Week-end Wrap – Political Economy – September 25, 2022
by Tony Wikrent
[TW: A enthralling discussion of how they strove to make the film as authentic as possible. The clock ticking heard in the background of some scenes, for example, was a recording made of a watch Lincoln had actually owned. And Daniel Day Lewis describing how he researched and came to love Lincoln as a person is simply marvelous. ]
[The New York Review of Books, September 17, 2022]
My father, Jack Foner, lost his job at the City University of New York because of the legislative investigation of “Communist influence” on the school. This was in the early 1940s, before McCarthy. My mother, who was a high school art teacher and an artist in her own right, was also named and was going to be fired from the city educational system, but the principal of her school allowed her to retire on a medical disability instead so that she could get a pension. My family lived on my mother’s pension while I was growing up. Much later, in the late 1960s, my father was able to get a teaching job for the remainder of his career.
Blacklisting had a devastating impact on the teaching of history. Some of the very best scholars were thrown out of the profession. But I eventually realized that that experience was very educational. I learned something a lot of my college classmates didn’t know and had to learn during the 1960s: the rhetoric of freedom, liberty, and progress in our country does not comport with reality. A person losing his livelihood because someone called him a Communist—what does that tell us about freedom of speech, academic freedom in this country? The principles the country claimed to stand for and the practices it instituted were contradictory, which many young people came to discover in other ways, through the Vietnam War and the way the government lied or the civil rights revolution and the idea that we lived in equality….
“We can’t accept the principle that the way to judge a course of study is by how much money you will make. It’s important to study history if you want to be an intelligent citizen in a democracy…
Eric Foner [The New York Review of Books, September 22, 2022]
In Teaching White Supremacy, Donald Yacovone traces how the writing of American history, from Reconstruction on, has falsified and illuminated our racial past…..
Like most works of history, W.E.B. Du Bois’s Black Reconstruction in America concludes with a bibliography listing primary and other sources consulted by the author. Most of the groupings are unexceptional—for example, monographs, government reports, and biographies. But Du Bois’s first and largest category comes as a shock to the modern reader: it consists of books by historians who believe African Americans to be “sub-human and congenitally unfitted for citizenship and the suffrage.” Just before the bibliography, Du Bois includes a chapter, “The Propaganda of History,” that indicts the profession for abandoning scholarly objectivity in the service of “that bizarre doctrine of race that makes most men inferior to the few.” This was the state of historical scholarship in the United States when Black Reconstruction was published, in 1935.
[The Conversation, via Naked Capitalism 9-21-2022]
In its global rankings, the United Nations Office of Sustainable Development dropped the U.S. to 41st worldwide, down from its previous ranking of 32nd. Under this methodology – an expansive model of 17 categories, or “goals,” many of them focused on the environment and equity – the U.S. ranks between Cuba and Bulgaria. Both are widely regarded as developing countries.
The U.S. is also now considered a “flawed democracy,” according to The Economist’s democracy index.
As a political historian who studies U.S. institutional development, I recognize these dismal ratings as the inevitable result of two problems. Racism has cheated many Americans out of the health care, education, economic security and environment they deserve. At the same time, as threats to democracy become more serious, a devotion to “American exceptionalism” keeps the country from candid appraisals and course corrections.
Pam Martens and Russ Martens, September 22, 2022 [Wall Street on Parade]
A sampling of the more than 200 instances of fraud alleged by the New York State Attorney General is as follows:
“Relying on objectively false numbers to calculate property values. For example, Mr. Trump’s own triplex apartment in Trump Tower was valued as being 30,000 square feet when it was 10,996 square feet. As a result, in 2015 the apartment was valued at $327 million in total, or $29,738 per square foot. That price was absurd given the fact that at that point only one apartment in New York City had ever sold for even $100 million, at a price per square foot of less than $10,000. And that sale was in a newly built, ultra-tall tower. In 30 year-old Trump Tower, the record sale as of 2015 was a mere $16.5 million at a price of less than $4,500 per square foot.
