By Lambert Strether of Corrente
Politics
2018
“Democrats are forecast to pick up 13 seats on November 6, 2018. Republicans will gain 1 seat, for a net gain of 12 seats for the Democratic Party” [Decision Desk HQ]. Just putting this out there…
2016 Post Mortem
“Hillary Clinton to Do Speaking Tour to Promote New Book” [Publishers Weekly]. “In addition to the traditional bookstore signings, [Simon & Schuster] has scheduled about 15 speaking/signing events around the country and in Canada at larger venues. Ticket prices to attend the speaking events are priced from about $50. Above that threshold there is the VIP package (for $229, which includes the book) and a VIP platinum package ($3,000, which includes front row seats for two, a back stage meeting, a photograph and signed book).” What Happened. Indeed.
Trump Transition
“Infrastructure dreams in limbo as Trump, Republicans running out of time in 2017 Congress” [Logistics Management]. “[Goldman’s] Gary Cohn, director of the president’s National Economic Council, said the infrastructure plan would ‘come on the heels’ of a tax overhaul. ‘We hope it’s this year,’ Cohn told Politico. As with most things Trump, that probably means not this year—if at all. The harsh reality is the first session of the 115th Congress is rapidly coming to an end as well – and the harsh political climate in Washington prevents anything except essential government business from getting done.” So Trump won’t be able to deliver for his marginal working class voters in the swing states; he’ll have to run his own version of “Have you seen the other guys?” — which he seems to have been doing for some time.
Realignment and Legitimacy
Concrete material benefits (a.k.a. “pothole socialism,” and read the full article on Rob Ford, below):
"We ended up changing brake lights on 50 cars. We did a conference call w/ 80 ppl from other chapters who want to start their own programs."
— DSA ? (@DemSocialists) August 30, 2017
The benefits are, in increasing order of abstraction: (1) The fixed brakelight; (2) the driver doesn’t get arrested (a life threatening event if you’re driving while black); and (3) “law enforcement for profit” schemes (as in Ferguson) are sabotaged by denying them revenue from the traffic stops.
“The Democratic Socialists Are Here to Fix Your Brake Lights” [Vice]. A-a-a-a-n-d some coverage (finally; NC readers have known about this program for more than a week).
UPDATE “NPC Report from the real minority view” [Danny Fetonte]. A response to critics (presumably these). This is an important story if you care about party institutions generally, and especially if you believe that current party institutions are disintegrating or at least re-aligning. (Watching the DSA in formation is rather like watching the birth of a star would be to an astronomer.) I gave a summary of the Fetonte situation two days ago, here. I probably have a dog in this fight, but I’m in the uncomfortable position of not knowing which of the several dogs it might be. On one hand: In an institution that claims to be democratic, it’s a good thing that it’s hard to get rid of board members; and the operational test of what the DSA membership thinks of l’affaire Fetonte will come from metrics like a dues strike or a drop-off in growth, or from a successful call for a new convention (doubtful). Then again: It’s hard to see how having a police organizer (no matter how, when, or why) on the DSA board makes alliances with parallel institutions like #BlackLivesMatter easier. (One very concrete material benefit, after all, is “the right not to be killed, as The Clash put it.) Also: I don’t like Fetonte saying he organized “state workers” in his campaign bio, when those state workers were police, since that certainly would have had a material impact on voters (and I’m mystified that nobody in the DSA leadership pointed this out, or fixed it. Who signed off on the bios?). And I don’t like that there was no recorded vote when Fetonte’s Austin chapter supported him, either, at a meeting he chaired (!). Then again: I think it’s sensible to appeal to Sanders voters, which Fetonte wants to do; see the link. The controversy reminds me of the way the Sanders-supporting Heath Mello got defenestrated by the Democratic establishment for not being 100% pro-abortion, where the locals had they been asked would have said that Mello had worked hard to mitigate pro-life efforts, so the establishment made their lives harder. I can’t imagine that organizing Texas for the DSA is easy, and by all accounts Fetonte did a good job at that. (“He asked for my vote,” said one of the attendees who voted for him in Chicago.) As Fetonte writes:
The bullies and “know it all’s” want to write and talk about revolution and organization without ever block walking or phone banking. These folks show utter contempt for regular people who do the living in this world, while they sit behind their computers and act superior.
