Monthly Archives: September 2020

Fed Minion ‘Accidentally’ Signals Tighter Monetary Policy as S&P 500 Investors Shift Focus Toward 2021

The S&P 500 (Index: SPX) has come to revolve as much around the miscellaneous pronouncements of various minions of the Federal Reserve as it does about their expectations for the fundamental future business prospects of the 500 largest publicly-traded U.S. companies.

The latest sign of how deeply dependent investors have become on those pronouncements on Tuesday, 22 February 2020. Speaking to a virtual forum of Official Monetary and Financial Institutions, Chicago Fed President Charles Evans 'accidentally' set a new expectation the Fed's future monetary policy would be less expansionary than it previously communicated it would be in announcing its new average inflation target policy.

For the dividend futures-based model we use to project the future potential levels of the S&P 500, that kind of change alters the model's amplification factor, which we think shifted from +1.0 to +1.5 as a direct consequence of Evans' statement. We've visually indicated that shift in the latest update of the alternative futures chart indicating the model's future projections.

That change also occurs as investors would seem to have shifted their forward-looking focus from 2020-Q4 toward the more distant quarter of 2021-Q1, which began last week. We think that shift can be best understood as the market starting to pay much closer attention to the 2020 election, whose outcome will have considerable impact on the future for the U.S. government's fiscal policies. We anticipate investors may switch their focus back and forth between 2020-Q4 and 2021-Q1 severval times before the end of the 2020 calendar year.

We've described Evans' rate hike statement as 'accidental' since he attempted to walk it back on the next day, though the level of the S&P 500 indicates his effort, combined with the statements of other Fed officials, was unsuccessful.

Speaking of which, there was quite a lot of noise coming from the Fed's minions in the trading week ending on 25 September 2020, mostly calling for the U.S. government to step up its fiscal stimulus efforts. There was other stuff too, but that's what stood out to us in reviewing what we consider to be market-moving headlines from the week's newstream.

Monday, 21 September 2020
Tuesday, 22 September 2020
Wednesday, 23 September 2020
Thursday, 24 September 2020
Friday, 25 September 2020

Barry Ritholtz presents the positives and negatives he found in the past week's economics and markets news over at The Big Picture.

Finally, for those looking for a primer of how the outcome of an election can alter the future expectations of investors, be sure to review the history of 2012's Great Dividend Raid, which we had the pleasure of documenting in real time as it happened!

Update 1 October 2020: Following the close of trading on 30 September 2020, we've tweaked the alternative futures chart to refine the start of the next redzone forecast range, which we're now showing as beginning on 1 October 2020. Here's the updated chart:

Alternative Futures - S&P 500 - 2020Q3 - Standard Model (m=+1.5 from 22 September 2020) - Snapshot on 30 Sep 2020

On Monday, 28 September 2020, investors shifted their forward-looking focus from 2020-Q1 back toward 2020-Q4. The new redzone forecast range assumes investors will hold their attention on 2020-Q4 through 28 October 2020. We anticipate investors may continue to shift their investing time horizon between these two quarters in the weeks ahead. While a strong focus on 2020-Q4 would see the trajectory of the S&500 run within the forecast range, we would see shifts toward 2020-Q1 would coincide with the trajectory of the S&P 500 running toward the low end of the forecast range, if not falling below it.

27/9/20: U.S. Labor Force Participation and Employment-Population Ratios

 Yesterday, I posted updates to the America's Scariest Charts series on the U.S. labor markets (see Two commonly over-looked and under-reported labor markets statistics worth covering in any analysis of economic conditions in the country are:

  • The labor force participation rate, and
  • The employment to population ratio.
Both have been shockingly impacted by the COVID19 crisis, and both are experiencing only partial recovery to-date. 

As the chart above illustrates:

  • U.S. Labor Force Participation rate stood at 61.8 at the end of August 2020, a slight deterioration on July 2020 (62.0), but above the COVID19 trough of 60.0 in April 2020. Current level is below 2020 average of 61.9, which is itself the lowest decade average since the 1970s. Excluding CIOVID19 period, latest reading for the participation rate is the absolute lowest since May 1977.
  • U.S. Employment to Population ratio has fallen to its all-time lows in April 2020, and has recovered since. At the end of August is stood at 56.5 percent, up on 51.3 percent pandemic period low, and in-line with the 2020 average to-date. Before the start of the pandemic, the ratio stood at 60.9 and the previous decade average was 59.3. In historical comparatives terms, the latest reading for this indicator is the lowest (excluding the pandemic period lows) since early 1983.
In terms of both indicators, current conditions in the U.S. labor markets are worse than those encountered at the worst points of any recession since 1983, including the depths of the Global Financial Crisis. And this assessment comes after 3 months of the ongoing 'recovery'. 

