UA-43475823-1

The Wrongologist

Geopolitics, Power and Political Economy

Category Archives: Economic Policy

What the Dem Debates Are Telling Us

The Daily Escape:

Yosemite Falls from floor of Yosemite Valley – June 2019 iPhone8 photo by Believeland313

Wrongo, Ms. Right and a few friends saw the play “Ink” on Broadway this week. It’s the story of Rupert Murdoch, and how he disrupted the newspaper business in England in the early 1970s. Everyone knows the story’s outline: A tradition-bound business is revolutionized by an outsider who uses tactics that the industry won’t consider using.

When the Newspaper old guard finally understand that failure is staring them in the face, they try half-heartedly to change, and fail.

Flash forward to America in 2019: The Murdoch-owned FOX network has disrupted our news organizations, assisted mightily by the internet and by little people like Wrongo. Trump disrupted our politics in 2016, and now it’s the Democrats’ time to decide to disrupt, or stay the course. Their Party is dominated by Biden, Schumer and Pelosi. Schumer is 68, while the others are in their 70s. All represent the old guard.

After two Democratic debates involving 20 would-be candidates, it’s clear that the Party is on the horns of a dilemma: Embrace disruption? Or, stay the course? One of the fringe candidates, Marianne Williamson said it’s not about policies, it’s about playing Donald Trump’s game and beating him.

The MSM says Dems should get down in the weeds, talk policies and how to pay for them. But we should really talk about the direction the country should be taking in a post-Trump America.

Democrats face a conundrum. The Democratic disruptors may be out in front of the public. Those candidates are Warren, Sanders, Harris, Buttigieg, and a few others. Republicans will attack them as radical socialists, but their message, that the average person has gotten screwed for at least 40 years and only systemic change can solve that, resonates.

For the disruptors, Incremental change hasn’t worked. That’s something Trump realized, and these few Democrats have as well. You have to be playing the long game. It’s not about one debate. You stick to your message, and make sure it resonates.

Then there are the traditional politicians like Biden, Beto and Klobuchar who are playing the old style game. Biden in particular says, “look at what I’ve done in the past. Give me the reins again“.

But it’s unclear whether voters want to play it safe. Wrongo had a good conversation with his Trump-supporting friend Dave C., who says he’s fiscally conservative, but may be flexible on some social issues. He knows that Trump won’t fulfill all of his promises. And no one should think that Sanders, Warren or any Democrat will be able to fulfill theirs either.

DC doesn’t work that way. But many things count bigly, like the appointment of Supreme Court Justices.

And regarding the “socialism” epithet, Bernie had a piece this week in the WSJ entitled “Trump Is The Worst Kind of Socialist.” If you read it, you’ll be sold. Bernie is not just saying Trump must go, he’s going at the Right’s main attack on him, while doubling-down on his position.

Bernie may not be your cup of tea; he isn’t Wrongo’s. But, he delivers his position with passion. This isn’t Hillary taking a poll, and trying to cover all bases. Bernie’s willing to drop a few bombs, and then deal with the fallout.

Biden can only go downhill from here. He’s rusty. The Biden we saw may not be around for Iowa if he doesn’t sharpen his game. Here’s Wrongo’s view of Biden and Bernie: (hat tip: Sean O.)

 

 

 

 

 

 

 

 

Kamala Harris showed passion, and her prosecutorial skills to viewers. But will that convince voters? Particularly those in the suburbs? Warren won night one. Let’s see how she does when she’s on stage with night two’s survivors. She’s certainly got the vision thing down, but Kamala seems to have more fight.

Ultimately, the next 18 months are going to be about who can win the suburbs. In 2018, Dems reversed their 2016 losses in the ‘burbs, while again losing rural areas, just like in 2016. The difference was that in 2018, they won control of the House.

Trump’s 2016 formula worked. He traded suburban votes for small-town and rural votes and it got him an Electoral College win. Democrats can win in 2020 if they continue their 2018 success in the suburbs.

If the Democratic presidential candidate focuses exclusively on climate change, he/she will lose a lot of rural votes. A candidate who berates everyone who works in financial services will lose suburban support. But, a candidate that offers solutions on health costs, a fairer, less monopolized economy, more affordable education, a serious approach to the opioid crisis can probably win urban and suburban America.

