Week-end Wrap – Political Economy – March 1, 2020

Week-end Wrap – Political Economy – March 1, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Chile's Struggle to Democratize the State
[NACLA, via Naked Capitalism 2-25-20]
A useful overview of the neoliberal policies enacted by the Pinochet regime three decades ago -- protesters chant, “It’s not 30 pesos, it’s 30 years!” referring to the transit fare hike that sparked the social uprising in October 2019 and the 30 years of enforced neoliberal economic devolution. Neoliberal policies were written in Pinochet's constitution, which is why Chileans are demanding a new constitution. 
General Augusto Pinochet’s 1980 Constitution both symbolizes and imposes the authoritarian model at the root of the ongoing mobilization. The Constitution institutionalized the economic and political domination of the dictatorship and enshrined a neoliberal framework that erased the role of the state in social and economic areas. It restricted political participation, gave the Right disproportionate power, and installed a tutelary role for the armed forces.... 
Pinochet’s radical neoliberal transformation privatized the pension system and promoted the development of a private sector in the health and education fields. These privatizations have perpetuated inequality and reinforced extreme social divisions. Moreover, Chile is the only country in the world with almost completely privatized water—Chapter III, Clause 24 of the 1980 Constitution establishes the “right” to private ownership of water. 
....A 2019 study by The Lancet showed that a woman in a poor district of Santiago lives some 18 years less than a woman in a rich neighborhood in the same city.
.... popular symbols have changed. In large demonstrations in the past, people carried the banners of their political parties or social organizations. Such banners are gone in the protests today, reflecting the spontaneous nature of the social explosion and its distance from the political parties.
[I can see these types of protests erupting in USA, as people give up hope that either the Republican Party - taken over by grifter Trump who lied about his intention to implement populist policies - and the Democratic Party, which is fighting desperately to prevent populist policies from being carried into office by Sanders or Warren.]
Some 70 to 80 percent are in favor of a new Constitution—forged under democracy—to guarantee social rights. Chileans now look forward to the national plebiscite called for April 26 to vote for a path toward a Constitution that will protect the rights to education, health, and decent pensions, among others.
View of the protest of an estimated 1.2 million people in Santiago, October 25, 2019. (Hugo Morales/Wikimedia)

The Carnage of Establishment Neoliberal Economics

Poverty Is All About Personal Stress, Not Laziness
[Bloomberg, via The Big Picture 2-25-20]
Economists are starting to accumulate evidence that instead of being indolent layabouts, poor people are harried and frantic. To deal with a world of precarity, where any misstep or piece of bad luck can lead to disastrous consequences, requires a massive amount of cognitive effort. And it’s the stress of that constant effort, rather than bad morals or welfare-inspired laziness, that drives many poor people to make subpar decisions....

Economist Sendhil Mullainathan of Harvard University has been at the forefront of the effort to better understand the challenges of poverty. In 2013, along with co-authors Anandi Mani, Eldar Shafir, and Jiaying Zhao, he published a groundbreaking paper entitled “Poverty Impedes Cognitive Function.” They found that when low-income shoppers in New Jersey thought about their finances, their cognitive performance went down. But that didn’t happen for higher-income subjects. This suggests that stress taxes the mind more than finances. In a second experiment on Indian farmers, they found that cognitive performance is worse before a harvest, when finances are tight.

Mullainathan expanded this result into a general theory of poverty. Scarcity, he believes, begets stress, which leads to bad decisions, which creates even more scarcity. Thus, poor people get trapped in an exhausting but inescapable cycle of precarity.

Flux: Wealth in the United States 
Barry Ritholtz, February 26, 2020 [The Big Picture]
Middle Class Now Holds Less Wealth than Top 1 Percent

Source: Survey of Consumer Finances and Brookings
[Boston Review, via Naked Capitalism 2-28-20]
The Debt Collective’s first debtors’ union, organized in 2014, brings together people holding debts from for-profit colleges. This collective has won not only more than $1.5 billion in debt cancellation to date but also the attention of policy makers. Indeed, in June 2019, when Representatives Ilhan Omar, Pramila Jayapal, Alexandria Ocasio-Cortez, along with Sanders, introduced their College for All legislation that would abolish student debt and make public college free, it was Pamela Hunt—Debt Collective member and student debt striker—who they invited to take the microphone. “I have $212,000 dollars of student debt, $51,000 of which is interest alone,” Pam began. “I stand before you as a person who pursued a higher degree and was worse off because of it.”
China Has More Billionaires Than U.S. And India Combined: Hurun Report 
[Caixin Global, via Naked Capitalism 2-27-20]

