Week-end Wrap – Political Economy – November 19, 2023

Week-end Wrap – Political Economy – November 19, 2023

by Tony Wikrent

Global power shift

The Hinge of History:  Palestine and the New World Order

Patrick Lawrence [Scheerpost, via Naked Capitalism 11-15-2023]

There is disgust and condemnation now, and they find expression not only on the streets of many cities but also in governing circles. Axios reported Monday that an internal State Department memo, signed by 100 officials at State and its aid agency, USAID, accuses President Biden of lying about Israel’s military campaign in Gaza and of complicity in war crimes. On Tuesday, The New York Times put the signatories of another letter to Biden at 400 representing 40 government departments and agencies, including the National Security Council — this in addition to an open letter to Secretary of State Blinken signed by more than 1,000 Agency for International Development employees. So far as I know, this measure of dissent in policy and governing circles is more or less unprecedented….

The devastation of America’s status in the community of nations—and I do not think we witness anything less—is altogether the consequence of a complacency long evident among America’s policy cliques. As Chas Freeman points out in his exchange with Chris Lydon, Israel is now breaking U.S. laws circumscribing the use of American-made armaments; it is in breach of multiple U.N. Security Council resolutions. And nobody in the U.S. says anything about it, Freeman says with obvious ire. It is the rest of the world that is beginning to speak up. I put it this way: We watch as the Age of Hegemonic Hypocrisy, as I propose we call it, draws to a close….

…We now have the Chinese preparing, by all appearances, to play a diplomatic role in the search for a settlement. We have Iran and Saudi Arabia summiting to determine a common course of action in response to the Gaza crisis. We have Turkey militantly denouncing Israel and talking to Iran after long, long years of animosity. We have a goodly number of America’s friends pulling the plug on their relations with Tel Aviv.

Postscript to ‘What’s on the tube…’ 

Gilbert Doctorow [via Naked Capitalism 11-15-2023]

…There are a lot of possiblities to explain subjectively what CNN and the BBC are doing. Objectively what they are doing is re-establishing their credibility as news as opposed to propaganda providers.  And I think this is especially obvious for the BBC.  One of their senior journalists who has his own program now calls it “Unspun” and repeats in the trailer-adverts that he is delivering news without spin.  Why would he be saying this if it were not obvious that everything the BBC has been saying about Russia for the past 20 months is “spun” and is being rejected by viewers for such tendentiousness.

This is all the more timely for these broadcasters now that the lies they have been disseminating about the Ukraine war are overturned by the latest news from the supreme Ukrainian military commander Zaluzhny in his widely cited interview in The Economist. Now, finally, we read in mainstream that the Ukrainian losses in the war may approach 400,000 dead, not 70,000 as official Kiev claims and that the kill ratio till now may be 10:1 or 12:1 in Russia’s favor….

The empire sails into a hurricane of consequences in the Middle East

Alex Krainer, November 17, 2023

Both Netanyahu‘s government and Hamas did their part to escalate the conflict: in addition to bombing Gaza, Israel launched a number of attacks against Lebanon, Syria, West Bank and even an “accidental” strike on targets in Egypt. US forces also launched strikes on Syria. For its part, Hamas called for the Muslim world to unite in a holy war against Israel. Recall, Hamas is the creation of Israel and western deep state structures which has been lavishly funded and supported, principally by western-allied Qatar, but also by Israel and western powers.

Five days after they lit the fuse on 7 October, Hamas leader and founder Khaled Mashal published a video message appealing to Muslims worldwide, asking them to carry out Jihad and become martyrs for Al-Aqsa. He urged Muslims to spill their blood for Palestine and even asked religious leaders to issue a fatwa compelling Muslims to take part in the holy war against Israel. Mashal himself wasn’t exactly volunteering: he sent his appeal from Qatar where he is safe from the mayhem he unleashed in Gaza.

Mashal has no links to Gaza since he never actually lived there… In the weeks that followed the war’s outbreak, Muslim world backed away from the impulse to attack Israel, and even Hezbollah’s Hassan Nasrallah declined to open a new front from Lebanon.

In short, they didn’t take the bait. Had muslim countries united to attack Israel, many western nations would have united to defend her, and might even have been able to do so with substantial popular support. Instead, using a variety of paramilitary forces in the region, the Muslim powers began to attack US bases in Syria and Iraq. Instead of ensnaring the Muslim world in a devastating war escalation, the US itself has become ensnared in a trap that could ultimately force it out of the region entirely….

One Theory Explains Why We Can’t Have Nice Things 

Jessica Wildfire [OK Doomer, via Naked Capitalism 11-15-2023]

…We’re surrounded by people we care about who can’t change to save themselves, no matter how bad things get. They can’t bring themselves to do anything different. They can’t operate on a more realistic worldview. They can’t break with their political party. They can’t wear a mask. They can’t demand clean air. They can’t update their vaccines. They can’t call out genocide when they see it.

Why?

Two social psychologists at Yale proposed a theory to explain all of this two decades ago. It’s a theory of theories, a master theory.

It’s called systems justification.

According to John Jost and Mahzarin Banaji, we’re wired to resist change. Members of a group will go out of their way to defend the status quo. They do it to preserve social harmony and to boost their own self-esteem. Since most of us play varying roles in perpetuating the current systems, we all feel somewhat motivated to justify them to each other….

Gaza — Palestine — Israel

‘Let Us Not Hurry to Our Doom’ 

Seth Anziska, November 9, 2023 [The New York Review, via John Ganz, Unpopular Front]

In the New York Review of Books, historian Seth Anziska has what I think is an important piece, which looks at the First Lebanon War—an event that always seemed to me an key turning point for the worse in the Israel’s history—as context and analogy for the present war in Gaza:

“…Last summer was the fortieth anniversary of the first Lebanon War, which began in June 1982, when Israel invaded Lebanon with the stated aim of targeting militants from the Palestine Liberation Organization (PLO). Even as it promised a limited incursion, Prime Minister Menachem Begin’s government had a far more ambitious plan to root out Palestinian nationalism from Lebanese territory. Soon the army had laid siege to Beirut as part of its ground invasion and bombing campaign, which in the southern city of Sidon destroyed entire homes, at least one hospital, and swathes of Ain al-Hilweh, the country’s largest Palestinian refugee camp.

