Week-end Wrap – Political Economy – September 17, 2023
by Tony Wikrent
The Pedagogy of Power
Chris Hedges, September 10, 2023 [scheerpost.com]
The ruling classes always work to keep the powerless from understanding how power functions. This assault has been aided by a cultural left determined to banish "dead white male" philosophers…. It is not that the criticisms leveled against these philosophers are incorrect….
What can these philosophers say to the issues we face — global corporate domination, the climate crisis, nuclear war and a digital universe where information, often manipulated and sometimes false, travels around the globe instantly? Are these thinkers antiquated relics?….
But the study of political philosophy, as well as ethics, is different. Not for the answers, but for the questions. The questions have not changed since Plato wrote “The Republic.” What is justice? Do all societies inevitably decay? Are we the authors of our lives? Or is our fate determined by forces beyond our control, a series of fortuitous or unfortunate accidents? How should power be distributed? Is the good statesman, as Plato argued, a philosopher king — a thinly disguised version of Plato — who puts truth and learning above greed and lust and who understands reality? Or, as Aristotle believed, is the good statesman skilled in the exercise of power and endowed with thoughtful deliberation? What qualities are needed to wield power? Machiavelli says these include immorality, deception and violence. Hobbes writes that in war, violence and fraud become virtues. What forces can be organized to pit the power of the demos, the populace, against the rulers, to ensure justice? What are our roles and duties as citizens? How should we educate the young? When is it permissible to break the law? How is tyranny prevented or overthrown? Can human nature, as the Jacobins and communists believed, be transformed? How do we protect our dignity and freedom? What is friendship? What constitutes virtue? What is evil? What is love? How do we define a good life? Is there a God? If God does not exist, should we abide by a moral code?….
“It is indeed difficult and even misleading to talk about politics and its innermost principles without drawing to some extent upon the experiences of Greek and Roman antiquity, and this for no other reason than that men have never, either before or after, thought so highly of political activity and bestowed so much dignity upon its realm” Arendt writes in “Between Past and Future.”….
If we cannot ask these fundamental questions, if we have not reflected on these concepts, if we do not understand human nature, we disempower ourselves. We become political illiterates blinded by historical amnesia. ….
The Orphan Among Revolutions
Lynn Hunt [The New York Review, October 5, 2023 issue]
Revolutionary Spring: Europe Aflame and the Fight for a New World, 1848–1849
by Christopher Clark
Crown, 873 pp., $40.00
...Judgments of the multiple eruptions of 1848 have not strayed all that far from Marx’s fuming disillusionment. In 1922 the British historian G.M. Trevelyan rendered the verdict that is still cited: “The year 1848 was the turning-point at which modern history failed to turn.” The “military despotisms” of Central Europe survived the challenge, he concluded, thereby laying the groundwork for the “misfortunes of European civilisation in our own day.” In other words, the ultimate defeat of the Central European revolts of 1848 made it possible for Germany and Austria to follow the disastrous policies that led to the carnage of World War I.
In his new book, Revolutionary Spring, Christopher Clark, the Regius Professor of History at Cambridge, wants to counter these negative views by emphasizing the many beneficial outcomes of the insurrections, but like others who have tried to put a more positive spin on the events of those years, he faces a daunting task. His likening of 1848 to the Arab Spring of 2010–2011 suggests the difficulty, since these recent uprisings largely failed to produce lasting democratic reforms. If anything, the Arab Spring seems to have reinforced the lesson taught by 1848 that divisions within revolutionary and democratic coalitions offer an opening to autocratic leaders, whether those already in power or those waiting in the wings for their opportunity.
Restoring balance to the economy
Can the UAW Transform America Again?
Timothy Noah, September 15, 2023 [The New Republic]
But while a 35 percent pay hike may sound audacious, under the current contract, starting pay—at $18 per hour—is about 36 percent below where it would be if the 2007 starting wage had kept up with inflation. Regardless, pay packages for the Big Three’s chief executives all rose 40 percent over the past decade. Fain’s ambitious wage target appears to be having the desired effect. It pushed Ford’s offer up from a 9 percent wage hike to 20 percent, GM’s from 10 percent to 18 percent, and Stellantis’s from 14.5 percent to 17.5 percent. Still, Fain said on Facebook Wednesday night, “their proposals don’t reflect the massive profits that we generated for these companies.”….
Since 2013, profits at the Big Three have risen 92 percent, according to the nonprofit Economic Policy Institute. During that time period, the companies paid out nearly $66 billion in dividends and stock buybacks, $14 billion of that in this year alone. One of the UAW’s more creative demands is that workers receive $2 in profit sharing for every million dollars the Big Three spend on stock buybacks and dividends. That would mean at least $28,000 per worker this year.
[The Lever, September 12, 2023]
The Big Three car companies have authorized $5 billion in stock buybacks over the past year….
On top of the stock buybacks, the Big Three have reported $21 billion in profits in just the first six months of 2023. Despite the enormous gains, the companies have cried poverty in response to union demands for wage increases to make up for decades of pay stagnation.
UAW Workers Explain Why They’re Ready to Strike
[The Real News, via Naked Capitalism 9-14-2023]
[TW: includes a good list of links]
[Twitter-X, via Naked Capitalism Water Cooler 9-12-2023]
‘Are you out of your f—ing minds?’: Dems recoil at Biden’s approach to labor standoff
[Politico, via Naked Capitalism 9-16-2023]
Shawn Fain, head of the United Auto Workers, has privately expressed his frustration with Joe Biden, wanting the president and other Democratic lawmakers to come out more aggressively in support of his union, which launched a strike Friday against the so-called Big Three automakers….
“The companies and the media want to use fear tactics about how we’re going to wreck the economy. We’re not going to wreck the economy. The truth is we are going to wreck the billionaire economy. Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”….
White House aides spent the last several weeks in close contact with both union leaders and carmaker executives in hopes of brokering a “win-win” deal and avoiding a strike, engaging both parties but being careful not to intervene. Many lawmakers saw that position as reasonable given the economic consequences of such a shutdown. But now that the strike is in motion, the union and its progressive supporters believe Biden needs to play a more assertive role in rallying the public to the workers’ side.
There is also a sense among some Democrats and labor officials that Biden’s team miscalculated the standoff and hasn’t understood the severity of labor’s frustration or concerns. Even the news this week that the Biden administration was considering providing aid to auto suppliers rankled some in the union world, who thought it could undermine the strike and saw it as evidence that there are always funds available for companies, but not workers….
But some progressives are still beginning to gradually ramp up pressure on Biden to take a stronger stand.
Without naming the president, Sen. John Fetterman (D-Pa.) issued a statement hours before Biden was planning to make remarks on the contract negotiations.
“It’s time to decide what side you’re on,” he declared. “Are you on the side of the Big 3 CEOs who made a combined $74 million last year, and are now claiming … they cannot afford to pay their workers? Or are you on the side of the UAW workers who bust their ass every day, the people who build the American cars and trucks we Pennsylvanians drive?”
‘Abandoned by the Democratic Party’: Behind the UAW’s frustrations with Biden
[Politico, via Naked Capitalism 9-14-2023]
...The United Auto Workers’ criticisms of Biden’s handling of his electric car and truck subsidies have become a frequent theme for the 150,000-member union as it prepares for a possible strike against the major U.S. automakers this week. That means a key part of the president’s trillion-dollar-plus climate and infrastructure agenda, a centerpiece of his argument for reelection, faces friction with a major source of Democratic political muscle in states like Michigan.
