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The Wrongologist

Geopolitics, Power and Political Economy

Monday Wake Up Call, Portland Edition — July 27, 2020

The Daily Escape:

Paradise Pass with Crested Butte in the distance, CO – 2020 photo by glacticspark

The second biggest story of the summer is the widespread support of the protesters, those people of all races and ages, who took to the streets to say something about racism in America. Portland is and seems likely to remain the epicenter of the Trump administration’s law and order response.

America’s First Amendment rights are under attack in Portland by Trump’s paramilitaries every day. How can that be? Few have heard of US Code 1357. It allows immigration officers to operate within 100 miles of any external US border. Hence Trump could call out border troops to DC, Portland, or Chicago.

USC 1357 gives DHS jurisdiction over about two-thirds of the US population. They can enter any building that isn’t a dwelling within 25 miles of the border without a warrant.

The regulation was adopted by the US Department of Justice in 1953. At the time, there were fewer than 1,100 Border Patrol agents nationwide; today, there are over 21,000.

These problems are compounded by a lack of personnel oversight by Customs and Border Protection (CBP) and the DHS. The CBP consistently fails to hold its agents accountable for abuses.

Portland has protests on most days of the year. It’s part of the DNA of the city. Now, it’s looking like Trump’s paramilitaries are trying to foment violence and create a backlash among the protesters. The NYT reports on how these troops were the instigators of recent violence: (emphasis by Wrongo)

“After flooding the streets around the federal courthouse in Portland with tear gas during Friday’s early morning hours, dozens of federal officers in camouflage and tactical gear stood in formation around the front of the building.

Then…the officers started advancing….they continued to fire flash grenades and welt-inducing marble-size balls filled with caustic chemicals. They moved down Main Street and continued up the hill, where one of the agents announced over a loudspeaker: “This is an unlawful assembly.”

By the time the security forces halted their advance, the federal courthouse they had been sent to protect was out of sight — two blocks behind them.”

What’s the end game for Trump in Portland?  His paramilitaries aren’t going to murder groups of protesters in cold blood, so what are they going to do? Have nightly tear gassing until the November election?

Trump’s paramilitaries are saying to Portland: “We wouldn’t have to violate your Constitutional rights if you didn’t insist on exercising them.”

There is libertarian support for ending the Trump paramilitary presence in Portland. Libertarians acknowledge that there is no police power in the Constitution. Policing is left to the states. To the extent the President can send federal officers into Portland or other cities, it should be limited to protecting federal property, not moving into crowds that are two blocks away.

The libertarian argument would say that the people of Portland and other cities have the right to decide who they want to elect to City Hall and how much funding they want to provide for their police. The federal government should only be brought in to defend federal property if the local police are unwilling or unable to do so.

Ironically, during the Obama administration, the GOP thought that the “arming up” of America’s internal security forces like the CPB was a risk to THEM. Now, when it’s impacting Democratic-voting cities, they’re all for it.

Trump’s election chances seem to depend on whether he’s Nixon reborn in 2020. Nixon ran on law and order and against violent demonstrations, largely by students who were against the Vietnam War. Protests never spread as broadly as this in the 1960s. To a great degree, the Vietnam protests were by white college age youth. That isn’t true of today’s protesters.

Trump’s law and order gambit is that Antifa Marxists will take over our cities and then, our suburbs. He’s clinging to the idea that there is an equivalent of the “silent majority” of 1968 still out there to elect him.

But Vanity Fair reported some new polling on the response to Trump’s anti-BLM efforts. If those polls are correct, the silent majority of 2020 is firmly on the side of Biden when it comes to issues of race and justice. Nixon’s ghost seems to have left the building.

Time to wake up America! People in Portland are not afraid of the protesters. They know that their safety isn’t in question. There’s no doubt this is a protest against the government, not their fellow citizens.

To help you wake up listen to Peter Green, guitarist of Fleetwood Mac who died this week, play “Albatross” from 1969’s “The Pious Bird of Good Omen”:

This reminds Wrongo of Santo and Johnny’s “Sleepwalk” from 1959.

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

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What’s Up With All the Fireworks?

The Daily Escape:

Temple of Luxor, Luxor, Egypt – photo by Hossam Abbas. The temple dates from 1400 BCE. It has been a Roman church and remains a mosque today.

Over the past month, every city, town, and village has been lit up with fireworks. This happens every year: Some neighborhood yahoo will buy firecrackers and more, often travelling out of state to get what they want. Then for a few days up to and including July 4, they are fired off as dusk settles on your town.

