those in the media who opposed him; if he had succeeded on January 6th, that would have happened by now, and people like me (and maybe you) would be in jail.

Echoing one of Pinochet’s first 1973 laws, a Republican state legislator in Florida just proposed legislation requiring bloggers and writers to register with the state if they intend to criticize any elected official; had Trump succeeded we’d all be living under similar laws today.

Trump had previously promised his violent partisans that he’d pardon them and pick up their legal fees; if he’d held onto the White House, by now hundreds of Kyle Rittenhouse’s would have “defended themselves” against Black people, “Antifa,” and “commie liberals”without consequence.

If Republicans held a large enough majority in Congress, a constitutional convention like rightwing billionaires have been promoting and annually rehearsing in Washington, DC would be underway to rewrite our founding document. The right of all Americans to vote, separation of church and state, civil rights, protections of free speech and assembly, the right to due process and equal protection under the law, even the obscure Emoluments Clause would all be on the chopping block.

Trump-friendly corporations would be running political purges reminiscent of the Republican “Red Scare” and “Blacklist”1950s all across the country as social media accounts were examined for evidence of “leftist” leanings; Johnny McEntee began that process when he was “Deputy President” to Trump and was firing people in the executive branch for “liking” postings by “leftwing” entertainers like Taylor Swift.

Week-end Wrap – Political Economy – March 5, 2023


Week-end Wrap – Political Economy – March 5, 2023

by Tony Wikrent

[TW: Sorry this week’s wrap is light. I was in the hospital overnight for a medical procedure and my energy has been sapped. I’m tired and sore, but otherwise fine.]

Living on a Deadline in the Nuclear Age. Some Personal News From Daniel Ellsberg 

[, via Naked Capitalism 3-31-2023]


Transcript: CIA director William Burns on “Face the Nation,” Feb. 26, 2023 

[CBS, via Naked Capitalism 2-27-2023]

The Reckoning That Wasn’t: Why America Remains Trapped by False Dreams of Hegemony

Andrew J. Bacevich, February 28, 2023 [Foreign Affairs, March/April 2023, via Naked Capitalism 3-31-2023]

House panel lays out ‘existential struggle’ with China in primetime debut 

[The Hill, via Naked Capitalism 3-1-2023]

US Dollar Primacy in an Age of Economic Warfare 

Michael St-Pierre and Michael Kao [Kaoboy Musings, via Naked Capitalism 2-27-2023]

Part one of four. Parts twothree, and four.

Restoring balance to the economy

President of Mexico nationalizes lithium

[Green Car Congress, via Naked Capitalism 2-26-2023]

The pandemic

“Estimated Airborne Decay of SARS-CoV-2 (virus that causes COVID-19)”

[Department of Homeland Security, via Naked Capitalism Water Cooler 3-3-2023]

“Use the sliders to select the UV index, temperature and relative humidity of interest. Information on how long SARS-CoV-2 would be expected to remain stable in aerosols (airborne) will be displayed in the table below. Users can find the environmental conditions for a specific location by accessing general weather resources online.” 

The carnage of mainstream neoliberal economics

Losing Out in Critical Technologies: Cisco Systems and Financialization

[via Naked Capitalism 3-1-2023]

Once the global leader in telecommunication systems and the Internet, over the past two decades, the United States has fallen behind global competitors, including China, in mobile-communication infrastructure—specifically 5G and Internet of Things (IoT). This national failure, with the socioeconomic and geopolitical tensions that it creates, is not due to a lack of US government investment in the knowledge required for the mobility revolution. Nor is it because of a dearth of domestic demand for the equipment, devices, and applications that can make use of this infrastructure. Rather, the problem is the dereliction of key US-based business corporations to take the lead in making the investments in organizational learning required to generate cutting-edge communication-infrastructure products.

No company in the United States exemplifies this deficiency more than Cisco Systems, the business corporation founded in Silicon Valley in 1984 that had explosive growth in the 1990s to become the foremost global enterprise-networking equipment vendor in the Internet revolution. In our Institute for New Economic Thinking Working Paper, “The Pursuit of Shareholder Value: Cisco’s Transformation from Innovation to Financialization”, we provide an in-depth analysis of the corporate resource-allocation decisions that have underpinned Cisco’s organizational failure.

Since 2001, Cisco’s top management has chosen to allocate corporate cash to open-market share repurchases—aka stock buybacks—for the purpose of giving manipulative boosts to the company’s stock price rather than make the investments in organizational learning required to become a world leader in communication-infrastructure equipment for the era of 5G and IoT. From October 2001 through October 2022, Cisco spent $152.3 billion—95 percent of its net income over the period—on stock buybacks for the purpose of propping up its stock price. These funds wasted in pursuit of “maximizing shareholder value” were on top of the $55.5 billion that Cisco paid out to shareholders in dividends, representing an additional 35 percent of net income. Besides absorbing all its profits over the 21 years, Cisco took on debt and dipped into the corporate treasury to fund these two types of distributions to shareholders.

[Twitter, via Naked Capitalism 3-2-2023]


Consultants Gone Wild: The real reason it costs so damn much to build new subways in America.

[Slate, via The Big Picture 2-26-2023]

There’s a lot going wrong with American transit projects—more on this in a moment—but many of the problems can be traced to a larger philosophy: outsourcing government expertise to a retainer of consultants. “What I’ve heard from consultants, which is surprising because they make so much money off this stuff, is, ‘Agencies don’t know what they want, and we have to figure it out.’ ”

The Build-Nothing Country 

Noahpinion, via Naked Capitalism 3-1-2023]

On regulations, specifically permitting:

What matters is not how big America’s spreadsheet numbers are, but how much physical stuff we get. And yet as a society we’ve decided to award people with stasis instead of stuff. In many dysfunctional societies, the government’s guarantee of economic inclusion comes in the form of a specific physical good — usually, cheap fuel. In the United States, the in-kind subsidy we provide our people is the option to keep their world from changing.

Spiraling housing costs in any city with real economic opportunity, a floundering energy transition, and the inexorable migration of manufacturing to more development-friendly countries have become so severe that we must dispense with our collective illusion that America will always look like it looked in 1975. Slashing the thicket of red tape that prevent development, and subordinating local interests to the needs of the nation itself, are no longer idle dreams — they are immediate necessities.

Green colonialism is flooding the Pacific Northwest 

[High Country News, via Naked Capitalism 3-1-2023]

“Is it green energy if it’s impacting cultural traditional sites?” 

Yakama Nation Tribal Councilman Jeremy Takala sounded weary. For five years, tribal leaders and staff have been fighting a renewable energy development that could permanently destroy tribal cultural property. “This area, it’s irreplaceable.”

The privately owned land, outside Goldendale, Washington, is called Pushpum, or “mother of roots,” a first foods seed bank. The Yakama people have treaty-protected gathering rights there. One wind turbine-studded ridge, Juniper Point, is the proposed site of a pumped hydro storage facility. But to build it, Boston-based Rye Development would have to carve up Pushpum — and the Yakama Nation lacks a realistic way to stop it.

“America Is Trying to Electrify. There Aren’t Enough Electricians.”

[Wall Street Journals, via Naked Capitalism Water Cooler 3-1-2023]

“Electricians, the essential workers in the transition to renewable energy, are in increasingly short supply. They are needed to install the electric-car chargers, heat pumps and other gear deemed essential to address climate change. Electricians say they are booked several months out and struggling to find enough workers to keep up with demand. Many are raising wages and prices and worried that they won’t be able to keep up as government climate incentives kick in…. The median age of electricians is over 40 years old, in line with the broader workforce. But nearly 30% of union electricians are between ages 50 and 70 and close to retirement, up from 22% in 2005, according to the National Electrical Contractors Association. The average annual electrician salary rose from roughly $50,000 to about $60,000 from 2018 to 2022, an increase roughly in line with the national average, according to the BLS.”

Health care crisis

The Insulin Pricing Wars Are Just Getting Started 

Charlotte Kilpatrick, March 3, 2023 [The New Republic]

Don’t let Eli Lilly’s latest P.R. stunt fool you: Private companies shouldn’t be allowed to set prices for these lifesaving drugs in the first place….

