The Wrongologist – Page 188 – Geopolitics, Power and Political Economy

Sunday Cartoon Blogging – August 14, 2016

Apparently, President Obama makes a playlist every year for his summer fun time on Martha’s Vineyard. Playlists by politicians are common, and usually are big nothingburgers. Obama has a “Day” playlist and a “Night” list. This year, The Atlantic approves of Mr. Obama’s night playlist, and thinks the day list is a snooze. Guess critics gotta criticize.

Make up your own mind: here is the Obama “Night” playlist.

It was a big week in manufactured news. Trump dominates, but Politico speaks about the Trump campaign thusly: (emphasis by the Wrongologist)

What’s bothering people on the [Trump] campaign is that they feel like they’re doing all the right things, but they’re losing every news cycle to Hillary and there’s nothing they can do about it.

It’s doubtful that Clinton has won a news cycle since the convention, but what the Trump campaign is trying to say is that Clinton doesn’t need to win a news cycle as long as Trump “misspeaks” every day. From Karoli Kuns at C&L: (brackets by the Wrongologist)

I think that’s precious, don’t you? Considering that Trump dominates the news for every cycle with his intentional demonization of President Barack Obama and [his] opponent, Hillary Clinton, it’s hard to imagine Republicans wringing their tiny little hands over losing news cycles to her.

Ok, the GOP should keep explaining Trump’s gaffes until America is tired of all the winning.

On to cartoons. Simone Biles gave us a feel-good moment:

COW Americas Great Again

This is the one Burka that Trump likes:

COW Tax Returns

With all of the “resets” and “mansplaining”, the GOP could lose its balance:

COW Balance Beam

This is as understandable as any other explanation by Monsieur big mouth:

COW Trump Backs Up

Trump’s new tax policy is same old, same old. It’s a reconstitution of the standard Republican trickle-down economics that benefits big corporations and a wealthy few:

COW Trump Tax Plan

Words Have Meaning

This captures where we are:

COW Hill's Threats

People are debating whether Donald Trump suggested violence against Hillary with his comment about how “the Second Amendment People” might be the only group capable of stopping Hillary Clinton from appointing liberal judges if she is elected president.

The Trump comment was in the context of what happens after Hillary is elected, and that there was nothing anyone could do about Hillary appointing Justices, except for…Second Amendment people.

He said, “If [Hillary Clinton] gets to pick her judges, nothing you can do, folks.” There’s “nothing you can do” in this situation because Trump is talking about a time after the 2016 election is over, and Clinton is president.

If he wasn’t talking about after the election, why would he say there was “nothing you can do?” During the election, there’s something pretty obvious you can do: Get out the vote and prevent her from becoming president in the first place.

Then Trump immediately follows it up by saying, “But I tell you what, that’ll be a horrible day.” Again, this suggests the time frame he’s talking about is when she’s already in the White House. Otherwise, both the “horrible day” comment and the “nothing you can do” comment that bookend his Second Amendment remark are total non-sequiturs.

So no, this isn’t about the NRA organizing their members to get out the vote. His comments were about doing something AFTER the election. Why would it be a “horrible day” if all he was talking about was getting out the vote, his vote? It is totally illogical.

There is no ambiguity here.

This seemed to Wrongo to be another effort at a joke by the Pant Load. The WaPo reported that Paul Ryan said:

It sounds like just a joke gone bad. I hope he clears it up very quickly. You should never joke about something like that.

It’s highly unusual for the Wrongologist to agree with Paul Ryan, but that’s probably the best defense for Trump’s words. But when faced with an outcry after his controversial comments, Trump never admits error and never backs down — no matter how strained the defense.

Why should this time be any different?

Trump knew exactly what he was doing, and he did so in the same manner he has been using throughout the campaign. A suggestion, an inference, a little birdie told him, it is what people are saying. The dog whistle, the wink, the nod. Some ambiguity to the comment, delivered in a veil of coyness.

Maybe we should remember the very bright line that Sarah Palin crossed a few years ago when she took out an ad that deliberately placed Gabby Giffords in crosshairs, just before Giffords was shot and critically wounded by a gunman. This is different, but really, how different is it?

On ABC’s Good Morning America, Rudy Giuliani gave Trump’s words the real test: How did they play with Trump’s audience? Getting Hillary couldn’t be what Trump meant, Rudy observed, because if Trump had actually called for Hillary to be killed, the crowd would have gone wild.

Imagine being Giuliani: So invested in Trump’s campaign that you’re contorting yourself into a pretzel to translate the candidate’s Wingbat-ese into English.

And once again, defending the indefensible.