But this year is different. We saw well beyond the usual, including professional-size explosives being detonated every night. Watch this video shot by a drone over Los Angles on July 4:

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

In most ways, these are actually more impressive than a professional fireworks display, since it is spontaneous, and performed so broadly by so many people. Is this the silent majority being heard? If so, what are they saying to the rest of us? Is this simply what people feel they need at the moment?

For the past few months, life has obviously been difficult. So lighting up fireworks to let off steam with a few family and/or friends while having a fun time may be all the explanation that we need.

OTOH, people on the right are calling it a nationwide protest by average people to the authoritarian effort to keep hard working Americans at home as part of the COVID pandemic. The comments on the above YouTube video tend to be like these:

  • A beautiful display of the middle finger to the authoritarian scum trying to squeeze the life out of America. Ain’t gonna happen.
  • American Patriots giving the deep state a big F-You!
  • The silent majority sure were loud this evening.

Theories range from coordinated efforts to blame those protesting police brutality, to bored people blowing off steam following coronavirus lockdowns. The trend, paired with a lack of clear information and a growing climate of distrust in institutions, has sparked some extreme theories, including that the various police departments are encouraging them as a type of civil disobedience.

Since most states allow at least some types of consumer fireworks, it’s difficult to prevent them from showing up in places like New York City where they’re banned. For years, people have been willing to drive a couple of hours away where they can be purchased legally.

According to MarketWatch, Retail aerial fireworks are capped at under 2 inches in diameter and burst at just under 200 feet, while professional fireworks are larger, and can explode hundreds of feet higher.

Perhaps the municipal cancellations of fireworks shows are the culprit: The fireworks business has gone bust from the coronavirus. At Pyroshows, a company that wholesales fireworks, 2020 sales are down almost 80%. A sales rep reported:

“Well, it’s been extreme. A lot of communities have had to cancel their events, therefore they had to cancel their fireworks…”

That means fireworks companies are dumping their products to the public at deep discounts.

So, on this Fourth of July holiday, Americans were out walking around. They had fun with the pretty lights. No cities were burned. They celebrated a 3-day weekend together. Let’s not make too much of it.

People, not the authorities, were in control. And except for dog owners and those who were kept up late by local yahoos, the fireworks displays, along with the Hamilton movie, gave America a much-needed spectacular.

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Police Violence

The Daily Escape:

Fall sunrise at Crystal Lake, near Ouray, CO – photo by Ryan Wright

Wrongo is now certain that 2020 is the worst year for America since 1968. Why? We have had riots in 140 cities. 40 million are unemployed, and the Death rate from COVID-19 has reached 106,003. Here’s a map of where protests have occurred in the past few days:

We have a national problem of civil disobedience leading to rioting and looting. Note the number of states (in yellow) that have already activated the National Guard. We should assume that the number of cities with protests will probably grow.

Let’s talk briefly about policing in America. After the Ferguson uprising in 2014, we were astonished at the militarization of the police. We also started paying closer attention to the number of police killings in the US, but since there was no central database, independent groups started to compile them.

Cities and towns introduced new policies designed to reduce police violence, starting with police wearing body cameras. But according to the Police Shootings Database, police in America killed more people in the US in 2019 than in 2015, and the number has risen every year since 2017.

If police killings are increasing despite widespread public attention and local reform efforts, shouldn’t we be asking why?

Minneapolis, like most other cities, has a civilian review board, but it didn’t prevent Chauvin from killing George Floyd. In fact, the review board had failed to impose consequences for any of the eighteen previous complaints made against Chauvin. This shows how little these review boards are doing to change behavior.

Can change happen through the ballot box? Minneapolis implies that voting isn’t enough: Minneapolis has a progressive mayor and a city council composed entirely of Democrats and Green Party members. But it doesn’t prevent out-of-control racist cops from killing people. The glue holding this broken system together is police unions.

From Eric Loomis:

“That our police are openly fascist is finally becoming apparent to a lot of liberals who really didn’t see it that clearly before…..The police are openly declaring war on the nation. They are raising their fascist flag instead of the American flag. They are blinding good journalists. It is completely unacceptable…”

Loomis specializes in labor unions and labor issues. He says that it is in the public’s interest to force the police unions to give up the blank check for violence that they currently have. The two concepts that should be written out of the union contracts are arbitration in discipline cases, and qualified immunity.  Qualified immunity is a concept in federal law that offers government officials immunity from harms caused by actions they perform as part of their official duties.

Because of qualified immunity, police act like the laws don’t apply to them. This is a legal obstacle blessed by the Supreme Court that’s nearly impossible to overcome when the police violate our Constitutional or civil rights.

Despite that, blanket immunity shouldn’t absolve cops of responsibility for violence. Since they are state actors, the burden of proof should be on them to prove their violence was justified, not the other way around.

