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The Wrongologist

Geopolitics, Power and Political Economy

Saturday Soother – August 19, 2017

The Daily Escape:

Orchha, on the banks of the Betwa River, India – photo by Arian Zwegers cc 2.0

Quite the week: After threatening nuclear war with North Korea, musing about invading Venezuela, and equivocating over Charlottesville, Trump folded two advisory councils and then decided against forming a council on Infrastructure. He also Twitter-attacked more Republican senators than Democrats this week, a bad strategy for someone who can’t be sure what Special Counsel Mueller may come up with.

But, according to a Survey Monkey poll as reported by Axios, Trump’s statements about Charlottesville have overwhelming support of Republican voters. Survey Monkey asked whether people agreed with a verbatim quote from President Trump on Tuesday:

You had a group on one side that was bad, and you had a group on the other side that was also very violent

Republicans agreed with the Trump comment, 87%-11%. Democrats disagreed, 83%-15%. Independents disagreed, 59%-39%.

When we no longer agree on basic facts, civil debate is impossible.

This is a dangerous moment. America is split. We need to stop fighting about the little things. Wrongo usually is against “slippery slope” arguments, but will make an exception in the case of our Civil War history: What is the objective of removing Civil War statues and monuments? Will their removal change the historical record of slavery?

Of course not. How would supporters of removal say we should polarize the continuum of history? What would be next? Removal of history books that mention the Confederacy or former slave owners?

One of Wrongo’s favorite histories of the Civil War is “A Diary from Dixie” by Mary Boykin Chestnut. It is a day-to-day diary of her experience as a southern partisan during the Civil War. Most Civil War historians have read and consulted it in the preparation of their own work. Should we burn the book because it was written by a slave-holding partisan?

Of course not.

Many want to draw a red line regarding slavery and the Civil War, and that is totally understandable. But where to draw it? Can it be drawn in a way that keeps our children in touch with our past, even the sordid bits?

We need to own our history.

We should ignore the false moral equivalencies mentioned by Trump, such as Lee and Washington. Both owned slaves, so statues of Washington must go too. It is true that both owned slaves, but Washington fought to build this country, while Lee fought to destroy it in support of slavery.

Some have pointed to the fact that Jews would never let Auschwitz, Dachau or Buchenwald be taken down. This is another false equivalency. Auschwitz is maintained not to celebrate Nazism, but to show its horrors.

Maybe that IS the lesson: Add interpretation to the Confederate monuments: Make them say that we do not want anyone to forget what happened, and that we want to make sure it can never happen again.

It’s Saturday, so we MUST get some distance between where we are as a country now, and where we need to be.

Wrongo’s prescription? Brew a cup of Brooklyn’s  Toby’s Estate El Ramo Columbian coffee. El Ramo means the bouquet in Spanish ($14 for 12oz.), close the door, and put on your over-the-ear headphones. Now, listen to G.P. Telemann’s “Concerto in G major for Viola, Strings and Basso continuo, TWV 51:G9”.

Wrongo and Ms. Right heard it last week at the final summer concert of the New Baroque Soloists at the Washington Meeting House in Washington, Connecticut. Here it is performed live by the Remember Barockorchester, in the Unser Lieben Frauen Church, Bremen, on November 21st, 2015:

The Viola Soloist is Tomoe Badiarova

Those who read the Wrongologist in email supplied by the execrable Feedburner, can view the video here.

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Sunday Cartoon Blogging – August 13, 2017

This just in from PBS shows how badly Democrats have hurt themselves since 2008:

After high-profile candidates lost decisively in the last two elections…the party now finds itself in unprecedented territory for the 2018 ballot: with no major candidate to run. Democratic leaders haven’t yet lined up a substantial name to represent the party and its message despite months of trying.

Ann Richards, elected in 1990, was the last Texas Democratic governor. And now, no major Dem candidate will run for governor. This is despite a booming Hispanic population and Democratic dominance in the state’s largest cities.