Words matter, especially when delivered by someone who aspires to be POTUS.

What Can Vietnam’s Success Teach Us?

Wrongo was against the Vietnam War. He was drafted right after college into the US Army while America was fighting the Viet Cong. Once in the military, he was twice on orders to go to Vietnam, but luckily, ended up serving his time in Germany, running a nuclear missile unit.

He has several army buddies whose names are inscribed on the Wall in Washington, but that was 50 years ago, and he holds no grudge against Vietnam, or its people. So, the remarkable recovery that Vietnam has made from the war, their now friendly ties with the US, and their success in becoming a middle income country ought to be instructive to our foreign policy establishment.

From the Economist:

Foreign direct investment in Vietnam hit a record in 2015 and has surged again this year. Deals reached $11.3 billion in the first half of 2016, up by 105% from the same period last year, despite a sluggish global economy. Big free-trade agreements explain some of the appeal. But something deeper is happening. Like South Korea, Taiwan and China before it, Vietnam is piecing together the right mix of ingredients for rapid, sustained growth.

Since 1990, Vietnam has averaged GDP growth of nearly 6% a year per person, lifting it from among the world’s poorest countries to middle-income status. This is similar to India’s or China’s growth, but China then went on to average double-digit growth for years. Check out this photo of today’s Ho Chi Minh City, what GI’s once called Saigon:

Stark Tower 2

The tall building is 68 floors high. It is the Bitexco Financial Tower, but locals call it “Stark Tower” because it looks like Tony Stark’s headquarters in the Iron Man films. While it is the city’s tallest building now, next year it’ll only be the fourth tallest.

So, how did this communist country do it? By moving from state ownership of the means of production to a mixed model. Vietnam’s Doi Moi policy opened up Vietnam to the rest of the world. They revamped much of the legal system to create a transparent and attractive place for foreign investment. This has given foreign companies the confidence to build factories. Foreign investors are now responsible for a quarter of annual capital spending. Trade accounts for about 150% of national output, more than any other country at its level of per-person GDP.

They established the Ho Chi Minh Stock Exchange in 2000, and de-nationalized many state-owned companies, opening doors for foreign investment. Equity was sold to both foreign and domestic investors, and in some cases, foreign ownership can now be 100%. In 2015, total Foreign Direct Investment (FDI) was $13 billion.

Vietnam shares a border with China. As Chinese wages rise, some firms can easily move to Vietnam for lower-cost production, while maintaining their links to China’s supply chain for parts.

Vietnam has a relatively young population. China’s median age is 36, while Vietnam’s is 30.7. Seven in ten Vietnamese still live in the countryside, about the same as in India, compared with only 44% in China. This reservoir of rural workers should help hold down wage pressure, allowing Vietnam to build up labor-intensive industries, a necessity for a nation of nearly 100 million people.

Public spending on education is about 6.3% of GDP, two percentage points more than the average for low- and middle-income countries. In global rankings, 15-year-olds in Vietnam beat those in America and Britain in math and science.

Although Vietnam has benefited from foreign investment, only 36% of its firms are integrated into its export industries, compared with nearly 60% in Malaysia and Thailand. While Samsung plans to invest $3 billion in consumer electronics production in Vietnam, there will be very little domestic content, except for packaging. More local value-added must be found to keep GDP growth high.

There are big problems: The fiscal deficit in 2016 will be more than 6% of GDP for the fifth straight year. As mentioned, domestic content in exports is low, and imports of consumer goods purchased by newly prosperous workers fuels a trade deficit.

Vietnam is now classified as a middle-income country; so it is about to lose access to preferential financing from the multilateral development banks. In 2017, the World Bank will start to phase out concessional lending.

Vietnam is successful, despite our dropping 3.5 times the number of bombs on it that we dropped in WWII, while killing more than a million Vietnamese.

For America, Vietnam’s success, despite our past efforts to devastate it, should cause us to reflect on how and why we are a guns-first country when we deal with the third world.

Pentagon Can’t Account for $6.5 Trillion

Let’s take another break from the cacophony of the presidential campaign to provide some insight into a Pentagon report that the mainstream media barely covered.

The Inspector General (IG) of the US Department of Defense (DoD) issued an audit report on July 26, stating that the DoD cannot account for $6.5 trillion in total funds, of which, $2.8 trillion is “missing” from the last fiscal quarter. According to the IG’s report: (brackets by the Wrongologist)

Army and Defense Finance and Accounting Service [DFAS] Indianapolis personnel did not adequately support $2.8 trillion in third quarter adjustments and $6.5 trillion in year-end adjustments made to Army General Fund [AGF] data during FY 2015 financial statement compilation…We conducted this audit in accordance with generally accepted government auditing standards.