Labor supporters say the roots of the conflict date back decades, to Democratic presidents who pursued pro-business or free-trade policies that the union blames for hollowing out protections for American workers. Now Biden is facing the blowback from that era, even as he pursues energy policies that he pledges will reverse that tide and rebuild U.S. manufacturing jobs.
“UAW members feel abandoned by the Democratic Party,” former UAW President Bob King said in an interview, citing President Bill Clinton’s signing of the North American Free Trade Agreement and the failure of Biden’s Inflation Reduction Act to ensure that clean energy funds flow to union workers. “I think there’s a segment of the Democratic Party that sees itself as serving corporations rather than the common good. … We’ve had a lot of disappointments.”
Half a Million California Workers Get a Raise—and a Seat at the Table
Harold Meyerson, September 13, 2022 [The American Prospect]
In a remarkable reversal of fortune, the state’s fast-food worker movement, created and steered by the Service Employees International Union (SEIU), has compelled the giants of the fast-food industry (both national stalwarts like McDonald’s, Wendy’s, Burger King, and Starbucks and local legends like In-N-Out) to withdraw their opposition to raising their workers’ wages and establishing a statewide labor-business board to deal with industry issues.
Last year, after the legislature and Gov. Gavin Newsom signed into law a bill that established such a council to raise those wages, the industry announced it would put $200 million behind a ballot measure it had devised to overturn that law. “This was just three frickin’ days after the bill was signed into law,” says SEIU President Mary Kay Henry. “It was a gut punch.”
The industry was following in the footsteps of Uber and Lyft, which had spent hundreds of millions to persuade state voters to overturn a law that would have required them to pay at least minimum wages to their drivers. They saturated the media with ads telling Californians that a yes vote on their measure would increase drivers’ incomes, and thus misinformed, voters approved the measure. (To keep that from happening again, the legislature just passed and Newsom signed a new law under which voters will be asked not to vote yes or no, but whether to “keep the law” or “overturn” it.)….
The deal that has emerged will give the state’s roughly 550,000 fast-food workers a raise, taking full effect in April, from an hourly wage of $15.50 to $20. It guarantees the workers an annual wage adjustment of either 3.5 percent or the increase in the cost of living, whichever is lower. With minor adjustments, it preserves the labor-management council that the law passed last year established. The nine-member council will consist of two franchise owner-operators, two representatives from the fast-food mega-corporations, two union representatives, two rank-and-file fast-food workers, and one public member. It will work alongside the state’s Department of Labor, which could monitor and enforce violations the council can highlight.
NLRB Complaint Calls a Noncompete Agreement an Unfair Labor Practice
David Dayen, September 14, 2023 [The American Prospect]
The complaint against an Ohio spa follows General Counsel Jennifer Abruzzo’s memo seeking these kinds of cases….
The [National Labor Relations Board]’s action adds another dimension to the Biden administration’s assault on noncompetes. The Federal Trade Commission (FTC) proposed a ban on most noncompete agreements earlier this year.
In May, NLRB General Counsel Jennifer Abruzzo, in a memo to regional directors, stated her view that noncompete provisions violate the NLRA, and sought complaints along those lines. Noncompetes “could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for,” Abruzzo wrote.
American workers are demanding almost $80,000 a year to take a new job
[CNN, via Naked Capitalism 9-11-2023]
‘Corporate Media Will Always Side With CEOs’: Sanders Rips Coverage of Looming UAW Strike
[Common Dreams, via Naked Capitalism 9-13-2023]
Fox Sued by New York City Pension Funds Over Election Falsehoods
[New York Times, via Naked Capitalism Water Cooler 9-13-2023]
“New York City’s pension funds sued the Fox Corporation and its board on Tuesday, accusing the company of neglecting its duty to shareholders by opening itself up to defamation lawsuits from the persistent broadcasting of falsehoods about the 2020 presidential election. The lawsuit, filed in the Delaware Court of Chancery, is the most significant shareholder action since Fox settled a blockbuster defamation lawsuit brought by Dominion Voting Systems in April for $787.5 million. The city’s five pension funds represent nearly 800,000 current and retired workers and are worth $253 billion. ‘We are shareholders at a company that, unfortunately, has a longstanding practice of allowing conspiracy theories that its executives and its board know are false to be repeated over and over and over again, despite the very clear and present risk of defamation lawsuits eroding shareholder value,’ said Brad Lander, New York City’s comptroller, who oversees the pension funds. ‘And there has been no effort to make governance reforms.'”• Hmm. I wonder who the expert witnesses about CT will be.
Professional management class war on workers
Catch Us if You Can
Maureen Tkacik, September 14, 2023 [The American Prospect]
The mysterious firing of Amazon’s most ruthless union-buster from his new job underscores the monopoly’s insidious stranglehold over shopping.
For nearly a quarter-century, Clark was the rare human embodiment of the dark side of a company that seems to outsource most of its dirty work to robots and algorithms.… But in spite of his reputation as a penny-pincher among Amazon’s worker army, Clark was also famously extravagant when it came to expanding and protecting the company’s retail monopoly. He spent billions on planes and ships and warehouse robots, even custom manufacturing proprietary shipping containers. More than perhaps anyone at Amazon save Jeff Bezos himself, Clark embraced burning cash as a long-term strategy for making Amazon the shipper to the world, the gears behind and the toll collector for every transaction in the economy. In 2021, the FTC ordered Amazon to repay its Flex drivers $61 million in stolen tips; the previous year, it spent a staggering $61 billion on shipping alone.
Democrats' political malpractice
Ohio’s working class felt deserted by Democrats. Can Biden win them back?
[Guardian, via Naked Capitalism Water Cooler 9-11-2023]
“Ohio Democrats have been energised by the size of the victory and turnout in last month’s referendum on a Republican attempt to make it more difficult to amend the state constitution. The move was aimed at making it harder for voters to enshrine access to abortion in the constitution in another ballot in November. But it was defeated by 57% to 43% on an exceptionally high turnout for a ballot vote in August, reflecting what Democrats see as a major electoral issue in their favor after the US supreme court struck down constitutional protections last year.” But will abortion be on the ballot in 2024? More: “Kim McCarthy, the Democratic chair in Greene county, which includes part of eastern Dayton, said her party struggles to shake the perception that, at a national level, it is not interested in working people. ‘It’s not a secret that our country is run by corporate USA Inc. I feel that limitation stops Democrats from fighting for things that would bring people over to their side, like universal healthcare,’ she said. McCarthy said that remained a good part of the reason for Trump’s continuing support in her county. ‘The appeal of Trump ultimately is that people recognise that our federal government is failing us as a society, as a nation. I’m from Australia and I think one of the most profound things that I’ve realised over my 25-odd years of living here is that the US government doesn’t care about me and my life,’ she said.”
Newsom throws South L.A. under the broadband bus
[Editorial Board, Los Angeles Times, via Naked Capitalism Water Cooler 9-11-2023]
“More than two years ago, Gov. Gavin Newsom approved what was then the nation’s largest-ever investment in public broadband. The $6-billion spending plan was supposed to finally bridge the digital divide that has left too many households and businesses in low-income and rural communities without fast, reliable internet access. But last month the Newsom administration cut projects in some of the neediest, most disconnected communities in the state, including South and Southeast Los Angeles and East Oakland, while adding projects in some of the most affluent, tech-connected communities, including Beverly Hills and Culver City.”
[Lambert Strether: “The whole piece is worth reading. Apparently, “bad maps” are at the root of the misallocation. And if you the think the maps are bad by accident, I have a bridge to sell you. Then again, Newsom’s only servicing his real constituency, and what’s wrong with that?”]
