By Lambert Strether of Corrente
Readers, thanks for the advice and the kind words on the flu. I seem to have fought it off, and only muscle aches and sleeplessness remain. Maybe I’ve got Legitimacy Crisis Stress Syndrome, or something. –lambert
“However, the approaching vote [on the Wilbur Ross confirmation] highlights the fact that the Senate Finance Committee still has not held a hearing on the nomination of Robert Lighthizer to be U.S. trade representative. Nor has Trump nominated anyone for a dozen trade positions that still need to be filled at the Commerce Department and USTR, not to mention the five vacancies on the U.S. Export-Import Bank’s board of directors, including the position of president. And don’t get us started about the international affairs vacancies at the Treasury, Agriculture and State departments” [Politico]. I don’t have any data on where the Trump administration is compared to the Obama administration in terms of filling positions. In 2009, there were many unfilled positions at Treasury, in the midst of the financial crisis! Readers?
“Recent press reports reveal that the Trump administration is exploring changes in how U.S. trade data is reported. Depending on what those changes are, that could be good news, because the current method for reporting bilateral trade flows significantly distorts trade balances to dramatically and deceptively reduce U.S. trade deficits. No doubt that defenders of status quo U.S. trade policies will gin up an attack on any efforts to fix these distortions” [Lori Wallach, Public Citizen]. No doubt, though we also need to know what the changes turn out to be, which we don’t, yet.
“Nearly 20 states, with both Republican and Democratic governors, have raised gas taxes or recalculated gas-tax formulas in recent years to generate funds for upgrades to aging roads and bridges. This legislative season, at least a dozen more are considering such measures, defying Republican Party barriers against tax increases amid frustration at decaying roads and depleted highway funds” [Wall Street Journal]. “Lawmakers in Washington are preparing to consider a plan to spend as much as $1 trillion on infrastructure, and some believe the state actions may make it politically easier for Congress to raise the federal fuels tax for the first time in 24 years.
“Nearly two-thirds of Americans, divided sharply along party lines, are worried that the United States will become engaged in a major war in the next four years” [NBC]. “While the vast majority of Democrats and Democratic-leaning Americans say they are worried (88 percent), Republicans and Republican-leaners are much less worried. About 4 in 10 say they are worried about a major war, while 60 percent say they are not worried.”
Our Famously Free Press
WaPo’s new tagline: “Democracy Dies in Darkness” [The Hill]. How true. WaPo’s news blackout undoubtedly hurt the Sanders campaign (though I’m not sure where to place the sixteen negatives stories in sixteen hours that WaPo ran on Sanders on the continuum of light to darkness.,..).
2016 Post Mortem
“DNC Chair Candidate Tom Perez’s Bank-Friendly Record Could Kneecap the Democratic Party” [Matt Stoller, The Intercept]. “Tom Perez, a leading candidate for the Democratic National Committee chairmanship, has an established record of not taking on the banks; both at the Department of Justice and the Department of Labor… Both Perez and Ellison support pro-labor policies. But Ellison shows that he also wants to oppose concentrated financial power. Perez represents the finance-friendly status quo that has relegated Democrats to minority status.” Ouch!
“Ellison holds edge in DNC race survey” [The Hill]. “Rep. Keith Ellison (Minn.) has the edge over former Labor secretary Tom Perez in The Hill’s new survey of DNC members. But while both men claim they are close to securing commitments from the majority of the 447 voting members, neither candidate is assured victory.”
“Howard Dean endorses South Bend Mayor Pete Buttigieg for DNC chair” [Politico].
even after using her as a prop for Clinton, Joy Ann Reid has never once spelled Dolores Huerta's name right pic.twitter.com/zlidpePWqx
— 🍍 Dollars Horton 🍍 (@crushingbort) February 21, 2017
Realignment and Legitimacy
“In California, supporters of the 2016 presidential contender packed the obscure party meetings that chose delegates to the state Democratic convention, with Sanders backers grabbing more than half the slots available. In Washington state, they swept to power at the Democratic state central committee, ousting a party chairman and installing one of their own in his place. Sanders acolytes have seized control of state parties in Hawaii and Nebraska and won posts throughout the party structure from coast to coast” [Wall Street Journal, “Bernie Sanders Loyalists Are Taking Over the Democratic Party One County Office at a Time”]. “Those gains come from an under-the-radar blitz in a debate over the future of the party following its bruising 2016 losses. While Democrats nationwide have put the focus on President Trump, the Sanders wing of the party has engaged in an intramural fight to remake the party in a more populist, liberal mold.” Good. The Democrats need a hostile takeover followed by a management purge.
