Monthly Archives: June 2021

"Booming" New Home Market Has Been Shrinking

New home sale prices have reached record highs. Fueled by strong demand, you would think homebuilders are making record amounts of cash with home prices at their highest-ever levels.

So it might be surprising to learn the market capitalization of new homes sold in the U.S. peaked in December 2020, falling in the months since according to the latest updated data.

Trailing Twelve Month Average New Home Sales Market Capitalization, January 1976 - May 2021

New home sales have been negatively impacted by a decline in home construction, which saw its biggest dip since the pandemic hit in May 2021:

Despite a historic shortage of homes for sale, homebuilders are actually slowing production, handcuffed by skyrocketing commodity prices and shortages of land and skilled labor.

Single-family housing starts dropped more than 13% in April compared with March, the U.S. Census reported Tuesday. That’s the sharpest decrease since last April, when the pandemic shut down the economy.

“I have to blame the difficulty in procuring lumber and other products, along with labor issues for the miss, in addition to likely cancellations due to skyrocketing costs for single family starts,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

The rising prices homebuilders are having to pay for raw materials are being directly transferred to new home buyers:

Prices new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years. Nearly half of all builders say they are adding escalation clauses to their sale prices because of rising material costs, according to a recent survey from the National Association of Home Builders.

“Escalation clauses specify that if building materials increase, by a certain percentage for example, the customer would be responsible for paying the higher cost. Including such a clause allows all parties to be on notice that the contract costs could change if materials prices change due to supply constraints outside the builder’s control,” according to a recent NAHB post.

Looking forward, lumber prices have peaked and have begun to fall as the available supply has begun to increase. Prices however are expected to remain at levels double their historical average for years to come according to an industry observer, meaning higher new home prices will be with us for some time to come.

For homebuilders, that positive development will be confirmed when the market cap for new home sales in the U.S. begins to rise, reversing its current trend.


U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [Excel Spreadsheet]. Accessed 24 June 2021.

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 24 June 2021. 

U.S. New Home Sale Prices Reach New Highs, Affordability Continues to Fall

Both median and average new home sale prices set new all-time records in May 2021. The initial estimates of median new home sale prices reached $374,400, while average new home prices reached $430,600. The first chart below shows the trend for both these data series during the 21st century to date:

U.S. Median and Average Monthly New Home Sale Prices, January 2000 - May 2021

Bill McBride describes the exceptional year-over-year change in these prices:

The average price in May 2021 was $430,600, up 17% year-over-year. The median price was $374,400, up 18% year-over-year.

In terms of relative affordability however, we do have some good news to report. Although new home prices continued to rise, May 2021 saw median household income in the U.S. rise outside the very narrow range in which it fell in the preceding year from April 2020 thorugh April 2021.

U.S. Trailing Year Averages of Median New Home Sale Prices vs Median Household Income, December 2000 - May 2021

Although the rising prices of new homes means their relative affordability continued to fall in May 2021, the increase in median household income means the rate at which new homes are becoming less affordable began to slow.

Relative Affordability of U.S. New Homes, Annual: 1967-2019, Monthly: December 2020 - May 2021

We'll officially release our estimate of median household income for May 2021 on 1 July 2021.


U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [Excel Spreadsheet]. Accessed 24 June 2021.

The S&P 500 Returns to Record Highs

The Fed's minions hit the news streams hard this past week, with most selling the message that the surge of inflation is mostly transitory and won't require the Fed to start boosting U.S. short term interest rates before 2024. That message seemed to take hold among investors, with the S&P 500 (Index: SPX) returning to record high levels on the expectation that outlook will hold. At least for now.

In the meantime, we find the trajectory of the S&P 500 falling well within the range of the latest redzone forecast in the alternative futures chart, which is based on the assumption investors will mostly focus on the upcoming quarter of 2021-Q3 over the next several weeks.

We weren't kidding when we said the Fed's minions were out in force in front of the news media during the past week. Their outsized role in an otherwise slow news week is really apparent in our roundup of market-moving news headlines:

Monday, 21 June 2021
Tuesday, 22 June 2021
Wednesday, 23 June 2021
Thursday, 24 June 2021
Friday, 25 June 2021

Looking for more news? With Barry Ritholtz' weekly summary still on vacation, you might consider tapping Bloomberg's RSS business news feed to get a bigger picture than what we've focused upon in this edition!

Week-end Wrap – Political Economy – June 27, 2021


Week-end Wrap – Political Economy – June 27, 2021

by Tony Wikrent

Strategic Political Economy

THE 50-100 PAY GAP: These 20 Harsh Facts About Income and Wealth Inequality Will Shock You 

[Capital & Main, via Naked Capitalism 6-22-2021]

Fourteen shocking facts on inequality and working Americans
● Worker hourly compensation increased just 17% from 1979 to 2019, while worker productivity increased more than 72% over the same time period.

● Had the income of the bottom 90% of Americans kept up with GDP growth, they’d have collectively taken home $2.5 trillion more in 2018. Over the 43 years since 1975 combined, the figure is $47 trillion.

● The wealth of the bottom half of families — roughly 64 million families — adds up to only 1% of total U.S. household wealth.