AOC HECKLED by furious New Yorkers over migrant crisis
[Daily Mail, via Naked Capitalism 9-16-2023]
Is Obama Running a Shadow Government from His Mansion in Kalorama, Washington DC?
Lambert Strether, August 13, 2023 [Naked Capitalism]
Pentagon-Funded Study Warns Dementia Among U.S. Officials Poses National Security Threat
[The Intercept, via Naked Capitalism 9-15-2023]
Sens. Mitch McConnell and Dianne Feinstein, who have access to top-secret information, recently had public health episodes.
The hard lessons from Ukraine’s summer offensive
[Financial Times, via Naked Capitalism 9-16-2023]
[TW: Noteworthy as among first reflections of reality in Western mainstream media]
[Twitter-X, via Naked Capitalism 9-16-2023]
Is NATO Learning About Its Future in Ukraine?
Stephen Bryen [via Naked Capitalism 9-16-2023]
What could be the reasons for the Western delay in hypersonic weapons?
[Cf2R, via Naked Capitalism 9-16-2023]
...Let us note then that at the end of the Cold War, we find ourselves in a rather strange situation at first glance. The West pushed electronics and computing much further than the Soviet Union. It did not occur to anyone that the latter had held up without this and we were content to think, here, that its equipment was obsolete and ineffective. The Ukrainian conflict demonstrated the opposite!
However, those who worked on equipment opposing the collapse of the Berlin Wall know very well that the “enemy” of the time had implemented treasures of thought to precisely make the equations speak and understand what was really in-game without having to go through computer calculations. This was the case, for example, with so-called “ionic” space propulsion engines.
Meanwhile, at home, we relied more and more on software. They constituted a black box over which we had no control and we “swallowed” the results, whatever they were, as if they were the naked truth coming out of the well….
Today, engineering schools, in full agreement with companies, want people who are efficient in handling various IT tools: Catia, etc. If in fact the latter, at the time they were designed, brought great progress for those who were used to thinking, they only “Taylorized” the real profession by degrading it enormously, leading to the incremental improvement which tomorrow will be the prerogative of artificial intelligence. On the other hand, from my point of view, replacing the Soviet physicists and engineers of the time with AI would absolutely not be possible.
So this is where we are and until our scientists are able to make the equations speak, it seems very unlikely that the West will be able to make hypersonic missiles worthy of the name….
Hypersonic Missiles Are Game-Changers, and America Doesn’t Have Them
[Wall Street Journal, via The Big Picture 9-16-2023]
The U.S. military is pouring resources into the superfast weapons but has struggled to develop them. China and Russia are far ahead.
The September 11 Legacy of Forever Wars, the Patriot Act, and Loss of Legal Rights
[Black Agenda Report, via Naked Capitalism 9-14-2023]
A Day that Never Ended
Matt Taibbi [Racket News, via Naked Capitalism Water Cooler 9-12-2023]
“It’s forgotten, but Barack Obama was sent to the White House in what a lot of the voting public at the time considered a referendum on the security state. The genteel Obama played up ‘constitutional lawyer’ credentials, announcing in a national security address at the Wilson Center in 2007 his opposition to the ‘color-coded politics of fear’ and ‘a war in Iraq that should never have been authorized.’ Candidate Obama added it was time to ‘turn the page’ with more peaceful means of ‘drying up’ support for terrorism, a strategy that hurtled him past favored Hillary Clinton in primary season. Privately however he’d already met with people like Richard Clarke, who told him, ‘As a president, you kill people.’ This is who Obama would actually be in office, an ‘idealist without illusions’ who expanded the buildup, institutionalized the ‘kill list,’ and in one of his last major acts, created a new counter-disinformation authority that helped birth the censorship state.”
Global power shift
Russia And China Channeling Hamilton
Mark Wauk [Meaning in History, via Mike Norman Economics, September 12, 2023]
... it seems that what the Russians, Chinese and others are working on is similar to what the United States itself did in the early 19th century, when it wanted to become less dependent on Great Britain. Then they had the American system. Again, they had these three pillars. They wanted the manufacturing industry, developed transportation infrastructure, and of course the National Bank. These three pillars. And you see that this is kind of the foundation that the Russians and Chinese are working on, as well as much of Eurasia. They want this first pillar of technological autonomy--this industry is decoupled from the US. They want the second, which is trillions of dollars into this Belt and Road initiative with new transportation corridors not vulnerable to the US, and of course third would be the financial aspect. We see this BRICS Development Bank, the SCO trading in their own currency by de-dollarizing, reducing reliance on Swift. So there's this shift in the economic system. The entire opportunity to reject the hegemonic world order, which has seen us being encapsulated by this rules-based international order, which is to a large extent a challenge to international law. [Russia has made this point, repeatedly, that the US has substituted its own rules for International Law.] I think this is why the Ukraine crisis has become so problematic. It's a symptom of a wider challenge to the entire world order, the geo-economic infrastructure….
Biden finds himself on the defensive after G20 leaders fail to rally around Ukraine
[USA Today, via Naked Capitalism 9-11-2023]
[Twitter-X, via Naked Capitalism 9-11-2023]
7 countries, EU sign memorandum of understanding for trade corridor linking Europe, Middle East and India Anadolu
[Agency, via Naked Capitalism 9-10-2023]
Data to oil, gas to goods: What is the announced sea-rail corridor from India to Europe?
[Indian Express, via Naked Capitalism 9-10-2023]
In Vladivostok, the Russian Far East rises
Pepe Escobar [The Cradle, via Mike Norman Economics, September 31, 2023]
...The development possibilities of what is in effect Russian Asia, and one of the key nodes of Asia-Pacific, are literally mind-boggling. Data from the Ministry for the Development of the Russian Far East and the Arctic - confirmed by several of the most eye-catching panels during the Forum - list a whopping 2,800 investment projects underway, 646 of which are already up and running, complete with the creation of several international Advanced Special Economic Zones (ASEZ) and the expansion of the Free Port of Vladivostok, home to several hundred small and midsize enterprises (SMEs).
Green New Deal - An opportunity too big to miss
World Needs $2.7 Trillion Annually for Net Zero Emissions by 2050-Wood Mackenzie
Nina Chestney, September 15, 2023 [Offshore Engineer]
Global investment of $2.7 trillion a year is needed to achieve net zero emissions by 2050 and avoid temperatures from rising above 1.5 degrees Celsius this century, a report by consultancy Wood Mackenzie said on Thursday….
Wood Mackenzie said to decarbonize the energy sector investment of $1.9 trillion a year is needed, and this must increase by 150% – or $2.7 trillion a year – to limit global warming to 1.5C. Three-quarters of that investment is needed in the power and infrastructure sectors.
[TW: In November 2014 I posted my first online article explaining the world needs a $100 trillion crash program to stop global climate change by switching the world economy from dependence on fossil fuels, to totally sustainable renewable energies. I wanted to achieve two things by putting the “shocking” $100 trillion front and center. First, the entire political discussion was being held back because talking in terms of trillions was unthinkable for most people and all politicians and economists. Second, the fact is that a trillion bucks, let alone $100 trillion, IS a massive amount of money, and it would force most people to ask, “where’s that much money going to come from?” Which of course opened the door to explaining the crucial questions of how money is created and who gets to create it. As I concluded that 2014 article:
Remember, $100 trillion really isn't too much to wrap your mind around: it's less than ten percent of world economic activity each year over the next 15 years. And, it's less money than Wall Street and the Chicago futures market shuffle around every month. Wall Street and the Chicago futures market are not doing anything socially useful with all that money. We have much better uses for it. So give me $100 trillion.
