By Lambert Strether of Corrente.
“U.S. and South Korean negotiators meet in Washington today for the third round of talks on renegotiating the U.S.-Korea Free Trade Agreement [KORUS], which President Donald Trump has threatened to terminate unless changes are made to reduce the U.S. trade deficit with the Asian ally. The meeting comes on the sixth anniversary of the pact going into effect in March 2012” [Politico]. “‘Not everything with regard to KORUS is perfect and there are important areas where Korea has not met its commitments,’ the U.S. Chamber of Commerce said in a blog post today that makes the case for staying in the agreement. ‘But it might come as a surprise that in six years KORUS is actually advancing many of the administration’s highest priorities and delivering wins for U.S. workers and the economy.'”
Sanders on National School Walkout day:
Just a reminder to both Dems & GOP, most of these people screaming for Bernie and saying they love him will be 18 by Nov 2020.
This is just 1 minute of over 5 minutes of this. pic.twitter.com/x9RRfhHo2g
— SLumpy SLouise (@lumpylouise) March 14, 2018
“Are Republicans in More Special Trouble?” [Larry Sabato’s Crystal Ball]. “With the PA-18 special now in the books, the House now only has three vacancies, seats previously held by ex-Reps. Trent Franks (R, AZ-8), John Conyers (D, MI-13), and Pat Tiberi (R, OH-12)….. AZ-8 is based entirely within Phoenix’s Maricopa County, the fastest-growing county in the whole country (its population is more than 4 million total and has roughly doubled over the last three decades). Maricopa remains one of the only big counties that still votes Republican at the presidential level, but that edge may be eroding… There’s no doubt MI-13 will elect a Democrat: Hillary Clinton won the majority-black seat 79%-18% in 2016…. Overall, OH-12 voted for Trump by about 11 points and Romney by 10, so it hardly budged at all from 2012 to 2016. That’s probably because the district is more highly educated than the national average (40% of residents over 25 have a four-year college degree, compared to about 30% nationally), and white college-educated voters are significantly more skeptical of Trump than white non-college voters. If there’s a parallel to PA-18, it would be if the areas of the district closest to Columbus swing heavily to the Democratic nominee as a protest against Trump, much like areas of PA-18 did on Tuesday.”
PA-18: “The Republican candidate, Rick Saccone, may still contest the outcome. But Mr. Lamb’s 627-vote lead Wednesday afternoon appeared insurmountable, given that the four counties in Pennsylvania’s 18th district have about 500 provisional, military and other absentee ballots left to count, election officials said” [New York Times].
PA-18: Recall yesterday’s turnout chart. Here’s more:
Story of the result: Lamb (D) & Saccone (R) both hit roughly the %s they needed in each county of #PA18. But here's the difference:
Allegheny Co. (Dem) turned out at 67% of '16 levels, Westmoreland Co. (GOP) turned out at just 60% of '16. Another pro-Dem enthusiasm gap.
— Dave Wasserman (@Redistrict) March 14, 2018
PA-18: “What the Pennsylvania special election tells us about the Democratic turnout surge” [WaPo].
Realignment and Legitimacy
“Philadelphia’s New Top Prosecutor Is Rolling Out Wild, Unprecedented Criminal Justice Reforms” [Slate]. “Back on the campaign trail last year, Krasner, a former civil rights and criminal defense attorney who had been best known for suing police officers, offered a stump speech that condemned the criminal justice system for being racist and for criminalizing poverty and addiction. He was an unusual candidate to be the city’s top law enforcer. Voters swept him into office. Now, two months into his term, DA Krasner is virtually undistinguishable from candidate Krasner. On Tuesday, Krasner issued a memo to his staff making official a wave of new policies he had announced his attorneys last month. The memo starts: ‘These policies are an effort to end mass incarceration and bring balance back to sentencing.’… In an about-face from how [plea bargaining] transactions typically work, Krasner’s 300 lawyers are to start many plea offers at the low end of sentencing guidelines…. Krasner’s lawyers are also now to decline charges for marijuana possession.” This is important. I don’t want readers to get the impression, when I go up to the 30,000-foot level and start blathering about institutions and systems, that electing one good person to office can’t make a difference. It can. (It’s just not enough.)