Democrats have expanded their advantage in California and New York. Combined, these states gave Clinton a 6 million vote edge, more than twice her national margin. But those two states elect only 4% of the Senate.

We once thought that there was an “Obama coalition” that would only grow because of demographics: Left-leaning populations were growing, America was becoming less white, and this alone would guarantee Democrat majorities well into the future. This idea has failed. Is it time for the DNC establishment to accept the awful truth that they are no longer a national party?

The Cook Political Report says that even if Democrats won every single 2018 House and Senate race for seats in districts that Hillary Clinton won, or that Trump won by less than 3 percentage points, they would still fall short of the House majority and lose five Senate seats. Some permanent majority. Time for a few new Democrats to lead.

On to cartoons. Many people pointed out that there were some similarities between Trump and Kim:

Strategic thinking, Trump-style:

Uncle Rex tells America a bedtime story:

Trump said that his North Korea comments were similar to a few other guys:

Foxconn gets $3 billion in tax breaks in exchange for building a $10 billion factory in Wisconsin. It will take 20 years for the state to break even:

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Monday Cartoon Blogging – August 7, 2017

Here are yesterday’s cartoons today. The week begins with Congress at home trying to explain all the winning to their voters, while Der Donald is again on the golf course. For the next 17 days, the job of the Whitewash House is limited to describing his golfing success:

Is it more likely to see four new faces on Mt. Rushmore, or a fifth?

Meme by Political and Editorial Cartoons

Kelly tries to pin Trump down on who knew what, when:

Donny’s talk to the Cops adds an awkward moment to Trump family meetings:

Trump’s phone calls always amount to less than he tells us:

Most kids would want a dog. Just not this one:

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Trump’s Termites

The Daily Escape:

Missouri Breaks, MT – photo (via)

US Interior Secretary Ryan Zinke announced that there would be no change for the Missouri Breaks National Monument. Zinke is from Montana, so saving one for his peeps isn’t a big surprise.

Missouri Breaks is one of 27 monuments established during the previous 20 years by presidents using the Antiquities Act. The Antiquities Act allows presidents to set aside objects of historic or scientific interest to prevent their destruction. The law was created in 1906 to guard against looting of sacred American Indian sites.

In April, Trump ordered the Department of the Interior to review the status of every national monument designated since 1996. As a result of the review, these cultural and/or natural treasures could be significantly reduced in size or even eliminated, and the Antiquities Act itself could be severely limited. The land would remain owned by the federal government, but might lose its protected status, and be contracted to private enterprises. When you allow corporations to ‘lease’ land for oil, fracking, mining, ranching, etc. fences go up, private police forces are hired to keep people out for their ‘safety’.

Not everyone agrees that Trump has the authority to do what he wants. From the Washington Times:

If President Donald Trump or any successor desires the authority to revoke national monument designations, they should urge Congress to amend the Antiquities Act accordingly. They should not torture the plain language of the Act to advance a political agenda at the expense of regular constitutional order.

The LA Times disagrees:

Indeed, those who claim that the Antiquities Act does not grant a reversal power cannot find a single case in another area of federal law that supports that contention. To override the norm, legislators have to clearly limit reversal powers in the original law; the plain text of the Antiquities Act includes no such limits.

Who knows? Next, Der Donald will lease the Grand Canyon to China for use as a landfill.

But the bigger picture is that behind the smoke and mirrors of Trump’s pathological lying and the media’s obsession with Russia, his cabinet appointees are working like industrious termites, eating away much of the support beams of our nation’s rules-based edifice.

Consider Attorney General Jeff Sessions. From the New Yorker: (brackets and editing by the Wrongologist)

He [Sessions] has reversed the Obama Administration’s commitment to voting rights…He has changed an Obama-era directive to federal prosecutors to seek reasonable, as opposed to maximum, prison sentences for nonviolent drug offenders…he has revived a discredited approach to civil forfeiture, which subjects innocent people to the loss of their property. He has also backed away from the effort…to rein in and reform police departments, like the one in Ferguson, Missouri, that have discriminated against African-Americans.