Insulin was invented over 100 years ago, and the researchers sold the patent to the University of Toronto for $1 each. At the time of the sale, the chief scientist noted, “Insulin does not belong to me, it belongs to the world.” The rights were then sold to Eli Lilly and Co. so that the company could mass-produce the medicine. Over the past century, Eli Lilly—along with Novo Nordisk and Sanofi, who together manufacture 90 percent of the world’s insulin—have raised prices continuously….

In 1996, Humalog, an insulin developed by Eli Lilly, sold for $21 for a month’s supply. By 2019, the cost had risen 1,200 percent to $275 per month. In 2021, the drug company announced it would reduce the price of its generic version of Humalog to $137 for an individual vial, down from $275. This was welcome news, but Eli Lilly sold the same insulin to Germans at an even lower price of $55 for a vial. That same year Humalog was Eli Lilly’s bestselling drug, raking in $2.7 billion in sales. 

Information age dystopia

Future Fords Could Repossess Themselves, Drive Away If You Miss Payments 

[The Drive, via Naked Capitalism 2-28-2023]

Neoliberalism requires a police state

Bristling Under Progressive Mayor, St. Louis Police Seek State Takeover 

[The Intercept, via Naked Capitalism 2-27-2023]

Disrupting mainstream politics

Eight Lessons From Bernie Sanders’s New Book 

[Jacobin, via Naked Capitalism 2-28-2023]

3. The Problem of Inequality Is Systematic
“The fight against American oligarchy — and the plutocratic arrangements that foster it — has nothing to do with personalities. Inequality isn’t about individuals; this is a systemic crisis.”

There is an ongoing class war in the United States, and the billionaire class is unquestionably on the offensive. In Sanders’s view, it’s important not to get bogged down in the individual quirks and idiosyncrasies of men like Jeff Bezos or Elon Musk, but rather to stay focused on the very system that allows them to accumulate their wealth in the first place. It is a system that exploits the worker, it’s a system that erodes democracy, and it’s a system that, as Bernie argues, goes against values of human decency….

5. You’re Either on the Side of Workers or You’re on the Side of Their Bosses

“Which side are you on? These days, corporations like Starbucks and Amazon don’t hire gun-toting thugs. Instead they hire anti-union consultants and pollsters and politically connected lobbyists — many of them Democrats — to thwart union organizing. But the fundamental premise remains: you’re either on the side of workers and organized labor, or you’re not.”

There’s Never Been a Better Time to Take on Fox News 

Alex Shephard, March 3, 2023 [The New Republic]

As Rupert Murdoch’s brainchild reels from legal disclosures, Democrats have a big opportunity to take their fight against the network right to its airwaves….

But the Dominion disclosures have forced Democrats’ hands in ways that the tidy status quo failed to provoke. In a letter sent to Fox’s leadership on Wednesday, Democratic Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries demanded its hosts publicly acknowledge that they deliberately misled their viewers about the outcome of the 2020 election. ​​“Though you have acknowledged your regret in allowing this grave propaganda to take place, your network hosts continue to promote, spew, and perpetuate election conspiracy theories to this day,” they write. As The Washington Post’s Greg Sargent noted, Democratic criticisms of Fox News are sharper and more direct than they’ve ever been before: The letter refers to its content as “propaganda”—a term that Democrats have largely avoided in the past.

Democrats' political malpractice

[Twitter, via Naked Capitalism Water Cooler 3-1-2023]


[TW: According to Wikipedia, Goldman “served as lead majority counsel in the first impeachment inquiry against Donald Trump and lead counsel to House Managers in Trump's subsequent impeachment trial.[3][4] Goldman is among the wealthiest members of Congress, with an estimated personal net worth of up to $253 million…. He is an heir to the Levi Strauss & Co. fortune.” Now, I think noblesse oblige is good and all, but I think it’s past time for the Democratic Party to adopt diversity goals based on income and wealth, besides the already widespread racial and gender diversity goals. Goldman knocked out much more progressive incumbent Mondaire Jones.]

“The biggest election of 2023 reaches final sprint”

[Politico, via Naked Capitalism Water Cooler 3-1-2023]

“Millions of dollars are flowing into the Wisconsin Supreme Court race, as the state rockets toward an election that could decide the future of abortion rights, redistricting and more in the key battleground state. The court has a 4-3 conservative majority, with one swing conservative justice who has broken with the rest of the ideological bloc on some major cases. The April 4 election could flip that dynamic to a liberal-leaning majority. The contest is poised to be the most expensive state Supreme Court race ever, with major outside groups — particularly those focused on abortion — rushing in funds.

[Lambert Strether comments: “ I’m so old I can remember when the national Democrats and Obama didn’t give the Wisconsin state Democrats a dime when they were first fighting Scott Walker.”]

Conservative / Libertarian Drive to Civil War

The GOP’s Addiction to Culture War May Cost It in 2024

Eric Levitz [New York Magazine, via DownWithTyranny]

“The urban, liberal college graduates who dominate the Democratic political class have distinct cultural sensibilities and social-policy preferences when compared to the middle-age, working-class rust belters who often play kingmaker in the Electoral College. Progressive ambition plus right-wing demagoguery has been a formula for electoral backlash more than once in modern history. And yet if hyper-political Democrats don’t always see eye to eye with the U.S.’s ‘low-information‘ normies, the same is at least as true of their counterparts in the GOP. For every Ivy League–educated nonprofit executive who believes in open borders and police abolition, there are two car-dealership owners who think the 2020 election was rigged by a cabal of pedophiles…. Meanwhile, in order to sustain the attention of their ideologically self-selecting audiences amid competition from other journalistic outlets, cat photos, video games, porn, and virtually every movie and TV show ever made, news purveyors have a strong incentive to keep consumers in a constant state of agitation…. As a result, strong partisans can find themselves locked in seemingly epochal political struggles that don’t even register on swing voters’ radar. This state of affairs creates problems for both parties. When your base lives in a distinct informational universe from your persuasion targets, finding messages that animate the former while placating the latter can be difficult. Nevertheless, that balancing act is far more challenging for Republicans than it is for Democrats…. Last week, a group of Democratic strategists released a report on public opinion in working-class, postindustrial counties of Michigan, Minnesota, Pennsylvania, and Wisconsin — areas where Biden will likely need to hold down Republican margins in order to win reelection. The researchers found that while ‘working-class folks find urban and intellectual ‘wokeism’ annoying,’ they are far more concerned with Democrats’ alleged failures in economic management.” 

How big Christian nationalism has come courting in North Idaho

[Religion News Service, via Naked Capitalism Water Cooler 2-28-2023]

“North Idaho has long been known for its hyperlibertarians, apocalyptic ‘preppers’ and white supremacist groups who have retreated to the region’s sweeping frozen lakes and wild forests to await the collapse of American society, when they’ll assert control over what remains. But in recent years, the state’s existing separatists have been joined by conservatives fleeing bluer Western states, opportunistic faith leaders, real-estate developers and, most recently, those opposed to COVID-19 restrictions and vaccines. Though few arrived carrying Christian nationalist banners, many have quickly adopted aspects of the ideology to advance conservative causes and seek strength in unity. The origin of North Idaho’s relationship with contemporary Christian nationalism can be traced to a 2011 blog post published by survivalist author James Wesley, Rawles (the comma is his addition). Titled ‘The American Redoubt — Move to the Mountain States,’ Rawles’ 4,000-word treatise called on conservative followers to pursue ‘exit strategies’ from liberal states and move to ‘safe havens’ in the American Northwest — specifically Idaho, Montana, Wyoming and eastern sections of Oregon and Washington. He dubbed the imagined region the ‘American Redoubt’ and listed Christianity as a pillar of his society-to-be.”

Marjorie Taylor Greene’s Civil War

[The Atlantic, via The Big Picture 2-26-2023]

The congresswoman is too influential within the GOP—and too representative of its views—for her calls for secession to be dismissed. 

“See No Evil”  (Ron Desantis)

[Harpers, via Naked Capitalism Water Cooler 3-3-2023]

[Mansoor Adayfi:] As you know, Guantánamo was created out of the legal zone, out of the legal system. Torture was the mechanism of Guantánamo. Torture, abuse, and experimenting on prisoners. We went on a massive hunger strike in 2005. And there was force-feeding. It was torture.