Week-end Wrap – Political Economy – September 27, 2020

Week-end Wrap – Political Economy – September 27, 2020
by Tony Wikrent

Slouching toward denouement 

Capitulation Will Not Halt Trump’s Coup
David Sirota, September 24, 2020
An important review of political events last week. Yoy may not agree with Sirota's interpretation, but his analyses has proven correct repeatedly. Remember that Sirota accurately outlined the future course of American politics in his 2008 book, The Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington
After Democrats spent the weekend signaling surrender on the Supreme Court vacancy and suggesting they have no appetite to fight over the judiciary or threaten to expand the court, Trump on Wednesday declared that he may not agree to a peaceful transfer of power, and he openly admitted that he is trying to rush through a judicial nominee so that the court can give him a second term. He suggested that he will “get rid of the ballots” and “there won't be a transfer, frankly. There'll be a continuation."
....Amid this onslaught, Democrats are behaving as if you can stop a coup merely by telling people to vote in an election where their ballots might get thrown out.  But the lesson here is the converse: Democrats’ culture of learned helplessness is no match for authoritarianism.
If opposition party [Democratic Party] lawmakers don’t stop imagining a return to normalcy and brunch — and if millions of Democratic voters don’t start immediately demanding that their party’s leaders begin fighting to stop Trump’s court pick right now — then whatever is left of American democracy is probably finished....
The Crescendo Of The GOP’s War On Democracy
What we see in this sequence of events is the simultaneous and horrifying culmination of the different kinds of “by any means necessary” pathologies that define each party. On the Republican side, this pathology is a relentless amoral quest for power that originally led the party into the realm of voter suppression and that now has resulted in a GOP president openly working to end democracy.

There is no pretense. There is no deception. This is a right-out-in-the-open attempt to destroy the system that lets voters choose their governmental leaders — and that initiative is happening not only in Washington, but in the states.

“According to sources in the Republican Party at the state and national levels, the Trump campaign is discussing contingency plans to bypass election results and appoint loyal electors in battleground states where Republicans hold the legislative majority,” The Atlantic reported yesterday....
The Democrats’ Learned Helplessness
This pathology has been long in the making. For years now, Democratic politicians have come to know that a generation of liberals raised on The West Wing and MSNBC roundtables has been inculcated to not merely tolerate selling out — but to laud it as an act of political savvy. If abandoning, say, pledges to support unions and helping the GOP grind workers into the dust theoretically helps a Democrat outmaneuver a Republican in a swing-state election, the Democratic voter is led to believe that this move must be Good, Smart and worthy of applause. Respect for institutions, bipartisanship and manners is more important than outcomes. 
Ironically, this capitulation-lauding mindset that prioritizes winning hasn’t actually won much — it has corresponded with some of the largest Democratic electoral losses in modern history, allowing the rise of the Republican fascism that now threatens to destroy our country.
David Sirota, September 20, 2020

‘Everyone sees the train wreck coming’: Trump reveals his November endgame
[Politico, via Naked Capitalism 9-25-20]
Steve Bannon says only in-person voting should be counted on Nov. 3rd, and there will be a "war" to "stop Biden from stealing" the election. Larry Wilkerson says Trump's forces are creating conditions for violence in the streets if he is defeated. AOC calls on people to get organized to defeat Trump as part of a larger battle.
Op-Ed: Democrats have a secret weapon to thwart a rapid Ginsburg replacement. They should use it  Erwin Chemerinsky [via Naked Capitalism 9-20-20]
Chemerinsky is touted as the most prolific and most cited liberal scholar of the Constitution.

[Twitter, via Naked Capitalism 9-20-20] 
Matt Stoller
The biggest obstacle we will face in addressing the court problem isn't Mitch McConnell, it'll be @neal_katyal and elite lawyers. It's the legal liberal elites who are trained to worship the Supreme Court and disdain Congress.
11:42 AM · Sep 19, 2020
Matt Stoller
Sep 19
There's a reason Supreme Court clerks get $400,000 signing bonuses when they go to #biglaw firms. It's outrageous but fixable. The issue is populists are up against a religion of the elites, which is what the fetish for judges is about.
How Abraham Lincoln Fought the Supreme Court
[Jacobin, via Naked Capitalism 9-20-20]
Above all, the [Lincoln] Republican assault struck at the fundamental power of the judiciary. The Supreme Court, they argued, had the authority to decide particular cases, but not to settle larger political disputes over the meaning of the Constitution. 
Today, we call this power “judicial review,” but as scholars like Keith Whittington have argued, it really amounts to something much more like to “judicial supremacy,” and its roots are not legal or constitutional but themselves political. After Dred Scott, Republicans mounted a direct challenge to this power — perhaps the most aggressive popular attack on judicial supremacy in US history. “A Court makes a decision,” argued one New York legislator, “but does not make the law.”
Socialists Have Long Fought to Disempower the Supreme Court. That’s More Urgent Than Ever Now. 
[The New Republic, via Naked Capitalism Water Cooler 9-23-20] 
“[There has been] a growing obsession with celebrity among Democrats, as if celebrity itself could somehow transcend the grubby business of politics. With figures like Ginsburg and Barack Obama, this thinking went, the party could win the day on the back of its leading lights. Those pleading for Ginsburg to retire were brushed off, or branded as sexists. Meanwhile, the conservative machine installed a bunch of young jurists to the Supreme Court who might not be famous but will be determining the fate of this country for years to come.”
Lambert Strether observes: "Installed with the help of Democrats, one might add. Remember when Schumer waved through a bunch of Trump’s judges so the Senate could go on vacation?"