Although candidate Trump promised to protect LGBT rights, President Trump last week vowed to remove transgender service members from the armed forces, and Sessions…took the position in court that Title VII, the nation’s premier anti-discrimination law, does not protect gay people from bias. Most of all, Sessions has embraced the issue that first brought him and Trump together: the crackdown on immigration…

All across the government, Trump appointees are busy chewing through the existing regulatory edifice, ending not just Obama-era rules, but others that have been in place for decades.

Another truly damning thing is Trump’s surrogates’ efforts to undermine foreign policy. The WaPo reports:

Trump signed off on Iran’s compliance with profound reluctance, and he has since signaled that when Iran’s certification comes up again — as it will every 90 days, per a mandate from Congress — he intends to declare Iran not in compliance, possibly even if there is evidence to the contrary.

According to the New York Times: (brackets by the Wrongologist)

American officials have already told allies they should be prepared to join in reopening negotiations with Iran or expect that the US may [unilaterally] abandon the agreement, as it did the Paris climate accord.

It is difficult to see how this ends well for the US. Imagine, Iran and North Korea both pursuing nuclear weapons to deploy against the US. Why would we want to engage on two fronts, when one (North Korea) is already so problematic?

What is the Trump agenda? Are there any articulated goals? What are the strategies to achieve them?

Have we heard a concrete proposal for any of his big ideas (health care, tax reform, or infrastructure)?

We have not, but his termites keep chewing, and soon, our whole building will be compromised.

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Saturday Soother – July 29, 2017

The Daily Escape:

Old Harry Rocks, Dorset England – drone photo by Ryan Howell

Wrongo has, like so many others, spent the last eight months in disbelief. Every day, more stupid tweets, more stupid legislation proposed, more threats to the American people.

He went to bed last night expecting to wake up this morning to the GOP celebrating the thinnest of wins, another blow to our health insurance. But, there was a small victory in the dead of night. Now we gear up for the next battle. The Republicans are not defeated, and cannot give up on what they promised their base for the past seven years, so we should expect to see another attempt on this soon.

A great letter to the editor in the NYT accurately captures GOP dysfunction: (emphasis by the Wrongologist)

Republican attempts to overturn the Affordable Care Act by flinging irresponsible alternatives that would wreak havoc with the health of millions of citizens have set a new low in legislative responsibility.

The outcome of many of these votes was a foregone conclusion. That the Republican leaders are comfortable putting on a show rather than seriously addressing the problems of access to and cost of health care is an embarrassment.

Their actions are not worthy of the salaries that they are paid.

In the past six months, we’ve come to expect the bizarre from Trump and his GOP Trumpets.

This week was no exception. Interior Secretary Ryan Zinke threatened both Alaska Senators with withholding of federal funds for their state because Sen. Lisa Murkowski planned to vote against the Republican health care bill. These Sopranos-like threats happen all the time in DC. Murkowski gets extra credit for telling Trump to go to hell by putting a few of his nominees on hold before voting against the GOP bill.

But, the strangest of strange this week was Trump’s speech to the Boy Scouts: Trump crowed about his election victory, attacked the news media and criticized Hillary Clinton and former President Barack Obama. Now, the Scouts are non-political, and few of them are old enough to vote. The speech resulted in the Scouts’ sending a letter of apology to the American people.

Then there was Trump’s new hired gun, Scaramucci, who said to the New Yorker:

I’m not Steve Bannon, I’m not trying to suck my own cock.

In less than a year we’ve gone from “Grab ‘em in the pussy” to “I’m not trying to suck my own cock.”

It’s demeaning. Wrongo is not offended by the language. He has heard, and in the remote past used those words, if not in that precise order. But Wrongo doesn’t work in the White House. Trump and his team represent all of us, and we deserve better.

