2:00PM Water Cooler 9/21/2017

By Lambert Strether of Corrente


“USTR CONSIDERS NON-BINDING DISPUTE SETTLEMENT MECHANISM IN NAFTA: The United States is considering dropping a binding mechanism in NAFTA for resolving government-to-government trade disputes in favor of a softer advisory system, sources following the talks told Morning Trade” [Politico]. “The dispute settlement shift would also include a change to Chapter 11 of NAFTA, which allows private investors to sue member governments over actions that they believe unfairly discriminate against their investment. The proposal would allow countries to opt into the system, essentially making it voluntary.”


2016 Post Mortem


“In June, at a rally in Cedar Rapids, Iowa, President Trump brought 6,000 supporters to their feet, roaring their approval. ‘I believe the time has come for new immigration rules,’ Trump bellowed. ‘Those seeking admission into our country must be able to support themselves financially and should not use welfare for a period of at least five years.’ A bill to shred the safety net for legal immigrants would be moving through Congress ‘very shortly,’ Trump promised’ [The New Republic].


The legislation never materialized, for a simple reason: What Trump proposed is already the law of the land. Thanks to the massive “welfare reform” bill that President Bill Clinton signed two decades ago, new immigrants are ineligible for public assistance during their first five years in America. It’s a mean-spirited policy. But it was the creation not of nationalist demagogues like Trump but of Democrats like Clinton, who pledged in his 1992 campaign to “end welfare as we know it.”

Health Care

“Behind the Senate GOP’s high-stakes health-care gamble: Unrelenting criticism back home” [WaPo]. “[A]ccording to GOP senators and aides, Republicans faced an unrelenting barrage of confrontations with some of their closest supporters, donors and friends. The moments occurred in small gatherings that proved even more meaningful than a caustic town hall — at meetings with local business executives, at church, at parks…. It didn’t matter if those friends and allies were big-time supporters of President Trump or part of the “Never Trump” crowd of purist conservatives opposed to his hostile takeover of the GOP. By August, those two wings came together in their sheer, utter contempt toward a Republican-controlled Congress that could not back up its most basic promise, to repeal Obamacare. Trump’s hectoring via social media egged them all on.”

New data from an Avalere Health analysis suggests that Graham-Cassidy — if passed in its current form — would cut federal money to states by $215 billion over the next decade. All told, 34 states would see cuts to the amount of federal dollars they are getting for health care under the Affordable Care Act, while 16 would see an increase” [CNN]. With handy map:

“Republicans aren’t voting for Graham-Cassidy. They’re just voting for Obamacare repeal.” [Vox]. “How have they found themselves here again, after their previous repeal bills failed in July? The underlying truth, the beating heart of Obamacare repeal that refuses to let it die, is: Republicans just want to pass a bill, any bill, to say they repealed Obamacare. Whatever standards they’ve set for their health care plan, whatever promises they made before, don’t matter.” More:

“Apparently no one cares what the bill actually does. That’s a tough thing to say, but it is more true than not,” one Republican lobbyist told me. “There are so many senators whose public positions in June leave them absolutely no conceivable way of voting for this.”

“Yet,” this person added, “here we are.”

I dunno. Look at the map above. The standards seem pretty clear.

“Republicans Peddle Nonsense to Sell Health-Care Plan” [Albert R. Hunt, Bloomberg]. With a picture of Mickey Mouse leading a parade. Cheeky!

Headline: “Left on ‘full war footing’ to stop Obamacare repeal” [Politico]. Deck: “Liberal activists have quickly mobilized ahead of a Senate vote next week.” Politico conflates “liberal” and “left” yet again. Check the picture of Schumer: See any #MedicareForAll signs? No? It’s liberals, who wouldn’t know recognize a “war footing” if a shoe salesperson was in front of them trying to measure it.

“Graham-Cassidy needs to pass this final test before it can come to a vote” [Vox]. The Byrd rule…

“According to financial projections produced by the office of Sen. Bill Cassidy, one of the bill’s authors, Alaska would be the only state to receive additional money from the legislation’s $182 billion stability fund. The money would be delivered through a provision in the bill that, in 2026, would award each state $4,400 in federal subsidies to each “eligible beneficiary.” Alaska, however, would be awarded $6,500, or 48 percent more than other states” [News Miner]. How convenient!

“The Political Genius of Bernie’s ‘Medicare for All’ Bill” [The Nation]. “The bill’s pragmatism lies in how it gets there. Medicare expansion would spool out over several years, first by enrolling children under 18 and dropping the eligibility age to 55, a step that even non-backers like Senator Tim Kaine support. By its fourth year, incremental expansions would finally create a true Medicare for All program. During that transition, many people who are uncovered would be able to buy into the system through provisions championed by Senator Kirsten Gillibrand, who supports the bill, and Senator Debbie Stabenow, who doesn’t—yet. Canvassing his fellow senators, including those who have taken a wait-and-see approach, was key to Sanders’s ability to build a surprisingly broad base of support, as was the backing of dozens of outside groups, from MoveOn.org to the Working Families Party to the United Mine Workers. That Sanders was one of the most vocal defenders of Obamacare—even as he consistently criticized it as insufficient—helped build credibility, too.”

Realignment and Legitimacy

“As Protests Escalate Under Trump, States Seek New Ways to Deter Them” [Governing]. “On Tuesday, Lynne DiSanto, the GOP whip in the South Dakota House, apologized after sharing a meme on Facebook that said, ‘All lives splatter. Nobody cares about your protests. Keep your ass out of the road.'” Genius! Of a sort…

“picking up the 24 seats required to retake the House, and the three states needed for control of the Senate, will mean luring back blue collar workers in places like Ryan’s Mahoning Valley district, where the steel plants are shells of their former selves, small businesses are boarded up and payday lenders seem to be on every corner. This used to be a Democratic stronghold, but Trump won three of the five counties in Ryan’s district. If Democrats don’t refine their pitch to alienated white voters, Trump could win re-election with ease. “The resistance can only be part of it,” Ryan says. “We have to be on the offense too.'” [Time]. How about just “alienated white voters”?