The Pandemic
How did Vietnam bring the spread of coronavirus to a halt — again? 
[ABC Australia, via Naked Capitalism 9-24-20]

Strategic Political Economy

In a US-China war, whose side is Southeast Asia on? Philippines, Singapore and Malaysia ponder the unthinkable
[SCMP, via Naked Capitalism 9-20-20]

“American Gentry” 
[Patrick Wyman, via Naked Capitalism Water Cooler 9-21-20]
"Ownership of the real, core assets is where the region’s wealth comes from, and it doesn’t extend down the social hierarchy… This class of people exists all over the United States, not just in Yakima. So do mid-sized metropolitan areas, the places where huge numbers of Americans live but which don’t figure prominently in the country’s popular imagination or its political narratives: San Luis Obispo, California; Odessa, Texas; Bloomington, Illinois; Medford, Oregon; Hilo, Dothan, Alabama; Green Bay, Wisconsin. … This kind of elite’s wealth derives not from their salary – this is what separates them from even extremely prosperous members of the professional-managerial class, like doctors and lawyers – but from their ownership of assets. Those assets vary depending on where in the country we’re talking about; they could be a bunch of McDonald’s franchises in Jackson, Mississippi, a beef-processing plant in Lubbock, Texas, a construction company in Billings, Montana, commercial properties in Portland, Maine, or a car dealership in western North Carolina. Even the less prosperous parts of the United States generate enough surplus to produce a class of wealthy people. Depending on the political culture and institutions of a locality or region, this elite class might wield more or less political power. In some places, they have an effective stranglehold over what gets done; in others, they’re important but not all-powerful. Wherever they live, their wealth and connections make them influential forces within local society. In the aggregate, through their political donations and positions within their localities and regions, they wield a great deal of political influence. They’re the local gentry of the United States.”

Predatory Finance

FinCEN Files Show Criminals Moved Billions As Banks Watched
[Buzzfeed, via Naked Capitalism 9-22-20]
A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it. 
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries. 
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees....
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
3-Count Felon, JPMorgan Chase, Caught Laundering More Dirty Money
Pam Martens and Russ Martens, September 21, 2020 [Wall Street on Parade]
ICIJ dropped a bombshell investigative report yesterday about money laundering for criminals at some of the biggest banks on Wall Street, but you won’t find a peep about it on the front page of today’s Wall Street Journal or New York Times’ print editions. In fact, the New York Times, as of 6:44 a.m. this morning, hasn’t reported the story at all. The Wall Street Journal carries an innocuous headline, “HSBC Stock Hits 25-Year Low,” putting the focus on the British bank, HSBC, when its focus should be on the largest bank in the U.S., JPMorgan Chase, a serial felon.
There’s a Pattern of Corporate Media Censoring News About Wall Street Banks’ Crimes
Pam Martens and Russ Martens, September 22, 2020 [Wall Street on Parade]
Wall Street On Parade has repeatedly written about critical reports showing serial corruption at these banks that have been censored by those Pulitzer prize winning media outlets. Yesterday provided another example: the New York Times refused to cover the International Consortium of Investigative Journalists’ stunning report on how five of the biggest banks on Wall Street have continued to launder dirty money for fugitives and suspected criminals. The Wall Street Journal, whose name suggests that perhaps its focus should be Wall Street, failed to put the story on its front page, opting instead to bury it under an innocuous headline about HSBC’s stock hitting a new low.
The same news blackout occurred last year when the public interest group, Better Markets, published an in-depth report on “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” Three days after the report came out, major news outlets were still refusing to cover the report.
Note that none of these reports on the filthy money of modern finance capitalism mention what I consider perhaps the most important point: these financial institutions are directed top-down by the highest elites of the Anglo-American establishment, including the "intelligence community."  As I wrote in February 2015, HSBC's board of directors included: 
Jonathan Evans, Lord Evans of Weardale, former Director-General of the British Security Service [MI5], the United Kingdom's domestic security and counter-intelligence service. You really think this guy does not know what HSBC is doing under his very nose while he's a director? Evans' presence on the board points to the intimate links between intelligence, drugs, and dirty banking that you're not supposed to talk about openly.
Even Matt Taibbi, Revenge of the Money Launderers, September 25, 2020, does mention this angle.  The connection between the illegal narcotics trade, the illegal arms, "respectable" financial institutions, and powerful intelligence agencies has been well documented in books by Celerino Castillo III and Dave Harmon; Alexander Cockburn and Jeffrey St. Clair; Michael Ruppert; Gary Webb, and others, but any mention of this criminality by ruling elites is very rarely mentioned or discussed.

