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The Wrongologist

Geopolitics, Power and Political Economy

Sunday Cartoon Blogging – March 24, 2019

What you missed in Friday’s news about Robert Mueller wrapping up the Russia investigation was that Trump announced the appointment of Stephen Moore, a conservative economic pundit as a member of the Board of the Federal Reserve.

Moore is a doofus. There’s no bigger example of a so-called “economist” failing his way upwards than Stephen Moore as Jon Chait points out: (emphasis by Wrongo)

“Stephen Moore’s career as an economic analyst has been a decades-long continuous procession of error and hackery….Moore’s primary area of pseudo-expertise — he is not an economist — is fiscal policy. He is a dedicated advocate of supply-side economics, relentlessly promoting his fanatical hatred of redistribution and belief that lower taxes for the rich can and will unleash wondrous prosperity. Like nearly all supply-siders, he has clung to this dogma in the face of repeated, spectacular failures.”

Wrongo hastens to remind everyone that the Fed is in charge of MONETARY POLICY, not Fiscal policy. Moore only holds a Master’s degree in Economics. There are many, many examples of Moore’s hacktastic pseudo-expertise in economics. Slate reports that Moore: (brackets by Wrongo)

“Predicted that Bill Clinton’s tax hikes would bring disaster (they didn’t), that George W. Bush’s tax cuts would bring prosperity (they didn’t), and that Barack Obama’s policies were setting us up for ’70s-style stagflation (they didn’t)….He and supply-side guru Art Laffer were also key advisers behind Kansas’ fiscally and politically disastrous tax cuts. In spite of his own track record of [consistently] failed predictions, he has disparaged Keynesian macroeconomics as ‘witchcraft.'”

He’s recently called for Trump to fire the entire Fed board. Moore has blamed the Fed’s rate increases over the past year for slowing economic growth, and recently called on the Fed to begin cutting rates. He helped draft Trump’s tax proposals while working as an economist at the Heritage Foundation.

Stephen Moore is a joke in the economics profession. This should go well. On to cartoons.

Barr holds the key to what we learn about the Mueller investigation:

Stop calling them White Nationalists, alt-Right or Populists. These people are White Supremacists:

Funny how most Christians in the US don’t obey the Ten Commandments, but consider the Second Amendment a must follow:

What is evident from attacks on Black Christian churches, Synagogues, and Mosques in the US, and now in NZ, is that RW extremists are increasing their attacks. They are citing Trump as their “guiding light”, while Trump continues to play down their involvement:

Biden looks like a candidate, but some wonder about his age:

George and Kellyanne Conway see Trump differently. Will their relationship survive?

Trump says free speech for conservatives is great, missing the point about our free press:

Rep. Devin Nunes sues Twitter because of a satirical account called “Devin Nunes’s Cow”. As of today, more people follow the fake cow that mocks Devin Nunes, than follow Devin Nunes:

 

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Saturday Soother – March 23, 2019

The Daily Escape:

Milford Sound, New Zealand – photo via The Travel Guys

You know leadership when you see it. In the US, we are chronically short of inspiring leaders. But there is a great model of leadership on view in New Zealand, their Prime Minister Jacinda Ardern. Now 38, she was the world’s youngest female head of government, when she took office at age 37.

We’ve seen her response to the Mosque killings. In lieu of texting thoughts and prayers, she donned a black head scarf and led a group of politicians to visit victims’ families. She went to a high school that had lost two students in the attack, and told the children they need to fight prejudice:

“Let New Zealand be a place where there is no tolerance for racism….That’s something we can all do.”

She announced a ban on military-style assault rifles and ammunition on Thursday. She has hammered social media companies for allowing and amplifying extremism. Ardern has called capitalism a “blatant failure” due to the extent of homelessness in New Zealand.

She has spent her political capital to unite her country, not to divide it.

None of those things could have been accomplished by Trump. And none will ever be accomplished by him. He’s too politically and ideologically conflicted to give a full-throated denouncement of extremism from the right.

He doesn’t have the empathy to sit with relatives of the dead and comfort them. He’s not capable of leading us through a teachable moment. He can’t move our government to action, except to pass unnecessary tax cuts and hire right-wing Supreme Court Justices. He can’t be a role model for any positive behaviors, and is a terrible communicator to the general public.