“Finalized Memo Mar. 13, 2018” (Scribd) [Larry Krasner].
“Political Identity as Identity Politics” (PDF) [Richard Thompson Ford, Legal Left]. Fun polemic, less mild-mannered than it seems at first:
Shaking off the constraints of left-liberal dogmatism should mean dropping the to politics that dominates the bi-partisan American scene: it’s our team against theirs, every loss for them is a victory for us and vice versa (now we even have team colors, red and blue). Perhaps the most destructive form of identity politics is this bi-polar identification of American ideology: in the cabined imagination of popular politics “left” and “right” become, not reasoned worldviews and normative commitments that are subject to argument and thoughtful revision, but instead (ironically) almost pre-political identifications from which follow detailed dogmas: bundles of logically distinct and unrelated commitments and positions offered, Happy Meal style, as an integrated package (no substitutions, please).
“Oconomowoc schools impose limits on ‘privilege’ discussions after parents complain” [Journal-Sentinel].
“Joanie Mahoney: Guilty verdict for Cor’s Steve Aiello ‘simply does not make sense'” [Syracuse.com (Bob)]. “The rot is completely bipartisan, top to bottom, right to left….. I’m not sure I can a put more fine point on this- Two of the defendants in this case were Mahoney’s patrons. She’s defending them, IN THE LOCAL [family blogging] PAPER, after they were convicted of bribing the Democrat governor.”
Philadelphia Fed Business Outlook Survey, March 2018: [Econoday]. “Rarely in its 50-year history has the Philly Fed’s manufacturing report shown such unusual strength and with it, unusual capacity stress” [Econoday]. “Shipments are at 32.4 and employment at 25.6, also at a feverish pitch which raises the question of sustainability for this sample…. Yet the strong upward signals being sent by like Philly and Empire State have yet to be matched by the actual factory sector where strength, though tangible, is much less extraordinary and much less at risk of capacity dislocations.” Survey vs. data mismatch, film at 11. And: “Consider this a stronger report than last month as key elements strongly improved” [Econintersect]. “This is a very noisy index which readers should be reminded is sentiment based. The Philly Fed historically is one of the more negative of all the Fed manufacturing surveys but has been more positive then the others recently.”
Empire State Manufacturing Survey, March 2018: “Empire State is back on fire.And like Philly Fed, employment is up, delivery times are slowing, and prices are hot. Also like Philly Fed, this sample sees their selling prices rising sharply in the months ahead” [Econoday]. “ have been sending record strong signals for the past year with actual government data showing much less strength, though tomorrow’s industrial production report, which is part of the actual data, is expected to move higher.” And: “I am not a fan of surveys – and this survey jumps around erratically – but has been relatively steady for the last year. Key internals in the report marginally improved so I would consider this a better report than last month” [Econintersect]
Import and Export Prices, February 2018: “Import prices, inflated by the yearlong decline in the dollar, continue to offer what may prove to be an early and, from the Federal Reserve’s perspective, a welcome indication of price pressures” [Econoday]. ” Excluding petroleum, import prices rose 0.5 percent for a second straight month which is very hot for this reading… February price data were uniformly soft before today’s import data, which though not showing an alarming increase do nevertheless support the Fed’s view that rising imported inflation should help prices move to their 2 percent inflation target over the course of the year.” And but: “Because of backward revisions – the import and export price indices were little changed from where we thought we were last month” [Econintersect].
Housing Market Index, March 2018: “Home builders remain extremely optimistic but just a little less so in March” [Econoday]. “Today’s data point to continued though perhaps to easing strength for the new home market, which are the expectations for tomorrow’s housing starts and permits report.”
Jobless Claims, week of March 10, 2018: “Jobless claims continue to point to strength in the labor market with initial claims down” [Econoday].
Bloomberg Consumer Comfort Index, week of March 11, 2018: “Consumer confidence remains very high, boosted by this year’s tax cut and despite volatility in the stock market” [Econoday].