The Carnage of Establishment Neoliberal Economics

Jamie Dimon and JPMorgan’s PAC Are Financially Supporting Mitch McConnell’s Reelection Bid
Pam Martens and Russ Martens, September 23, 2020 [Wall Street on Parade]
Nonetheless, Jamie Dimon’s public records at the Federal Election Commission (FEC) show that he has contributed $2800 to McConnell’s political campaign for this election cycle; another $2800 to WinRed, a political committee supporting Republicans; $5,000 to JPMorgan Chase & Co.’s PAC, which has, in turn, provided $5,000 to the McConnell Senate Committee, $30,000 combined to the National Republican Senatorial Committee and the National Republican Congressional Committee.
Last year CEOs pledged to serve stakeholders, not shareholders: You were right not to buy it
[Los Angeles Times, via The Big Picture 9-22-20]
In the year since the Roundtable statement, there have been few signs that major corporations have taken real steps to serve nonshareholders that they wouldn’t have taken without outside pressure, whether from public opinion or government regulation. 
[New York Times, via The Big Picture 9-22-20]
The pandemic and the movement for racial justice have tested corporate pledges to elevate social concerns alongside shareholder interests. A new study finds companies are failing to follow through. 
[Barrons, via The Big Picture 9-21-20]
A half-century of promoting small government, efficiency, and corresponding “free” markets above all else hasn’t even succeeded on its own, far too narrow, terms. It has failed to generate higher growth or dynamism.
What Happened to Milwaukee’s Black Middle Class?
[The American Prospect, via Naked Capitalism Water Cooler 9-25-20]  
“The story we tell ourselves about the decline of American cities, especially in the Rust Belt, places the blame on deindustrialization and globalization. Yet, says Michael Rosen, retired Milwaukee Area Technical College (MATC) economics professor and former president of MATC’s faculty union, Milwaukee’s decline—and that of many cities across the country—was hardly inevitable. Business, he says ‘[broke] the social contract’ between management and labor and began a strategy of both union avoidance and outright union busting. ‘Capital declared war on labor in this town,’ he says, and it ‘decimated the Black community.’ Racist redlining kept Black families segregated, while many jobs moved into the suburbs—where public transit was not designed to reach.” • Surely globalization and breaking the social contract are both parts of capital having declared war on labor, and redlining is another tool in the war?

[Vice, via Naked Capitalism Water Cooler 9-25-20] 
 “An Amazon Web Services employee emailed a series of internal Amazon listservs and told them that their communications were being monitored for labor organizing efforts and processed in a data farming project by the company’s Global Security Operations, according to an internal email obtained by Motherboard. The emails were sent—at least—to the employee listservs “” and “,” and mentioned a handful of other listservs the employee believed were being watched…. The Amazon Web Services employee notes that this data was being used to track “Whole Foods Market Activism/Unionization Efforts, Internal Communications-Social Listening, Presence of Local Union Chapters and Alt Labor Groups, Presence of Community Organizations, Union Officials and Social Influencers.” Motherboard was unable to specifically verify this.”

Why Do Americans Give Away So Much Control to Corporations? Counterpunch. , 
Ralph Nader [via Naked Capitalism 9-21-20] 

Economic Armageddon: The COVID Collapsed Economy

Nearly 9 million people didn’t get stimulus payments. A GAO report asks why the IRS isn’t doing more to help.
WaPo, via Naked Capitalism 9-23-20]

Unsanitized: How the Muni Bond Market Is Preventing Economic Recovery
David Dayen, September 25, 2020 [American Prospect]
More important, if the Fed filled the gap, that $500 billion would be out of the muni markets, meaning those financiers would be denied the fees that go along with them. And this mentality has carried through to the government, through former muni traders now placed there.\ 
That includes Kent Hiteshew, who is running the MLF for the Fed. Prior to his stints at the Fed and at the Treasury Department he had a “30-year career in public finance on Wall Street,” another way of saying muni trader. The announcement of the Fed hiring described Hiteshew as a “veteran muni banker.” (while at Treasury, he also worked on the junta, the financial oversight commission, in Puerto Rico.) 
Hiteshew, in testimony before the COC last week, said that the MLF must not “replace private capital” and that the success of the MLF is based on “the condition of the municipal securities market.” During questioning, Hiteshew noted that his phone was ringing off the hook for the first time, alluding to his pals in the muni market. It was a moment where the mask slipped, and top officials revealed the influence peddling at work to deny the public sector needed relief. 
“It’s a very clubby sector of the financial services industry, they have a kind of oligopoly status,” said Hockett. “That in turn stays with people who leave to go to work in government.”

