Links 5/28/18

Patient readers, I am dreadfully sorry, I got the post time wrong for Links; granted, if I had to do this, Memorial Day was the best time to do it. I don’t know what came over me!

Monkey business and more: Proving intelligence in animals (Book Review) Business Standard. Word of the day: umwelt.

Mysterious wolf-like creature shot in northcentral Montana near Denton Great Falls Tribune. More interesting than the headline.

Antibiotics in Meat Could Be Damaging Our Guts NYT (J-LS). Looks like reporting, to me. Not sure why it’s filed under “Opinion.”

Google and Facebook’s “Kill Zone”: “We’ve Taken the Focus Off of Rewarding Genius and Innovation to Rewarding Capital and Scale” Pro-Market

Bitcoin backlash as ‘miners’ suck up electricity, stress power grids in Central Washington Seattle Times (DK). Of all the things we could stress the power grid for… Currency speculation?

The Old Allure of New Money Robert Shiller, Project Syndicate

TSB under fire over telling companies customers were dead The National. “TSB said the latest instances had arisen when customers tried to switch their accounts from the bank.” We’re learning that it’s hard to have a bank run when the bank’s IT systems have collapsed. Every cloud has a silver lining!

The Week in Public Finance: Governments Haven’t Had Rules for Revealing Their Private Debt — Until Now Governing

Overwhelmed and confused by the EU’s General Data Protection Regulation Handelsblatt

Italy’s president scotches populist governing alliance Politico

Italy in Turmoil as New Government Fails to Form WSJ

Italian bonds and euro strengthen after populist coalition fizzles FT

How Worried Should We Be about an Italian Debt Crisis? Olivier Blanchard, Silvia Merler, and Jeromin Zettelmeyer Peterson Institute for International Economics

So, if you’re Italian, why wouldn’t you be a Euroskeptic?

North Korea

U.S. and North Korean Officials Race to Resurrect Trump-Kim Meeting NYT. It’s amusing to watch events outrun the hot takes.


Britain’s plans for ‘no-deal’ Brexit have ground to a halt FT

Ireland’s abortion referendum could open a huge fault line in Theresa May’s fragile government Business Insider

In Britain, Austerity Is Changing Everything NYT. The deck: “After eight years of budget cutting, Britain is looking less like the rest of Europe and more like the United States, with a shrinking welfare state and spreading poverty.” Does make you wonder how rapidly the rest of the Five Eyes will follow the leaders…


The Battle For Energy Dominance In The Mediterranean

The Bill to Protect Elor Azaria Haaretz (JBird). “The message such legislation would convey, if passed, is that Israel has a great deal to hide regarding the IDF’s activities.”

Sara Netanyahu will be indicted in corruption case: report i24

The leader of Hamas in Gaza is the most influential man in Palestine Economist

Women’s arrests cast doubt on Saudi Crown Prince’s reforms (!) CNN

Morocco boycott revives debate over business, politics links Agence France Presse


China steps up pace in new nuclear arms race with US and Russia as experts warn of rising risk of conflict South China Morning Post

How Strong Social Hierarchies Shape Chinese Views of Work SIxth Tone. Maybe.

China Energy Misses Payment on Bond, Triggering Cross Default Bloomberg

The new world disorder: is war inevitable in the Asian century? FT

New Cold War

Australia to seek diplomatic backup against Russia over MH17 atrocity Australian Financial Review. I’m unclear why this isn’t being loudly framed as a casus belli, right now.

Poland offers US up to $2B for permanent military base Politico. That’s nice.

Marines took tanks out of secret caves to do military exercises near Russia’s northern border for the first time Business Insider

Trump Transition

Three related links on the discourse:

Cory Doctorow: The Engagement-Maximization Presidency Cory Doctorow, Locus. Must-read, both for the fascinating description of modern — dare I say, neoliberal? — software development practices, and for its description of Trump’s use of language.

Happy 21st Century! Charlie’s Diary “You don’t need to build concentration camps with barbed wire fences and guards if you can turn your entire society into a machine-mediated panopticon with automated penalties for non-compliance.”

“That Is What Power Looks Like”: As Trump Prepares for 2020, Democrats Are Losing the Only Fight That Matters Vanity Fair

* * *

Budget battle brews as Trump threatens another shutdown AP

Our Famously Free Press

Looking for Calley Seymour Hersh, Harpers (UserFriendly). Nice to see Hersh published in the United States again, even if the piece is a memoir, not reporting on current event.