In many cases, the police unions are also run by bad people. In Chicago, the police union just elected as president a cop who has been reprimanded several times and is currently stripped of his police powers.

Minneapolis’s police union has a hard line and controversial president, Bob Kroll, who said that George Floyd had a “violent criminal history” and that the demonstrations were part of a “terrorist movement.”

Minnesota AG Keith Ellison blasted Kroll on “Fox News Sunday”:

“…he operates as sort of an alternative chief who, I think, undermines good order in the department.”

These are the kinds of people that rank and file police all across America want protecting them. That shows something about the true character of the rank and file.

Cities should pull the records of every cop with a double digit number of excessive force complaints and fire them. Force the unions to sue and then litigate it every step of the way. Make them defend the indefensible.

America needs stronger mayors, town councils and district attorneys who can be for “law and order” and also for protecting the rights of citizens who are swept up by day-to-day policing. We can have stronger public servants by voting them in.

Atlanta Mayor Keisha Bottoms says just that in this video, which everyone can see here:

As an aside, Mayor Bottoms looks to Wrongo like an excellent choice for the Democratic VP.

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Available Housing Drives Growth in Jobs

The Daily Escape:

Snow near Boulder, CO – November 2019 photo via

Last week, in our town’s Mayoral race, each side had a signature issue. For the Republicans, it was roads. For the Democrats, it was affordable housing. Wrongo has served on the town’s municipal roads committee for three years. He’s also attended a few town workshops on affordable housing. The incumbent Republican Mayor won in a landslide.

Did that mean that affordable housing was a non-issue? Not really. Like most of Connecticut, our town has a sharp income divide. And despite having among the most affordable housing in Litchfield County, we have elderly poor and younger middle-income people vying for limited multifamily housing stock.

The major problem is a concern that affordable housing equals more kids in our schools, and more infrastructure. The reality is that the incremental real estate taxes that landlords would pay the town will not offset the increased costs of schooling and infrastructure.

But, the town also desires greater economic development. New businesses and jobs are important to increasing our tax base. We’re not alone in this. Consider the city of San Jose, CA. The Silicon Valley region has added about 385,000 new jobs over the past five years, but only approved about 60,000 housing units. From Vox: (emphasis by Wrongo)

“Communities sometimes mobilize in opposition to some kind of new project, but this…happened when someone proposed building some offices near a new football stadium in Santa Clara, California, is mind-boggling: San Jose has taken the rare step of publicly opposing the project, saying it would add far too many jobs, exacerbating the region’s housing shortage.”

It’s difficult to believe that we’ve reached a point in our economy where creating new jobs can be construed as bad for existing residents of an area.

The Bay area isn’t overbuilt with housing. San Francisco is less densely populated than Brooklyn, NY. Santa Clara County, where Silicon Valley is located, is significantly less populated than the Long Island suburbs. The fear is that meeting the need for housing will lead to many lower income residents living in high-rise buildings.

Or take New York City, where Amazon was shocked when the public said that Amazon could take their 25,000 new jobs and shove them. (brackets by Wrongo)

“It’s only natural that Amazon saw its promise to create 25,000 jobs as a blessing, for creating jobs is most [all] of what we have ever asked of American companies. But given the realities of our economy…. it’s also only natural that many New Yorkers wanted nothing to do with it.”

Promises of 25,000 new jobs in NYC sounded much different in 2019 than it would have sounded in 2009. If you’re among the sea of NYC hotel and restaurant workers, you know you’re never likely to be qualified for one of the jobs Amazon promised to create in your backyard. And since it would be built in an area where many hourly workers live, they naturally opposed what would have driven their costs of housing even higher.

Amazon already had 2,000 employees in NYC in November 2018, when the HQ search concluded. Despite not building a NY headquarters, that number has grown to 5,000 in the past year. Amazon’s continuing jobs expansion in NYC makes the case that those who fought against the state’s $3 billion dollar incentive package were correct.

No economic problem is simple, and neither are their solutions. Here is a good rule of thumb: When things are complicated, inputs are messy. Some factors may cancel out other factors.

And in the case of trying to increase economic growth in a given city or town, an available, skilled workforce in numbers sufficient to meet the new business needs is primary. Available housing is huge as well. These two inputs exist in a feedback loop. Our towns can’t grow if workers can’t find housing.

Freezing housing stock in a growing economy helps those who enjoy higher Socio-Economic Status (SES). Our cities are seeing an outflow of lower SES’s and an inflow of higher SES’s. This is making housing costs in our second-tier cities move closer to what they have become in NYC and LA.

Exurban ring towns like Wrongo’s are seeing inward migration, mostly of middle and lower SES’s who routinely commute long distances for work. That adds local spending on goods and services, but puts pressure on local housing stock and on schools.