Predatory Finance

How Blackstone became the world’s biggest corporate landlord 
[Fortune, via The Big Picture 2-24-20]
Printing’s Not Dead: The $35 Billion Fight Over Ink Cartridges
[Businessweek, via The Big Picture 2-28-20]
The Dangerous Deeds of Carl Icahn: A Top Defender of Trump’s Economic Agenda is a Major Destroyer of American Jobs

Restoring balance to the economy

[BBC, via Naked Capitalism 2-28-20]. 
“In 2015, the boss of a card payments company in Seattle introduced a $70,000 minimum salary for all of his 120 staff – and personally took a pay cut of $1m....
Since then, Gravity has transformed. The headcount has doubled and the value of payments that the company processes has gone from $3.8bn a year to $10.2bn.
But there are other metrics that Price is more proud of. "Before the $70,000 minimum wage, we were having between zero and two babies born per year amongst the team," he says. "And since the announcement - and it's been only about four-and-a-half years - we've had more than 40 babies."
....Senior staff have found their workload reduced. They're under less pressure and can do things like take all of the holiday leave to which they are entitled. Price tells the story about one staff member who works in Gravity's call centre.
"He was commuting over an hour and a half a day," he says. "He was worried that during his commute he was going to blow out a tyre and not have enough money to fix that tyre. He was stressing about it every day."
When his salary was raised to $70,000 this man moved closer to the office, now he spends more money on his health, he exercises every day and eats more healthily.
"We had another gentleman on a similar team and he literally lost more than 50lb (22kg)," he says. Others report spending more time with their families or helping their parents pay off debt. "We saw, every day, the effects of giving somebody freedom," Price says. He thinks it is why Gravity is making more money than ever.
Raising salaries didn't change people's motivation - he says staff were already motivated to work hard - but it increased what he calls their capability. "You're not thinking I have to go to work because I have to make money," Rosita Barlow agrees. "Now it's become focused on 'How do I do good work?'"
These are exactly the results expected under the forgotten Doctrine of High Wages, which was one of the key tenets of American School political economy in the 1800s, when USA industrialized and emerged as a world power. 

5 Arrested as Dozens of Airline Catering Workers Protest at CLT
[AFL-CIO North Carolina 2-19-20]
Five people were arrested and dozens of workers protested at Charlotte Douglas International Airport as part of national day of action on Valentine’s Day calling on airlines like American, Delta, and United to take action to end poverty and unaffordable health care in the airline catering industry.”

Health Care Crisis

"Medicare For All Would Save $450 Billion Annually While Preventing 68,000 Deaths, New Study Shows
[Newsweek, via Avedon's Sideshow 2-28-20]
The Medicare For All plan proposed by Democratic presidential candidates Bernie Sanders and Elizabeth Warren would save taxpayers hundreds of billions of dollars each year and would prevent tens of thousands of unnecessary deaths, a new study shows. The analysis, conducted by researchers at Yale University, the University of Florida and the University of Maryland, found that transitioning the U.S. to a single-payer health care system would actually save an estimated $450 billion each year, with the average American family seeing about $2,400 in annual savings. The research, which was published Saturday in the medical journal The Lancet, also found that Medicare for all would prevent about 68,000 unnecessary deaths per year. 'Our study is actually conservative because it doesn't factor in the lives saved among underinsured Americans—which includes anyone who nominally has insurance but has postponed or foregone care because they couldn't afford the copays and deductibles,' Alison Galvani, an author of the study and researcher at the Center for Infectious Disease Modeling and Analysis at the Yale School of Public Health, told Newsweek."