Democrats in Disarray

How Two House Democrats Defended Helping the GOP Weaken Dodd-Frank Financial Regulations The Intercept

Hillary Clinton says she is afraid of losing her country USA Today. “She called for what she termed ‘radical empathy,’ encouraging people ‘to try to see the world through the eyes of people very different from ourselves’ and to ‘try to return to rational debate.'”

How the ‘Watergate Babies’ Broke American Politics Politico. Cf. Stoller, back in 2016.

Realignment and Legitimacy

America’s Civil Discord: The In-Thing For Fiction Society of U.S. Intellectual History. “[H]alf of America’s political culture now refers to itself as ‘the Resistance.'” Pretty sloppy for an intellectual historian.

A Surprising Reason to Worry About Low Birth Rates The Atlantic

Class Warfare

Forget about broad-based pay hikes, executives say Axios

Harley-Davidson workers say plant closure after tax cut is like a bad dream USA Today (PA-04 (?)).

After Janus, Should Unions Abandon Exclusive Representation? In These Times

MMT’s ignorance of economic thought Steve Keen. “To my way of thinking, the MMT position on trade is not MMT enough. I don’t want to see, and obviously won’t tolerate, further arguments about exports as costs and imports as benefits. I want to see a detailed double-entry bookkeeping exploration of the monetary (and capacity-utilization/real GDP/physical) implications of trade surpluses and deficits.”

Why GPS will never make the road atlas obsolete NY Post (J-LS).

The Amazing Psychology of Japanese Train Stations CityLab

Antidote du jour (via):

See yesterday’s Links and Antidote du Jour here.

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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. jackiebass

        Be careful when you use words like everybody. It means that there are no exceptions. Most would be a better choice of words.

    1. Carla

      I agree — to such an extent that I just have to make another modest contribution to the tip jar.

  1. MyLessThanPrimeBeef

    Google and Facebook’s “Kill Zone”: “We’ve Taken the Focus Off of Rewarding Genius and Innovation to Rewarding Capital and Scale” Pro-Market

    There are other rewarding chioces (and some are intimidated by genius and innovation) other than the ones above, like compassion.

    But love or compassion is its own reward. So, there is no need for extra rewards, I guess.

    1. Carolinian

      Yes, been needing some Cory Doctorow around here.

      All through the 2016 election campaign, this story kept coming to my mind. Donald Trump is manifestly not very smart in the sense of understand­ing nuance or being able to discern the truth among many propositions. But he is very good at acting like a machine-learning system that is co-evolving with the attention-maximization systems built into our ad-driven systems.

      In other words Trump is a “look at me” algorithm. Consider yourself manipulated.

      1. djrichard

        Bernie Sanders has a “look at me” algorithm. But that’s pretty much it on the dem side. Though Hillary does still seem to be in the “look at me” biz, lol.

        Anyways, the dems otherwise seem to have made their bets with a “look at Trump” algorithm.

        If the “blue wave” is successful, it will be successful like the Iraqi surge. A surge like that makes you king of the hill for the time being. But once you’re king of the hill, what then?

        1. ChrisPacific

          I would describe Hillary’s algorithm more as “How dare you look at anyone that isn’t me?”

  2. MyLessThanPrimeBeef

    MMT’s ignorance of economic thought Steve Keen. “To my way of thinking, the MMT position on trade is not MMT enough. I don’t want to see, and obviously won’t tolerate, further arguments about exports as costs and imports as benefits. I want to see a detailed double-entry bookkeeping exploration of the monetary (and capacity-utilization/real GDP/physical) implications of trade surpluses and deficits


    Maybe the relationship is non linear (times when more is more, and other times less is more).

    Water is life saving…wait, now you are drowning in it.

    Maybe it goes through a phase change.

    Water turning into ice…you are being frozen.

  3. Lee

    Hillary Clinton says she is afraid of losing her country USA Today. “She called for what she termed ‘radical empathy,’ encouraging people ‘to try to see the world through the eyes of people very different from ourselves’ and to ‘try to return to rational debate.’”

    Are people really that different from each other? They are all starting to look pretty much the same to me. Maybe it’s my age. Certainly, their circumstances differ. But I’m starting to suspect that anybody could pretty much be anybody else, given the right circumstances.

    ‘Radical empathy’: does this mean HRC is having a road to Damascus moment wherein she accepts ‘deplorables’ as fellow human beings?

    ‘Rational debate’? Shouldn’t that be ‘Russianal debate’?

    1. nippersdad

      I don’t think I have ever seen a compilation of pure projection as extensive as the one found in that article. I really do wish she would just go away. Wasn’t it Peggy Noonan(!) who said that they trashed the joint and that it wasn’t theirs to trash while Bill was in office?

      My takeaway from that article was that she got the world she worked so hard to create and is now losing it. Fair enough, but why is that such a bad thing from our perspective?