So, look clearly at America’s politicians, and find someone who has the ability to lead like Ms. Ardern. Wrongo doubts that you will find many. Ms. Ardern is a politician not a saint, but her actions prove that politicians exist who can be effective thought and cultural leaders.

Remember that she’s just 38 years old!

Does this imply we shouldn’t be thinking that America necessarily needs an older politician driving the bus of state?

By the time you’re reading this, you’ll already know that the Mueller Report has been submitted to the Attorney General. Where we go from here depends to a great extent on the leadership of the Attorney General, the House and Senate, and the president.

Sadly, there’s no Jacinda Ardern in sight.

Time to unplug and get as soothed as we can under the current circumstances. Start by brewing up some Eaagads Estate Kenyan small batch coffee ($19/12oz.) from Austin Texas’s Greater Goods Coffee. The roaster says it pairs well with blackberry scones and citrus fruit.

Now, get to your favorite chair, put on your headphones and listen to Roxane Elfasci play “Clair de Lune” by Claude Debussy, on guitar. This 2016 live performance was in Paris. “Clair de Lune” is the third movement of “Suite Bergamasque” by Claude Debussy, from a poem by Paul Verlaine. It was written for piano, and here it is arranged for guitar by James Edwards. This is a wonderful performance of a well-known piece which is incredibly difficult to play on solo guitar:

Those who read the Wrongologist in email can view the video here.

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Biden?

The Daily Escape:

Azulik Hotel, Tulum Mexico, – 2019 photo by Phoebe Montague

A long-time friend of Wrongo and Ms. Right who is also a reader of the Wrongologist, emailed that a friend who is a well-placed Democrat in DC, said the Party plans to push Joe Biden for a single four-year term “to bring us together in healing”. He would also appoint a younger VP who would appeal to Millennials.

After a little digging, it seems that may be the plan. CNN reports that Biden is considering:

“The early selection of a running mate, which one aide said would help keep the focus of the primary fight on the ultimate goal of unseating Trump.”

If Biden would commit to one term, selecting his VP candidate early would lay hands on that person as the presumptive Democratic nominee in 2024. It sounds like a really bad idea, one that also would preclude Biden’s selecting one of the existing candidates for the 2020 nomination.

This strategy would have precluded Biden getting the VP nomination in 2008. Obama couldn’t have picked Biden early, because Biden was also running for president. And even once Biden dropped out, he wasn’t prepared to immediately back Obama over Hillary Clinton for the nomination.

Biden has tons of history for his primary opponents and the Republicans to pick through. Ryan Cooper, writing in The Week, said:

“Joe Biden is about to ruin his reputation….The most immediate problem for Biden personally is that he has #MeToo written all over him…..there are already vast compilations of footage of him being far too handsy with women in public settings.”

More from Cooper:

“Biden’s actual policy record is probably almost as big of a potential problem. The Democratic Party has shifted markedly to the left over the last decade, as the consequences of the party’s policy record from the mid-1970s to 2008 have become clear….he was personally involved in almost every bad policy decision of the last 40 years.”

Democrats use identity politics to help win elections. They try to knit together disparate groups of voters to counter the GOP’s solid South and Western states. Biden is tragically flawed in this regard. When you have a long history, people can learn that he gave the eulogy at Strom Thurmond’s funeral.  Thurmond was one of the most notorious segregationists in history.

In 2020, Biden’s eulogy works with Democrats in South Carolina, but how Biden confronts his 2003 praise for a former segregationist elsewhere in the primaries could prove a big challenge. Biden would be trying to lead a party that says it’s committed to fighting racial inequality, but would he be seen as the right person for the job? Some in the party will reject whatever explanation he gives, while others will say he’s trying to persuade more white voters to join Democrats in 2020.

Many black voters failed to support Hillary Clinton in 2016 for much less than Biden’s praise of Thurmond. Like Clinton, Biden has already expressed regret for supporting criminal sentencing laws that disproportionately punished people of color. He needs to clearly explain his treatment of Anita Hill, who accused Clarence Thomas of sexual harassment during Supreme Court confirmation hearings that Biden chaired in 1991.

Biden’s old Senate votes in favor of the Iraq War, the Defense of Marriage Act, and the North American Free Trade Agreement will be difficult to explain to young Democrats.

He has long said he believes in bi-partisanship, saying that the differences between Republicans and Democrats are superficial disagreements, not fundamental differences over matters of principle. Given Biden’s success in early Iowa polling, some might say that message is resonating. After all, according to orthodox wisdom, there is no more commendable virtue in American politics than bipartisanship.