The IG also said that the DoD agrees they received these funds, agrees the funds are gone, and claims not to have records of where the money went. This doesn’t mean that the money (or equipment and supplies) was embezzled, but without accounting records, the Pentagon just doesn’t know what happened to it.

This isn’t a new problem. On September 10, 2001, then Sec Def Donald Rumsfeld reported that the DoD could not find $2.3 trillion of our tax dollars. After the next day’s al Qaeda attack, the Pentagon and the Congress lost focus on this problem. From the Fiscal Times:

Starting in 1996, federal agencies were mandated by law to conduct regular financial audits. However, the Pentagon has NEVER complied with that federal law. In 20 years, it has never been able to account for the trillions of dollars in taxpayer funds it has spent. An increasingly impatient Congress has demanded that the Army achieve “audit readiness” for the first time by Sept. 30, 2017, so that lawmakers can get a better handle on military spending.

But the IG report says (pg. 21), that they are not likely to comply:

Until the Army and DFAS Indianapolis correct these control deficiencies, there is considerable risk that the AGF financial statements will be materially misstated and the Army will not achieve audit readiness by the congressionally mandated September 30, 2017, deadline.

If this was your bank, and they agreed that they had received a large deposit from you, agreed that they had no idea where it was, and had no plans to refund it, you would sue and move to another bank.

Since this is the Pentagon, you can’t do either. Congress has been allowing the Pentagon to get away with this travesty for decades. Heads should roll at the Pentagon, but where is the Congressional oversight?

Sorry, this is gross negligence, and it isn’t excused because it is done by our “warrior” class who are only trying to keep us safe.

Think about it, $6.5 trillion lost is the equivalent of embezzling $1 billion a day for 18 years. Another way to look at the issue, is that the Pentagon can’t account for around $86 million in our tax dollars per hour. That means the Pentagon misplaces enough of your tax dollars every day to deliver every American free health care.

Now, they almost certainly didn’t lose or steal that much, but they shouldn’t have so much dough to play with until they learn how to account for what they get.

The people deserve whatever regime they endure.

This should be unendurable.

WTF Is It With Cellphone Cameras?

The NYT had an article last Thursday about a suicide rescue on the George Washington Bridge by a bicyclist. Julio De Leon, 61, was biking home from work across the GW Bridge when he saw someone about the jump off the bridge and into the Hudson River. From the NYT:

Then he saw it: a dog in the pathway, tethered to a rail. “This is something unusual, and I looked to my left, and I saw the guy,” Mr. De Leon said.

Sunday Cartoon Blogging – August 7, 2016

At a rally in Virginia, Trump said:

The [economic] numbers are getting worse and worse all the time.

He was saying that he thinks the economy is going to tank, and that he hopes he will benefit politically. It’s clear that if his assertion were true it would help him, but, it’s not:

The BLS reported Friday that nonfarm payrolls rose by a seasonally adjusted 255,000 in July. Revisions showed US employers added 18,000 more jobs in May and June than previously estimated. The unemployment rate was unchanged at 4.9% in July.

In any case, it’s good to know that the Pant Load is rooting for an economic downturn to happen in the next 90 days, so he can personally benefit. Seems like his normal mode of operation.

Sorry Donny, the American economy has now experienced 77 months of consecutive private sector job growth. He’s wrong, but OTOH, it is a very uneven recovery.

On to cartoons. The Rio Olympics dominated Trump’s efforts to command the news cycle this week.

Brazil put its Christ on the Hill statue in an appropriate garb for the Games:

COW Haz Mat

Concerns about Rio’s water reminds us that Congress didn’t appropriate any money for Flint:

COW Olympics Water

Many athletes pulled out due to the Zika virus when the solution was Trump-simple:

COW Citronella

Being in Rio gives athletes a respite from the news at home:

COW Making the Olympics

The ceremonial dumpster lighting kicked off our presidential Olympics:

COW Donnie Dumpster

In other news, voting rights won a few fights:

COW Vote Supression roll back

Why is AARP Funding ALEC?

Yes, you heard that correctly, AARP, the insurance company that styles itself as a champion for senior citizens has become a corporate sponsor of ALEC.

Let’s remember what ALEC is: The name stands for the American Legislative Exchange Council. It operates by offering model legislation to its members, who typically are big corporations and conservative Republican state legislators. It was initially funded by the Koch Brothers.

Its legislative ideas cover practically every area of state government, from education and health to energy, environment and tax policy. State legislators introduce the ALEC-drafted bills in their home states, allowing ALEC’s legislative concepts to metastasize in almost identical laws in statehouses across the country.