        1. Procopius

          Really? I could have sworn it was Sally Quinn, wife of the publisher of the Washington Post. She also likened DC to a village, which is where I think the current usage comes from. However, my memory is not as reliable as it used to be and I’m not interested enough to google it.

    2. clarky90

      Scott Adams teaches you how to spot cognitive dissonance

      I believe that a rip has formed in Hillary’s space-time reality fabric. I have seen this over the years amongst some of my friends, neighbors and family members. They lose “it”, and don’t get “it” back. -(a slow motion Tesla wreck). Usually, there is not much that can be done to help as they spiral downward; unless they grok, “ohh, ahh ha! What was I thinking?”.

    3. The Rev Kev

      She actually said the following:
      “Waging a war on the rule of law and a free press, delegitimizing elections, perpetuating corruption, rejecting the idea that our leaders should be public servants, undermining our national unity and attacking truth and reason.”
      When she said that in her speech I wondering if somebody had made a mistake and instead of reading from her prepared speech, she was actually reading from her mission statement.

      1. Sid Finster

        See, all that stuff is bad. Very Bad, even, but only when done by people that she and other establishment types don’t approve of.

        When *they* do it, then that makes it OK!

    1. MyLessThanPrimeBeef

      Not requiring a college degree.

      In Germany and a few other countries, there is another option to the degree route – apprenticeship via a vocational school.

    2. Lee

      Remember when students were the future, as in the future of a society as a whole? They still are the future but now primarily for the usurers. Just as the prospect of getting drafted during the Vietnam war and a belief that the war was unjust, mobilized so many of us back in the day, it is my hope that the burden of student debt will produce similar organized mass resistance. But a word to the kids: Avoid the veal pens!

      1. Harry

        Very true. In the new identity politics neoliberal nirvana, you dont have to be black to be an indentured servant. Im sure we all appreciate the changes.

  4. John k

    A blue footed booby! Or some other booby with blue envy that bought plastic waders.
    When courting, the male booby proudly lifts his foot to show the girl his foot is blue enough.
    This shade of blue seems far more unlikely than the red version.

    1. J Sterling

      I wonder if booby dating site profiles have a quantified blueness of foot, as human dating site profiles say they won’t date men shorter than so many feet and inches?

    2. polecat

      “Waddle along ..These aren’t the Boobies your l`⊙⊙`king for …”

      ‘I’m Curious Bluefooted’

      ‘Behind the Bluefooted Door’

    3. ChrisPacific

      I hadn’t realized they had binocular vision. It’s not obvious from looking at most pictures of them, but you can see it really clearly in this one.

  5. MyLessThanPrimeBeef

    U.S. and North Korean Officials Race to Resurrect Trump-Kim Meeting NYT. It’s amusing to watch events outrun the hot takes.

    Where is Bolton now?

    Wii he strike back?

    1. Procopius

      I’m sure he will, and he’s much better at this game than those other guys. He’s insane, but he’s very skillful and not at all stupid.

  6. Samuel Conner

    I don’t buy the “vertical farms” concept (re: Charles Stross’ dystopian prognostication). It looks plausible for watery higher priced greens, but for calories you need serious energy input (2000 dietary calories is ~ 8megajoules or a bit over 2 kWh, and plants absorb only a small proportion of the radiant energy that hits them), and that looks (to me at least) colossally inefficient to do under artificial lighting. I think we’ll be growing carbs in dirt under open sky for long time yet.

    I do share his gloomy overall outlook, though.

    1. Pelham

      I think you’re right. I’m a novice on the subject, but I’ve always been struck by the vast quantities of basil that vertical and indoor farming seems to grow. How much of that stuff do we need?

      The answer might be no-till farming in conventional dirt with unconventional crops, mainly grain, that have yet to be fully developed. People are working on this.

    2. Ignacio

      that looks (to me at least) colossally inefficient to do under artificial lighting.

      Not necessarily. Not all ligth wavelengths are exploited equally during photosynthesis. You can try to iluminate using LEDs emitting just the wavelengths that give best results so you reduce the amount of radiant energy applied. There is also less leaf heating that has to be dissipated with a loss.

      A good theoretical exercise would be analyse what is the maximum energy you can convert from sunligth into electricity, an then how much of it can be re-emitted in the proper wavelength span. If sunligth provides 1000 W per square meter and you obtain, let’s say 200 W of electricity, how many LEDs emitting the selected wavelengths can you feed with that? I don’t know.