[Twitter, via Naked Capitalism 2-27-20]
Theres an am*zon warehouse in my city. 4000 + workers. Many of my friends work there and had a stomach bug after thanksgiving. Sups didnt care and just put trash cans on the sorting line for them. Its gonna be a problem

“Trump Has Sabotaged America’s Coronavirus Response” 
[Foreign Policy, via Naked Capitalism 2-25-20] 
“In 2018, the Trump administration fired the government’s entire pandemic response chain of command, including the White House management infrastructure. In numerous phone calls and emails with key agencies across the U.S. government, the only consistent response I encountered was distressed confusion. If the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it isIf the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it is—not just for the public but for the government itself, which largely finds itself in the dark…. 
In the absence of a formal structure, the government has resorted to improvisation. In practical terms, the U.S. government’s public health effort is led by Daniel Jernigan, the incident commander for the Wuhan coronavirus response at the CDC. Jernigan is responsible for convening meetings of the nation’s state health commissioners and briefing CDC Director Robert Redfield and his boss, Azar. Meanwhile, state-level health leaders told me that they have been sharing information with one another and deciding how best to prepare their medical and public health workers without waiting for instructions from federal leadership. The most important federal program for local medical worker and hospital epidemic training, however, will run out of money in May, as Congress has failed to vote on its funding.” 
“White House fears coronavirus could shape Trump’s 2020 fortunes”
[Politico, via Naked Capitalism 2-25-20]
A Naked Capitalism reader commented on another story two days later:
“The 20th century model of [pandemic] containment was protecting lives. The 21st century model is protecting markets.”

Naked Capitalism Water Cooler 2-24-20
Suppose you had #COVID-19 symptoms but co-pays and an enormous deductible. Would you seek help immediately? Would you put the visit off as long as possible? Or would you to gut it out, at home? Would you self-quarantine? Suppose you had only $400 for emergencies, like most Americans. What if you were a retail worker? Or a server? Could you self-quarantine? 
“A Miami man who flew to China worried he might have coronavirus. He may owe thousands.” [Miami Herald, via Naked Capitalism 2-25-20]
“After returning to Miami last month from a work trip in China, Osmel Martinez Azcue found himself in a frightening position: he was developing flu-like symptoms, just as coronavirus was ravaging the country he had visited. Under normal circumstances, Azcue said he would have gone to CVS for over-the-counter medicine and fought the flu on his own, but this time was different. As health officials stressed preparedness and vigilance for the respiratory illness, Azcue felt it was his responsibility to his family and his community to get tested for novel coronavirus, known as COVID-19. He went to Jackson Memorial Hospital, where he said he was placed in a closed-off room. Nurses in protective white suits sprayed some kind of disinfectant smoke under the door before entering, Azcue said. Then hospital staff members told him he’d need a CT scan to screen for coronavirus, but Azcue said he asked for a flu test first. ‘This will be out of my pocket,’ Azcue, who has a very limited insurance plan, recalled saying. ‘Let’s start with the blood test, and if I test positive, just discharge me.’ Fortunately, that’s exactly what happened. He had the flu… But two weeks later, Azcue got unwelcome news in the form of a notice from his insurance company about a claim for $3,270.”

Here is an example of public virtue, the key to successful republican self-government
[Twitter, via Naked Capitalism 2-25-20]
My wife and I shared a moment today over how touched we were reading about the Culinary Union workers stating frankly that the risks they'd face with were worth it because they knew so many people without healthcare who needed it. We face a similar risk. 1/

Climate and environmental crises

Researchers find new reason Arctic is warming so fast 
[PhysOrg, via Naked Capitalism 2-26-20]

Fossil-Fuel Subsidies Must End 
[Scientific American, via Naked Capitalism 2-26-20]  

Commandant of Marine Corps orders immediate removal of Confederate symbols from all its bases
Walter Einenkel, Daily Kos Staff [Daily Kos 2-27-20]

Information Age Dystopia

This Assange “Trial” Is A Self-Contradictory Kafkaesque Nightmare
[Caitlin Johnstone, via Naked Capitalism 2-29-20]
“This is so fucked up. He is in a glass booth and cannot hear what is going on. The judge says that he can only talk through his lawyers. But then the judge says that he is forbidden to talk to his lawyers, even with notes. But also that he cannot sit with his lawyers as he is so dangerous he might kill someone.”
Google’s Black Box Algorithm Controls Which Political Emails Land in Your Main Inbox 
[Common Dreams, via Naked Capitalism 2-24-20]
MSNBC's Nicole Wallace admitted as much Saturday evening, lamenting that she has "no idea what voters think about anything anymore" following Sanders' overwhelming caucus victory, powered by the mobilization of a diverse coalition of voters across Nevada. UCLA's Latino Policy and Politics Initiative estimated Sunday morning, with around 60% of precincts officially reporting, that Sanders won over 70% of the Latino vote in the Nevada caucus. 
"You have someone talking about, in a way we have not heard, genuine deeper democracy, popular movements, human equality in a meaningful way, and a politics of love in the tradition of Dr. King—and winning elections," Giridharadas said of Sanders. "I think this is a wake-up moment for the American power establishment, from Michael Bloomberg to those of us in the media to the Democratic Party to donors to CEOs."

