Week-end Wrap – Political Economy – May 28, 2023

Week-end Wrap – Political Economy – May 28, 2023

by Tony Wikrent

 

War

Why Are We in Ukraine?

Benjamin Schwarz, Christopher Layne [Harpers, June 2023 issue, via Naked Capitalism 5-22-2023]

Both the global role that Washington has assigned itself generally, and America’s specific policies toward NATO and Russia, have led inexorably to war—as many foreign policy critics, ourselves among them, have long warned that they would….

Initiated by the Clinton Administration while Boris Yeltsin was serving as the first democratically elected leader in Russia’s history, NATO expansion has been pursued by every subsequent U.S. administration, regardless of the tenor of Russian leadership at any given moment… Thus did the United States recklessly embark on a policy that would “restore the atmosphere of the cold war to East-West relations,” as the venerable American foreign policy expert, diplomat, and historian George F. Kennan had warned. Writing in 1997, Kennan predicted that this move would be “the most fateful error of American policy in the entire post-cold-war era.”

….By embracing what came to be called its “unipolar moment,” Washington demonstrated—to Paris, Berlin, London, New Delhi, and Beijing, no less than to Moscow—that it would no longer be bound by the norms implicit in great power politics, norms that constrain the aims pursued as much as the means employed. Those who determine U.S. foreign policy hold that, as President George W. Bush declared in his second inaugural address, “the survival of liberty in our land increasingly depends on the success of liberty in other lands.” They maintain, as President Bill Clinton averred in 1993, that the security of the United States demands a “focus on relations within nations, on a nation’s form of governance, on its economic structure.”

….Moscow’s alarm over the hegemonic role America had assigned itself was intensified by what could fairly be characterized as the bellicose utopianism demonstrated by Washington’s series of regime-change wars….

Rather than attempting to maintain that stable nuclear balance, however, Washington has been pursuing nuclear dominance for the past thirty years…. [While there] was the precipitous qualitative erosion of Russian nuclear capabilities…. [US] didn’t fit with the aim of deterring an adversary’s nuclear attack—which requires only the nuclear capacity for a “countervalue” strike on enemy cities. They were, however, necessary for a disarming “counterforce” strike, capable of preempting a Russian retaliatory nuclear response. “What the planned force appears best suited to provide,” as a 2003 RAND report on the U.S. nuclear arsenal concluded, “is a preemptive counterforce capability against Russia and China. Otherwise, the numbers and the operating procedures simply do not add up.”

….Two critical events precipitated Russia’s war in Ukraine. First, at NATO’s Bucharest summit in April 2008, the U.S. delegation, led by President Bush, urged the alliance to put Ukraine and Georgia on the immediate path to NATO membership. German chancellor Angela Merkel understood the implications of Washington’s proposal: “I was very sure . . . that Putin was not going to just let that happen,” she recalled in 2022. “From his perspective, that would be a declaration of war.” America’s ambassador to Moscow, William J. Burns, shared Merkel’s assessment. Burns had already warned Secretary of State Condoleezza Rice in a classified email….

The second precipitating event came when Ukraine began talks about forming an “association agreement” with the European Union in September 2008 and, in October, applied for a loan from the International Monetary Fund to stabilize its economy after the global financial collapse.

The War in Ukraine Was Provoked—and Why That Matters to Achieve Peace 

[Common Dreams, via Naked Capitalism 5-24-2023]

IS NATO A NAZI ORGANIZATION?

[MATT EHRET AND CARY HARRISON ON KPFK 90.7 FM] 

[Bitchute, via Naked Capitalism 5-24-2023]

What if the celebrations of the victory over fascism in 1945 was a bit premature? What if leading Nazis were absorbed into NATO after the war and went on to play leading roles in carrying out terrorism, assassinations and a broader infiltration of western governments under the banner of a new rules-based order of globalization?

Chinese scientists war-game hypersonic strike on US carrier group in South China Sea 

[South China Morning Post, [Twitter, via Naked Capitalism 5-24-2023]

• Military planners conclude the Gerald R. Ford and its fleet could be destroyed ‘with certainty’ in rare published report
• The researchers said 24 hypersonic anti-ship missiles were used to sink the US Navy’s newest carrier and its group in 20 simulated battles

…Over 20 intense battles, Chinese forces sank the USS Gerald R. Ford carrier fleet with a volley of 24 hypersonic anti-ship missiles, in a simulation run on a mainstream war game software platform used by China’s military.

In the scenario, the US vessels are attacked after continuing to approach a China-claimed island in the South China Sea despite repeated warnings.

A paper detailing the war game was published in May by the Chinese-language Journal of Test and Measurement Technology. It is the first time the results of simulated hypersonic strikes against a US carrier group have been made public.

[Twitter, via Naked Capitalism 5-27-2023]

.

 

Global power shift

“The day it came apart.” 

Patrick Lawrence [The Scrum, via Naked Capitalism 5-21-2023]

[April 30, 1975]

…I also looked forward to escaping not only the sour mood and the discontent and the aimlessness Reno mentions, but also a certain air of unreality that has come to permeate American life.

It is not so easy to describe this state, especially to those who are most thoroughly immersed in it or who simply don’t want to hear anything about it….

I have long argued that the events of September 11, 2001, shattered our national myths and so reshaped the American consciousness. It was then, as myth gave way to history, that the imperium, thrown onto its back foot, assumed the defensive crouch and began conducting itself with the vicious aggression of the wounded. It was then our media caved entirely to the needs of a national-security state suddenly desperate to preserve its global primacy.

But I go back a little further now to explain “the national psychosis.”

….isn’t 30 April 1975, when that famous helicopter rose from the roof of the American Embassy, marking the rise (not fall) of Saigon, America’s decisive date of departure from reality? I think so, having lived through it and all the flinching and pretending that followed.

5 trade moves China has made in 2023 in Latin America – the traditional backyard of the US

[South China Morning Post, via Naked Capitalism 5-22-2023]

 

Strategic Political Economy

PODCAST — Is America Two Nations?

May 11, 2023 [Roosevelt Institute, The New Republic, and PRX]

[Interview of Michael Podhorzer, former political director of the AFL–CIO, before becoming a senior adviser to AFL–CIO President Richard Trumka, described by Time magazine as “the architect” of a “shadow campaign that saved the 2020 Election.”]

Michael: Mike, let me ask you about the history, because I think this is something our listeners would be really interested in learning more about. You trace this back to the beginning of the Republic. Is this about Federalists versus Democratic Republicans? Those were our first original two political parties. The Federalists, the Hamiltonians, the city slickers, the coastal elites, if you will, and the Democratic Republicans, the Jeffersonian yeoman farmers. Does that map onto today’s divide, or not quite exactly?

Mike: Very close. And I think that there’s a way in which when we try to think about that history, we get unfortunately locked in a binary that you just described, between the Federalists and the Jeffersonian Democratic Republicans. I think a more accurate way of talking about it is that what was then the Confederacy has been an enduring, unified, geographic nation within a nation from the beginning only interrupted by the Civil War and begun to be interrupted by the dismantling of Jim Crow in the middle of the twentieth century. But other than that, it has been an intentional nation within the nation.

Michael: It’s been, you say, an authoritarian state within a state, a one-party state within a state, with the exception of that transition period in the mid to late twentieth century.