● The median white family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.

● In 2016, 72% of white families owned their home, compared to just 44% of Black families and 45% of Latino families.

● For the average American consumer, the share of their expenditures spent on health doubled from 1980 to 2018.

● Half of U.S. adults with lower incomes skipped necessary medical care such as doctor visits, recommended tests, treatments, follow-up care or prescription medications in the past year because of the high cost.

● Between 2008 and 2018, the number of states in which health insurance premiums and deductibles consumed at least 10% of median income increased from seven to 42.

● The price of education increased 600% more than incomes from 1980 to 2018.

● One in four Americans have no retirement savings — and those who do aren’t saving enough. The median retirement savings account of $120,000 for those approaching retirement (ages 55 to 64) will likely provide less than $1,000 per month over a 15-year retirement span.

● Social Security benefits have lost 30% of their buying power since 2000.

● Nearly 83 million adults — 34 percent of all adults in the country — reported that their household found it somewhat or very difficult to cover usual expenses such as food, rent or mortgage, car payments, medical expenses or student loans in the last seven days, according to survey research in November 2020.

● Nearly half of Black adults reported it was somewhat or very difficult to pay usual household expenses, nearly twice the rate among white adults and Asian adults (28%). A similar share (47%) of Latino adults reported such difficulties.

[Twitter, via Naked Capitalism 6-23-2021]


India Walton Poised To Become Buffalo’s First Socialist Mayor 

[HuffPo, via Naked Capitalism 6-23-2021]

In a stunning upset Tuesday night, political newcomer India Walton appeared set to knock off longtime incumbent Byron Brown in the Democratic primary for mayor of Buffalo. Backed by the Democratic Socialists of America and the Working Families Party, Walton is on the brink of defeating Buffalo’s four-term mayor and a close ally of New York Gov. Andrew Cuomo.

[Twitter, via Naked Capitalism Water Cooler 6-24-21] 


China Launches First Electric Train In Tibet Near India's Border

[Sputnik International, via Mike Norman Economics, June 25, 2021]

India and China are trying to outpace each other in infrastructure development along their disputed Himalayan border. Incidents of threats from villagers have been reported on the Indian side. Villagers have demanded that the Indian government provide them with road, rail and electricity infrastructure; otherwise they will seek Chinese help....

China Starts Production At Massive Deepwater Gas Field — Irina Slav

[Oilpricel, via Mike Norman Economics, June 25, 2021]

China’s CNOOC this week started production from the first deepwater gas field it operates fully, Reuters has reported, adding that the field is expected to yield some 4.39 billion cubic meters of natural gas, representing 2 percent of China’s total output.…

Predatory Finance

“Wall Street Sees Big Wish Granted in Biden’s Infrastructure Deal”

[Bloomberg, via Naked Capitalism Water Cooler 6-25-21]

It’s just two words of jargon near the bottom of the infrastructure plan the White House posted Thursday — ‘asset recycling’ — but for a slew of investing titans that longed to see that phrase, it’s reason to rejoice…. “The bipartisan group that put this bill together has been keenly focused on the importance of private investment, including the concept of asset recycling, which has been championed by infrastructure funds for a number of years,” said DJ Gribbin, the former special assistant to the president for infrastructure policy from 2017 to 2018 who is also a senior operating partner at Stonepeak Infrastructure Partners. President Joe Biden’s administration could kick off an asset-recycling initiative with federal government-owned power and generation companies such as the Tennessee Valley Authority and the Bonneville Power Administration, Gribbin said. He added that government-owned dams around the country that generate hydroelectric power and haven’t been well maintained could also be part of the program. Other federally-owned infrastructure that investors have long coveted include the Ronald Reagan Washington National Airport and Washington Dulles International Airport. Asset recycling — a policy many credit as being coined in Australia — features the sale or leasing of infrastructure such as roads, airports and utilities to private operators.” 

Bipartisan Senate Infrastructure Plan Is a Stalking Horse for Privatization

David Dayen, June 21, 2021 [The American Prospect]

But the really scary piece is labeled “Public private partnerships, private activity bonds, and asset recycling.” In the name of building world-class infrastructure, these lawmakers would sell it off in fire sales to private financiers. We have lots of experience with infrastructure privatization that strongly suggests it should be avoided.

There was a time when Democrats did oppose such schemes; it was during the Trump administration. To the extent that Trump had an infrastructure vision, it was rooted in privatization. Wilbur Ross and Peter Navarro, who would each take high-level jobs in the Trump administration, wrote a paper before the 2016 election outlining their vision: $1 trillion in investment provided by private bond buyers, who would be guaranteed a tax credit to buy the bonds, interest on the debt, and an equity stake with dividends (with up to a 10 percent profit margin). It adds the usual song and dance about how private enterprise is so much more efficient than the public sector, therefore saving money overall….

But let’s call attention to the third item on that list, “asset recycling.” This is an idea imported from Australia, which is really just an enormous shell game. It involves selling off public infrastructure to acquire the resources to build new infrastructure. It’s literally robbing Peter to pay Paul. Naturally the Trump administration was enthusiastic about it, though they never passed legislation on it. That’s fallen to this bipartisan group….