Stats Watch

Leading Indicators, August 2017: “The index of leading economic indicators rose a solid 0.4 percent in August in results that, however, do not fully reflect the impact of Hurricane Harvey” [Econoday]. “Hurricanes aside, the report notes that underlying trends in the economy point to an extension of the current pace of solid growth.” But: “The rate of growth appears steady on this index. Because of the significant backward revisions, I do not trust this index” [Econintersect].

Philadelphia Fed Business Outlook Survey, September 20, 2017: “There are few hints of indirect hurricane dislocations in the Philly Fed report where strength is simply enormous” [Econoday]. “New orders are pouring in this month, up more than 9 points to 29.5 for among the very strongest readings of the 8-year economic expansion. Unfilled orders are at 17.0, up 3.5 points to indicate one of the very strongest monthly builds in the 50 year history of this report. Shipments are moving out the gates at a frenzy, at 37.8 which again is one of the best on record… This report, among all the regional reports, has consistently showed the most strength this year, strength however that contrasts with little better than mixed results in actual factory data at the national level. This is a reminder that the Philly Fed’s results are based on voluntary responses from what is often a small sample numbering no more than a couple of hundred companies.” And: “Consider this a stronger report than last month. The New York Fed’s manufacturing survey (released last week) insignificantly declined and remained in expansion” [Econintersect].

Bloomberg Consumer Comfort Index, week of September 17, 2017: “The consumer comfort index fell back for a third straight week, down 1.3 points in the September 17 week to what is still a very strong 50.6 that reflects unusual confidence in the economic outlook” [Econoday].

FHFA House Price Index. July 2017: “Indications on home prices have been cooling including July’s FHFA house price index which managed only a 0.2 percent gain with the year-on-year rate down 2 tenths to 6.3 percent” [Econoday]. “Though slowing, price growth of roughly 6 percent is still very strong especially in a low interest rate, low inflation economy. And slowing appreciation will help improve affordability and perhaps give a boost to sales as well. Today’s report will likely limit expectations for strength in next week’s Case-Shiller data which likewise have been slowing.”

Jobless Claims, week of September 16, 2017: “Initial jobless claims fell sharply and unexpectedly in the September 16 week but may reflect the inability of displaced workers in hurricane hit states to file claims” [Econoday].

Retail: “The holiday hiring season is starting earlier than ever, and the biggest jobs focus is in the warehouse. Retailers including Macy’s Inc. and Target Corp. are joining Amazon.com Inc. as well as United Parcel Service Inc. and FedEx Corp. and other logistics specialists in scaling up their hiring…, with a tight labor market adding pressure to bring new workers on board and primed for the seasonal rush. Companies are bumping up pay, loosening disciplinary policies and even operating bus routes to get workers to the fulfillment centers they expect to be busier than ever this year” [Wall Street Journal].

Shipping: “[Maersk, in selling its tanker unit,] aims to reshape itself into a global supply chain player more deeply involved with its customers, but Maersk also is looking for more flexibility to respond to changes in the global container shipping market. Maritime operators are consolidating since the industry’s steep downturn, with Chinese operators on the ocean and at ports growing more powerful, and big competitors CMA CGM and Mediterranean Shipping Co. are buying bigger ships. Those trends challenge the scale that Maersk has always seen as a strategic advantage, one the carrier will look to maintain” [Wall Street Journal].

Shipping: “Stiff competition from niche carriers on trades to and from Asia is preventing the three leading container shipping alliances from establishing dominant positions in the region, according to one of Asia’s leading forwarders” [Lloyd’s Loading List]. “”The five niche container lines – Zim, PIL, Wan Hai, Matson and SM Lines – moving Asian imports increased their total share 1% point to 6.4% in the April-to-June period,” [Kimber Lee, Corporate Ocean Freight Vice President at Dimerco Express Group] added.”

Tech: “Some electronics manufacturers are trying to shore up their chip supplies by buying a major producer. Toshiba Corp. plans to sell its memory-chip business to a group that includes Apple Inc. and Dell Technologies Inc. for $18 billion…, bringing a tumultuous period at the semiconductor provider closer to a conclusion. Members of the bidding group, led by private-equity firm Bain Capital, hope the sale also brings some calm to a volatile chip market that’s been marked by tight supplies and high demand” [Wall Street Journal]. Hmm.

The Bezzle: “Apple can patch bugs, but its biggest Apple Watch problem can’t be fixed” [Business Insider]. “[T]he watch’s LTE cellular connectivity – which is supposed to let users make phone calls directly from their wrists, and which Apple has touted as a selling point – doesn’t always work very well. (Actually, it’s a bug with the watch’s WiFi, but the end result is the same.)” Seems like a subset of a general problem; if you want to watch a real human tragedy, check Apple’s Discussions threads on internet connectivity; you’ll see thousands of messages stretching back years. Sure, I lost a tooth from the grinding, but my laptop sure is thin!

The Bezzle: “Grocery chain Albertsons Cos. thinks the supply chains that feed its supermarkets are just what meal-kit services need. Albertsons is buying New York-based Plated, the first acquisition of a prepared-meals company by a national chain as grocers scramble to keep shoppers coming to their stores. The acquisition looks to turn the meal-kit competition on its head, with Albertsons effectively giving in to the idea that some consumers are going to look for meals outside the traditional scope of supermarkets. Albertsons Chief Executive Bob Miller tells the WSJ’s Heather Haddon the chain will bring Plated, which does business as DineInFresh Inc., a cost advantage with the scale of its food purchasing and a network of 18 manufacturing plants. That won’t solve the “last-mile” delivery questions that companies face. But Albertsons will be able to market Plated to millions of customers and that scale could help the companies cook up a financially healthy combination” [Wall Street Journal]. Who knows. Maybe to a grocery company, the margins in meal-kits look attractive.