Consumer Spending: “Federal tax refunds have caught up which may have slowed spending in Feb” (chart) [Mosler Economics],
Retail: “The demise of Toys “R” Us poses a serious challenge to the $27 billion U.S. toy industry. The chain has been a vital cog in the industry as its stores carried a breadth of toys unmatched by rivals and nurtured smaller companies hoping to hit it big” [Wall Street Journal].
Retail: “‘Not welcome here’: Amazon faces growing resistance to its second home” [Guardian]. “What do you get for the man who has everything? When it comes to Jeff Bezos – the richest man in the world with around $130bn to his name – many US cities competing to host Amazon’s second headquarters have an answer: billions of dollars in tax incentives. That proposition has united an ideologically diverse group of dissenters to Amazon’s grand HQ2 competition, ranging from rightwing organizations linked to the Koch brothers to the Democratic Socialists of America (DSA). Groups and individuals that would normally agree only to mutual disdain and distrust have somehow come around to the same conclusion: that Amazon’s decision to pit 20 cities against each other in a fight to host a future hub is a bad deal for everyone except Amazon.”
Retail: “Detroit’s Amazon tax incentives remain ‘trade secret'” [Crain’s Detroit Business]. “The Michigan Economic Development Corp. is keeping secret the tax incentives offered to Amazon for an economic development project in downtown Detroit that’s not expected to ever materialize, citing a “standing” nondisclosure agreement with billionaire Dan Gilbert’s Rock Ventures. The state agency’s decision to shield from public disclosure the likely billions of dollars in tax incentives the state was prepared to give Amazon for a 50,000-employee corporate campus in Detroit stands in contrast to its disclosure last week of up to $2 billion in incentives offered to Amazon for a Grand Rapids campus and the more than $3 billion in subsidies offered last year to Foxconn Technology Group for a manufacturing plant in Michigan. It also raises questions about whether Gilbert and Rock Ventures are getting special treatment from the state, and why the state is keeping secret incentives that it and the city of Detroit had offered. Public money was being offered that would have benefited Gilbert, but the public isn’t being told how much.” Tax breaks are a trade secret? Icky. That sounds like a CalPERS move.
Retail: “The best online trend some retail real-estate experts have heard of lately is what they call “clicks-to-bricks.” A New York City landlord recently signed four web-based apparel retailers to open storefronts at a single Manhattan property…, making the site a destination for shoppers looking to test out physical products before they buy online. It’s the latest move by retail-space owners to rethink and renovate stores as e-commerce continues to whittle down sales at brick-and-mortar sites” [Wall Street Journal].
Apparel: “[Zara] plans to operate online stores in all 96 of its markets, up from 49 markets today. That could chip away at profitability since Inditex will take on extra shipping costs, but the company insists it has fashioned a fulfillment strategy that makes the online sales just as profitable as store sales” [Wall Street Journal].
Shipping: “Port of Oakland imports jumped 14.9 percent last month” [Logistics Management]. “February container volume grew in all categories, setting records along the way.”
Shipping: “Ship owner Seaspan Corp. is placing a bigger bet on container shipping. The ship-leasing heavyweight is buying out the controlling shares of a China-based joint venture called GCI from private-equity firm Carlyle Group , giving the company a bigger share of a charter market that’s been in broad recovery” [Wall Street Journal]. “[T]he $450 million deal brings Seaspan 18 container ships and a jumpstart to what may turn into a bigger acquisition strategy. Seaspan is the world’s largest containership lessor by cargo-carrying capacity, according to Alphaliner, and the combined companies would have 8% of the market. Alphaliner said in a report this week that charter demand has been ‘robust’ in recent weeks, boosting ship leasing prices.”
Shipping: “Advances in Last-mile Delivery Take Shape” [Logistics Management]. “From China to Europe to the U.S., companies as divergent as Amazon, SF Express, Shipt, Instacart and XPO Logistics are pushing and shoving their way through the last-mile delivery maze…. On the surface, last-mile doesn’t look all that tough. Just deliver goods from a regional distribution center or retail store to the consumer. But looks can be deceiving. And expensive, too. Some say nearly 30% of the total cost of all goods delivery is in last-mile. Last-mile delivery is much more than navigating city streets, avoiding traffic congestion and finding the right address. Last-mile is also a matter of actually being able to deliver the goods, especially when no one is home but needs to be. And that doesn’t even include the challenges of building security, the scale of high-rises and parking availability. Oh, don’t forget the weather.”
