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By Lambert Strether of Corrente.
“The final U.S. proposal on [NAFTA] investor-state dispute settlement comes not only with an “opt-in” provisions that effectively makes the whole process voluntary, but also rolls back two key investor protections private companies have been able to use under the mechanism in past U.S. agreements. U.S. business and agriculture groups have already signaled that a radical departure from the current U.S. approach to investor protections would be forcefully opposed by them” [Politico]. “[T[he NAFTA proposal the administration is expected to unveil would also eliminate “indirect expropriation” as an argument a foreign investor could use to file a claim. That would make it harder for a foreign company to win damages based on a government action that has only partially devalued an investment as opposed to a full seizure of the investment without proper compensation.”
“John Murphy, senior vice president at the U.S. Chamber of Commerce, warned that the Trump administration was pushing several “dangerous” proposals in the NAFTA talks that the business group could not support” [Politico]. “That prompted several Democrats with a long record of voting against trade agreement to fire back at the Chamber and align themselves with the administration’s efforts. They included Rep. Marcy Kaptur (D-Ohio) and Rosa DeLauro (D-Conn.). It also included Sen. Sherrod Brown, who told Morning Trade last month that he regularly chats with U.S. Trade Representative Robert Lighthizer about the NAFTA negotiations.”
“A new trade dispute between the U.S. and Mexico is taking root in the rich farmland northeast of Mexico City. Fed by growing American demand, the region has seen an explosion in berry farming…, drawing charges from U.S. growers that Mexico’s exporters are outflanking their goods with cheaper, year-round berries” [Wall Street Journal].
” If USTR was expecting scores of business leaders to bear their souls in public about the challenges of operating in China, that doesn’t seem to be on the agenda for today… only three companies — SolarWorld Americas, American Superconductor Corp. and ABRO Industries — will be on hand [at the USTR’s dual Russia China hearings] to share their perspectives” [Politico]. “Several groups that filed comments — such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Foreign Trade Council, the U.S. Council for International Business and the Pharmaceutical Research and Manufacturers of America — decided against testifying.”
2016 Post Mortem
Grifters gotta grift:
SIMPLY PUT: If you spread the idea that Hillary Clinton is a horrible monster, you were a de facto Russian propagandist. Congratulations.
— Peter Daou (@peterdaou) October 10, 2017
I like especially the question begging of “horrible monster,” though it’s hard to think of a better term for the architect of the Libyan debacle (not to imply that the term can’t be applied to most fully paid up members of The Blob).
“Billionaire Robert Mercer and his wife Diana donated almost $200,000 to the legal defense fund of the Republican Party on the day that President Donald Trump fired former FBI Director James Comey, financial filings show” [Newsweek]. “The Mercers are just one of several billionaire couples donating heavily to the fund in recent months, according to the filings with the Federal Election Commission (FEC)….” So, wait a minute. Maybe the real problem with the Trump administration isn’t just Trump?
“These Are the Tax Issues Threatening to Divide Republicans” [Bloomberg].
“‘Trump’s speed in nominating judges has been perhaps the most successful aspect of his presidency,’ said Carl Tobias, a law professor at the University of Richmond who specializes in judicial nominations. ‘Trump has easily surpassed Obama, Bush and Clinton at this point in the first year of their presidencies in terms of the sheer number nominated'” [HuffPo]. But Russia! Moron! [bangs head on desk]
“While Feinstein could be vulnerable to a primary challenge in liberal California, remember that the state has a top-two primary system — meaning that the two primary candidates with the most votes, regardless of party, head to the general election” [NBC]. “So say a Bernie Sanders-like candidate challenges Feinstein from the left: It’s possible that this challenger might not even make the runoff (because a Republican could get more votes in the primary). And even if this challenger makes the top two, Feinstein could win by consolidating the GOP/indie vote. Bottom line: It would be very hard to beat Feinstein from the left.”
“Bannon Plans to Back Challengers to Most GOP Senators Running in 2018” [Bloomberg]. “Bannon plans to support as many as 15 Republican Senate candidates in 2018, including several challengers to incumbents, the people said. He’ll support only candidates who agree to two conditions: They will vote against McConnell as majority leader, and they will vote to end senators’ ability to block legislation by filibustering.” And if the Democrats do in fact double down on 2016’s “Pied Piper” strategy, they’ll be helping him!
“Starbucks’ Schultz still not running for president, launches series on Amazon” [Reuters]. “The new season of “Upstanders” chronicles the journeys of everyday people who, among other things, have successfully reached across ideological divides to find consensus on divisive issues such as refugee resettlement, climate change to needle-exchange programs. Upstanders launched last year on the Starbucks app, which has 19 million active users, and the chain’s in-store wireless network.”