The Bezzle: “Sheryl Sandberg Leans In To Take Public Beating On Mark Zuckerberg’s Behalf” [DealBreaker]. “Last week, ProPublica reported that there was a tiny little problem with Facebook’s ad-targeting algorithm insofar as that advertisers could target users interested in such far-ranging subjects as ‘Hungarian sausages’ to ‘Jew Haters.”… Complicating things even further is the burgeoning public woke-ness of Facebook CEO Mark Zuckerberg. He’s been out there hosting Facebook Live events with Dreamers, touring all 50 states and even meeting actual human beings IRL. It has been a heavy lift for a Millennial billionaire with absolutely no interest in a political career [implied enormous wink emoji]…. Instead of letting the woman who works for him step out in front of this, Zuckerberg should have doubled-down on his new politically viable public image and taken all the blame for what happened. It not only would have given him the glow of a true leader of The Valley, it could have sent a message that he has even accumulated through maturity the rarest of tech billionaire traits; courage and contrition.”

The Bezzle: “Google is linking secret, court-protected names – including victim IDs – to online coverage” [Ottawa Citizen]. “In six high-profile cases documented by the Citizen, searching the name of a young offender or victim online pointed to media coverage of their court cases, even though their names do not appear anywhere in the news articles themselves. It’s a curious anomaly that appears to apply primarily to results produced by Google’s search engine. Similar searches in Bing and Yahoo! do not link the protected names to news coverage with the same consistency.”

The Bezzle: “Get Rid of Equifax” [New York Time]. “Why should we continue to allow private companies to make money from us while ignoring our needs? Let’s nationalize Equifax and the other two major credit reporting companies, Experian and TransUnion. We could follow other countries’ example and hand the duty of tracking our financial histories over to a public registry instead of a private profiteer.”

The Fed: “The Federal Reserve announced today [September 20] that it will begin reducing the size of its balance sheet next month in very modest and deliberate steps. One reason the Fed is moving so slowly is that they don’t want a repeat of the May 2013 taper tantrum, in which a surprise hint that the Fed might slow the rate at which it would be growing its balance sheet led to a spike up in long-term interest rates. But there may also be another reason why the Fed is contracting its balance sheet so cautiously.” [Econbrowser]. “The reason the Fed may go back to growing its balance sheet within three years comes from thinking about the liability side of its balance sheet. The big bulge in assets has mainly been financed by extra Federal Reserve deposits held by financial institutions, shown in purple on the graph below. But several other liabilities are also significant– deposits held by the U.S. Treasury’s account with the Fed (yellow), deposits that get returned temporarily to the Fed through reverse repos (orange), and currency held by the public (green). A key feature of those last three is that under current Fed operating procedures these quantities are basically chosen outside the Fed.”

The Fed: “Janet Yellen Officially Done Stimulating Your Economy” [DealBreaker]. “Fed officials finally collectively took a deep breath and announced they will begin to cut the size of their balance sheet, which has provided a liquidity safety net for the U.S. economy since the financial crisis. The decision fully commits the Fed to a path of policy tightening, even with growth numbers remaining ‘eh’ and Fed officials now openly puzzled about why they can’t drive inflation levels higher…. Now the question for the Fed, then, is how it handles interest rates when half of its mandate is a black box and it is engaging in balance sheet policy experiments on the fly.” Wheeeeeee!

Climate Risk: “Puerto Rico’s bondholders worried after Hurricane Maria turns out lights” [MarketWatch]. “If Puerto Rico is without power for months after Hurricane Maria, as authorities now warn, many investors in the $9 billion of Puerto Rico’s outstanding electric utility bonds risk never seeing their money.”

Honey for the Bears (?): “Basically Mike Bloomberg would like to ask the financial markets ‘Are you f*cking high?'” [Dealbreaker]. “[Bloomberg] is part of that growing chorus of money-smart old dudes wondering aloud if this market is tethered at all to reality and if Trump has finally become the ultimate example of looking at an uncertainty and trying to price it as a risk.”

Five Horsemen: “Apple checks its stopped watch, as Facebook gazes down serenely from its permanently high plateau” [Hat tip, Jim Haygood].

Five Horsemen Sep 21

Today’s Fear & Greed Index: 74 Greed (previous close: 79, Extreme Greed) [CNN]. One week ago: 68 (Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Sep 21 at 12:16pm.

Class Warfare

“Colleges as class reproduction machines” [Brookings Institute]. “The returns to a post-secondary education are variable, but on average remain high. The main problem is not unfair competition in the labor market, it is unequal preparation for it. As I write in Dream Hoarders, ”the labor market is where inequality is expressed, not where it is created.'”

“Why Workers Are Losing to Capitalists” [Bloomberg]. “[T]he two most conventional explanations for rising inequality and falling wages might both be correct. A perfect storm of robots and free trade — and some monopoly power to boot — could be shifting power from the proletariat to the capitalists. With all these factors at work, maybe the real puzzle is why workers aren’t doing even worse than they are.” Always room for improvement!

“Basic Income Research Proposal” [Y Combinator Research]. From the people who brought you the term “Founder”…

News of the Wired

“Distrustful U.S. allies force spy agency to back down in encryption fight” [Reuters]. “An international group of cryptography experts has forced the U.S. National Security Agency to back down over two data encryption techniques it wanted set as global industry standards, reflecting deep mistrust among close U.S. allies. In interviews and emails seen by Reuters, academic and industry experts from countries including Germany, Japan and Israel worried that the U.S. electronic spy agency was pushing the new techniques not because they were good encryption tools, but because it knew how to break them.”

“I Have Nothing to Hide – Really? Here’s why privacy matters to all of us” [Privacy News Online]. More recommendations for applications. Email: Tutanota. Search: Qwant. Readers, thoughts?