“In the 2012 Statement, rent stabilized apartments at Trump Park Avenue were valued as if they were unrestricted, leading to a nearly $50 million valuation for those units—but an appraisal accounting for those units’ stabilized [rent] status valued them collectively at just $750,000;
“The Mar-a-Lago club was valued as high as $739 million based on the false premise that it was unrestricted property and could be developed and sold for residential use, even though Mr. Trump himself signed deeds donating his residential development rights and sharply restricting changes to the property – in reality, the club generated annual revenues of less than $25 million and should have been valued at closer to $75 million…
“Increasing the value of golf clubs to incorporate a ‘brand premium’ despite expressly advising in the Statements that brand value was not included in the figures and despite GAAP rules prohibiting inclusion of internally-generated intangible brand premiums. For example, in the 2013 Statement, the value of Mr. Trump’s golf course in Jupiter, Florida was further inflated by fraudulently adding 30% for the Trump ‘brand.’ Combining the inflation from using the fixed-asset approach with the 30% brand premium, Mr. Trump claimed that a club he purchased for $5 million in 2012 was worth more than $62 million in 2013. The 2013 Statement included the same fraudulent 30% brand premium for six other golf clubs.”
The carnage of mainstream neoliberal economics
[Twitter, via Naked Capitalism Water Cooler 9-22-2022]
[The Lens, via Naked Capitalism 9-19-2022] BP 9-21
This is an important piece on the US response to inflation that shows you have to ignore all the historical evidence to believe raising rates will solve the problem without pushing the cost onto working people.
Eric Topol [Ground Truths, via Naked Capitalism Water Cooler 9-19-2022]
“The reluctance for Americans to get a booster shot has been striking. The United States currently ranks 73rd among countries for its uptake of boosters at 33% of its population. All peer, rich countries around the world are at least double that rate. Countries ranking above the US now include Rwanda, Uzbekistan, Iran, Honduras, and Azerbaijan. Seemingly, you’d have to work very hard to show up this poorly as the country that first validated the vaccines, manufactures them, and has had such a surfeit supply that it has >50 million shots it can’t get anyone to take. Nonetheless, it has maintained optimism and purchased 171 million new Omicron BA.5 variant bivalent shots. There are many reasons for this abject failure—a veritable booster botch—stemming back to the beginning of the US booster campaign plan in August 2021, with mass public confusion induced by a different plan announced every few days and infighting between the different governmental agencies (CDC, FDA, NIH, WH) as to the appropriate strategy. This was compounded by the very late endorsement that boosters are necessary for all adults that did not come until the end of November, even though the data from Israel and other countries were clearcut many months prior to that juncture. Delays, confusion, and poor messaging got boosters off on the wrong footing. All the anti-science, anti-vax, mis- and disinformation hasn’t helped at all, and has never been effectively countered.”
[Twitter, via Naked Capitalism Water Cooler 9-19-2022]
[American Society for Epidemiology, via Naked Capitalism Water Cooler 9-22-2022]
“Air filtration simulation experiments quantitatively showed that an air cleaner equipped with a HEPA filter can continuously remove SARS-CoV-2 from the air. The capture ratios for SARS-CoV-2 in the air when the air cleaner was equipped with an antiviral-agent-coated HEPA filter were comparable to those with the conventional HEPA filter, and there was little effect on SARS-CoV-2 in the air that passed through the antiviral-reagent-coated HEPA filter.”
[Yale School of Public Health, via The Big Picture 9-18-2022]
In the United States, death rates from COVID-19 are higher than in any other high-income country—and our fragmented and inefficient health system may be largely to blame, Yale researchers say in a new study.
Suicide by neoliberalism
Stephanie Kelton [The Lens, via Mike Norman Economics 9-20-2022]
Alpert: This is the second time in 15 years that conventional thinking about oil has gotten things very wrong. The error has been compounded by the Russian invasion of Ukraine, which actually came rather late in an oil price shock that was already well underway.
Oil shocks, and energy shocks more broadly, are conventionally attributed to supply constraints (either real or artificial) or demand surges (chiefly during periods of rapid expansion, either globally or regionally). But since late 2007 the financialization of oil has led to the use of the commodity in hedging and speculation strategies not directly related to the commodity itself, but to using the dollar denominated commodity to hedge U.S. inflation and the dollar itself (Bouchouev). Accordingly, during periods in which traders fear that the Fed will be forced into highly accommodative policy (especially in the most recent round in which such policy was accompanied by unprecedented fiscal stimulus and unique, albeit temporary, supply constraints related to the pandemic) they have increasingly tended express their concern regarding the prospect for inflation resulting in dollar devaluation by going long oil futures.