The Bezzle: AirBnB is really in the business of selling regulatory arbitrage to landlords who want to go into the hotel business:
Airbnb has updated its website to clearly show how many listings a host has on their site. They've hidden this information for years. Let's say hi to some of New Orleans biggest operators.
— Jane Place Neighborhood Sustainability Initiative (@JanePlaceCLT) March 12, 2018
The Bezzle: “Blue Apron to Sell Meal Kits in Stores to Buttress Sagging Deliveries” [Wall Street Journal]. Another squillionaire vanity project, then?
The Bezzle: “Tesla employees say automaker is churning out a high volume of flawed parts requiring costly rework” [CNBC]. “To deal with a backlog of flawed parts and vehicles, said these current and former employees, Tesla has brought in teams of technicians and engineers from its service centers and remanufacturing lines to help with rework and repairs on site in Fremont…. Tesla said that cars coming off the end of the line are reviewed in detail in an effort to ‘produce perfect cars for every customer.'” I don’t think Edward Deming would think very much of Elon Musk.
The Bezzle: “Tesla’s corporate treasurer and vice president, Susan Repo, has left Tesla, Bloomberg reported on Tuesday. The report said Repo departed to become chief financial officer at another company. Her LinkedIn profile hasn’t changed, yet” [The Street]. “Repo’s exit comes a few days from Tesla’s chief accounting officer Eric Branderiz leaving because of “personal reasons,” said a filing with the Securities & Exchange Commission. Perhaps this is all a coincidence, a function of a high-achiever burning out (Branderiz has been on the grind since the late 1990s) and another wanting to be the top person in the finance department (Repo). Even still, losing two people overseeing the finances of a money-losing electric car company that has a history of execution missteps, weeks removed from the end of the first quarter, is a big red flag. Buyer beware.”
The Bezzle: “New report highlights limitations of Cruise self-driving cars” [Ars Technica]. “In recent months, Cruise has been ramping up testing efforts in a roughly 20-square-mile area in and around downtown San Francisco. Sources familiar with that testing effort told The Information’s Amir Efrati that Cruise vehicles still had significant limitations. ‘Cruise cars frequently swerve and hesitate,’ Efrati reports. ‘They sometimes slow down or stop if they see a bush on the side of a street or a lane-dividing pole, mistaking it for an object in their path.’ In one case, Efrati says, .” If your algo doesn’t work, change the data…
The Bezzle: “Uber Freight sends driverless truck on its inaugural trip across Arizona” [DC Velocity]. “The movement captured San Francisco-based Uber Freight’s near-term vision for its autonomous truck operation: A hybrid of human and technological effort. No one expects a tractor-trailer to fly down the roads any time soon without the presence of a professional truck driver. Indeed, drivers will be called upon to execute more complex, precise actions that automation cannot yet do, such as backing up into truck bays. In addition, because federal rules need to be written governing the interstate movements of autonomous trucks, driverless trucks will be confined to intrastate hauls. For the foreseeable future, loads must be transferred to a conventional truck for a move across state lines.”
Concentration: “Antitrust critics fear that a winner-take-all contract for the Defense Department’s cloud computing needs could help tech giant Amazon corner the government contract market even further” [The Hill]. “The winner of the contract, which the DOD updated its position on last week, in its current form would give its winner control over serving the Pentagon’s cloud computing system as it switches over from an older IT system. The agency predicts that the contract will be worth billions.”
Five Horsemen: “Amazon bides its time as the press speculates fancifully about which industry it takes over next” [Hat Tip, Jim Haygood].
NakedCap Mania-Panic Index: “Mania-panic index cools to 51 (complacency) as new lows outnumbered new highs yesterday” [Hat Tip, Jim Haygood]. (The NakedCap mania-panic index is an equally-weighted average of seven technical indicators derived from stock indexes, volatility (VIX), Treasuries, junk bonds, equity options, and internal measures of new highs vs new lows and up volume vs down volume … each converted to a scale of 0 to 100 before averaging, using thirty years of history for five of the seven series.)
