Last week, it seemed as if every cartoonist wanted to draw something about the Baltimore Key Bridge, or about Trumpâs bibles. Hereâs the best of the lot.
Bridge collision brought some elephants to reality:
Some saw it as a metaphor:
Trump reduced to schilling:
It could have been worse:
The Biden Impeachment failed:
Suck it up, buttercup:
Capitalism is no longer ready for prime time:
The Daily Escape:
Ceanothus, Black Mountain Preserve, San Diego, CA – March 2024 photo by Michelle Duong
Everyone knows about the cargo ship MV Dali that struck the Francis Scott Key Bridge (FSK) in Baltimore, causing it to completely collapse into the frigid Patapsco River. Currently, we know that six people are presumed dead, while two people were recovered alive. Letâs talk about the ways capitalism figures into the FSK bridge collapse.
âThe America Pilotâs Association provided details on the ship that crashed into the Baltimore bridge. The association says the ship lost full power, with no lights, no electronics and no engine propulsion, making it essentially a âdead shipâ within 20 to 30 seconds. The group says lights came back on in the ship thanks to an emergency generator, but that doesnât give the engine power. Video shows lights flicker back on briefly before the vessel hits the bridge.â
There are backup generators on ships because power can fail at critical times. In the case of the MV Dali, it has one propeller driven by one engine. The fuel and steering systems of the ship require electricity to function.It is believed that the Dali had 3-4 backup generators, but did they function as designed?
Wrongo knows from his experience with backup generators in the commercial world that they donât start up instantaneously. It might take them 30-60 seconds to start and longer to come up to full power to restore control of the ship. Without electric power, both the navigation and the steering systems would have been disabled in the critical minutes prior to the collision. No one on the ground in the Port of Baltimore performs testing to see if the MV Daliâs back-up generators are working properly. Why? Because it would be very costly to do.
There are several other factors unique to shipping that will make it difficult for Maryland or US taxpayers to collect enough to cover all of Marylandâs costs from the ownership of the MV Dali. From VOX:
âThe Dali was a Singapore-flagged ship, with an all Indian-nationality crew, operated by the Danish company Maersk….â
This organization structure, dividing ownership and operations, is a classic method used in shipping to limit liability when bad things happen, like when your vessel knocks down a bridge in a foreign country.
Cargo ships have become exponentially bigger while US bridges have been aging. When the Francis Scott Key Bridge was being built between 1972 and 1977 the average container ship carried between 500-800 twenty-foot shipping containers (called TEUs). But they ballooned to an average of 4,000 TEUs by 1985. The MV Dali, manufactured in 2015, had a capacity of 10,000 TEUs. According to bridge experts, no bridge pylon could have survived being hit by a vessel of this size.
This continuous upsizing has pitted US ports against each other in order to attract bigger vessels. The 2016 expansion of the Panama Canal caused ports along the US East Coast to dredge their harbors and build higher bridges to accommodate the larger ships now traveling through the Canal.
Back in 2015, Wrongo wrote about the upsizing of US bridges:
âConsider NJ, where, at high tide, 151 feet of empty air lies between the waters of the Kill Van Kull and the deck of the Bayonne Bridge. The Kill, a narrow tidal strait between Staten Island, NY and Bayonne, NJ, is one of the busiest shipping channels in the country. When the Bayonne Bridge opened in 1931,151 feet easily accommodated the worldâs largest vessels. But the new ships wonât fit, so, the roadway will be elevated…to 215 feet, more than enough to let these big ships pass underneath. The five-year Bayonne Bridge project costs $1.3 billion.â
This imposed costs on NJ taxpayers beyond what it should have, because then-Gov. Christie (R), signed a bill that ended the collection of any cargo facility charge by the Port Authority of New York and New Jersey. Christie was attempting to offer something to ship owners and operators that would make Bayonne more competitive vs other US ports.
So the taxpayers of NY & NJ not only paid for allowing the bigger Panamax ships under the Bayonne Bridge, but no ocean-going vessel had ANY stake in paying the costs of that bridge expansion. Instead, NJ turned to a âPublic-Private Partnershipâ to finance this project.
The Port of Baltimore also expanded to accommodate supersized ships in 2013, but it didnât need to raise the height of the FSK bridge. Since then, it has grown into the 9th-busiest port for receiving foreign cargo. The Port of Baltimore is the largest in the US for roll-on/roll-off (Ro-Ro) ships carrying trucks and trailers.