Then again, @LarryWebsite knows how to organize, too.
On the final hand: I don’t care about civility and tone as values, but I do care about them as markers. Even on the Twitter, the DSA chapters come across as welcoming, even humorous; an institution to join. (I grant that’s partly PR, but that’s if you want to build an institution, PR is strategic.) On the Twitter, Fetonte’s detractors — as opposed to the chapter statements, which are sober and well-reasoned — come across as snarky virtue-signalers who make fun of other people for being stupid (the greengrocer’s apostrophe in “know it all’s” came in for much derision). If I want to hang out with people like that, I can join the Democrats. It would be nice if there were real reporting on this. If putting the working class first is the essence of what it means to be on the left, which dog(s) in this fight is (are) doing that?
Here’s why the Arpaio pardon is truly worrying:
Arpaio is a very well known "Constitutional Sheriff," a subgroup to the overall Anti-Government Extremist (A.G.E.) movement. 2/ pic.twitter.com/deuOXQzIMl
— JJ MacNab (@jjmacnab) August 26, 2017
Most coverage of the Arpaio hasn’t focused on the institutional aspects of the Arpaio pardon; this author does.
“Winter is coming in Donald Trump’s Washington” [Ed Luce, Financial Times]. “The pace of Mr Trump’s implosion will be dictated by the issuance of subpoenas on his relatives and associates. The deeper that special counsel Robert Mueller’s Russia probe goes, the greater Mr Trump’s temptation to scapegoat his staff and trigger outrageous diversions.” In pieces like this, it’s very difficult to separate the real power dynamics from the performative speech.
“Rob Ford, Donald Trump, and the New Direction of Political Polarization” [American Affairs Journal]. “I am not a typical American, either. In fact, I’m a Canadian. I was a key player on the team that helped elect Rob Ford as mayor of Toronto—North America’s fourth largest city. I helped him craft a campaign platform that resonated with typical Torontonians and, later, helped him translate that platform into an actionable governing agenda. I helped him get things done. Three years later, Ford fired me as his chief of staff when I insisted that he go to rehab to address the personal demons that were destroying both him and his mayoralty. My experience with Ford has given me an unusual perspective on the recent presidential election, the Trump phenomenon, and the rise of a new and powerful political force that favors unorthodox candidates…. In 2010, Rob Ford assembled a passionate coalition of voters that defied the traditional Left-Right spectrum in Toronto: they were conservatives, liberals, and socialists. The pro-Brexit campaign crossed political party lines and won. Donald Trump won the 2016 presidential election by pulling together a coalition of support that most pundits didn’t believe existed. After all of this, I’m convinced that typical Canadians, Britons, and Americans simply do not view the world the way I do. They don’t see life through ideological lenses. They don’t measure politics on the traditional Left-Right continuum. Most typical Americans don’t have time to divide the world into Left and Right. Instead, they instinctively divide the world into things that affect them and things that don’t, things that help them and things that don’t.” This is a must-read, agree or disagree.
“In Berkeley, community comes out in force against hate, racism” [BerkeleySide]. Another trip report.
Stats Watch
Personal Income and Outlays, July 2017: “Vital signs for the consumer are strong but inflation is completely lifeless, based on a mixed personal income & outlays report for July” [Econoday]. “Income is the highlight, up 0.4 percent in the month including a second straight 0.5 percent gain for wages & salaries in what is an important and emerging sign of wage traction.” After 40 years… More: “Employment is very strong and may finally be reflected in strength in wages, but gains here have yet to boost inflation readings which in this report are central to Federal Reserve policy. Nevertheless, the gain in income will put the focus on average hourly earnings for August in tomorrow’s employment report which, however, are not expected to show much strength.” And: “The increase in personal income was at expectations, and the increase in PCE was slightly below expectations” [Calculated Risk]. And: “The data will tend to maintain market doubts whether inflation will strengthen towards the 2% target in the short term and the more dovish FOMC members will continue to preach patience over raising interest rates further” [Economic Calendar]. “The US data overall will maintain the case for policy normalisation, but with the FOMC still proceeding carefully.” And but: “The savings rate continues to decline – and historically is extremely low. Consumer spending is far outpacing income – not good news” [Econintersect]. “The backward revisions this month marginally improved the year-over-year rate of growth for income and expenditures.”