I saw a fucking handsome person come in and he said, “I’m here to ensure that you are treated humanely.”

m[Mike Prysner:] It was Ron DeSantis?

[Adayfi:] Yes. And, “If you have any problems, if you have any concerns, just talk to me.” We were drowning in that place. So I was like, “Oh, this is cool. This person will raise the concerns.” But it was a piece of the game. What they were doing was looking for what hurts us more so they could use it against us. In 2006, when DeSantis was there, it was one of the worst times at Guantánamo. The administration, the guards, all of them were the worst. They cracked down on us so hard. When they came to break our hunger strike, a team came to us. The head of the team, he was a general. He said, “I have a job. I was sent here to break your fucking hunger strike. I don’t care why you are here. I don’t care who you are. My job is to make you eat. Today we are talking. Tomorrow there will be no talking.” The second day, they brought piles of Ensure and they started force-feeding us over and over again.

[Prysner:] For those who don’t know, Ensure is a thick milky nutritional shake mainly marketed on daytime television to elderly people. It is very hard to drink.

[Adayfi:] Yes, and Ron DeSantis was there watching us. We were crying, screaming. We were tied to the feeding chair. And he was watching. He was laughing. Our stomachs could not hold this amount of Ensure. They poured one can after another. So when he approached me, I said, “This is the way we are treated!” He said, “You should eat.” I threw up in his face. Literally on his face.

[Prysner:] Ron DeSantis?

[Adayfi:] In his face. Yeah.

“Florida bill would require bloggers who write about the governor and legislators to register with the state”  

[NBC, via Naked Capitalism Water Cooler 3-3-2023]

“A Republican state senator in Florida has introduced a bill that, if passed, would require bloggers who write about Gov. Ron DeSantis, his Cabinet or state legislators to register with the state. Sen. Jason Brodeur’s bill, titled ‘Information Dissemination,’ would also require bloggers to disclose who’s paying them for their posts about certain elected officials and how much. ‘If a blogger posts to a blog about an elected state officer and receives, or will receive, compensation for that post, the blogger must register’ with the appropriate office within five days of the post, the legislation says. It defines ‘elected state officer’ as ‘the Governor, the Lieutenant Governor, a Cabinet officer, or any member of the Legislature.’ Failing to register would result in a fine of $25 a day, and the penalty would be capped at $2,500 per posting, NBC affiliate WFLA of Tampa reported. The bill says the bloggers’ reports to the state ‘must include’ the ‘individual or entity that compensated the blogger for the blog post, and ‘the amount of compensation received from the individual or entity.'” 

“New bill would eliminate Florida Democratic Party” 

[WESH, via Naked Capitalism Water Cooler 3-3-2023]

“Spring Hill Republican Senator Blaise Ingoglia has filed SB 1248, which would be called ‘The Ultimate Cancel Act.’ While it does not mention the Democratic party’s name, it would direct the Florida Division of Elections to ‘immediately cancel the filings of a political party, to include its registration and approved status as a political party, if the party’s platform has previously advocated for, or been in support of, slavery or involuntary servitude.'” 

[TW: Ingoglia is trafficking in half-truths by arguing the Democratic Party supported slavery. What actually happened is that the Democratic Party split in the years before the Civil War, and ran two candidates in 1860, allowing Abraham Lincoln to win with only a plurality of 39.8 percent of the vote.] 

The (Anti)Federalist Society Infestation of the Courts

“Dark money and special deals: How Leonard Leo and his friends benefited from his judicial activism”

[Politico, via Naked Capitalism Water Cooler 3-3-2023]

“A network of political non-profits formed by judicial activist Leonard Leo moved at least $43 million to a new firm he is leading, raising questions about how his conservative legal movement is funded. Leo’s own personal wealth appeared to have ballooned as his fundraising prowess accelerated since his efforts to cement the Supreme Court’s conservative majority helped to bring about its decision to overturn abortion rights. Most recently, Leo reaped a $1.6 billion windfall from a single donor in what is likely the biggest single political gift in U.S. history. Fundraising reports for 2022 have yet to be filed but spending by Leo’s aligned nonprofits on his for-profit business in 2020 and 2021 demonstrates the extent to which his money-raising benefited his own bottom line. And it shows how campaign-style politics — and the generous paydays that go along with it — are now adjacent to the Supreme Court, the 

Week-end Wrap – Political Economy – February 26, 2023


Week-end Wrap – Political Economy – February 26, 2023

by Tony Wikrent


How The U.S. (And UK) Sabotaged Peace In Ukraine

[Moon of Alabama, via Naked Capitalism 2-23-2023]

In an interview with an Israeli outlet (vid), former prime minister of Israel Naftali Bennett, who was personally deeply involved in the negotiation process, also alleged that the 'West' blocked them:

“Reports at the time reflect Bennet’s comments and said Russia and Ukraine were softening their positions. Citing Israeli officials, Axios reported on March 8 that Putin’s “proposal is difficult for Zelensky to accept but not as extreme as they anticipated. They said the proposal doesn’t include regime change in Kyiv and allows Ukraine to keep its sovereignty.”

“Discussing how Western leaders felt about his mediation efforts, Bennett said then-British Prime Minister Boris Johnson took an “aggressive line” while French President Emmanuel Macron and German Chancellor Olaf Scholz were more “pragmatic.” Bennett said President Biden adopted “both” positions.

“But ultimately, the Western leaders opposed Bennet’s efforts. “I’ll say this in the broad sense. I think there was a legitimate decision by the West to keep striking Putin and not [negotiate],” Bennett said.

“When asked if the Western powers “blocked” the mediation efforts, Bennet said,

“ "Basically, yes. They blocked it, and I thought they were wrong." “

Recognizing The War Is Lost The ‘West’ Seeks An Exit 

[Moon of Alabama, via Naked Capitalism 2-21-2023]

President Vladimir Putin’s State of the Nation address, 21 February 2023 

Gilbert Doctorow [via Naked Capitalism 2-25-2023]

The State Duma has just approved a law sent to it by the President declaring the suspension of Russian participation in the New Start treaty. There is now no remaining convention limiting the nuclear arsenals of the nuclear superpowers.

The constellation of treaties that was developed starting in the 1970s was important not only for setting down numbers and kinds of systems that were permitted to the signatories. Still more important were the verification procedures which were ongoing. They involved regular meetings of high officials from both sides and served to establish some kind of mutual respect and trust.  As I noted from the opening remarks of Vladimir Putin in his address, there is now zero mutual trust and the guard rails protecting us from nuclear holocaust have been removed.

A Fight for Survival: What Victory Looks Like to Putin 

[Carnegie Endowment for International Peace, via Naked Capitalism 2-24-2023]

Putin’s state of the nation address effectively suggests that in the growing confrontation with the West, Russia will rely on one sole argument: the nuclear option. In this respect, suspending the New START treaty also sends a warning to non-Western countries of the consequences for the entire world of the West’s anti-Russian policies. Moscow is presenting the global community with a choice between Russia or descending into a nuclear disaster.

A year on, Russia’s war on Ukraine threatens to redraw the map of world politics – and 2023 will be crucial 

[The Converstion, via Naked Capitalism 2-22-2023]

Russia summons US ambassador over ‘aggressive course’ in Ukraine 

[Press TV, via Naked Capitalism 2-22-2023]

Assessing the Economic Value of Military Materiel 

Philip Pilkington [American Affairs, via Mike Norman Economics 2-22-2023]

This reflects what former USSR naval officer Andrei Martyanov has been saying and writing books about for a long time. The West is using the wrong standards of comparison, like nominal GDP rather than national capacity. In this light, Russia and China are far stronger than the West realizes using Western-preferred metrics. 

This has been brought out by industrial warfare. Pursuit of neoliberalism has apparently weakened the West's industrial capacity as factories were moved to locations of cheap labor, notably China.

The West not only misjudged the power of sanctions but also underestimated relative national capacity in relation to Russia with respect to effect on war-making. This was a double failure on the part of intelligence that amounts to a serious strategic blunder.

Global power shift

Who’s Winning and Losing the Economic War Over Ukraine? 