Candidates always try to assure voters that they will strive to “work across the aisle” to deliver “commonsense solutions”. But, Wrongo thinks his ratings are due largely to Joe Biden being widely considered a likable guy, genial Uncle Joe. A father who has suffered family loss, there’s also a halo effect from his relationship with Obama that drives his favorability.

Biden is 76. He’s one of a cohort of elder politicians running for President, including Bernie Sanders (77) and Elizabeth Warren (70 in June). There are several candidates in their 60’s, 50’s, 40’s and a few in their 30’s.

Biden starts with strength among Democrats who think a safe pair of hands is a tested white man, and with Independents nostalgic for the Obama administration.

He will be opposed by Millennials eager for a new generation of leaders, and people of color who won’t buy his explanations about Anita Hill and Strom Thurmond.

He looks like a divisive candidate to Wrongo.

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Who’s Electable?

The Daily Escape:

Valley of Fire State Park, Nevada – 2019 photo by trolleg

Ultimately, that question will be about Donald Trump vs. whichever Democrat is chosen as the Party’s nominee in 2020. Today, it’s a way to try to make a cut from among the 15+ Democrats that have announced their intention to seek that 2020 nomination.

Wrongo talked last week about the landscape of the 2019 primaries, saying:

“The internet is full of comments about which of the 14 are most worthy, and plenty of hot takes on who can’t win vs. Trump.”

We know that in past presidential elections, a few candidates always emerge early as having the ability to “excite the voters”. The press starts to say that “this one might have a chance”. It works out sometimes, as it did for Bill Clinton vs. Paul Tsongas and Jerry Brown, or Barack Obama vs. Hillary Clinton. Both Clinton and Obama had charisma, which their opponents lacked. What hasn’t worked so well is being a policy wonk or having a bulletproof resume. Every candidate has a resume, a story to tell about themselves, but some try to parlay long careers in politics to the winner’s circle.

Think about Nixon and his resume squeaking past Hubert Humphrey, also with a long resume in politics. GHW Bush took his long resume to the White House for one term. The idea is that you can’t ask voters to look ahead while looking backwards at the same time. For Baby Boomer politicians, there are things in the rear-view that aren’t pretty, or even relevant today.

This is Joe Biden’s problem: When you’re challenging the status quo, ahead is the only winning direction. For another Boomer, Elizabeth Warren, her political resume is short, so less baggage in the 2020 primaries, and more new ideas.

It isn’t totally clear how the electability equation works. The media’s biases have a lot to do with deciding who gets the early buzz. It should be pretty simple to sort them into electable/not-electable categories, but think about Obama in January 2008: (emphasis by Wrongo)

“Senator Barack Obama’s victory in Iowa has improved his standing within the party on a critical measure: his electability. The percentage of Democrats who say he would be the strongest candidate against the Republicans has more than doubled in a month, to 35% from 14% in December.”

So today, we have no idea who is electable, and probably won’t know until after Super Tuesday (March 3rd), when 54% of Democratic primary votes will have been cast.

And does anyone have a reliable metric for “electability”? We can’t really say that John Kerry was un-electable. Hillary was chosen FOR her (supposed) electability, as opposed to the (supposedly) “un-electable” Bernie Sanders.

The GOP have usually played the most electable hand. That gave them Bob Dole, George Bush 43, John McCain and Mitt Romney as candidates. Only one winner among them.

Ultimately, are we capable of analyzing “electability”?  We want it to be useful and true, but is it? The media and the pundits think that moderate political views make a candidate electable, but it’s really more like charisma and authenticity.

At this point Wrongo wants to give a brief plug to Pete Buttigieg. He’s met the Democratic National Committee’s threshold of 65,000 individual donors, which means he’ll be included in the Democratic primary debates. He’s 37 and gay. He’s a Harvard and Oxford grad who served in Afghanistan and speaks Arabic. All of that probably signals to Establishment Democrats that he’s un-electable.