“The 1982 Lebanon War became what some have called Israel’s Vietnam. By the end of the first, ten-week phase of the war over 19,000 Lebanese and Palestinian combatants and civilians and 364 Israeli combatants were dead. The PLO was expelled to Tunis, reconstituting Palestinian politics both in the diaspora and on the ground in Palestine, paving the way for the group’s greater international recognition, including by the United States, and contributing to the outbreak of the first intifada. South Lebanon was occupied by Israeli forces and the South Lebanon Army (SLA), which remained there until Israel withdrew its forces and the SLA collapsed in 2000. Local opposition militias evolved into Hezbollah, an Iranian-backed paramilitary organization that in the 1980s emerged as a central player in the region.

“Meanwhile a movement of military refusal emerged in Israel itself, starting in the opening days of the war, when combat veterans founded a group called Yesh Gvul (“There Is a Limit”) to advocate for conscientious objection. The shocking accounts and images of the Sabra and Shatila massacre in September 1982—when IDF-backed Phalangist forces murdered between eight hundred and three thousand Palestinian refugees, including infants, children, and pregnant women—temporarily pierced support for Israel within the Jewish diaspora and brought 10 percent of the Israeli population into the streets. Many began questioning Israel’s use of force and the eliminationist thinking about Palestinians that had enabled the violence, while others charged Israel’s critics with promoting antisemitic blood libels. Despite the PLO’s dispersal, the Palestinian quest for self-determination intensified. As the CIA’s National Intelligence Estimate argued in November 1982, “Israel has been surprised to discover that its military victory has not produced the expected political dividends and seems to have strengthened its antagonists’ political hand.” “

No Endgame in Gaza

Fintan O’Toole [December 7, 2023 issue of The New York Review]

After weeks of bombardment and thousands of deaths, what are Netanyahu’s political and ethical limits?

….“Enough” is the word that Yitzhak Rabin, then Israel’s prime minister, stressed in his remarkable speech of September 1993 at the signing of the Oslo Accords”

“We who have fought against you, the Palestinians, we say to you today in a loud and a clear voice: Enough of blood and tears. Enough…. We are today giving peace a chance and saying to you and saying again to you: Enough.”

Enough is a both a political goal and an ethical limit. Without the first, it is hard to set the second. To know how far you can go, you have to know where you want to get to. Benjamin Netanyahu’s government seems to know neither….

srael has already tried two radically different strategies in Gaza. The first was a familiar military and political orthodoxy: conquest and colonization. Gaza, having belonged to the Ottoman empire and then to the British mandate in Palestine, was governed by Egypt after 1948, though neither its traditional residents nor the large refugee population were granted Egyptian citizenship. After its capture by Israel in 1956, Gaza was quickly returned to Egyptian control, but following its reconquest in the Six-Day War of 1967, the territory was ruled by an Israeli military governor for almost forty years. (Civil control of Gaza City was transferred to the Palestinian Authority in 1994.) In the late 1970s the right-wing government of Menachem Begin imagined that this rule could be made permanent and stable if enough Jews were settled in the territory. Eventually, 8,500 Jewish people did settle in Gaza—a number large enough to create a sense of existential threat for Palestinians but too small to be able to control the strip. Israel needed three thousand soldiers to protect these 8,500 Jews. In the second intifada it lost 230 of those soldiers.

Ariel Sharon’s decision in 2005 to end the military occupation and forcibly withdraw the settlements was not a wild caprice. It was a recognition of reality: the post-1967 attempt at colonization could not be sustained. By occupying Gaza, Israel had gained nothing and lost soldiers, money, and international goodwill. It’s worth recalling that Netanyahu supported the withdrawal for sound policy reasons before he opposed it for cynical political ones.

It was not for nothing that in 2014, when Hamas was firing rockets into Israel, Netanyahu did not support demands from his own foreign minister Avigdor Liberman for a military reconquest and reoccupation of Gaza. Netanyahu, when running for election, had made aggressive noises about Hamas, claiming in 2008 that “we will finish the job. We will topple the terror regime of Hamas.” But this was utterly deceitful. Netanyahu never wanted to topple the Hamas regime. He wanted to retain the threat that he might do it as a rhetorical trope, a furious sound that signified nothing. It is this empty vessel that Netanyahu is now seeking to fill with meaning and purpose—and with blood.

[X-Twitter, via Naked Capitalism Water Cooler 11-13-2023]

[X-Twitter, via Naked Capitalism Water Cooler 11-13-2023]

.

Israel and America’s Growing Zugzwang 

[Simplicius the Thinker, via Naked Capitalism 11-18-2023]

… the U.S. is not ready for true full-scale war, doesn’t have the ammo or assets in place, nor has the resolve—as there is a full-blown mutiny inside the State Department as more and more officials side with Palestinians and believe the U.S. to be in the wrong.

The tide is slowly being turned against Israel with many in the Western structures now seeing a ceasefire and some sort of political solution as best. In fact, some have opined that the West is signaling this to Israel via its control over the media. There has been a very bizarre raft of new reports from Western MSM stalwarts like BBC and CNN that are suddenly quite critical of Israel….

The powers that be … are panicking because Israel has always been nothing more than a neo-colonialist forward base for the Western / Atlanticist empire to dominate the Middle East and thereby the Heartland of the world. Israel’s current actions are seen as accelerating the realignment of the entire globe to such a dangerous degree that the U.S. and co. see no “off-ramp” to ending the conflict without the total loss of influence in the MidEast, as well as the handing the entire future destiny of the globe on a silver platter to Russia and China—who are being perceived as the ‘good guys’ on the right side of history as per this conflict….