Medea Benjamin and Nicolas J. S. Davies [Naked Capitalism, February 22, 2023]

The pandemic

“Inside these parents’ long, nerdy struggle over how to improve air quality in Calgary schools”

[CBC, via Naked Capitalism Water Cooler 2-23-2023]

“[T]his stuff matters, especially for Canadians, who spend so much time indoors during the winter months. These systems deliver the majority of the air we breathe…. School administrators say they’ve upgraded the filters in these systems “wherever possible” to a higher standard, known as MERV-13. These filters are much better at trapping tiny particles, such as viruses, in the air…. Both the Calgary Board of Education (CBE) and the Calgary Catholic School District (CCSD) say they’ve put ventilation upgrades at the core of their strategy to improve air quality in schools. In addition to MERV-13 filters, they say they have taken additional protective steps, such as setting the systems to maximize fresh-air intake and running them in ‘occupied mode’ before and after school each day to further flush out stale air and replace it with clean air. In Edmonton, however, the public school board has gone a step further. It made similar upgrades to its ventilation systems, but it didn’t stop there. It also purchased nearly 6,000 portable HEPA filter units — enough for every classroom and office — as an additional layer of protection from viruses, allergens and other airborne particles that can make people sick. ‘We invested in these measures in an effort to provide the safest possible learning and working environments for our staff and students,’ said Veronica Jubinville, a spokesperson with Edmonton Public Schools. Those portable HEPA filters were installed in Edmonton last spring. Ever since, the group of concerned parents here in Calgary have been wondering why the same can’t happen in their kids’ classrooms. ‘I can’t understand why anyone would block these measures,’ said Lacey Elliot, who has one child in kindergarten and another in Grade 2. ‘We all breathe air. We know how viruses are transmitted. We have the resources to keep our kids healthy and further help alleviate this public health issue. Why would we not do this?'” 

“The COVID-19 Pandemic Will Be Over When Americans Think It Is”

Steven Phillips [Time, via Naked Capitalism Water Cooler 2-23-2023]

[TW: Phillips is a ghoul; I link to this to relay Lambert Strether’s unsparing comments.]

“[T]he country will not fully emerge from the COVID-19 pandemic until most people in our diverse nation accept the risk and consequences of exposure to a ubiquitous SARS-CoV-2, the virus that causes COVID-19.”

[Strether: “elites have no inclination whatever to accept the “risks and consequences of exposure”; hence Davos Man ventilating and filtering his air; Biden ventilating and filtering his gymnasium appearance; and Jha and Walensky’s wealthy community spending millions to ventilate its school system.”]

“A recent national poll demonstrates a strikingly divided public, not ready to make peace with the virus: while nearly half say that they have returned to their pre-COVID life, one-third still believe this is more than a year away or never.”

[Strether: “ “Make peace” with the virus? Did this dude really write that? “Make peace” with the vascular and neurological damage? “Make peace” with Long Covid? Also, one-third is a remarkably high number, given the enormous wave of eugenicist propaganda that daily engulfs us.]

“Instead a sharper understanding can be gained through an agnostic evaluation of the evidence and science. Today, this strongly supports a new paradigm of ‘living with the virus’ through accepting exposure for most Americans.”

[Strether: “What a vile screed. Phillips is a member of the American College of Epidemiology. I wonder if they support his view? Or have they joined what can only be characterized as a death cult? (Not for elites, of course; just for the rest of us.) Phillips is quite a character:”]

[Twitter, via Naked Capitalism Water Cooler 2-23-2023]


[TW: Strether has sharpened his understanding, and condemnation, of the eugenics underlying much of the thinking and actions of USA and western elites. Though I think it would be useful if he went further and also condemned these eugenics ideas as neo-Malthusian, and thus openly identify them with the British empire.]

“Opinion: Treating kids as invulnerable is treating them as disposable” 

[Calgary Herald, via Naked Capitalism Water Cooler 2-20-2023]

“The solutions for protecting kids can be gleaned from behaviours of wealthy elites, and they involve layering protections to create clean indoor air. The recent World Economic Forum in Davos used the following safety systems: mandatory daily PCR testing with ID-badge access linked to results, new ‘state-of-the-art ventilation systems‘, HEPA purifiers everywhere, various levels of masking and, it appeared, virus-killing UV lighting systems. Our children deserve these protections, in their schools and elsewhere. These measures, along with boosters, are in fact the only currently existing ways of reducing the public health need for universal indoor masking. By treating children as invulnerable we are actually treating them as disposable. But they are everything — to our lives and to our future. Their long-term health is at risk and we need to protect them.”

“Fixing U.S. public health will require a health-systems revolution — and for physicians to take a backseat”

Eric Reinhart [STAT, via Naked Capitalism Water Cooler 2-24-2023]

“Through its stranglehold on resources and institutional power, the U.S. medical profession has also come to distort the very definition of public health and what is now widely believed to constitute relevant knowledge. As I noted in a related essay in The Nation, lessons from labor history, social anthropology, political economy, epidemiology, communication, law, and various other nonmedical fields represent the bulk of the expertise that is most essential to formulating effective public health policy. Medical interventions constitute just 10% to 20% of modifiable factors that affect health, yet narrow biomedical expertise has been consistently prioritized in the selection of U.S. public health leaders from local to state and federal levels. The marginalization of non-biomedical knowledge within public health administration and the corresponding elevation of physicians to power has had catastrophic consequences for population-level health. While the clinical frameworks that characterize medical training are appropriate for the one-to-one encounters of patient care, misapplying them to the population-level problems of public health leads to a failure to effectively anticipate and address the social conditions upon which disease and disability feed. This, in turn, fuels a top heavy, reactive national health policy that prioritizes profitable medical treatment rather than cost- and life-saving prevention via community-based social services. Declining life expectancy in the U.S. — now at its lowest in nearly two decades — reflects the consequences of this policy choice. Rebuilding public health in the U.S. will require reclaiming it from its biomedical perversions.”

[TW: in the 19th century, a large part of the national policy of ensuring public health centered on the construction of massive public water works and sewage systems: Chronology of American Waterworks from 1649 to 1865. Here’s the separate page for 1866 to 1880. Here’s a website dedicated to the history of the Chicago waterworks, including pictures of the water crib built offshore in Lake Michigan, and the Water Tower built near the end of the Civil War. How were these financed? Who paid for them? Would these even be possible today, with governments infested by hundreds and thousands of libertarians, deficit scolds, NIMBYs, and general anti-government right wingers? ]

[Twitter, via Naked Capitalism Water Cooler 2-24-2023]


[TW: Historians generally agree that there were three national policies that guided the Hamiltonian program for building the USA economy: a protective tariff, a national banking and financial system, and “internal improvements” what we today call “infrastructure.” Ie., municipal water and sewage systems. (Generally overlooked as a fourth Hamiltonian national policy is the Doctrine of High Wages.) As John Lauritz Larson writes in his conclusion of Internal Improvement: National Public Works and the Promise of Popular Government in the Early United States (University of North Carolina Press, 2001, p, 263): 

The tragedy for Americans was not that they had failed to build a national system of roads and canals, or that they lost control of the railroads to the private sector. The tragedy lay in the subtle substitution, during the long struggle over internal improvements, of economic liberalism for political republicanism at the heart of the American experiment. ]

Civic republicanism

Anaximander and the Nature of Science by Carlo Rovelli review – the ancient master of the universe 

[Guardian, via Naked Capitalism 2-22-2023]

...the Miletus of 2,600 years ago was a time and place in which the ability to read and write moved beyond a limited circle of elite scribes. The effect of extending education far and wide was instantaneous. And it was no coincidence that Anaximander’s revolutionary thinking also coincided with the birth of the polis – the nascent democratic structures built on debate as to how best to govern society. Once people started seeing power as negotiable then everything else became debatable too. “Alongside the desacralisation and secularisation of public life,” Rovelli argues, “which passed from the hands of divine kings to those of citizens, came the desacralisation and secularisation of knowledge… law was not handed down once and for all but was instead questioned again and again.”

This new freedom to doubt received wisdom was crucial in Anaximander revealing what it took Chinese stargazers – advanced in many other respects – another 2,000 years to acknowledge: that the Earth was suspended in space. But there was one other critical factor in the new way of thinking. It was implicit in Miletus’s geography as a trading city in which Greek and Egyptian and Babylonian cultures met. Anaximander borrowed knowledge from all these traditions to build his theories. In this, Rovelli suggests, he sends perhaps his most potent message through the ages, “one that can serve as a warning to us today”. That message, as relevant in Rovelli’s native Italy as in contemporary Britain, is this: “Each time that we – as a nation, a group, a continent or a religion – look inward in celebration of our specific identity we do nothing but lionise our own limits and sing of our stupidity.”