Besides, we can create money out of thin air any time we want. That's what the real fight is about: Who controls, and who benefits, from the creation and allocation of new money and credit? ]
The $100tn path to net zero
[Financial Times, via Naked Capitalism 9-7-2023]
On any reasonable estimate, the scale of funding required to hit net zero is vast. In 2021, the International Energy Agency calculated that annual investment would need to rise from an annual $2tn to almost $5tn, or 2.5 per cent of global GDP, by 2030. It would still total $4.5tn in 2050.
Lord Nicholas Stern, chair of the London School of Economics’ Grantham institute and a former World Bank chief economist, estimates(opens a new window)
an extra $3tn a year is needed, totalling $100tn over 30 or 40 years, to boost renewable energy, electrify transport systems, decarbonise the heating and cooling of buildings, and foster green hydrogen.
Economists broadly agree that most of this investment has to come from the private sector. “Some estimates on climate change transition are in the stratosphere,” said Mahmood Pradhan, head of global macroeconomics at Amundi Institute. “The demands of net zero are just too high [to come from governments alone] — they have to come from the private sector.”
[TWNear the bottom of the page, you will find the FT editors’ great fear encapsulated, viz:]
The Return of Big Government
This is the second part of a series on how advanced economies are shifting back to using fiscal policy to drive interventions
Climate and environmental crises
Direct Solar Power: Off-Grid Without Batteries
[Low Tech Magazine, via The Big Picture 9-16-2023]
Using solar panels without backup infrastructure makes renewable energy production much more affordable, efficient and sustainable.
US Behind More Than a Third of Global Oil and Gas Expansion Plans, Report Finds
[Guardian, via Naked Capitalism 9-13-2023]
California Lawmakers Approve Nation’s Most Sweeping Emissions Disclosure Rules for Big Business
[Associated Press, via Naked Capitalism 9-13-2023]
Finance hits back against US regulator’s rulemaking spree
[Financial Times, via Naked Capitalism Water Cooler 9-11-2023]
“Securities and Exchange Commission chair Gary Gensler’s ambitious regulatory agenda is igniting fierce opposition from the financial industry, which is challenging what it views as egregious overextension of the securities watchdog’s legal authority. In recent months, the SEC has been targeted in lawsuits from the US Chamber of Commerce, a business lobby, over a rule expanding stock buyback disclosures, and a coalition of private equity, venture capital and hedge fund groups last week sued to block sweeping new rules for private fund managers adopted by the SEC last month. Its crackdown on the crypto industry has also encountered resistance, as the company backing the Ripple digital token challenges an SEC civil lawsuit on the basis that it goes beyond the agency’s power to regulate securities.” • Stuck pigs squeal.
Grab an Easy Chair and Watch 21 Experts Explore the Path from the Collapse of Lehman Brothers to This Spring’s Banking Crisis to the Urgency of Defanging the Mega Banks
Pam Martens and Russ Martens, September 12, 2023 [Wall Street on Parade]
The Better Markets webinar will feature a number of people who are familiar to readers of Wall Street On Parade. Senator Elizabeth Warren, a long-term critic of Wall Street mega banks and a strong voice on the Senate Banking Committee, will deliver the opening remarks. For the lonely investigative role that Senator Warren has been forced to play on numerous occasions, see our report: The Senate Banking Committee Has Subpoena Power; So Why Has Senator Elizabeth Warren Been Left to Investigate on Her Own?
Art Wilmarth, the author of the seminal work on the dangers facing the U.S. financial system from the Wall Street mega banks, will also be participating in the Better Markets webinar. Wilmarth wrote the critically-important Taming the Megabanks: Why We Need a New Glass-Steagall Act, which is essential to any hope of understanding the historic underpinnings of how the banking system landed in the mess it’s in today.
Two men who worked in the bowels of Wall Street and then exposed its dark underbelly as authors will also be participating: Frank Partnoy and William Cohan.
Partnoy, now a law professor at UC Berkeley School of Law, has the unique knowledge base of a Wall Street veteran. Partnoy worked in the 90s as a derivatives structurer at Morgan Stanley and CS First Boston and wrote the Wall Street classic, F.I.A.S.C.O.: Blood in the Water on Wall Street. Another essential read from Partnoy is Infectious Greed: How Deceit and Risk Corrupted the Financial Markets.
William Cohan is a former investment banker at multiple Wall Street firms, including JPMorgan Chase. He wrote Money and Power: How Goldman Sachs Came to Rule the World and House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, along with numerous other books, newspaper and magazine articles dissecting Wall Street. Cohan is certain to have interesting things to say about today’s situation.
Another man who has warned about the fragility of the banking system for decades and will be participating in the webinar is Thomas Hoenig, the former Vice Chair of the FDIC from 2012 to 2018 and President of the Kansas City Fed from 1991 to 2011….
15TH ANNIVERSARY LEHMAN COLLAPSE CONFERENCE
[BetterMarkets.org, September 13, 2023]
Credit card debt collection
[Bits About Money, via Naked Capitalism 9-14-2023]
[TW: this is a lengthy article, but there is a lot of information, including some that you can use in any dispute with a debt collector. I have added bolding to a few points.]
...A small percentage of borrowers, carefully tracked and generally oscillating between 2.5% and 5% depending on the overall health of the economy, will go delinquent on credit card debt. (Some issuers specialize in certain parts of the credit spectrum and, as a result, will have sharply lower or sharply higher delinquency rates. American Express, for example, specializes at the high end and typically has delinquency close to 1%. Capital One made its name in so-called subprime credit cards, though it has diversified since, and typically tends towards the high end among banks whose names you know. There is a largely hidden ecosystem of banks you don’t know that issue very expensive products to poor people; you can accurately predict their default rates exceed anything mentioned above.)….
Most defaults are small. This fact drives everything about debt collection; it has to be done scalably, by the cheapest labor available, with a minimum of customization or thoughtful weighing of competing interests. The average defaulted credit card debt is on the order of $2,000, the median is between $500 and $1,000. These are processed like McDonalds burgers, not like grant proposals.
Debts are sold as part of a portfolio, where (typically) thousands of relatively similarly situated debts in a cohort are sold as a packet. The value of portfolios is a huge discount to the face value of the debts; at the point where a lender has only worked it themselves and the debt is a few months delinquent, portfolios generally fetch about 5 cents on the dollar….
The debt collection industry is... among the most odious hives of scum and villainy as exists in the United States. The business is sordid and virtually immune to reform, despite decades of trying. The Fair Debt Collection Practices Act was passed in 1978! It is older than me!….
This is not because of a lack of virtue or a lack of laws; the structure of the industry colliding with the socioeconomic reality of defaulting debtors basically ensures that it will be a miserable place populated by miserable people who will project leveraged amounts of misery into the outside world in the hopes of collecting a tiny sliver of defaulted debts.
Debts are conveyed to the debt buyers as large CSV files with minimal supporting documentation….
The former advocate in me will observe that the single most effective method for resolving debts is carefully sending a series of letters invoking one’s rights under the FDCPA (and other legislation) to a debt collector who is operationally incapable of respecting those rights, then threatening them with legal or regulatory action when they inevitably infringe upon them in writing, leading to them abandoning further attempts at collection.
This effectively makes paying consumer debts basically optional in the United States, contingent on one being sufficiently organized and informed. That is likely a surprising result to many people. Is the financial industry unaware of this? Oh no….