“To resist the Trump presidency effectively, Democrats have to go beyond the defensive posture of relying exclusively or even primarily on protests, demonstrations and other forms of opposition. Instead, Democrats must seek to establish an independent and strong political base from which to articulate an alternative vision for the country. One way to do this would be for the governors of the blue states — California, New York, Oregon, Washington, Illinois, Connecticut and Colorado, to name some of the mightiest in numbers and weight — to form a very public council to articulate that alternative vision and publicly seek to make that vision a reality within their respective states: a vision that includes universal health care, strong support for labor unions, a humanitarian approach to immigrants and refugees, protection of the environment, among other morally necessary and compelling elements” [Truthout]. Could single payer, for those states, be achieved with an interstate compact?
“New Praetorianism” [The Baffler]. “There’s something in the air, coming from both parties, from commentators on all sides. Let’s call it the New Praetorianism: a pervasive militant nationalism, a combination of exceptionalist chauvinism and get-tough pretense that sees all American politics as fundamentally oriented toward security, conflict, and, ultimately, war. In part, the New Praetorianism draws on our evergreen militarism, the ways in which, regardless of who’s in the White House, America is literally invested in fueling global arms races and stoking international conflicts. But now, in the chaos following the electoral upset, and in the even greater chaos that every day of this chaotic new administration seems to bring, the drumbeats are audible like never before.”
“There seems to be a fascination with numbers and/or mobilizing crowds on the left today. Along with that is the concept of the ‘mass’ party. I am going to argue against this approach. I’m going to argue we need to organize by affinity groups” [Counterpunch (ChiGal)]. “As far as I know, the first affinity groups were developed during the Spanish Revolution of the 1930s. Basically, they are small groups of people—say 12 to 14 members—that get together to create a long-term organization to engage in “political” work, however they define it. The key to the strength of an affinity group is that it is based on a small number of people who each gets to know well and, ultimately, who can trust each other totally.” This certainly worked for us landfill activists. “How to coordinate them? If you envision a center ‘hub,’ with an empowered representative from each affinity group in each agreed-upon geographical area, then you have the basic idea of a ‘spokes council.'” I’d like an example a little more recent than the Spanish Civil War.
MBA Mortgage Applications, week of February 17, 2017: “Purchase applications for home mortgages fell a seasonally adjusted 3 percent” [Econoday]. ” The second weekly decline in a row for purchase applications could be signalling that home buyers are not as immune to the impact of higher rates as previous data during the post-election rise in mortgage rates indicated.”
Existing Home Sales, Januray 2017: Jump, above consensus [Econoday]. “January’s rate is the very best of the economic cycle, since the end of the prior cycle in February 2007.”
Shipping: “Truck shipments improved in January. Trucking data, like rail, may saying the worst is over” [Econintersect].
Chemical Activity Barometer: “The Chemical Activity Barometer (CAB) posted a strong gain in February of 0.4 percent, following a similar 0.4 percent gain in January. This follows a steady 0.3 percent gain every month during the third quarter of 2016” [Econintersect]. Stuff is moving!
Architectural Billings Index, January 2017: “[D]ipped slightly into negative territory in January, after a very strong showing in December. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending” [The American Institute of Architects]. “‘This small decrease in activity, taking into consideration strong readings in project inquiries and new design contracts, isn’t exactly a cause for concern,’ said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. ‘The fundamentals of a sound nonresidential design and construction market persist.'”
Real Estate: “Data recently released by CBRE in the February edition of its “Americas Industrial & Logistics Trends Report” points to ongoing industrial real estate expansion throughout most parts of the Americas [Logistics Management]. “From a U.S. tenant and user perspective, CBRE observed that e-commerce, 3PL, and food &beverage tenants are still dominating user demand in most markets. And it also found that due to very low U.S. unemployment rates, occupiers are concerned about the availability and cost of labor, which is a major factor in location decisions. … [Said David Egan, CBRE head of industrial and logistics research in the Americas:] “E-commerce players have a preference for big box and high-cube facilities, but there definitely has been an increased preference for smaller, closer in last-mile-type facilities closer to the last touch of a package, which means being closer to the customer and also means a smaller building. We are seeing greater activity in that area. Big box is still the majority of demand, but it is not the massive majority like it was a couple of years ago. It is interesting to see how diverse the demand has become in terms of the specs and location of buildings. It is definitely not a big box, big market cycle anymore. It is a more diverse and widespread cycle.”