Chicago Purchasing Managers Index, August 2017: “Chicago’s PMI sample continues to report strong activity” [Econoday]. “Both new orders and production are accelerating though employment, in what is a negative signal for tomorrow’s jobs report, contracted in the month. Backlog orders, after peaking near a 2-year high in June, also contracted. Yet the story of this report is strength and is reflected in a drawdown in inventories…” And: “The results of this survey continue to agree with district Federal Reserve manufacturing surveys – and aligns with the overall trend of the ISM manufacturing survey” [Econintersect].
Pending Home Sales Index, July 2017: “For the fourth time in five months the pending home sales index fell” [Econoday]. “Housing opened the year with strength before fizzling during the Spring selling season and limping through the Summer months. Also note that Hurricane Harvey is certain to depress home sales in the South in coming housing reports.” And: “The rolling averages are in positive territory. The data is very noisy and must be averaged to make sense of the situation. There is no signs of a surge in home sales, and the overall downward trends remain in play” [Econintersect].
Bloomberg Consumer Comfort Index, week of August 27, 2017: “Yet another expansion high is the result for the consumer comfort index” [Econoday].
Jobless Claims, week of August 26, 2017: “Jobless claims remain at historic lows” [Econoday].
Challenger Job-Cut Report, August 2017: “Layoff announcements remained subdued but did increase in August” [Econoday]. “Construction, where demand for labor is strong, surprisingly had the highest layoff total in August followed by retail where layoffs have been heavy this year. Unlike most advance indications, these results are not pointing to increasing strength for tomorrow’s August employment report.”
Retail: “Sears’ receivables have dropped from $152.6 million in 2012 to $44.3 million in 2017, according to CreditRiskMonitor. In the company’s Q2 earnings statement, Sears reported merchandise sales of $3.4 billion during the period, compared to $4.7 billion during the same quarter a year ago” [Sourcing Journal]. “Some ongoing vendors like LG Electronics that have decided to continue to supply the retailer also do so on the condition of shortened payment windows. … While arrangements like this keep some stock in the stores, it also threatens to drain Sears’ liquidity… That might help explain the situation at some Sears locations…. Sears is in the midst of a massive cost saving initiative with the goal of reaching $1.25 billion this year. To date, the company’s latest earning statement shows it has achieved $1 billion of it. The result has been hundreds of Sears and Kmart store closures and thousands of jobs lost.”
Retail: “Dollar General Q2 Earnings Beat Due to New Stores, Increased Traffic” [MarketWatch]. “For the quarter, same-store sales increased 2.6%, mainly attributable to increases in average transaction amount and customer traffic. Same-store sales increases were driven by positive results in the consumables and seasonal categories, partially offset by negative results in the home products and apparel categories.”
Retail: “A commercial printing studio, Lqqk (pronounced: “Look”) also produces its own label known for handprinted T-shirts, hats, knapsacks and patterned outerwear that typically sell out within 48 hours of release” [Women’s Wear Daily]. “The past year has seen Lqqk lend its distinctly minimal, off-kilter aesthetic to a suite of new partners. The studio has collaborated with Japanese men’s wear brand N. Hoolywood, opened new wholesale channels and devised a sneaker and apparel collaboration with Vans’ tier-one label, Vault, due this spring. Commercial jobs are but a spoke in [Lqqk founder Alex Dondero’s] wheel. As such, Dondero has used the studio to spin a creative web and establish a Lqqk network — a crew of artists, technician and print collaborators who orbit his particular culture of music, art and design. ‘In New York it’s just so important to have your creative network and make sure you’re always paying it forward. Everyone has to be compensated in order to just live in N.Y., because nothing comes cheap,’ he said.” This again is William Gibson territory; Dondero lacks only representation by Blue Ant! And the “creative network” model meshes nicely with the etymology of entrepreneur. Let’s put on a show!