The FDCPA and state legislation provides for automatic damages for illegal behavior from collectors, the incidence of illegal behavior is extremely high, and a debt collector with a high school education and three months of experience will frequently commit three federal torts in a few minutes of talking to a debtor then follow up with a confirmation of the same in writing. (You think I am exaggerating. Reader, I am not. “If you don’t pay me I will sue you and then Immigration will take notice of that and yank your green card” contains three separate causes of action: (frequently) a false threat to file a suit where that is not actually a business practice of the firm, a false alleged affiliation with a government agency, and a false alleged consequence for debt nonpayment not provided for in law.)
As a result, private companies compiled databases of (public in the U.S.) court filings and organized them by Social Security number, address, and similar to allow debt collectors to identify which debtors are aware of their legal rights. In principle, a debt collector could do anything they wanted with that fact, like being extra careful to follow the law in contacting them. But the economics of debt collection do not counsel careful, individualized consideration of credit card debt.
I will bet you that, in practice, they simply avoid collecting against anyone who demonstrates ability and financial resources to enforce their rights. This is one for the history books of borked equilibriums. We devoted substantial efforts to pro-consumer legislation to address abuse of (mostly) poor people. We gated redress behind labor that is abundantly available in the professional managerial class and scarce outside of it, like writing letters and counting to 30 days. (People telling me they were incapable of doing these two things is why I started ghostwriting letters for debtors.) We now have literal computer programs exempting heuristically identified professional managerial class members from debt collection, inclusive of their legitimate debts, so that debt collectors can more profitably conserve their time to do abusive and frequently illegal shakedowns of the people the legislation was meant to benefit….
The carnage of mainstream neoliberal economics
Businesses keep complaining about shoplifting, but wage theft is a bigger crime
[Los Angeles Times, via The Big Picture 9-10-2023]
The other side of the coin on workplace crime is wage theft. That’s been estimated as high as $50 billion a year by the Economic Policy Institute, which extrapolated from a 2008 survey of low-wage front-line workers in Los Angeles, Chicago and New York.
Why furniture got so bad
[Washington Post, via The Big Picture 9-10-2023]
Furniture used to last generations. Now it barely survives a move. Industry insiders explain.
Generic Drugs Should Be Cheap, but Insurers Are Charging Thousands of Dollars for Them
[Wall Street Journal, via Naked Capitalism 9-13-2023]
Information age dystopia / surveillance state
Silicon Valley’s vision for AI? It’s religion, repackaged.
[VOX, via Naked Capitalism 9-10-2023]
The Tyranny of the Marginal User
[Nothing Human, via Naked Capitalism Water Cooler 9-14-2023]
“How is it possible that software gets worse, not better, over time, despite billions of dollars of R&D and rapid progress in tooling and AI? What evil force, more powerful than Innovation and Progress, is at work here? In my six years at Google, I got to observe this force up close, relentlessly killing features users loved and eroding the last vestiges of creativity and agency from our products. I know this force well, and I hate it, but I do not yet know how to fight it. I call this force the Tyranny of the Marginal User. Simply put, companies building apps have strong incentives to gain more users, even users that derive very little value from the app. Sometimes this is because you can monetize low value users by selling them ads. Often, it’s because your business relies on network effects and even low value users can help you build a moat. So the north star metric for designers and engineers is typically something like Daily Active Users, or DAUs for short: the number of users who log into your app in a 24 hour period. What’s wrong with such a metric? A product that many users want to use is a good product, right? Sort of. Since most software products charge a flat per-user fee (often zero, because ads), and economic incentives operate on the margin, a company with a billion-user product doesn’t actually care about its billion existing users. It cares about the marginal user – the billion-plus-first user – and it focuses all its energy on making sure that marginal user doesn’t stop using the app… [I]n practice, the design of popular apps caters almost entirely to the marginal user. But who is this marginal user, anyway? Why does he have such bad taste in apps? Here’s what I’ve been able to piece together about the marginal user. Let’s call him Marl. The first thing you need to know about Marl is that he has the attention span of a goldfish on acid. Once Marl opens your app, you have about 1.3 seconds to catch his attention with a shiny image or triggering headline, otherwise he’ll swipe back to TikTok and never open your app again. Marl’s tolerance for user interface complexity is zero. As far as you can tell he only has one working thumb, and the only thing that thumb can do is flick upwards in a repetitive, zombielike scrolling motion…. By contrast, consumer software tools that enhance human agency, that serve us when we are most creative and intentional, are often built by hobbyists and used by a handful of nerds. If such a tool ever gets too successful one of the Marl-serving companies, flush with cash from advertising or growth-hungry venture capital, will acquire it and kill it. So it goes.”
[Lambert Strether: “The enshittification cycle seen from the inside?”]
In Missouri v. Biden Internet Censorship Case, a Win and a Loss
Matt Taibbi [Racket News, via Naked Capitalism 9-11-2023]
Three Simple Rules for Protecting Your Data
[Atlantic, via Naked Capitalism 9-13-2023]
How I stay reasonably anonymous online
[Mellow Root, via Naked Capitalism Water Cooler 9-14-2023]
California Legislature Passes Delete Act Regulating Data Brokers
[Association of Privacy Professionals, via Naked Capitalism 9-16-2023]
Google To Pay $155 Million In Settlements Over Location Tracking
[Reuters, via Naked Capitalism 9-16-2023]
Car Hackers Are Out for Blood
[Atlantic, via Naked Capitalism 9-13-2023]
As part of the move toward electric cars, most automakers are copying Silicon Valley’s playbook and making drivers pay monthly or yearly fees to unlock new features. Sometimes those features are fairly basic, like a remote starter; in other cases they’re more advanced, like autonomous parking assistance….
There is another explanation for the pivot to subscriptions. Although subscription features aren’t exclusive to electric cars, they are inextricably tied to the EV revolution. Developing and building EV batteries is staggeringly expensive—less a “shift” and more a total reinvention of the industry costing hundreds of billions of dollars. And because EVs generally have far fewer mechanical components than gas cars, they require very little maintenance, meaning that car makers, suppliers, and dealers are poised to lose a significant amount of revenue made from selling parts for repairs. One Hyundai executive told me earlier this year that the company wants 30 percent of future profits to come from software, downloadable features, in-car entertainment, and other subscription features.
China-Linked Hackers Breached a Power Grid—Again
Wired, via Naked Capitalism 9-13-2023]
Google Chrome pushes ahead with targeted ads based on your browser history
[The Register, via Naked Capitalism Water Cooler 9-12-2023]
The AI-Powered, Totally Autonomous Future of War Is Here
[Wired, via Naked Capitalism 9-10-2023]
Top US Spies Meet With Privacy Experts Over Surveillance ‘Crown Jewel’
[Wired, via Naked Capitalism 9-12-2023]
Lithuania Was the Country That Secretly Wiretapped the World for the FBI
[404Media, via Naked Capitalism 9-12-2023]
How the Other Half Votes: The United States, Part One
[Sabato’s Crystal Ball, via Naked Capitalism Water Cooler 9-14-2023]
“Just about 150 of the nation’s more than 3,100 counties cast half of the nation’s presidential vote in 2020. As we typically see at the state level, the more vote-rich counties are more Democratic, while the thousands of smaller counties that make up the bottom half are more Republican. This political gulf has widened. Despite similar overall national presidential margins in 2012 and 2020, the difference between the top and bottom halves expanded about 10 points from 2012 to 2020. Joe Biden won 126 of the 151 top half counties, while Donald Trump won 2,548 of the remaining 2,960 counties in the bottom half. Trump’s wins among the top half counties were concentrated among the smaller pieces of that group — Biden won all but one of the nearly 50 counties that cast 500,000 votes or more.”