Commodities: “The U.S. supply chain for organic grains increasingly begins overseas, and that’s drawing complaints from American farmers. Supplies of organic corn and soybeans from countries including Turkey, Ukraine and Argentina are surging” [Wall Street Journal]. “U.S. organic-farming groups say the influx of foreign grain helped slash prices for organic corn by about 30% in 2016, but that the import business presents unfair competition. Some U.S. farmers contend overseas organic farms benefit from looser oversight, giving them an edge over domestic farms. They’re seeking better tracking of grains throughout a supply chain where agricultural goods often go through commodities traders, and certification back to the source of the imports.” GMO labelng would be nice…
Retail: “Results at Wal-Mart Stores Inc. and Home Depot Inc. suggest there’s still some life left in physical stores. Both big-box retailers report sales at their brick-and-mortar stores improved over the holiday season… even as investments in e-commerce helped expand online purchases. [Wal-Mart] reported a 16% gain in online sales last quarter—a slowdown from 21% growth the previous quarter” [Wall Street Journal]. “Home Depot was better, reporting overall 5.8% same-store sales growth and 19% online revenue expansion. Nearly half of Home Depot’s e-commerce sales were picked up at stores, an apparent validation of an ‘omnichannel’ strategy that also helped the home-improvement retailer’s net profit grow 18%. While many retailers struggle with the toll online deliveries take on profit margins, Home Depot seems to be getting the best of both worlds.”
Shipping: “For the first time in its 110-year history, UPS Inc. has begun regularly scheduled Saturday ground pick-ups and deliveries across its U.S. network” [DC Velocity], “The Saturday ground service is expected to cover half of the U.S. population by the end of 2017….. By providing ground pickups as well as local sorting services on Saturdays, omnichannel retailers can expand their “ship-from-store” models by arranging pickups over the weekend for delivery the following Monday…. UPS will use its existing resources to launch the service, according to [UPS spokesman Steve Gaut]. It plans to hire about 6,000 workers over the next couple of years to support the operation.”
The Bezzle: “A Reuters’ review of minutes from about two dozen state and municipal pension board meetings across the country from October to December showed Wells Fargo wealth management executives offering apologies, weighing fee cuts and emphasizing their own controls on staff hiring and vetting” [Reuters]. State and municipal pension boards? Oopsie…
The Bezzle: “We’ve said it before and we ‘ll say it again now; Kalanick’s purified strain of Silicon Valley capitalism is awe-inspiring in that it allows him to hyper-focus on the success of Uber above all things. By eschewing emotion, morality and political correctness in favor of automation research, capital infusions from Saudi Arabia and borderline illegal labor practices, Kalanick has built one of the greatest American business success stories since Apple” [DealBreaker]. Well, for some definition of success. Until the music stops, anyhow….
The Bezzle: “In September, the grocery delivery company Instacart announced a big change that pissed off many of its workers: The startup was replacing tips with a “service fee” that would be collected by the company instead of the people delivering orders” [Recode (BobW)]. “The startup’s explanation was that Instacart workers were too reliant on tips — around 80 percent of orders had one — and that the service fee would allow the startup to pay everyone a more reliable wage. Many workers looked at it another way: Instacart, in their eyes, saw all of the tips they were making and wanted to capture that revenue for itself. And when Instacart’s best workers realized the tip-to-service-fee transition would mean lower pay for them, they, in turn, freaked out. Instacart quickly relented and added the tipping feature back. But with a catch: The company made tipping much harder to find in the app.” Is there one of these “new economy” “start-ups” that actually has good relations with its workers? Uber, Blue Apron, and now Instacart are all horrible.
Banking: “the Bank of England have released an official policy document that concedes that much of Post-Keynesian endoegnous money theory is indeed correct” [Philip Pilkington, Econintersect]. “[T]hey have also released some Youtube clips with the authors, [which] are fascinating. The language the authors use — which contains references to ‘fiat money creation’ and money as IOUs — is straight out of either David Graeber’s book Debt: The First 5000 Years or MMT. If I were to guess I would say that it is some combination of both,”
Co-ops: “[T]he Veterinary Cooperative (TVC)] is the only veterinary co-op operating throughout the U.S. today. It has 1,500 members located in 49 states, as well as in Puerto Rico” [Truthout]. “[O]ur overall goal is to keep independents around and that’s what co-ops truly help do. We also want to have a 20 percent share of the industry as part of our co-op because we believe it will give us the strength to truly have power and make change and stick around for a long, long time.”