Wrongo thinks he has charisma and authenticity, along with very rare smarts. Here’s a quote from a Buttigieg profile in the New Yorker:

“If you thought in terms of the effects of public policy on millennials, he said, you began to see generational imbalances everywhere. The victims of school shootings suffered because of the gun liberties given to older Americans. Cutting taxes for the richest Americans meant that young people, inevitably, would have to pay the bill. Climate policy, he said, was the deepest example of the imbalance…”

Buttigieg may be strong in the Mid-West, and may be able to bring out non-voters. Non-voters were the biggest cohort in 2016. Many don’t vote because they don’t believe any of the candidates will make things any better. America needs a candidate that is committed to meeting increasingly desperate needs. Maybe Buttigieg would bring non-voters to the polls.

And haven’t Baby Boomers done enough to screw up both America and the planet?

Maybe we should give a Millennial a shot. At least for Vice-President.

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Monday Wake Up Call – March 18, 2019

The Daily Escape:

View from Angel’s Landing, Zion NP – 2019 photo by ducc517

Sen. Elizabeth Warren (D-MA) says that she favors “capitalism with serious rules.” David Leonhardt wrote in Sunday’s NYT:

Her platform aims to reform American capitalism so that it once again works well for most American families. The recent tradition in Democratic politics has been different. It has been largely to accept that big companies are going to get bigger and do everything they can to hold down workers’ pay. The government will then try to improve things through income taxes and benefit programs.

Warren is trying to treat not just the symptoms of inequality, but the underlying disease. Warren also called for an annual wealth tax, for people with assets greater than $50 million. She has proposed a universal child-care and pre-K program. She favors tougher guidelines on future mergers, and also a breakup of the giant tech companies (Google, Facebook) that resemble monopolies.

Of the current crop of Democrats, she’s the reform capitalism candidate. But one idea that Warren hasn’t espoused is the Financial Transactions Tax, (FTT). Wrongo first wrote about a FTT in March 2013.

Sen. Brian Schatz, (D-HI) and Rep. Peter DeFazio (D-OR) introduced a tax of one-tenth-of-one-percent, or 10 basis points (100 basis points equals 1 percentage point), on securities trades, including stocks, bonds, and derivatives. The CBO estimates that the FTT would raise $777 billion over 10 years. Sens. Chris Van Hollen (D-MD), Jeff Merkley (D-OR), and Kirsten Gillibrand (D-NY) are co-sponsors of the bill.

For the math-challenged, 10 basis points on a $1,000 trade equals one dollar. Jared Bernstein says:

FTTs exist in various countries, including the UK and France, with Germany considering the tax (also, Brazil, India, South Korea, and Argentina). The UK is a particularly germane example, where an FTT has long co-existed with London’s vibrant, global financial market.

More from Bernstein: (brackets by Wrongo)

Because the value of the stock holdings is highly skewed toward the wealthy, the FTT is highly progressive: The TPC [Tax Policy Center] estimates that 40% of the cost of the tax falls on the top 1% (which makes sense as they hold about 40% of the value of the stock market and 40% of national wealth).

Vox also reports that an FTT would mostly affect wealthy Americans, because an estimated 84% of the value of stocks is owned by the wealthiest 10% of households. Schatz isn’t the first Democrat to suggest an FTT, Bernie Sanders ran on a similar idea in the 2016 Democratic primary. He pitched it as a way to pay for free college.

Globally, there is plenty of experience with FTTs. In the UK, a 0.5% “stamp tax” is charged when someone buys shares on the stock market, and the UK market is fine. France in 2012 introduced a tax on financial transactions, and a study from the European Commission found that trading volumes declined slightly, but share prices and volatility weren’t meaningfully changed. France and Germany have pushed for a European Union-wide FTT.

Opponents include the high-frequency traders, who note that even a small FTT could upend their extremely low margin business model. Although a dollar on a $1,000 trade doesn’t sound like much, if the industry is making 4 billion trades a day, it can add up.

Time to wake up and support an FTT, America. Sens Warren and Sanders support this idea, and you should too. Those who think that the government should use the tax code to ensure that everyone has an equal opportunity to get ahead, and that we should do more to ensure the well-being of our citizens aren’t socialists.

If that makes us socialists, then Eisenhower, who presided over a 90% top tax bracket, was also a socialist.

To help you wake up, here’s Steely Dan with “Any World That I’m Welcome To from their 1975 album “Kay Lied”. This tune gives you the benefit of hearing the late, great, Hal Blaine on drums. Blaine may have been the most recorded drummer in pop music history. From the late 50s through the mid-70s, Blaine did sessions with Sam Cooke, Ray Charles, The Righteous Brothers, Henry Mancini, Ike & Tina Turner, The Monkees, Nancy Sinatra, The Fifth Dimension, The Byrds, Sonny & Cher, Mamas and the Papas, and The Grass Roots.