Meanwhile, the FSK bridge has remained largely unchanged since the 1970s. From 1960 to 2015, there were 35 major bridge collapses worldwide due to ship or barge collisions, 18 of which happened in the US.
There are now about thirty ships stranded in the Harbor. They will stay there until the damaged bridge remains are removed from the ship channel. That includes container ships, Ro-Ro ships, and bulk carriers. There are also three US Naval ships stranded there. The collapse is almost sure to create a logistical nightmare for months, if not years along the East Coast. The accident will also snarl cargo and commuter traffic.
And who will pay the costs to repair the bridge, or compensate the people who died, or cover the lost revenues for the many years it will take to rebuild the bridge? Or the tax receipts that Baltimore wonât be in a position to charge while the port is closed?
According to Business Insider, the majority of the financial fallout is likely to lay primarily with the insurance industry:
âIndustry experts told the FT that insurers could pay out losses for bridge damage, port disruption, and any loss of life. The collapse could drive “one of the largest claims ever to hit the marine (re)insurance market…”
The Dali is covered by the Britannia Steam Ship Insurance Association Ltd., known as Britannia P&I Club, according to S&P Global Market Intelligence. Britannia is one of 12 mutual insurers included in the International Group of P&I Clubs, which maintains more than $3 billion of reinsurance cover. Although the shipâs owner and itâs operator have insurance, their policies will in no way cover the all-in costs of this event.
Some are saying that this is a âblack Swanâ event. But this is almost certainly the result of operational pressure for more containers, faster turnaround, and more profit. The ship owners have traded reliability for economy. Unless we force the container trade to transition to more reliable and more costly vessels, weâll continue to see events like this every few years.
Thatâs the price of cheap goods in our stores and of the profits it generates for ship owners.
Once again, the losses will be socialized, and the US taxpayer will be gouged again, all in service to our capitalist overlords who will laugh all the way to the bank. Wrongo certainly isnât a Marxist, but Marx was absolutely right when he said that capitalism contained the seeds of its own destruction.
Why is it that no legislator is willing to consider the costs of externalities (a cost that is caused by one party but financially incurred by another) to its taxpayers when they approve partnering with big industry?
Are the tax revenues in Baltimore going to be enough to cover the costs to all US taxpayers when the US government rebuilds the FSK bridge? They will not. You know theyâll be minuscule compared to the real costs.
And the big shipping players will sail off towards the horizon with hardly a financial scratch.
The Daily Escape:
Grand Canyon NP at golden hour – photo by indieaz
Viatris is a new pharmaceutical company formed by the merger of Mylan and Upjohn late last year. Their strategy for improving profits post-merger was as is usual, to restructure and cut $1 billion in costs. One victim of the cost-cutting is the Viatris plant in Morgantown, West Virginia. The company announced the plant would close last December.
The Morgantown plant has been in operation since 1965. It employs between 1,500 and 2,000, whose jobs will be offshored to India and Australia. These are well-paying jobs in one of Americaâs poorer states. The bulk of the layoffs will occur on July 31, when 1,246 people will be let go, including 764 union workers and 482 nonunion staff. Complete closure will happen by March 2022.
Mylan reported $3.9 billion in profits in 2019. Naturally, local union president Joe Gouzd had harsh words for Viatris:
âThis is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?â
The local union represents about 900 workers. Gouzd said:
â…weâre going to rid ourselves of 2,000 high-paying jobs in north central West Virginia, taking out $150m to $200m out of the local economy…â
The West Virginia legislature passed a bill calling on Governor Jim Justice and Joe Biden to save the jobs. Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful.
Senators Elizabeth Warren and Marco Rubio introduced the Pharmaceutical Supply Chain Review Act to study Americaâs over-reliance on foreign countries in pharmaceutical industry, but neither West Virginia Senator has sponsored the bill.
The Guardian reports that Republican Senator Shelley Moore Capito has ignored pleas to work with Biden officials to save the plant. Democrat Joe Manchin, whose daughter Heather Bresch served as Mylanâs chief executive until she retired in 2020, didnât fully ignore their requests to get involved; he held a Zoom meeting in December that might as well have focused on âthoughts and prayers.â
Isnât it curious that the stateâs two Senators aren’t trying hard to keep jobs in their state?