Our experience with privatization has drawn similar criticism, as it’s a triumph of short-term thinking and long-term pain. The city of Chicago sold off 36,000 parking meters to a Wall Street-led investor group in 2009, taking back $1.15 billion to plug budget holes. Chicago drivers will pay $11.6 billion over the 75-year life of the deal to park, and fees are scheduled to rise as much as 800 percent. When the city shuts down a street for a festival or parade, it has to pay the private company for the parking revenue it loses. And the city cannot make improvements like bike lanes or sidewalk widening on metered streets, again because the privatizers might lose revenue. Indianapolis gave a similar 50-year lease on its downtown parking meters to a subsidiary of Xerox, using the money to build a giant downtown parking garage, a form of asset recycling. The garage on average is 5.5 percent full during the year.

Chicago Parking Meters Hit With Potential Class Action Suit 

[Chicago Sun Times, via The Daily Poster 6-26-2021]

“A potential class action lawsuit filed this week against the private company that operates Chicago’s sprawling parking meter system alleges its exclusive contract with the city amounts to an ‘unreasonable 75-year monopoly.’ The complaint, filed Wednesday in federal court in Chicago, holds that Chicago Parking Meters’ lengthy deal with the city has resulted in increased parking rates and restrictions on other forms of travel, like bicycles and ride-hailing.”

Here Come Wall Street Rental Communities: What Could Possibly Go Wrong?

Pam Martens and Russ Martens, June 24, 2021 [Wall Street on Parade]

“Top U.S. Officials Consulted With BlackRock as Markets Melted Down”

[New York Times, via Naked Capitalism Water Cooler 6-24-21]

“As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue. Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as ‘the project’ that he and the Fed were ‘working on together.'” 

Fed Chair Powell Misleads House Hearing on Wall Street’s Bailout Programs

Pam Martens and Russ Martens, June 23, 2021 [Wall Street on Parade]

It’s factually incorrect for the Fed Chairman to say that it can only make emergency loans with the approval of the Treasury. Months before there was any case of COVID-19 anywhere in the world the Fed was making hundreds of billions of dollars a week in emergency repo loans to Wall Street trading houses. The emergency loans started on September 17, 2019 – four months before the first reported case of COVID-19 in the United States. By January 27, 2020 the Fed’s ongoing cumulative loans to bail out Wall Street’s hubris tallied up to an astounding $6.6 trillion. (See Fed Repos Have Plowed $6.6 Trillion to Wall Street in Four Months; That’s 34% of Its Feeding Tube During Epic Financial Crash.)

The Fed made these loans without any Congressional approval or oversight. Despite Powell’s promises to the Senate Banking Committee that the Fed would provide a full report on what caused the need for these emergency bailouts to Wall Street banks, the public has yet to see any such report from the Fed.

In addition, Powell appeared to be giving the impression yesterday that the Fed’s pandemic bailout programs have ended. While the programs funded with CARES Act money have stopped making new loans, the Fed’s weekly H.4.1 balance sheet as of last week shows that it held the following balances in its various emergency bailout programs: Paycheck Protection Program Liquidity Facility, $87.32 billion; Commercial Paper Funding Facility, $8.55 billion; Corporate Credit Facilities, $25.85 billion; Main Street Facilities, $30.56 billion; Municipal Liquidity Facility, $10.73 billion; TALF, $4.76 billion; Central Bank Liquidity Swaps, $500 million.

[Twitter, via Naked Capitalism Water Cooler 6-25-21]


Why Does Anyone Care What Lawrence Summers Thinks?
Barry Ritholtz, June 25, 2021 [The Big Picture]

...I see a public intellectual and policy wonk whose professional history is a continual series of disastrous decision-making across markets, academia, and public policy.

Yes, yes, we all know he is very smart. It helps to think of him as a PC with a super high-powered CPU processor but very crappy software. Worse decisions faster….

But Harvard is only one of the errors that Summers can take credit for: An even bigger problem was his tenure as Treasury Secretary in the late 1990s for the Clinton administration. Summers embraced much of the radical deregulation favored by senator Phil Gramm and then-Fed chair Alan Greenspan. He was at Treasury when the Travelers Citigroup merger was approved, despite a variety of concerns about antitrust issues. (Who thought forming this behemoth was a worthwhile idea?)

That merger effectively violated the Glass Steagall act; approving it ended its enforcement as a viable regulation….

But that wasn’t the only failure from the Summers era. His endorsement of the Commodities Futures Modernization Act of 2000 (CFMA) was where things really went off the rails….