The famously picky Steely Dan only used Blaine for this one tune:

Those who read the Wrongologist in email can view the video here.

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Sunday Cartoon Blogging – March 17, 2019

New Zealand appears to be moving quickly to change its gun laws after Friday’s shooting by a White Terrorist at two mosques. From Vox:

“Prime Minister Jacinda Ardern unequivocally stated Friday that, “our gun laws will change,” after announcing that the suspected shooter, Australian Brenton Tarrant, had obtained the weapons used to kill 49 people legally. Ardern did not elaborate on specific legislative or regulatory proposals.”

Their laws are tougher than in the US. New Zealanders do not have a constitutional right to bear arms, and they must pass a firearms course and a background check before obtaining a license to buy a gun. Licenses must be renewed every 10 years, and police can revoke a person’s license. Of the 3.9 million New Zealanders of gun licensing age, 238,000, or 6% have a firearm license, yet it is estimated that there are 1.2 million guns in private hands. The person is licensed, not the gun, so there is no limit on guns the individual can own.

Shannon Watts, founder of Moms on Demand, wrote:

“Imagine: elected officials putting public safety over gun manufacturers’ profits. Americans deserve better than lawmakers who are letting gun lobbyists write our nation’s gun laws.”

It took just one mass killing and just one day to start the process of banning semi-automatic weapons in New Zealand. America’s politicians are shameful. On to cartoons:

From Ruby Jones, a New Zealand cartoonist:

To get ahead, you have to start early in America:

More evidence that tax cuts went to the top:

The admission scandal created many stories:

Dems move convention to the Mid-West to prove they’re regular folks:

Brexit may take off, but there could be dangerous consequences:

Our foreign enemies may be less dangerous than the domestic kind:

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Saturday Soother – March 16, 2019

The Daily Escape:

More California poppies – March, 2019 photo by West Coast Aerial Photography

The horror in New Zealand, Manafort’s sentencing, and both Houses of Congress voting to end Trump’s emergency declaration. The vote tally was 59-41, not enough to override a veto. Moments after Thursday’s vote, the president tweeted a single word: “VETO!”, and has now he’s done just that.

We head into the weekend with 13 Democrats declared as running for the Party’s nomination. Another, Joe Biden, may announce this weekend. The internet is full of comments about which of the 14 are most worthy, and plenty of hot takes on who can’t win vs. Trump.

Wrongo’s hot take is that the 2020 presidential election will be determined by a handful of states. Michigan, Ohio, Pennsylvania and Florida were all lost last time around. Any Democratic candidate can win the same states as Hillary won last time. We need to be asking ourselves is: “Who has the best chance to win in those four states?”

Your choice may be different from Wrongo’s, but this must be a prime consideration. We all know that the presidential election isn’t about who wins the most votes. It’s about who accumulates the necessary number of electoral votes, and that path leads through the four states above.

So the challenge for the Democratic Party nominee is: How are you going to convince people in the above states to vote for you?

In the meantime, pundits are talking about a brokered convention. They’re assuming that no single candidate will garner a majority of votes through the primary process. The Democratic National Committee (DNC) has set the system up so it’s difficult to win an outright majority if there is a large field of candidates, since there are no winner-take-all contests.

Instead, the delegates are awarded proportionately by congressional district and statewide vote. That means in a large field, the first place winner is unlikely to get close to 60% of a state’s delegates. To get any delegates at all, a candidate must receive at least 15% of a state’s votes.

It’s too complicated to go deeply into this, but there are lots of votes up for grabs in the early primaries. Brookings has this:

“Fifty-four percent of all pledged delegates will be chosen in the first five weeks of the primary season, mostly from four states — California, Texas, Ohio, and Michigan. An additional 10 percent of pledged delegates will be chosen one week later — nearly all from Florida and Illinois. One candidate with a big lead in name recognition or with a small band of intense supporters could wrap up the Democratic nomination based on the votes of a tiny share of voters and do so before primary voters have had much time to get acquainted with the candidates.”

This means that, assuming Kamala Harris will win California, and Beto O’Rourke will win Texas, catching them could be difficult. And if no one else breaks the 15% barrier in either state, it could be a pitched battle between just them all the way to the convention on July 13-16 2020 in Milwaukee.