You probably hadnât heard that Bresch collected $37.6 million when she stepped down from Mylan. You also missed that under her leadership, Mylan recently undertook whatâs called a âtax inversionâ, changing its headquarters for tax purposes from Pittsburgh, PA to the Netherlands, reaping big tax breaks. So, less tax revenue for America.
Earlier, Mylan disclosed that it is in an ongoing lawsuit by the Public Employees Retirement System of Mississippi that alleges misconduct by the company. The suit alleges âmisrepresentation and concealment of violations of FDA regulations governing pharmaceutical product quality and safety.” In 2016 and in 2018, the FDA found documentation, record-keeping, quality-control and cleaning issues. The plant was shut down temporarily after the 2018 findings. It then reduced production volume by about two thirds, and “right sized” plant staff.
But we initially heard about Ms. Bresch during Mylanâs EpiPen pricing controversy. They had been hiking prices for years on their epinephrine injector to the point where many people could no longer pay for it. Along with the EpiPen fiasco, Mylan paid $465 million to the federal government to settle claims it underpaid Medicaid rebates.
Understandably, the town and the state are looking for ways to head off the layoffs. Last week, members of the union and others rallied outside the state capitol in Charleston to urge Republican governor Jim Justice to help save the facility. According to the union, Justice said his administration was trying to find an alternative to closure, including holding talks with two companies that have expressed an interest in buying the plant.
But Justice said that Viatris was not cooperating:
âWeâve talked with Viatris, and we continue to struggle with them….Theyâre difficult to work with. The least they could do …is be cooperative.â
So, Viatris isnât the best of corporate citizens. That doesnât make them different from most multinationals. That means political pressure is the only leverage that will keep these jobs in America.
Yet, when you see these two âbipartisanâ Senators not lift a finger to help the soon-to-be unemployed citizens of their own state, you have to ask: Why havenât they done more?
We had a very consequential week, followed by a consequential weekend. Sunday was both the Super Bowl and Groundhog Day. It was also a very rare eight-digit palindrome when written as 02/02/2020, the first since 11/11/1111.
We had the âdeal of the centuryâ that isnât, and the Chiefs won the Super Bowl. But the Constitution died.
And so did Kobe Bryant and his daughter, along with seven others. It doesnât take a basketball fan to feel shocked and saddened when a Dad and his 13-year old daughter are suddenly killed. Of course we know about Kobe Bryant, a basketball genius who, in his retirement, helped young people and championed womenâs basketball. His life story was complicated, but if you think that people can work hard and redeem themselves, Kobe Bryant is your prime example:
The movie thatâs always on repeat:
Peace? Or pieces?
Brexit happened, the UK is now going it alone:
Failing to call witnesses shows that the GOPâs loyalties have shifted:
Beauty is in the eye of the beholder:
Brown paper bags have replaced the MAGA hats for GOP Senators:
With Iowa voting tomorrow, itâs important to know your enemies:
The Daily Escape:
Mount Robson & Berg Glacier, BC, Canada – June 2019 photo by DrTand the women
New York Magazineâs Eric Levitz writes: (brackets and emphasis by Wrongo)
â…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 Peopleâs Policy Project took the Fedâs data and calculated how much the respective net worth of Americaâs top one percent and its bottom 50 percent has changed since 1989.
He found that Americaâs 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.â
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:
âSo, is an economic system that distributes its benefits in this manner consistent with Americansâ common-sense views of economic justice? If not, would incremental changes be sufficient to bring it into alignment with the median Americanâs values? Or would more sweeping measures be required?â
In a sense, Democrats are testing whether advocating for changing Capitalism is an argument that voters will accept in 2020. More from Levitz:
 âSome Democratic presidential candidates say that Americaâs 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.â
Essentially, the question is âwhoâs the extremist?â in the Democratic Party. This conflation of “extreme” or “radical” with “badâ 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 itâs much too big a change to even discuss.
Respectable talking heads like Judy Woodruff will ask: âWill 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 shouldnât 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. Theyâre 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 âextremeâ policies only if our baseline is what the average Congress critterâs economic agenda looks like. Itâs not clear why thatâs 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? Â Our assessment (and support) of these dissentersâ 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 isnât 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 âradicalâ in American politics is anybody who argues that the American economy isnât 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 âalready greatâ 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.