So the U.S. itself senses that Israel is potentially deliberately trying to draw Hezbollah in so that big daddy America can come in and “finish off” Hezbollah/Iran once and for all. Meanwhile, U.S. knows the dangers of this as it has no where near the current capability to fight a protracted conflict against Iran, which could virtually shut down the entire global economy and cause all of Biden’s “economic miracles” to be flushed down the toilet, creating a disastrous scenario for the 2024 elections that would hand the win to some opposition party, particularly Trump….

Send America’s Floating Hospitals to Gaza 

[Bloomberg, via Naked Capitalism 11-18-2023]

[Lambert Strether: “A very obvious thing to do, with no downside. Why aren’t we doing it?” ]

War

It’s Time to End Magical Thinking About Russia’s Defeat 

[The Wall Street Journal, via Naked Capitalism 11-17-2023]

Why is the West moving to replace Zelensky?

[Asia Times, via Naked Capitalism 11-13-2023]

Are we in a countdown to all-out nuclear war? 

Gilbert Doctorow [via Naked Capitalism 11-17-2023]

…If you pay attention, you see that the West, and Europe in particular, is staging one provocation against Russia after another with complete indifference to where this may lead.

One month ago, Latvia was threatening to close the Baltic to Russian ships as punishment for the possible Russian involvement in damage to the Balticonnector pipeline.  That scandal quickly dispelled when the Finns announced that the likely cause was the anchor of a passing Chinese merchant vessel which detached during a storm.

However, now a similar threat has been issued by the European Commission as it has directed Denmark to inspect and possibly arrest oil tankers carrying Russian oil passing through Danish territorial waters on their way to the Atlantic for deliveries worldwide. The inspections will be to see if the vessels have proper European insurance coverage or not and the pretext for arrest will be that the vessels pose an environmental hazard. All of this is in answer to the findings of the Financial Times that nearly all Russian oil exported by sea is now being sold at well above the $60 ceiling mandated by Europe thanks to a shadow fleet that Russia assembled in the past year. October oil was sold for $80. which was just $10 below Brent.

One wonders whether anyone in Brussels or in Copenhagen stopped to think what response the Russians may make to any threats to stop their oil shipments by force on the seas.  Russia is not some far away Iran without the wherewithal to react in these waters.

Injustice

LEFT WITH NO DEFENSE, McBRIDE PLEADS GUILTY 

[Consortium News, via Naked Capitalism 11-17-2023]

With his options for a fair trial exhausted, Australian whistleblower David McBride on Friday asked for a new indictment to which he pled guilty on all counts.

McBride, a former military lawyer, was charged with stealing government documents and giving them to journalists to reveal covered-up murders of unarmed civilians by Australian soldiers in Afghanistan.

His defense had rested on the court accepting his argument that his oath to the British crown gave him a duty beyond obedience to military orders to instead inform the entire nation of these crimes.

But the trial judge, Justice David Mossop, said he would instruct the jury, which was to be selected starting Monday, to disregard any public interest in the defense. “There is no aspect of duty that allows the accused to act in the public interest contrary to a lawful order,” he told the court Wednesday.

[TW: “There is no aspect of duty that allows the accused to act in the public interest contrary to a lawful order” SHAMEFUL! This certainly not accord with the principles of civic republicanism, which mandates a pursuit of justice and a regard for the common good. ]

Strategic Political Economy

U.S. Population Projected to Begin Declining in Second Half of Century

[U.S. Census Bureau, November 9, 2023 [via downwithtyranny.com]

The U.S. population is projected to reach a high of nearly 370 million in 2080 before edging downward to 366 million in 2100. By 2100, the total U.S. resident population is projected to increase by only 9.7% from 2022, according to the latest U.S. Census Bureau population projections released today. The projections provide possible scenarios of population change for the nation through the end of the century.

The Majority of All U.S. Children are of Color

Stacy M. Brown, April 14, 2021 [Washington Informer, via downwithtyranny.com]

In 2019, there were more than 73 million children in the United States – making up 22 percent of the nation’s population.

Children of color made up 49.8 percent of all children, and more than half of the 19.6 million children under five in America were individuals of color.

The statistics are part of the nonprofit  Children’s Defense Fund’s “The State of America’s Children 2021 report.”

How inheritance data secretly explains U.S. inequality

[Washington Post, via The Big Picture 11-15-2023]

A little over 1 in 5 U.S. households had received an inheritance at some point in their lives as of 2022, according to the Federal Reserve’s remarkable Survey of Consumer Finances. The inheritance rate jumps to 2 out of 5 if you look only at folks in their 70s, who have had more time for their parents and favorite aunts to meet a regrettable but timely demise. But even those folks are in the lucky minority.

Gustavus Myers, The Ending of Hereditary American Fortunes (1939)

Assaults on the’hereditary transmission of wealth came into the open in 1829 by a resolution adopted by the Workingmen’s Party in New York City “that the first appropriation of the soil of the State to private and exclusive possession was eminently and barbarously unjust. That it was substantially feudal in character, inasmuch as those who received enormous and unequal possessions were lords and those who received little or nothing were vassals.” Having made this
timely and pertinent approach, understood then by everybody, the resolutions went on to press the main point: “That hereditary transmission of wealth, on the one hand, and poverty on the other, has brought down to the present generation all of the evils of the feudal system, and that, in our opinion, is the prime source of all our calamities.”

Benjamin Franklin on Property

[Writings of Benjamin Franklin, 9:138, via Thomas Neuberger, November 17, 2023]

All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition.