ALEC has pushed for:

The repeal of the Affordable Care Act, which has saved Medicare enrollees millions of dollars by closing the Medicare drug benefit “doughnut hole.”
It opposed Medicaid expansion under Obamacare.
It has targeted public pensions, pushing to cap benefits and shift workers toward defined contribution plans, which shifts market risk onto the shoulders of individual workers.
It advocates for privatizing at least a portion of your Social Security taxes.

Governing, a publication for state and local policymakers, says that roughly 1,000 bills based on ALEC language are introduced in an average year, with about 20% getting enacted.

Since 2011, ALEC suffered a backlash, as a number of its corporate sponsors, (more than 100 corporations), pulled their support including Ford, Google, Facebook, and Microsoft, among many others. Eric Schmidt of Google told NPR after deciding to leave ALEC:

I think the consensus within the company was that that was some sort of mistake and so we’re trying to not do that in the future.

So why would AARP sign on as a corporate sponsor of ALEC? From the LA Times: (emphasis by the Wrongologist)

Among the policies that have been promoted by ALEC are several that arguably undermine the interests of seniors and retirees, AARP’s core constituency.

Despite that, the Center for Media and Democracy has learned that AARP joined ALEC, and that it is a named sponsor of the ALEC annual meeting that took place in Indianapolis, Indiana from July 27-29, 2016.

AARP didn’t hide its new financial relationship with ALEC, at least to ALEC legislators. The AARP logo appears in the conference brochure and attendees at the conference were each provided with an AARP branded portable USB power pack as they registered for the event.

Here is AARP’s corporate response when challenged about their new ALEC relationship: (emphasis by the Wrongologist)

In 2016, AARP paid a fee to ALEC, which gave us an opportunity to engage with state legislators and advance our members’ priorities from a position of strength at ALEC’s annual meeting.

AARP’s engagement with ALEC is NOT an endorsement of the organization’s policies either past or present. As is the case with other groups AARP engages with, there are many issues and areas where we strongly disagree with ALEC’s position or approach.

So, who in AARP’s marketing department convinced the top brass that they need to “pay” to meet with state legislators? And wouldn’t AARP members be very interested in what AARP’s management asked of state legislators?

From the LA Times:

Yet in arguing that a relationship with ALEC is necessary to “engage” with the legislators affiliated with the group, AARP is taking a different approach from the dozens of corporations that have abandoned ALEC.

Election Myths and Realities – Pant Load Edition

Ian Welsh lays out a probable narrative that the Pant Load will use if he loses:

Republican leaders and billionaires turned on him when he could have won, flocking to Clinton, and there was voter fraud.

Trump Channels George Costanza

The underlying personality trait of George Costanza is that he’s a liar. He doesn’t try to hide it, he wears it as a badge of honor, and he takes great pride in his dishonesty. Here, in George’s own words:

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

The Donald is the second coming of George Costanza. With all his lying, Prima Donald didn’t have a great Monday. From the Daily Beast:

Monday was an incredible day of falsehoods for the GOP nominee.

The DB goes on to list and rebut a series of lies that Trumpy put out at a few campaign stops and on a pre-recorded piece for Sean Hannity of Fox News. Read the whole list here. In addition, Prima Donald:

Continued to attack against Khizr Khan.
For the second time in two days, Trump attacked a fire marshal at a press conference for having the temerity to not allow him to violate maximum occupancy regulations.
Reacted to the NYT’s investigation of his draft-dodging.
Preemptively declared that the presidential election is rigged.
Announced unimpressive funds raising numbers. (He’s raised $35 million, which he said is “unheard of for Republicans, $35.8 million”. Actually, Mitt raised $101 million in July 2012.)
Declared that if women, even his daughter, were victims of sexual harassment, they should just quit (perhaps overlooking that not every woman can just get another job within their father’s empire)
Praised Paul Ryan’s primary challenger, while Paul Ryan is (1) basically the leader of his party and (2) standing by his endorsement of Trump.

These are just a few of his recent whoppers. Why is he like this? He’s a man whose mentality is completely focused on closing deals. He, like many senior business leaders, sees everything as a transaction.

Wrongo has a lifetime of big business experience with dozens of people like Trump, people who identify with the deal. The deal validates who they are. They wine, dine, flatter, intimidate, abuse psychologically; the closer does whatever it takes to get the signature on the bottom line.