Wrongo thinks Bernie will break 15% in a few states, and possibly be the spoiler for these two new faces of the Party.

Some think that if no one gets a majority before Milwaukee, that favors Biden, who will most likely, hold the majority of the DNC’s Super delegates, who can vote after the first ballot. OTOH, Biden has to prove he has the ability to get more than 15% in several states to merit their votes on the second ballot of the convention.

These primary contests used to reduce the field quickly, since it was very difficult to raise money from the big donors if you lost Iowa and New Hampshire. But, money is easier to raise via social media than it used to be. And social media can keep a candidate in the news even without huge TV expenditures.

There are now 485 days left until the Democrat’s convention, and a lot will happen between now and then. Buckle up!

Time for your Saturday Soother. In honor of St. Patrick’s Day tomorrow, we break from our usual format of coffee and classical music. Let’s start by getting into a comfy chair, and listen to the Hooligans (the Irish Hooligans, not the Bruno Mars band) perform the Bluegrass classic, “Whiskey for Breakfast”:

As we all know, breakfast is the most important drink of the day. Now pour a nice snifter of Irish whiskey. Wrongo has 8 different Irish whiskeys in the pantry, and recommends Bushmills 21 Single Malt (~$230/750 ml). Enjoy its notes of toffee, honey, spiced fruit and dark mocha.

Sample Lyric:

Lord preserve us and protect us,
We’ve been drinking whiskey ‘fore breakfast

Those who read the Wrongologist in email can view the video here.

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The Long Battle to Reform Capitalism

The Daily Escape:

Poppies in bloom, Southern California – March 2019 photo by Leslie Simis. This annual explosion of color is enhanced this year by extraordinary rainfall

You can call the period in US history from FDR to Nixon “America’s social democratic era”.  A collection of politicians had hammered out the policies and regulations that became FDR’s New Deal in America. It became a period of post-war prosperity during which inequality narrowed, economic growth boomed, and optimism reigned.

The characteristics these policies shared were reciprocity and generosity. For the citizen, there was some form of social support that grew from Social Security in 1935 through the 1960’s with Medicare and Medicaid. In 1970, Nixon implemented the Environmental Protection Agency. There was also a willingness to care for the disadvantaged. Our Marshall Plan and our commitment to foreign aid are both great examples. The success of social democracy in the postwar era weakened the market’s power to act independently within our society.

But then things changed. Our government’s role became a helpmate for corporations, financial institutions, and their lobbyists. The result has been growing inequality between suppliers of capital and the suppliers of labor, even of highly educated labor, like teachers and professors. Economic growth slowed, and we have developed a permanent underclass that seems impervious to repair.

Yesterday, we talked about Economic Dignity, and how focusing on it might help solve inequality. Today’s market economics is partly based on the ideas of Jeremy Bentham and John Stuart Mill, economists who viewed human beings as supreme over the state. As individuals who would make rational decisions to maximize utility. It turned out to be incomplete, since it left out key dimensions of human psychology, like the individual’s need for social esteem or respect. In other words, they ignored economic dignity.

Couple that with Milton Friedman’s idea, that the mission of the firm is to solely maximize profits, that any responsibilities to its employees, consumers, or society should be ignored. Profit maximization at all costs has done great damage to American society. And conservatives and free marketers have married the ideas of these three economists, making the removal of government from markets their primary mission.

But what they call “the market” is really a bundle of regulatory (and non-regulatory) rules by which market activities operate. The mix of free and regulated market activities can be changed, even though capitalists say we shouldn’t change the rules, because it adds uncertainty to markets.

Just because in baseball, three strikes and the batter is out, or with four balls, there is a free pass to first base, doesn’t mean it has to be that way. It could be five strikes and you’re out, or three balls is a walk.

As an example, we tend to fight unemployment with “trickle-down” solutions. That means we bribe the rich and corporations to hire more. But, the bribe is always bigger than the payrolls that are generated.

We could fight unemployment with fiscal policy, such as infrastructure spending by the government. It would employ many, possibly hundreds of thousands, and there would be no need to pay any entity more than was warranted by the tasks at hand.