[Neuberger adds: “File under ‘Property is a social agreement, not a right.’ ” ]

Milanovic Gets Feisty

Peter Radford ‘[The Radford Free Press, via Mike Norman Economics, November 15, 2023]

I have just finished reading the excellent new book by Branko Milanovic. It’s called “Visions of Inequality” and is a tour through the history of economics since the days of Quesnay. More specifically it takes a look at how a handful of prominent economists have treated the topic of inequality. Most of you will have covered this territory before, but examining how people such as Quesnay, Smith, Ricardo, Marx, Pareto and Kuznets discussed the problem of distribution is not only an excellent refresher on their individual thought, but is also a tour through the evolution of economics itself.…

In his very long seventh chapter, where he lays bare the lean years for the study of distribution, he goes on offense. He prefers to call the economics developed during those mid to late twentieth century decades “Cold War” economics because it was ideologically tainted by the preferences of the American ruling class. It also suffered a catastrophic breakdown of method. The two go hand in hand. In order to eliminate power — and thus by definition things such as class — economics reduced its boundaries and focused only on matters that did not disturb its patrons.…

Power matters. The study of inequality allows us to reconnect economics with reality…

The 20 Farming Families Who Use More Water From the Colorado River Than Some Western States

[ProPublica, via Thomas Neuberger, November 17, 2023]

Anger Is What’s Driving the US Economy

[Bloomberg, via The Big Picture 11-16-2023]

Chief Economist of the United States Department of Labor (2010–2011)

A deep-seated resentment about a “rigged” system has been simmering since long before the pandemic and continues to affect consumer attitudes….

…Why is the gap between attitudes and action so large? Much of the economic anger expressed in the polls may be less about current economic conditions and more about the economy the US has built over the past 40 years: one of high and rising inequality, with greater economic fragility due to higher income volatility and a reduced safety net. A deep-seated anger about how the economy is “rigged” has been simmering since long before the pandemic.

Revisiting Greedflation 

Barry Ritholtz, November 16, 2023 [The Big Picture]

GRAPH — Total Sales compared to Cost of Goods Sold

The first person to identify this was Corbu’s Samuel Rines. (Twitter) He first began discussing the corporate preference for maintaining margin in 2022; over time, he observed some companies had pricing power for both price AND volume. Soon after, “Price over volume” began to morph into “Price AND Margin” (PAM).

It’s the kind of subject ripe for academic analysis. Mike Konczal, director of the macroeconomic analysis program at the Roosevelt Institute, wrote a report, Prices, profits, and power. (See charts above and below) The focus was on annual net profit margins. It was about 5.5% in the 1960 to 1980 era. In the ZIRP decade of ultra-low rates in the 2010s, it rose to 6%. In 2021, it shot up to 9.5%.

That’s a huge, unexplained increase:

GRAPH — Markups have increased

…The “tell” about corporate profits and greedflation came after 2022 proved to be such a challenging year in the markets. Despite 500+ BPS of rate increases, a ~20% drop in the S&P500, and a 30+% drop in the Nasdaq 100, profits have remained much better than expected….

Restoring balance to the economy

A new book to read: Busting the Bankers’ Club 

[University of California Press, via Naked Capitalism 11-13-2023]

The UAW’s Game Changer: The Right to Strike over Mass Layoffs

Les Leopold, November 15, 2023

The United Auto Workers has scored major victories in its new contracts with the Big Three automakers: GM, Ford, and Stellantis. Not only did the union win massive wage increases and other critical demands, but it also won the virtually unheard of right to strike over plant closures. This historic victory could have significant benefits for all working people….

Non-Union Auto Workers Win, Too 

[The Lever 11-14-2023]

The impacts of the historic 2023 United Auto Workers strike, which ended victoriously in October, are now reverberating across the industry. In recent weeks, major automakers Hyundai, Toyota, and Honda all announced plans to raise wages at their U.S. factories by 25 percent over the next five years, matching the deals that union auto workers won from the Big Three automakers after six weeks of targeted strikes.

A General Strike in 2028 Is a Uniquely Plausible Dream 

[In These Times, via Naked Capitalism 11-15-2023]

“The UAW’s call for unions to align their contract expirations is legitimately achievable. But the work starts now.”

At Tesla, Swedish Workers Can Do What American Workers Can’t

Harold Meyerson, November 14, 2023 [The American Prospect]

…Tesla has no factories in Sweden, but it does employ around 120 mechanics to tune up and fix their cars. The union of such workers, IF Metall, has been trying for years to get Tesla to the bargaining table, as is the norm in Sweden, where roughly 90 percent of the workforce is represented by unions. The very idea is anathema, of course, to Elon Musk, who believes such matters at the company, and perhaps in the world at large, are best left to Elon Musk. After Musk responded with a flat No to recognize the union, the mechanics walked off the job on October 27 and remain on strike.

What followed illustrates nicely what it means when a nation has solidaristic values reinforced by solidaristic laws. A few days into the strike, the union of Swedish dockworkers announced it would no longer unload Teslas at the nation’s ports. (The Teslas sold in Sweden are shipped in from German and U.S. Tesla factories.) Then, the painters’ union joined in and vowed that its members would no longer do paint jobs on any Teslas in need of a touch-up. Now, the Communications Employees vows not to make deliveries to Tesla’s offices if Tesla doesn’t recognize its mechanics union by November 20.

These are not actions that U.S. unions could undertake in support of a UAW strike at Tesla. During the great period of union growth in the U.S., however—roughly 1936 through 1947—such “solidarity strikes” were legal and not uncommon. With the passage of the National Labor Relations Act in 1935, they were seen, and codified, as a necessary way to build worker power in a capitalist nation where undue power by managers and shareholders was the default condition of economic relations—a condition that had contributed to a catastrophic global depression in the early 1930s.

With the enactment (over President Truman’s veto) of the Taft-Hartley Act by a Congress dominated by Republicans and right-wing Southern Democrats in 1947, however, secondary strikes and boycotts by workers in support of striking workers at a different company or in a different sector were outlawed. At the time, unions represented roughly one-third of the American workforce, but under Taft-Hartley, their rise was abruptly halted and within a decade began its 60-plus-year decline to its current 10 percent level (just 6 percent in the private sector). That puts the share of unionized workers about where it was before the NLRA legalized workers’ right to bargain in the mid-’30s.