The Daily Escape:
Steps leading to Franciscan Sanctuary, La Verna, Tuscany, Italy – photo by Guiseppe Pepperoni
Over the weekend, Wrongo and Ms. Right, along with a few friends, saw âHadestownâ on Broadway. It is a theatrical home run that has received 14 Tony nominations. Describing the plot is difficult. Most reviews focus on the mythology at the heart of the play. The story is a re-imagination of Orpheus and Eurydice set in contemporary time.
The mythological story is that Orpheus is the worldâs greatest poet, and Eurydice is his bride. It is intertwined with the love story of King Hades and his wife Persephone. During the play, we take an epic journey to the underworld and back.
In the myth, Eurydice is killed by a snake bite, and the mourning Orpheus travels to the underworld to beg Hades to return his wife to life. To make his case, Orpheus sings a song so beautiful that Persephone begs Hades to let Eurydice go.
That is loosely followed in the play, where these mythic characters are pawns in a central metaphor of capitalism as death. That seems so current in todayâs predatory capitalism, and yet, the play is not a polemic. In the play, Eurydice isnât bitten by a snake. Instead, sheâs lured into Hadestown by Hadesâs promise of work and food.
Hadestown is a factory town, and Hades is both the god of death and a merciless taskmaster, forcing his subjects to build an endless wall around Hadestown. In his April 15th âMonday Wake Up Callâ, Wrongo used Hadesâs call and response song, âWhy We Build the Wallâ. The song seems right for 2019 because of our Orange Overlord, but in reality it was written in 2010.
Wrongo posts a sample lyric for you:
Who do we call the enemy? The enemy is poverty, And the wall keeps out the enemy, And we build the wall to keep us free. Thatâs why we build the wall;
We build the wall to keep us free.
The Wall makes us free. Arbiet macht frei. The few Trumpets in the audience demonstratively did not applaud the song, while the vast majority cheered. Partisanship is an always-on emotion.
Some call-outs to cast members: Patrick Page and Amber Gray are standouts, he as Hades, and she as Persephone. The legendary AndrĂ© De Shields, plays Hermes. He’s the showâs narrator. His cool swagger pulls the audience into the play from the opening curtain.
See it if you can.
During our pre-theater meal, we talked about the Democratic presidential candidates, a list that seems destined to continue growing. Our friends at dinner follow politics quite closely, and none are fully happy with any of the Democrats on offer.
Most defaulted to âelectabilityâ, espousing the view that it is âDo-or-Dieâ time in America, that we canât take four more years of what we are experiencing now. That leads them to accept Joe Bidenâs candidacy. Wrongo has a different view, as captured in this Vanity Fair article: (emphasis by Wrongo)
âSince Vietnam, every time a Democrat has won the presidency, itâs because Democrats voted with their hearts in a primary and closed ranks around the candidate who inspired them, promising an obvious break from the past and an inspiring vision that blossomed in the general election. Jimmy Carter. Bill Clinton. Barack Obama. All were young outsiders who tethered their message to the culture of the time. When Democrats have picked nominees cautiously and strategicallyâfalling in lineâthe results have been devastating, as Michael Dukakis, Al Gore, John Kerry and Hillary Clinton made plain.â
So, what will happen this time? Those who believe in Bidenâs electability should remember that there are 45 million Americans with student loans: 22% of those loans are in default, and 99% of them fail to qualify for loan forgiveness.
It was Bidenâs decision to make student loans not dischargeable in bankruptcy. Thatâs going to be one large group of people who, when they learn who is behind their plight, probably will vote against him.
Biden has been on the job in Washington for around 50 years. Suddenly, according to Bloomberg, he wants to âFix Thingsâ?
Wake up Democrats! Find a candidate who inspires YOU. Work for that candidate in the primaries. Donât buy the argument âbut he/she isnât electableâ until that is proven by the results of the primaries.
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 âprogressive capitalismâ: (emphasis by Wrongo)
âThere 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.â
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 isnât inequality. Weâve survived a permanent underclass, but until recently, it has been a statistical minority. But, we wonât survive todayâs continuing erosion of the middle class. Stieglitz says:
âWe 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.â
He calls for:
â…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.â
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.
Letâs spend a minute on the difference between positive and negative rights.
In the simplest terms, negative rights (most of the Constitutionâs 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 thereâs 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 âsocialismâ, 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, todayâs 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.
Letâs 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, letâs create a stiff Alternative Minimum Tax (AMT) for corporations.