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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 (DD):

DD writes: “Olympic National Park, Washington, where the forest comes right up to the beach in places. Some unfortunate trees have their soil eroded out from under them. But even the one whose roots are seen waving in the breeze here is not dead, it has green needles on its upper branches (not visible in the picture).”

* * *

Readers: Do feel free to use the dropdown and click the hat to make a contribution today or any day. Here is why: Regular positive feedback both makes me feel good and lets me know I’m on the right track with coverage. When I get no donations for five or ten days I get worried. More tangibly, a constant trickle of small donations helps me with expenses, and I factor that trickle in when setting fundraising goals. So if you see something you especially appreciate, please click the hat!


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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Wukchumni

    I hear the new version of the Apple Watch will be a strictly limited addition variety that only goes to 11 o’clock…

  2. Summer

    This overarching goal—to destroy the health care system’s structural underpinnings that could be used to create a national health care system—was made clear in the opening boasts of the Senate bill’s co-sponsor, Sen. Lindsey Graham, R-SC, when he introduced the bill on the same day Sen. Bernie Sanders, I-VT, introduced a Medicare for All bill…

    And this is why you see some unusual suspects “co-sponsoring and supporting” the Single Payer/Medicare for All bills. They will have the Republicans to point to as the reason to water down those bills and save their big insurance donors.

    I can’t help but notice that the countries pointed to as models for universal healthcare have multi-party systems. There may be two major parties at any given time, but they are parliamentary systems.
    Every day wasted with the Democrats is a step backwards.

  3. grayslady

    Thanks for another fine article link on privacy. I didn’t know about Qwant. It has now replaced Duck Duck Go on my speed dial since the search results by Qwant are vastly superior to DDG. Unlike Google, Qwant doesn’t automatically put Amazon first on all searches. PIA looked interesting as a VPN until I learned that it is U.S. based–a definite no-no for VPNs. Since I never send emails abroad or include anything in an email that is not totally mundane, I haven’t really looked into encrypted email services, so I can’t comment on that recommendation.

    1. Hide & Seek

      I use tutamail for email and can recommend it.
      Duckduckgo for search but at work, unfortunately, google works better for my purposes.

      Gmail – still have my account but use it only for shopping purposes on big sites, like amazon etc. my thinking is that the spam that these sites send me will load google-servers and only be a cost for them because the advertisers will not reach me and google doesnt get any really important information about me since i do not send anything of importance through gmail (i.e., private life)

      please let me know about your thoughts about cost maximizing for google and minimize their revenues/the value of you as a user.

      1. Kurtismayfield

        If you are looking for a private email account try Protonmail. It uses end-to-end encryption and it’s servers are based in Switzerland.. out of US and EU jurisdiction I believe.

        And Duckduckgo is a great replacement for Google’s pay to play search engine. They really have become Yahoo.

        1. subgenius

          Just don’t forget your password…

          …it’s so secure a new password won’t access the previous emails!

      1. grayslady

        Maybe I was lying ☺ Or maybe only some of what I said was untrue. That’s one of the problems with the internet.

    2. Steve

      I like protonmail.com a lot. They are Swiss based and descended from CERN. Very helpful support.
      We are using PIA with no complaints.

    3. Propertius

      Gee, I’d trust their security recommendations more if their own SSL certificates weren’t invalid:

      Your connection is not secure

      The owner of http://www.privateinternetaccess.com has configured their website improperly. To protect your information from being stolen, Firefox has not connected to this website.

      Learn more…

      Report errors like this to help Mozilla identify and block malicious sites

      http://www.privateinternetaccess.com uses an invalid security certificate.

      The certificate is not trusted because the issuer certificate is unknown.
      The server might not be sending the appropriate intermediate certificates.
      An additional root certificate may need to be imported.


      1. Henry Moon Pie

        All that means is that they’re not playing the SSL Certificate game. They self-certified, and there’s nothing wrong with that in and of itself. It does mean they’re hosting themselves, and that probably means they don’t want to get hassled by some nervous type who works for an ISP.

        1. pricklyone

          Shows up here (from link in Propertius comment) as valid cert. issued by Symantec Corp.
          Temp problem, maybe?
          Mixed content warning on NC still. (Images hosted elsewhere?)

      2. pricklyone

        No prob here with Firefox.

        Naked Cap on the other hand is showing “not secure caution sign on padlock” in Firefox!

        Moving to https seems to be fouling up lots of sites, at present.
        My buddy has an old laptop. Loses a couple of minutes a day on its real time clock. Whenever the time on his machine gets out of sync with “internet time” certificate errors start cropping up on every site he visits, until he corrects the time on his machine. Including goog and Microsuk.

  4. JTMcPhee

    If there are no dumb questions, maybe it is ok if I ask this one: How come this “over the next decade” meme or frame or whatever, from the above link on Grahan-Cassisy — “would cut federal money to states by $215 billion over the next decade…” — has infected all debating points and data deliveries in the Narrative and political economic discourse? Is it somehow misleading to say that the cut would be “$21.5 billion a year, for the next decade”? Since states work on fiscal year budgeting? http://www.ncsl.org/research/fiscal-policy/basic-information-about-which-states-have-major-ta.aspx#fyrs

    I think the first time I saw and reacted to this was a few years ago when the Military-Security people were knickers-in-a-twist about the legislatively mandated “reductions” (I forget the buzz term, oh yeah, “sequesters”) from the debt ceiling legislation in the war-wealth-transfer budget for “outyears –” supposedly gutting the world’s most idiotic and cumbersome military by “cutting appropriations” by some gargantuan amount, “over ten years…”

    I know, it’s all spin anyway, especially with the Pentagram and its open-checkbook carte blanche from the closet MMTers in “our’ Congress… Anyone looking for an end to the madness, “over the next ten years,” there’s this:

    Two big things are about to happen to military spending. The wars in Iraq and Afghanistan are winding down. And, thanks to the 2011 Budget Control Act, the Pentagon is facing both hard budget caps and a looming sequester that would cut defense spending by about $1 trillion over the next decade (compared to what was expected).