Pam Martens and Russ Martens, September 15, 2022 [Wall Street on Parade]
The nonpartisan watchdog group, Accountable.US, has released the results of an investigation into how committed to democracy the 100 largest corporations in America are. The corporations were graded on support for voting rights, the electoral process, and American democracy. The results were provided in an interactive resource called the American Democracy Scorecard.
Researchers looked at 14 key criteria. Seven elements of the criteria involved making pro-democracy statements, being affiliated with pro-democracy organizations, and taking other pro-democracy actions. Seven other criteria involved corporate contributions to elected officials who are undermining democracy and voting rights.
Three of the largest mega banks on Wall Street, JPMorgan Chase, Morgan Stanley, and Wells Fargo, flunked the democracy test, each receiving a score of “F.” Goldman Sachs received a “D.” Bank of America and Citigroup received a “B” grade, but, clearly, that was based on very recent history.
Both Bank of America’s Merrill Lynch brokerage unit and Citigroup (along with most other major Wall Street firms) have compelled their workers for decades to relinquish the Seventh Amendment to the U.S. Bill of Rights – the right to a jury trial – and agree to bring all legal disputes into Wall Street’s private justice system called “mandatory arbitration” as a condition of getting a job at the company. To put it simply, Wall Street, for decades, has been forcing its workers to forego a constitutional right in order to receive a paycheck. (See here and here.) For this reason alone, these Wall Street corporations should have flunked the democracy test.
Peter Radford [via Mike Norman Economics 9-20-2022]
Economists do not study economies. They study economics. They study their own models and other stylized facts in ever more detail and abstraction. They have substituted technical wizardry for contemplation. They privilege mathematics over other kinds of analysis. And they scrupulously avoid entanglement with history which might drag them into a conversation about just how they arrived atop Mount Economics far above the plains of reality below….
One of the great ironies of economics is that it, too, acts as a guild. It decides what economic knowledge is good and which is bad. It selects only certain parts of its own history to create the “right” narrative. It tells its own stories of what it wants outsiders to know. And it defies, quite often, its own teaching by so doing. After all, economics tells us that restraints on trade are harmful to the great fulfillment of the harmonic perfection of market efficiency. So why are there tenured professors of economics? Tenure is a restraint on trade. Where are the market forces determining what economics is or is not? Ought those professors not step down from tenure and expose themselves to a proper market for whatever it is they are selling? Isn’t that, then, the method we ought employ to determine the value of economics?
Bill Mitchell [billy blog, via Mike Norman Economics 9-18-2022]
I remember a conversation I had when I was picked up hitch hiking to Melbourne from where I was living down the coast. It was during the 1970s inflationary period, which had morphed into stagflation as a result of deliberate government policy to create unemployment and discipline the wage-price spiral. The driver was a manual worker and during a conversation about the state of the economy (I was studying economics at the time) he said “the government should care about employment because at least then everyone has a job even if prices are rising”. That conversation stuck with me because it summed up what research shows in more sophisticated ways – the costs of inflation are minimal when compared to the devastating costs of unemployment. At present, our policy makers are unwilling to recognise that reality because it is not them that bear the costs.
“Nothing will fundamentally change”
[Washington Post, via The Big Picture 9-18-2022]
The high cost of settlements over police misconduct has led insurers to demand police departments overhaul tactics or forgo coverage.
This is plutocracy, not capitalism
Andrew Perez, September 23, 2022 [The Lever]
During a televised hearing, a Wall Street-friendly GOP lawmaker thanked a bank CEO for hiring his top aide.
Aditi Ramaswami, September 19, 2022 [The Lever]
In just five minutes, we’ll tell you what you need to know about the biggest political donors this election season.
Climate and environmental crises
[Maritime Logistics Professional, via Naked Capitalism 9-20-2022]
[Vice, via The Big Picture 9-21-2022]
“Water is now a valuable asset for us, and as it becomes more scarce, the more we will fight to make sure we have enough,” a cartel operative told VICE World News.
[Gizmodo, via Naked Capitalism 9-22-2022]
[The New Republic, via Naked Capitalism 9-21-2022]
[High Country News, via Naked Capitalism 9-21-2022]
Restoring balance to the economy
Rishika Pardikar, September 23, 2022 [The Lever]
A landmark 2021 Dutch district court ruling ordered Shell to slash emissions by almost half by 2030. Now the oil and gas company is appealing the decision, claiming the emissions target is “just not feasible — or even reasonable,” and arguing that consumers who buy its products are actually the ones responsible for the climate disaster.