Restoring balance to the economy 

“California to Pay off all Past Due Rent Accrued During COVID, Giving Renters Clean Slate”

[Newsweek, via Naked Capitalism Water Cooler 6-22-21]

“Tech crackdown survives House panel’s marathon slugfest”

[Politico, via Naked Capitalism Water Cooler 6-24-21]

“The House Judiciary Committee voted in the wee hours Thursday to block the hugest tech companies from buying their competitors and disadvantaging their rivals — part of a series of bipartisan moves, stretching overnight toward dawn, aimed at hobbling Silicon Valley’s reigning powers. Still to come later Thursday is a vote on the panel’s starkest proposal: a bill that could make it easier to break up tech giants like Google and Facebook. Taken together, the package of bills would represent the most significant changes to U.S. antitrust law in decades. But reaction throughout the Capitol to the panel’s tech antitrust legislation showed that the effort faces serious friction from lawmakers of both parties, despite years of growing anger at the industry among Democrats and Republicans in Congress. The most notable pockets of resistance during Wednesday’s and Thursday’s 19-plus-hours-and-counting markup came from lawmakers from California, the home base of Google, Facebook and Apple. One lawmaker not on the committee, Silicon Valley-based Democrat Ro Khanna, separately told POLITICO that he will ask a fellow Californian, Speaker Nancy Pelosi, to retool the legislation.” • Here is an enormous thread on the markup of the bills:

Why Did Congress Just Vote to Break Up Big Tech?

Matt Stoller, June 25, 2021

Stoller had been a leading proponent of reviving anti-trust enforcement and dismantling monopolies. 

Schumer Backs Sanders’ Proposal to Include Dental, Hearing, and Vision Care in Medicare 

[Common Dreams, via Naked Capitalism 6-22-2021]

The Pandemic

Covid is already deadlier this year than all of 2020. So why do many in U.S. think the problem’s over? 

[CNBC, via Naked Capitalism 6-24-2021]

The carnage of mainstream neoliberal economics

How America quietly lost 2,700 ships 

[Business Insider, via Naked Capitalism 6-20-2021]

  • Since 1960, America's cargo fleet has fallen from 16% of the world's fleet to 0.2%.
  • It's thanks to the government slashing support of shipping, and the rise of overseas tax havens. 
  • Our domestic snubbing of shipping underlies why we're in a shipping crisis.

The (Anti)Federalist Society Infestation of the Courts

Court vs. Farmworkers May Foreshadow Court vs. All Workers

Harold Meyerson, June 25, 2021 [The American Prospect]

On Wednesday, the Supreme Court reaffirmed one of its most venerable traditions: upholding the rights of property over the rights of humans, most particularly humans who happen to be employees….

And then as now, agribusiness’s anger at this affront led them to go after the upstarts who dared put workers on the same footing as owners. I know this because it’s part of a story to which I was particularly privy.

In my younger, pre-journalist days, when we still lit our rooms with kerosene lamps, I was a political consultant for a range of progressive causes and candidates in California. In 1986, I ended up running a statewide campaign on behalf of three California Supreme Court justices, all of whom had been appointed by then-former (and later future) Gov. Jerry Brown, and all of whom, under the state’s quirky election laws, had to stand for “retention” that year. Previously, to the best of my knowledge, no state justice had ever faced an electoral challenge to his or her retention, under which process voters simply voted “yes” or “no,” and if “no,” the governor got to choose a successor. But this time around, Republicans and business interests sensed that Brown’s justices were electorally vulnerable and decided to wage an all-out campaign against their retention.

Corporate Media Camouflages The Corporate Court

David Sirota, June 24, 2021 [The Daily Poster]

The Supreme Court’s transformation into a corporate star chamber is rarely mentioned by an elite media owned by corporations and billionaires — but it is a story The Daily Poster has been reporting on since we launched.

Business-related rulings typically are not framed on a liberal-conservative continuum, and in many cases the bloc of putatively liberal justices are siding with corporations against workers, shareholders, and anyone else in society who is not rich and powerful. Indeed, two of the three aforementioned cases this week were 8-to-1 rulings.

Even the Times admitted that “the court’s three Democratic appointees have voted with the majority 73 percent of the time in divided cases” — although the paper casts this as proof of jurisprudential moderation rather than a reflection of corporate capture or bipartisan conservatism….

Thirty years ago, casino magnate Donald Trump helped create a dangerous legal precedent that made it far harder for investors to sue Wall Street firms when those firms use fine print to mislead them with rosy financial projections and promises. In that case — which revolved around assurances that Trump’s company made to investors before they lost their money — Trump secured a landmark ruling from future Supreme Court Justice Samuel Alito.

Two decades later, Goldman Sachs was telling clients in investment documents that it has “extensive procedures and controls that are designed to identify and address conflicts of interest.” But then the firm was exposed for betting against the mortgage investments it was selling its clients. During a congressional hearing on the topic, Sen. Carl Levin (D-Mich.) grilled a top Goldman executive about the fact that he had pushed investments on clients that he had referred to in an email to a colleague as a “shitty deal.”

Goldman investors led by Arkansas’ teachers pension fund sued  and this week, the Supreme Court effectively solidified the original Trump doctrine. In an opinion written by Justice Barrett, the high court tossed out the class action lawsuit that aimed to hold Goldman accountable.