Restoring balance to the economy

Public Banking Institute Youtube: The Fed vs. the States with Prof. Robert Hockett, Michael Brennan, and Ellen Brown
In the wake of COVID-19, a mere 5% of the nearly $3 trillion CARES relief package was allocated to the 50 states, which remain desperately short of funds. Meanwhile, the Federal Reserve money helicopter flew directly to Wall Street and hovered. Banks can now borrow money virtually interest-free with no strings attached. States, on the other hand, can access the Fed only by selling bonds to it at more expensive market rates, plus penalty fees. What is behind this discrimination? What does it mean for the people? PBI Chair Ellen Brown talks with Cornell Prof. Robert Hockett and Michael Brennan, Democratizing Capital Policy Organizer for the Democracy Policy Network.

Health Care Crisis

[Bored Panda, via Naked Capitalism Water Cooler 9-22-20] 

Creating new economic potential - science and technology

The story of cheaper batteries, from smartphones to Teslas
[Ars Technica, via The Big Picture 9-23-20] 
In 2010, a lithium-ion battery pack with 1 kWh of capacity—enough to power an electric car for three or four miles—cost more than $1,000. By 2019, the figure had fallen to $156. The average cost of a kilowatt-hour of lithium-ion battery capacity should fall below $100 by the mid-2020s. 

Eating "only" half a bowl of shit

You’ll notice that Democratic vote-shamers rarely complain the other way. Typically, they lament progressive pressure, but don’t lament big donors constantly demanding ideological fealty to an incrementalist corporate agenda that makes sure nothing fundamentally changes — which inevitably leads to voter disillusionment.

They celebrate efforts to policy pander to affluent conservatives, but scoff at the notion of having to do any work to secure support from disaffected lower income Americans who might consider sitting the election out or voting third party because they are so completely disgusted with both parties.

In this world view, Democrats promising tax breaks to wealthy suburbanites is seen as laudable pragmatism and shrewd politics to attract affluent Republicans. By contrast, the idea of having to promise a Green New Deal to young people who see a lifetime of climate dystopia and think about voting third party — that’s seen as uncouth behavior and detestable pandering to petulant serfs who supposedly don’t deserve even minimal respect or attention. The political class tells us to pay them no mind — they are the electoral arena’s “no real person involved.” 

As an election strategy, this attitude presumes that Chuck Schumer was right in 2016 when he insisted that “for every blue-collar Democrat we lose in western Pennsylvania, we will pick up two moderate Republicans in the suburbs in Philadelphia, and you can repeat that in Ohio and Illinois and Wisconsin.”

Of course, that theory has been electorally shellacked for a decade. And yet, these Democratic elites adhere to it — and vote-shame anyone who questions it — not because it has been successful and is the best strategy to win back Congress, expand health care or save the planet from climate change. They cling to the hypothesis because it at least provides a rationale — however absurd — to continue running campaigns whose number one directive is comforting the donor class.

LA Progressive, September 25, 2020
What are progressives to make of this truly dire situation—and, most importantly, what are we to do? Right now. At this potentially cataclysmic moment, I haven’t seen better answers anywhere than on the new website, where a basic precept is laid out in big letters on the first screen: “We’ve got our own reasons to vote for Biden, and Joe ain’t one.” 
The next words are from Cornel West: “A vote for Joe Biden is . . . a way of preserving the condition for the possibility of any kind of democratic practice in the United States.”
The “Not Him Us” site goes on to ask a central question: “We wanted a political revolution. Now what?” The answers begin by reframing the current realities to include not just clear and present dangers but also great possibilities: 
  • “It might not feel like it right now, but our movements are starting to win. In the streets: one of the most massive uprisings in our nation’s history is unfolding, demanding racial justice and systemic change. And in the halls of power: from Alexandria Ocasio-Cortez and Rashida Tlaib, to Jamaal Bowman and Cori Bush, more and more people’s champions are challenging a failed status quo — and winning.”
  • “To continue to gain ground, we need to keep building our movements and elect more people’s candidates. But right now our forward trajectory depends on stopping Trump in his tracks. Our organizations, movements, and people’s candidates are engaged in an incredibly consequential contest for the future. If history is any guide, we cannot allow an authoritarian demagogue like Trump to continue to consolidate power.”
....Tweeting in support of the Not Him Us project last week, Naomi Klein wrote: “Vote for a more favorable terrain. Our struggle goes way beyond elections. We’re in the streets. We’re talking to our neighbors and co-workers. But who controls the presidency changes what’s politically possible for our struggles.”

In response to the launch of #NotHimUs, former Bernie Sanders senior advisor and speechwriter David Sirota tweeted: “This is good. This is the right message. It’s honest. It doesn’t try to pretend Biden is awesome. It doesn’t insult voters’ intelligence. It doesn’t try to insult or vote shame people into voting to defeat Trump. It makes a positive case.
Even the New Deal had to be forced on Roosevelt, Sam Pizzigatti explains in his great 2012 book, The Rich Don't Always Win: The Forgotten Triumph Over Plutocracy that Created the American Middle Class, 1900-1970. It is a mistake to focus only on the presidency. The ground work to provide a foundation for real change has always been at the state and Congressional level, and has always involved radicals winning seats in local and state governments, and in Congress. As I wrote in December 2013
....hoping to elevate one good progressive to the White House is a dangerous diversion from the job we need to do. The federal structure of government designed by the Founders – with political power diffused at the local, state, and national levels, overlaid with an institutional superstructure of three branches of government intended to check and balance each other – offers fissures and pressure points in the political system in which dominance by the rich is not complete and total. This reality is what progressives need to understand thoroughly, and use ruthlessly, to leverage political power where it can do the most good.