Mike: Right. Really though where it reconsolidates in the same kind of iron grip way is beginning with the 2010 election where this built-in impulse to separate by region was supercharged by a trifecta of the backlash against the Obama election and the way the Republican establishment reacted to it, the great recession, and the decisions to completely rewrite the rules of elections that the Supreme Court undertook at that point….

…The Red Nation has always been the foundation of extracted industries, the oil industry, obviously at the beginning, cotton—

Felicia: And enslavement. Right, so it was both.

Mike: Yeah, whereas the Blue Nation has tech and communications and finance. I’m not saying all of those are great things, and obviously they had a lot to do with the Democrats’ turn toward neoliberalism. But it’s a fundamentally different outlook that is more global in its aperture and that values education and those kinds of industries that are really the hub of innovation in the economy….

Felicia: Right. One of the things that you describe, Mike, in much of your writing is the effort over time for a larger nation, a more expansive rights-focused nation, a more generous nation to persuade the red or whatever you want to call it. In a way, you can think of that as really the struggle our nation has been going through for more than 300 years. That being said, I think that one question is, OK, well where is the court system going to be in this struggle between red and blue or rights expansion versus rights contraction? How do you think the court is playing a role in today’s red and blue politics?

Mike: I think the court has played perhaps the most decisive role of all in all of this….  the Supreme Court. Through its decisions in Citizens United, Shelby, Bromwich, Rucho….  The way they changed politics since what it was until 2009 was unlimited money, much of it undisclosed, a wide open door to partisan gerrymandering and an abandonment of the Voting Rights Act. So the combination of all of those things is what has created the different politics we exist in now than the one we existed in from around 1965 to 2009. The Citizens United and the other changes in campaign finance has been estimated to have increased Republican vote share and state legislative elections by three to five points.

Felicia: I just want our listeners to pay attention to that for a second, three to five points in close elections.

Mike: If Michigan, Wisconsin, or Pennsylvania, where in 2008 they were part of a blue wall, you move them three to five points Republican and you have what we have now. Not because someone did a different message, not whatever, just the difference in how state elections are funded now. All these funding things get much more attention at the federal level, but they’ve been devastating at the state legislative level and have essentially let billionaires in places like Wisconsin, Michigan, North Carolina, basically become a party there. That’s very difficult to dislodge. And then the removal of the Voting Rights Protections has created a situation where since 2008, the rate of turnout for African Americans in the red nation has gone down. While it’s gone up in the blue nation where voting right laws have been liberalized. You just have to take what happened in Tennessee with that expulsion. Obviously, Tennessee is a Republican state. It would’ve been without Citizens United, but because of the fact that it’s hands off on the Voting Rights Act, they were able to split up the vote in Nashville and then not have any worries about overruling partisan gerrymandering. Instead of having maybe 60 percent majority, they had a three-quarter percent majority. If you have that kind of unilateral power, you start going off the rails that way because you have the power. So to your question, how the Supreme Court has done this, it’s what has enabled MAGA to so quickly take over the institutions in Red Nation….

I really try always to call what the court does the act of the Federalist Society. This is an actual deliberate outside takeover of the court where Republican presidents have essentially, used for a seal of approval, the Federalist Society. And one of the dangers, we have right now is in understanding this Federalist Society majority, what it’s been doing, only in terms of what it’s doing on Dobbs, or religion. Because more quietly it has been dismantling the economic elements of the New Deal as well. And that’s really where the funding came from: It was a coalition of forces that realized that its agenda could not be achieved democratically. And so it set about taking over the court, which it succeeded in doing. They don’t actually hear cases anymore. They look for opportunities to legislate and, in fact, I think that’s really the frame we need to think about the court, now. It’s the only functioning legislative body in the country.

Durham Report: The Republic We Didn’t Keep

Lambert Strether [Naked Capitalism 5-27-2023]

…I will put a thesis to the readership: What the Durham Report (DR) documents, but does not name, is a change in the Constitutional order. As we know, the Professional-Managerial Class (PMC) is the Democrat base (see Thomas Frank). The PMC achieved class consciousness in 2016, triggered by Trump’s victory (and Clinton’s defeat). They then collectively declared a state of exception — as sovereigns or would-be sovereigns are wont to do — where anything that would defeat Trump was licensed (a “permission structure,” as we say; here is an early example). In the process, the hegemonic elements of the PMC fused Democrat Party operatives, the organs of state security, and the press into a single, Flexnet-like Faction (I use the word “Faction” deliberately) that had the objective of retaining its own power by delegitimizing an elected President, an object it in part achieved. This Faction[1] has dominated the governing class[2] of the United States since 2016, and has a good shot of retaining power permanently (assuming the United States remains a single political entity). The result is a new, and distinctly anti-democratic, Constitutional order that is no way a Republic as the Framers understood the term. The Durham report is a window into the initial stages of the process I have just described….

…Here, the work of James Madison in Federalist #10, also 1787, is relevant….

However, fast forwarding to the present day, a Faction that can nationalize politics by controlling a political party, and capturing the press and the organs of state security, will be able to “secure the national councils” in a manner that would horrify Madison. And has done so! Similarly, it looks to me very much like factionalists in the FBI were very much “judges in their own cause,” or else they would not have gone full speed ahead on the Steele Dossier, and buried the Clinton Plan.

Let’s sketch out something a bit more up-to-date, retaining Madison’s central insight that class struggle property is the driver of faction. Randy Waldman has a great post on the structure of the PMC….

Comments:

DidaMay 22, 2023 at 8:13 pm

Do Democrats and Republicans really have ‘the same power base and goals’? Matthew Karp recently wrote in NLR about the crucial split along party lines inside the American oligarchy (Party and class in American politics):

“Democrats now hold the upper hand in communications (including a near-monopoly in Silicon Valley), finance (including lopsided support from hedge funds, private equity and venture capital), and health care (including an acute Red-to-Blue swing within the pharmaceutical industry)… In addition to their accustomed dominance within the culture industry, Democrats now prevail in the three most conspicuously dynamic sectors of the 21st century US economy.”

Based on campaign contributions by sector, Republicans maintain preponderance in energy, real estate, retail, and agribusiness.

Why the national security establishment moved ‘from an alliance with Bush-Cheney to Obama-Clinton’? My guess then would be that the security establishment decided to go with the winners, the richest and most dynamic side of the Great Reset Economy.

To quote from Matthew Karp’s analysis of plutocratic politics, the Democrats have become, particularly after 2016, not only a fundamentally technocratic party, ‘conspicuous in the embrace of science as an ideological value’, “but a party which can claim a new kind of predominance atop America’s social, cultural and economic hierarchies.”

And a party which has in its camp high finance, the high-tech sector, the health-pharma-biotech complex, the culture-media complex necessary to create legitimacy, and which has also coopted the security apparatus of the state, should be unbeatable. The Republicans must be operating in panic mode by now.

Godfree RobertsMay 22, 2023 at 7:55 pm

To faction is human. To unite is civilized.
It doesn’t have to be politics or money or anything.
People will kill each other for wearing certain colors or speaking with a certain accent.
The Blue and Green factions (ancient equivalents of today’s football clubs) got so murderous and riotous that Constantine had the Army simple slaughter all the Greens after herding them into an amphitheater.