The Supreme Court Is Closer to a 9-0 Corporatist Supermajority Than a 3-3-3 Split
Alexander Sammon, June 22, 2021 [American Prospect]

Of course, the notion that the Supreme Court has cleaved into a 3-3-3 split—with Justices Samuel Alito, Clarence Thomas, and Neil Gorsuch making up a hard-right sect; Justices Barrett, Kavanaugh, and Roberts as the sober, center-right moderates; and Justices Elena Kagan, Stephen Breyer, and Sonia Sotomayor the counterbalancing liberals—is nonsense, and anyone finding solace in these recent rulings is doing so at great risk. The Court, in its most recent decisions especially and in the entire body of work of the Roberts Court broadly, is much closer to a 9-0 corporatist supermajority than some evenhanded triad. Liberals may be desperately hoping for some conservative wedge that will solve their problems without having to do anything, but that won’t solve the many problems of our unbalanced judiciary.

Information Age Dystopia

Uber and Lyft Donated to Community Groups Who Then Pushed the Companies’Agenda

[The Markup, via Naked Capitalism 6-20-2021]

The ride-hail giants are orchestrating a complex PR scheme to sway public opinion to ensure drivers aren’t classified as employees

The Co-op Movement Is Taking On Big Tech

Amelia Pollard, June 24, 201 [The American Prospect]

Like many co-ops arriving on the market, the Drivers Cooperative is pitched as a more equitable antidote to the notoriously exploitative practices of its competitors, chiefly Uber and Lyft. The Drivers Cooperative’s members are paid a significantly larger commission on each ride, and any profits go straight to the drivers. With 2,500 drivers, the new co-op has already established itself as a force to be reckoned with.

The idea of a cooperative business, or co-op, sounds almost utopian: a shared-ownership model where profits are distributed to various stakeholders as opposed to shareholders only. Instead of an oligarchy—as is the case with Bezosworld, for instance—cooperatives are democratic. The collective group of owners—the workers, consumers, or small-business owners—share the profits and often have a say in the company’s governance.

“People know it’s better than the winner-take-all extractive economy that we’re in,” says Greg Brodsky.

McGill: The Disinformation Dozen
Barry Ritholtz, June 20, 2021 [The Big Picture]

If you prefer to listen rather than read, here are all of the related Masters in Business interviews with all of your favorite Psychologists & Behavioral Economists. It is a full semester’s worth of material, and you should earn about 12 college credits for listening to all of it….

Last, a short excerpt about Vaccine disinformation on social media from that McGill report I referenced is after the jump.

The Disinformation Dozen are responsible for up to 65% of anti-vaccine content.”

“At the outset of this research, we identified a dozen individuals who appeared to be extremely influential creators of digital anti-vaccine content. These individuals were selected either because they run anti-vaccine social media accounts with large numbers of followers, because they produce high volumes of anti-vaccine content or because their growth was accelerating rapidly at the outset of our research in February.

Full profiles of each are available at the end of this report:

1. Joseph Mercola
2. Robert F. Kennedy, Jr.
3. Ty and Charlene Bollinger
4. Sherri Tenpenny
5. Rizza Islam
6. Rashid Buttar
7. Erin Elizabeth
8. Sayer Ji
9. Kelly Brogan
10. Christiane Northrup
11. BenTapper
12. Kevin Jenkins

“On Booksellers And ‘Fair Trade’”

[The American Conservative, via Naked Capitalism Water Cooler 6-24-21]

“Recent issues of TAC have contained lamentations about the disappearance of independent booksellers and Amazon’s near-emerging monopoly on bookselling, with its cancellation of works praising Justice Clarence Thomas and questioning transgender orthodoxy. The usual remedy proposed is voluntary patronage of the few surviving independent booksellers. But it may surprise readers to know that there was once, and still is in many parts of the world, a legal regime, not dependent on government, that accords authors and publishers the means to assure a level playing field in bookselling. That regime is resale price maintenance, once called “fair trade,” that allows publishers to set and enforce firm resale prices for the works they publish. This right does not eliminate competition among booksellers. It curtails price competition to be sure, but diverts it to competition in inventory, pre-sale advice, delivery and other services, and in amenities including social events, book fairs, and book talks.”

With Bezos at the Helm, Democracy Dies at the Washington Post Editorial Board 

[Mint Press News, via Naked Capitalism 6-21-2021]

“Internal Amazon documents shed light on how company pressures out 6% of office workers”

[Seattle Times, via Naked Capitalism Water Cooler 6-22-21]

“Amazon systematically attempts to channel 6% of its office employees out of the company each year, using processes embedded in proprietary software to help meet a target for turnover among low-ranked office workers, a metric Amazon calls “unregretted attrition,” according to internal company documents seen by The Seattle Times. The documents underscore the extent to which Amazon’s processes closely resemble the controversial management practice of stack ranking —in which employees are graded by comparison with each other rather than against a job description or performance goals — despite Amazon’s insistence that it does not engage in stack ranking. The documents also highlight how much of Amazon’s human resources processes are reliant on apps and algorithms, even among the company’s office workforce. And they provide the most detailed picture yet of how Amazon uses performance improvement plans to funnel low-ranked employees out of the company. The company expects more than one-third of employees on performance improvement plans to fail, documents show. Amazon has previously said that its performance improvement plans aren’t meant to punish employees. The policies described in the documents reviewed by The Seattle Times apply to the company’s office workforce, who comprise a minority of Amazon’s roughly 950,000 U.S. employees. Amazon’s warehouses replace workers much more frequently, The New York Times has reported: Before the pandemic, annual turnover rates at Amazon warehouses reached 150%”