    That’s a serious cut. Although, as the graph above from the Center for Strategic and International Studies shows, even if the sequester is fully implemented, which no one expects, the drawdowns after Korea, Vietnam and the Cold War were far more drastic in inflation-adjusted dollars.”

    That’s from a WaPo article in 2013 — remember that far back? https://www.washingtonpost.com/news/wonk/wp/2013/01/07/everything-chuck-hagel-needs-to-know-about-the-defense-budget-in-charts/?utm_term=.1381083ab9ec

    How it has operated, and operates now, and will continue to operate “over the next ten years:” “A hidden world, growing beyond control,” http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/

    1. Summer

      “Two big things are about to happen to military spending. The wars in Iraq and Afghanistan are winding down. And, thanks to the 2011 Budget Control Act, the Pentagon is facing both hard budget caps and a looming sequester that would cut defense spending by about $1 trillion over the next decade (compared to what was expected)…”

      But the country is always one “terrorist” attack away from ramping up more war.

    2. Left in Wisconsin

      IIRC, the whole ten years thing comes from a requirement that CBO scoring of a bill go out ten years (no more, no less). I believe this requirement was instilled by balanced-budget Repubs some time back (Gingrich era, perhaps?) allegedly as a way to ensure that the finances of bills weren’t gamed. Of course, everything is still gamed, with the 10-year scoring now an essential part of the gaming. I remember the GWB tax cuts were not scored as a deficit killer because they were “temporary” and thus would be ended by the time the 10 years were up. Ha ha.

    3. a different chris

      Because everything has to be costed out 10 years. So that’s (I suspect) literally what the reports say “over 10 years this will cost”… and nobody bothers to divide by 10 because… well, I dunno I think because they are just use to speaking in those terms. Us plebes, with our day-to-day (let alone year-to-year) concerns are not on their radar at all.

  5. Livius Drusus

    Re: “Dream Hoarders” and college, we really should just dump the idea of social mobility entirely. It is part of the modern obsession with meritocracy that is one of the biggest obstacles to improving the lot of the majority of working people. The whole concept of social mobility assumes that one would want to desperately leave your working-class background to become a professional. What about those people who don’t want to go to college or don’t have the aptitude for it? Do they deserve to be left behind and miserable because they did not go to college? It would be better to have a society where workers, no matter what field they are in or what educational credentials they have, are able to live a decent life. Bring back the concept of the living wage and an honest wage for an honest day’s work.

    Chris Dillow has written some good pieces critiquing the obsession with social mobility and meritocracy.





    1. justanotherprogressive

      Looks like a double whammy, doesn’t it?

      Those who do not want to go to college have a very limited ability to find a job that pays enough to have a decent life…..

      Those who do want to go to college have a limited ability to do so if they don’t come from wealth – else they find themselves covered with debt and again unable to find a job that pays enough to pay back the loans and have a decent life…..

      I wouldn’t call this system we have a meritocracy, though, because those at the top aren’t terribly well educated or all that “skillful” (oh, I know, they all have their MBA’s but in reality what does an MBA teach you that you couldn’t learn on The Apprentice?), rather they are in the positions they are because of wealth or connections……rather it is much more like nepotism…..is nepotocracy a word?

    2. jrs


      “the labor market is where inequality is expressed rather than where it is created” wtf does that even mean? It’s more “equality of opportunity” weaseling isn’t it, that if only we had perfect educational opportunities or something then we wouldn’t have huge levels of inequality. But back in the real world vast discrepancies in pay (and pay compared to unearned income) is inequality period. Fix that and worry less about everything else.

    3. lyman alpha blob

      Hear hear!

      All the talk of ‘improving’ one’s self to get ahead seems to tacitly admit that a large portion of the available jawbz in the US of A don’t pay enough to live on by working a 40 hour week. IMNSO it ought to be criminal to create a business model where your profit comes from not paying those who work for you enough to live on.

      Many of the so-called better jobs are paper-pushing, Dilbert-esque soul-crushing nightmares anyway. If I could actually make a living doing retail in a bookstore , I’d do it in a heartbeat.

      1. NotTimothyGeithner

        “If I could actually make a living doing retail in a bookstore , I’d do it in a heartbeat.”

        This is why arguments about how single payer would help big business fall on deaf ears when reformers waste their efforts appealing to CEOs of non-health fraud companies. It might increase competitiveness of small businesses and start ups, but corporate America would lose significant control over its work force.

        It might not be you specifically and your dream of being a corporate librarian :), but you get the idea. Single payer would be good for most of the country except the Trump class.

        1. CanCyn

          To paraphrase Will Hunting, “Why waste $150,000 on an education you coulda got for $1.50 in late fees at the public library and/or on the web?”

    4. Sutter Cane

      How about a return to college being about actually learning things, rather than being about job training? I would prefer everybody had a chance to go to college so that they could be exposed to different ideas, viewpoints, people from different backgrounds, etc. A good ‘ol liberal arts education. But having ditch diggers discussing Russian literature on their break might make society a better place to live in for everybody but it doesn’t earn anything extra for the boss man, does it?

      1. Wukchumni

        If you feel so inclined, this contraption can be your university to learn about everything and then some. My mode growing up was a 1966 World Book encyclopedia I read cover to cover, mostly in the bathtub. (that “M” was pretty hefty)

        In any case, it isn’t as if colleges and universities have secret knowledge anymore, it’s all here waiting for you.

        1. Anonymized

          Encyclopedias only have general-level information, though, good enough to get a feel for the subject without much in-depth information. Besides which, Wikipedia has effectively killed print encyclopedias.

          There’s also a social aspect involved in learning. We need others as study aides and for motivation as competitors, not to mention as teachers who can explain difficult concepts, clear up misunderstood material, and evaluate your work. All the information may be available in libraries but how many people are self-taught PhD-equivalents?

    5. Sue

      Live Drusus, good point
      I have always said that rather than target breaking the glass ceiling let’s aim for everyone’s happiness on firm ground.