 Anaximander and the Nature of Science by Carlo Rovelli (translated by Marion Lignana Rosenberg) is published by Allen Lane (£16.99).

[TW: The really important message in “Anaximander” is not the creation of science, but that every human being has the potential to contribute, hence the need to educate everyone, and give everyone a voice in the polis: “Each time that we – as a nation, a group, a continent or a religion – look inward in celebration of our specific identity we do nothing but lionise our own limits and sing of our stupidity.”

“The Court [is supposed to] protect the republican state — that is, the citizens politically engaged — from lapsing into a politics of self-denial. It challenges “the people’s” self-enclosing tendency to assume their own moral completion as they now are and thus to deny to themselves the plurality on which their capacity for transformative self-renewal depends.”

— Frank Michelman
“Law’s Republic” (pdf), The Yale Law Journal, Volume 97, Number 8, July 1988

The carnage of mainstream neoliberal economics

“The answer to the East Palestine disaster: Railroad workers’ control over safety and working conditions”

[WSWS, via Naked Capitalism Water Cooler 2-21-2023]

“Railroaders have been warning about the conditions that resulted in the derailment for years. They include the impact of Precision Scheduled Railroading and similar attendance schemes, endless cost-cutting by the railroads, a massive reduction in the size of the nationwide workforce, and a relaxation of inspection and maintenance. These have made the trains ticking time bombs. We all knew that something like this was bound to happen. In fact, it happens every day, where on average there are three derailments in the United States…. The disaster is a direct consequence of Congress’ ban on our striking. The conditions on the railroads have been decaying for years. We wanted to fight for better and safer conditions, adequate staffing and maintenance. But the government decided that the profit interests of the railroads are more sacred than our democratic right to strike and even the right of the public to a safe and healthy environment.” • Certainly odd that that Lever News and a chorus of liberals immediately focused on technical solutions….

How Congressional Rail Industry Allies Helped Block Safety Regulations 

[Intercept, via Naked Capitalism 2-25-2023]

Norfolk Southern eliminated key maintenance role in derailment region, union says 

[FreightWaves, via Naked Capitalism 2-19-2023]

“Railroaded Part Four – NTSB report day in East Palestine and my interview about it with The Lever” (interview)

[The Holler, via Naked Capitalism 2-23-2023]

John Russell of The Holler is interviewed by Frank Capallo of The Level: “[CAPALLO]: “You’ve also been speaking to the rail workers about this specific derailment, which they are saying was caused by a wheel bearing issue rather than the brake system. So can you go into a little bit of detail about that? Because I don’t think this is something that our audience has really heard about yet. [RUSSELL:] But there’s video of this wheel bearing glowing white hot for as much as 20 miles before the derailment. And this was caught by ring doorbell cameras, security footage, etc…. Because had these braking system has been updated and the chemicals classified accurately this disaster and the response likely would have been much less terrible. Rail workers have been telling me about this wheel bearing since I arrived here. And they’ve also told me that PSR, precision scheduled railroad, has put pressure on every aspect of how the railroads are run, including inspection and maintenance on things like wheel bearings.”

[Lambert Strether comments: “Well, I’m glad that finally somebody at The Lever knows about the bearing (“the hot box“). (It has occurred to me that the immediate focus on regulating braking systems + regulation vs. bearings + Precision Scheduled Railroading (PSR) has appeal for liberal Democrats, (a) because they could focus on blaming Trump (correctly) for deregulation, while (b) not talking to actual rail workers, who they just screwed over with their anti-strike legislation, and (c) definitely avoided talking about worker empowerment, let alone nationalization, which talking about PSR would have entailed. I was surprised to see Lever News erasing the views of rail workers, but these are strange times). However, I don’t see a reason to split the difference on braking systems. Again, if you investigate what rail workers have to say, you will find that the East Palestine train was improperly “blocked,” with the heavy cars at the front. I would need to know that new braking systems would bring an improperly blocked train to a safe stop. This is naturally not addressed.]

“Norfolk Southern, in wake of toxic derailment, gives in on sick days for one of its unions”

[CNN, via Naked Capitalism Water Cooler 2-22-2023]

“Norfolk Southern has agreed to give one of its unions the paid sick days it demanded for members in negotiations last year, and is in talks to grant sick days to its other unions as well. The announcement comes hours after the company’s chief financial officer, Mark George, told investors that it is still struggling to fill the open positions it has at almost all 95 locations where staff is based. George also said the company may have cut staff too deep during the early days of the pandemic, and that it has had trouble bringing back laid-off staff members. 

“Norfolk Southern CEO to East Palestine residents: ‘I understand the anger'”

[The Hill, via Naked Capitalism Water Cooler 2-22-2023]

“Jim Stewart, who said he has lived in East Palestine for 65 years, said that he no longer feels safe in the town, and is worried about the value of his home. He said he has had a lingering cough since the derailment and has developed a rash on his cheek. ‘Did you shorten my life, now? I want to retire and enjoy it. How are we gonna enjoy it? You burned me,’ he said. ‘We were going to sell our house. Our value went poof. Do I mow the grass? Do I — can I plant tomatoes next summer? What can I do? I’m afraid to.'”

After Norfolk Southern Support, DeWine Says No Disaster In East Palestine

Matthew Cunningham-Cook, February 23, 2023 [The Lever]

Ohio Gov. Mike DeWine’s track record and rail company links raise questions about his ability to hold the rail giant accountable for the derailment disaster.

The overlooked message behind Republicans’ response to the Ohio train derailment 

Ben Jacobs, February 23, 2023 [Vox]

...Yet it also did capture a certain bit of the conservative zeitgeist within what Schweppe called “elite populist circles.” As he put it, “There is a growing sense that all of these corporations are against us — not only are they trying to screw us over on the woke stuff, but generally, they just don’t care about ordinary people.”

Sharma noted that this happened only months after some Republicans joined with progressives in December to oppose a Biden-backed effort to settle a railway strike that was opposed by some unions. The strike, Sharma said, presents an opportunity for the right to draw attention to “a case of corporate malfeasance that doesn’t have an easy culture war angle.”

The question is whether the East Palestine accident drives Republicans to embrace those populist issues. As one Republican familiar with the response told Vox, there are “cross-cutting cleavages.” The Republican said while “corporate graft and greed” can be blamed, there are other easy villains, including “bureaucratic incompetence” and the indifference of “cultural elites,” that fit easily within existing conservative messaging.


[US Department of Labor, via Naked Capitalism 2-20-2023]

[Lambert Strether: “Is it just me or is the frequency of these stories increasing?”]


[The Intercept, via Naked Capitalism 2-20-2023]

War, pestilence, climate change, and the rich.

When Neoliberals Declared War on the Poor 

[CounterPunch, via Naked Capitalism 2-25-2023]

[TW: An excerpt from An Orgy of Thieves: Neoliberalism and Its Discontents, by Alexander Cockburn and Jeffrey St. Clair, details how Bill Clinton and Al Gore destroyed most of the social safety net built by the New Dealers. It’s gut-wrenching and infuriating. Even Robert Rubin advised them not to do it. Left me wondering why Democrats continue to admire Clinton and Gore. ]

On Lina Khan Derangement Syndrome 

Matt Stoller [BIG, via Naked Capitalism 2-20-2023]

On Wednesday, Republican FTC commissioner Christine Wilson penned a resignation letter in the Wall Street Journal editorial pages, accusing Chair Lina Khan of lawlessness and deception, and saying she could no longer be part of the commission as a result.

Why does such a move matter? Wilson is a mostly irrelevant minor functionary. But as odd as it may sound, the corporatist wing of the GOP - a network of antitrust defense lawyers, monopoly-funded academics, and Wall Street lobbyists - think that this huffy resignation has delivered a deadly blow to Lina Khan’s agenda. I’m going to explain their point of view, as well as the entrenched anger they feel not just towards Khan, but towards the anti-monopoly movement, as well as their real fear, which is that the Republican Party itself is starting to buy into what Khan is selling….