“Amazon’s Greatest Weapon Against Unions: Worker Turnover”

[HuffPo, via Naked Capitalism Water Cooler 6-22-21]

“[T]he National Employment Law Project… found that the turnover rate in the local warehouse industry increases significantly when Amazon comes to town. Warehouse churn more than doubled in several California counties after Amazon facilities opened, averaging more than 100%. The Seattle Times conducted its own analysis of Amazon’s workforce data last year, putting the company’s turnover at 111% during the pandemic. A New York Times investigation published this week put the figure even higher, at 150%, showing that Amazon was shedding 3% of its workers every week before the pandemic began…. Under a turnover rate of 100%, every theoretical position inside the warehouse would turn over once in a year, on average. That has huge implications for organizing. …. At an Amazon warehouse, high turnover means a union would be losing cards every day as workers leave and new employees unfamiliar with the campaign replace them. Even if the union manages to win an election, high turnover could hurt its position at the bargaining table if some of the most active organizers have quit or been fired. And churn could even help the employer purge the union from the facility by convincing newer workers to decertify it.”

How to poison the data that Big Tech uses to surveil you 

[MIT Technology Review, via The Big Picture 6-124-2021]

Researchers at Northwestern University are suggesting new ways to redress this power imbalance by treating our collective data as a bargaining chip. Tech giants may have fancy algorithms at their disposal, but they are meaningless without enough of the right data to train on. 

Creating new economic potential - science and technology

Finland Might Have Solved Nuclear Power’s Biggest Problem 

[The B1M, via Naked Capitalism 6-23-2021]

While burying nuclear waste might sound alarming and may cause concern to environmental groups, the process at Onkalo is so much more than simply burying the problem.

Based on a Swedish disposal method known as KBS-3, irradiated material is placed into boron steel canisters and enclosed within corrosion-resistant copper capsules before being buried in individual holes and backfilled with bentonite clay - entombing it forever.

Once buried, no further mechanical or human intervention is required to contain the radioactive payload, essentially eliminating one of the biggest barriers many countries have when it comes to adopting nuclear power.

With the capacity to accommodate the last 50 years’ worth of Finland’s accumulated spent fuel and the needs of its existing reactors until at least 2120 – at which time the facility will be permanently sealed - Onlako appears to provide a viable long-term solution to dealing with nuclear waste.

Institutionalists = Obstructionists

The Man Who Controls the Senate 

[New Yorker, via Naked Capitalism 6-22-2021]

Manchin, not Schumer

Manchin’s feud with progressive Democrats centers on a basic difference in their assessment of the Republican Party. To many of his colleagues, the G.O.P. has become an overt enemy of democracy, by perpetuating Trump’s lies about his loss in 2020 and rewriting state laws in ways that could allow them to overturn future elections. Senate Minority Leader Mitch McConnell has stated plainly, “One hundred percent of our focus is on stopping this new administration,” an echo of his comment, in 2010, that “the single most important thing we want to achieve is for President Obama to be a one-term President.” McConnell, in that view, will never coöperate, because doing so could allow Democrats to win the next elections by claiming policy achievements and a breakthrough in partisan gridlock. Harry Reid, a senator from Nevada for three decades and the Democratic Senate Majority Leader from 2007 to 2015, told me that Manchin underestimates the change in D.C. culture. “We’ve never had it like this before,” he said. “When Lyndon Johnson was Majority Leader for six years, he overcame two filibusters. In my first six years as Leader, I had to face and overcome more than a hundred filibusters. I think that you cannot expect the Senate to be a place where it’s kind of ‘Kumbaya,’ where you hold hands and sing.”

But, when Manchin looks at today’s Republican Party, he sees, almost literally, his neighbors and friends. Since 2000, the congressional delegation of West Virginia has gone from all Democrats to all Republicans—except for him. The state has voted for a Republican in each of the past six Presidential elections, and in 2014 the state legislature flipped to Republican control for the first time since 1931. On January 6th, when word circulated on the Senate floor that Trump supporters had stormed the Capitol, Manchin did not initially assume the worst. “I’ve always been for a good protest,” he recalled. “My instinct was, Let them in! They’re raising all kinds of hell and hollering. Let them in! Let’s talk!” Soon, he glimpsed the horror of it—“Never in my wildest dreams did I imagine our form of government being attacked,” he said—and, during the impeachment trial, he voted to convict. But Manchin never broke faith with the Republican Party, and he was determined to work with it again.

Corporate Lobbyists Declare War On Nina Turner

[The Daily Poster, June 21, 2021]

Corporate Dems and lobbyists for Big Oil, Big Pharma, Fox News and Wall Street are fundraising for Turner’s primary opponent Shontel Brown in the Ohio congressional race.

