By Lambert Strether of Corrente
“[The cost of Obama’s stimulus package, the ARRA] was equal to 5.7 percent of the nation’s 2008 output. The New Deal, however, was about 40 percent of the nation’s 1929 output” [Econintersect]. “[T]he New Deal programs lasted much longer than ARRA programs. ‘Most of the Recovery Act spending took place over three years, but the New Deal spending stretched over seven years, Fishback and Kachanovskaya reported,’ [St Louis Fed Assistant Vice President and Economist William Dupor] wrote.”
“Senate Republicans are on track to finish writing their draft health care bill this evening, but have no plans to publicly release the bill, according to two senior Senate GOP aides” [Axios]. “‘We aren’t stupid,’ said one of the aides. One issue is that Senate Republicans plan to keep talking about it after the draft is done: ‘We are still in discussions about what will be in the final product so it is premature to release any draft absent further member conversations and consensus.'”
“While most of the political media is riveted by Trump’s endless Russia scandal, especially the explosive testimony of former FBI director James Comey, Senate Republicans are stealthily moving forward on dynamiting health care for poor Americans” [The Week]. “It’s unclear exactly what changes Republicans in the Senate have made, because the process — just as in the House — is proceeding under a cloud of total secrecy. There have been no hearings, no committee markups, and no possibility for amendment, and there will be none.” Of course, even a damp squib can explode. Not with a bang, but a whimper.
“EDITORIAL: Democrats becoming more intent on a government takeover of health care” [Las Vegas Review-Journal]. “Single payer” isn’t “socialized medicine” because the providers are still private. That said, there are still conservative talking points (generally adopted by liberals) to answer.
New Cold War
“National Democrats hoping to parlay the latest furor surrounding the Russia investigations into political victory in the Midwest may want to take a different tack” [NBC]. “The party has targeted Iowa’s 1st Congressional District, currently represented by Republican Rod Blum, as a battleground in the 2018 house race. But in the days leading up to former FBI Director James Comey’s blockbuster testimony before the Senate Intelligence Committee, residents made it clear that while news of the scandal billowing around President Donald Trump’s White House was impossible to avoid, it was far from their biggest concern. Most constituents interviewed by NBC News said that they need to see fire before they come to any conclusions about the Russia investigation and added that they are beginning to tune out news connected to it because of fatigue. Voters here are more concerned about issues like health care, veterans’ benefits, Planned Parenthood and infrastructure.”
“A Shining Comey on a Hill” [Foreign Policy]. Help me.
UPDATE “Virginia governor says Russia was helped by ‘treasonous’ Americans who gave ‘these people a roadmap'” [The Week]. Making it all the more remarkable that some kind soul in the intelligence community hasn’t risked their career to expose the traitors by coming forward with evidence (Reality Winner seems to be a kind soul, and she did risk her career, but the evidence part…) We really do need more than the word of a corrupt Clintonite — sorry for the redundancy — blowhard on this.
Saying [family blog] is a total sign of authenticity, as “foul-mouthed bloggers of the left” proved in 2003-2006:
Kirsten Gillibrand speaking at NYU just now on Trump: "Has he kept his promises? No. Fuck no."
— Hamilton Nolan (@hamiltonnolan) June 9, 2017
“Republicans are growing increasingly worried that they will lose the House of Representatives. The pervasive pessimism comes as there continues to be a dearth of legislative victories, and a toxic political environment that appears to be worsening. Of course, the midterm elections are nearly a year and a half away. But more than a dozen Republicans we’ve spoken to in the last few weeks say the prospect for political and legislative wins big and small is dimming. And as much as President Donald Trump has worked to woo over fellow Republicans with dinners at the White House and regular meetings with GOP leadership, it hasn’t had much of an impact on the overall state of play” [Politico]. “The rank and file has been frustrated with the House committees, which have not produced a drumbeat of legislation to tout as victories [Hi, Paul! [waves]]. And the party is deeply split on health-care reform, a tax overhaul and infrastructure spending. Passing a budget to set the groundwork for tax reform is still seen as far off. And the congressional schedule doesn’t leave a lot of time to kick things into high gear.”