Then the closer walks away, and is on to the next deal, repeating the process. If shit happens after the close, there are designated handlers who are tasked with fixing it, it’s not the closer’s job. Whatever was said or done to close the last deal is irrelevant to the next one. The closer is walled off from the last deal, and the sole focus is validating his/her worth by closing the next one. There is no feeling of remorse for prior actions, no blow-back penetrates the wall.

For Trump, the idea that people would hold his bullying and insults against him must be surprising. That is why he fights back so angrily when caught up short.

Turning his personality to the political arena, Trump above all thrives on winning. He needs to be able to point to victories and yell: I WON! I WON! I WON!

Between the end of the Conventions and Election Day, it’s beginning to look like there aren’t going to be a lot of well-defined victory moments for Prima Donald.

Three months is a long time for a thin-skinned addict to go without his fix.

This is his temperament. It should disqualify him.

Capitalism, It’s Not You, It’s Me

There is a meme that has gone global since the early days of the Occupy movement. Here it is as a wall graffiti from Greece that uses the same meme we first saw in NYC in 2011:

Capitalism Lotek

Just kidding capitalism, it really is you.

The artist is a Greek who styles himself as Lotek. The name Lotek is derived from the short story (and later, a film) by William Gibson called Johnny Mnemonic. The story is set in 2021, in a world ruled by corporations. An anti-authoritarian gang that are called Lo-Teks, fight the power. They are in fact not low tech at all, but are high tech hackers. Sound familiar?

Greece is surely a place at war with neoliberalism and free market capitalism. So is it also time for us to reconsider capitalism?

Consider this from Mark Blyth in Foreign Affairs:

An inherent tension exists between capitalism and democratic politics since capitalism allocates resources through markets, whereas democracy allocates power through voting.

The compromises both systems have struck with each other over recent history shapes our contemporary political and economic world. Blyth observes:

In the three decades that followed World War II, democracy set the rules, taming markets with the establishment of protective labor laws, restrictive financial regulations, and expanded welfare systems.
Starting in the 1970s, a globalized, deregulated capitalism, unconstrained by national borders, began to push back.

And today, capital markets and capitalists are setting the rules, and democratic governments follow them.

Some background: Cutting taxes in the 1980s caused government revenues to fall. Deficits widened, and interest rates rose as those deficits became harder to finance. At the same time, conservative governments, especially in the UK and the US, dismantled the regulations that had reined in the excesses of the financial service industry since the 1940s.

The financial industry began to grow unchecked, and as it expanded, investors sought safe assets that were highly liquid and provided good returns: the debt of developed countries.

This allowed governments to plug their deficits and spend more, all without raising taxes.

But the shift to financing the state through debt came at a cost. Since WW II, taxes on labor and capital had provided the foundation of postwar state spending. But, as governments began to rely more on debt, the tax-based states of the postwar era became the debt-based states of today.

This transformation had profound political consequences. The increase in government debt has allowed capitalists to override the preferences of citizens:

Bond-market investors can now exercise an effective veto on policies they don’t like by demanding higher interest rates when they replace old debt with new debt.
Investors can use courts to override the ability of states to default on their debts, as happened recently in Argentina
They can shut down an entire country’s payment system if that country votes against the interests of creditors, as happened in Greece in 2015.
Citizens United dictates who runs for office in the US, and in many cases, who wins.

Now that the financial industry has become more powerful than the people, should we blindly follow capitalism’s meme as the only way forward?

Free-market rhetoric hides the dependence of corporate profits on conditions provided for, and guaranteed by, governments. For example:

Our financial institutions insist that they should be free of meddlesome regulations while they depend on continuing access to cheap credit from the Federal Reserve.
Our pharmaceutical firms have resisted any government limits on their price-setting ability at the same time that they rely on government grants of monopolies through our patent system.

To use a sporting metaphor, it’s as if the best football team purchased not only the best coaches and facilities, but also bought the referees and the journalists as well. Those responsible for judging economic competition have lost all authority, which leaves the dream of ‘meritocracy’ or a ‘level playing field’ in tatters.

In our country, the divide between the business oligarchs, the political class and “the people” increasingly appears unbridgeable, marked by hostility and deep distrust. When people are told for a generation that government mustn’t make decisions that interfere with free markets, it is inevitable that people will lose faith in democratic governance, and in government’s capacity to help them solve their problems.

Capitalism in its current form no longer works for the people. We have seen a reaction in the start of movements by Occupy, by Bernie, and by others in Europe.

Remember that the greatest prosperity in living memory in the US came during the brief social democratic moment, in the 1950s and 1960s, when the constraints on business were the greatest.

More democracy and more economic justice are the necessary foundations for the path to a more prosperous, and sustainable economy.

A reformed capitalism must be a part of what emerges from that fight.