      1. Synoia

        A good theoretical exercise would be analyse what is the maximum energy you can convert from sunligth into electricity, 50% Second law of thermodynamics

        then how much of it can be re-emitted in the proper wavelength span 50% Second law of thermodynamics

        25% Maximum possible efficiency

        In practice, sunligth into electricity, 10%, electricity to light 15% to 20% overall efficiency 1.5 to 2%

        However, we can ignore the first conversion’s efficiency, sunlight to electricity, because it’s not relevant. The sunlight would have been “spent” somewhere in every event.

    3. Lambert Strether Post author

      > vertical farms

      Vertical farming seems like a fantasy of separatism, to me. “See! We can be self-sufficient. We don’t need flyover at all.” Good luck with that (especially when real estate speculation takes over the farm buildings).

  7. timbers

    Hillary Clinton says she is afraid of losing her country USA Today. “She called for what she termed ‘radical empathy,’ encouraging people ‘to try to see the world through the eyes of people very different from ourselves’ and to ‘try to return to rational debate.’”

    Or you support Medicare for all, expanded Social Security, working people, and jail terms for bankers who break laws – and win elections.

    1. Pat

      In similar BS speak, Michelle Obama has begun the tour to sell the book. It may not be called that yet but considering the other big item I saw on her was her showing the utterly ridiculous cover of her book “Becoming” (I will leave it to the NC jokesters to do their damage on that.) Anyway in an hour long interview she apparently spoke out about the GOP hypocrisy, the comment used to illustrate this was about caring about humans after a hurricane but not enough to make sure they had health care.

      Funnily enough my first thought was how was your husband and the Democrats so different since they went with a system that effectively denied actual health care to a large percentage of people while forcing them to buy overpriced insurance. But that would mean looking past the obvious optics to the actual results of administrative policies. See “look forward not back” and foaming runways for banks and…

      With Clinton my first thought was if that was what you really stood for you would be doing things like actually talking to people who DON’T have access to enough money for emergencies much less private jets. Oops. The only people who Clinton think needs to see the world differently are those who don’t think she and people like her are brilliant, generous, and that just getting crumbs from them is a privilege not the theft it is.

      1. Lynne

        Michelle Obama is well used to BS attacks on anyone who criticizes her or her husband. Recall when people challenged her revamp of the school meals program because she cut out all the fat, despite the fact that many pediatricians say fat is necessary for proper development of the nervous system in juveniles, and despite the fact that most dietitians say that some fat is necessary for proper absorption of the minerals contained in vegetables? Her response was that it was sad Republicans were anti-science.

      2. ObjectiveFunction

        Of course HRC meant “losing the country I once belonged to”. But I couldn’t help reading it as “losing My Country” (i.e. Rightful Throne).

        I suppose that’s what egotistical slogans like “I’m With Her” do over time.

        “It’s a terrible thing to lose your [country] ” (ht Dan Quayle)

        1. Lambert Strether Post author

          That’s how I read it. When Clinton says “our democracy,” that’s exactly what she means. 10% rage is driving a good deal of Clinton’s remaining support, and much liberal Democrat activism; their right to rule has been challenged, and they are most definitely not having any of that.

      3. Jerri-Lynn Scofield

        That cover is ridiculous! I think we would have seem more NC commentary if it hadn’t been a bank holiday w/e in both the US and UK.

    2. Mo's Bike Shop

      “Radical Empathy” = ‘to try to see the world through the eyes of people very different from ourselves’

      Hillary, “empathy” itself covers that idea, without any qualifier. Do you, once again, have a private definition of empathy that requires the qualifier?

      1. a different chris

        Thanks for pointing that out. Again, wtf do they teach in those Ivy League colleges?

      2. pretzelattack

        the private definition involves empathy for the plight of bankers who run their banks into the ground with speculation, and have to get bailed out by the government.

    1. makedoanmend

      Yes, sober reading.

      I appreciate Hersh being sensitive about making judgements since doing so serves little purpose to those affected by the events. Or maybe he thinks the events, and the act of reporting them, made judgement an implicit reaction?

      Also, it’s astonishing just how many news outlets existed back then and how more open society was, or maybe how less surveillance there was.

  8. John k

    Imports are both a widely shared benefit and, when they disrupt or destroy local industries, a concentrated cost. We could tax some imports but this distorts those markets while boosting imports of other goods as foreign savers wanting dollars, and mercantilist nations, shift production to goods not taxed.
    Why not use the Swiss model? Like the Swiss, our problem is our currency is too strong… this is easier to fix then if it was too weak. The Swiss don’t want their currency to rise, but foreign savers see Swiss francs as useful adjunct to the dollars in their mattress. So they sell all the francs foreigners want above a given exchange rate, preventing further rises in their currency, and protecting their local manufacturers.
    The fed could copy that, driving down the dollar while accumulating euros, or yuan, or whatever, of foreign currency reserves. Mercedes C unit might hit 200k, encouraging some locals to buy Cadillac. This would satisfy foreign savers and reduce foreign dollar shortages, granted it would annoy the mercantile nations… course, we argue the goal is simply balanced trade, and the alternative is a blanket tax on all goods from nations with whom we have a trade deficit (maybe excluding oil, where net imports equal half our consumption.)