It’s a long slog from here. And the winning candidate’s job is to keep voters engaged about how important 2020 will be to our kids and grandkids.

Facebooklinkedinrss

Monday Wake Up Call – June 24, 2019

The Daily Escape:

View from Angels Landing summit, Zion NP Utah – 2019 photo by SurrealShock. 86,000 people visited Angels Landing over the four-day Memorial Day weekend in 2018.

On Sunday, the NYT reported: (emphasis by Wrongo)

“In the last decade, private land in the United States has become increasingly concentrated in the hands of a few. Today, just 100 families own about 42 million acres across the country, a 65,000-square-mile expanse, according to the Land Report, a magazine that tracks large purchases. Researchers at the magazine have found that the amount of land owned by those 100 families has jumped 50 percent since 2007.”

The West is a patchwork of public and private lands. Land ownership in the West has always been concentrated in the hands of the federal government, which owns about 50%. Now we learn that the rest of the West is quickly moving into the hands of a very few people.

The large purchases by these new private landholders come as the region is experiencing the fastest population growth in the country. That drives up housing prices and the cost of living. Some locals are fearful of losing both their culture and economic stability.

Rocky Barker, a retired columnist for The Idaho Statesman, has said this is a clash between two American dreams, pitting the nation’s respect for private property rights against the notion of beauty-rich publicly-owned lands set aside for the enjoyment of all.

In the West, there is an evolution of an economy based in minerals extraction, to one based on recreation; from a working class culture to a more moneyed one. The NYT article focuses on one family, the Wilks brothers, Dan and Farris, who made their money ($3.5 billion) in fracking. They sold out, and bought a vast stretch of mountainous land in southwest Idaho.

The Wilks brothers see what they are doing as a duty. God had given them much, and in return, “we feel that we have a responsibility to the land.”

The Wilkses now own 700,000 acres across several states, and have become a symbol of the out-of-touch owner. In Idaho, they have closed trails, and hired armed guards to patrol their land, blocking or stymieing access not just to their property, but also to some publicly owned areas. They also hired a lobbyist to push for a law that would stiffen penalties for trespass, and the bill passed.

This has made locals angry, as they have hiked and hunted on these lands for generations. Some emailed the Wilkses, asking permission to cross their property. They were surprised to receive a response suggesting they first visit PragerU, a right-wing website that was financed by the Wilkses and share their opinions of its content.

This is an example of a test for land use. Should you have to tell landowners your political views before you get to use their land?

Welcome to the future. Concentration of land ownership is a natural consequence of our free market capitalism. Our capitalist system isn’t designed to prevent concentration of ownership, whether it be of corporations or land.

That requires politicians who are not beholden to corporations and capitalists.

Our ancestors left Europe because by the 1600s, much of the land had already been bought up and was either inaccessible, or available in small lots for rent. America has been in the process of being divided up in the same way since the 1700s.

We talk about wealth inequality, and this story shows again that it is much more than numbers on a ledger. It is the power to own vast chunks of America, to decide how that land will be used, and to charge for that usage if they desire.

Battles over both private and public land have been a defining part of the West since the 1800s. For years, fights have played out between private individuals and the federal government.

OTOH, Americans in the West have made private ownership of wilderness a sacrament. They even contend that private use of public lands should be a right. Now, when the results of concentrated private land ownership become clear, when suddenly, a river or a mountain range they’ve enjoyed using for decades has a fence around it, their bellyaching begins.

But when the Wilkses, who made their money in fracking talk about how they feel they have a responsibility to the land, that has to be seen as hypocrisy.

The people in the West should Wake Up and give thanks for every inch of every national park. They should willingly pay additional taxes to keep our national parks in prime condition.

And they should finally see the wisdom in higher income taxes on corporate profits, and in Elizabeth Warren’s taxes on individuals with greater than $50 million in assets .

Facebooklinkedinrss

Is Ending Income Inequality a “Radical” policy?

The Daily Escape:

Mount Robson & Berg Glacier, BC, Canada – June 2019 photo by DrTand the women

New York Magazine’s Eric Levitz writes: (brackets and emphasis by Wrongo)

“…the Federal Reserve just released…its new Distributive Financial Accounts data series [that] offers a granular picture of how American capitalism has been distributing the gains of economic growth over the past three decades. Matt Bruenig of the People’s Policy Project took the Fed’s data and calculated how much the respective net worth of America’s top one percent and its bottom 50 percent has changed since 1989.