David Sirota tweets videos showing Sanders speaking against GOP cuts to Social Security in January 1995, followed by Biden bragging how fiscally responsible he is by supporting the GOP cuts
[via Naked Capitalism 2-28-20]

"Culinary Workers Bucked Their Leadership by Backing Bernie Sanders in Nevada. Here's What They Knew."
[The Intercept 2-23-20, via Avedon's Sideshow 2-28-20]

Democratic- Party leadership insists on suicide

Democratic Leaders Willing to Risk Party Damage to Stop Bernie Sanders
[New York Times 2-27-20]

The Superdelegates Are Nervous, And many of them tell us they’re willing to use a brokered convention to stop Bernie Sanders.
[New York Times 2-27-20]
One prominent Democrat put the “freakout level” at a 12 — on a scale of one to 10. In private conversations, members of Congress used words like “disaster” and said Mr. Sanders had “hijacked the party.” One lawmaker described the mind-set as “depression mode.” (Many of these people threw in some expletives, too.)

[FiveThirtyEight, via Naked Capitalism 2-29-20]

"Tom Perez Should Resign, Preferably Today:
David Dayen [via Avedon's Sideshow 2-28-20]
Tom Perez should never have been DNC chair. He was used as part of a proxy war between Barack Obama's faction of the establishment and the rest of the party, which was fully ready to move on after the 2016 mess. Both Harry Reid and Chuck Schumer had embraced Keith Ellison, one of Bernie Sanders's top surrogates in 2016, for the position, a show of unity that might have helped rebuild broken bonds within the party. Just as Howard Dean's elevation to DNC chair in 2005 brought insurgents within a broader circle of power, Ellison's victory would have at least attempted a rough union between the Sanders and Clinton forces, and given the party's left wing more of a shot at creating a strong and legitimate message to counter Donald Trump. Obama couldn't handle it. He pressured Perez, who was musing about running for governor in Maryland, into the race, and bore down on the establishment to break with the Ellison unity shtick and accept his preferred candidate. This eventually succeeded, with the help of a party coup in Puerto Rico that delivered Perez all of that delegation's votes. 
Obama, now a movie studio boss and occasional public speaker, had no personal reason to force Perez on the party. The most logical reading of his rationale would be that he did it for the blob, the network of consultants, strategists, pollsters, lobbyists, policy mandarins, and media figures for whom politics is their business. They didn't want the spigot to close on the hundreds of millions of dollars that flow through campaigns, and they needed to eliminate the threat of a gatekeeper like Ellison, who might have different ideas. So Perez was installed. The disastrous past week of Democratic politics is the result, deeply damaging the perceived competence of a party that is attempting to ask the American people to put them back in power to engage in activist government. The Iowa results weren't just one snafu but part of a pattern of self-dealing and stupidity within a party elite that's more concerned with staying in power than taking power."