It’s Saturday, and you expect better, too. Time to brush off the trail dust, let go of the shenanigans and vote to repeal and replace this entire week. Here is Debussy’s “Arabesque No. 1 and No. 2”. He wrote them between 1888 and 1891. Debussy said of these arabesques:

That was the age of the ‘wonderful arabesque’, when music was subject to the laws of beauty inscribed in the movements of Nature herself.

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

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Book Review: “The First Congress” by Fergus M. Bordewich

The Daily Escape:

251 1st Street, Brooklyn, NYC – photo by Miguel de Guzman

It is time to review “The First Congress – How James Madison, George Washington, and a Group of Extraordinary Men Invented the Government” by Fergus M. Bordewich, which has been on Wrongo’s reading list since winter.

Bordewich says that the First Congress was the most important in US history, because it established in some detail how our government would actually function. Had it failed − as it nearly did − it’s possible that the US would exist in a different form today.

Congress began its work in New York City, then a fast-growing and chaotic shipping port of 30,000. Its first meeting was hardly auspicious: On March 4, 1789 they met as the new government after ratification by 11 of the 13 original states. But, there was no quorum to do business in either house. Bordewich outlines how difficult it was to make overland journeys: Boston to New York required six days, trips from the South were much longer. The House achieved a quorum of 29 members on April 1st, and the Senate followed on April 5th, but some members did not arrive until late summer.

Bordewich states that the need to accomplish something quickly was pressing:

Confidence in government was abysmally low…contempt for politicians was rife…and many political men held an equally low opinion of the voting public.

Sounds just like today.

The members were sharply divided, with huge differences of philosophy and opinion. The anti-federalists were opposed to a strong federal government, and had largely been against the ratification of the Constitution, preferring that power remain in the hands of the states. The Federalists wanted a stronger national government and supported the new Constitution.

Underlying everything were issues of North vs. South, rural agrarian vs. urban manufacturing economies, and pro-slave and anti-slave views.

During two years of political struggle, they passed the first ten amendments to the Constitution; they resolved regional rivalries to choose the location for a new national capital; they set in place the procedure for admitting new states to the union; they created the Supreme Court, and worked through the respective roles of the federal and state judiciaries. They established a national bank that was later dissolved by Andrew Jackson in 1832.

But the First Congress also confronted issues that are still with us: the appropriate balance between states’ rights and the powers of national government, and the proper balance between legislative and executive power. The issue of slavery would fester for almost seven decades before being resolved.

The reason that the First Congress succeeded was that they compromised. Without a willingness to compromise, all might have been lost. The great motivator behind their willingness to compromise was the fear that the anti-Federalists would walk away from the new Constitution. There was real reason to fear secession, and it was threatened many times by both the slave-holding South, as well as by the New England states.

Bordewich shows the regional splits that played out in the effort to create a national bank:

The balloting also had a disturbing subtext: all but one of the twenty votes against the bank hailed from the South…Of the thirty-nine votes in favor of the bank, all but five were from the North – yet another omen of the embryonic divide that would dominate the nation’s politics for years to come.

There are wonderful nuggets like this: (emphasis by the Wrongologist)

The First Amendment…became so only by default, when the two preceding amendments – on congressional apportionment and compensation for members – failed to achieve ratification by enough states…Three states – Massachusetts, Connecticut and Georgia – would not officially ratify even the ten amendments until…1939. (pg. 140)

In all, 39 amendments received meaningful debate. As important as passing the 10 we know about, was the rejection of others that would have imperiled a strong federal government, including one that gave voters the right to give legislators binding instructions on how to vote.

There was nothing inevitable about the survival and success of the new government. It came about by men from all sections of the country, each with an agenda, who overlooked their prejudices to create a government. The result of their spirit of compromise was the successful launch of our government.

Sharp divisions, rural vs. urban, states’ rights vs. federal authority: We face many of the same issues today that the First Congress had to face in 1789.

But, they had Washington, Jefferson, Madison, and Hamilton.

Who do we have?

Mitch McConnell and Paul Ryan. Chuck Schumer and Nancy Pelosi.