Last Year 12,000 Lobbyists Were Whispering in the Ear of Congress with a Bankroll of $4.1 Billion; Five Senators Are Demanding Transparency

Pam Martens and Russ Martens, November 16, 2023 [Wall Street on Parade]

Yesterday, five U.S. Senators who are members of the Senate Banking Committee issued a letter to Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), demanding that he issue a rule that would force publicly-traded companies to disclose the dollar amount of their lobbying expenditures as well as the issues they are lobbying for or against. The authors of the letter were: U.S. Senators Elizabeth Warren, (D-Mass.), Sherrod Brown  (D-Ohio), Jon Tester (D-Mont.), Tina Smith (D-Minn.), and John Fetterman (D-Pa.).

The carnage of mainstream neoliberal economics

Why Protectionists Sometimes Win: The Narrative Power of Economic Nationalism

Marvin Suesse [VoxEU, via Naked Capitalism 11-16-2023]

In her introduction, Yves Smith quotes from her 2010 book Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism:

Recall that the situations that economists stipulate in theoretical models are idealized, usually highly so. Consumers are rational and have access to perfect information. There are no transaction costs. Goods of a particular type are identical. Capital moves freely across borders. Using these assumptions, or similar ones, the model is then shown to produce a global optimum.This highly abstract result is then used to argue for making the world correspond as closely to the model as possible, by lowering transaction costs (such as taxes and regulatory costs) and reducing barriers to movements of goods and capital.

But these changes will not produce the fantasy world of the model. Doing business always involves costs, such as negotiating, invoicing, and shipping. Capital never moves without restriction. Buyers and sellers are never all knowing, and products are differentiated….

The article shows, first in narrative form, then with the required formulas, that if all the conditions for the ideal state cannot be met, trying to meet anything less than all of them will not necessarily produce an optimum. Partial fulfillment of equilibrium conditions may be positively harmful, forcing the economy to a less desirable state than it was in before. Thus simple-minded attempts to make the world resemble hypothetical optimizing models could well make matters worse.

Fiscal austerity does not on average reduce public debt ratios 

Bill Mitchell [Modern Monetary Theory, via Mike Norman Economics, November 13, 2023]

The resurgence of economic orthodoxy is a great example of how declining schools of thought can maintain dominance in the narrative for extended periods of time if the vested interests are powerful enough. In the case of the economics profession, mainstream New Keynesian theory persists because it serves the interests of capital. Recently, the IMF urged the Australian government to engage in ‘fiscal consolidation’ in order to support further interest rate hikes by the RBA aimed at reducing inflation quickly. In general, the IMF is urging nations to engage in fiscal austerity in order to bring their public debt ratios down. The problem is that even their own research shows that these fiscal adjustments on average do not succeed. And, usually, they leave a damaged society where the lower income and disadvantaged cohorts are forced to endure the bulk of the negative effects.…

SURVEILLANCE WAGES: A TAXONOMY 

Zephyr Teachout [Law and Political Economy Project, via Naked Capitalism 11-12-2023]

One notable feature of the so-called gig economy is that workers, such as for-hire drivers and delivery workers, are often paid different amounts for performing the same task. More broadly, as work by the Markup and Veena Dubal shows, the manner in which these wages are calculated is a black box: they are determined by a complicated algorithm to which the workers have no access….

In addition to making worker’s pay much less predictable, the potential spread of these management techniques has broader democratic implications. They will increase economic and racial inequality, undermine labor solidarity, and put workers in a profoundly humiliating position in relationship to their boss, one where worker speech and autonomy are highly circumscribed….

With this taxonomy in hand, let’s return to the democratic implications of such wage discrimination. To begin, real time and individually targeted wages will transform the nature of supervision. It undermines the importance of relationships between supervisors and mid-level decisionmakers, instead allowing upper-level management to continuously spy and tinker with low-level workers. Workers are then employed in a state of rational paranoia, where they know that they are being punished and rewarded and experimented upon, but they have no way of knowing whether any given decision they are faced with is a result of a game, an experiment, a punishment, a reward, or changing circumstances on the ground and changing needs at the job. Being dominated, watched, and controlled are destabilizing conditions even when they are occasional, and all the more so if they are the center of work life. Privacy concerns that have long attended the workplace—and never been adequately addressed—are thus even more important today, as the lack of protection from intimate intrusions enables this further harm.

Beyond undermining the liberties of the moderns, intrusive surveillance and experimentation and differentiation also necessarily undermines the liberties of the ancients. The people being surveilled are not just workers but citizens, who must vote, serve on juries, share their experiences with the public, and engage in public debate. Citizens are also subject to some of the same monopoly practices in their role as consumers, but the relationship between the consumer and surveillance capitalism and the worker and the surveilled workplace is different. At work—when labor markets have a handful of dominant players—employees don’t even have the theoretical option of opting out of being watched. Negotiating the terms of surveillance and experimentation simply doesn’t happen. And unlike the consumer, the worker is surveilled for the entire scope of their workday, with no default right of respite.

Why Mainstream Economics Got Inflation Wrong 

James K. Galbraith, November 15, 2023 [Project Syndicate]

Leading economists’ misdiagnosis of inflation in 2021-22 was the latest episode in a long-running series of failures, from not foreseeing the 2008 financial crisis to endorsing self-destructive austerity in the 2010s. Either mainstream economists need to re-examine their core beliefs, or the profession needs a new mainstream.

The End of Milton Friedman’s Reign

Patrick Iber, November 13, 2023 [The New Republic]

…Jennifer Burns’s biography of the economist Milton Friedman arrives at a moment when his legacy is increasingly questioned. For no one is more closely linked with neoliberalism than Friedman, who preached the virtues of markets in popular books, on public television, and from his position at the University of Chicago. One of Friedman’s major accomplishments, as Burns describes it, is to have crafted the “basic intellectual consensus about free markets and limited government that powered twentieth-century American conservatism.” ….

Because the book avoids polemic, the reader will not leave with a deep understanding of why Friedman’s influence has faded. There are very good reasons to doubt that his view of the world is the right one for the problems of our time. Burns has written with one kind of fairness in mind. But a more critical look at Friedman’s legacy could have been fair, too. Friedman’s statue casts a long shadow, and a different vantage would have shown something less monumental, but not less true.