Geo. Washington:

Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party, generally.

This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but, in those of the popular form, it is seen in its greatest rankness, and is truly their worst enemy.

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries, which result, gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of Public Liberty.

Without looking forward to an extremity of this kind, (which nevertheless ought not to be entirely out of sight,) the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.

It serves always to distract the Public Councils, and enfeeble the Public Administration. It agitates the Community with ill-founded jealousies and false alarms; kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.

There is an opinion, that parties in free countries are useful checks upon the administration of the Government, and serve to keep alive the spirit of Liberty. This within certain limits is probably true; and in Governments of a Monarchical cast, Patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in Governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And, there being constant danger of excess, the effort ought to be, by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.

NYT_MemesMay 22, 2023 at 10:48 pm

The real coup was in the GFC. The globalist showed themselves to be above the law, meaning they now have sovereign power over the government. Everything since then has been tightening the screws. John Titus has a series of videos at UTube/BestEvidence which cover the Clinton to Obama years plus a deep dive into some historical context and how the coup was accomplished – silently. There is much more to what has happened to this nation, far more than virtually anyone can see.

Mark GislesonMay 23, 2023 at 7:35 am

“The PMC achieved class consciousness in 2016”

I would submit that this attaining of consciousness was the result of a fecal implant. The Clinton campaign used social media like a machete. They were significantly more obsessed with purging the Left/BernieBros than they were with any kind of positive messaging.

After the loss, a stunned PMC simply ceded their voice to the Clintonists who then brayed about Russia nonstop for an entire election cycle in which no one dared take control of the party from them because of Russia/Trump!!! They didn’t lose, they were cheated.

As for Dip State’s participation, it’s always seemed probable that they were running the show. The folks in charge of the DNC are grifters, not planners. This also explains the insanely counterproductive themes/memes emerging from the DNC, the kinds of things CIA planners would come up with if they wanted to keep the Democrats from gaining too much of a majority.

I’m happy with the report. Much can be built on this foundation whereas I honestly don’t know that we’d be better off if Durham had included everything as then Garland would have simply classified the report and we’d still be mumbling about that instead of talking about Her crimes.

1. Steve H.May 23, 2023 at 8:48 am

   > purging the Left/BernieBros

   > “Ridiculous!” “Ridiculous!” “Ridiculous!”

Lambert StretherMay 24, 2023 at 2:42 am

> It just may be that the power of capital has now met its equal in the ever increasing power of digital surveillance–giving the spooks the self-confidence to now institute an in-your-face strategy of counterterrorism on all of us.

I think that if the spooks did not have the approval or at least tacit consent of important oligarchs — perhaps the count of oligarchs is so low we need to think of individuals, and not factions? — then the explosion of the surveillance state would not be happening. (Of course, except for those whose firms profit from it, they might not care very much, thinking themselves immune, or they figure they’ll profit later if one of their own makes the running, like Uber leading to a whole new legally defined class of exploited worker, or Twitter showing you can fire a ton of tech workers and your firm will still run.)

NOTE I don’t think most of us have factored into our thinking the presence in our society of a class of people who can literally buy anything, including any service. Neal Stephenson’s Termination Shock touches on this point.

Origins of Debt: Michael Hudson Reveals How Financial Oligarchies in Greece & Rome Shaped Our World

The death of ownership

[Business Insider, via The Big Picture 5-27-2023]

Companies are taking away your ability to actually own the stuff you buy….

Eventually, Apple rolled out a software update that allowed FaceID to work after a screen repair. But the phone still warns users the screen is not genuine unless they use an “Apple-authorized” repair provider. But why does anyone need Apple’s blessing to fix their phone? You already paid for it — you own the phone, you should be able to fix it on your terms.

Apple isn’t the only company to put restrictions on goods that people have already bought. As more devices in our lives run on software, manufacturers have started to exert more control over their products even after the customer has taken them home. In some cases, companies force customers to use their repair services, disabling the product if they try to fix it themselves. In other instances, corporations require people to pay for ongoing subscription to access basic features of the goods.

Modern software allows manufacturers to tether product users to them, forever. Companies are just beginning to monetize this control, with dystopian methods and the assistance of America’s unbalanced copyright laws. But there are ways that consumers and policymakers can push back on this corporate attempt to redefine what it means to “own” a product….

In other cases, companies have tried to block consumers from accessing certain features at all unless they pay up first. Car companies have taken the lead on pushing this trend. Mercedes-Benz and BMW made headlines for charging users monthly fees for better acceleration and the use of heated seats, respectively. You already bought the seat heater (and the luxury car that contains it), but now you need to pay for the right to turn it on? Printer companies have used similar tactics to get people to sign up for subscriptions that remotely monitor ink levels but can also shut off your machine if you fail to pay. Imagine if you had to pay the contractor who built your house a monthly fee so the light switches would work!

Finally, manufacturers use internet connectivity to monitor and control what you do. If they detect you did something they don’t like (maybe hot-wiring your heated seat), they can take away or disable other features. Tesla has been accused of revoking charge capacity, fast-charging compatibility, and other features remotely. Consumers are afraid to do anything that displeases manufacturers, knowing that they can be punished….

Manufacturers also author dense user agreements that contain language to prevent customers from tinkering with the product. Most people have run into long “Terms of Use” documents chocked full of legalese that stretch on for pages and pages. In most cases, consumers simply check “agree” with little to no knowledge about what they’re signing. A 2017 Deloitte survey of 2,000 consumers found that 91% click to agree with terms and conditions without reading them.

But inside these dense documents are rules that prevent people from fixing their goods or let the company take back ownership if they don’t approve of how customers use the product.

[TW: Swell. We’re moving from the internet of things shit to the internet of vindictive things shit.]

70 percent of US voters fear intel agencies will interfere in elections: Harvard poll 

[The Cradle, via Naked Capitalism 5-24-2023]

Billionaires And Democracies Are Incompatible– It’s Us Or Them

Howie Klein, May 18, 2023 [downwithtyranny.com]

[TW: The headline says it all.]

 

(anti)Republican Party debt terrorism

Republicans would rather Crash the Economy than roll back Bush & Trump Tax Cuts for the Wealthy

Lefty Coaster, May 24, 2023 [Daily Kos]

[TW: Again, the headline says it all.]

Republican Debt Ceiling Lies

Ryan Cooper, May 23, 2023 [The American Prospect]

…the Biden administration has proposed numerous revenue-raisers as part of the negotiations, only to be dismissed out of hand. Jeff Stein reports at The Washington Post: “On a phone call last week, senior White House officials floated about a dozen tax plans to reduce the deficit as part of a broader budget agreement with House Republicans, including a measure aimed at cryptocurrency transactions and another for large real estate investors, two of the people said. They were all swiftly rejected by the GOP aides on the call, the people said.”

If one were legitimately concerned above all with budget deficit, then it makes no sense to categorically rule out reducing it with more taxes rather than benefit cuts. A dollar is a dollar either way—and especially at a time of historically gigantic corporate profits, one would think deficit scolds would conclude that soaking the rich at least a bit should be part of the program. But one would think wrong.