Mark Zuckerberg still not running for President either:
— The Verge (@verge) October 9, 2017
Realignment and Legitimacy
“American Kakistocracy” [Norm Ornstein, The Atlantic]. “The moves undertaken now by Trump and his aides to sabotage Obamacare, after the embarrassing failures to enact a bill to repeal and replace it, are sadistic and outrageous.” No, they’re consistent with the conservative view that health care is a privilege and not a right. Of course, liberal Democrats can’t make that the centerpiece of their attack, since they believe that health care is a privilege, too (as ObamaCare’s insanely complex system of eligibility determination makes crystal clear). And so we get endless reams of huffing and puffing like this piece. I mean, does anybody really believe that ObamaCare eliminated “sadistic and outrageous” behavior — by the insurance companies? Ask NC readers!
“This is the America we deserve” (I’m sensing a theme) [The Week]. “The United States is a great nation. A superpower the likes of which the world has never seen. The single most essential guarantor of global order since 1945. The engine and overseer of worldwide economic growth and technological advancements over the same period. And yet here in the second decade of the 21st century, our political culture has descended into pure mayhem. It’s become a madhouse, a freak-show circus. Donald Trump is its ringleader, but the rest of us gamely play along, with some cheering him on, and many others relishing every opportunity to express our hatred of him and everything he and his party represents. It’s all heat and next to no light at all — a grim, sickening display. And it’s becoming increasingly difficult to imagine a way out.” In the Beltway, perhaps.
“How conservative states and liberal cities vie for control” [The Economist]. “At first glance, they seem unrelated: a fracking ban in Denton, Texas; a minimum-wage increase in St Louis, Missouri; and an anti-discrimination ordinance in Charlotte, North Carolina. Yet each was passed in a city then later overturned by a Republican-controlled state legislature. Legal observers see a trend in the rollbacks. Grassroots Change, a nonprofit organisation, counts 140 state bills introduced this year specifically to block municipal laws.”
“Trump’s popularity is slipping in rural America: poll” [Reuters]. “[T]he Republican president’s popularity is eroding in small towns and rural communities where 15 percent of the country’s population lives. The poll of more than 15,000 adults in “non-metro” areas shows that they are now as likely to disapprove of Trump as they are to approve of him.” First, these are not the Republican base in the wealthy suburbs. These are voters at the margin; and like the voters at the margins in counties that flipped from Obama to Trump, they are evaluating Trump based on his performance.
“Antifa in Theory and in Practice” [Counterpunch]. “American Antifa looks very much like a middle class wedding between Identity Politics and gang warfare.” With, I note sourly, plenty of agent provocateurs mixed in.
NFIB Small Business Optimism Index, September 2017: “fell 2.3 points in September to 103.0, led by a sharp drop in sales expectations, not only in states affected by hurricanes in Texas and Florida, but across the country.” Below consensus [Econoday]. “The most severe declines were registered in sales expectations, which fell 12 points to 15, and now is a good time to expand, falling 10 points to 17. But planned increases in capital outlays by small business owners also fell significantly…. The September survey indicates the frothy expectations of business-friendly health reform and lower corporate taxes have cooled noticeably in September. Moreover, NFIB noted that optimism may have actually declined more than its survey indicates, since it was likely that reporting members in Florida and Texas were underrepresented because of disruptions.” End of the Trump Bump?
Employment Situation: “Year over year growth has been decelerating for all practical purposes in a straight line, as per the chart. And the downward revisions in prior months are further evidence of the weakness which began with the collapse in oil capex at the end of 2014. And wage growth increased at least partially because the jobs lost were largely those of lower income workers” (charts) [Mosler Economics]. “Also, at this point with low levels of deficit spending, both public and private, the economy is more likely to be path dependent. In other words, a drop in employment and sales for any reason is also a drop in income which probably means less subsequent spending, less income, etc. etc. but it take another month or so of data to see if that’s what’s happening.”
Credit: “Appears to be leveling off at much lower rates of growth than last year, as reflected by weaker than expected data releases and revisions” (charts) [Mosler Economics].
Energy: “Citing data gleaned from the world’s biggest developers of coal-fired power plants, Urgewald found that of all the new coal generation expected to go online over the next decade, Chinese companies will build nearly half of it. Specifically, that means 700 new coal plants, with most to be built in China, and about a fifth outside the country” [Mining.com].