    1. Oregoncharles

      There are other considerations, like autarchy. This is an oddly conservative thing for a supposed lefty to say, but I think we had it more nearly right back in the boom years, the 50s and 60s. In effect (not sure of the detailed structure), there was a broad, low tariff – IIRC, about 10% on anything that could be produced in the US. (Fortunately for me, the lawmakers didn’t realize tea could be grown here; in any case, it wasn’t.)

      That gave local producers a consistent but not decisive edge. We in fact imported things that were distinctive, like French wine and German cars and cameras (later Japanese), but produced most things that were practical here. And again, that was the Golden Age (quoting Gore Vidal.) There were other factors, of course, like the aftermath of WWII, but the system did work, and supported a fairly healthy welfare state.

      1. Jeremy Grimm

        In addition to autarchy what about robustness as we move toward a different future? Trade as a question of pure economics ignores far too many messy problems. We have a world economy based on trade conducted across oceans and continents and structured by the relatively low costs of transportation. What happens when the costs for transportation start to increase? Is everything nicely reversible? Will our factories and expertise return from their visits aboard and each find their room just the way they left it? In the relative stability of today’s international trade that trade leads some businesses to multiply single points of failure across world spanning supply lines. What happens when there’s a natural disaster or a point of stability fails?

        A discussion of trade in terms of the rarefied world of economics assumes the market through its price mechanisms somehow discovers the proper costs and values for all exchanges between countries and economic transformations in response to trade within those countries. The market leads some countries to become suppliers of raw materials, some the producers of coffee, bananas, or coco, while other countries pull in resources and spew out higher value products along with wastes and pollution. Some countries specially subsidize goods to force competitors in other countries out of business. What good is an economic theory of fair trade if there isn’t fair trade? Does MMT economic theory have a theory of the market significantly different than the neoclassical notion of the market pricing, allocating and distributing goods? What does MMT have to say about externalities — do they exist?
        … And whatever happened to the political in a field of study which once upon a time was called political economics?

      2. Procopius

        I remember that shortly before I was assigned to Germany the first time, the Deutsch Mark rose greatly against the US Dollar. Remember, we still had a draft then, so soldiers weren’t paid much, and some low ranking draftees brought their wives over even though they weren’t eligible for dependent housing. The German people actually ran charity drives to help them buy food. That was, what, 1966, 1967?

    2. Left in Wisconsin

      Imports are both a widely shared benefit and, when they disrupt or destroy local industries, a concentrated cost. We could tax some imports but this distorts those markets while boosting imports of other goods as foreign savers wanting dollars, and mercantilist nations, shift production to goods not taxed.

      Saying “imports are a widely shared benefit” is excessively one-size-fits-all. Some imports provide more value per dollar than domestic production of competing goods (if that is the definition of “benefit”) but in typical MNC cost-arbitrage, there is no change to product or price. It is simply cost-cutting and all of the benefit accrues to the corporation. Similarly, the bit about market distortion seems “economistic” to me, a just-so story about “pure” markets rather than a fact.

      Separately, the Harley-Davidson story is sourced to PA but the plant actually closing is in Kansas City and some of the work/jobs will be coming to PA.

    3. djrichard

      we argue the goal is simply balanced trade

      We send our dollars to China for goods and services. But only some of it comes back for goods and services from the US. What is happening to the rest of our currency?

      Michael Hudson identified that our currency is being bought (in exchange for yuan) by two players:
      – US corporations operating in China who need to want to cash out of their profit in yuan and have it be in US$ instead
      – corporations and entities in China that are indebted in the US dollar and need to buy dollars on the open market (in exchange for yuan) to pay interest and principal on that debt.

      Another big “consumer” of the US$ in China would be China needing the US$ for oil consumption. In fact, all non-oil producing countries in the world need to procure the US$ for that need. Which means that all those countries will have to run a trade surplus with the US in order to have the surplus US$ needed for oil consumption. This is a consequence of the US$ being the petro currency.