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Monday Wake Up Call – July 24, 2017

The Daily Escape:

Toronto Canada – photo by Carlos D. Ramirez

We sometimes forget what the Amendments to the Constitution are about. We remember the 1st Amendment and these days, with several in the Trump administration about to testify before Congress, we have renewed interest in the 5th, but who knows anything about the 17th Amendment?

It provides that Senators are directly elected by citizens.

The idea that we directly elect our senators seems uncontroversial, but the Tea Party and the American Legislative Exchange Council (ALEC), want to change that. ALEC has proposed new “model legislation” to do away with an elected Senate.

The idea of reversing 104 years of representative democracy and returning to the days when senators were chosen via backroom deals, is not new. The John Birch Society peddled the proposal decades ago. But with the rise of the Tea Party, the notion moved into the conservative mainstream.

In 2010, the Tea Party called for revision or repeal of three Constitutional amendments: the 14th (which is the basis for federal protection of civil rights), the 16th (the income tax) and the 17th. Some Tea Partiers even linked evangelical Christianity and Libertarian economics to argue that the original 1789 Constitution and the Bill of Rights were divinely inspired, but all subsequent amendments were of human origin and the 14th, 16th and 17th in particular had been Satanic perversions of the divine plan.

From The Nation:

Let’s focus on the 32 legislatures where Republicans have control: If Republicans were to maintain their current advantage, and if they were empowered to replace all sitting Democratic senators at the end of their current terms, they could shape a Senate with at least 64 Republican members.

There is already a political imbalance in states with large urban populations. In 2016, for instance, 51,496,682 Americans cast ballots for Democratic Senate candidates, while 40,402,790 cast Republican ballots, yet the Republicans took 22 seats to 12 for the Democrats.

If the resolution is approved by ALEC’s members, it will become part of ALEC’s agenda for the states—advanced in each by legislators who have a long-established pattern of rubber-stamping ALEC’s “model legislation.”

But, it is a long distance from model legislation to an amendment to the Constitution. ALEC controls some states, but it doesn’t control 38 states to the extent that they are capable of repealing one of the nation’s core political reforms. OTOH, if they were successful, it would reverse one of the great strides toward democracy in American history: the 1913 decision to end the corrupt practice of letting state legislators barter off Senate seats in backroom deals with campaign donors and lobbyists.

People in the 19th century knew that votes for state representatives were proxy votes for electing their Senators. The Lincoln-Douglass debates involved two Senate candidates trying to sway the elections of state legislators in order to get one of them elected to the Senate.

But, in 2017, returning the nation to direct election of Senators by state legislators is just one of the many ideas Republicans have for revamping the American system into a one-party state, including extreme gerrymandering of Congressional and state legislative districts, restrictive voter-ID laws, ending early voting, and other tricks designed to make sure that people unlikely to vote Republican have difficulty voting at all.

It’s amazing, and downright scary that the American Right looks at the structure and apportionment of the Senate and decides it’s not yet tilted enough in their favor. The Senate is already an undemocratic, unrepresentative institution that overweights small states at the expense of large ones.

The idea of a 17th amendment repeal is a classic example of “we had a serious problem, and then we fixed it, but so much time has passed, people have forgotten what the problem was”.

They want to undo the fix without bothering to check history.

America! It’s time to wake up and learn your history. It’s crucially important to you, your kids and grandkids. We don’t want to repeat past mistakes. To help you wake up, here is “Non-Stop” from the play “Hamilton”. It reprises the time of writing The Federalist papers, and the establishment of our Constitution, in hip-hop format:

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

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Sunday Cartoon Blogging – July 16, 2017

Trump just returned from France. French President Macron apparently became the “Trump Whisperer” while escorting His Orangeness around Paris, because nothing terrible happened. Trump returned to the incessant talk about who attended Trump Jr.’s meeting with the Russians, what was discussed, and what Trump Sr. knew about it all. OTOH, Mitch McConnell tried to breathe new life into the GOP Health Insurance Plan.