Manufacturing: “General Motors Co. is facing a supply glut and it goes beyond automobiles on dealer lots. Despite its drastic downsizing a decade ago, the top U.S. auto manufacturer by sales finds itself with too many factories that can turn out too many vehicles. The imbalance is undermining GM’s finances” [Wall Street Journal]. “Adding to the strain: GM must contend with its capacity glut at the same time the company is making costly investments in electric cars and self-driving vehicles.”
Retail: “The Szechuan sauce fiasco proves Rick and Morty fans don’t understand Rick and Morty” [Eater]. “Rick and Morty superfans, the ones who are giving the rest of us a bad reputation, like to “joke” about how you have to be smart to understand the show while proving over and over again that they don’t understand the show. Rick wasn’t saying the sauce was important, he was saying that nothing is important. Why not destroy a family over a sauce? Why do or don’t do anything? The fans responded by giving the subject of that joke an absurd amount of importance in their lives. They felt real anger over not getting their sauce, and they don’t mind taking it out on McDonald’s.” Life, again, imitates a William Gibson novel. Although, to be fair, if there’s one thing our economy knows how to produce, it’s anger.
Retail: “[L]ate Sunday, McDonald’s said it would bring back the coveted Szechuan sauce this winter — ‘a lot more,’ and at more locations, and for more than just one day. ‘We want to make this right,’ the company said in a statement” [MarketWatch]. Genius!
Retail: “The “Amazon effect” is hitting a wall at the high end of the retail market. Owners of big luxury brands including Swatch Group and LVMH Moët Hennessy Louis Vuitton SE are resisting Amazon.com Inc.’s pitches to join the marketplace, the WSJ’s Matthew Dalton and Laura Stevens report, undercutting the e-commerce leader’s bid to expand its reach and move up the profit-margin ladder” [Wall Street Journal]. Yeah. Louis Vuitton doesn’t sell at Walmart, either, for pity’s sake.
Retail: “Cristiano Ronaldo still reigns in the social media stakes. The 32-year-old former Manchester United winger is the athlete with the most valuable reach on social media, according to a new report from D’Marie Analytics, a social media research firm. A post by Ronaldo across Instagram, Facebook and Twitter is worth a cumulative $728,973.35, making him both the most valuable soccer player and athlete overall” [Moneyish].
Retail: “How AI Will Change Strategy: A Thought Experiment” [Harvard Business Review]. ” AI is fundamentally a prediction technology. As advances in AI make prediction cheaper, economic theory dictates that we’ll use prediction more frequently and widely, and the value of complements to prediction – like human judgment – will rise…. At some point, as they turn the knob, the AI’s prediction accuracy crosses a threshold, such that it becomes in Amazon’s interest to change its business model. The prediction becomes sufficiently accurate that it becomes more profitable for Amazon to ship you the goods that it predicts you will want rather than wait for you to order them.” Cool! And when we eliminate cash, Amazon can just deduct the cost of the goods from my bank account. In fact — just spitballing, here — the government might create statutory minimums for consumer spending. Why not?
Shipping: “Container shipping rates into the U.S. are on a downward spiral even as volumes into U.S. port gateways remain solid, a sign that vessel overcapacity is trumping stronger demand and the impact of carrier alliances designed to rationalize ship space” [DC Velocity].
Shipping: “Risk of fragmentation when it comes to autonomous ship regulation” [Splash 247]. “The International Union of Marine Insurance (IUMI) has warned that there could be global disunity when it comes to autonomous ship regulation with the International Maritime Organization (IMO) expected to take many years to approve laws governing this new technology phenomenon…. Long before IMO reaches agreement, a number of autonomous ships are set to be trading including the Yara Birkeland, a boxship conceived by fertilizer company Yara and tech firm Kongsberg Maritime, which is due to start trading in Norwegian waters towards the end of next year.”
The Bezzle: “HelloFresh, the meal-kit startup owned by Rocket Internet SE, aims to announce an initial public offering” [DealBreaker]. “This is great news for every wealth-hating self-abnegating maniac that has spent the last few months wishing that they could invest in a stock that is similar to Blue Apron but somehow even sh*ttier.”
Fodder for the Bulls: “Recent data on global gross domestic product (GDP) growth point to a modest and broad-based increase in real economic activity. In the Federal Reserve Bank of Dallas’ Database of Global Economic Indicators (DGEI), world GDP growth (excluding the U.S.) was 3.5 percent in the second quarter on a year-over-year basis, up from 3.1 percent in the first quarter” [Federal Reserve Bank of Dallas].