    6. Huey Long

      The whole concept of social mobility assumes that one would want to desperately leave your working-class background to become a professional. What about those people who don’t want to go to college or don’t have the aptitude for it? Do they deserve to be left behind and miserable because they did not go to college?

      All workers have value:


      As you can see in this video, there’s a lot of folks “busting their [family blog] doing all the [family blog] work you take for granted.”

      Unfortunately in our society if you’re not white collar you’re assumed to be some kind of eff-up no matter how vital your role is. This is why I’d love to see a return to the days of the sitdown strike.

      Although they’re illegal now as per the NLRA, there’s no more effective way to scare the hell out of the bosses as they neutralize the effectiveness of both strikebreakers and Pinkertons.

      1. OpenthepodbaydoorsHAL

        Saint Obama travelled to Germany and gushed “we need to learn from them and do what they’re doing”. (Except for the part about strong unions, high shop floor wages, and decent benefits, that is.) He spent a cool $100B per year on the Afghanistan surge but at least he looked teally hip when he said that stuff on his Germany trip

  6. Vatch

    “The dispute settlement shift would also include a change to Chapter 11 of NAFTA, … The proposal would allow countries to opt into the system, essentially making it voluntary.”

    That great, but I have one question: will countries be able to opt out? Suppose a corrupt administration and legislature ratify the agreement, and then opt into the ISDS program, even though there is massive public opinion opposed to it. When a new administration takes office, will they be able to opt out of the bad system that never should have been agreed to in the first place?

    (Yes, I understand that most administrations and legislators are corrupt.)

    1. Huey Long

      Lhota won’t bite the hand that feeds him

      Which hand? Dear Governor’s or NYU Langone Hospital’s?

      I’m still at a loss over why Lhota was even brought back to the agency or why NYU Langone signed off on it. I mean if you were on the NYU Langone Hospital board would you be thrilled that your CEO is now splitting his time with the MTA instead of focusing exclusively on running the hospital?

  7. L

    It looks like Wisconcin’s capitulation to Foxconn is a go. Governor Walker just signed a bill that transfers 2.8 billion dollars to the company. The bill also contains the `usual’ exemptions from environmental laws. Significantly it also does an end-run around the courts and guarantees Foxconn a virtual get out of court free card:

    Finally, the legislation stipulates that, should environmentalists, local businesses, or Wisconsin residents sue this company, for any reason, any trial-court rulings against it will be automatically suspended, until a higher court weighs in — should the higher court rule also against it, the company will be able to take its case to the state’s (conservative-dominated) Supreme Court in an expedited fashion.

    See here

    So it seems that the Walker administration (with the public backing of Trump and Paul Ryan is not only exempting laws but cutting out the courts by giving a Taiwanese company rights above and beyond those of who merely live in or own businesses in Wisconsin.

    How exactly is that “America First?

      1. L

        As the article noted the state’s official legislative advisors noted that parts of the bill “may be unconstitutional.” In particular they highlighted the role of courts in deciding elevation which would seem to be exactly an equal protection issue. Apparently that did not slow down Walker and, as the article noted, the taxpayers will be required to foot the bill to defend this bill so perhaps he is unconcerned.

    1. jrs

      but jawbs, never mind that jawbs without even a legal recourse, is probably jawbs that have a good chance of killing the employee … I mean working somewhere that is officially above the law sounds like such a plum opportunity NOT, but hey JAWBS JAWBS!

    2. Huey Long

      See, a sitdown strike could really work here:

      You occupy the building, drain the sprinklers, and if the Pinkertons (the state’s or the company’s, it does not matter) try to kick the door in you light a match, run like hell, and watch the state’s 2.8 billion dollar corporate handout go up in flames.

      If the guys at the top want to play hardball they should be prepared for the guys at the bottom to return the favor.

  8. Jim Haygood

    [Bloomberg] is part of that growing chorus of money-smart old dudes wondering aloud if this market is tethered at all to reality.

    Today, on the same day that Robert Shiller posted an article saying that conditions are about the same now as before 13 other bear markets, Howard Ma at Meritocracy Capital offered a different version of Shiller’s CAPE ratio.

    To smooth volatile corporate earnings, Shiller divides the current S&P 500 index level by a 10-year average of its constituents’ earnings. Ma suggests that outliers, such as depressed profits during the 2008 crisis and its aftermath, could be suppressing the 10-year mean. He instead uses the median, which is less affected by a couple of extreme highs or lows. Here’s a chart of Ma’s CAPME:


    Today’s CAPME of around 26 is lower than in 2007, lower than in 1929, and slightly above the Nifty Fifty bubble of 1966. You may recall that the Nifty Fifty bubble ushered in 17 long years when the Dow Industrials could not durably break above 1,000, sliding back every time. Meanwhile inflation was severely eroding the purchasing power of the Dow Thou, even had it held.

    Dow Thou (call it Dow 20 Thou today) is one possible endgame of Bubble III. That is, stock indexes stay parked in a familiar range, while the inflation that the Fed ardently desires erodes its real value. Since a serious pension crisis is coming in the 2020s, Treasury needs to inflate away the principal of the epic borrowing on tap to bail out the busted pensions of our beloved government workers.

    We’ve got a plan; now we just have to figure out how to implement it. :-)

    1. pricklyone

      The only ‘pension crisis’ extant is the one where the guys in charge decided to stop paying into the pensions, and took the money (private), or put it to other uses(government).
      Now we should blame the employees, not their employers?

      1. ewmayer

        You also should have stripped off all the URL tracking-spam starting with the ‘?’. (I do similarly whenever I send e.g. Reuters links to Yves.)