He found that America’s super-rich have grown about $21 trillion richer since Taylor Swift was born, while those in the bottom half of the wealth distribution have grown $900 billion poorer.”

This is what a few of the Democratic presidential candidates have been talking about, some loudly and some quietly, for the past few months. Levitz asks the right question:

“So, is an economic system that distributes its benefits in this manner consistent with Americans’ common-sense views of economic justice? If not, would incremental changes be sufficient to bring it into alignment with the median American’s values? Or would more sweeping measures be required?”

In a sense, Democrats are testing whether advocating for changing Capitalism is an argument that voters will accept in 2020. More from Levitz:

 “Some Democratic presidential candidates say that America’s economic system is badly broken and in need of sweeping, structural change. Others say that the existing order is fundamentally sound, even if it could use a few modest renovations. The former are widely portrayed as ideologues or extremists, the latter as moderates.”

Essentially, the question is “who’s the extremist?” in the Democratic Party. This conflation of “extreme” or “radical” with “bad” is what the GOP and the Main Stream Media do every day, and it weakens our policy-making.

We use “extremist” or “radical” as a way of signaling that a policy position is too awful to consider.

If you simply say that something is bad, then you are forced to defend your position. But, when you describe it as “extreme“, you’ve called it bad, and people will HEAR that you think it’s much too big a change to even discuss.

Respectable talking heads like Judy Woodruff will ask: “Will Americans really go for THAT?”

This is bad faith messaging about important questions. This is so ingrained into people who talk about politics that it largely goes unquestioned. We shouldn’t care about pundits and broadcasters saying how extreme or not extreme something is. We should care about the merits of the argument.

Republicans have been calling Democrats “extreme” “radical” and “Socialist” for decades. They’re using bad-faith tactics; de-legitimizing an idea or a candidate without having to debate on the merits.

Bernie Sanders and Elizabeth Warren are offering “extreme” policies only if our baseline is what the average Congress critter’s economic agenda looks like. It’s not clear why that’s an appropriate yardstick.

Did we think calls for sweeping change in Egypt were extremism when students took to the streets demanding basic civil rights? Do we think the young people demonstrating today in Sudan are radicals?  Our assessment (and support) of these dissenters’ ideologies has more to do with how far their values are from those of their corrupt political and military leaders.

And also by how close they seem to be to our core values.

Whether it is extreme or moderate to propose sweeping changes to American capitalism should depend on how close our existing system is to how a just economic system operates. And these latest data show that the one percent have gotten $21 trillion richer since 1989, while the bottom 50% have gotten $900 million poorer.

This is what economic class warfare looks like. Saying that isn’t hyperbole. The earnings and wealth of a majority of our citizens has been systematically declining with the complicity and power of our government, in order to benefit the rich.

It shows how bad things are when the “radical” in American politics is anybody who argues that the American economy isn’t working for a huge percentage of the population.

Judy Woodruff may think that the economy is great, but incrementalism has failed most of us for the past 40 years.

Given all this, any politician who insists that American capitalism is “already great” is clearly someone who is indifferent to economic inequality.

We need to adopt redistributive economic policies. That may sound like an extreme position, but the alternative of continuing our growing wealth inequality, should really be thought of as far more radical.

Facebooklinkedinrss

Monday Wake Up Call – June 3, 2019

The Daily Escape:

Mont Rotui, Moorea, French Polynesia – 2019 iPhone photo by mystackhasoverflowed

Time to wake up America! Donald Trump has proven once again that he has no understanding of economics. From the Wall Street Journal:

“President Trump will award the Presidential Medal of Freedom to economist Arthur Laffer, one of the pioneers of the idea that tax cuts can boost government revenue, the White House said Friday.

Mr. Laffer is one of the founding theorists of supply-side economics, a school of public economics that rose to prominence during the Reagan administration and returned to the fore in the run-up to the 2017 package of tax cuts that Mr. Trump signed into law.

The White House described Mr. Laffer as “one of the most influential economists in American history,” and said his “public service and contributions to economic policy have helped spur prosperity for our Nation.”

Laffer is famous for his drawing his Laffer curve on a napkin, illustrating his idea to Dick Cheney and Donald Rumsfeld at a dinner in 1974. His curve showed that increases in tax rates will eventually cause government tax revenue to decrease, because people will begin to work and earn less. This was then taken to its theoretical limit, saying that tax cuts could pay for themselves by spurring economic growth.