The landslide results in our town’s election was a vote for better roads, and against changing zoning requirements to add affordable housing. Indirectly, it also was a vote in favor of lower economic growth, just like what happened in San Jose, CA.

But we shouldn’t be confused with Silicon Valley.

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Current and Future Job Growth Will Be In Cities

The Daily Escape:

Breezewood, PA – 2008 photo by Edward Burtynsky. Each year, 3.5 million passenger vehicles and 1.5 million trucks drive the half-mile Breezewood strip on Route 30. That’s because a law in the 1950s prohibited spending federal funds to connect a free road to a toll road. So, highway planners designed an interchange that routes drivers onto Route 30 for a half-mile.

An interesting article from Market Watch shows how nearly all job growth is in big cities, while rural America is being left behind:

“Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s. But….Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind.”

MarketWatch cites a July 2019 study by McKinsey forecasting that 25 cities that are home to about 30% of Americans will capture about 60% of the job growth between 2017 and 2030, just as they did between 2007 and 2017. In typical McKinsey fashion, they break cities and towns into many categories. Please read the report for full details. Here are their top-line findings about where the largest growth is happening:

  • Twelve mega-cities (and their extended suburbs) top the list: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Francisco and Washington.
  • Another 13 are high-growth hubs in or around smaller cities: Austin, Charlotte, Denver, Las Vegas, Minneapolis, Nashville, Orlando, Portland (Ore.), Raleigh, San Antonio, San Jose, Seattle, and Tampa.
  • Smaller, fast-growing cities and a few privileged rural counties will also add jobs, while vast swaths of the South, Midwest and Plains will lose jobs.
  • The New York metro area, home to 20 million people, added more jobs over the past year than did all of America’s small towns and rural areas, with a population of 46 million people, combined.

McKinsey’s forecast reinforces concerns about persistent economic inequality in America. Inclusive growth is a must, or it is likely that our society will fall apart. The problem: No one, and certainly not Republicans, have a magic wand that will bring back jobs to rural and small-town America.

Anyone who’s been paying attention knows that job growth is mostly occurring in places that vote for Democrats, while the stagnation is mostly in places that vote for Republicans. In 2016, Trump was smart to tailor a pitch to those parts of America, but their situations haven’t improved since his election.

And the divide is getting larger. Over the past year, only 12% of 389 metro areas had any significant job growth, according to an analysis of Bureau of Labor Statistics data by Aaron Sojourner, a former White House economist, now an associate professor at the University of Minnesota:

So, after 17 years of significant and broadly-spread growth, fewer towns and cities are now doing so well. And, of the 47 metros that gained significant numbers of jobs over the past year, 21 were on McKinsey’s top 25 list.

Meanwhile, the regional jobs data from the BLS shows that non-metropolitan areas, which account for 18% of jobs, had just 5% of job growth over the past year.

OTOH, income inequality is greatest in those cities with the highest jobs growth. But, we can’t write off one quarter of the US population simply because they live in low-growth areas. And politically, it’s essential. Rural America is overrepresented politically — we can’t ignore them.

But, what to do? Sanders and Warren have addressed this by trying to raise tax revenues from corporations, and funding free college. They along with others, believe in some form of Medicare-for-all, which could help address the fact that rural America is older, sicker, and poorer than ever before.

Yang proposes a universal basic income of $1,000/month for everyone.

Trump proposes tax cuts for the wealthy, tariffs and weakened environmental regulations, but despite all three, the situation has gotten worse since his election.

McKinsey suggests that communities that are being left behind ought to try almost everything: improved transportation to get residents to jobs, rural broadband, and lifelong job training.

Building consensus about how to address job growth and income inequality is the key to America’s future. This is what the 2020 presidential election should be about.

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Democrats Can’t Let Trump Beat Them On Immigration

The Daily Escape:

Barcelona balcony – 2016 photo by Wrongo

We should talk about the Democrats’ unwillingness to articulate an immigration policy. Wrongo has shied away from talking much about immigration, because it is a very complicated problem without a school-book answer. It’s an emotional issue, but it is also a complex problem that isn’t easily addressed.

Amy Walter of the Cook Political Report says that immigration will be a key issue in 2020, since Trump will surely stoke more immigration fear to hold on to his base while trying to peel away working-class white voters who might otherwise be voting for Democrats.

Despite historical data that show border crossings are relatively low, we’re faced with a genuine border crisis. The number of people attempting to cross the border and seek asylum rose to about 100,000 in March. If sustained, that would be more than a million asylum seekers a year.