The Dark Side

“The Onion’s Guide To QAnon” 
[The Onion, via Naked Capitalism Water Cooler 9-22-20] 
“Q: What is QAnon? A: A conspiracy theory that posits world leaders are secretly evil rather than openly so.”

“Biden has raised $156,584 from individuals at Goldman Sachs (GS), according to OpenSecrets. With just $11,943 in contributions, Trump ranks a staggering 45th among federal campaign recipients — well behind House Speaker Nancy Pelosi, US Senator Lindsey Graham, Graham’s opponent Jaime Harrison and Andrew Yang, a CNN political commentator who has called for universal basic income. But it’s not just Goldman Sachs, whose employees have historically supported Democrats. (Former Goldman Sachs CEO Jon Corzine later served as the Democratic governor and US senator from New Jersey.) At Citigroup (C), Trump has been outraised by Biden as well as Pete Buttigieg, Bernie Sanders, Yang, vice presidential nominee Kamala Harris and US Senator Doug Jones. Trump has raised just $86,083 from JPMorgan Chase (JPM), the largest US bank. At $379,057, Biden has raised three times as much as Trump from JPMorgan. Trump was also behind Buttigieg and Sanders at JPMorgan.
Biden has raised more than twice as much ($257,821) from Morgan Stanley (MS) as Trump has ($96,010), according to OpenSecrets.” 
“Trump vows to reverse ‘blue-collar carnage’ in Ohio” 
[Washington Examiner, via Naked Capitalism Water Cooler 9-24-20]
“In a speech in Dayton on “Fighting for the American Worker,” his first of two events in Ohio on Monday, Trump accused Biden of being ‘a die-hard globalist’ who inflicted ‘terrible damage’ on Ohio’s economy during his years in Washington…. The North American Free Trade Agreement, which Biden supported when it was approved in 1993, caused the loss of tens of thousands of jobs in the Dayton area, Trump said. Biden, he added, ‘should be begging for your forgiveness.’ Trump pointed to China’s entry into the World Trade Organization as ‘a total catastrophe.’ ‘That’s when China started going up like a rocket,’ he added.” 
As Lamber Strether noted: "And he’s not wrong, is he? Turns out that “I alone can fix it” was a little off…." Once again, the Democrats' remain mesmerized by the neoliberalism of the donor class, while Trump outlanks on the economic left. 

Australian Politics 2020-09-27 15:58:00


Qlders say private education is too expensive, experts warn the extra cost brings little benefit

This is transparent nonsense. It included ALL Queenslanders when it is only middle class parents who can afford it. What people think who cannot afford it is irrelevant. Around 40% of Queensland teenagers go to a private school so there are plenty who think it is worthwhile, almost the whole of the middle class, one surmises.

I sent my son to a private school and thought nothing of the fees. I got value for money in several ways — including orderly classrooms and some male teachers

I am also sponsoring a very bright lad in Scotland to the tune of $33,00 a year. With my help he is going to a top private school so that his opportunities in later life will be commensurate with his abilities. What school you went to is immensely important in Britain

Queenslanders have sounded the alarm over exorbitant school fees, with 60 per cent of Sunshine State residents saying the price of private education is too high, The Courier-Mail’s Your Say sentiment survey has found.

The survey, which garnered responses from 8000 Sunshine State residents, revealed 60 per cent of Queensland parents thought private schools were too expensive.

The Courier-Mail this year revealed that All Hallows’ School increased fees by 5.5 per cent to $11,450 for Year 7 in 2020.

Elite Brisbane Grammar School secondary fees are $27,540 per year, while sister school Brisbane Girls Grammar’s fees for Years 7-12 are $25,782 per year.

Southwest Queenslanders felt private education would cause the most hip pocket pain, with 64.72 per cent saying private education is too costly, followed by those who live in other southeast areas at 63.61 per cent.

Queenslanders in northern Greater Brisbane areas were the third most likely to think private school is too expensive with 60.85 per cent of residents in the area sounding the alarm over fees.

Sunshine Coast residents followed closely behind with 59.93 per cent objecting to private education costs, only slightly ahead of 59.08 per cent Central Queenslanders, and 59.03 per cent Far North Queenslanders.

Of those living in south Greater Brisbane, 58.8 per cent objected to private school costs, followed by 57.64 per cent of Gold Coast respondents.

The Sunshine State residents least likely to object to fees were North Queenslanders with just 54.14 per cent objecting to the costs of private education.

Southern Cross University associate professor David Zyngier said the average cost of educating a high school student was around $15,000 per annum.