      Of course, ideally all those petro dollars flow to Saudia Arabia and other oil producing countries and are used by those countries for goods and services from the US. But instead, the US Treasury worked out a deal with the Kingdom of Saudi Arabia to have them use those surplus dollars to buy US treasuries instead. Part of me thinks the US would have been better off letting Saudi Arabia collect US$ out the wazoo, forcing the price of oil in USD to reset to what the market demand in Saudi Arabia was for goods and services from the US. But I’m wondering if the reason the US Treasury blinked and intervened was that they were worried that a shortage of currency in the US would lead to deflation. In contrast to the argument that the reason the US Treasury intervened was simply to find a buyer (with deep pockets) for US treasuries.

      Even accounting for all the above, I think there’s other consumers in China that are buying the US$ in exchange for yuan (consumers that are not then using the US$ to buy goods and services from the US). It used to be the central bank of China (PBoC) was printing yuan to buy US dollars (which they would then use to buy US treasuries) to keep the peg. But the PBoC seems to mostly be out of that game. They had to get out of that game in order for the yuan to be allowed in to the SDR basket. But after getting out of that game, the peg didn’t dramatically change, indicating that somebody else is picking up the slack. I don’t think the culprits mentioned above are enough to fill that void.

      1. Procopius

        Robert Rubin. His policy. It’s better for US banks. Of course the DLC/New Democrats sold it as being better for American workers to be able to buy cheap imports. At first it wasn’t too bad. Even after Clinton got China into the WTO I think the trade deficit was only about 2% of GDP. However it has not worked out well in the longer run, I think because the seizure of most wealth by the top 0.1% has had the effect of reducing demand for American products because people can’t afford them.

  9. MyLessThanPrimeBeef

    Hillary Clinton says she is afraid of losing her country USA Today. “She called for what she termed ‘radical empathy’ encouraging people ‘to try to see the world through the eyes of people very different from ourselves’ and to ‘try to return to rational debate.’”

    Is ‘radical empathy’ something between tolerating nd loving?

    You can tolerate your Republican neighbor, but you don’t have to love him.

    Though love will save the world, or so we believed in the Sixties.

    And for thousands of years, the idea of loving one another, or at least one’ neighbors has lingered around.

    This ‘radical empathy’ seems to be moving from tolerating towards the direction of loving.

    With zealots, anywhere, of any belief, the difficulty here with Hillary’s new wisdom, is it becomes ‘you must’ love your conservative neighbors.

    1. Carolinian

      you must’ love your conservative neighbors

      Or Donald Trump! Clearly she flunks her own test.

  10. ambrit

    The antidote today is way too subtle. As the disclaimers used for fictions put it: “Any resemblance between characters herein and actual, real persons is strictly accidental and unintended.” It is a holiday, and, as Clive explained on another thread, compassion for the overworked staff of NC is a proper holiday attitude to take.
    I could see the blue footed fellow saying: “Welcome to the Hatch!”

  11. Irrational

    This European didn’t notice the delay with a full day of work and all.
    Thanks for many interesting links, which I shall now read, the cool antidote, which gave me laugh, and the water cooler, which educated me.
    To all of the US commentariat: hope you enjoy you day off.

  12. Oregoncharles

    “The 5Stars and League have indicated they would prefer early elections, which pollsters expect they would do even better in than in March, when they sidelined the legacy mainstream parties. The populist parties trained their rhetorical guns on the president, the establishment and foreign powers — the markets and Germany — in the wake of the coalition’s collapse, in a taste of the politics to come

    See who the “foreign powers” are? Not technically foreign at all. Mattarella made a mistake by forcing a new election: they’re going to campaign against (at least) the Euro. If they win any bigger, they may impeach him. Interesting times in Italy.

        1. ambrit

          The Blue Booby Boogie!
          And, for your snarking pleasure: The Blue Boobie States Stakes! Run on a round robin platform at various racetracks about the country. The primary winners get to sponsor horses in the Electoral Stakes. The sponsor of the winning horse governs for the next two years. Of course, the Senate can be decided by the Incitatus Stakes, one running for each state. Replace the rule of money with the rule of chance, or Fate, if you will. I can’t see any worse outcome than what we get now.

  13. disc_writes

    Current developments proved that Italy will not leave the Euro democratically. The President played a very risky hand, and won.

    But the price is shocking. This is the most serious constitutional crisis since the 1946 abolition of the monarchy. Nothing even comparable has happened since Mussolini rose to power, aided by the King, in 1922.

    The utterly irresponsible M5S and Lega reacted in the worst possible ways. They threatened to impeach the President, incite revolts, and asked schools to remove the President´s pictures from the corridors. I hate to say it, but history will not look kindly on them.

    From now on, mainstream media will punnel the populists, who will be contained at the coming elections.

    It is game over.

    Italy will be rewarded for caving in, probably with more ECB largesse.