There are now 800,000 pending cases in immigration courts, and each case requires about 700 days to process. Most of these families have woefully inadequate resources for housing, food and medical care. And now, Trump plans to ship them from detention to America’s sanctuary cities.

We’re at a critical juncture. Trump’s Immigration policy based on incarceration, deportation, and border militarization has proven to be a disastrous failure. But what should replace it? As the crisis grows, maybe the possibility for political change can improve. The NYT’s David Leonhardt said this about Democrats:

“…not so long ago. The party’s leaders knew what they favored and felt comfortable saying so. Their platform generally included: 1) a path to citizenship for immigrants who came to this country illegally but had since obeyed the law; 2) deportation of undocumented immigrants who had since broken the law in significant ways; 3) fairly robust border security and investigation of companies employing undocumented immigrants, to hold down current and future levels of illegal immigration.”

In the past, Democrats were also willing to talk about limiting immigration. David Frum has a must read article in April’s Atlantic. His biggest point is that “If Liberals Won’t Enforce Borders, Fascists Will”. He feels that we are at an inflection point, and that Democrats in particular, need to promote policies to prevent Trump from riding the wave of anti-immigrant sentiment into a second term.

Democrats, including some 2020 presidential hopefuls, have expressed ever greater unease about removing unauthorized border-crossers. Julián Castro wants to decriminalize the very act of crossing the border illegally, by repealing 1325, the section of the US Code that makes unauthorized entry into the US a federal crime. No other Democrat is willing to go that far.

Speaker Pelosi spoke this week about immigration overhaul: (brackets by Wrongo)

“Our view of how we go forward is if we can….give [the American] people confidence, end some of their insecurities about their own economic situation, there will be a better atmosphere among some who are opposed to immigration in the country….”

This is why Democrats are more focused on their economic agenda than rewriting immigration laws.

When it comes to immigration, public sentiment is not on the Democrats’ side. A Gallup poll from early March found opinions largely split on how much voters worry about illegal immigration: 36% of those surveyed said they worried a “great deal,” followed by, “only a little” at 24%, “not at all” at 21% and a “fair amount” at 18%.

A different Gallup poll in February found that 47% of respondents felt that large numbers of undocumented immigrants entering the US was a critical threat. Another 30% said it was important, while 22% said it was not important. That 77% who view undocumented immigrants as a threat was up by 8 points from a year earlier.

The pressure on Democrats will be to run as pro-immigrant in 2020 since it contrasts completely with Trump’s position. But with so many people concerned about border security and illegal immigration; that may not be a wise political decision.

Dems can make a case that it would be destabilizing and impractical to remove all who have been living peaceably in this country for many years. But they can’t support a position like Castro’s that says any non-felon who sets foot in the US should be allowed to remain here.

Wrongo favors setting hard overall quotas for all immigration, and a hard sub-quota for asylum requests.

We can’t solve the illegal immigration problem overnight, but we can warn potential migrants that once the yearly quota is reached, all will be denied entrance.

And Wrongo is in favor of letting in fewer low-skills immigrants and more high-skills immigrants. That could help reduce poverty among immigrants while also potentially lifting domestic economic growth.

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Saturday Soother – Amazon Bails on NYC Edition

The Daily Escape:

Marijuana Museum, Amsterdam, Netherlands – 2017 photo by Wrongo

When Alexandria Ocasio-Cortez and Michael Bloomberg agree on something, it’s worth taking seriously, and neither wanted the Amazon deal with NYC. And this week, Amazon scuttled its plans to build its HQ2 in Long Island City, (LIC) Queens, New York City, citing opposition by “state and local politicians.”

Amazon’s abrupt announcement to withdraw from the deal came after it was roughed up at two City Council meetings along with enduring the indignity of having to contend with anti-gentrification protestors and union leaders.

There were two big problems that Amazon faced in LIC. First, they were getting a huge tax subsidy, about $2.8 billion. The tax subsidy looked even worse when we learned this week that Amazon nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes.

It didn’t help that the state and city announced the massive subsidies when both are also contending with large budget deficits. NYC Mayor Bill de Blasio, citing a shortfall of $1 billion in revenues, told city agencies to cut their budgets by $750 million by April. And these cuts would have to be recurring.

This helped build outrage about the nearly $3-billion corporate welfare program for Amazon.

The second problem was gentrification in the LIC neighborhood. Immediately after the announcement, real estate prices zoomed, precisely when Manhattan prices were falling. The NY real estate industry was to be one of the primary beneficiaries of the HQ2 project, but local residents would be driven out of their neighborhoods.

Amazon has a poor track record in Seattle. They had fiercely opposed a local tax on large companies to fund housing for the homeless, and got it reversed one month after it had taken effect. Microsoft, after the tax law was scuppered, pledged $500 million to fund affordable housing for the low and middle income in the Puget Sound area, and encouraged other companies to make similar efforts.