But Milieudefensie, the Dutch environmental organization that spearheaded the Shell lawsuit, is ready to fight back and is even optimistic about the outcome of the appeals process. This time, the environmentalists are contemplating a radical litigation tactic: holding Shell board members personally accountable for violating human rights by furthering the climate crisis.
Both Shell’s appeal and Milieudefensie’s planned response could prove pivotal in the battle to combat climate change, since both tacks aim to put a personal spin on corporate climate malfeasance. While the fossil fuel giant wants to pin the blame on its customers, climate defenders are taking aim at the corporate shield that protects the business executives behind these disastrous decision-making processes from liability.
[Axios, via Naked Capitalism Water Cooler 9-22-2022]
“Google suffered a significant loss Wednesday when a European court denied its appeal of an antitrust decision and issued a fine of 4.1 billion euro ($4.13 billion), a record penalty. Google had challenged an earlier EU ruling that said it used its Android mobile operating system to stymie rivals, but Europe’s second-highest court upheld it. The hefty fine and ruling is a win for top EU antitrust official Margrethe Vestager, who has aggressively prosecuted Big Tech companies, and could set a precedent for future European antitrust rulings covering tech giants.”
Lambert Strether asks: “Why the small fine?” [TW: Alphabet Inc. (the name Google rebranded itself under) had revenues of $257.6 billion in 2021, and net income of $76.0 billion, while using aggressive tax accounting to avoid paying almost all taxes.]
David Dayen, September 23, 2022 [The American Prospect]
Today on TAP: Foreclosure activist-turned-journalist Lisa Epstein’s work leads to another victory over a predatory company.
Robert Kuttner, September 22, 2022 [The American Prospect]
In March 1975, I took a job as chief investigator of the Senate Banking Committee. My boss, Sen. William Proxmire of Wisconsin, had just become chairman, and he was looking for a journalist with a financial and investigative background to fill the newly created post.
Proxmire had been the very effective chair of the Subcommittee on Consumer Affairs. He was the nemesis of the banking industry. He had successfully sponsored Truth in Lending, Fair Credit Reporting, and Equal Credit Opportunity legislation. After the 1974 election, the banking lobby did everything they could to block Proxmire, now the senior Democrat on the committee, from ascending to chair, but they failed….
THE REINVESTMENT MOVEMENT WAS SPEARHEADED by three national groups and some inspired local leaders. In Chicago, a stay-at-home mother of six named Gale Cincotta lived in the Austin neighborhood on Chicago’s West Side, a prime target of blockbusters. In the late 1960s, Cincotta, the daughter of Italian and Greek immigrants, organized the Organization for a Better Austin (OBA) to resist blockbusters and press for normal bank credit; then in 1972, she created National People’s Action on Housing, later renamed National People’s Action and finally just People’s Action.
Cincotta connected with a Saul Alinsky–trained organizer named Shel Trapp. Their strategy was classic Alinsky: Organize your neighbors, do your homework, embarrass the bad guys, work the press, and win some modest victories, which then energizes neighbors to fight for bigger victories.
With her immense blond bouffant hairdo and street-smart bravado, Cincotta was great newspaper copy for her David-and-Goliath battles. When President Ford signed the Home Mortgage Disclosure Act, it was a banner headline story in the Chicago Tribune, crediting a jubilant Cincotta.
Eric Alterman, September 23, 2022 [The American Prospect]
Michael Tomasky on how a dissident, if realistic, assessment of the economy became mainstream.
I want to thank Eric and the Prospect for giving me some space today to tell you about my new book. It’s called The Middle Out: The Rise of Progressive Economics and a Return to Shared Prosperity and was published earlier this month by Doubleday.
What’s it about, and why is it unique? I wrote the book to tell the story of the effort over the past decade or so by hundreds of people to change, as Joe Biden sometimes likes to say, “the economic paradigm.” ….
Well, Biden didn’t coin that phrase. I didn’t coin it. It was coined by Nick Hanauer and Eric Liu back in 2011. The fact that the phrase is more than a decade old reinforces my point above—a lot of people have been thinking about these problems for a long time….