COVID lockdowns saved millions of lives — so of course Ron DeSantis is angry about them
[Los Angeles Times, via The Big Picture 9-10-2023]
There’s a lot there to unpack, but let’s start with the most fundamental point: In the early months of the COVID pandemic, before vaccines became widely available, lockdowns worked. Combined with other “non-pharmaceutical interventions” (NPIs) such as masking and social distancing, they slowed the spread of the disease, saving millions of people from falling ill, landing in the hospital, or dying. Absent these measures, hospitals, which already were overrun with patients in dire condition, would have fared even worse.
[TW: Obvious to place Ian Welsh’s post next, to show how criminally wrong DeSantis is. Why do people keep voting for someone trying to kill them?]
Ten Simple Facts About Covid (With Bonus Fact!)
Ian Welsh, September 15, 2023
COVID booster warning from Florida surgeon general, who advises people not to get new vaccine
[Fox, via Naked Capitalism 9-13-2023]
Anti-Vaccine Dog Owners Could Bring Back Rabies
[RealClearScience, via Naked Capitalism 9-12-2023]
We’re progressing, but backwards:
[Twitter-X, via Naked Capitalism Water Cooler 9-11-2023]
Vivek Ramaswamy says he’ll deport children of undocumented immigrants born in the U.S.
[NBC, via Naked Capitalism 9-10-2023]
Why You Are Probably An NPC
[The Prism, via Naked Capitalism 9-10-2023]
NPC = “Non-Player Character.”
The Wisconsin G.O.P.’s Looming Judicial Attack
[New Yorker, via Naked Capitalism 9-12-2023]
Elon Musk has Massively Transformed Politics and Media to Help the Right
[Town Hall, via Naked Capitalism 9-12-2023]
Strategic Political Economy
The Big Myth About “Free” Markets That Justified History’s Greatest Heist
Jon Schwarz, August 4 2023 [The Intercept]
In 2020, the RAND Corporation, a think tank in Santa Monica, California, released a study with the humdrum title “Trends in Income From 1975 to 2018.” …. Incredibly enough, this dreary-sounding paper describes what might be the largest material theft since human civilization began. It examines a simple question: If U.S. income inequality had remained at its 1975 level through 2018, how much more money would the bottom 90 percent of Americans have made during these 43 years? Put another way, how much additional wealth flowed to the top 10 percent during this time, thanks to increased income equality?
If you have a butt, you should hold onto it, because the answer is 47 TRILLION DOLLARS….
This raises an obvious question. Traditionally, this kind of upward concentration of wealth has required mass slaughter. How did America’s elites pull this off without needing to mow thousands of us down in the streets?
The answer can be found in the new book “The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market.” It was written by Naomi Oreskes, a history of science professor at Harvard, and Erik M. Conway, a historian at Caltech’s Jet Propulsion Laboratory….
As Oreskes and Conway explain, “The Big Myth” grew out of their previous book. While writing “Merchants of Doubt,” they discovered that the groundwork of global warming denialism had been laid in the 1980s by prominent scientists who understood the reality of the situation quite well. However, these scientists were convinced believers in what Oreskes and Conway call “market fundamentalism” (borrowing from George Soros, one of market fundamentalism’s loudest critics). This is a system of belief that holds that political and economic freedom are indivisible. They quote the physicist Fred Singer, who wrote that “if we do not carefully delineate the government’s role in regulating … dangers there is essentially no limit to how much government can ultimately control our lives.”
In other words, government interventions in the economy — such as laws removing lead from gas, carbon taxes, or mandated cooling-off breaks for people working in 100-degree heat — not only make us all poorer, but also put us on the road to Stalinist tyranny. Hence it’s crucial to head them all off at the pass, even if that requires a vast misrepresentation of observable fact….
Finally, there’s the historical fact that no country has ever gone communist gradually, starting with minimum wage laws and ending up with gulags. Rather, it happened in various fell swoops in places with glaring injustices and vicious capitalistic inequality, and even then generally has required contemporary wars. As the renowned Soviet expert George Kennan put it in 1946, “communism is like malignant parasite which feeds only on diseased tissue.” Therefore, Kennan believed, “every courageous and incisive measure to solve internal problems of our own society” was a victory over communism.
Capitalist wants government to drive up unemployment by 40-50 per cent and inflict more ‘pain in the economy’ on workers
William Mitchell [Modern Monetary Theory, via Mike Norman Economics, September 13, 2023]
At a ‘Property Summit’ in Sydney yesterday (September 13, 2023), one such developer waxed lyrical about how government must force a 40-50 per cent rise in unemployment to force workers into submission….
“We need to see unemployment rise. Unemployment has to jump 40-50 per cent …
“In my view, we need to see pain in the economy. We need to remind people that they work for the employer, not the other way around … When there’s been a systematic change where employees feel the employer is extremely lucky to have them as opposed to the other way around … it’s a dynamic that has to change. We’ve got to kill that attitude.
“That has to come through hurting the economy. Which is what the whole global … Governments around the world are trying to increase unemployment to get back to some sort of of normality.
“There is definitely massive layoffs … and we are starting to see less arrogance in the labour market and that has to continue because that will cascade across the cost balance.”
[TW: The next three posts report on the comments of a rich Australian real estate developer who called for a massive increase in unemployment to force working people to be more subservient to capital and “the markets.” Contrast this to the civic republican doctrines of high wages and the General Welfare, which Benjamin Franklin explained in the context of the economic significance in Europe of the American Revolution: HAWB 1783 - Benjamin Franklin on the Augmentation of Wages Occasioned by the American Revolution - How America Was Built.]
CEO Honesty About Wanting High Unemployment
Ian Welsh, September 15, 2023
This is also a pure example of “job creator” ideology. “We the big bosses create the jobs. All the good things come from us. Without us people wouldn’t have jobs. They should be grateful and obedient and subservient because they are worth something only when being used by us.”
This is specific example of what’s common in almost all eras: the people who have the most power believe that means they are also the best people. “The GodKing makes the rains the flow and the sun rise. All bow to the GodKing.”
Wealthy Capitalist Accidentally Makes Great Argument For Revolution
Caitlin Johnstone [via Mike Norman Economics, September 13, 2023]
Recent comments from a wealthy Australian property developer named Tim Gurner are going viral on social media right now for the unusual frankness with which he discusses the inherent conflicts of interest between the working class and employers, saying workers who’ve grown lazy and arrogant during Covid need to experience economic pain in the form of unemployment to rein them in and put them in their place.
Gurner, who with a net worth of $912 million is ranked by the Australian Financial Review as the 154th richest person in Australia, made the remarks at the Australian Financial Review Property Summit on Tuesday.
“You know, tradies [Australian slang for tradesmen] have definitely pulled back on productivity,” Gurner said. “They have been paid a lot to do not too much in the last few years. And we need to see that change. I think the problem that we’ve had is that we have people who decided they didn’t really want to work so much anymore through Covid.”
Confessions of a McKinsey Whistleblower
Garrison Lovely [The Nation]
...McKinsey made the prescient decision to avoid credit for its work, keeping its client and project lists secret. In practice, this has insulated the company from the disasters it was party to, such as the collapse of Enron. (This secrecy also serves to deter nearly all current and former McKinsey employees from speaking to reporters, meaning that, despite my best efforts, some of the details in this piece are based solely upon my own recollections.)….