The WSJ calls Laffer “one of the pioneers of the idea that tax cuts can boost government revenue”. Isn’t it weird that the fact that his “idea” has been completely disproven in the real world, doesn’t seem to matter?

Conservative economics is not a branch of economics, it’s a branch of Conservatism.

The Laffer curve was successful at its real purpose, providing a basis to funnel more money to corporations and the rich. Republicans traffic in propaganda, not knowledge.

Last year, Laffer co-wrote a book titled “Trumponomics: Inside the America First Plan to Revive Our Economy.” Laffer’s co-author was Stephen Moore, another conservative who styles himself as an economist. Earlier this year Trump nominated Moore to serve on the Federal Reserve Board of Governors. Moore had to withdraw, amid bipartisan opposition from Senators.

Laffer was the advisor behind the notorious Kansas state income tax plan that ruined the state’s finances. In 2012, Then-Kansas Gov. Sam Brownback passed a package of tax cuts based on Laffer’s ideas. The result was that Kansas lagged behind neighboring states with similar economies in nearly every major category: job creation, unemployment, gross domestic product, and taxes collected.

In 2017, the Kansas legislature repealed the Laffer/Brownback tax cuts. After the repeal, state taxes were boosted by $1.2 billion.

Laffer has spent years preaching his idea that almost any tax cut for businesses and the rich could potentially pay for itself. That idea has become the bankrupt conceptual backbone of the Republican Party’s entire economic theology.

For the 2017 Trump tax cuts, his administration also borrowed Laffer’s idea. Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow, have repeatedly claimed that the Trump tax cuts will pay for themselves. But, a new report finds that the tax cuts were responsible for less than five percent of the growth that is needed to offset the revenue loss from the Trump tax cuts.

We must point out here that Larry Kudlow does not hold a degree in economics. He was once fired from an investment bank for doing cocaine. Imagine just how much cocaine you’d have to do to get fired on Wall Street in the 1980s.

Trump’s now added the Presidential Medal of Freedom to the American traditions he’s debasing. Other economists awarded the Medal of Freedom include Gary Becker, Milton Friedman, John Kenneth Galbraith and Robert Solow. Laffer can’t carry their briefcases.

There may be no man alive who has done more damage to America’s understanding of taxes and their effect on economic growth than Art Laffer.

Evidently, Trump is grading him on a curve.

Facebooklinkedinrss

Taxes Aren’t Theft

The Daily Escape:

Humpback Whale, Tonga – Photo by Rita Kluge

Joseph Stieglitz has an op-ed in the NYT about saving capitalism from itself. He wants to re-brand capitalism as “progressive capitalism”: (emphasis by Wrongo)

“There is an alternative: progressive capitalism. Progressive capitalism is not an oxymoron; we can indeed channel the power of the market to serve society….The prescription follows from the diagnosis: It begins by recognizing the vital role that the state plays in making markets serve society. We need regulations that ensure strong competition without abusive exploitation, realigning the relationship between corporations and the workers they employ and the customers they are supposed to serve. We must be as resolute in combating market power as the corporate sector is in increasing it.”

America has been debating the role of capitalism in our society since our beginnings. In 1790, John Adams published the Discourses on Davila in which he said that entrenched economic inequality would create a political oligarchy in America similar to what had already occurred in Europe.

The problem isn’t inequality. We’ve survived a permanent underclass, but until recently, it has been a statistical minority. But, we won’t survive today’s continuing erosion of the middle class. Stieglitz says:

“We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven political system, to more political inequality, with weaker rules and deregulation causing still more economic inequality.”

He calls for:

“…a new social contract between voters and elected officials, between workers and corporations, between rich and poor, and between those with jobs and those who are un- or underemployed.”

Call it progressive capitalism, capitalism plus, democratic capitalism, or whatever you want. At the core of any reform of capitalism is less corporate control over the levers of power, and a redistribution of wealth. Along with the growth in economic inequality and political impotence, so grows the myth propagated by the ultra-rich that higher taxes are a public theft of their hard earned fortunes, and are a threat to their personal freedoms.

Let’s spend a minute on the difference between positive and negative rights.