GA-06: “Democratic strategists may hate the idea that they must win the June 20 special election in Georgia’s 6th District, but that doesn’t make it any less true” [Stuart Rothenberg, Inside Elections]. “[A]nother special election defeat, in an upscale district that did not embrace Donald Trump the way districts in Kansas and Montana did, would lead to another round of finger-pointing and self-flagellation by Democrats still consumed by their 2016 defeat.” Rothenberg says that like it’s a bad thing! And: “Given the closeness of the 2016 presidential race in this district and President Trump’s controversial behavior since then, Ossoff should have the upper hand in this special election. But the contest looks tight. Democrats need a win, while Republicans can’t afford a loss.”
2016 Post Mortem
“Everybody Needs to Stop Telling Hillary Clinton to Shut Up” [The American Prospect]. Attagirl, Neera! “ClintonEntire books have been written about the myriad ways the backlash against feminism was projected onto Clinton; if you want something more concise, I’d recommend this excellent segment from Samantha Bee, who notes that at every stage of her career Clinton was told to suppress her authentic self (cut your hair, take your husband’s name, apologize for speaking your mind, don’t make it seem like you have a strong role in his administration) until she was finally told that she wasn’t authentic enough to be elected president.” Surely “authentic self” assumes facts not in evidence?
Our Famously Free Press
“And then there’s the dirty little secret that every journalist knows — Trump stories drive ratings and clicks. The word ‘Trump’ in a headline vastly increases its chances of getting attention. (We’re all guilty; see above.)” [Margeret Sullivan, WaPo]. After shredding the notion of “balance,” Sullivan considers what the press should do. For example:
Do news sites give serious, sustained attention to policy issues as well as publishing innumerable hot takes about the personality-driven dust-up of the moment?
Harvard professor Thomas E. Patterson, the study’s author, sees trouble on that last point.
“The press is focusing on personality, not substance,” he said recently on public radio’s “On the Media” program. And that reflects “not a partisan bias but a journalistic bias,” the tendency to seek out conflict. (No mystery there — it’s more interesting.)
Trump stories are cheap to produce, because they generally don’t require reporting. Or editing, apparently:
— Jason Kint (@jason_kint) June 11, 2017
Realignment and Legitimacy
“My Lawyers Got Trump to Admit 30 Lies Under Oath” [Bloomberg]. Which is great, but does rather undercut using Trump’s words against him either in court or in impeachment; Trump’s bullshit would be the political equivalent of commercial puffery, not to be taken seriously.
No official stats today.
Credit: “The collapse continues. With total bank credit just over $12.5 trillion, it’s about $500 billion less than it would have been had last year’s loan growth continued. If this lower rate of loan growth continues, and isn’t replaced by some other channel that facilitates agents spending more than their incomes, the implication is that GDP could be a full 2% less than last year, as a substantial portion of bank lending finances purchases of real goods and services” [Mosler Economics]. “Looks like another rate hike coming from the Fed next week. Seems to me the Fed models (not mine) tell them rates work through the credit channels, the idea being a rate hike will slow down credit growth and thereby keep the economy from overheating, etc. But with credit growth as it is per the above charts, seems they are already decelerating. So what would be the point of a rate hike? To make credit growth decelerate even faster?”