Just like the AMT that Wrongo has had to pay for lo, these many years.
The Daily Escape:
Aiguille du Midi – 2019 photo by Berenicids. The Aiguille du Midi (12,605Â 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 Wrongoâs favorite sport, the college basketball season, happens on Monday. Tonight is the Final Four, the Wrong familyâs equivalent of the Super Bowl, with family gathering for food and drink around the TV.
But, that doesnât start until the early evening, so weâve 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:
âIn 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.â
Axios goes on to quote Aspenâs 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:
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:
âThe reason weâre not excited by it is because we live in a society where if you donât have a job, you are left to die. And that is, at its core, our problem.â
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 mastersâ 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 isnât 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.
Itâs time for a new Capitalism.
But youâve 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. Letâs brew up a cup of New Hampshireâs Flight Coffeeâs single origin Tanzania Tarime AB, ($17/12oz.), with its floral fragrance and intensely sweet flavor. Now settle into your favorite chair and listen to âSpring Morningâ by Frederick Delius, played by the Royal Scottish National Orchestra and conducted by David Lloyd Jones. âSpring Morningâ is the third of ‘Three Small Tone Poems’ by Delius:
Those who read the Wrongologist in email can view the video here.
The Daily Escape:
Eagle pair on nest, Litchfield County CT – 2015 photo by JH Clery
With the college admissions fraud, wealthy Americans are now bribing people to get their kids into college. Itâs just another way that the wealthy are rigging the game. Robert Reich enumerates:
Weâve become a nation where any number of greased poles stop your ascent. People with wealth seem unwilling to compete fairly. It turns out that executives from Pimco, Hercules Capital, and the co-chairman of the law firm, Willkie Farr & Gallagher, were named in the buy your way into Yale scam, along with a few Hollywood types.
Itâs become very difficult to differentiate between applicants for the prestige colleges. Good grades and test scores and life experiences are no longer enough to help a kid to stand out the way they might have a few years ago. So some are bribing their way to the head of the line.
Itâs just another cost of doing business in America. The truly wealthy can just pay for a new building and see their children get into the best universities. But, the merely rich canât do that. OTOH, they canât be expected to simply earn their way in.
As for the kids: They all knew whether what was on their applications was true or not. They had to be in on the scam. This is what passes for the charmed life of the rich in the USA: Kids knowingly cheat right along with their cheating, entitled parents, because they believe they deserve to go to Georgetown.
Robert Reich is correct, this is the rot that concentration of wealth has brought to our country.
Randall Lane has a long read at Forbes about âReimagining Capitalismâ in which he summarizes his one-on-one discussions with two dozen billionaires, including face-to-face meetings with the three richest people in the world, Bill Gates, Jeff Bezos, and Warren Buffett, about capitalismâs future. Lane says:
âVirtually every billionaire I spoke with acknowledged that higher taxes on the billionaire set are inevitable; most even saw them as beneficial, if correctly applied. According to Gates, Buffett, Khosla and others, the correct way to levy taxes on the superrich is….Either an estate tax without the loopholes that currently render it useless or a higher capital gains tax applied only on extreme fortunes…â
He quotes Buffett about the disparity of earnings between the top 1% and the bottom 50%:
âThe market system as it gets more specialized pushes more money to the top….The natural function of a more specialized market economy is to divert more and more of the rewards to the top. Thatâs something I donât think weâve fully addressed in this country.â
Lane points out that Bill and Melinda Gates even went on Steven Colbert and called for higher taxes on the super-rich.
Younger Americans know that the deck is stacked. That may be in part why some kids play along with their parents and cheat to get into Harvard.
An often-cited 2016 Harvard University survey found that 51% of American youth aged 18 to 29 no longer support capitalism. Only 42% said they back it, while just 19% were willing to call themselves âcapitalists.â A follow-up focus group study concluded that most felt that:
âCapitalism was unfair and left people out despite their hard work.â
Gene Sperling, Obamaâs Director of the National Economic Council, has an interesting take on redefining our overall economic goal. He says we should strive for âEconomic Dignityâ. His conclusion is that the Fed and the Congress should implement a full employment monetary and fiscal policy that fosters tight labor markets.
Sperling says that would be a triple win for economic dignity, because it would lead to higher wages, and it would give companies greater incentive to provide advanced training to their employees. Meanwhile, high labor demand gives more workers some âtake this job and shove itâ leverage that they lack today.