In the simplest terms, negative rights (most of the Constitution’s Bill of Rights) protect us from the government. They tell us what the government can’t do. The Constitution was designed as primarily a negative rights document, to maximize our individual liberty, and to protect us from the government interfering in our lives. They are most helpful to people whose rights are already protected.

Positive rights are different. They include things like the right to an education, and in some countries, the right to healthcare. Most of us define freedom as: freedom from hunger, freedom from ignorance, freedom from exploitation, freedom from poverty, freedom from hopelessness and despair. Very few positive rights are enumerated in the Constitution, with the exception of the right to have the government protect private property.

Today, if there’s one enduring myth that drives US politics, it is the myth that the rich have earned their reward, through nothing but their own hard work and savvy. The rich want no income redistribution, which they call “socialism”, just as the fat cats said in this cartoon from 1912:

The Republicans in the 1930s called FDR a socialist. Now, as we are thinking about a New Deal 2.0, today’s Republicans want to again brand all Democrats as socialists.

Corporations and the 1% ignore how much they are helped by a system designed by them, and for them. They are contemptuous of government and public authority, which they say act as agents of the poor, attempting to extort the rich.

They forget that our government facilitates and protects their wealth. If not for the many Federal agencies that write regulations favorable to industry, the Federal Reserve, protectors of the banking industry along with others, there would be a lot less wealth for corporations and the 1% to aggregate.

Therefore, they should pay the most.

And remember, rural electrification was a federal project under FDR. The dams on the Columbia River made irrigation possible, opening up western lands to agriculture. The Tennessee Valley Authority (TVA) was the Green New Deal of its time, and was the basis for development of a modern Southeastern US. The railroads that opened up the West relied on government property provided to private companies (redistribution?) to develop.

Let’s decide to reform capitalism. First, by making it responsive to the positive rights that average Americans are longing for. Second, paying for that with much high taxes on corporations. If the loopholes created by savvy corporate tax lawyers remain on the books, let’s create a stiff Alternative Minimum Tax (AMT) for corporations.

Just like the AMT that Wrongo has had to pay for lo, these many years.

Facebooklinkedinrss

Saturday Soother – Final Four Edition

The Daily Escape:

Aiguille du Midi – 2019 photo by Berenicids. The Aiguille du Midi (12,605 ft.) is part of the Mont Blanc massif in the French Alps. It can be directly accessed by cable car from Chamonix. If you enlarge the picture, the cable car building is visible at the very top of the mountain.

The end of Wrongo’s favorite sport, the college basketball season, happens on Monday. Tonight is the Final Four, the Wrong family’s equivalent of the Super Bowl, with family gathering for food and drink around the TV.

But, that doesn’t start until the early evening, so we’ve got time to talk about another scary piece of news this week: There will be severe human impacts caused by the next wave of automation. The bottom line is that plenty of jobs will be lost and we’ll see societal disruption as machines and robots take over American jobs. Axios takes it from there:

“In a new report, the Aspen Institute nudges policymakers away from any notion that the American economy will naturally adjust as robots are introduced at an accelerated pace over the coming two and three decades.”

Axios goes on to quote Aspen’s Alistair Fitzpayne who says that, workers displaced in prior technological cycles “have experienced profound downward mobility” in new jobs at much lower pay and benefits.

The report’s executive summary warns, “Artificial intelligence and other new technologies may lead to deeper, faster, broader, and more disruptive automation”, and retraining programs may be unable to mitigate the downward trend in earnings and social status. Aspen warns that fewer jobs may be created than are destroyed:

  • No one knows how many new jobs will be produced, where they will be created, or how much they will pay.
  • Most studies play down the real possibility that the automation age could go very wrong, for an extended period, for large swaths of workers and their communities.
  • Workers who lost their jobs in the wave of manufacturing layoffs in the early 1980s, for instance, were still earning 15%-20% less in their new work 20 years later, according to the Aspen report.

Axios reports that Aspen tries to pull the punch, saying that with the right policy choices, we can choose to create an economy that works for everybody. That we can encourage employers to adopt a more “human-centric approach” to delivering the bottom line. That we can support displaced workers through retraining, reemployment services, and unemployment insurance to help them transition to new jobs and careers.

Maybe, but it seems questionable that those things will spontaneously happen. Rep. Alexandria Ocasio-Cortez (D-NY) suggests all this new technology might be liberating, but she has reservations:

“The reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem.”