America needs a return to what economist Paul Collier calls the “cornerstones of belonging”— family, workplace, and nation, all of which are threatened by today’s market driven capitalism. That means capitalism has to return to the ethics of the New Deal. Joseph Stiglitz, Nobel laureate in economics, says: (parenthesis and emphasis by Wrongo)

Over the past half-century, Chicago School economists, (including Milton Friedman) acting on the assumption that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became dominant in policymaking circles just when economists were beginning to reveal its flaws.

Stiglitz says we need the same resolve fighting for an increase in corporate competition that the corporations have demonstrated in their fight against it. We’ll need new policies to manage capitalism.

It means higher taxes on profits.

It means paying workers more.

It means rebuilding public assets like roads.

It means teaching students to be both technically capable, and grounded in their values.

Speaking of needing to teach our students, if you think we’re not in a rigged game, think about one “USC student” who is part of the admissions fraud scandal, Olivia Jade Giannulli. She was on the yacht of the Chairman of USC’s Board of Trustees when she heard about it.

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College Admissions Fraud: A Teachable Moment About Capitalism

The Daily Escape:

Eagle pair on nest, Litchfield County CT – 2015 photo by JH Clery

With the college admissions fraud, wealthy Americans are now bribing people to get their kids into college. It’s just another way that the wealthy are rigging the game. Robert Reich enumerates:

We’ve become a nation where any number of greased poles stop your ascent. People with wealth seem unwilling to compete fairly. It turns out that executives from Pimco, Hercules Capital, and the co-chairman of the law firm, Willkie Farr & Gallagher, were named in the buy your way into Yale scam, along with a few Hollywood types.

It’s become very difficult to differentiate between applicants for the prestige colleges. Good grades and test scores and life experiences are no longer enough to help a kid to stand out the way they might have a few years ago. So some are bribing their way to the head of the line.

It’s just another cost of doing business in America. The truly wealthy can just pay for a new building and see their children get into the best universities. But, the merely rich can’t do that. OTOH, they can’t be expected to simply earn their way in.

As for the kids: They all knew whether what was on their applications was true or not. They had to be in on the scam. This is what passes for the charmed life of the rich in the USA: Kids knowingly cheat right along with their cheating, entitled parents, because they believe they deserve to go to Georgetown.

Robert Reich is correct, this is the rot that concentration of wealth has brought to our country.

Randall Lane has a long read at Forbes about “Reimagining Capitalism” in which he summarizes his one-on-one discussions with two dozen billionaires, including face-to-face meetings with the three richest people in the world, Bill Gates, Jeff Bezos, and Warren Buffett, about capitalism’s future. Lane says:

“Virtually every billionaire I spoke with acknowledged that higher taxes on the billionaire set are inevitable; most even saw them as beneficial, if correctly applied. According to Gates, Buffett, Khosla and others, the correct way to levy taxes on the superrich is….Either an estate tax without the loopholes that currently render it useless or a higher capital gains tax applied only on extreme fortunes…”

He quotes Buffett about the disparity of earnings between the top 1% and the bottom 50%:

“The market system as it gets more specialized pushes more money to the top….The natural function of a more specialized market economy is to divert more and more of the rewards to the top. That’s something I don’t think we’ve fully addressed in this country.”

Lane points out that Bill and Melinda Gates even went on Steven Colbert and called for higher taxes on the super-rich.

Younger Americans know that the deck is stacked. That may be in part why some kids play along with their parents and cheat to get into Harvard.

An often-cited 2016 Harvard University survey found that 51% of American youth aged 18 to 29 no longer support capitalism. Only 42% said they back it, while just 19% were willing to call themselves “capitalists.” A follow-up focus group study concluded that most felt that:

“Capitalism was unfair and left people out despite their hard work.”

Gene Sperling, Obama’s Director of the National Economic Council, has an interesting take on redefining our overall economic goal. He says we should strive for “Economic Dignity”. His conclusion is that the Fed and the Congress should implement a full employment monetary and fiscal policy that fosters tight labor markets.

Sperling says that would be a triple win for economic dignity, because it would lead to higher wages, and it would give companies greater incentive to provide advanced training to their employees. Meanwhile, high labor demand gives more workers some “take this job and shove it” leverage that they lack today.

Taken together, it would allow people to care for and provide opportunity to their families, something that is at the core of America’s beliefs.

Young Americans know that capitalism in its current form creates inequality, oppression, and exploitation. It could be made to work for all if it were more responsive to society’s needs, and yes, if it provided economic dignity for all.