“Bloomberg catches himself from saying he “bought” House races in 2018″
[CNN, via Naked Capitalism 2-26-20]
Bloomberg's Freudian slip: “All of the new Democrats that came in, put Nancy Pelosi in charge, and gave the Congress the ability to control this President, I boug… I got them.”
Stop Bloomberg. He's showing billionaires how to buy the presidency and it's dangerous
USA Today, via Avedon's Sideshow 2-28-20]
"How far would you go to get rid of President Donald Trump? Would you give up any pretense that we live in a democracy of the people, by the people, for the people? That seems to be the bet Mike Bloomberg is making. [...] While it might feel comforting to have our self-made real billionaire beat the spray tan off the fake mismanager of his daddy's wealth, here's the spoiler: You don't have any billionaires; they have you. And once they figure out it's easier and cheaper to buy the presidency than an NFL franchise, the excesses of Trump — or even King George III — will seem trivial in comparison."
End the GOP: In order to save our democracy, we must not merely defeat the Republican Party.
[The New Republic, February 13, 2020]
Every single aspect of [Trump's] administration has been foreshadowed not only by fringe figures within the GOP and voices in the conservative media, but also by the last Republican president—a man now embraced, sometimes literally, by liberal and moderate conservative figures decrying Trump’s conduct. Trump’s own rhetoric of division and exclusion was preceded by the 2004 reelection campaign for George W. Bush, which took advantage of homophobia to boost turnout from social conservatives. Before thousands of Puerto Ricans devastated by Hurricane Maria were forced by the Trump administration’s shoddy recovery effort to ask themselves whether they were really Americans after all, thousands of African Americans failed by the Bush administration’s relief efforts after Hurricane Katrina posed the same question to themselves. Trump’s intimations that the federal executive is above the law may well have been bolstered by the Bush administration’s warrantless surveillance of the American people. Even Trump’s efforts to integrate his companies within the processes of the state were preceded by the Bush administration’s curious keenness for contracts with Halliburton, the company Vice President Dick Cheney ran before Bush took office.
The propaganda and misinformation campaigns that characterize what some have called a new post-truth era under Trump should, in fact, be quite familiar to those who remember the denialism that characterized defenses of the Iraq War and the hundreds of thousands of casualties it produced. The two Republicans who have occupied the White House in the first two decades of the new millennium have shared not only an address, but an enthusiasm for torture and war crimes, a zeal for using fear and the threat of terrorism to quash political dissent, and near-total support from the Republican political establishment.
In the years since the end of the Bush era, we have seen figures within the Republican Party denigrate African Americans, Hispanics, Muslims, and gender and sexual minorities. We have seen the Republican Party repeatedly back cuts to critical social programs under the pretense of fiscal discipline only to pass giveaways to major corporations, the wealthy, and an already gluttonous military. The character of the GOP is not an open question. Even those who suggest otherwise know it—the American political establishment meets each fresh stain the GOP leaves on the American conscience not with genuine surprise, but with performances of disbelief. Impotent in the face of a party that defied all political convention and wisdom with its victory in the last election, and unwilling to reshape a political order that offers them sinecures, political elites have only indignation and repetition as recourse....
It’s left to the rest of us to face the truth squarely: Donald Trump is not a departure from the values defining the Republican Party, but the culmination of its efforts to secure power in this country. The question before us is not how much more the Republican Party might be willing to tolerate from the president but how much more we are willing to tolerate from the Republican Party....
Bipartisanship has become a both particularly sacred and particularly destructive part of the American civil religion, a hollow and superficial virtue promoted by political elites responsible for the domestic and foreign policy failures the two parties have crafted together over the past 30 years—from the Iraq War and support for oppressive regimes abroad to the expansion of extreme poverty and the carceral state at home. But bipartisanship, as Biden knows, also remains appealing to the majority of the American electorate, including the majority of Democrats. The daunting task ahead for progressive activists is convincing ordinary voters that a major political party—prejudiced, venal, and unmoored from reason—can lose the right to govern. Because without a pressure campaign making it clear that Republican power is unsustainable for the country and the planet—that a party in thrall to a racist demagogue and aligned against the Voting Rights Act is not only disagreeable but dangerous—Democrats will never build the support necessary to structurally reform and rebalance the American political system.
Biden and the centrists of the contemporary political establishment are not the first generation of optimists to hope that the Republican Party might return from a period of shame to moderation and political respectability. Barry Goldwater’s catastrophic campaign in 1964 sparked widespread speculation among liberals that right-wing politics could never take root in America. But it was followed by a Nixon campaign in ’68 that set the template for the deployment of white grievance politics as an electoral strategy. The skullduggery of Watergate was followed by Reagan and the mythology of the welfare queen. And it was the 1988 campaign of George H.W. Bush, another establishment figure and policy moderate, that attempted to terrify white voters with the Willie Horton ad and dog whistles about race and crime. His son, having ridden into the White House on the promise of a “compassionate conservatism,” made opposition to gay marriage a centerpiece of his second campaign.
[The Nation, via Naked Capitalism 2-28-20]
....some kind of reform must happen under the next Democratic administration, whenever that is. Republicans have changed the rules when it comes to Supreme Court appointments. We can’t just go back to the way things were before Kavanaugh, before Gorsuch, and before McConnell.

The Republicans didn’t win the Supreme Court in one day or in one election. They spent a generation figuring out how to take control of it. They poured money and political resources into promoting their vision, and they built an entire infrastructure to help them pull off a full-scale heist of the Supreme Court in broad daylight.
Not just the Supreme Court, but the entire judiciary is going to be a major problem -- it's infested with (Anti)Federalist Society ideologues who will have to be removed someway, somehow to restore the principle of equality before the law.