Progressives Alarmed by Privatization Dub Infrastructure Deal a ‘Disaster in the Making’ 

[Common Dreams, via Naked Capitalism 6-25-2021]

“What happened to Glenn Greenwald? Trump happened – and put the left’s priorities to the test”

[Jonathon Cook, via Naked Capitalism Water Cooler 6-22-21]

The problem with characterising Trump as a supremely evil figure is that all sorts of authoritarian political conclusions flow from that characterisation – precisely the political conclusions we have seen parts of the left adopting. Robinson may not expressly share these conclusions but, unlike Greenwald and Taibbi, he has largely ignored or downplayed the threat they present.

If Trump poses a unique danger to democracy, then to avoid any recurrence:

  • We are obligated to rally uncritically, or at least very much less critically, behind whoever was selected to be his opponent. Following Trump’s defeat, we are dutybound to restrain our criticisms of the winner, Joe Biden, however poor his performance, in case it opens the door to Trump, or someone like Trump, standing for the presidency in four years’ time.
  • We must curb free speech and limit the free-for-all of social media in case it contributed to the original surge of support for Trump, or created the more febrile political environment in which Trump flourished.
  • We must eradicate all signs of populism, whether on the right or the left, because we cannot be sure that in a battle of populisms the left will defeat the right, or that leftwing populism cannot be easily flipped into rightwing populism.
  • And most importantly, we must learn to distrust “the masses” – those who elected Trump – because they have demonstrated that they are too easily swayed by emotion, prejudice and charisma. Instead, we must think in more traditional liberal terms, of rule by technocrats and “experts” who can be trusted to run our societies largely in secret but provide a stability that should keep any Trumps out of power.

Yellen: US “out of money!” in August

[Mike Norman Economics, ​​​​​​​June 26, 2021]

Sigh…. they’re beginning to resort to deficit scare again. Yellen needs — desperately needs — to read Mark Blyth’s 2013 book Austerity: The History of a Dangerous Idea. Or at least watch the damn video…


I know a lot of people — including, ironically, Blyth — are suspicious of Modern Monetary Theory, but, seriously, is there a more effective riposte to deficit scare mongering than MMT? The only criticism I have of MMT so far is that it has yet to incorporate one of the central tenets of civic republicanism: one key duty of government is to actively promote the doing of good. The Constitutional mandate to Promote the General Welfare is what sets the USA as a republic apart from and above all the monarchies, aristocracies, oligarchies, and dictatorships that came before i, and are coming after it — including the corporatist oligarchy that has now replaced the USA republic. 



[Twitter, via Naked Capitalism Water Cooler 6-22-21]


Lambert Strether adds this insight: “I think the 1619 Project maps to reparations, and reparations is what the PMC believes will save capitalism. Reading between the lines:”


The Dark Side

Biden DOJ Is Suing Georgia Over Voter Suppression Law, UPDATES Included

poopdogcomedy, June 25, 2021 [DailyKos]

Good collection of Twitter threads, most of which were posted real-time.

Tip of the spear’: Texas governor leads revolt against Biden 

[Politico, via Naked Capitalism 6-22-2021]

“We are the tip of the spear, we are on the front of the battle lines, no question,” said James Dickey, the former chair of the Texas Republican Party. “With the federal government entirely abdicating their responsibility, that leaves us on the border needing to take up the fight, and Governor Abbott is clearly doing that.”

In part, raising the Texas flag is a return to form for Abbott, who made a political career out of suing the Obama administration. As state attorney general, his posture toward Washington was so hostile that he said of his job in 2013, “I go into the office in the morning. I sue Barack Obama, and then I go home.

But in restoring Texas to its place as Washington’s chief antagonist, Abbott is also doing something more revealing: Facing criticism from Republican activists for the mask mandate and business restrictions he imposed during the coronavirus pandemic, he is covering his right flank, while re-elevating immigration and border security — a major concern to Republican base voters — as a national issue. Just as important, he is carving out a distinct lane in the GOP’s presidential sweepstakes at a time when Florida Gov. Ron DeSantis is beginning to rise in stature among the party grassroots.

“They Seemed Like Democratic Activists. They Were Secretly Conservative Spies.” [New York Times]. 

Reactionary billionaires hired spies to infiltrate Democratic Party

What the effort accomplished — and how much information Mr. Seddon’s operatives gathered — is unclear. Sometimes, their tactics were bumbling and amateurish. But the operation’s use of spycraft to manipulate the politics of several states over years greatly exceeds the tactics of more traditional political dirty tricks operations.

It is also a sign of how ultraconservative Republicans see a deep need to install allies in various positions at the state level to gain an advantage on the electoral map. Secretaries of state, for example, play a crucial role in certifying election results every two years, and some became targets of Mr. Trump and his allies in their efforts to overturn the results of the 2020 election.

This is a good example of what the true purpose of taxation in a republic should be: to tax large concentrations of wealth punitively enough that such anti-democratic operations cannot be easily funded. There are no circumstances in a republic in which a person with hundreds of millions or billions of dollars is not a potential threat to self-government by millions of other citizens not possessing similar wealth.

As James Madison wrote in April 1787, preparing for the Constitutional Convention in Vices of the Political System of the United States,

“If the minority happen to include all such as possess the skill and habits of military life, & such as possess the great pecuniary resources, one third only may conquer the remaining two thirds.”