Despite Ronald Reagan’s history as a divorced Hollywood icon who had championed abortion rights in California while Governor, he built a deep and enduring bond with the religious right. In 1988, Jerry Falwell, a man with immense influence among white evangelicals, made that clear, saying that “Ronald Reagan saved the country.” Behind this statement was a political deal. Social conservatives would provide the votes, Wall Street would provide the money, and an ascendant Republican coalition would put judges on the bench who would serve both.

Under this new ‘fusion’ coalition, Robert Bork’s Chicago School pro-monopoly antitrust revolution flowered. Since 1890, and again in 1913, 1936, 1950, and 1976, Congress had passed laws to attack corporate consolidation. As Judge Learned Hand wrote in 1945, “Among the purposes of Congress in 1890 was a desire to put an end to great aggregations of capital because of the helplessness of the individual before them.” But in 1981, the views of Bork, and associated operatives like Tim Muris, Jim Miller, and Bill Baxter, spread from the Wall Street Journal editorial page, and turned antitrust law on its head.

Bork, et al, thought that consolidation was good, and that traditional anti-monopoly safeguards for small business and workers were a form of inefficient ‘protectionism.’ They did not like how antitrust enforcers looked at real-world evidence of how the economy did work. Instead, they wanted enforcers to use wholly theoretical economic models about how the economy should work, calling this the ‘law and economics’ school of policy….

As my colleague Erik Peinert proved with internal Reagan administration memos, these advocates knew they were acting unlawfully when they relaxed antitrust enforcement. But they correctly thought Congress wouldn’t stop them. Mergers exploded as a result, and sectors across the economy consolidated.

GRAPH of USA mergers and acquisitions 1978-1987

 [TW: in the mid-80s I was tracking this issue; by the end of the 1980s, the dollar value of mergers and acquisitions had exceeded both the total amount spent on scientific research, and private spending on new plant and equipment. Also noteworthy: the largest amount of mergers and acquisitions of USA companies by foreigners each year  was never from Japan, but from the UK and the British commonwealth. ]

Gradually, antitrust establishment lawyers and economists took over the field entirely, and a club of narrow technocrats came to imagine themselves as quasi-scientific experts over the economy, above politics or accountability. And until recently, this group ruled, without much dissent. But in 2008, they faced a challenge. The financial crisis….

And this brings me to Lina Khan, the Biden antitrust enforcer who has inspired fear, admiration, and to the antitrust defense bar, utter derangement. Khan was appointed in 2021 to run the FTC, but before she was picked, her career was shaped by the same financial crisis. In the early 2010s, a network of anti-monopoly writers, scholars, workers, and businesspeople, spurred by the great collapse of 2008, came together and began arguing that Bork’s framework led to authoritarian commerce dominated by monopolies….

Naturally, the Reagan and Clinton era officials were unhappy to see their work criticized. But what blew their minds was that Donald Trump, and then Joe Biden, accepted anti-monopoly arguments instead of what they, a self-defined scientific elite, thought. When Khan was appointed Chair of the FTC in 2021, it reflected that this narrow clique was no longer in control of antitrust law. 

How They RIGGED It All: A Corporate Law Professor Explains (w/ Jon Hanson)


[Bad Faith podcast, via YouTube, February 24, 2023]

[TW: hard to believe, but inspires hope, that this guy teaches at Harvard Law.]

19:32 …the legal system reflects the cultural common sense… that what happens to anyone is the consequence of their choice…. On that notion we build this idea that who you are is what you consume, what you buy right: that's your identity… manifested through the choices you make and we have opened up this set of markets for you the more chances you have to purchase and express yourself, that's what Freedom looks like.”

22:53 …Richard Posner, 7th Circuit Judge… the father of Law and Economics, this very major legal theory that dominated the late part of the 20th century and still is really important for shaping how we understand our laws…. what Richard Posner did in the 1990s was say, no, we don't really need strict liability; let's adopt a standard that is harder to meet, called negligence. You have to show that these transporters… those who are producing these chemicals, did something wrong.”

1:20:02 …in real life if the obligation is for the harmed party to prove negligence you're in a situation where you're hoping that through the deposition process the person that wronged you is going to disclose information that proves they knew that there was a risk here that they ignored and could have controlled for that. [you're hoping] you're going to get those documents and you're going be able to prove it in court [but]in real life corporations are very good at not ratting themselves out in that way.

37:34 The way corporate law is produced is through a competition among the states where little Delaware has won that competition by providing to large corporations the terms of governance
that most the appeals to the decision makers for corporations. So it's not law that's being imposed, it's law that's being consumed, in a marketplace of laws and… Delaware has managed to provide such attractive law that it attracts a significant majority of the largest global corporations in the world that are us-based and Delaware based now. And those companies now all have a shared common interest: their common interest is we want more markets; we want less regulation; we like stories that make markets look good and stories that make regulation look bad; and we want to interact in the political process….

49:37 [Explaining the background to the creation and promotion of the Powell Memo advising corporations to band together to defend the “free enterprise system”, by tobacco lawyer and Philip Morris board member Lewis F. Powell.] Now I'll go back to my tobacco story. Tobacco had weathered this storm in the 1950s where the evidence had come out that their product was killing lots of people, and they had to figure out a way to navigate that through public relations… The key two aspects of that solution was, one, we're going to create doubts as long as we can, and, two, we're going to promote freedom and choice as much as we can. Where there's doubts we can say, look, we didn't do it and where there's freedom and choice,  we're not responsible… Both of those strategies worked up to a point. But around 1964 … it's just too obvious by that point that tobacco is killing hundreds of thousands of people…

[Discusses impact in 1960s of Rachel Carson and Ralph Nader in further damaging reputation of corporations.]

52:25 so it's in 1970, 1971 in which Milton Friedman  writes for the New York Times Sunday magazine a piece on why shareholder Primacy should be the primary goal of corporations… corporations should not have to take into account any effects they have on stakeholders, it should just be profit and doing otherwise would be unadulterated socialism….

1:08:19 When legal economists speak about what the normative goal of law should be, what should law be trying to do, should it be trying to advance justice or  somehow be true to the the goals and meanings of the founders…. The dominant answer in the late 20th century for much of law was it should be trying to advance the goal of efficiency…. [which] led to a set of presumptions among legal theorists that markets would achieve efficiency more effectively than any non-market institution or process… We will get there as long as people have the ability to choose and no one else imposes their views on people. So we're back now to a story that would justify and valorize choice over everything else, and again, what have we done we've ignored context, we've ignored history, we've ignored circumstances. All the things that the law had basically been doing back in the Lochner era, it's now going to do again.

Introduction, The Anti-Oligarchy Constitution Reconstructing the Economic Foundations of American Democracy 

by Joseph Fishkin and William E. Forbath (Harvard University Press, 2022)

Confronting the present crisis will require liberals and progressives to reclaim many of their older arguments about political economy and enact policies and laws that implement them. This is work for the elected branches. Much of the work is federal legislation. And nearly all of it is vulnerable to constitutional attack by an emboldened conservative political and legal movement that aims, as its predecessors did a century ago, to elevate an anti-redistributive vision of political economy into constitutional arguments to be enforced in court.

In the looming constitutional confrontation, the democratically elected branches have some tools and methods of their own, which they can and likely will use to challenge, defy, or threaten the courts, pushing back against judges' constitutional and statutory claims.' But in the name of what? General theories of democracy? A broad vision of congressional power? Precedent and stare decisis, to protect old holdings won in prior rounds of this same conflict, such as the battle over the New Deal? There is room for all these arguments, although each has real limitations. But there is also something else. There is an American tradition of constitutional argument that directly addresses the central problems of oligarchy and inequality we now face. That tradition is the subject of this book.

Throughout the nineteenth and early twentieth centuries, generations of reformers argued that America was becoming a society with a "moneyed aristocracy" or a "ruling class"—an "oligarchy," not a republic. These reformers were making constitutional claims. For them, circumstances resembling America's today, in which too much economic and political power is concentrated in the hands of the few, posed not just an economic, social, or political problem, but a constitutional problem.