    But the bitterness will remain. One day it will resurface, and this time the problems will be much bigger, and the republican institutions much weaker.

    1. Oregoncharles

      I posted on this under the Italian bonds article; but briefly, I disagree strongly. I think he blew it. It isn’t just that there will be a constitutional crisis; more to the point, there will be a new election, which is likely to go against him. If 5star and the League come back with a bigger majority, he’s toast, and the Euro might be, too, though that’s a stretch.

      At least in Oregon, the voters, when asked to reconsider a vote, usually double down: “Yes, we meant it.”

      You did see that graph of Italy’s performance since the Euro, didn’t you? It’s sinking in.

      And what happened in 2005, anyway?

        1. Oregoncharles

          Further detail: “Italy crisis: Call to impeach president after candidate vetoed”

          According to the article, a simple majority in Parliament sends an impeachment to the Constitutional Court. The coalition have that majority. So yes, there are established procedures, but a direct head-to-head between President and Parliament sounds like a crisis to me. Unless the 5Stars and Lega lose their nerve, he will be impeached and tried.

          I’m not familiar with Italian parliamentary procedure, but I suspect they can also block the interim PM by calling a vote of confidence, which he would lose. Again, that’s established procedure to bring on a new vote ASAP – with no government empanelled to administer it and no new election law.

          So, not a constitutional crisis in the sense of no way forward, but certainly a crisis of some sort. I obviously don’t know how Italian voters work, but I think Mattarella is courting a major backlash. The coalition parties seem to think so. He’s converted a symbolic act – making Savona finance minister – into a challenge to the EU and his own office.

          Of course, Italy is used to this sort of thing, but that graph in Links is pretty convincing. Something is up.

          1. Yves Smith

            Only 5 Star is talking impeachment and it’s only talk. Lega represents the wealthy commercial North. Too much upset is bad for business.

          2. Lambert Strether Post author

            > not a constitutional crisis in the sense of no way forward, but certainly a crisis of some sort

            Not a constitutional crisis at all in the sense that all the processes prescribed by the Constitution have been followed. Lots of mainstream commentary seems to be using “constitutional” as a mere intensifier, and it isn’t one.

    2. Synoia

      Welcom to the New German Empire!

      Perhaps you now have a slightly better understanding of the motivations for Brexit?

      1. disc_writes

        I supported Brexit.

        I think the UK was right to join the Common Market in ’79 (who would not want more trade?), but the UK is perfectly justified in escaping the creeping EU totalitarianism.

        I am only sorry that the xenophobes’ hijacked Brexit. For the rest, I wished Italy could do the same.

    3. Synoia

      The President played a very risky hand, and won.

      We will see.

      The utterly irresponsible M5S and Lega reacted in the worst possible ways.

      How would you have them react? Civil war? They used words, why was that “the worst possible way”?

      Let us consider two outcomes:

      1. They fade as you predict (I don’t understand why the voters will suddenly change their minds).
      2. The get another majority. Then what? Rinse & repeat?

      1. disc_writes

        >How would you have them react? Civil war? They used words, why was that “the worst possible way”?

        They should have just accepted the President’s decision and asked the electorate for a larger majority next time.

        It is hard to overstate the importance and moral influence of the President in Italy. One does not just go calling for his impeachment or threatening with riots.

        Italians hate their politicians, but love their President. In Italy’s chaotic political system, the President is the one force you can always rely on.

        >1. They fade as you predict (I don’t understand why the voters will suddenly change their minds).

        Because the populists just proved that:
        – they do not respect the republican institutions by attacking the president
        – they do not respect Italian political unity (the Lega called for schools *in Lombardy* to hide the President’s picture)

        Mainstream media will punnel M5S and the Lega and scare the electorate with the horrors of leaving the Euro (even though, probably, leaving the Euro was never the plan anyway).

        The Lega still has the option to re-join Berlusconi. The M5S will split, fade, or both.

        >2. The get another majority. Then what? Rinse & repeat?

        I would like to point out that the Italian establishment kept the Communists out of power for almost 50 years. The PCI was richer, stronger, better organized and altogether of a higher level than M5S.

        I see very little chance that today’s populists get another majority.

    4. VietnamVet

      I’m on the other side of the world, but looking at how insanely the USA is acting this Memorial Day, I think that Italy could crash the EuroZone by ignoring their people’s vote. Yes, this is in the short term. Too many bad things are happening at once; forced austerity, Brexit, refugee influx, and a war from Syria to Ukraine that is threatening to spread into Iran. In the past, when wealth became too concentrated and people’s debt too great, revolt or conquest wiped away the wealth and debt. Civilization started over again, renewed. Except this time, a world war will destroy the earth.