“The firm does execution, not policy,” Elder said. This was a common refrain at McKinsey. At Rikers, I had asked my team about the possibility of eliminating cash bail, which would have reduced the number of people passing through the jail at the time by roughly 45,000, or well over half, and was told that ideas like this were “out of scope” because the firm “doesn’t do policy.”
If we just do execution, I asked, what would have stopped us from helping Nazis more efficiently procure barbed wire for their concentration camps? In response, I recall Elder muttering about McKinsey being a values-based organization. (Elder has not responded to requests for comment.)….
In December 2018, I met some of my former colleagues for dinner in New York. One of them had landed his “dream job” and signed a lease for a ridiculously expensive apartment. When the talk turned to politics, I remember him drunkenly proclaiming, “All I know is my life is amazing, and I want nothing to change.” People chastised him, but I appreciated the honesty—I couldn’t help but notice that everyone else at the table who postured as a progressive had gone on to work at a private equity firm or a hedge fund….
McKinsey won’t truly reform itself, because it neither needs to nor wants to. As the world’s largest private partnership, it can’t be taken over by shareholder activists. All it needs to sustain itself is its client base and its recruiting pipeline from elite universities. The past few years of critical attention have done little to affect either. In 2021, then–managing partner Kevin Sneader told the Financial Times that the firm had lost “very, very, very few clients” and just had its “best recruiting year ever.”….
My time at McKinsey led to the Current Affairs essay that launched my journalism career. It also led to the piece you are reading now. If I ever crawled back to the corporate world, McKinsey would be the credential that most validates me as a “smart, competent person” to a recruiter. Some of them would likely see it as a promising sign of my ruthlessness—always a prized asset in the pursuit of profit…. We will know things have improved only when the name “McKinsey” on a résumé becomes what I learned it should be: a source of shame.
The Chilean coup just one link in a complicated right-wing economics agenda to empower capital
William Mitchell [Modern Monetary Theory, via Mike Norman Economics, September 13, 2023]
Today marks the 50th anniversary of the overthrow of the Salvatore Allende’s democratically-elected government in Chile by the US CIA and there local puppets under the leadership of General – Augusto Pinochet. I have also been following a trail of the antecedents of the Powell Manifesto (thanks to Jonathan for a tip), which helps understand how the neoliberals infested every institution in the US and beyond. And the Chilean coup d’état in 1973 was followed by – Operation Condor – which together with the coup demonstrated the principle terrorist organisation in the world has been the US government and its agencies. Tracking the Powell trail also took me to old research about the so-called ‘Manne Programs in Economics for Federal Judges’ – which was a program mostly taught by Chicago School economists that indoctrinated US judges into free market economic thinking and has distorted US judicial decisions ever since. And the circle closes when we investigate the role played by the so-called – Chicago Boys – who were Chilean PhD graduates from that school, who went back to Chile and ravaged the prosperity of the people with their extreme neoliberal ideas.
A Doctrine in Name Only — Strengthening Prohibitions against the Corporate Practice of Medicine
NEJM, via Naked Capitalism 9-14-2023]
Texas fracking billionaire brothers fuel rightwing media with millions of dollars
[The Guardian, via The Big Picture 9-10-2023]
Farris and Dan Wilks’ deep pockets fund climate denialism education, conservative politicians and pro-fossil fuel projects.
In Poland, Testing Women for Abortion Drugs Is a Reality. It Could Happen Here.
[New York Times, via Naked Capitalism 9-16-2023]
The (anti)Federalist Society Infestation of the Courts
Court blocks Jack Smith’s access to many of Rep. Scott Perry’s contacts about 2020 election
[Politico, via Naked Capitalism Water Cooler 9-14-2023]
“A three-judge panel of the D.C. Circuit Court of Appeals concluded that prosecutors’ effort to access the cellphone communications of Rep. Scott Perry (R-Pa.) with colleagues and executive branch officials violated his immunity under the Constitution’s Speech or Debate clause, which shields members of Congress from legal proceedings connected to their official duties. ‘While elections are political events, a Member’s deliberation about whether to certify a presidential election or how to assess information relevant to legislation about federal election procedures are textbook legislative acts,’ Judge Neomi Rao wrote in the opinion issued last week. The decision breaks new ground in a decadeslong tug-of-war between Congress and the executive branch. For the first time, an appeals court has held that lawmakers’ cellphones are subject to the same protections as their physical offices. And it is the first significant legal setback for Smith in his bid to obtain evidence about involvement by allies of then-President Donald Trump in his effort to subvert the 2020 election. It’s unclear whether Smith will appeal the decision to the full bench of the D.C. Circuit or to the Supreme Court. His office declined to comment, as it did last week when the court released an order broadly outlining the outcome of the fight.”
‘Shady and Corrupt’: Add Barrett Real Estate Deal to List of Supreme Court Ethics Scandals
[Common Dreams, via The Big Picture 9-10-2023]
The right-wing justice sold a home to a religious freedom group that has filed numerous briefs in cases before the court.
The Court’s Conservative Constitutional Revolution
Noah Feldman [The New York Review, October 5, 2023 issue]
This conservative constitutional revolution at the Court is ongoing, but it has reached the end of its beginning. Now it feels possible to identify its structure and strategy. This is an essential step in predicting where it will go next—and in formulating an appropriate liberal response.
The Court launched this revolution by reversing a series of precedents that date back to the Burger Court (1969–1986). These were not, to be clear, grand pronouncements on fundamental rights of the kind favored by the Warren Court (1953–1969). They were compromise rulings, characterized by pragmatic accommodation of conflicting judicial positions.
These Burger Court decisions—on abortion (Roe v. Wade, 1973), affirmative action (Regents of the University of California v. Bakke, 1978), separation of religion and government (Lemon v. Kurtzman, 1971), campaign finance (Buckley v. Valeo, 1976), and beyond—emerged from a Court more evenly divided than today’s. The Burger Court’s liberals wanted to extend progressive values further than the Warren Court had, and conservatives wanted to curtail or reverse that extension. No one in the judiciary or the legal academy much loved those compromises. They typically featured tortured logic and sometimes verged on incoherence. But they nonetheless provided the building blocks of constitutional law for nearly a quarter of our nation’s history.
Today’s constitutional revolution proceeds by taking the views expressed in the conservative dissents in these Burger Court cases and making them law. What we are seeing is revolution by hit list, a hit list created by the conservative legal movement and particularly by the Federalist Society, founded in 1982 to put smart young conservative lawyers into a pipeline leading to the judiciary. The justices who came to the Court through this pipeline—Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett—know what decisions to reverse but often lack a clear sense of what legal regime should replace them….
Once the remaining items on the to-do list have been crossed off, however, the conservative majority of the Court is going to find itself at a crossroads. The most extreme legal conservatives (Justices Clarence Thomas, Samuel Alito, and sometimes Gorsuch) will push for even more radical decisions that implement not constitutional conservatism so much as political outcomes sought by conservatives. They would like to weaken the courts’ supervisory authority over elections and voting rights even more than has already been done, to exempt religious groups from complying with civil rights laws, and to dismantle as much of the modern administrative state as possible by holding that Congress cannot constitutionally delegate lawmaking power to executive-branch agencies.