Retail: “Amazon has one of the most advanced systems to organize work flow at distribution centers. Much of it can be transferred to retail operations. Amazon Robotics is among the company’s top initiatives, according to the company” [247 Wall Street]. Really? Warehouse robots “work” in retail? Scanners I can see, but IMNHSO, developers tend not to build generic “work flow” systems; rather such systems are built to be fit-for-purpose. This smells like a propagated narrative spun post hoc, to me.
Retail: “Web grocery shopping accounts for less than 5% of the nearly $800 billion in food and beverage sales in the U.S., but food retailers that have both physical stores and e-commerce offerings have done better in getting a share of that market, providing more confidence along with produce to shoppers. Amazon, like other online retailers, is focused on adding new products to its web offerings—both on its own and through third-party sellers. Whole Foods will bring those goods to Amazon, which now has to figure out how to get them to consumers” [Wall Street Journal].
Supply Chain: “Zaycon Fresh, a company that sells farm-fresh meat direct to consumers buying in bulk, shows up in a truck, usually at a local church parking lot, to hand off product to client” [MarketWatch]. “‘We go to a spot and they’ll come to me,’ said Mike Conrad, founder of Zaycon Fresh. ‘People don’t have to get out of their cars’ at the pickup location… According to Conrad, Zaycon Fresh has no warehouses, and delivers across nationwide routes with 31 trucks that pick up and drop off meat along the way. The company started in December 2009, and has a logistics system that was built as the company grew. Zaycon Fresh depends on ‘personable’ staffers* to deal with customers at pickup spots.” In a third-world country, this would be called a “pop up store.” * IOW, this is not a tech company.
Supply Chain: “Rob Siegers, President, DHL Technology Sector, said the semiconductor industry was undergoing fundamental changes due to new Internet of Things (IoT) applications and digitization efforts as the market shifted from traditional PC Chips to IoT, gaming chips, high-end graphic chips and into the automotive industry” [Lloyd’s Loading]. “In terms of freight demand, air cargo operators and forwarders would be the main beneficiaries. ‘Typically, the production times are compressed and, with the need for high security and premium handling as well as the demand to get to market quickly, a majority of products are being transported via air services,’ he added. ‘We do not see this model significantly changing in the near future.'”
Supply Chain: “Kra backers rebrand project as the Thai Canal with marketing picking up for ambitious Asian waterway” [Splash 247]. “Plans to create a waterway through southern Thailand’s isthmus were first mooted in 1677. The 135 km long canal would link the South China Sea with the Andaman Sea and provide an alternative to the Malacca Strait. Every few years the infrastructure project reappears in the headlines, normally shot down due to its prohibitive costs.” Such a canal would also sever the restive provinces in the Muslim south from the rest of Thailand. I’m not sure that wouldn’t be an over-riding concern, even if the Chinese wrote a big fat check for the whole thing.
Shipping: “Irrespective of the business management missteps by Hanjin [when it went belly-up in 2016], it seems that the industry has totally ignored the self-defeating cycle of ordering excess capacity, applying cutthroat pricing, and living with long-term transfer of value to suppliers and customers (i.e. commoditisation). It is hard to imagine how to avoid experiencing another Hanjin moment, as many carriers with stretched balance sheets will be tempted to replicate Hanjin’s tactics to survive the inevitable” [Splash 247]. “From the flurry of new order announcements and knowing what is already coming down the delivery pipeline, it seems to me that the only sure strategy to persist is one that we know in economics as tit-for-tat, or a similar ‘prisoner’s dilemma’, game theory. Just as tit-for-tat strategy is implemented in games with repeated moves, so is the ongoing carriers’ strategy. The economic framework of tit-fir-tat nicely explains how carriers interact with each other in competitive environments and what will be the outcomes of their strategies. Since regulatory frameworks don’t allow them to collaborate* (or collude, if you prefer that word), they are forever forced to play the uncooperative version of this game theory. In the business environment which also includes long lead times for new capacity, low barriers to entry, high barriers to exit, perishable inventory, high elasticity, the uncooperative game theory has only one outcome – one prisoner goes free and the other one gets a life sentence. As a shipper, you might be watching these developments with glee in your eye.” * Really? They merged, didn’t they?