Amazon didn’t join with Microsoft.

All is not lost. Amazon says it will still be expanding employment in NYC. And LIC has been a hot real estate/development market for several years, long before Bezos started playing his urban version of the Hunger Games. If the commercial construction in LIC over the past five years was happening in a second-tier US city, it would be equivalent to an entirely new business district.

A third problem was Amazon’s sense of entitlement. They expected zero push back, and their New York City campaign was inept. Amazon seems to have thought that since it had the governor and mayor in its pocket, all it had to do was show up for photo ops. The NYT points out Amazon didn’t even hire a native to grease the wheels:

“…the company did not hire a single New Yorker as an employee to represent it in discussions with local groups. Its main representatives traveled between Washington and Manhattan, and only one had moved into an apartment to work with community members and foster support.”

Amazon’s leaving was celebrated by Rep. Alexandria Ocasio-Cortez (D-NY), who represents the district. She complained about the “creeping overreach of one of the world’s biggest corporations“, and maybe that was the final straw for Bezos.

So props to AOC, and to the local politicians for standing up to this example of corporate welfare.

It’s possible that Jeff Bezos’s sudden change of heart was that he couldn’t stomach the idea of not being able to push around NYC the way he bullied Seattle into dropping its homeless tax. In NYC, he’d have to curry favor, feign interest in the concerns of locals, and make occasional contributions to the city.

Bezos may have felt all that was too high a price. But we should assume Amazon penciled out the deal, and didn’t like the result. For Amazon, it may have been a prudent business decision, artfully dressed up as a response to the political opposition the incentive package was facing.

Maybe, it’s no longer business as usual in America. AOC and other young people may not have money, but that doesn’t mean they can’t use power.

These corporate tax subsidy deals never add up for the cities that make them. Maybe people in other cities will learn from this NYC moment, and fight against the selling of our cities and towns to the uber-wealthy.

Now, it’s time to let go of Amazon, AOC, and Trump’s National Emergency. It’s time to get some Saturday Soothing.

Start by brewing up a vente cup of Roasting Rabbi Coffee, where the company slogan is: “Releasing the Holy Spark in Each Bean!” Try their Breakfast Blend.

Now settle into your most comfy chair and listen to Valentina Lisitsa play Liszt’s Hungarian Rhapsody No. 2, recorded live in May, 2010 in Leiden, Holland:

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

 

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Another Lie From Trump

The Daily Escape:

The Cuernos del Paine in Chile – photo via Live Science. The 4,300-mile-long Andes, the longest continuous mountain range in the world, didn’t form slowly by one geologic plate sliding under another. They grew in two growth spurts helped by volcanic action. (Hat tip to Ottho H.)

What Trump said about El Paso in the SOTU:

“The border city of El Paso, Texas, used to have extremely high rates of violent crime—one of the highest in the country, and (was) considered one of our nation’s most dangerous cities. Now, with a powerful barrier in place, El Paso is one of our safest cities,”

Local politicians weren’t happy with Trump’s false claims that the city was violent and dangerous before a border wall was built. Trump was repeating bogus information from Texas Attorney General Ken Paxton. And, he had made the same claim at the American Farm Bureau convention in mid-January.

Here is an example of the local outrage. Jon Barela, the chief executive officer of the Borderplex Alliance, which leads economic development efforts in the El Paso region, tweeted:

Texas Monthly reports that El Paso has made lists of the nation’s safest cities for almost two decades. But what are facts when you have a wall to build on the back of a racist narrative?

Wrongo lived in El Paso for a time when he was in the military (Vietnam era), back before there was talk of a wall, before the Maquiladora factories became a part of NAFTA, when Ciudad Juarez was probably far more dangerous than it is today. But back then, El Paso couldn’t be considered dangerous for someone who went to college in Washington DC, and lived on the outskirts of NYC.

One state over in New Mexico, Governor Michelle Lujan Grisham, a Democrat, has ordered the withdrawal of the majority of National Guard troops stationed at the US state’s southern border, denouncing as “a charade” President Donald Trump’s warnings about migrants swarming the border, saying:

“I reject the federal contention that there exists an overwhelming national security crisis at the southern border, along which are some of the safest communities in the country,”

Are you getting the theme here? Two of the states closest to “the problem” say there isn’t a problem.

Kevin Drum at MoJo gathered the El Paso statistics. He shows that Trump cherry-picked the data, looking at 2005-2009. There was a spike from 400 crimes/100,000 people in 2005 to 450 crimes/100,000 people in 2008. Here is a chart showing the same statistics from 1993 to 2013:

Do you see the big reduction that came with the Wall? The Wall had almost no effect on crime in El Paso. It’s also important to remember that crime rates have come down throughout the US since the 1980’s.