Housing: “[M]any observers speculated that a slew of [foreclosed upon] “boomerang buyers” [with bad credit] was poised to return to the housing market. Those buyers have been slow to materialize…The housing market is a vital part of the U.S. economy. Increases in residential investment, including new homes and remodeling, generate a lot of jobs – not only in construction, but also in real estate, finance, and transportation, to name just a few industries. Moreover, rising home prices create a wealth effect that enables many households to fund consumption. Some economists and policymakers thus pointed to the sluggishness of the housing market after the recession as a factor contributing to slower-than-desired economic growth. If potential boomerang buyers remain on the sidelines and current trends in homeownership continue, it’s unlikely that housing activity will return to the levels of the boom years – or that it will make as large a contribution to GDP growth” [Federal Reserve Bank of Richmond]. “But to the extent the economy is in the process of adjusting to a sustainable level of housing activity, that may be an unavoidable cost.”
Shipping: “Maersk Line has introduced a new service for supply chain managers seeking to finance their global trade while optimizing carrier service….. Maersk Line is launching Trade Finance for its customers in the United States in five states – New York, Texas, Florida, New Jersey and Georgia – after several successful pilots in Singapore, India, Spain, the Netherlands” [Logistics Management]. “[T]he only collateral required is shipping with Maersk shipping companies.” Hmm.
The Fed: “The consensus is that the Fed will raise the Fed Funds Rate 25 bps following the FOMC meeting this coming week” [Calculated Risk].
The Fed: “The front page Fed-vs-the-financial markets article in today’s WSJ dives into what ought to be the most controversial reason the Fed is raising rates this year: They have decided stocks are overvalued and they can’t stand when long-term interest rates fall when they raise short rates. The paper notes the Goldman Sachs Financial Conditions Index, which has fallen considerably since December, suggesting markets have eased more than the Fed has tightened. The GSFCI is just exactly the sort of thing the Fed loves to watch while tightening because it allows FOMC participants to ignore the economic damage they are doing to real world economic activity” [FTN Financial, Across the Curve]. “The Fed will raise rates on Wednesday, and again in September and/or December, despite a sharp slowdown in credit activity because FOMC participants have a weak spot for indicators like the GSFCI and because they are all-too eager to believe in global savings gluts and the stupidity of rich investors as an alternative to the possibility the fed funds target they arbitrarily chose when they started tightening is too high.” Also too, 2018.
IT: “Video will make up 82 percent of all internet traffic in 2021, according to forecasts released today by Cisco, which sells networking equipment. Video accounted for 73 percent of traffic in 2016” [Recode]. Possibly Cisco talking its book. If true, corporations will have succeeded in turning the internet into network television. Yay.
The Bezzle: “Uber shakeup: Here’s everything that leaked about Eric Holder’s investigation this weekend” [Fast Company]. “Stay tuned for lots more Uber news this week.” And you will wait in vain for news that Uber has become profitable.
The Bezzle: “Uber CEO Kalanick likely to take leave, SVP Michael out -source” [Reuters, 12:49PM].
The Bezzle: “Top Uber exec Emil Michael departs the company as Kalanick’s fate remains in doubt” [WaPo, 1:24PM]. Noting the timestamps, it looks like the situation is still fluid.
The Bezzle: “A corruption scandal engulfing the world’s largest meatpacker Is triggering a backlash from business partners, including some whose codes of conduct extend to their suppliers. The holding company of Brazilian meat giant JBS SA agreed last month to pay a record-setting penalty after admitting to bribing politicians. Now a slew of Brazilian supermarkets and restaurants are backing away from JBS products… as public companies with ethics policies that also apply to suppliers weigh their options. Wal-Mart Stores Inc. and McDonald’s Corp. say they are monitoring the investigations closely, while French supermarket chain Carrefour SA seeks “clarifications” regarding JBS” [Wall Street Journal].
The Bezzle: “Manipulation in the VIX?” (PDF) [SSRN]. From the conclusion: “Overall, we find considerable interesting activity in index options around VIX settlement. The most natural explanation for these patterns appears to be attempted manipulation. However, we cannot rule out other possibilities.” I can’t assess this study. But it seems important. Readers?
The Bezzle: “Created to track expectations of volatility, the [VIX] indicator has spawned a giant trading ecosystem that could magnify losses when turbulence hits” [Wall Street Journal].’