Taken together, it would allow people to care for and provide opportunity to their families, something that is at the core of Americaâs beliefs.
Young Americans know that capitalism in its current form creates inequality, oppression, and exploitation. It could be made to work for all if it were more responsive to societyâs needs, and yes, if it provided economic dignity for all.
Those who have been rewarded by capitalism shouldnât be able to use their bounty to make the lives of others worse than they are. This isnât just about the Koch brothers. Itâs also about the merely wealthy who scam the college admissions system to get their kids into better schools.
We should be showing the young that thereâs a better form of capitalism.
The Daily Escape:
St. Augustine Beach, FL – 2015 photo by Wrongo
(Wrongo and Ms. Right leave today for Florida and their annual week-long visit with Wrongoâs sisters. Weâre leaving 19° for 70°. Blogging will be uneven, unless Trump wins his wrestling match with Kim, or India and Pakistan declare war.)
âThere are lots of people talking about how they much disagree with Alexandria Ocasio-Cortez, how silly she is, how dumb and impossible and irresponsible her Green New Deal is, but I think theyâre missing a point or two. First of all: whatâs the alternative? Who would you trade her for? Would you rather things stay the same?”
Wrongo thinks that Alexandria Ocasio-Cortez seems savvy beyond her years. The septuagenarians in Congress canât present themselves as she does, because sheâs 29 years old, born in 1989. Sheâs in the first generation to grow up with a ubiquitous internet. For her elders, like Wrongo, thatâs an acquired skill.
Wrongo has been thinking a lot about capitalism reform. Changing capitalism to take advantage of lessons learned in the past 50 years should be seen as a good thing, not the first step on the path to socialism as Republicans would have everyone believe.
And the Green New Deal is more New Deal than green. It emphasizes reforming our current economic system by deficit financing a new jobs program aimed at improving our infrastructure. The new infrastructure should create clean power, zero emissions vehicles, and high quality jobs that pay prevailing wages. It would be financed by a new tax structure that adds revenue while tilting the tax burden away from individuals to corporations and the uber-wealthy.
Wrongo isnât a fan of Ocasio saying sheâs a socialist. Thatâs most likely a bridge too far for America in 2020. Itâs also unnecessary. Calling what she, Bernie, Elizabeth Warren and a few others have as policy goals are, for the most part, reform of capitalism.
Of course, cynical politicians can say that the Green New Deal is not realistic. That takes you back to establishment Democrats like Hillary, Pelosi, Biden, Booker, Harris and a few more we canât hear. Thatâs fine if you want young Americans to invade a few more foreign nations, or you prefer growing income inequality for people here at home. Otherwise, they would all be terrible political leaders, particularly if you believe those policies must stop.
Turning to the âGreenâ part of the Green New Deal, Benjamin Studebaker offers a great perspective: (emphasis by Wrongo)
â…at this point, we have integrated the global economy so thoroughly that there may now be many irreducibly global problems that cannot be solved at the national level, even with an American commitment….We donât have the global political institutions we need to handle problems like this, and every time we try to create them voters balk, accusing us of trying to destroy their cultures and deprive them of âsovereigntyâ and ânational self-determinationâ, as if there were any meaningful sense in which they still had these things to start with.â
His point is that the US now produces only 15% of total global emissions. More from Studebaker:
“The EU commands a further 10%, while other rich states (such as Japan, Australia, and so on) add another 8%. This means that the rich states only control about a third of total emissions. China controls nearly another third (about 30%), and the rest comes from the remaining developing countries, with India and Russia making the largest contributions (7% and 5%, respectively) of that bunch.”
These developing countries are continuing to increase their emissions. This means that reductions from rich states are cancelled out by the growing emissions of developing countries.
Studebaker concludes that itâs beyond the ability of the US to go green unilaterally, and if we did, it wouldnât bend the arc of global warming sufficiently to make a meaningful difference.
What we can do is provide an example for the world. We can do the right thing, precisely because it is the right thing to do. And along the way, reforming capitalism will quickly improve the lives of average Americans.
We can form a coalition around capitalism reform that includes most people in the bottom 90% of the economic pyramid. It can include Democrats, Independents and a few Republicans, most of whom would never be part of Bernieâs democratic socialism, or AOCâs Green New Deal.
There will be some version of the Green New Deal that starts in the near future. Letâs call it reform of capitalism, and get started on it today.