A supporting piece of evidence here is that Republicans’ ransom demands include rescinding the additional $80 billion in funding for the IRS passed in last year’s Inflation Reduction Act. Funding the IRS not only greatly improves the agency’s customer service—thanks to that money, phone response time fell by 84 percent during the 2023 tax season—it will also more than pay for itself. The Congressional Budget Office estimated that the new funding will produce a net revenue increase of $124 billion over a decade.

The reason is that chronic IRS underfunding has led to a collapse in the audit rate, and hence an enormous “tax gap” of unpaid taxes, largely among the rich. “Three fifths of the tax gap is due to underreporting of income by the top 10% of taxpayers, and more than a quarter comes from the top 1%,” writes Vanessa Williamson at the Brookings Institution. “Audits of millionaires have dropped 61% in less than a decade. For those making more than $5 million, the audit rate has dropped 87%.”

Will the Democrats Unilaterally Disarm on the Debt Ceiling in the Name of Being “Normal”?

Neil H. Buchanan, May 23, 2023 [verdict.justia.com, via mikemonett, A week from debt limit Armageddon, this is the only guy I notice today discussing the options, Daily Kos]

After his first fatefully unwise decision to negotiate with Republicans over the debt ceiling in 2011, President Barack Obama realized that the smart response to subsequent attempts at hostage-taking was to refuse to engage with his radically irresponsible opponents. Republicans ultimately blinked each time, meaning that there was never a moment when Obama had to answer the question: What will the President do if Republicans, whether deliberately or by sheer incompetence, fail to approve a debt ceiling increase before disaster strikes?

We are now, it seems, very likely to find out what President Joe Biden will do in that situation, because Republicans are both more ideologically extreme and less politically competent than they were in the 2010s….

Yesterday, Professor Michael Dorf and I wrote here on Verdict that President Biden’s fundamental tendency toward caution and centrism were leading the White House astray, causing the President to offer weak excuses for refusing to recognize that the debt ceiling law is unconstitutional….

The Impeachment Trap

In fact, even if Biden were to follow Klein’s advice and allow the government to default on legally required payments, the Republicans would be very likely to blame him for violating the law. And they will not be wrong in the immediate sense, because what Professor Dorf and I call the trilemma is an impossible situation for a President precisely because he would have to violate at least one law. For the last decade, I have been referring to this as an “impeachment trap,” because Republicans can honestly say that the President has violated his oath of office by failing to obey one law or another.

Biden is at his moment of maximum risk. Look out. 

Ryan Grim, May 23, 2023 [badnews.substack.com]

The major tax cuts pushed through by President George W. Bush were set to expire at the end of 2012, creating what was called a fiscal cliff.  If Congress did nothing, taxes would go up on everybody. Harry Reid told me in an interview for “We’ve Got People” that going over the cliff was precisely his plan. Reid said: “I thought that would have been the best thing to do because the conversation would not have been about raising taxes, which it became, it would have been about lowering taxes.”

In other words, let all the rates go up, and then bargain with Republicans to reduce taxes just for the middle class and the poor. McConnell similarly knew the difficult position going over the cliff would put him in, and in talks with Reid, he agreed to let rates on people making more than $250,000 per year go back up.

Reid felt like he had successfully pushed McConnell to the brink; McConnell had a strong sense that Reid intended to go over the cliff and put Republicans up against a wall. It was now Sunday, December 30, 2012, and Democrats only had to hold out until Tuesday to find themselves in a dramatically improved political position, as the dawning of the new year would mean the tax cuts expired and automatically reverted to pre-Bush levels. At that point, it would be Republicans who would be left pleading for rate cuts.

In desperation, McConnell reached out directly to Vice President Joe Biden, calling him on the phone and explaining that Reid was refusing to be reasonable. Over the course of the day, McConnell and Biden struck a deal. A senior Republican aide told me: “Biden gave Republicans everything they wanted in exchange for fixing the fiscal cliff problem.”

What are the possible scenarios for the U.S debt ceiling?

[J.P. Morgan Private Bank Global Investment Strategy Team, Weiheng Chen, Madison Faller, May 18, 2023, via , via The Big Picture 5-23-2023]

A Cohort of Scientists Is About to Be Crushed 

[Mike the Mad Biologist, via Naked Capitalism 5-21-2023]

I find it remarkable that Science Twitter isn’t in absolute panic over the likely capitulation by the Biden administration* to House Republicans regarding the debt ceiling. If Republicans get their way, we’re looking at 22 percent cuts in all non-military, non-Social Security spending (and a couple of other programs)–and that’s if the cuts are equally distributed. If science gets hit worse, it will be really awful. Between these likely cuts and the pandemic, there’s a just-beginning cohort of researchers that is going to be obliterated.

Urgent measures are needed to shore up NIST’s crumbling facilities 

[Physics Today, via Naked Capitalism 5-25-2023]

The Expanding Role of Medicaid in US Health Care

run75441 [Angry Bear, via Naked Capitalism 5-26-2023]

…Originally published in July 2020. In light of the Republicans’ debt ceiling negotiations with the Biden administration in 2023, involving discussions of a federal Medicaid work requirement, the report is current as of May 24 with some updated statistics….

A few statistics show how Medicaid underpins much of U.S. health care.

• About 1 in 5 Americans get health insurance through Medicaid. It is run by the states with federal financial support and oversight. As of January 2023, more than 85.9 million people in the U.S. were in Medicaid. This according to the latest data posted by the Centers for Medicare and Medicaid Services (CMS). There were about 7 million participants in the Children’s Health Insurance Program (CHIP), considered a sister initiative to Medicaid.
• Medicaid paid for 43% of all births in the U.S. in 2018, while private insurance plans paid for 49%. Policymakers now are looking to expand Medicaid coverage to try to lower the high rate of maternal mortality in the United States. There are bills pending in Congress that would require Medicaid coverage of new mothers from a 60-day period to the entire year following giving birth.
• Medicaid is the largest U.S. purchaser of what it calls behavioral health services, which include mental health treatment and services to treat addiction and substance abuse.
• Medicaid is the primary tool through which the Affordable Care Act (ACA) of 2010 expands the public’s access to health care.

GOP’s cut to IRS funding in debt limit plan would backfire 

[Politico, via Naked Capitalism 5-23-2023]

Republicans’ proposal to rescind $71 billion in IRS funding pushed through by Democrats last year would cut projected tax receipts by $191 billion over the next decade, the nonpartisan Congressional Budget Office estimates.

The result: The government would find itself an additional $120 billion in the hole.

 

Disrupting mainstream economics

Why Are Economists Still Uncertain About the Effects of Monetary Policy? 

[Federal Reserve Bank of Richmond, via The Big Picture 5-24-2023]

Despite decades of research, there remains substantial uncertainty about the quantitative effects of monetary policy. Different models produce conflicting predictions, and these predictions lack precision. This article discusses some reasons for these issues. In addition to the relative lack of data, the structure of the economy has continued to evolve, posing challenges for empirical macroeconomic analysis more generally. Economists have been confronting these challenges by developing tools to jointly consider a range of models and continuing to seek new sources of data.

 

Health care crisis

This company made billions by surprise-billing helpless ER patients. Then justice arrived 

[LA Times, via Naked Capitalism 5-26-2023]

Some businesses deserve sympathy when they land in bankruptcy. Then there’s Envision.