The cultural stigma attached to job loss is profound, and that is unlikely to change by adding more retraining programs. Conservatives are not about to celebrate jobless people having more time to learn, to create art, or enjoy the world they live in, as long as they are unemployed.

The merciless mantra of shareholder value above all, and our corporate masters’ acceptance of the inevitability of technological change means that low and moderate-skill workers are expendable. Efficiency for more bottom line is more important than the lives of human workers.

This coming automation disruption is hard to see now. But estimates are that it will impact as many as 40% of American workers.

The 21st Century American corporation isn’t our friend, as currently constituted and rewarded. It is the enemy of our society, because they are quietly working to eliminate our jobs. We constantly reduce their taxes, vainly hoping for them to create more jobs. We look the other way when they pollute our environment. We allow them to disproportionately finance our elections.

It’s time for a new Capitalism.

But you’ve had enough for this week, so on to the Saturday Soother. Start slowly, particularly if you plan to stay up until the last Final Four game ends at around midnight. Let’s brew up a cup of New Hampshire’s Flight Coffee’s single origin Tanzania Tarime AB, ($17/12oz.), with its floral fragrance and intensely sweet flavor. Now settle into your favorite chair and listen to “Spring Morning” by Frederick Delius, played by the Royal Scottish National Orchestra and conducted by David Lloyd Jones. “Spring Morning” is the third of ‘Three Small Tone Poems’ by Delius:

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

Facebooklinkedinrss

Monday Wake Up Call – April 1, 2019

The Daily Escape:

Racka Sheep, Hungary, April 2017 – photo by Laszlo Balogh.

The Trump legacy keeps on giving. Forbes reports that when Trump’s tax bill passed in late 2017, it included:

“A new tax on litigation settlements: no deduction for legal fees…..That means many plaintiffs must pay taxes even on monies their attorneys collect. Of course, the attorneys must also pay tax on the same money.”

Robert W. Wood, a Forbes contributing writer who follows taxes, cites the case of Edwin Hardeman who won $80.5 million in a suit against Monsanto’s Roundup. From Forbes:

“Hardeman was awarded a bit over $5 million in compensatory damages, and $75M in punitive damages. The combined contingent fees and costs Mr. Hardeman pays his attorneys might total as much as 50%. If so, the plaintiff would get to keep half, or $2.5 million of the $5 million compensatory award. Since it is for his…non-Hodgkin’s lymphoma, that part for physical injuries should not be taxed. Then, of the $75 million punitive award, $37.5 million goes to legal fees and costs, and $37.5 million to Hardeman. So before taxes, the plaintiff’s take home is $40 million.”

But because of Trump’s new math, Hardeman’s $75 million punitive damages award is fully taxable, with no deduction for the fees he pays to his lawyer. Between federal taxes of 37% and California taxes of about 13.3%, Hardeman could lose about 50% to the IRS and California Franchise Tax Board. He would still owe another $37.5 million to his lawyers, so his after-tax take from an $80 million verdict only $2.5 million.

A $2.5 million award isn’t chump change, but this is another effort by corporations and Republicans to discourage law suits seeking punitive damages by plaintiffs. Notably, compensatory damages for physical injuries or physical sickness are still tax-free, but not punitive damages.

Doesn’t paying taxes on money you don’t receive seem un-American? The reach of corporate interests into our laws cannot be overstated. It will take a generation to reverse all of the inroads corporate lobbyists have made into our tax laws alone.

So, wake up America! It’s time to change capitalism so that it works for the people, not just for the owners and managers of corporate America. Bill Maher had a great discussion on his show “Real Time“. He echoed FDR’s “Four Freedoms” while commenting on how countries with a higher socialism-to-capitalism mix rank as happier than the US in the recent World Happiness Report. Maher says;

“Happiness isn’t only about what you have. It’s also about what you don’t have to worry about,”

Maher recommends rebranding Capitalism Reform as “Capitalism Plus.” Because, “It’s a plus when you get sick and you can focus on getting better instead of not going broke“. Or, ending up sleeping under an overpass.

Maher ends with:

“Does pure unbridled capitalism work? I guess that depends whether you’re on the board of Boeing, or onboard a Boeing.”