The Fed: “[Donald Broughton, managing director, chief market strategist and senior transportation analyst at Avondale Partners] repeated his long-held concern that the freight flow data does not justify an interest rate hike from the Federal Reserve at this time. A rate increase, which is widely expected next month at the next meeting of the rate-setting Federal Open Market Committee (FOMC), will hurt freight activity by continuing to drive up the dollar’s value, curtailing U.S. exports and slowing domestic production, Broughton said” [DC Velocity]. “Broughton acknowledged that the current national unemployment rate has fallen to the point where it historically generated labor cost inflation. However, the combination of a secular decline in the nation’s labor participation rate and a dramatic slowing in productivity gains means labor cost inflation is not the threat that it once was, he said.”
Today’s Fear & Greed Index: 80 Extreme Greed (previous close: 83, Extreme Greed) [CNN]. One week ago: 80 (Extreme Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Feb 22 at 11:48am. Too bad the stock market has nothing to do with the real economy, but at least the elites are happy!
“Legal Marijuana Market to Create Nearly 300,000 Jobs by 2020” [247 Wall Street]. “According to the 2017 Legal Marijuana Outlook published by New Frontier Data, the cannabis industry is expected to created 283,422 jobs by 2020. As many as 150,000 jobs have already been created in the industry, according to the 2016 Marijuana Business Factbook, so the implied growth rate is more than 17% compounded over the next four years.”
Our Famously Free Press
“This is why most Facebook-fail-fundamentalists so badly miss the point: that the company pays nothing for its content is not a weakness, it is a reflection of the fundamental reality that the supply of content (and increasingly goods) is infinite, and thus worthless; that the company is not essential to the distribution of products is not a measure of its economic importance, or lack thereof, but a reflection that distribution is no longer a differentiator. And last of all, the fact that communication is possible on other platforms is to ignore the fact that communication will always be easiest on Facebook, because they own the social graph. Combine that with the fact that controlling consumption is about controlling billions of individual consumers, all of whom will, all things being equal, choose the easy option, and you start to appreciate just how dominant Facebook is” [Stratechery]. So in other words, humans are infinitely creative, and therefore should be paid nothing for their labor. He’s talkin’ sense, Merle!
“The New York Times Claws Its Way Into the Future” [Wired]. By becoming Kos with better writers, apparently.
“Squid speak a unique, undeciphered language using their skin” [Quartz].
“Giant crack in Antarctic ice shelf spotlights advances in glaciology” [Nature]. “A massive crack in Antarctica’s fourth-biggest ice shelf has surged forward by at least 10 kilometres since early January. Scientists who have been monitoring the 175-kilometre rift in the Larsen C ice shelf say that it could reach the ocean within weeks or months, releasing an iceberg twice the size of Luxembourg into the Weddell Sea.”
“‘Man-made’ famine declared in South Sudan: United Nations” [Globe and Mail].
— Branko Milanovic (@BrankoMilan) February 20, 2017
“The many upsides of algorithms are accompanied by challenges”
— Pew Research Center (@pewresearch) February 22, 2017
“‘We the Workers’: New film depicts crackdown on China’s labour advocate” [Hong Kong Free Press].
News of the Wired
“Close the door, and the light stays on!”
even if this happened for just a few minutes i'd probably just rip them out and throw 'em away https://t.co/ngYkcREzru
— Internet of Shit (@internetofshit) February 16, 2017
“Isaac Asimov wrote almost 500 books in his lifetime—these are the six ways he did it” [Quartz]. Click-baity headline, but the methods apply to blogging, too.
“Kenneth Arrow, Nobel-Winning Economist Whose Influence Spanned Decades, Dies at 95” [New York Times].
Professor Arrow was widely hailed as a polymath, possessing prodigious knowledge of subjects far removed from economics. Eric Maskin, a Harvard economist and fellow Nobel winner, told of a good-natured conspiracy waged by junior faculty to get the better of Professor Arrow, even if artificially. They all agreed to study the breeding habits of gray whales — a suitably abstruse topic — and gathered at an appointed date at a place where Professor Arrow would be sure to visit.
When, as expected, he showed up, they were talking out loud about the theory by a marine biologist — last name, Turner — which purported to explain how gray whales found the same breeding spot year after year. As Professor Maskin recounted the story, “Ken was silent,” and his junior colleagues amused themselves that they had for once bested their formidable professor.
Well, not so fast.
Before leaving, Professor Arrow muttered, “But I thought that Turner’s theory was entirely discredited by Spencer, who showed that the hypothesized homing mechanism couldn’t possibly work.”
Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant:
As above, so below.
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