The Tennessee company prospered as a provider of medical staff to hospitals around the country. It concentrated on emergency physicians, anesthesiologists and radiologists for a simple reason: Their patients typically had no ability to pick and choose among these doctors when they need care.

Waiting to be seen at the emergency room or already laid out on an operating table, the patients weren’t in a position to ask whether the doctor was in their insurance plan’s network….

Surprise billing — sometimes known as “balance billing” — by Envision and other firms like it elicited so much public outrage that Congress was finally moved to do something about the practice. In 2020 it enacted the No Surprises Act, which went into effect on Jan. 1, 2022….

The No Surprises Act blew a sizable hole in Envision’s profit-and-loss statement — part of “a whiplash-inducing onslaught of obstacles and complications” facing the firm’s management, its bankruptcy filing stated….

It’s worthwhile, then, to take a closer look at what this firm and its owner, the private equity firm Kohlberg Kravis Roberts & Co., have been up to, and why we should celebrate the modest change in the American healthcare system represented by the act. (TeamHealth is owned by another private equity firm, Blackstone.)….

The firms first showed interest in healthcare businesses in the 1990s, initially focusing on nursing homes and hospitals because of their reliable cash flows, as a Brookings Institution study outlined in 2021. By 2010, the private equity firms had moved on to urgent care clinics, ambulance services, and emergency departments and hospital services such as anesthesiology and radiology “that could utilize surprise out-of-network billing,” Brookings found.

According to a 2018 Yale University study that heavily influenced the legislative movement in Congress, it wasn’t unusual for emergency doctors to end their network contract with insurers. On average, the Yale researchers reported, out-of-network physicians charged more than twice the going in-network insurance reimbursements and more than six times the standard reimbursements from Medicare.

The study in effect pointed the finger at the physician staffing firms, Envision (known at the time as EmHealth) and TeamHealth. “Both firms profit from the fact that out-of-network physicians working in in-network hospitals cannot be avoided by patients.” The runup in charges, the researchers wrote, “undercuts the functioning of healthcare labor markets, exposes patients to significant financial risk, and reduces social welfare.”

….Private equity investors had long had their eyes on Envision, which was founded in 1992. The firm oscillated between private and public ownership, as a succession of investors sought to squeeze it for profits.

[TW: I bolded the name Kohlberg Kravis Roberts & Co., because one of my first assignments back in the mid-1980s was to examine the leveraged buy-out of RJR/Nabisco, by KKR. By the mid 1990s, KKR, because of all the companies it had LBO’d, controlled more corporate revenues than any other company in USA. Moreover, KKR’s name came up a number of times in connection with banks notorious for laundering criminals’ money. Catherine Austin Fitts has written that the RJR/Nabisco buyout only made sense if KKR intended to use RJR/Nabisco’s massive cash flow to hide dirty money.  To top it all off, Henry Kravis has given millions of dollars to the (anti)Republican Party and (anti)Republican candidates, including $1 million to Trump’s presidential inauguration.]

These ‘experts’ sold the U.S. on a disastrous COVID plan, and never paid a professional price

[Los Angeles Times, via Naked Capitalism Water Cooler 5-23-2023]

“They’ve held credentials from some of the world’s most elite universities — Harvard, Stanford, Johns Hopkins, Oxford. They’ve been welcomed into the highest government policy councils. They became fixtures on television news shows and were quoted incessantly by some of the nation’s leading newspapers. They’re a cadre of academics and scientists who pushed a discredited solution to the COVID pandemic, shunning masks, school closings, even vaccines, all in the name of reaching the elusive goal of ‘herd immunity,’ resulting in what may have been hundreds of thousands of unnecessary American deaths. That’s the contention of ‘We Want Them Infected,’ a painstakingly documented new book by Jonathan Howard, a neurologist at New York University and a veteran debunker of the pseudoscience contaminating our efforts to fight the pandemic.’” And: “In his book, Howard reserves his deepest scorn for the promoters of the “Great Barrington Declaration,” a manifesto for herd immunity published in October 2020 and signed initially by epidemiologists Jay Bhattacharya of Stanford; Martin Kulldorff, then of Harvard; and Sunetra Gupta of Oxford. (Thousands of other academics and scientists would later add their signatures)…. As Howard documents, the declaration was little more than a libertarian fantasy.”

[Lambert Strether: “Needs a copy editor. “Libertarian fantasy” is redundant.]

[Twitter, via Naked Capitalism Water Cooler 5-26-2023]

.

Climate and environmental crises

CHART Average global surface temperature 1860-2020

[National Centers for Environmental Information, via The Big Picture 5-21-2023]

Billionaires Contribute to Climate Change the Most — and Determine Climate Policy 

[Teen Vogue, via Naked Capitalism 5-25-2023]

France bans short-haul domestic flights that could be made by train 

[ABC Australia, via Naked Capitalism 5-24-2023]

New $800M sustainable aviation fuel plant planned for Washington state 

[Seattle Times, via Naked Capitalism 5-21-2023]

Silicon heterojunction solar cells with up to 26.81% efficiency

Delft University of Technology [techxplore.com, May 9, 2023]

The new solar cell is made of the same material as 95% of all current solar cells but performs much better at 26.81% efficiency. The innovation further cements the crucial role of solar cells in the energy transition. The research results were published May 4 in Nature Energy.

The report on this breakthrough is the result of a unique international collaboration between LONGi Green Energy Technology Co., Ltd,—one of the global leading producers of solar cells of the highest quality—together with Sun Yat-Sen University (SYSU) and Delft University of Technology (TU Delft). The team optimized the design of the solar cell by using a much improved “nanocrystalline-silicon hole contact layer.” Such a new layer has been known as a theoretical possibility for quite some time, but it was never successfully put into practice.

How solar farms took over the California desert: ‘An oasis has become a dead sea’ 

[Guardian, via Naked Capitalism 5-23-2023]

[Twitter, via Naked Capitalism 5-24-2023]

.

The Climate War Between the States 

[Heat Map, via Naked Capitalism 5-26-2023]

Southwest states strike landmark deal with Biden to conserve Colorado River water 

[CNBC, via Naked Capitalism 5-23-2023]

Time to pay the piper: Fossil fuel companies’ reparations for climate damages 

[One Earth, Cell, via Naked Capitalism 5-21-2023]

The recent progress in climate attribution science makes it evident that [the companies that engage in the exploration, production, refining, and distribution of oil, gas, and coal] have played a major role in the accumulation and escalation of [the costs of climate harm] by providing gigatonnes of carbon fuels to the global economy while willfully ignoring foreseeable climate harm. All the while they successfully shaped the public narrative on climate change through disinformation, misleading ‘advertorials,’ lobbying, and political donations to delay action directly or through trade associations and other surrogates. Fossil fuel companies have a moral responsibility to affected parties for climate harm and have a duty to rectify such harm.