Those efforts have already been met with mild skepticism by the very-conservative-but-perhaps-not-entirely-off-the-deep-end justices like Chief Justice John Roberts, Kavanaugh, and sometimes Barrett. These conservatives are committed to checking off the items on the inherited hit list, but they do not want to upend the entire edifice of constitutional law. In short, they want a revolution, not a descent into doctrinal anarchy. Which faction prevails, and to what degree, will have major implications for the future of our constitutional democracy….
in the new Supreme Court term that begins in October, the conservatives’ most immediate target is Chevron v. Natural Resources Defense Council (1984), a classically flimsy, quasi-constitutional Burger Court compromise decision that granted administrative agencies broad leeway to interpret federal laws. The Court will hear oral arguments in a case that asks it to overrule Chevron. The most important real-world stakes relate to the ease with which judges can overturn environmental regulations.
[TW: Feldman is a Professor of Law and the Chair of the Society of Fellows at Harvard University, so his apparent ignorance of the actual history of USA economic development in not unexpected, and certainly emblematic. I am referring here to the mistaken belief that the “administrative state” began under Franklin Roosevelt and the New Deal. In fact, Congress delegating regulatory power to executive branch agencies began at the very outset of the new federal government. The United States Revenue Cutter Service was created by Congress (1 Stat. 175) on 4 August 1790. There were immediately a complex of papers and documents that had to be generated for the Cutter Service and for Customs. By another Act of Congress on 31 December 1792, ship owners were required to obtain a Certificate of Registry, issued by a customs district, containing the vessel name, the names of the owners and master, a physical description of the vessel, and the name, location, and qualification of the shipbuilder.
A new Registration and a Register Bond was required whenever the vessel was physically altered (re-rigged, new deck house, etc.), or when her ownership changed. Permanent Registrations could only be secured at the vessel’s official hailing port, although temporary certificates were issued when needed, by other customs districts. Registers, and Enrolment Certificates, were made out in triplicate. One copy was given to the master for use aboard the vessel. A second copy was kept by the collector at the customhouse, while the third was sent to the treasury
The Coasting Permit was a customs document required to be carried by shipmasters of vessels transporting certain previously imported goods from one U.S. port to another.
They were generally small, undecorated forms, and carried the signature of the issuing customs official. Coasting Permits were authorized by 1790 and 1793 legislation that dealt with licensing and enrollment of American vessels, but these permits were valid for one voyage only, and were used in addition to these other documents.
[In 1789, the Congress created the United States Lighthouse Establishment and placed it under the Department of the Treasury. The USLE imposed standards for design, construction, maintenance, and operation of all lighthouse in USA, as well as other aides to to navigation as they were developed.
[As steam engines and in particular steamboats proliferated in the 1820s and 1830s, boiler explosions and deaths mounted to such a degree that Congressmen were forced to enact new laws and delegate more regulatory authority, including the Steamboat Act of 1838, the Steamboat Act of August 30, 1852, and the creation of the Steamboat Inspection Service in 1871. Among the new documents required were, Boiler and Engine Inspector’s Certificates,Hull & Boiler Inspection Certificate, and Steamboat Pilot’s Certificate. (See John G. Burke, Bursting Boilers and the Federal Power (pdf), Technology and Culture, Vol. 7, No. 1 (Winter, 1966), pp. 1-23.)
[Finally, there is the creation of the Interstate Commerce Act of 1887 and its creation of the Interstate Commerce Commission.
[And Feldman is wrong to focus on the “compromise rulings” of the Burger Court and ignore the clear anti-Federalist, neo-confederate ideology of today’s conservative and libertarian movements.]
The Stealth Attack on the Power to Tax
Robert Kuttner, September 12, 2023 [The American Prospect]
The Supreme Court has accepted a sleeper case for review that could cost the Treasury seven trillion dollars over a decade if the justices agree with the most extreme constitutional claims about limiting the government’s power to tax. This is the latest front in the war to kill the modern administrative state by “starving the beast” for revenue.
The case, Moore v. U.S., challenges one of the few provisions in Trump’s massive 2017 tax cuts for the rich that actually collected revenue to offset some of the losses. The offset provision, known as the Mandatory Repatriation Tax, ended the unlimited deferral of foreign earnings from U.S. taxation when investors or corporations kept profits offshore.
At the time, tax avoidance schemes had accumulated about $2 trillion outside the U.S. With the closing of this loophole. the Joint Committee on Taxation (JCT) estimated that this new provision would increase federal revenues by $338 billion in the ten fiscal years from 2018 to 2027….
To put this in perspective, the Biden budget for FY2024 is $6.9 trillion. The amount of revenue lost over a decade in the worst-case scenario is almost exactly that. In the immediate terms, an extreme Supreme Court ruling would reduce revenue by something like 10 percent, increase the annual deficit by that amount, and create massive pressure for spending cuts. Such a ruling would also prohibit progressive proposals for some kind of wealth tax, because that would be yet another tax on unrealized gains.
Top Dems Press Supreme Court To Block Billionaire Tax
Julia Rock, September 13, 2023 [The Lever]
Obama’s former acting Solicitor General and a senator-turned-lobbyist are helping a dark money group pressure the high court.
The former Supreme Court lawyer for the Obama administration and a Democratic senator-turned-lobbyist are pressuring justices to block Congress from ever instituting a wealth tax on the superrich, according to court filings reviewed by The Lever.
Former Obama acting Solicitor General Neal Katyal recently submitted an amicus brief in the Supreme Court case Moore v. United States on behalf of the group Saving America’s Family Enterprises (SAFE). That anonymously funded group — whose board includes corporate lobbyists — has spearheaded campaigns against Democrats’ efforts to tax the inheritances and wealth of millionaires and billionaires.
Too Much of Not A Lot
Aurelien [Trying to Understand the World, via Naked Capitalism 9-14-2023]
[Long read, but well worth the time]
Politicians are obviously a reflection of the society they come from, and the talent pool which is available. Changes in society necessarily imply that those who go into politics will bear the imprint of these changes, and problems and weaknesses: falling education standards, for example. It’s certainly true that the frivolous and frenetic atmosphere of western popular culture today is very different from the serious world in which Macmillan or De Gaulle practiced politics. But then again, research shows that in most western countries the political class is more privileged and more ingrown than ever. Its members generally come from higher-income families, and have had long and expensive educations at prestigious institutions, as well as benefitting from powerful family and professional networks. So they are on average better educated and prepared than their forbears fifty years ago: they have no excuses. Compare that with cases such as Ernest Bevin, one of Britain’s greatest foreign secretaries, and the man who as much as anyone created NATO, was born into poverty, had scarcely any formal education and made his career in the Trades Union movement. Yet he impressed everyone, including Oxbridge diplomats, with his native intelligence and capacity for hard work, as well as his concern for his staff.
Another factor is precisely this ingrown nature of the political class. A quick survey of major political figures up to about 1990 or so displays a wide variety of backgrounds, education and life experiences. In all major western parliaments until fairly recently there were politicians who had begun life as manual workers. These days there are effectively none. The decline of mass political parties, especially on the Left, has drained the reservoir of those who came up the hard way, often through strikes and pickets and the fierce internal politics of the trades unions, and whose convictions were overwhelmingly shaped by experience….
But there are two other, linked, characteristics of political, systems today that have more importance in my view, even if they are less obvious. One (a consequence of this “professionalism”) is that political careers are made today almost exclusively within the apparatus of the political party of which you are a member. An obvious, if perverse, corollary, is that your enemies are in the first instance members of your own party, rather than others.
A New JFK Assassination Revelation Could Upend the Long-Held “Lone Gunman” Theory
[Vanity Fair, via Naked Capitalism 9-10-2023]