The most damning fact about crime on the southern border is that it is way down. American Progress reports that:

  • Border cities are among the nation’s safest: Phoenix and other large border (and near-border) cities have some of the nation’s lowest crime rates, including San Diego, El Paso, and Austin
  • Border counties have low violent crime rates: Counties along the southwest border have some of the lowest rates of violent crime per capita in the nation. Their rates have dropped by more than 30% since the 1990s.
  • There’s no evidence of “spillover” of violence from Mexico: El Paso, Texas, has three bridges leading directly into Ciudad Juarez, Mexico, a city which has suffered a significant percentage of the national death toll brought on by the Mexican war on drug cartels, which approaches 23,000 today.
  • El Paso experienced only 12 murders in 2009, which was actually down from 17 in 2008. San Diego, California saw 41 murders in 2009, down from 55 in 2008, and Tucson, Arizona experienced 35 in 2009 a significant decrease from the 65 murders committed in 2008.

We should remember that Trump is from Queens, an outer borough of New York City. He lived there during the 1970s and 1980s, so he knows first-hand what living in a high crime city feels like. He also knows that the high crime he (and Wrongo) experienced, wasn’t caused by immigrants. That was when the Guardian Angels were founded in NYC. Trump lived there the whole time, he probably even took the subway.

His argument is false, and is clearly purely political. He’s playing to the fears of those suburbanites too intimidated to visit NYC, even if they live less than 25 miles away. His audience is suburbanites in the Midwest and Northern states.

These same people believe European cities like London and Paris are full of Muslim “no-go” zones. You can show them evidence that those cities are safer than their own suburbs, but that’s not the point.

Maybe “safe” really means “white”, so any place with too many non-whites is just too dangerous.

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Tax Abatements Are Killing School Budgets

The Daily Escape:

Egmont National Park, NZ – photo by vicarious_NZ

A new report shows that US public schools in 28 states lost at least $1.8 billion in tax revenues last year as a result of tax incentives granted to corporations. The study analyzed the financial reports of 5,600 of the nation’s 13,500 independent public school districts.

Good Jobs First examined the first full year of reporting under a new accounting standard for school districts, adopted by the Governmental Accounting Standards Board (GASB), the body that sets accounting rules for all states and most localities. The new rule, GASB Statement No. 77 on Tax Abatement Disclosures, requires most state and local governments to report annually on the amount of revenue they’ve lost to corporate tax abatements.

This is extremely important, since most local schools are very dependent on revenue from property taxes, but they rarely have influence over corporate tax abatements granted by their towns, and/or the cities or counties where they are located.

And local voters have had no way to see how much they are forced to pay in additional taxes that were lost to enrich the pockets of corporate employers.

Good Jobs found that the 10 most affected states could have hired more than 28,000 new teachers if they were able to use the lost revenues. Or, they could have avoided higher home property taxes, or provided their teachers with better resources, or higher pay.

States and cities have long used abatements and other tax incentives to lure companies, or to keep them from leaving, and/or to encourage them to expand locally. Often, those companies make their choice of location based on the quality of local schools and colleges.

These abatement deals are made by local politicians and are meant to boost local economic development. Their proponents say the lost tax revenue is worth it, because they grow the local economy. But it is difficult to know whether the benefits outweigh the burdens.

And until GASB 77, it has been impossible to see just how much a school system may have lost because of a company’s tax break. The new rule is especially helpful in understanding local schools finances, because it requires the reporting of revenue losses even if they are suffered passively by the school system as the result of decisions made by another body of government.

Of the five districts that lost the most, three are in Louisiana. Together, they lost more than $158 million, or $2,500 for each student enrolled. The School District of Philadelphia, which only last year regained local control from the state after climbing out of a deep fiscal crisis, lost the second most revenue at $62 million.

Overall, nearly 250 school districts lost at least $1 million each, and in four districts, tax abatements reduced classroom resources by more than $50 million.

But most school districts have not yet complied with Rule 77, which was implemented in 2015. Good Jobs First estimates that another $500 million of subsidies and abatements are currently unreported.

Most of us believe that our governments are supposed to govern in the interests of the “general welfare,” that when voters put people in positions of power, based on the legitimacy of our electoral process, is the limit of our responsibility as voters.

We accept that somebody has to say what the rules are, and then enforce them.

But in our neoliberal economic times, voters have to remember that our governments often act as wholly owned subsidiaries of the 1%. It takes suspension of belief to accept that our republic, ruled as it is by an oligarchy, is working for the general welfare of all of our citizens.