 

Information age dystopia / surveillance state

Facebook parent Meta hit with record fine for transferring European user data to US 

[AP, via Naked Capitalism 5-22-2023]

FBI Abused Spy Law 280,000 Times In a Year

The Register, via Naked Capitalism 5-23-2023]

Leaked Government Document Shows Spain Wants To Ban End-to-End Encryption 

[Wired, via Naked Capitalism 5-23-2023]

Media And Politicians Throw So Much Bullshit At Us That It Is Difficult To See Through It 

[Moon of Alabama, via Naked Capitalism 5-23-2023]

 

Restoring balance to the economy

Monopoly Round-Up: The Debt Ceiling and a Major Win against Airlines 

Matt Stoller [BIG, via Naked Capitalism 5-22-2023]

• The Antitrust Division just brought down airline fares in the Northeast, winning an antitrust case against American Airlines and JetBlue on Friday. Here’s the backstory. In 2020, the two airlines had come together in what was called the Northeast Alliance, which was a joint venture in New York and Boston where the two airlines would fully integrate operations. It was essentially a quasi-merger, since 75% of JetBlue’s flights came to or from the two hubs, and one approved by Trump DOT Secretary Elaine Chao on her way out the door. The Biden Antitrust Division had to challenge it to undo what looked like a pretty corrupt deal. They did. On Friday, in a spectacular opinion, Judge Leo Sorokin ruled against the airlines. Sorokin said the arrangement consolidated the market for airline travel, and in doing so, substantially reduced competition. The airlines had argued they needed to be bigger to take on Delta, which the judge dismissed as both untrue and irrelevant to the standards of the Sherman Act….
• In a busy legislative session, the new fully Democratic Party controlled Minnesota-government voided non-compete agreements. It also became the fourth state to make prison phone calls free. Excellent! A very cruel practice by private equity to extract cash from the families of prisoners.

How to Humiliate an Economist

Matt Stoller, May 27, 2023 [BIG]

Judge Leo Sorokin had enough of the experts of American Airlines and JetBlue last week, calling their testimony “unnuanced” “glib” “misleading” “bias” “not soundly reasoned” and “absurd.”….

In antitrust, the place where the dirty laundry gets washed clean is in the economic consulting firms, with names like Compass Lexecon and Charles River Associates. Economists and expert witnesses, often tenured faculty members at well-known universities, have side gigs at these consulting shops working for merging parties in antitrust cases, for somewhere around $1350/hour. The University of Chicago’s Dennis Carlton, for instance, has made over $100 million in his career at Compass Lexecon. This industry creates a structural barrier to justice, as it’s almost impossible to bring an antitrust case without one of these people on your side, which raises the cost of litigation into the millions….  It’s an industry without accountability. For instance, Carlton at one point predicted that if AT&T couldn’t buy T-Mobile, then T-Mobile’s business would fall apart. The merger was blocked, and T-Mobile did quite well. But it didn’t matter, Carlton is still considered an important disinterested expert.

No one tracks who got things right and wrong

Workers in the South Are Defying History with Union Wins 

Tom Conway, the international president of the United Steelworkers Union (USW) [Independent Media Institute, via Naked Capitalism 5-26-2023]

Union campaigns are scoring more successes in the South despite the high-profile defeat at the Amazon warehouse in Bessemer, Alabama

The Bill That Would Stop Buybacks

Harold Meyerson, May 25, 2023 [The American Prospect]

To be introduced later today, this House bill would stop the massive diversion of corporate revenues into CEOs’ pockets….

Until 1982, buying back shares wasn’t actually allowed. In that year, Ronald Reagan’s appointees to the SEC passed a new rule legalizing the practice. It took some time for CEOs to realize that this method of self-enrichment had been opened to them. It wasn’t until 2014, when University of Massachusetts economist William Lazonick published a report in the Harvard Business Review documenting the practice, that it began to come to public notice. Lazonick looked at

the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. During that period those companies used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37% of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.

A Liberalism That Builds Power

David Dayen, May 25, 2023 [The American Prospect]

In December 2021, the U.S. shipped seven million tons of liquefied natural gas (LNG), more than market champions Qatar and Australia. An explosion at the Freeport LNG terminal in June 2022 was the only thing keeping the U.S. from solidifying its position as the world’s largest exporter, and once Freeport came back online in February 2023, exports hit new records for two straight months.

Six years earlier, the country was a net importer, and only one port in Alaska could ship LNG abroad. In February 2016, Sabine Pass in Louisiana became the first active export terminal in the Lower 48 states. LNG export capacity subsequently climbed from next to nothing to a peak of 14.1 billion cubic feet per day. In 2015, the U.S. exported 28.3 billion cubic feet of LNG; just in February of 2023, it exported 326.2 billion.

In short, America built a complex industry virtually from scratch into the global leader in six years, under today’s permitting rules and approval processes, with the same standards for public participation, through companies that had no guarantee of profitability. Seven different terminals were built or expanded in the past half-decade, with at least 16 more projects in the pipeline.

You may not like the proliferation of LNG, which expends energy to chill and degasify, releases prodigious amounts of carbon pollution, causes health hazards for local communities, and is fueled by private equity. What you cannot say is that this industry is the product of a country that has forgotten how to build. A mix of national policy, willing financing, and economic and political power easily overcame whatever lethargy is judged to be endemic to the U.S. system.

The Biden administration is trying to generate a similar dynamic to expand clean energy and critical technology industries. Three major laws—the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act, and the Inflation Reduction Act (IRA)—aim to subsidize domestic manufacturing and the supports underlying it. In the first few months, the public outlays have been matched by a surge of private investment, faster than any analyst expected.

 

The carnage of mainstream neoliberal economics

Rigged Capitalism and the Rise of Pluto-populism: On Martin Wolf’s “The Crisis of Democratic Capitalism” 

[Los Angeles Review of Books, via Naked Capitalism 5-22-2023]

Grand Theft Capital: The Increasing Exploitation and Robbery of the U.S. Working Class 

[Monthly Review, via Naked Capitalism 5-21-2023]

“The Wall Street Grumble”

[American Economic Liberties Project, via Naked Capitalism Water Cooler 5-23-2023]

“The American Economic Liberties Project has been tracking the number of editorials, op-eds, and letters to the editor published in the pages of the Wall Street Journal that raise concerns about the antitrust enforcement record of FTC Chair Lina Khan. In total, as of May 2023, the elite voices of the Wall Street Journal have published 63 pieces since the beginning of Khan’s tenure, all of them intending to undermine the FTC’s enforcement actions. In our view, that means Chair Khan is on the right path. According to our analysis, the Journal is publishing a screed against Chair Khan once every 11 days!”

The War on Poverty Is Over. Rich People Won. 

[Atlantic, via The Big Picture 5-21-2023]

The sociologist Matthew Desmond believes that being poor is different in the U.S. than in other rich countries. How is poverty different in America than in its peer countries? Matthew Desmond: We have more of it. We have double the child-poverty rate of Germany and South Korea. We have a lot less to go around with, in terms of fighting poverty. We collect a much smaller share of our GDP in taxes every year….

Desmond: I don’t know if you’ve ever been to a zoning-board meeting where folks are debating affordable housing. It shows you just how much work and effort and force goes into defending segregation. The folks who show up for those meetings are really not representative of the broader community. They tend to be whiter, more affluent, more likely to be homeowners. It’s this interesting thing wherein a democratic process has an undemocratic outcome, because representation in this case is a defense of the status quo….

It’s interesting to read the histories of segregation in the 1950s or 1930s. The segregationists used the same exact arguments that we do today. They talk about property values, schools, and crime….

Lowrey: What about federal spending on housing?