Replacing Obamacare still is looking mean:

 

One insurance option that never made it into the bill:

Putin said he would help Donny find the hackers:

People talk about the uncanny resemblance between Sr. and Jr.:

Baseball’s All-Star break gave the GOP an idea:

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Today’s Conservatives’ Southern Roots

The Daily Escape:

Vasconcelos Library – Mexico City

From The Atlantic’s Sam Tannenhaus:

…the most populous region in America, by far, is the South. Nearly four in 10 Americans live there, roughly 122 million people, by the latest official estimate. And the number is climbing. For that reason alone, the South deserves more attention than it seems to be getting in political discussion today.

Ain’t demographics great? Tannenhaus continues:

The South is the cradle of modern conservatism. This, too, may come as a surprise, so entrenched is the origin myth of the far-westerners Barry Goldwater, Richard Nixon, and Ronald Reagan as leaders of a Sun Belt realignment and forerunners of today’s polarizing GOP. But each of those politicians had his own “southern strategy,” playing to white backlash against the civil-rights revolution—“hunting where the ducks are,” as Goldwater explained—though it was encrypted in the states’-rights ideology that has been vital to southern politics since the days of John C. Calhoun.

Tannenhaus is reviewing Nancy MacLean’s Democracy in Chains, and using it as a jumping off point to explore the roots of modern conservatism. Why does all this matter today? Donald Trump.

Tannenhaus points out that Trump won the South bigly:

Lost amid the many 2016 postmortems, and the careful parsing of returns in Ohio swing counties, was Donald Trump’s prodigious conquest of the South: 60% or more of the vote in Alabama, Arkansas, Kentucky, Oklahoma, Tennessee, and West Virginia, with similar margins in Louisiana and Mississippi.

And we need to look at Trump’s Cabinet: 10 Cabinet appointees are from the South, including Attorney General Sessions (Alabama) and Secretary of State Tillerson (Texas).

MacLean’s view is that modern conservatives draw on Southern resistance to 1954’s Supreme Court decision in Brown vs. Board of Education. After the New Deal, conservatives pushed back hard against the expanding federal government. Tannenhaus says:

But it was an uphill battle; the public was grateful for Social Security. Brown changed all that. More than the economic order was now under siege…A new postwar conservatism was born, mingling states’-rights doctrine with odes to the freedom-loving individual and resistance to the “social engineering” pursued by what conservative writers in the mid-1950s began to call the “liberal establishment.”

MacLean focuses on James Buchanan, a Virginian, and a Nobel Prize-winning economist, who argued that the crux of the desegregation problem was that “state-run” schools had become a “monopoly”.

Buchanan argued for privatization of schools. If local towns and cities limited their involvement in education to setting minimum standards, then many kinds of schools might flourish. Each parent “would cast his vote in the marketplace and have it count.”

Sounds like Betsy DeVos.

But, Buchanan wasn’t done. In his book “The Calculus of Consent” (1962), he argued that politicians were looking out for themselves, and they could do real damage that citizens were unable to avoid. The high-priced programs they devised were paid for by taxes, and citizens had little choice but to pay them. Reinforced by the steep progressive tax rates of the time, he called it licensed theft. Not long after Buchanan’s book, Medicare was passed, then the War on Poverty, and then the Great Society— each another example of social engineering delivered by the liberal establishment.

Buchanan’s ideas live on today. The right believes that liberal values cost us our liberty.

Today’s Freedom Caucus is Buchanan’s ideological descendant. They believe they are the guardians of liberty, that drastic measures, like shutting down the government, or defaulting on the national debt are legitimate uses of political power that serves their higher objective. More from Tannenhaus:

This is what drives House Republicans to scale back social programs, or to shift the tax burden from the 1% onto the parasitic mob, or to come up with a health-care plan that would leave Trump’s own voters out in the cold.

Conservatives and Libertarians say that “government is trampling our way of life”. That sets people against government programs, even when the specific program doesn’t need to be attacked. Consider Medicaid. It is attacked as both social engineering and a gift to minorities, even though the majority of those benefiting from it are elderly or white.