“That’s the set costs for the average student so any private or non government school that charges more than $15,000, one has to ask the question what are they doing with that,” he said.

“If they’re charging $25,000 or $30,000, then parents should be asking themselves what they get for that additional money,” he said.

He explained that while parents pay more fees at independent schools, both public and private education outcomes balance out.

“Parents have been sold a story that private is better and unfortunately it is not,” Prof Zyngier said. “When you compare private schools (and public schools) with the same socio-economic status … the public school does better.”

UQ senior lecturer in education Dr Anna Hogan said there had been a trend of increasing public school enrolments.

“There seems to be an understanding in the public school sector, that middle-class parents who have the choice to pay for school fees are actually starting to more closely consider what they’re paying for education,” she said.

Parents were questioning why they would pay $30,000 in elite school costs when their children could have a good education at a select public school, she said.

He said private education meant smaller class sizes, more extra-curricular and sporting activities and more opportunities for their three children.

“There’s a strong sense of community and connections for later in life,” he said.

“I didn’t go to a private school but I personally feel the opportunities of private schools are better than what I had.”


Call for Australia to adopt new ‘ring fencing’ virus approach

One of Australia‘s top health experts has called on the Australian government to introduce a new technique to contain the COVID-19 virus as the country moves towards reopening.

Professor Mary-Louise McLaws, an epidemiologist and World Health Organisation advisor, said “ring fencing” of certain hotspots should be adopted moving forward.

“We have at least a year-and-a-half before the vaccine is found and produced in large enough numbers to be rolled out and I can only say that really we are a small country with a population, but a larger physical country,” Prof McLaws told ABC.

“We need to have a national approach to reduce borders so that people can move around and have a national agreement to what is a rapid response so that we can just ring-fence small clusters so that Australians can freely move around our country for work and pleasure.”

Prof McLaws also warned against fast-tracking Victoria‘s roadmap out of lockdown, saying it could undo all the work residents have done to reduce virus cases.

“Given the numbers and the success that the Victorians had to date, I can‘t see too many restrictions being eased other than the 5km area that people are allowed to move around in because Victorians, and particularly the Melbourne public, only have 26 more days to go until they reach their goal of less than five cases per day,” she said.

“If they continue on the downward decline in numbers, they will get there. I would just recommend sticking with the plan and maybe letting them move more than 5km to give them a compassionate break from the challenges that they have had to deal with so far.”


Better than Sweden

While Sweden is often cited in debates over how best to balance health and economic considerations in response to the coronavirus, Prime Minister Scott Morrison doesn’t think Australia should be following that country’s model of lax restrictions.

Speaking on Sky News this week, the Prime Minister said June quarter GDP showed Australia’s economy had experienced one of the “lowest falls of any developed country”.

“Our economy fell by 7 per cent. Devastating, absolutely devastating. But compared to the rest of the world, it was one of the lowest falls of any developed country,” Mr Morrison said.

“And when you look at our health results, both on the case incidents in Australia of COVID and the upsetting number of deaths that we’ve had compared to overseas, I mean, I know a lot of people on your program talk about Sweden. Well, Sweden has had a bigger fall in their economy and they’ve had almost 20 times the number of deaths.”

Indeed, Sweden’s economy tumbled 8.3 per cent in the June quarter, compared with Australia’s drop of 7 per cent.

However, Mr Morrison’s claim that Sweden has had almost 20 times the number of deaths is wide of the mark.

According to data compiled by US-based Johns Hopkins University, Australia had recorded 859 COVID-19 deaths (as of September 23), while Sweden had suffered 5,870 deaths. While Sweden’s death count is much higher than Australia’s, it is only seven times the number of deaths seen in Australia.

While Mr Morrison referred to the number of deaths when comparing the two nations, a comparison of the rate of deaths in both countries more closely aligns with his claim.

On those figures, Sweden’s rate of deaths per million people is 576.62 compared with Australia’s rate of 34.37. That means the Nordic nation has suffered a death rate more than 16 times that of Australia.


Labor’s Joel Fitzgibbon threatens to quit shadow cabinet over emissions target

The veteran New South Wales Labor rightwinger Joel Fitzgibbon has threatened to quit the shadow cabinet if the opposition adopts a medium-term emissions reduction target he cannot live with.

In a significant escalation of Labor’s internal dispute about climate and energy policy, Fitzgibbon made the threat during an interview with Guardian Australia’s politics podcast.

The shadow resources minister said he would not quit the party over the issue. “I’m 58 years of age… I’ve been in the party for almost 40 years, I am too old to rat.”

But he said if Labor’s landing point on an emissions reduction target for the 2030s was “so offensive to me, if it didn’t keep faith with our traditional base, if it was fundamentally wrong and harmful, I would not criticise it from the shadow cabinet, I would have no choice but to go and do so from another position”.

Fitzgibbon said if the forthcoming shadow cabinet deliberation on the medium term target was a “fair fight and I just lost” then he would sell the collective decision even though it was “not my preferred position obviously”.