Desmond: We’re giving a patient with Stage 4 cancer an Advil and wondering why it doesn’t work. In 2020, we spent $53 billion on direct housing assistance to the needy, through public housing, Section 8 vouchers. We spent $193 billion on homeowner tax subsidies. Most of the benefit goes to families with six-figure incomes. Most white Americans are homeowners. Most Black and Latinx Americans aren’t, because of our systematic dispossession of people of color from the land. It is really hard to think of a social policy that does a better job of amplifying our economic and racial inequalities than our current housing policy does….

I don’t know if you’ve ever been to eviction court. But if you go, there are just tons of kids. Until recently, one in the South Bronx had a day care inside it because there were so many kids coming through housing court. What we are comparing is not a family growing up in public housing versus a homeowner in Naperville, Illinois. We’re comparing a family growing up in public housing versus another family paying 50, 60, 70 percent of its income on housing and facing eviction on a routine basis, and maybe homelessness.

That has a profound effect on kids. They lose their school, their teachers, their neighborhood. There are massive health implications and job implications for the parents….

Desmond: In Evicted, I followed this woman I called Arlene. After one eviction, she started applying for housing. She applied to 20 apartments. Then 40 apartments. Then 60. Then 80. I was counting, and she was accepted to none of them. Finally, the 90th person said yes. She got rejected 89 times before she heard yes. Rejection, rejection, rejection, rejection, rejection, then to have someone ask you to think about job training? Or even showing up at your kid’s parent-teacher conference? Poverty just taxes your mind. It captures your mind.

That’s so crucial to our policy debate, because many times we have the causality backwards. Folks will say, If you want to get out of poverty, get a better job and make better decisions. But the evidence is that once we have a floor under people, that’s when they can start self-actuating. I love the health research about what happens when states raise the minimum wage. People stop smoking. Their babies are healthier at birth. Child-neglect charges go down. All these massive prosocial events.

The theory behind that: When you’re like Arlene—rejection, rejection, rejection, eviction, rejection, where are my kids going to sleep at night?—the willpower you might have to stop smoking is diminished. This is crucial to understanding the lived experience of poverty.

Desmond: During COVID, we saw this incredible, bold relief, unmatched since the War on Poverty and the Great Society. If you look at the extended child tax credit, it dropped child poverty 46 percent in six months. If you look at emergency rental assistance, eviction rates drop to the lowest on record. If you look at incomes of families in the bottom half of the distribution—after the Great Recession, it took them 10 years to recover. This time, it took a year and a half. Night and day.

I see this as incredible, incredible evidence of what robust government spending can do.

The Ugly Truth Behind “We Buy Ugly Houses” 

[ProPublica, via The Big Picture 5-21-2023]

HomeVestors of America, the self-proclaimed “largest homebuyer in the U.S.,” trains its nearly 1,150 franchisees to zero in on homeowners’ desperation.

Health Insurance Claim Denied? See What Insurers Said Behind the Scenes

[ProPublica, via The Big Picture 5-21-2023]

Learn how to request your health insurance claim file, which can include details about what your insurer is saying about you and your case.

 

Democrats’ political malpractice

Why The Pedophile Who Led The GOP Is Relevant: We Need To Talk About Hastert, Trump, and Everything Between Them

Oliver Willis, May 18, 2023 [Oliver Willis Explains, via Mike the Mad Biologist]

The disappearing of Hastert says a lot to me about the lack of a killer edge from the Democratic Party, the kind of investment in bare-knuckle politics that is so desperately needed in the current atmosphere, but which the party fails to engage in time and time again.… the abuse conviction of Hastert is almost never brought up by Democratic officials or even pundits on the left side of the aisle.

The disappearing is even more damning when you consider the mountain of allegations, based on absolute nothing, that is frequently heaped on Democrats. According to the right – not the fringe, but mainstream Republicans, conservative pundits and the like – figures like President Joe Biden, President Barack Obama, Sec. Hillary Clinton are nothing short of serial killers and abusers, responsible for a legendary list of crimes and offenses.

One time Obama was even accused of trying to drop a nuclear bomb on Charleston, South Carolina.

Why does this happen? Why do Democrats go into political battles by unnecessarily disarming themselves?

There is the belief among some that Democrats are controlled opposition, that they intentionally throw fights. I admit, it certainly can look that way sometimes….

I think the failure to weaponize the Hastert scandal, and so much else, is because many Democratic leaders find the mechanics of politics “icky.”

While Republicans and the conservative movement revels in combat, valuing ideas like “owning the libs” as among their highest priorities, liberalism still tends to hold on to loftier notions. I have personally caricatured this as “West Wing brain” for liberalism’s obsession with some sort of Pollyanna view of politics, but it is a real phenomenon….

This notion leads Democrats to the idea that they must pursue the higher ground. To quote First Lady Michelle Obama, “When they go low, we go high….

If your political opponents are in the mud and they live and breathe the mud and the mud has unfortunately been a valuable weapon in elevating them to positions of power, you cannot in good conscience simply pretend that the muck doesn’t exist.

Democrats Need to Get Over Their Pathetic Fear of the Supreme Court

Ryan Cooper, May 25, 2023 [The American Prospect]

…This is a terrible position. A sensible president would not be preemptively conceding the Court’s authority in this area. They would be attacking its legitimacy, and preparing—as Franklin Roosevelt did in a similarly dire circumstance—to disobey it….

As James Ledbetter writes in One Nation Under Gold, before the New Deal, contracts commonly stipulated that payments could be required to be in gold or its equivalent. This worsened the Great Depression, as regular waves of bank failures prompted people to start hoarding gold, draining liquidity out of the banking system (and possibly out of the country). So after taking office, FDR and his Democrats passed laws allowing the president to confiscate all gold in private hands, and voiding all gold clauses in contracts.

That led to a number of lawsuits demanding payment in gold as originally specified, which were consolidated in one case that got to the Supreme Court in 1934. Oral arguments did not go well for the administration, so FDR directed his staff to prepare legal work-arounds, and drew up a speech explaining why he was going to disobey the ruling. (Luckily, the Court narrowly ruled in favor of the government, and the resulting opinion actually uses as precedent the 14th Amendment clause about the validity of the public debt.)

Nonprofits are sapping the progressive project (excerpt)

Noah Smith [Noahpinion, via Naked Capitalism 5-21-2023]

We need to bring back state capacity…. I am not claiming, of course, that all spending that goes through nonprofits is waste, or that nonprofits should have no role in helping the government do its job. But I think we’ve reached an odd political equilibrium in America where we overlook the failure modes of this form of privatization. And those failure modes present a real danger to the progressive project.

(anti)Republican Party

How to Raise $89 Million in Small Donations, and Make It Disappear

[New York Times, via The Big Picture 5-21-2023]

A group of conservative operatives using sophisticated robocalls raised millions of dollars from donors using pro-police and pro-veteran messages. But instead of using the money to promote issues and candidates, an analysis by The New York Times shows, nearly all the money went to pay the firms making the calls and the operatives themselves, highlighting a flaw in the regulation of political nonprofits.

Who’s Funding ‘No Labels’? Pro-GOP Billionaires Opposed to Democracy 

[Common Dreams, via Naked Capitalism 5-24-2023]

A video released Monday by the pro-worker media organization More Perfect Union delves into the funders behind the dark money group No Labels, which has grown its nationwide influence in recent months as it promises to back candidates in the 2024 elections who will give voters a break from “the angriest voices dominating our politics” and make “commonsense progress.”

