The Wrongologist

Geopolitics, Power and Political Economy

Monday Wake Up Call – May 18, 2020

The Daily Escape:

Colorado River, from South Kaibab trail, Grand Canyon NP, AZ  – photo by DJ Memering. The bridge is called the Black Suspension Bridge. It is 5,260 ft below the canyon rim.

The CARES Act was sold as emergency funding for individuals and small businesses. In all, Congress has authorized $3.3 trillion in coronavirus relief in four separate acts over the last two months. The stated intent of those bills was to protect the American economy from long-term harm caused by the overall impact of the virus.

Alas, Congress also took care of their true constituents, Big Oil and other fossil fuel companies. Those companies got CARES Act tax breaks. The subsidies were supposed to help bail out small businesses pounded by the pandemic, but at least $1.9 billion of it was sent to fossil fuel companies and their executives.

Bloomberg News reports:

“$1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms, and contractors”

Bloomberg used the example of Diamond Offshore Drilling Inc. who manipulated the bailout: (emphasis by Wrongo)

“As it headed toward bankruptcy, Diamond Offshore Drilling Inc. took advantage of a little-noticed provision in the stimulus bill Congress passed in March to get a $9.7 million tax refund. Then, it asked a bankruptcy judge to authorize the same amount as bonuses to nine executives.”

But, Diamond’s refund wasn’t all. Some went to their larger competitors. More from Bloomberg:

“…$55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp.”

In addition, Kevin Crowley reports that Marathon Oil got $411m, Occidental $195m, and Valero $110m.

Hats off to all of our Senators, Congresscritters and the Trump administration! They all continue pursuing a pro-fossil fuel agenda, even as the economic disaster of the pandemic unfolds. Bernie Sanders tweeted:

“Good thing President Trump is looking out for the real victims of the coronavirus: fossil fuel executives,”

But, Bernie apparently voted for the bill, which passed the Senate in a unanimous vote. Hypocrisy much, Bernie?

These loopholes in the Act were deliberately written in so that corporations could feed at the trough along with small businesses, and we the people. Moreover, the initial bill was written in the House, although presumably in consultation with Trump and the Republicans. So, you can view this as either the cost of doing business for Democrats, or as just another day at the office listening to the lobbyists. Subsidy legislation has been a bipartisan objective.

Its always been this way. Here’s a cartoon from 1920 that could be drawn today:

Let’s remember that a big issue was the requirement for oversight, particularly after Trump said he wasn’t interested in having any. A compromise was struck so that an oversight commission could be empaneled to keep track of how the money was spent.

Today, it remains without a leader. Four of the five members of the Congressional Oversight Commission have been appointed, but Speaker Nancy Pelosi, (D-CA) and Senate Majority Leader Mitch McConnell, (R-KY) have not agreed on a chair.

While the current members of the panel can perform some oversight, without a leader, it can’t hire staff or set up office space. In addition, the four members have not met as a group since the economic rescue law was passed. The PBS NewsHour quotes John Coates, a professor of law and economics at Harvard Law School:

“If the commission is not functioning — which it is not — then there is no oversight on a huge part of the economic rescue law…”

We seem to be able to bail out the rich every few decades, and we always seem to do it on the backs of the poor. It will probably happen again in another 10 years or so. Between these bailouts, politicians and pundits appear on all of the news shows, and write very serious articles proclaiming the need to resist socialism and to preserve “the free market” for the sake of “wealth creation and innovation”.

Time to wake up America! This great con has been going on for all of Wrongo’s lifetime and by looking at the cartoon above, for a few lifetimes before. Yet voters seem to be oblivious to this insidious form of corruption each and every time they go to the polls.

To help America wake up, let’s listen to Drive by Truckers, and their tune “Armageddon’s Back in Town” from their 2020 album, “The Unraveling

Sample Lyric:

There’ll be no healing
From the art of double-dealing
Armageddon’s back in town again

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


Are Donald Trump and Andrew Jackson Soul Mates?

President Trump has hung a portrait of Andrew Jackson in the oval office. Several of Trump’s spokespeople have heaped praise on Jackson, so Trump has picked Old Hickory as his populist role model.