    1. G

      It was miles better than the foreign policy views of most politically important democrats, but severally things rubbed me the wrong way:

      1. The belief that Russia constitutes a grave threat to American democracy and related beliefs about the danger of Russia on the international stage. I have my doubts about the Russia hacking scandal, but even if parts of it were true, it would not justify the claim that America’s democracy is at threat. So far as I can tell, nobody has even tried to prove any causal connection between Russian “influence” (whether through wikileaks or facebook ads) and how people voted. My guess is that those who already disliked Hillary were strengthened in their resolve not to vote for her by them, but I doubt few if any people explicitly changed their vote as a result. Like the supposed Russian Hacking, where’s the evidence? Moreover, Russia has shown little threat internationally. It has not tried to annex any other parts of the Ukraine (recently I read it was in favor of having UN peacekeepers in Ukraine) and it does not show any real interest in threatening any other Eastern European countries. Any supposed military build-up on the borders seems defensive (related to corresponding NATO build-up). Moreover, Putin has argued for dialogue regarding the NK situation, which puts him in the sane and reasonable camp, at least on that issue.

      2. While Bernie came out in support of the Iran deal, he still felt compelled to mention that it was a threat to other Middle Eastern countries. While it certainly is expanding its “soft-power” influence in Iraq and Syria, these do not seem to correspond to military build-up. It seems that Iran is just taking an opportunity of the power vacuums left by the US and its allies, including their support for ISIS and other rebel groups. Hardly a threat.

      3. Bernie endorsed more sanctions on NK and putting more pressure on China, which will be totally un-helpful to easing tensions and opening dialogue. Sanctions have proven totally ineffective in curbing NK militarization. Moreover, they seem to have had the opposite effect. They spur NK on to develop weapons more rapidly and make greater threats. Experts, like David Kang and John Delury have also called attention to the fact that the various small market reforms that have been taking place in NK, which overwhelming benefit the NK people, may be curbed in light of continued sanctions. It is very telling that Bernie does not endorse dialogue as the primary solution to the NK problem.

      4. Bernie did not mention drone warfare and its consequences in the Mid-east. During his campaign he endorsed the use of drones. This has always bothered me.

      I applaud Bernie’s stand on Saudi Arabia. That alone sets him apart from most other democrats and republicans. I also was glad that he called out US complicity in Israel’s oppression of the Palestinians. However, I worry that he still retains too much of the liberal-interventionist attitude than many of his supporters would like to think.

      1. nippersdad

        Agreed. There do still seem to be some blank spots in his analyses, particularly wrt Russia. Normally I would tune out at the first mention of them, but even this is worlds better than anything else we have heard in years. The general tone seems to preempt the idea of interventionism as a first resort, though, so I’ll take that as a win!

        I, obviously, can’t know this, but I thought that maybe he didn’t want to mess up the catbox he was running in too badly; he was a guest, after all. It is nice to see that that may have actually been the case and that he actually has given some thought to these issues.

  9. L

    Alaska, however, would be awarded $6,500, or 48 percent more than other states” [News Miner]. How convenient!

    Convenient yes but this tack was tried the last time around and it failed for the same flaw that this shares. That fund goes away after a short period and then Alaska is back with less like everyone else.

    As the state’s governor Bill Walker (no relation to Scott) put it. “Flexibility doesn’t help me if I have less money.”

  10. JBird4049

    I am misreading the map and graph of what states would gain and what states would lose healthcare funding?

    Blue state California would lose as much as Red state Texas would gain?


  11. Summer


    “The rationale for this rapid curricular renovation is economic. Teaching kids how to code will help them land good jobs, the argument goes. In an era of flat and falling incomes, programming provides a new path to the middle class – a skill so widely demanded that anyone who acquires it can command a livable, even lucrative, wage.
    This narrative pervades policymaking at every level, from school boards to the government. Yet it rests on a fundamentally flawed premise. Contrary to public perception, the economy doesn’t actually need that many more programmers. As a result, teaching millions of kids to code won’t make them all middle-class. Rather, it will proletarianize the profession by flooding the market and forcing wages down – and that’s precisely the point…”

    “should have the opportunity to learn how to code. Coding can be a rewarding, even pleasurable, experience, and it’s useful for performing all sorts of tasks. More broadly, an understanding of how code works is critical for basic digital literacy – something that is swiftly becoming a requirement for informed citizenship in an increasingly technologized world.

    But coding is not magic. It is a technical skill, akin to carpentry. Learning to build software does not make you any more immune to the forces of American capitalism than learning to build a house. Whether a coder or a carpenter, capital will do what it can to lower your wages, and enlist public institutions towards that end.

    Silicon Valley has been extraordinarily adept at converting previously uncommodified portions of our common life into sources of profit. Our schools may prove an easy conquest by comparison….”

    Those are just excerpts, but I could see another development from the computer courses…
    As requirements, they won’t be about creating great programmers that can develop new technologies. I think they want it to be just enough of a “new must have requirement” so that students will know just enough to serve as their own IT help desk at other jobs.
    They want students to be able to do other jobs AND the every day IT help desk chores (without having to pay for the IT Help Desk (every office has one).

  12. roadie

    Re: “The Political Genius of Bernie’s ‘Medicare for All’ Bill” [The Nation]. “

    Jim Kavanagh warns of the preemptive compromises/sabotage being baked-in to Bernie’s bill with the assist of Franken & Gillibrand: https://www.counterpunch.org/2017/09/21/fool-me-twice-trojan-horse-democrats-pile-into-the-house-of-single-payer/

    “Single-payer…won’t pass a Republican-controlled Congress or a Democrat-controlled Congress. We saw that in 2009, where no Republican vote was received or needed for whatever the Democrats wanted to pass—which was not single-payer.”

    “The Democrats’ shunning of single-payer wasn’t because of Republicans in 2009, and it’s not now.
    The Democratic Party as an institution, as opposed to its constituency (to which it is opposed), is against single-payer. Through its financial infrastructure (and media assets), on which all of its candidates and legislators depend, it will …concoct any excuse or diversion, to prevent a robust and irreversible single-payer program.”