Founded in 2009, No Labels has for more than a decade peddled the familiar notion that the majority of Americans are political centrists, despite numerous polls showing that people in the U.S. broadly support progressive policy proposals such as Medicare for All, higher taxes for the wealthiest Americans, and universal childcare…. More Perfect Union‘s investigation into who has poured money into the organization shows how No Labels has depended heavily on corporations and billionaires who benefit from sidelining popular proposals aimed at helping working people….

Louis Bacon, billionaire CEO of hedge fund Moore Capital Management, gave $1 million each to No Labels and the Republican Party after donating the maximum allowable contribution to Sinema. Nelson Peltz, a major backer of former Republican President Donald Trump and a billionaire investor, gave $900,000 to two No Labels political action committees and also maxed out his donations to Sinema.

The director of No Labels called on its donors—who also include private equity executive Stephen Schwartzman of Blackstone and former 20th Century Fox CEO James Rupert Murdoch—to donate heavily to Sinema after she helped block the Build Back Better Act.

Leaked Brownstone Institute Emails Reveal Support for Child Labor, Underage Smoking 

Walker Bragman [ImportantContext.news, via Naked Capitalism 5-26-2023]

…What the emails do show, however, is Brownstone founder Jeffrey Tucker and several Brownstone contributors, including one of the institute’s 2023 fellows, discussing the merits of “the good old days” when children smoked tobacco and performed labor. The group lamented how young people today don’t share their values and are allegedly coddled and entitled.

In the course of the conversation, Tucker admitted to supporting “youth” cigarette smoking and labor. At one point, he confessed that he had even provided his high schooler son with cigarettes to get him away from marijuana. Later in the conversation, Tucker wrote that he would “fully [repeal] the 1936 ‘child labor’ law,” because “it is cruel and robs kids of a good life.”….

A veteran of various dark money groups in billionaire industrialist Charles Koch’s political influence network as well as a neo-confederate and neo-confederate leaning groups, Tucker has long supported rolling back child labor laws—going as far back as 2013 when he took part in the “School Sucks Project,” a libertarian crusade against formal schooling….

With the COVID pandemic, Tucker turned his focus to public health. He founded Brownstone in May 2021 with the purpose of combatting government interventions put in place to reduce the spread of the virus. The group, which Important Context has previously reported received most of its revenue in 2021 from just nine large, anonymous contributions, became a mainstay in a larger war on public health measures waged by business-aligned right-wing groups to minimize economic disruption….

In recent months, Republican states have responded to these economic woes by starting to roll back restrictions on child labor. In March, following revelations of children as young as 13 working in meatpacking plants in her state, Arkansas Gov. Sarah Huckabee Sanders signed a bill into law making it easier for businesses to exploit the labor of young people.

The Brownstone emails provide a clear picture the war on COVID mitigation measures has primed the pump for a war on child labor laws.

State Election Officials Have Their January 6th Moment

Gabrielle Gurley, May 25, 2023 [The American Prospect]

Breaking up ERIC, the state election administration organization, could be the boldest attempt yet to destabilize national elections.

The King’s Dominion (The real Succession)

[Vanity Fair, via The Big Picture 5-27-2023]

His sons are at war. He’s divorced his fourth wife and broken an engagement to a would-be fifth. The jewel in what’s left of his crown faces a billion-dollar lawsuit. Will the division Rupert Murdoch spent his life fostering undo his empire? ….

…Although he is a nonagenarian intent on living forever, Murdoch has been consumed with the question of his succession. He long wanted one of his three children from his second wife, Anna—Elisabeth, 54, Lachlan, 51, and James, 50—to take over the company one day. Murdoch believed a Darwinian struggle would produce the most capable heir. “He pitted his kids against each other their entire lives. It’s sad,” a person close to the family said. Elisabeth was by many accounts the sharpest, but she is a woman, and Murdoch subscribed to old-fashioned primogeniture. She quit the family business in 2000 and launched her own phenomenally successful television production company. Lachlan shared Murdoch’s right-wing politics and atavistic love for newsprint and their homeland, Australia. “Lachlan was the golden child,” the person close to the family said. But Murdoch worried that his easygoing son, who seemed happiest rock climbing, did not want the top job badly enough. In 2005, Lachlan, then News Corp’s deputy chief operating officer, quit and moved back to Sydney after clashing with Fox News chief Roger Ailes and chief operating officer Peter Chernin. That left James as the heir apparent. For the next decade, James climbed the ranks, vowing to make the Murdoch empire carbon-neutral and investing in prestige media brands like Hulu and the National Geographic Channel. But James’s liberal politics and desire to make News Corp respected in elite circles rankled Murdoch, who continued to woo Lachlan with Ahab-like determination. In 2015, the older son agreed to return from Australia as his father’s heir. “It was a big slap in the face,” a person close to James said.

Fox News’s ‘vitriolic lies’ present clear threat to US democracy, says woman suing rightwing network

[The Guardian, via The Big Picture 5-23-2023]

Disinformation expert Nina Jankowicz, who is suing over campaign of falsehoods, says ‘if Fox isn’t brought to account, it will not stop.’

No More Losers

[The American Conservative, via Naked Capitalism Water Cooler 5-23-2023]

“Since the time Nixon initiated a generation of GOP dominance in 1968, the Republican nominee had won, on average, thirty-seven of the fifty states in each presidential election. Twice—in 1972 and 1984—a Republican incumbent carried all but one. Bob Dole pulled nineteen, scraping together just 159 electoral votes against Bill Clinton’s 379. Bob Dole, that is, was the last massive loser put forward by either major party. What does it say, then, when his campaign manager returns from the grave to foist another candidate on a divided GOP? Scott Reed, who led Bob Dole and the party to electoral humiliation 27 years ago, was announced this week as co-leader of “Allies of Mike Pence,” a Super PAC set up to fund the former vice-president’s long-shot candidacy for the 2024 nomination. Since the bungling of 1996, Reed has slinked from swamp role to swamp role, among the most recent of which was political director of the U.S. Chamber of Commerce. (He was terminated for cause in 2020 after “an internal review…revealed that Scott repeatedly breached confidentiality, distorted facts for his own benefit, withheld information from chamber leadership and leaked internal information to the press.”)

Negotiating with post-Trump Republicans is like dealing with a toddler’s tantrum

[The Guardian, via The Big Picture 5-23-2023]

While one side is happy to defecate on the floor, the other side has no choice but to clean up the mess.

DeSantis’s $13.5m police program lures officers with violent records to Florida 

[Guardian, via Naked Capitalism 5-24-2023]

The (anti)Federalist Society infestation of the courts

Justice Thomas Ethics Review Questioned by US Court Leader in 2012

[Bloomberg, via The Big Picture 5-21-2023]

Thomas faced complaints in 2011 over reporting wife’s income Judiciary leadership member objected to lack of information.

Supreme Court curtails Clean Water Act 

[SCOTUSblog, via Naked Capitalism 5-26-2023]

Samuel Alito’s Assault on Wetlands Is So Indefensible That He Lost Brett Kavanaugh 

[Slate, via Naked Capitalism 5-26-2023]