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

 

Facebooklinkedinrss

Don’t Call Warren a Wonk

The Daily Escape:

Bryce Canyon, Utah – 2019 photo by AccountexpiresSept10

(Wrongo has been a little distracted by the Barr Letter and the aftermath of Russiagate. He’s spent a ton of time checking out who is recanting their positions, and who is doubling down. That explains the lack of daily posting. Also, there will be no Saturday Soother this week as Wrongo and Ms. Right take advantage of Broadway and NYC’s nightlife. There will be cartoons on Sunday, though.)

Wrongo is beginning to place Pete Buttigieg near the head of the 2020 class of presidential candidates. He’s smart, an intellectual, and most important, someone who thinks and speaks with nuance about our politics. Wrongo also likes Elizabeth Warren. She’s turning out ideas at a higher rate than any of her competitors. This, from Charlie Pierce: (brackets by Wrongo)

“The Senator Professor Warren Policy Shop and Idea Factory continues to operate at full capacity. First, a little something-something from the Des Moines Register: Warren has not shied away from confronting those affected by her policies, delivering them directly to those industries’ doorsteps. Just as she announced her plan to break apart the nation’s largest tech companies before heading to one of the [agricultural] industry’s largest gatherings…”

Warren announced her plan to take on corporate agriculture just before traveling to Iowa to speak at a rural issues forum. The companies she names in her plan — Tyson, Dow-DuPont and Bayer-Monsanto — are all key players in Iowa’s economy. More:

“Warren argues small farmers are unable to get ahead ‘because bad decisions in Washington have consistently favored the interests of multinational corporations and big business lobbyists’ over their own. Warren said during a recent interview with the Register ‘The number of purchasers of soybeans or hogs has shrunk dramatically….The number of seed providers has shrunk dramatically, and the diversity of the seeds (offered) has shrunk. Concentration in those industries has put a real squeeze on small- and medium-sized farms in Iowa.”

But Warren is being concern-trolled as an unlikeable, wonkish professor, while Buttigieg gets praise for learning Norwegian in order to read a favorite author. More from Pierce:

“The temptation will be great for people to hang the deadly Wonk label on her, an especially painful tag for a woman. But to do so is to ignore the fundamental theme that all of these proposals have in common: a multi-front attack on…monopoly power as an enemy of the poor and middle class….”

Bias remains in all of us, even as we try to ignore it. Wrongo wonders if non-MAGA males will view a smart female candidate like Warren differently than a male competitor.

Buttigieg is impressive. He may be young, but he’s serious, intelligent, and well-versed in the issues.

Warren, a college professor and US Senator, is every bit the intellectual equal of Buttigieg and, like Mayor Pete, is light-years smarter than Donald Trump.

Here’s the problem: When men listen to Buttigieg, they hear intelligence, humility, and a willingness to learn. When they listen to Warren, do they hear something different, and maybe, less likeable?

That was true in 2016. Hillary Clinton was held to a higher standard than Donald Trump. Her negatives were far higher than would have been true for a male candidate with similar strengths. Despite more than three decades of public service, Clinton lost to the most unqualified and unfit Presidential candidate in our nation’s history.

Can Democrats nominate another woman so soon? If so, should Warren be the one?

Warren is an intellectual force who wants capitalism reform. She articulates real policies, and attacks the class war waged by the rich. Like Mayor Pete, she has the ability to present complex ideas in ways that are both accessible, and actionable.

Maybe, “wonk” won’t stick to her as it did to Hillary. “Wonk” implies focusing on technicalities that ordinary people find boring, or beyond their understanding. The wonk tries to describe a small world, while the rest of us mostly try to focus on the big picture.

Warren seems the opposite of a wonk. She is more like Teddy Roosevelt than Paul Krugman. No one would call Theodore Roosevelt, a demonstrated reformer with anti-plutocrat chops, a wonk. It should be difficult to portray Warren that way.

Warren has found a way to merge an economic agenda and Democratic voters’ deep concern about our political system. She says, “rebuild democracy.” Accountability, reform, oversight, anti-corruption brings it all together.

But there are those in the media who think Warren is wonky. There also are men who, in 2019, still have trouble listening to a smart woman.

Clearly, as a society, we haven’t made nearly the progress we like to give ourselves credit for.

Warren needs to avoid the media painting her into a corner. Her message is resonating.

Facebooklinkedinrss

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:

 

Facebooklinkedinrss

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.

Facebooklinkedinrss