    1. roadie

      My first post here at NC. Sincere thanks to Yves, Lambert, and Jeri-Lyn for all of your work. (please feel free to stop apologizing for taking any well-deserved breaks :)

      And thanks to the commenters for adding so much to the site.

    2. Richard

      I am interested in discussing what seems to be a premise of the article in The Nation, that Bernie’s ‘credibility'” in supporting neo-liberal policies like Obamacare have helped him garner support for Medicare For All. I guess I could read the dang article, but I’d really rather hear who you all know (or speculate :)).Is there any evidence this is true? Does working within the system, that despised (by me) bromide, actually have one piece of supporting evidence?
      Of course the obvious reply to this idea is that Bernie would still be an relatively unknown senator with little influence, except people are good and pissed off and finally beginning to exert pressure. So besides whatever goodwill his support of DLC type policy has engendered, the times have also made the man.

      1. NotTimothyGeithner

        The Democratic 2016 platform springs to mind of how Sanders might be thinking. Many of the Hillary delegates would vote for the Sanders side despite the opposition of their minders because many Hillary supporters voted for an imaginary friend, the candidate of the “well behaved women…” bumper sticker, not the real Hillary Clinton. Criticizing Hillary or Obama (insert your political idol of choice even Sanders) is an attack on your choice of bumper sticker for too many people. As Nomiki Konst demonstrated, those people can be led to be better when their imaginary friend isn’t being impugned. Clear positions are easier to hold people accountable on. Obama not closing Gitmo didn’t help him and served as a source of embarrassment.

        The other side is who really expected Hillary to lose? With 1.4 billion dollars and an aging GOP, I figured even Hillary would be able to get enough votes out. Admittedly, I never imagined the Clinton campaign would pull resources to drive up popular vote totals in safe states, but I suffer from a lack of imagination.

        The last part is the celebrity quality of Hillary and Obama. They were celebrities without being President. Obama’s election was a bit of good news in 2004 and was a sure thing as Kerry floundered. It was something of a shared event that kind of mattered emotionally along with the obvious issues with being black in America. With the rise of the internet and a return to text based news (I do believe television rots the mind and conditions people to be shallow) and the recency of the Obama phenomenon, there isn’t stomach for a new celebrity candidate. Even in some ways, Obama is the product of Oprah who isn’t Oprah anymore. Who can be the celebrity candidate? We just had two, and they took up the oxygen and the environment for a celebrity candidate from the Democratic side for some time. Cuomo? Booker? Harris? Warren? Biden? Kaine? Zuckerburg? I can list countless Democrats, but none of them are poised to be celebrity candidates. Over the last few years, elected Democrats have hid behind the personalities and loyalties of Hillary and Obama, but the town halls in recent months have shown the crowds are very different than they use to be. The next Democratic President will have to earn it. No one will be able to anoint a new celebrity for some time, and people (potential Democratic voters) are too stretched to accept a candidate who says mindless drivel. Republicans will always applaud drivel.

        I see the Democratic Party as too rotten to be fixed and Sanders should focus on a new party.

    3. marym

      Thanks for the link. That article does go on and on….. but the reemergence of the public option scam, and the perpetuation of a multi-tiered “market” for health insurance are among the real danger points in the Sanders bill compared to the Conyers bill in the House.

    4. UserFriendly

      That article is stupid. Calling for a slow phase in of single payer with a public option buy in available for those who don’t want to wait for their age bracket is so completely different than a permanent non expanding public option that the author just sounds stupid. Health care is 1/5 of the economy, it isn’t insane to want to have the change phase in slowly. The public option in this case is actually a great idea because should the private insurance industry collapse during the phase in period they have somewhere to turn. Pretending that killing the insurance industry and their murder for profit with a slow acting poison is any less efficient than killing it with a bullet to the head is just naive.

  13. JCC

    Maybe I’m missing something here regarding the “Politics – 2016 post-mortem” section…

    “new immigrants are ineligible for public assistance during their first five years in America”

    Unless they are refugees, is that so bad?

    I’ve been looking at 2nd citizenships/passports for quite a few years now, and unless I hit the lottery it’s not going to happen. It’s a *very expensive* proposition to emigrate to just about any foreign country.

    I really doubt that if I were to convert all my assets to cash in order to get enough money to do so, that lucky country would immediately allow me to jump onto their welfare roles (if they even had any sort of welfare).

    Do other countries commonly allow this?

    (And please don’t assume that my question means I support Trump or anti-immigration policies in general – it’s just a question)

  14. allan

    Turkish President Erdogan’s Bodyguards Punch NYC Protesters, Witnesses Say [Manhattan Patch]

    For the second time this year, bodyguards for Turkish President Recep Tayyip Erdogan appear to have gotten physical with U.S. protesters — this time, inside the Marriott Marquis Hotel in Times Square, during a “special address” Erdogan was giving to local Turkish and Muslim leaders on Thursday afternoon. …

    At around the 5-to-15-second mark and 30-second mark in the TV news footage below, men in dark suits can be seen punching two different protesters as they’re escorted out of the hotel. …

    Being a NATO member means never having to say you’re sorry.

    1. UserFriendly

      Wow and Klobuchar hasn’t even back Medicare for all…. interesting. If she tries to only back Obamacare during the debate then she won’t get my vote in 2018.

  15. Duck1

    /s it’s a Kondratiev wave, dudes
    AI, autonomous vehicles, automation killing the working class
    Never mind resources run out, concrete ablation, cannot assume the can opener\s
    Good luck duckies

  16. Kim Kaufman

    ““Republicans aren’t voting for Graham-Cassidy. They’re just voting for Obamacare repeal.” [Vox].”

    I think they’re voting for all the cuts with only havig to have 51 votes which has to get done by September 30. They need this for their later “tax reform” aka tax cuts for the rich and richer. After September 30, they will need 60 votes, I think.

  17. tooearly

    “Behind the Senate GOP’s high-stakes health-care gamble: Unrelenting criticism back home”
    Back home with the Bros that is:

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