Conservatives and Libertarians prefer “individual choice” for poor elderly, or children who can’t afford healthcare. A broadly-based social safety net isn’t consistent with their ideological purity.

They fail to see the value of government as a moderating force in markets.

Accordingly, their thinking cannot advance human society in any meaningful way.

Today’s tune: “Revolution” by The Beatles recorded in September 1968. It was released as the B-side of the “Hey Jude” single in late August 1968, and we hear the live studio version from a month later:

Takeaway Lyric:

You say you’ll change the constitution
Well, you know
We all want to change your head
You tell me it’s the institution
Well, you know
You better free you mind instead

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

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Saturday Soother – July 8, 2017

The Daily Escape:

Marble Caves, Patagonia – photo by Clane Gessel

Any idea which investor-types are the largest buyers of US stocks? It is the corporations themselves, buying back their own stock. They are followed by Exchange Traded Funds (ETFs). Here is a graphic:

From Bloomberg:

The entities shoveling more money into the stock market than any other this year, as has been the case for the past few years, remain corporations. Buybacks are on pace to reach nearly $550 billion, or $150 billion more than ETFs.

None of that cash is going into new markets, new products, R & D, or innovation. The buyback is equivalent to the CEO saying: “I’ve got no idea what we should be doing to improve profits or market share”.  Arne Alsin at Forbes said this:

For most of the 20th century, stock buybacks were deemed illegal because they were thought to be a form of stock market manipulation. But since 1982, when they were essentially legalized by the SEC, buybacks have become perhaps the most popular financial engineering tool in the C-Suite tool shed. And it’s obvious why Wall Street loves them: Buying back company stock can inflate a company’s share price and boost its earnings per share — metrics that often guide lucrative executive bonuses.

Alsin suggests that buybacks are big because we’re in a period of technological disruption. New industries like cloud computing, electric cars, and streaming video are rapidly changing the world. But older companies are slow to adapt, and rather than investing in R & D (or simply holding onto cash) the corporate boards of legacy businesses are bolstering stock prices the only way they know how: buying back their stock.

Alsin offers Hewlett-Packard as an example:

In the last decade, the company has invested $47 billion in stock buybacks — which is nearly double the company’s current market capitalization. That risk is senseless. HP knows they are facing existential threats from upstart competitors, but instead of paying out dividends or letting cash accrue on the balance sheet, HP is choosing the riskiest option.

Buybacks are the result of several converging forces: pressure from activist shareholders; executive compensation programs that tie pay to per-share earnings and share prices that buybacks can boost; increased global competition; and fear of making bets on products and services that may not pay off.

This financialization of non-financial firms increasingly crowds out other types of investment, to the detriment of lower level employees, whose jobs are less secure. It can hurt long-term investors, who hold these stocks in their 401(k)s and pension plans.

Serving customers, creating innovative new products, employing workers, and taking care of the environment are not the objectives of these firms.

So think carefully about the companies you invest in, or buy from.

Enough worrying for this week! Time to unstress. Grab a cuppa Vermont Artisan Coffee & Tea Company’sDarkest Roast”, $11.25/lb. (It is available in decaf), settle into your favorite chair, and listen to “Ashokan Farewell” performed by Jay Ungar and Molly Mason Family Band, live in the Folk Alley studio at WKSU 89.7 FM. WKSU is Kent State’s college radio station:

Wrongo supports Folk Alley, and recommends that everyone should. Ungar composed Ashokan Farewell in 1982. It is written in the style of a Scottish lament. Ungar sometimes introduces it as:

A Scottish lament written by a Jewish guy from the Bronx.

Ungar says that Ken Burns heard the song in 1984, and asked to use it in his (then) upcoming PBS series, “The Civil War”. The original version and a few other versions are heard 25 times in the show, for a surprising total of 59 minutes and 33 seconds of the 11-hour series. For the non-math majors, that is 9% of the show!

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

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