Honey for the Bears: “Consumers Strain to Prop Up Recovery” [Bloomberg]. “On Tuesday, the Commerce Department reported that U.S. consumers boosted their July retail spending by the most this year. Analysts cheered, with some seeing less chance of a recession. Yet after a closer look, it appears that consumers are straining their finances to buy more makeup, baseball bats, couches and home-improvement supplies. For one, they’re packing on more debt…. Not only that, but families are also dipping more deeply into their cash reserves.”
Five Horsemen: “Internet Bubble fave Microsoft gives Facebook a run for the money” [Hat tip, Jim Haygood].
Today’s Fear & Greed Index: 84 Extreme Greed (previous close: 84, Extreme Greed) [CNN]. One week ago: 92 (Extreme Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Oct 10 at 12:08pm.
“Judicial Watch: Documents Show HHS Used IRS to Push Obamacare, Use of Confidential Taxpayer Information Raises Legal Questions” [Judicial Watch]. That’s very bad. Imagine income tax data being used by Obama’s “nudge theorists” (or, rather, the “White House Behavioral Sciences Team”) Ick.
“Tight oil export pipeline capacity expected to persist as Energy East cancelled” [CTV].
“A tree’s genetics picks its fungus, which grants drought tolerance (or not)” [Ars Technica]. “Pinyon pines, like other trees, need fungal partners. Trees can only draw in nutrients from the tips of their roots, and that is not nearly enough to support them. Fungi provide the trees with nutrients and minerals; in exchange, the trees feed the fungi some sugar so the fungi can grow…. seeds from drought-tolerant mothers only grew larger than their drought-intolerant cousins when in the presence of their attendant fungi. The tree’s genetics simply helped it recruit specific species of fungi.”
Dear Old Blighty
Maggie Thatcher’s 70’s dinner party recipe:
This is the full recipe ? pic.twitter.com/FJGcyhQGlT
— Amy Gray (@amyelizgray) October 10, 2017
“Who Killed the ERA?” [New York Review of Books]. One theory: “[Robert O. Self] observes further that ‘it was not feminists’ analysis of American society that fell short,’ but rather their failure ‘to manage the political narrative of the ‘crisis of the family.'”
“Meet The New York Times’s First Gender Editor” [Teen Vogue] (from the Department of “SEXUAL HEALTH + IDENTITY”).
“The study [by David Harding, a UC Berkeley associate professor of sociology and three co-authors] shows that if people are sentenced to prison rather than probation, the probability of imprisonment in the first three years after release increases by 18 percent among nonwhite individuals and 19 percent among white individuals” [Daily Californian]. So the carceral state is a self-licking ice cream cone?
“This term at the U.S. Supreme Court seems likely to end with an assault foretold—on America’s public-employee unions. It will come in a case called Janus v. American Federation of State, County, and Municipal Employees, Council 31, which was granted review on September 28. Janus challenges—for the third time in five years—the financial stability of public employee unions. By coincidence, these unions are an important pillar of the Democratic Party” [The Atlantic]. “This is a constitutional dispute conjured more or less out of thin air over the past five years by Justice Samuel Alito… The Abood court was wrong, Alito wrote: ‘free-rider arguments … are generally insufficient to overcome First Amendment objections.'”
News of the Wired
“Why Do We Sleep?” [JSTOR]. Kidding, right? Anyhow: “The mystery of sleep keeps getting deeper. A recent serendipitous discovery by a group of graduate students led them to prove that jellyfish seem to sleep. It’s a pretty remarkable discovery, not least because jellyfish don’t really have brains. It calls into question very purpose of sleep, which, despite years of study, is still not understood.”
“It’s almost never possible to evaluate the utility of an algorithm by looking at the code or measuring it against a mathematical formula. To evaluate the risks or benefits of an algorithm, we need to study its impact in people’s lives, whether in controlled lab conditions or in the wider world” [Medium]. Should be obvious, but isn’t.
“Modern psychology (as I’ve argued at greater length elsewhere) is broadly corroborating the Buddhist view of our situation: We are naturally afflicted by confusion, including cognitive biases, and this confusion is indeed abetted by feelings, and one consequence of all this is needless suffering. With Buddhism’s diagnosis of the human predicament getting more and more scientific validation, maybe it’s time we started paying attention to the Buddhist prescription” [Wired]. Arriving at this conclusion after a long tour through tribalism and attribution bias.
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 (AL):
AL: “Beargrass on the Highline Trail at Glacier National Park this summer.”
Readers, thanks for the nice pictures of plants! Now I have a little bit of a stash.