This is the age-old problem of oligarchy, and it is exactly what we confront in the Republican Party and runaway economic inequality today. It is exactly why high taxes on the rich are required so that they simply cannot afford to undertake or even contemplate such anti-democratic covert actions, or even massive political organizing and lobbying.  

The real purpose of taxation in a republic is to prevent the emergence of oligarchy. Once you realize this, you can easily see why the conservative / libertarian / Republican dogma of low taxes is always inherently a threat to democratic government.

The Price of No Consequences for Trump 

[Slate, via The Big Picture 6-20-2021]

Joe Biden and Merrick Garland are acting like Donald Trump was a crazy dream. But the threat to American democracy will only get worse the longer we ignore it.

Trump-inspired death threats are terrorizing election workers 

[Reuters, via The Big Picture 6-20-2021]

Election officials and their families are living with threats of hanging, firing squads, torture and bomb blasts, interviews and documents reveal. The campaign of fear, sparked by Trump’s voter-fraud falsehoods, threatens the U.S. electoral system.

Former NRA President Tricked Into Speaking At Fake High School Graduation 

[Buzzfeed News, via The Daily Poster 6-26-2021]

“Without realizing it, Keene was actually addressing his comments to thousands of empty chairs set up to represent the estimated 3,044 kids who should have graduated high school this year and instead were killed by gun violence.”

Why The Two-Party System Is Effing Up U.S. Democracy

[FiveThirtyEight, via The Big Picture 6-20-2021]

There’s no shortage of plausible explanations for why U.S. politics has become so polarized, but many of these theories describe impossible-to-reverse trends that have played out across developed democracies, like the rise of social media and the increased political salience of globalizationimmigration and urban-rural cultural divides. All of these trends are important contributors, for sure. But if they alone are driving illiberalism and hyper-partisanship in the U.S., then the problem should be consistent across all western democracies. But it isn’t.…

What’s happening in the U.S. is distinct in four respects.

First, the animosity that people feel toward opposing parties relative to their own (what’s known as affective polarization in political science) has grown considerably over the last four decades. According to a June 2020 paper from economists Levi Boxell, Matthew Gentzkow and Jesse M. Shapiro, the increase in affective polarization in the U.S. is the greatest compared to that of eight other OECD countries over the same time period….

Third, more so than in other countries, Americans report feeling isolated from their own party….

Fourth, and perhaps most significant, in the U.S., one party has become a major illiberal outlier: The Republican Party. Scholars at the V-Dem Institute at the University of Gothenburg in Sweden have been monitoring and evaluating political parties around the world. And one big area of study for them is liberalism and illiberalism, or a party’s commitment (or lack thereof) to democratic norms prior to elections. And as the chart below shows, of conservative, right-leaning parties across the globe, the Republican Party has more in common with the dangerously authoritarian parties in Hungary and Turkey than it does with conservative parties in the U.K. or Germany. 

No mention of the crucial role of rich reactionaries in creating and funding the modern conservative movement, which is a repudiation of the Enlightenment, the concept of classic civic republicanism that citizens’ responsibility to community is as important as individual liberty, and the USA republic’s Constitutional mandate to promote the Geberal Welfare. 


“Turn Your Old, Cracked Android Phone Into a Backup Server! (UrBackup/Linux Deploy Tutorial Part I)” [Hannah Tech, via Naked Capitalism Water Cooler 6-21-21] “Today, I’m going to show you how to run a full-fledged backup server on a rooted Android phone with UrBackup and Linux Deploy! Plastic waste isn’t going away, but the next big pollution problem to compound our anxieties is e-waste. So why toss out a perfectly good, albeit cracked and worn, phone? Besides, that old phone of yours: 1. Probably isn’t even that old (do you get a new computer every 1-2 years????) 2. Probably has 4-8 processors and ~4 GB of RAM- and definitely has a built-in UPS. Slap an external hard drive on it, and it looks like the perfect candidate to back up your entire home network!” • I definitely won’t be doing this, but the idea is brilliant, and some readers might try it out.…

The Man Who Loved Presidents
By Thomas Frank
On Jon Meacham

    Why You Hate Contemporary Architecture

    The Biggest Churches in the World: Anglo-Norman eleventh-century cathedrals

    Say, What’s this Bitcoin Thing We Keep Hearing About in the News?

    Bitcoin made big news within the last several weeks, as El Salvador became the first nation to pass a law allowing the electronic currency to be accepted as legal tender within that country.

    It became bigger news a little over a week later, when the World Bank declined to support El Salvador's use of the cryptocurrency.

    All these actions raise some basic questions. Namely, what is Bitcoin and how exactly does it work? For the answer to those questions, we turned to Grant Sanderson's 26 minute 3Blue1Brown video to find out:

    Meanwhile, if you want a real flash from the past, here's the first analysis we saw from an economist on the topic of bitcoin. Here's an excerpt from their recent e-mail on the topic of Bitcoin's adoption by El Salvador.

    Bonus Update: What's the future for blockchain ledger transactions? It could be cryptographic proofs, which would be an interesting way to 'compress' Bitcoin ledger transactions into a more resource efficient process (HT: Tyler Cowen).