Is There an Establishment Plan to Repeal Antitrust Laws?

Matt Stoller [BIG, via Naked Capitalism Water Cooler 11-17-2023] , BIG].

“Here’s Montana Senator Jon Tester, running for reelection in a very Trump-friendly state as a Democrat, attacking consolidation in the meat-packing and seed industries as a point of distinction between the parties… [T]he juxtaposition of very popular antitrust with ham-fisted efforts to weaken antitrust provides fertile terrain for doing some brute politics…. Given where most Republican and Trump voters are on issues of corporate power, the attack ads write themselves… That kind of ad could be done in a Republican primary, or a general election. They could also be used in Democratic primaries, or general elections. It really does not matter. The point is, right now, lower prices are the top priority for over two-thirds of voters. Yet, most voters haven’t heard about what antitrust enforcers are doing… Senator Jon Tester thinks it’s politically salient enough to bring up. It won’t take much more for big business to be on the ballot in 2024.” • Appointing Lina Kahn is one of the very few unambiguously good things Biden has done, and he’s not running on it. Curious.

Big Tech on Trial: Is Google’s Reckoning Finally Here?  

Matt Stoller [BIG, via Naked Capitalism 11-12-2023]

The Anti-Surveillance Coalition’s Highest-Stakes Gamble 

Forever Wars by Spencer Ackerman, via Naked Capitalism 11-12-2023]

Confronting the Threat of Deepfakes in Politics 

[Tech Policy Press, via Naked Capitalism 11-12-2023]

Is it Google “magic” or just user data? 

[Big Tech on Trial, via Naked Capitalism 11-18-2023]

[Lambert Strether notes: “Theory of the case. Well worth a read.”]

Climate and environmental crises

‘It feels like I’m not crazy.’ Gardeners aren’t surprised as USDA updates key map 

[NPR, via Naked Capitalism 11-18-2023]

… U.S. Department of Agriculture’s “plant hardiness zone map,” and it’s the national standard for gardeners and growers to figure out which plants are most likely to survive the coldest winter temperatures in their location.

This week the map got its first update in more than a decade, and the outlook for many gardens looks warmer. The 2023 map is about 2.5 degrees Fahrenheit warmer than the 2012 map across the contiguous U.S., says Chris Daly, director of the PRISM Climate Group at Oregon State University that jointly developed the map with the USDA.

Daly says the new map means about half the country has shifted into a new half zone and half hasn’t. In some locations, people may find they can grow new types of flowers, fruits, vegetables and plants.

Many of the nation’s gardeners are not surprised by the change….

Well-designed cities can withstand 21st-century weather extremes 

[Interesting Engineering, via Naked Capitalism 11-13-2023]

Creating new economic potential – science and technology

The Ultra-Efficient Farm of the Future Is in the Sky

[Wired, via The Big Picture 11-13-2023]

Take a tour of a rooftop laboratory where scientists show how growing crops under solar panels can produce both food and clean energy.

3 takeaways from Biden’s big transmission plan

Brian Dabbs, Miranda Willson, Jeffrey Tomich, Jason Plautz, November 14, 2023 [E & E News Energy Wire]

A long-awaited study released by the Department of Energy last month laid out the areas of the country with the biggest transmission needs. DOE could soon spell out its plan to use the siting authority — which was strengthened by the 2021 bipartisan infrastructure law — to pave the way for national transmission corridors. Some energy experts argue that program could alter the course of electricity development as the Biden administration seeks a carbon-free U.S. grid by 2035.

Oligarchy

Billionaire Philanthropy Is a Scam

Jason Linkins, November 18, 2023 [The New Republic]

…if there’s one thing that money is absolutely stupendous at doing, it’s solving problems. Naturally, the more money you have, the more problems you can solve. Which is why the fact that we’ve allowed a large portion of an otherwise finite amount of wealth to become concentrated in the hands of an increasing number of billionaire plutocrats is something of a crisis: Since they have all the money, they call the shots on what problems get solved. And the main problem they want to solve is the public relations problem that’s arisen from their terrible ideas.

Naturally, the ultrarich put on a big show of generosity to temper your resolve to claw back their fortunes. Everywhere you look, their philanthropic endeavors thrive….

But as a new report from the Institute for Policy Studies finds, these pledgers aren’t following through on their commitments—and the often self-serving nature of their philanthropy is actually making things worse for charitable organizations.

As the IPS notes, the business of being a billionaire—which suffered nary a hiccup during the pandemic—is booming. So one of the challenges that the Giving Pledgers face is that the rate at which they accrue wealth is making their promise harder to fulfill. The 73 pledgers “who were billionaires in 2010 saw their wealth grow by 138 percent, or 224 percent when adjusted for inflation, through 2022,” with combined assets ballooning from $348 billion to $828 billion….

Big Publishing Killed the Author

Scott W. Stern, November 15, 2023 [The New Republic]

How corporations wrested creative control from writers and editors—to produce less interesting books.

The suggestion that Beloved, Toni Morrison’s acclaimed novel about slavery and its afterlives, is also a parable about the publishing industry would be bizarre, even offensive—if, that is, Morrison herself hadn’t explicitly suggested it. For years, Morrison had felt not merely penned in by her career as an editor at the publishing giant Random House; she had felt indentured, “held in contempt—to be played with when our masters are pleased, to be dismissed when they are not,” as she declared in a speech six years before publishing Beloved. Upon leaving her job at Random House to focus on writing full-time, she felt “free in a way I had never been, ever.… Enter Beloved.” It was, she continued in the novel’s preface, “the shock of liberation”—liberation from the world of corporate publishing—“that drew my thoughts to what ‘free’ could mean.”….