Those who have been rewarded by capitalism shouldn’t be able to use their bounty to make the lives of others worse than they are. This isn’t just about the Koch brothers. It’s also about the merely wealthy who scam the college admissions system to get their kids into better schools.

We should be showing the young that there’s a better form of capitalism.

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Trump Says Dems Are Socialists

The Daily Escape:

Sulfur Skyline Trail, Jasper NP Alberta, CN – August 2018 photo by MetalTele79

Trump wants to run against socialism in 2020, so he’s trying to paint the Democrats as socialists. At the Conservative Political Action Conference, Trump brought up “socialism” four separate times:

“Just this week, more than 100 Democrats in Congress signed up for a socialist takeover of American health care.”

“America will never be a socialist country — ever.”

“If these socialist progressives had their way, they would put our Constitution through the paper shredder in a heartbeat.”

“We believe in the American Dream, not in the socialist nightmare.”

Steve Benen notes that Senate Majority Leader Mitch McConnell (R-KY), indicated that the Voting Rights Bill passed by the House as HR-1 was a “radical, half-baked socialist proposal”. Benen goes on to say:

“There’s nothing “socialist” about automatic voter registration. Or curtailing partisan gerrymandering. Or requiring officials to use “durable, voter-verified” paper ballots in federal elections.”

Or making Election Day a national holiday.

Perhaps the GOP is redefining socialism as: Any legislation or policy that would diminish the power of the far right, or diminish the wealth differential enjoyed by their business elites.

An NBC News/Wall Street Journal poll showed that just 18% of Americans had a positive view of socialism, 50% had a negative view, and 26% had a neutral view. Most of the skepticism about socialism comes from older American generations. People who are nearly Trump’s age grew up fearing nuclear war. They saw the Soviet Union as an existential threat to the US.

OTOH, Axios reports that 73% of Millennials and Gen Z think the government should provide universal health care. They will make up 37% of the electorate in 2020. And Gallup found that Americans aged 18 to 29 are as positive about socialism (51%) as they are about capitalism (45%).

Vilifying socialism might be a winner for the GOP, unless the Democrats hammer home a series of ideas. First, that Social Security and Medicare aren’t socialism or socialized medicine. Second, that we socialize corporate losses all the time. The taxpayers bailed out banks, capitalists and speculators 10 years ago. We also bailed out GM and Chrysler.

We bail out corporations that do not pay for “externalities”. Externalities are the indirect costs incurred because of actions taken by someone else. Think about pollution. When a manufacturer can make its decisions based on their bottom line, it makes sense for them to dump waste into our rivers or air, pushing the costs of cleanup onto society as a whole.

Today’s GOP is pushing quickly to gut regulations in order to protect the industries of their big donors from paying the cost of these externalities.

Third, reforming capitalism isn’t socialism.  Reform is necessary for the economic future of the country. The current neoliberal form of capitalism dominates both our economy and our thinking about economic success. And in the past 40 years, we’ve changed the rules of the game for corporations. We’ve moved the fifty yard line much closer to the capitalists’ goalpost than it was during FDR’s time.

And corporations and capitalists have been running up the score in the economic game ever since.

Neoliberal capitalism has made selfishness an economic and moral good. One result was that improving our economic security, or our social safety net, can no longer be discussed in our society.

The Green New Deal document directs the government to provide all Americans with:

(i) high-quality health care,
(ii) affordable, safe, and adequate housing,
(iii) economic security; and
(iv) access to clean water, clean air, healthy and affordable food, and nature.

These goals are within America’s capabilities, but they come with costs, costs that will not be willingly paid for by corporations, or by “public-private partnerships”. They will only come about with direct government intervention, primarily by implementing policies that encourage them, and by a new tax policy that finances them.

Nothing in the above requires state ownership of corporations, so we don’t have to talk about socialism.

Our market economy should remain, but capitalism needs to be different, because its current track cannot be sustained if we want to contain and correct income inequality, or deal with climate change. Today’s capitalism is creating concentrations in most industries, driving out the little firms. Price gouging is an issue, particularly with big Pharma.

Everyone should agree that companies above a certain size must pay for the externalities they create. That they should also pay a larger share of their profits as taxes. And that they should pay a fee for domestic jobs lost to overseas locations.

2020 should be about those who want to reform capitalism, and how to do it. It shouldn’t be about Trump’s trying to paint Democrats as Soviet-era socialists.

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