Why do we think that, our “governments”, all of which are subject to capture and ownership by the few, are going to somehow provide decency, comity, or fairness to all of us?

We need to abandon the article of faith that the free market, one without government oversight, promotes the best economic outcome for all of us.

Today’s inequality says the opposite.

We need a new vision of the role of government. But it isn’t really a “new” vision. It is simply a return to insisting on the “promotion of the General Welfare for all” as the paramount object of government.

Here’s another thought from Gordon Wood, in his book, Creation of the American Republic:

In a republic each individual gives up all private interest that is not consistent with the general good, the interest of the whole body. For the republican patriots of 1776 the commonweal was all encompassing—a transcendent object with a unique moral worth that made partial considerations fade into insignificance.

The last outcome that American revolutionaries wanted was to be ruled by oligarchs. But, here we are.

We need to reform our capitalism.

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Monday Wake Up Call – June 4, 2018

The Daily Escape:

The Blue Grotto, Malta – photo by SingularET. Not to be confused with THE Blue Grotto on Capri, the hangout of the Roman emperor, Tiberius.

NewdealDemocrat over at Angry Bear raised a few excellent points about historically low unemployment and stagnant wage growth: (emphasis by Wrongo)

As I noted several weeks ago, even though we are at least closing in on full employment, the percentage of employers not raising wages at all has gone up in the last year:

(The blue line is the percentage of employers who have not increased wages. The grey shaded areas are recessions.)

There was more bad news from Axios , reporting on a meeting with the Dallas Federal Reserve about how big companies aren’t planning on raising wages at all:

The message is that Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.

Troy Taylor, CEO of the Coke franchise for Florida, said he is currently adding employees with the idea of later reducing the staff over time “as we invest in automation.” Those being hired: technically-skilled people. “It’s highly technical just being a driver,” he said.

The moderator asked the panel whether there would be broad-based wage gains again. “It’s just not going to happen,” Taylor said. The gains would go mostly to technically-skilled employees, he said. As for a general raise? “Absolutely not in my business,” he said.

John Stephens, chief financial officer at AT&T, said 20% of the company’s employees are call-center workers. He said he doesn’t need that many. In addition, he added, “I don’t need that many guys to install coaxial cables.”

The Civilian Non-Institutional Population (those who the government tracks for jobs analysis), grew 21.3% between April 2000 and April 2018, yet, full-time jobs grew only 11.7%. This means that we can’t possibly be at full employment, despite the government’s headline unemployment rate of 3.8%, the lowest since 2000.

And if most employers are thinking like those at Coke and AT&T, wages won’t increase, despite the country’s nine-year economic recovery. If wages will not be increasing, where do employers think increased demand will come from? And, if companies are freezing wages during the supposed good times, what will happen when times turn bad?

Corporate policies are designed primarily to respond to the requirements of its management and its institutional shareholders, not employees. Employers’ profits have been increasing steadily, but the wealth keeps getting transferred upwards. And it’s the employers who are responsible for layoffs, and who use other methods to increase profits, such as automation, which leave the surviving workers in an increasingly poor negotiating position when it’s time for the annual raise discussion.

Do workers “deserve” an annual increase? By performing their jobs, workers produce value for the company. If a company is profitable, workers should get a cut, and if profits go up, so should their share.

If a particular individual isn’t performing well, then in an efficient/well-managed company, they’ll be replaced. If the job itself is not structured to produce effectively, in an efficient/well-managed company, the job will change. And if the company fails to do either, then in an efficient/well-managed company, the company will change, or it will fail.

It appears that with their paltry increases, workers are losing ground. Rents are rapidly rising in most cities. Wrongo saw a story about a New York City couple who moved from Brooklyn, NYC to Westport, CT for cheaper housing. It wasn’t many years ago that Westport was substantially more expensive than Brooklyn. In fact, it was once the home town of Paul Newman and Martha Stewart.

Many workers are fighting for a 2% raise. (Remember, 2.6% is the average, which means many workers are getting less than that). Factor in the rising rents, food costs, and health care insurance, and you can see that the average hourly worker has little chance of upward mobility.

Is this an inevitable outcome caused by Mr. Market? Not really. Our government has its thumb on the scale via tax benefits to corporations, combined with a Federal minimum wage that is impossibly low.

Time to wake up, America! We must stop letting corporations hoard the profits! Capitalism is institutionalized avarice. Its purpose is concentration of power. And one outcome is the spreading of economic misery.

To help you wake up, here is the Soup Nazi who, says, “No soup for you! Come back 1 year!” Just like many employers say when hourly employees ask for a raise.

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

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