Predatory Finance

“1 big thing: When a savings account is very risky”

Felix Salmon [Axios, via Naked Capitalism Water Cooler 2-20-2023]

“Compound Banc pays an eye-popping 7% on deposits — or at least things that look and feel a lot like deposits. But it’s not a bank, and the deposits — technically, they’re risky bonds — are not insured by the FDIC or anybody else. The product is aimed at very small investors: The minimum investment is just $10. People looking for improbably high interest rates on their money have learned the hard way to avoid crypto. That’s created an opening for dollar-denominated products taking advantage of various regulatory loopholes — and of the fact that Americans are increasingly comfortable handing over their money to digital institutions. Compound Banc’s product is marketed as a high-yield digital account. Savings start compounding immediately at a 7% APY (annual percentage yield); savers can withdraw their money at any time without any fees or penalties. ‘No if and or buts about it,’ says the homepage. Compound Banc is neither a bank nor a brokerage, and its savings bonds, if you read its SEC filings, are characterized by “a high degree of risk.” Accounts at Compound Banc are not insured by the FDIC, the SIPC, or any other government regulator. ‘We primarily lend to sub-prime real estate borrowers,’ notes Compound on page 7 of its offering circular.” Eesh. Preying on the absolute weakest. And: “The fact that Compound Banc has managed to go live without any real regulatory oversight — they say they have already issued some $1.5 million in bonds — demonstrates the limits of America’s existing regulatory infrastructure.”

Private Equity’s Senator Gets Big Payout

Julia Rock & Andrew Perez, Feb 23, 2023 [The Lever] 

On February 22, Apollo Global Management announced that Toomey, who retired from the Senate in January, will serve on the firm’s board of directors. In 2021, Bloomberg reported that new directors at Apollo are granted $600,000 in restricted stock, in addition to a baseline $150,000 salary.

[TW: The historical background of Apollo Global Management helps to understand the process by which USA’s economy has fallen under the control of financial predators. Apollo was founded in 1990 by Leon Black, whose father Eli M. Black (1921–1975), was chairman of United Brands Company. A number of authors have described the role of United Brands (formerly United Fruit) in smuggling illegal narcotics, and arranging various coups in Central America. In 1975, when federal investigators were gathering evidence that United Brands had bribed Honduran government officials in preparation for a law suit that threatened to reveal the role of dirty money in the boardrooms of certain companies, Eli M. Black fell to his death from the 44th floor of Manhattan’s Pan Am Building. In March 2021, Leon Black was forced out of Apollo because after it was revealed pedophile and US/UK intelligence asset Jeffrey Epstein had been paid $158 million between 2012 and 2017.]

Disrupting mainstream politics

The West’s Betrayal of Freedom 

Matt Taibbi [Racket News, via Naked Capitalism 2-20-2023]

How About a Victory for the Left Occasionally? 

[Trying to Understand the World, via Naked Capitalism 2-19-2023]

Decisions, it  is perhaps necessary to stress, are always made by people. They are seldom made by individuals alone, but most often by groups, including groups which may be outside the formal decision-making process itself. Even decisions formally made “personally” often have to take account of what is acceptable to others. The focus of any political campaign, therefore, has to be on individuals, with names, opinions, and potential weaknesses that can be exploited. Unless individuals who have the power to make decisions are deliberately targeted and subjected to adequate pressure, nothing will change and nothing will get done. Conversely, a Leftist government in power that does not identify its enemies as individuals, and then deliberately work to undermine their capacity for nuisance, will not last long.

Perhaps this sounds unattractively clinical and technical, and detached from considerations of ethics, or even political theory.  But in fact, there is nothing more dispiriting and depressing than seeing representatives of causes you support failing hopelessly because they do not understand the basic rules of politics, while their opponents do. 

...idealism isn’t unknown on the Right either: the peasants of Vendée who rose against the Republic in 1793, or the students and intellectuals who joined Franco’s Falange in 1936, were ready to fight, and if necessary die, for what they believed in. Many did. And that perhaps gives us one clue: when the Right talks about fighting, it means it literally. When the Left talks about fighting it means signing petitions.

Jeremy Corbyn on the establishment campaign to stop him becoming Prime Minister 


[Declassified UK, via Naked Capitalism 2-20-2023]

The Power-Serving Myth That Anti-War Protests Make No Difference 

[Caitlin’s Newsletter, via Naked Capitalism 2-20-2023]

One in 20 US homicides are committed by police – and the numbers aren’t falling

[The Guardian, via The Big Picture 2-19-2023]

Police killings of any sort account for nearly 5% of all homicides, with at least 1,192 people killed by law enforcement in 2022.

“Will the Left Stand Up to the Deep State?”

[Compact, via Naked Capitalism Water Cooler 2-23-2023]

“In 2020, Mickey Windecker showed up in Denver smoking cigars, driving a hearse loaded with guns, and talking ultra-radical claptrap about having served with Marxist Kurdish guerrillas in Syria. Despite his preposterous persona, Windecker managed to entrap one BLM activist into pleading guilty on weapons charges. He also worked to inflame peaceful demonstrations by ‘encouraging people to break windows and leading marches directly into police traps.’ Windecker and his FBI handlers even attempted to recruit BLM activists into an assassination plot against Colorado Attorney General Phil Weiser. Ultimately unsuccessful, this scheme shows the outrageous lengths to which the bureau will go to manufacture threats. It is reasonable to assume this was not the only recent FBI infiltration of a left political movement.” • So, the Democrats have a very clear choice here: Supporting BLM, or the organs of state security. I wonder why their choice will be?

Restoring balance to the economy

NLRB bans non-disparagement and confidentiality mandates in severance agreements 

[Ohio Employer Law Blog, via Naked Capitalism 2-25-2023]

They’re not capitalists — they’re predatory criminals

Fear Made John McAfee Rich. It Also Ruined Him

[Businessweek, via The Big Picture 2-19-2023]

The cybersecurity pioneer’s long, strange saga started in Silicon Valley and ended in a Spanish prison. An exclusive story and podcast.

[TW: It really seems to be a pattern: these squillionaires newly minted over the past couple decades are drug-addled sex freaks who hate society and refuse to pay taxes. But Bill Clinton loves to party with them! No wonder Trump won in 2016 by mobilizing hatred against elites.]

Information age dystopia

“Science Fiction Magazines Battle a Flood of Chatbot-Generated Stories”

[New York Times, via Naked Capitalism Water Cooler 2-23-2023]

“The editors of three science fiction magazines — Clarkesworld, The Magazine of Fantasy & Science Fiction, and Asimov’s Science Fiction — said this week that they had been flooded by submissions of works of fiction generated by A.I. chatbots…. [Neil Clarke, the editor of Clarkesworld] declined to be more specific, saying he did not want to give those submitting the stories any advantages. The writing is also ‘bad in spectacular ways,’ Mr. Clarke said. ‘They’re just prompting, dumping, pasting and submitting to a magazine.’ He wrote on Twitter that the submissions were largely ‘driven by ‘side hustle’ experts making claims of easy money with ChatGPT.’ ‘It’s not just going to go away on its own, and I don’t have a solution,’ Mr. Clarke wrote on his blog. ‘I’m tinkering with some, but this isn’t a game of whack-a-mole that anyone can ‘win.’ The best we can hope for is to bail enough water to stay afloat. (Like we needed one more thing to bail.)'” 

The New York Times

Joe Costello, via Naked Capitalism 2-25-2023]

Historian and novelist Gore Vidal wrote several decades ago,

“The late Murray Kempton once noted that although the New York Times likes to pose as being above the battle, this position has never stopped the Times, once the battle's fought, from sneaking onto the field and shooting the wounded.”

...However in the 20th century, for several reasons, this understanding of press subjectivity changed. One important reason was the rise of broadcast media. By the 1920s, as radio broadcasts proliferated, the government stepped in to regulate a limited broadcast spectrum. A few years later, the same model was applied to television. National ownership of broadcast media became concentrated in three corporations, a big difference from the preceding century’s massively distributed printing presses. This half-century of three corporations' domination of broadcast media is truly one of the great centrally controlled information regimes in history, though today's technology has the potential to be much worse….

In the 70s, the New York Times was never the biggest fan of the young California Governor and they certainly weren't excited about his insurgent message of reform in '92. The New York Times' reporter covering the campaign was Gwen Ifill, who later went on to fame with a whole other bad journalism kettle of fish – PBS. Ifill was also assigned to cover two or three other candidates besides us….