In despairing of the modern publishing industry, even comparing it to bondage, Morrison was far from alone. Indeed, as Dan Sinykin, an assistant professor of English at Emory University, argues in his revelatory new book, Big Fiction: How Conglomeration Changed the Publishing Industry and American Literature, the increasing consolidation and corporatization of the publishing industry—a process Sinykin calls “conglomeration”—profoundly changed not merely the way novels were published but also the content of those novels. As publishers grew far larger—and ever more concerned with the bottom line—the lives of editors and authors transformed. More than ever before, they became cogs in a corporate machine, responsible for growth and returns on investment, necessarily responsive to the whims and demands of capital—and these pressures increasingly showed up in their output….

Then everything changed. In 1960, the newspaper Times Mirror Company purchased the mass-market publisher New American Library, inaugurating what Sinykin calls “the conglomerate era.” That same year, Random House went public and, flush with newfound capital, acquired Knopf and, a year later, Pantheon. Conglomeration spread rapidly, with well-capitalized behemoths gobbling up mass-market houses and old family-run firms with equal fervor. Over the next decade and a half, the electronics company Radio Corporation of America acquired Random House, a Canadian communications firm nabbed Macmillan, the Italian conglomerate that owned Fiat swallowed Bantam, and Gulf + Western bought Simon & Schuster. Ultimately, conglomeration consolidated more and more imprints under single roofs, with the German conglomerate Bertelsmann seizing Doubleday in 1986, Random House in 1998, and Penguin (via a merger) in 2013….

Plastics Are Poisoning Both Our Bodies and Our Politics

Heather Souvaine Horn, November 17, 2023 [The New Republic]

The petrochemical industry is obstructing a global treaty to reduce plastic pollution.

Bank Regulator Who Approved the Riskiest U.S. Bank Getting Bigger in May, Wants to Do a Survey on Why Trust in U.S. Banks Is Tanking

Pam Martens and Russ Martens, November 13, 2023 [Wall Street on Parade]

Democrats’ political malpractice

The Squad Is About to Fight for Its Political Life 

[Slate, via Naked Capitalism Water Cooler 11-16-2023]

“One of the biggest, bitterest, and most expensive political battles of the 2024 election cycle has emerged: The American Israel Public Affairs Committee, one of the most powerful, best-funded influence operations in Washington, is planning to go all out to knock the famed “Squad”—the small group of highly visible and popular progressive legislators of color, most of them women—out of office…. Critically, all of them reject big-money backing, surviving on just grassroots support and small-dollar fundraising… In the 2022 midterms, the Israel lobby became the largest single-issue outside spender in Democratic primaries, pouring in nearly $30 million via the super PAC the United Democracy Project, and millions more via the Democratic Majority for Israel PAC. It was an astronomical amount of money, mostly directed at knocking progressives out of the primaries, largely in open and redrawn seats. Despite there being fewer vacancies in 2024, that money figure is expected to at least triple.” It would be handy to have an explanation of why AIPAC’s campaign isn’t election interference by a foreign power. More: “So far, House Democratic leadership has been quiet about all this [lol]. Minority Leader Hakeem Jeffries—who took more money from the Israel lobby in 2022 than from any other group and is featured prominently on the lobbying group’s website (alongside House Republican leadership)—hasn’t tried to dissuade the primarying of these progressive Democratic incumbents. He could easily publicly disavow such spending and make it clear to candidates that accepting such support is against caucus policy; in 2019, House Democrats made it an official policy to blacklist any Democratic consultant or political group who aided a progressive challenger against a sitting Democratic incumbent ahead of the 2020 elections. But so far Jeffries has only managed to say: ‘Outside groups are gonna do what outside groups are gonna do. I think House Democrats are going to continue to support each other.’”

How The Israel Lobby Silenced Democratic Dissent 

Amos Barshad, November 16, 2023 [The Lever]

After AIPAC targeted a Jewish Democratic congressman, most Dem lawmakers won’t risk pressing Israel to stop its war.

The City That Just Might Decide the 2024 Election

Dan Simmons, November 16, 2023 [The New Republic]

Milwaukee’s sizable Black population is supposed to help put Biden over the top—but people there aren’t as put off by Trump as white liberals would hope.

It’s Alive! Social Justice Movement Turns On Its Creators

Russell Dobular, November 14, 2023

In 1816, over the course of a rainy vacation in Geneva, 20-year-old Mary Shelly wrote what many consider to be the first science fiction novel. In it, brilliant young medical student Victor von Frankenstein creates a creature sown together from the body parts of the dead that eventually murders everyone he loves, before driving his creator to the ends of the earth in a doomed attempt at revenge. The story has been retold in countless films, most of which focus on the grotesque and the macabre elements, while ignoring the moral and philosophical questions that have made it such an enduring cultural myth. But those questions are so much a part of its legacy that to describe an arrogant creator playing with forces they scarcely understand, losing control of their creation, and then being destroyed by it, all you need to say is, “They created a Frankenstein monster,” and everyone will know exactly what you mean.

And so it is with the decades-long project in liberal politics, corporate branding, and academia, to redirect the famously disruptive energies of youth away from questions of class and economics, and towards questions of race, gender, and sexuality, to the exclusion of all other things. The product of this mad scientist’s experiment in separating race from class, fat from food, attraction from aesthetics, gender expression from sex, and sex in turn from biology, all with the purpose of driving the public to fight over absurdities while our overlords extract the last scrap of wealth remaining in the hands of the peasantry, has been a lumbering misshapen ideological monstrosity, as incapable of forming a coherent sentence as Boris Karloff’s iconic interpretation of Shelley’s nightmare….

Conservative / Libertarian Drive to Civil War

Mildred Rutherford’s War: The “historian general” of the United Daughters of the Confederacy began the battle over the depiction of the Old South and slavery in US history textbooks that continues today

Adam Hochschild [December 7, 2023 issue of The New York Review]

…The long battle over American history textbooks arose from the ashes of the Civil War, which had left the white population of the South devastated. Parts of many towns and cities were in rubble; 18 percent of Southern white men between the ages of thirteen and forty-three had been killed—triple the rate in the North—and by some estimates nearly 200,000 Southern soldiers were wounded. The humiliation of military defeat quickly gave rise to a romanticization of the Old South that became known as the Lost Cause. That vanished land was happy, rural, and idyllic for all, white and Black, the myth goes, without the problems of industrial society, and it was this harmonious world that the brave Confederate soldiers had fought to defend….