The Bezzle: “Time for U.S. Supreme Court to ‘Rectify’ Online Tax Rule?” [Bloomberg BNA]. “A South Dakota Supreme Court justice suggested during Aug. 29 oral arguments that the U.S. Supreme Court should revisit a 25-year-old opinion that restricts the ability of states to tax remote retailers ( South Dakota v. Wayfair, Inc., S.D., No. 28160, oral arguments 8/29/17).”
The Bezzle: “SAC Capital’s Steven Cohen, faced with a Securities and Exchange Commission deadline to liquidate his funds as part of an insider-trading settlement, has turned to an affiliate of his firm’s auditor to take the remaining investments off his hands” [Francine McKenna, MarketWatch]. “The move appears to fly in the face of SEC auditor independence rules that prohibit business relationships between auditors and their clients—rules that apply not only to the organization under audit, but the audit client’s affiliates as well.” The Cayman Islands are lovely this time of year…
Social Risk: “The recently proposed liquidity regulations for banks under Basel III emphasize the importance of deposit insurance and well-established customer relationships for the stability of bank funding. However, little is known about which clients withdraw their deposits from distressed banks. New survey data covering the behaviour of households in Switzerland during the 2007-2009 crisis suggest that well-established customer relationships are indeed crucial for mitigating withdrawal risk when a bank is in distress” [Bank Underground].
Political Risk: “One proposed fund, the Point Bridge GOP Stock Tracker ETF holds companies that are seen as sympathetic to the Republican Party. The ticker, MAGA, is a reference to ‘make America great again,’ the slogan that President Donald Trump used in his successful White House run” [MarketWatch]. “It wasn’t clear when the fund might begin trading.” Seems more than a little meta! And then: “In an updated filing on Wednesday, Point Bridge wrote that the fund would charge an annual expense ratio of 0.72%, or $72 for every $10,000 invested. That is significantly higher than what is charged for other funds with a large-cap U.S. stock focus.” Must be the Louis Quinze bathroom taps…
Political Risk: “Sometimes all the planning in a supply chain is no match for political forces. Hyundai Motor Co. was forced into a week-long suspension of production in China…, as a dispute between Beijing and Seoul wreaks financial havoc at the Korean auto maker and its bid to establish a bigger presence in China. Hyundai says its Chinese joint venture, Beijing Hyundai Motor Co., halted production last week because it was unable to pay a parts maker, causing the supplier to halt deliveries. The trouble comes as Hyundai’s sales in China have crashed following South Korea’s deployment of a U.S.-built missile-defense system in the face of North Korea’s growing nuclear threat” [Wall Street Journal].
Today’s Fear & Greed Index: 43 Fear (previous close: 34, Fear) [CNN]. One week ago: 22 (Extreme Fear). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Aug 31 at 12:38pm. The swing away from fear continues….
Gaia
“Repeating radio signals from a mysterious source in a dwarf galaxy 3 billion light-years away have been detected by astronomers” [Newsweek]. “Despite widespread speculation, the possibility of the signals coming from an advanced alien civilization has been largely ruled out.”
Class Warfare
“[B]ehind these [“gig economy”] companies’ flashy design and world-disrupting messaging lies something else: Good old-fashioned exploitation, as a growing fleet of workers is being denied basic protection from racial discrimination” (Interview with Nayantara Mehta, senior staff attorney at the National Employment Law Project) [PortSide]. “Provisions like Title VII of the Civil Rights Act of 1964—which bars employers from discriminating on the basis of race, color, religion, sex and national origin—apply only to legally recognized employees. Gig economy companies tend to classify drivers and ‘taskers’ as independent contractors instead, which excludes them from adhering to most of the laws that regulate workplaces and protect employees.”
To start off, what does the on-demand economy workforce actually look like? Who are these workers, and what sorts of jobs are they doing?
Many workers in the on-demand economy—people who get work through an app—work part-time or only occasionally, but there are workers who do this work full-time. And for companies like Uber that rely on the constant availability of drivers to meet passenger demand, those full-time drivers end up performing a lot of the company’s driving hours.
One of the problems is that we just don’t have data from the companies. We have a sense of the number of hours people are working, but not so much the demographics of the drivers and the workers. We get a lot of information from interviews and other sources outside the company, but it’d be helpful to have information directly from the companies.