But asked whether the party leader, Anthony Albanese, would continue to enjoy his support if he insisted on Labor adopting a target Fitzgibbon could not live with, the shadow resources minister said: “I’d have to consider my position at the time.

“I wouldn’t overtly challenge it from the shadow cabinet, I’d have to make a decision about that”.

Albanese told the National Press Club in June Labor would set a medium-term target for the 2030s “based on science”, and the climate change spokesman, Mark Butler, has made that commitment several times since the 2019 election.

Fitzgibbon said he accepted the science of climate change, and had signed off on Labor’s policy of net zero emissions by 2050. But he has dug in his heels about the medium term target, first saying Labor should adopt the same position as the Coalition, then arguing Labor should not set one at all.

On the podcast, Fitzgibbon said first that he would accept the collective decision on the medium term target, pointing with unusual candour to his record of selling policies he didn’t support after collective decisions, including during the 2019 election.

“Gee I wish I could show you videos of me before the last election backing in things I hated, standing at the National Press Club and debating David Littleproud and ferociously backing in Labor’s policy.”

But later his position hardened, with the clear threat about quitting the shadow cabinet if the policy is not to his liking.

Fitzgibbon suffered a significant negative swing in his safe Hunter Valley seat at the 2019 election, and he contends ambitious climate change policies have contributed to Labor’s election defeats federally since 2013. He said voters in the regions now think Labor panders to inner city interests and disdains workers in traditional industries.

He argues Scott Morrison has made it much harder for Labor to resolve a medium term target by promoting a gas-led recovery from the coronavirus. While colleagues have criticised the prime minister’s announcements, arguing they lack substance, Fitzgibbon said Labor should let the prime minister roll out his agenda.

Fitzgibbon said it was unlikely Morrison would be able to implement many policies to lock in gas before the next election, but “if he rushes along that path, what does the Labor party do then? Do we say we are going to pull all that back and go down our own path?

“Now that’s an open question, and I don’t mind saying I will be internally urging my people to let him go his way, let this be his problem now, he’s the government, we lost. One of the consequences of losing … is you don’t get to call the shots.”

While Fitzgibbon’s front-running has some support within the caucus, and among some in the trade union leadership, his campaign has also infuriated and dismayed many colleagues. While his views have grabbed the headlines, many in Labor believe the party cannot retreat from climate action both on the merits of the issue, and politically.

Australian political history shows internal fights about climate change can be lethal for leaders of the major parties. But Fitzgibbon said Albanese would lead Labor to the next election.

“I’ve been around these games for a long time and there’s not even a hint, or a whisper, and very importantly he continues to enjoy my support.”

But Fitzgibbon suggested there was room to improve. “I think Albo is doing as well as an opposition leader could in Covid. I think this is a period where the power of incumbency is very, very significant.

“Not even a young Bob Hawke as opposition leader would be cutting through too much. But there’s a message in that for us too, to have a bit of a rethink ourselves about our approach. The last thing the Labor party can afford to be at the moment is a party of protest. It has to look like an alternative government.”

He said voters federally only “come to us when they are tiring of or angry at the other mob and when we don’t look too scary, and at the last election we made ourselves look as scary as we possibly could”.

“It’s as if we worked at it.”


Posted by John J. Ray (M.A.; Ph.D.). For a daily critique of Leftist activities, see DISSECTING LEFTISM. To keep up with attacks on free speech see Tongue Tied. Also, don’t forget your daily roundup of pro-environment but anti-Greenie news and commentary at GREENIE WATCH . Email me here

26/9/20: America’s Scariest Charts: Duration of Unemployment

 Adding to my prior posts covering:

Here is analysis of the latest duration of unemployment data, and a look at employment data across past recessions.

As usual with all recessions, average duration of unemployment has fallen in the early days of the pandemic, as new unemployment cases rose dramatically, compared to prior existent claims. Since then, however, average duration has been creeping up. 

As the jobs recovery continues, we will be seeing further increases in the average duration of unemployment as a sign of longer term unemployment, so keep an eye for the future updates to the graph.

At the peak of the pandemic, average duration of unemployment fell to just 6.1 weeks or 15.6 weeks below pre-pandemic average. As of the end of August 2020, average duration of unemployment was at 20.2 weeks, or just 1.54 weeks below the last post-recession period average. 

Taking a slightly different look at the labour markets, consider current employment levels relative to the 6 months pre-COVID19 average levels of employment:

The chart above helps strip out volatility in the levels of employment across the business cycle by using 6 months average levels of employment for the period prior to the onset of the recession as a benchmark and then relating recession period and subsequent recovery period employment levels to this benchmark.

Clearly, current recovery to-date has been sharp, but given the levels of employment contraction in the first months of the pandemic, even this speed of the recovery is not sufficient to bounce employment levels back to where they were during pre-COVID19 period of economic growth. The chart also shows that recovery in employment has slowed down sharply in August, compared to June and July.