The next stage came in the 1890s with the founding of the United Daughters of the Confederacy, which quickly became the most influential force promoting the Lost Cause. The Daughters, as they were called, grew rapidly, quintupling their membership between 1900 and 1920. Their most visible work was helping to erect monuments to Confederate leaders. Although dozens of these have been toppled in the past few years, a far greater number are still standing….

The most powerful impact of the Lost Cause, however, was on schools, in large part because of a formidable woman named Mildred Lewis Rutherford. Both her grandfathers were wealthy Georgia planters; one owned more than two hundred slaves. Two uncles were Confederate generals. Rutherford was as patriotic about her class as her region. The plantation owners she celebrated were, she claimed, descended from the cavaliers, the royalists of the English Civil War, “men of the leading families of England, gentlemen of the best English society, the landed gentry born to wealth.” By contrast, the villain who had crushed their world, Abraham Lincoln, had been chosen by Republicans because they “wanted a man from the lower class to humiliate the upper class.”….

Rutherford’s pamphlet A Measuring Rod to Test Text-Books, and Reference Books in Schools, Colleges, and Libraries laid down instructions as rigid as those of a Soviet cultural commissar:

• Reject a text-book that does not give the principles for which the South fought in 1861.
• Reject a book that says the South fought to hold her slaves.
• Reject a book that speaks of the slaveholder of the South as cruel and unjust to his slaves.

Trump and allies plot revenge, Justice Department control in a second term

[Washington Post, via The Big Picture 11-12-2023]

Advisers have also discussed deploying the military to quell potential unrest on Inauguration Day. Critics have called the ideas under consideration dangerous and unconstitutional.

Building now for a conservative victory through policy, personnel, and training

[Project 2025, Heritage Foundation, via Thomas Neuberger, November 17, 2023]

“It is not enough for conservatives to win elections. If we are going to rescue the country from the grip of the radical Left, we need both a governing agenda and the right people in place, ready to carry this agenda out on Day One of the next conservative Administration…. The 2025 Presidential Transition Project paves the way for an effective conservative Administration based on four pillars: a policy agenda, Presidential Personnel Database, Presidential Administration Academy, and playbook for the first 180 days of the next Administration.” (920 pages in PDF).

Get to Know the Influential Conservative Intellectuals Who Help Explain G.O.P. Extremism

[New York Times, via The Big Picture 11-14-2023]

We shouldn’t grow complacent about just how dangerous it all is — and how much more dangerous it could become. The efforts to overturn the 2020 election failed. We’re told that’s because the institutions held. But it’s more accurate to say that most of the individuals holding powerful positions within those institutions — the White House, the Pentagon, the courts, election officials in Georgia and other states — sided with the Constitution over Mr. Trump’s desire to remain in power.

But what if key individuals decide differently the next time they are faced with this kind of choice? What if they have come to believe that the country is in such dire straits — has reached a state of apocalyptic decadence — that democracy is a luxury we can no longer afford?

A coalition of intellectual catastrophists on the American right is trying to convince people of just that — giving the next generation of Republican officeholders, senior advisers, judges and appointees explicit permission and encouragement to believe that the country is on the verge of collapse. Some catastrophists take it a step further and suggest that officials might contemplate overthrowing liberal democracy in favor of revolutionary regime change or even imposing a right-wing dictatorship on the country….

The Claremont Catastrophists

Probably the best-known faction of catastrophists and the one with the most direct connection to Republican politics is led by Michael Anton and others with ties to the Claremont Institute, a right-wing think tank in California. Mr. Anton’s notorious Claremont Review of Books essay in September 2016 called the contest between Mr. Trump and Hillary Clinton “The Flight 93 Election.” Mr. Anton, who would go on to serve as a National Security Council official in the Trump administration, insisted the choice facing Republicans, like the passengers on the jet hijacked by terrorists intent on self-immolation in a suicide attack on the White House or the Capitol on Sept. 11, was to “charge the cockpit or you die.” ….

John Eastman, a conservative lawyer also at the Claremont Institute… In a conversation this summer with Thomas Klingenstein, a leading funder of the Claremont Institute, Mr. Eastman explained why he thought such unprecedented moves were justified….

…far-right Silicon Valley tech guru and self-described “monarchist,” Curtis Yarvin

The Christian Reverse Revolutionaries

…Stephen Wolfe, whose book “The Case for Christian Nationalism” calls for a “just revolution” against America’s “gynocracy” (rule by women) that emasculates men, persuading them to affirm “feminine virtues, such as empathy, fairness and equality.” In its place, Mr. Wolfe proposes the installation of a “Christian prince,” or a form of “theocratic Caesarism.”….

The Bronze Age Pervert and the Nietzschean Fringe

Farther out on the right’s political and philosophical extremes there’s Costin Alamariu, the person generally understood to be writing under the pseudonym Bronze Age Pervert.

He self-published a book in 2018, “Bronze Age Mindset,” which follows Friedrich Nietzsche and other authors beloved by the European far right in proclaiming that Western civilization itself is on the verge of collapse, its greatest achievements far in the past, its present a “garbage world” in an advanced state of decay….

(anti)Republican Party

How Conservatives Spent Millions in Public Money Building their Party’s Voter Database. Odds Are, You’re In It. 

Douglas Lamont [via Naked Capitalism 11-17-2023]

The (anti)Federalist Society Infestation of the Courts

A guide to the friends and patrons of Clarence and Ginni Thomas

[Washington Post, via The Big Picture 11-12-2023]

These are the associates of Supreme Court Justice Clarence Thomas and his wife, Ginni, who have given gifts, made payments or otherwise supported the couple based on recent reporting from various news outlets.