Most employers report on the demographics of their workforce, but these companies tend to be particularly opaque because they’re selling a story of themselves as a place where people go to earn some extra money for vacation or to pay for their kid’s sports trips. But we don’t know the reality to be able to really assess what companies are saying. It reminds me of the fast food industry’s positioning of itself as people’s first job, where teenagers work. Actually it’s a lot of people providing for their families who work there. It kind of obscures the responsibility to the workers when these companies say they just employ teenagers looking to make pocket money. Also, that people need to earn extra money on top of, say, working full time tells us something about our economy—that people need to work multiple jobs in order to make ends meet.
“Weak online connections on job sites and social networking sites are no match for ‘strong connections’ — i.e., close friends and family members with whom you communicate at least once a month — when it comes to landing a gig, according to a new study from the Institute for Operations Research and the Management Sciences” [Moneyish]. A gig, or that unpaid internship that gets you the entry-level job requiring two years of experience…
“Is Poor Health Hindering Economic Growth?” [Federal Reserve Bank of Atlanta]. “So how might poor health hinder economic growth? Health factors account for a significant part of the decline in labor force participation since at least the late 1990s. After controlling for demographic changes, the share of people too sick or disabled to work is about 1.6 percentage points higher today than it was two decades ago… [S]ignificant improvements to the health of the working-age population would help lessen the drag on growth of the labor supply coming from an aging population. Public policy efforts centered on both prevention and treatment of work-impeding health conditions could play an important role in bolstering the nation’s workforce.”
Race, Money and Broadway: How ‘Great Comet’ Burned Out NYT (DG). DG: “Just about everything wrong with the arts is on display here.”
News of the Wired
“How Apple Plans to Change the Way You Use the Next iPhone” [Bloomberg]. Whaddaya mean, “you”? If Apple forces facial recognition on me, I’m off the platform. Even if I trained it with a Nixon mask, I’d still have to carry the mask at all times. Or just wear it. Hey, why not?
“Bitcoin’s Academic Pedigree” [Association for Computing Machinery]. “[N]early all of the technical components of bitcoin originated in the academic literature of the 1980s and ’90s…. This is not to diminish Nakamoto’s achievement but to point out that he stood on the shoulders of giants. Indeed, by tracing the origins of the ideas in bitcoin, we can zero in on Nakamoto’s true leap of insight—the specific, complex way in which the underlying components are put together. This helps explain why bitcoin took so long to be invented. Readers already familiar with how bitcoin works may gain a deeper understanding from this historical presentation…. Bitcoin’s intellectual history also serves as a case study demonstrating the relationships among academia, outside researchers, and practitioners, and offers lessons on how these groups can benefit from one another.”
“Wittgenstein on Whether Speech Is Violence” [JSTOR Daily]. “In his essay, “Wittgenstein’s Dictionary,” the educator John Willinsky highlights the differences between the ‘meaning is use’ doctrine and a dictionary-first theory of meaning. ‘The dictionary’s careful fixing of words to definitions, like butterflies pinned under glass, can suggest that this is how language works. The definitions can seem to ensure and fix the meaning of words, just as the gold standard can back a country’s currency. What Wittgenstein found in the circulation of ordinary language, however, was a free-floating currency of meaning. The value of each word arises out of the exchange. The lexicographer abstracts a meaning from that exchange, which is then set within the conventions of the dictionary definition… When is speech violence? It depends on how we define it. If we define violence as a physical act, then speech is never violence. If we choose to define violence as causing harm to a person, then speech is often violence. If we choose to define violence as intentionally causing harm, then sometimes speech is violence.”
“I didn’t know what a meme was, says Distracted Boyfriend photographer” [Guardian]. If you’re into meme transmission, this is a must-read (And see the indispensable Know Your Meme here.) Since nobody else has, I guess I’ll have to (and do feel free to propagate on the Twitter):
What’s interesting to me is the tripartite structure of the meme (which is the source of its power as a vehicle for jokes and commentary). Most of our political discourse is binary (“If you voted against X you are for Y,” “If you are against anti-X you are pro-X”). So watching “the Internet” collectively learn to think in threes is interesting.
Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please put it in the subject line. Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (EM):
EM: “These beautiful plants hang down from bluff overhangs on the Buffalo River at our favorite swimming hole. Do wonder what they are.”
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