By this point, the Times had already had enough of the Brown candidacy and thought they were going to hang a head on the wall. I was in the Santa Monica office and got a call, not from Gwen, but queerly enough from one of the editors, this to say the least was unusual. They had caught in the announcement speech passages from Richard Goodwin. If you don't know who Dick Goodwin was, you should. He died a few years ago, one of those people whose passing represents the end of an era to which there is no return. Goodwin had been a speech writer for President John Kennedy and then his brother Robert. He also wrote for President Lyndon Johnson and was responsible in 1964, at the height of the Civil Rights Movement, for getting Johnson to say live on national television, “We shall overcome.”

Climate and environmental crises

The stumbling block in ‘the race of our lives’: transition-critical materials, financial risks and the NGFS climate scenarios

[The London School of Economics and Political Science, via Naked Capitalism 2-19-2023]

New and recent books about climate and environmental justice 

[Yale Climate Connections, via Naked Capitalism 2-21-2023]


Elite IDF reservists threaten to stop showing up for duty over judicial overhaul 

[The Times of Israel, via Naked Capitalism 2-25-2023]

The signatories included lieutenant colonels, colonels, brigadier generals, and a major general, among dozens of junior officers and sergeants….

Much of the Special Operations Division is classified; however, it is known to conduct undercover intelligence-gathering operations deep in enemy territory….

Meanwhile, Israeli television reported Tuesday that top military prosecution officials have warned in recent weeks that the judicial shakeup could expose senior IDF commanders as well as senior political figures to criminal proceedings in international courts.

The Kan public broadcaster said a similar warning was issued Tuesday at a closed meeting of the Knesset’s Constitution, Law and Justice Committee by legal counsels to Shin Bet and Mossad, the Military Advocate General and senior Justice Ministry officials.

Senior diplomat Alon Ushpiz, who recently resigned as Foreign Ministry director general, issued a similar warning Thursday.

The International Criminal Court in The Hague does not investigate individuals in countries that have strong justice systems and which are seen as capable of investigating themselves. However, it is feared that a perception of the Israeli system as having been grievously harmed could lead the court to assert jurisdiction and investigate Israeli officials on suspicions of war crimes.

The people who kill the truth: From a small office building, a group of Israelis is spreading global disruption

[Haaretz, via The Big Picture 2-19-2023]

The Israelis destabilizing democracy and disrupting elections worldwide. No morals, no qualms, no borders: Tal Hanan and Team Jorge have turned chaos into business (Haaretz

[TW: This is part of the West’s “rule-based order.”]

How Israeli youth helped usher in the farthest right-wing government ever

Claire Porter Robbins, February 23, 2023 [Vox]

A joint poll published by the Israel Democracy Institute last month found that 73 percent of Jewish Israelis between ages 18 and 24 identify as right-wing, compared with only 46 percent of Jewish Israelis over 65. Young Jewish Israelis are showing up to rallies and polling stations for the extremist politicians whose November electoral victory ushered in Israel’s farthest right-wing government ever….

“‘Moderate PAC’ is latest big-money push to keep Democrats in line on Israel”

[MondoWeiss, via Naked Capitalism Water Cooler 2-23-2023]

“A new Democratic political action committee (PAC) has arisen, dedicated to cultivating what it refers to as ‘moderate policies.’ It stands against Republicans, as it supports only Democrats, but primarily, it aims to move the Democratic party to the right. It’s the latest iteration of conservative efforts to revive the classical conservatism that has been drowned by right-wing fanaticism, creating the so-called “Never-Trump Republicans” who don’t have a political home for the moment…. The new PAC, which intends to raise at least $20 million to target progressive candidates in the 2024 election, currently has only one major donor: billionaire Jeffrey Yass. That name may not be familiar to most Americans, but it’s one we need to get to know better. Yass, often referred to as the richest person in Pennsylvania, is the driving force behind funding for the Kohelet Forum, an organization that bears a great deal of responsibility for pushing Israeli policy to the far right, and whose network expands not only throughout Israel but also deep into the United States…. In the U.S., Yass is a major figure in the background of Republican donations. He is a leading funder of Club for Growth, which supports the Trump base of the Republican party, including many who sought to overturn the 2020 election.” 

[Lambert Strether adds: “More on Yass from (sigh) WikiPedia: “He is the co-founder and managing director of the Philadelphia-based Susquehanna International Group (SIG) and an early investor in TikTok. In 2001, he joined the executive advisory council of the Cato Institute.” ”]

Conservative / Libertarian Drive to Civil War

It’s Not a “National Divorce.” It’s a Call for One-Party Authoritarian Rule.

Matt Ford, February 25, 2023 [The New Republic]

Marjorie Taylor Greene’s idea for America to “separate by red states and blue states” isn’t just dumb and harmless. It’s also a window into a dangerous vision that’s ascendant in the Republican Party….

...It’s not worth quibbling with her about what Democrats and liberals actually believe or what Republicans and conservatives really hope to accomplish. The most important takeaway here is her complete rejection of the idea that Americans can resolve their political differences through discussion, persuasion, or compromise. In her preferred outcome, Greene would never have to convince a single voter that her policy ideas are better than her opponents’ or that they would be better off if they elected her. She simply wants to win by default….

She continued, “What I think would be something that some red states could propose is: Well, OK, if Democrat voters choose to flee these blue states where they cannot tolerate the living conditions, they don’t want their children taught these horrible things, and they really change their mind on the types of policies that they support, well once they move to a red state, guess what, maybe you don’t get to vote for five years. You can live there, and you can work there, but you don’t get to bring your values that you basically created in the blue states you came from by voting for Democrat leaders and Democrat policies.”

“National divorce,” in other words, is a call for one-party rule. Its proponents hope to abandon all those pesky democratic processes and practices so they can simply impose their policy agenda upon Americans by fiat. Never mind that the states aren’t homogenous, with plenty of Democrats living in the red states and plenty of Republicans living in the blue states….

The idea of breaking apart this country over pronouns or climate change regulations is nonsense. It should not be taken seriously. But Greene’s underlying idea—that all our perceived national problems would go away if we stopped trying to resolve our differences through elections and the democratic process—can’t be ignored. It demonstrates a dangerous and malignant view of politics in this country, one that has led to bloodshed and madness everywhere else it has been tried. 


Florida Republicans’ New Bill May Be the Biggest Attack on Academic Freedom Yet

Prem Thakker, February 24, 2023 [The New Republic]

The bill calls for the removal of degrees in gender studies and critical race theory (or “any derivative major or minor of these belief systems,” perhaps left intentionally ambiguous) and bars anything else that promotes diversity, equity, and inclusion. The bill also prohibits universities from promoting, supporting, or maintaining any program or campus activities that “espouse diversity, equity, and inclusion or Critical Race Theory rhetoric.”

…. the bill also says that general education courses may not “suppress or distort significant historical events or include a curriculum that teaches identity politics, such as Critical Race Theory, or defines American history as contrary to the creation of a new nation based on universal principles stated in the Declaration of Independence.” And they ought to “promote the philosophical underpinnings of Western civilization.”

Texas asks a Trump judge to declare most of the federal government unconstitutional

Ian Millhiser, February 26, 2023 [Vox]

Earlier this month, Texas’s Republican Attorney General Ken Paxton filed a lawsuit claiming that the $1.7 trillion spending law that keeps most of the federal government — including the US military — operating through September of 2023 is unconstitutional.

Paxton’s claims in Texas v. Garland, which turn on the fact that many of the lawmakers who voted for the bill voted by proxy, should fail. They are at odds with the Constitution’s explicit text. And a bipartisan panel of a powerful federal appeals court in Washington, DC, already rejected a similar lawsuit in 2021.

Realistically, this lawsuit is unlikely to prevail even in the current, highly conservative Supreme Court. Declaring a law that funds most of the federal government unconstitutional would be an extraordinary act, especially given the very strong legal arguments against Paxton’s position.

But the case is a window into Paxton’s broader litigation strategy, where he frequently raises weak legal arguments undercutting federal policies before right-wing judges that he has personally chosen because of their ideology. And these judges often do sow chaos throughout the government, which can last months or longer, before a higher court steps in.