Our Famously Free Press
“Google offers olive branch to newspapers, YouTube relies on Wikipedia” [Columbia Journalism Review]. “Google is planning to highlight content from newspapers with paywalls for users who are paying subscribers…. So when users search for articles on a topic, results from sites they subscribe to will show up higher than results from regular websites. Google also plans to share data with publishers about who is most likely to sign up…. Google also recently changed its policy on search results from sites with subscription models. It used to encourage publishers with paywalls to let searchers read at least three articles free under its “First Click Free” model, and those who didn’t comply were ranked lower in search results. But the company dropped the FCF approach last year, and now subscription-based publishers can choose to provide whatever number of free articles they wish to non-subscribers, including providing none at all.”
“The Federal Job Guarantee – A Policy to Achieve Permanent Full Employment” [Center on Budget and Policy Priorities]. Mainstreaming…
“MMT meets Rey’s dilemma: a balance sheet view of capital flight (coming soon to an EM country near you)” [Critical Macro Finance] What a nice name for a journal!
Police State Watch
“Amid legal battle, Alabama sheriff wants judge to let her keep unspent jail food funds” [Birmingham News]. “The center argued that Franklin should have been held in contempt after removing $160,000 from the inmate food account. The sheriff loaned $150,000 of the money to a now-bankrupt, corrupt used car dealership, Priceville Partners, LLC, that was co-owned by Greg Steenson, a convicted felon.” Know your sheriffs: This is not the same sheriff as the one who used $750K jail food funds to buy a house.
This is March 15, not April 1:
Capitalism still has some life left in it yet. pic.twitter.com/PeupswBnHO
— Jacobin (@jacobinmag) March 15, 2018
“Agriculture Wars” [Viewpoint]. “If country music gave voice to many American farmers during the 20th century, what does it have to say about the fundamental shift in farm labor that is coming to define the 21st?” Can any country music fans in the readership comment?
“Reckoning with the Imperial We” [Fellow Travelers]. “Fundamental to the territories are questions of self-rule and union, which were shaped through an explicitly racist understanding of the world into law through the Insular Cases—the Supreme Court rulings that allow for the territories to be governed as colonies, rather than extending the full dignity and protections of the Constitution (as well as statehood) to the people living there.” Next time I look at Puerto Rico, I’ll have to remember this review.
“Big data for the people: it’s time to take it back from our tech overlords” [Guardian]. “Data is no less a form of common property than oil or soil or copper. We make data together, and we make it meaningful together, but its value is currently captured by the companies that own it. We find ourselves in the position of a colonized country, our resources extracted to fill faraway pockets. Wealth that belongs to the many – wealth that could help feed, educate, house and heal people – is used to enrich the few.”
News of The Wired
“Human hippocampal neurogenesis drops sharply in children to undetectable levels in adults” [Nature]. “We conclude that recruitment of young neurons to the primate hippocampus decreases rapidly during the first years of life, and that neurogenesis in the dentate gyrus does not continue, or is extremely rare, in adult humans.” Scientific American translates: “In a direct challenge to earlier studies, the authors report adults produce no new cells in the hippocampus, a key hub for processing memories.”
“The Consciousness Deniers” [New York Review of Books]. “How could anybody have been led to something so silly as to deny the existence of conscious experience, the only general thing we know for certain exists?”
And speaking of silly:
So this Roman centurion goes into a bar and orders a martinus.
The bartender asks, “Do you mean a martini?”
The centurion says, “Look, if I wanted a double I’d tell you!”#idesofmarch
— Ro Pi (@TheRAP1966) March 15, 2018
Caesar was assassinated at the Curia Pompeia, within the Theater of Pompey's complex. #IdesOfMarch The site where Julius Caesar was betrayed and killed in 44 BC is now a stray cat-sanctuary. ttps://commons.m.wikimedia.org/wiki/File:Theatre_of_Pompey_Sketch_up_model.png #Rome pic.twitter.com/fspYGg2gL5
— Ticia Verveer (@ticiaverveer) March 15, 2018
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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 place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (C Carroll):
C Carroll writes: “A second year clary sage starting to green up despite the recent cold and snow, should bloom this summer.” So there’s hope!
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