Political Risk: “The recent surge in populist politics, [Goldman Sachs Asset Management CIO Jonathan Beinner] said, has widened the range of potential market outcomes, both positive and negative. Giant tax cuts remain possible (if vanishingly so). So does trade war or just, like, war war. But the VIX reflects the opposite: a smaller set of potential market-shaking outcomes. Beinner didn’t offer an explanation for the disconnect. Still, it’s always good to learn that it’s not you but everyone else who’s nuts” [DealBreaker].
Political Risk: “Cost of ‘Black Swan’ bet on falling markets hits pre-crisis low” [Financial Times]. “Months of low market volatility has forced down the price of options allowing hedge funds to place bets that would make them 25 times on their money if the S&P 500 index fell by 7 per cent over the next month…. Last month the Financial Times reported that Ruffer, a $20bn London investment company, had been buying up large amounts of contracts linked to the Vix index priced at half a dollar as part of a hedging strategy for its portfolio, earning it the moniker “50 Cent” among bemused traders. At the same time, low expected volatility also allows traders to make cheap bets using options on the US stock market also rising in value.”
Rapture Index: Closes down 1 on Oil Supply/Price. “The price of oil has been falling on a rebound in shale oil drilling” [Rapture Ready]. Record High, October 10, 2016: 189. Current: 182.
Today’s Fear & Greed Index: 51 Neutral (previous close: 54, Neutral) [CNN]. One week ago: 58 (Greed). (0 is Extreme Fear; 100 is Extreme Greed. Last updated Jun 12 at 12:29pm.
“America’s Health-Care Crisis Is a Gold Mine for Crowdfunding” [Bloomberg]. “Crowdfunding platforms such as GoFundMe and YouCaring have turned sympathy for Americans drowning in medical expenses into a cottage industry. Now Republican efforts in Congress to repeal and replace Obamacare could swell the ranks of the uninsured and spur the business of helping people raise donations online to pay for health care. But medical crowdfunding doesn’t have to wait for Congress to act. Business is already booming, and its leaders expect the rapid growth to continue no matter what happens on the Hill.” America is exceptional, alright.
“”Cook County failed to value homes accurately for years. The result: a property tax system that harmed the poor and helped the rich” [Chicago Tribune]. First of a series. Actual investigative journalism! Well, to an extent… I searched all three stories for “Rahm.” Zero hits.
“Just like capitalism requires the destruction of its constant capital during the cyclical depressions and recessions in order to revitalize the rate of profit, similarly finance laws have gone through their own corresponding cycles of deregulation and discipline. As the rate of profit falls, corporations and especially finance encourage the government to deregulate in order to increase their surplus value to stay above the organic composition of capital. Once a crisis is triggered, the inflamed class struggle and support by institutions that require more market stability allow for the passage of reform legislation. That reform is then chipped away at in the proceeding years until a new deregulation law is passed. Thus there is almost always a deregulation law that corresponds to a discipline law that corresponds to a deregulation law” [Habeas Questus]. Interesting analysis relating the famous “tendency of the rate of profit to fall” to bankruptcy and regulation generally.
News of the Wired
“An Incredibly Clever Lock Design from 1680” [Core77 (Re Silc)]. Fun!
Forget that Fifth Borough nonsense:
Philly train station hangs tough with the analog age.Still makes that cool flippy sound. pic.twitter.com/uQdruNpt1V
— Martha Southgate (@mesouthgate) June 10, 2017
Here is a fine example of a kludge:
— Karine (@KarineReiter1) June 9, 2017
* * *
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 (JN):
JN writes: “Poppies and organic wheat.”
* * *
Readers, Water Cooler is a standalone entity, not supported by the Naked Capitalism fundraisers. Please use the dropdown to choose your contribution, and then click the hat! Your tip will be welcome today, and indeed any day. Water Cooler will not exist without your continued help.