Really? Did anyone on Trump’s staff even read the Cliffs Notes about Andrew Jackson? Here is the surface view:

A presidential candidate who strikes a wide range of observers, including leaders of his own party, as dangerously abrasive, arrogant, and racist. Partly because of those qualities, the candidate appeals stylistically to common-man voters who feel threatened by change, despite his being one of the super-rich himself. While this is Donald Trump in 2016, it also describes Andrew Jackson in the 1820s.

According to Benjamin Studebaker, when Jackson was elected, the accepted view was America needed strong economic growth to compete with Europe. Most thought the country needed to be industrialized quickly to turn us into an independent power. Tariffs should protect infant American industries from their established British competitors. Infrastructure investments should be directed towards transportation.

Jackson was uninterested in industrialization. He won the election because of slaveholding, agricultural states. The southern states had not industrialized, and they hated tariffs. Tariffs made British manufactured goods expensive, and made the price of Southern cotton uncompetitive. South Carolina attempted to nullify the tariffs, which led to tough talk and threats by Jackson to invade. But, ultimately, he signed legislation to reduce the South’s tariffs.

At the time, Jackson was praised for averting a violent confrontation, but his compromise left the issue of nullification unresolved. This eventually led to our Civil War.

The Second Bank of the United States (created by John Q. Adams, Jackson’s predecessor), was designed to stabilize prices and facilitate commerce. Jackson refused to renew the charter of the Second Bank of the US. Public monies were then directed to state banks, called “pet banks” since they were located in states that were Jackson’s core base of support. This deprived the industrial northeast of the investment funds it needed to grow.

The favored state banks began lending the new money feverishly, inflating land prices, and exposing the banks to undue risk.

Jackson blamed the resulting inflation on paper money, so he issued the “Specie Circular”, an executive order requiring all land purchases from the federal government to be made in gold and silver. This destroyed the value of the country’s paper currency, causing land prices to crash.

Executive orders can come back to bite you, Donald.

There is supreme irony that Jackson waged war on the Second Bank of United States, but he is on our $20 bill. Jackson found support for his economy policies among white men who felt threatened by changing from an agrarian to an industrial economy. But his war on the Bank, and the Democrats’ commitment to limited federal government helped propel the country into a four-year depression after the Panic of 1837.

Jackson created the spoils system. Thereafter, newly elected presidents would purge the civil service and hand out government jobs to friends, supporters, and even relatives. Jackson fired 10% of the federal workforce, replacing experienced hands with his buddies and lackeys. This practice continued for decades, ensuring that the federal government was consistently full of incompetents.

Jackson drained the swamp, and then recharged it with camp followers. Just like Trump!

Many on the right revere Jackson for the same reason they admire Donald Trump – he acts like a badass. Jackson killed people in duels. He spoke his mind. He may have rolled over on tariffs, but he used the word “treason” to describe South Carolina before he compromised. That made him seem tough.

The Right lets Jackson’s tough manner obscure the reality, that often he had little notion of the consequences of his actions. He sank the country’s economy for a decade, and handed its civil service over to generations of mismanagement.

A reappraisal of Jackson’s presidency forces us to look at the now-infamous policy of Indian Removal, whereby Jackson approved the confiscation of Native lands and then forcibly evicted them to the far West. He ignored John Marshall’s Supreme Court ruling that his Removal policy was unconstitutional.

He thought those in the abolitionist movement were traitors. His Postmaster General suppressed their mailings, and his party passed the Gag Rule in 1836 suppressing all antislavery petitions and discussion in Congress.

Trump’s new Gag Rule on Abortion limits the funding of global family planning providers if in any aspect of their work, they recommend, discuss, or even mention abortions to clients.

In most ways, it’s a fool’s errand to compare Trump to Andrew Jackson. Although there are gross similarities, Trump isn’t Jackson. Jackson was a military hero, but a failure at national policy. Trump has no heroic resume, and the jury is out on the success of his national policy.

For one thing, Trump confuses military school with military service.