3. Economics has changed profoundly in this century. In sum, much of economics has moved from being based on theoretical modeling to being based on empirical data. And as this change has happened, economics has moved left, not because economists are leftists, but because the empirical data showed, for example, that r > g, in Thomas Piketty’s famous formulation. That is, the data show that the system is rigged for the rich in a way theoretical modeling did not. There are still, of course, plenty of conservative economists, but a younger and more diverse generation of economists is changing the profession, and those changes are seeping their way into politics.
4. Finally, here’s how the Democrats should explain all this to people. Republicans and the right are not, of course, just going to lie down and stop arguing economics. We’re in for a long battle. I think the best way for Democrats to win it is this: They need to attach their economic ideas to the ideals that Americans are taught to cherish from an early age—democracy and freedom. They should say something like: Yes, our economic policies will put more money in your pocket. But they’ll do more. They are good for democracy, because as the founders knew, a healthy democracy depends on a strong middle class. Too much economic and political power in the hands of the rich leads to oligarchy, and that’s where we’re headed if the trend of the last few decades isn’t arrested.
Creating new economic potential - science and technology
[NASA, via The Big Picture 9-20-2022]
“This juxtaposition provides us with a rich understanding of the geologic history after the crater formed and a diverse sample suite. For example, we found a sandstone that carries grains and rock fragments created far from Jezero Crater – and a mudstone that includes intriguing organic compounds.”
Information age dystopia
Matt Taibbi [TK News, via Naked Capitalism 9-18-2022]
Matt Taibbi [TK News, via Naked Capitalism 9-20-2022]
[OpIndia, via Naked Capitalism 9-18-2022]
[The Saturday Paper, via Naked Capitalism 9-18-2022]
[The Guardian, via Naked Capitalism 9-19-2022]
[Tel Aviv University, via Naked Capitalism Water Cooler 9-22-2022]
“The study was based on data that dates back to the 2004 advent of Facebook at Harvard University, before it took the internet by storm. Facebook was initially accessible only to Harvard students who had a Harvard email address. Quickly spreading to other colleges in and outside the US, the network was made available to the general public in the US and beyond in September 2006. The researchers were able to analyze the impact of social media use by comparing colleges that had access to the platform to colleges that did not. The findings show a rise in the number of students reporting severe depression and anxiety (7% and 20% respectively). …. The study combined information from two different datasets: the specific dates on which Facebook was introduced at 775 American colleges, and the National College Health Assessment (NCHA), a survey conducted periodically at American colleges…. the methodology also considered any differences in mental health over time or across colleges that were not related to Facebook. This approach enabled conditions similar to those of a ‘natural experiment,’ which would be impossible today now that billions of people around the world use many different social networks.”
Ed Snowden [Continuing Ed., via Naked Capitalism 9-21-2022]
Our glittering nation of laws observes this year two birthdays: the 70th anniversary of the National Security Agency, on which my thoughts have been recorded, and the 75th anniversary of the Central Intelligence Agency.
The CIA was founded in the wake of the 1947 National Security Act. The Act foresaw no need for the Courts and Congress to oversee a simple information-aggregation facility, and therefore subordinated it exclusively to the President, through the National Security Council he controls.
Within a year, the young agency had already slipped the leash of its intended role of intelligence collection and analysis to establish a covert operations division. Within a decade, the CIA was directing the coverage of American news organizations, overthrowing democratically elected governments (at times merely to benefit a favored corporation), establishing propaganda outfits to manipulate public sentiment, launching a long-running series of mind-control experiments on unwitting human subjects (purportedly contributing to the creation of the Unabomber), and—gasp—interfering with foreign elections. From there, it was a short hop to wiretapping journalists and compiling files on Americans who opposed its wars.
In 1963, no less than former President Harry Truman confessed that the very agency he personally signed into law had transformed into something altogether different than he intended, writing:….
Jacobin, via Naked Capitalism 9-21-2022]
[Dallas Morning News, via Naked Capitalism 9-21-2022]
[Bloomberg, via Naked Capitalism Water Cooler 9-22-2022]
[The Tablet, via Naked Capitalism 9-22-2022]
Conservative / Libertarian Drive to Civil War
Pam Martens and Russ Martens, September 19, 2022 [Wall Street on Parade]