    5. Yves Smith

      This is not a Constitutional crisis. The President was entirely within his rights to do what he did.

      We don’t like readers giving bad information in comments. It’s a violation of our written site Policies.

      Now you can argue, correctly, that this is a political crisis. But that is not what you said.

      1. disc_writes

        Ms. Smith, I do not think I exaggerated the seriousness of the situation. The recent days call into question the whole Italian institutional framework.

        These are not my words. Several observers, newspapers and political parties are using the phrase “institutional crisis” (crisi istituzionale). A quick Google search returns results from the Corriere, Sole-24 Ore, Repubblica, Rolling Stone, Internazionale, Il Piccolo, Huffington Post, Gazzetta di Parma. Even the newspaper of the Vatican, L’Osservatore Romano.

        And while I did use the term “constitutional crisis” instead of “institutional crisis”, the design of Italian institutions is of course laid out in our Constitution.

        Even former premier Renzi admitted as much, indirectly, by saying that, if the *constitutional* referendum of a few months ago had gone differently, we would not be in a crisis now.

        It has never happened before that an Italian President refused a government to a parliamentary majority. The last time an Italian head of state did something even remotely similar was, yes, in 1922.

        The whole post-1946 framework was created in order to prevent such a crisis. The President was meant to be, and has been very effectively for the past 70 years, the cornerstone of this framework.

        You write that this is a political crisis. It is not.

        A political crisis happens when a ruling party loses the majority in parliament. It is solved by calling new elections or reshuffling the government. It is a routine thing. Italy has one of those on a yearly basis.

        An institutional crisis happens when one party is clearly abusing the rules. Then the rules have to be re-written.

        The case can be made that Mattarella abused his powers.

        M5S and the Lega reacted in ways that border on sedition. That, again, is something that has never happened in republican Italy. Even the former Communist party never threatened the republican institutions.

        The points I made are not fundamentally different from the two concluding paragraphs in Blanchard’s analysis that your very blog published (

        I am surprised by your comment. I am not giving bad information: the situation really is unprecedented.

  14. precariat

    The ‘soft genocide’ Charlie Stross describes is an accurate extrapolation of what is going on overtly and covertly in the US now. He is right. However, it is not *only* the alt right/ white supremacists who will embrace and accelerate the murderous dynamics of scarce resources. The neoliberal powerful are also fine with policies that are leading us toward this algorithmic horror of a future.

    The constant deceitful framing of all that is wrong now is the abhorrent, ‘populist’ alt-right nazified bigots, serves to deny, distract, disable any common ground citizens can find and act on.

    USAToday’s Hillary piece is Exhibit A.

  15. LS

    The constant deceitful framing of all that is wrong now is the abhorrent, ‘populist’ alt-right nazified bigots, serves to deny, distract, disable any common ground citizens can find and act on.


  16. Pelham

    Re the Atlantic article linking falling birth rates to populism: I’m always a bit miffed at the immediate assumption that populism is an unalloyed evil, but more so in this piece that plainly defines populism as ordinary people demanding to take back control from outsiders and globalist elites. By that definition, why is populism so awful?

    There’s a good deal more to argue — and agree — with in the piece, but I’ll note only the obvious problem with the following quote from Stephen Lewandowski about immigration in the UK:

    “For example, in 1978, when net migration to the U.K. was around zero, up to 70 percent of the British public felt that they were in danger of ‘being swamped’ by other cultures. Conversely, in the early 2010s, the white Britons who were least concerned about immigration were those who lived in highly diverse areas in “Cosmopolitan London.”

    He’s comparing apples and oranges. He’s loading the dice. In the 1978 instance, he’s talking about the UK public in general and their abhorrence of being swamped. In the 2010s instance, he’s talking about a highly peculiar corner of the UK dominated by the hyper-globalist financial industry. Also, it’s a city that had already been swamped. I’m not sure about then but London is now only 45% native white, an urban populace that’s unlikely to yield anything like a majority opinion skeptical of immigration.

  17. Carolinian

    Re GPS versus a map book–while it’s true that small navigators or smartphones can’t give the context that map books offer, it’s also true that map books can’t do what a GPS can do. If you plan to travel secondary or obscure country roads you’d be foolish not to take a GPS if available. With a GPS you always know exactly where you are even if the unit’s road map may be out of date. You can even find your way home using a GPS with no maps at all as long as the destination coordinates are available. Whereas in the map book era I occasionally found myself quite lost and the low detail maps of Rand McNally not much help. It’s true that some GPS users have found themselves driving off docks and such but then common sense always a benefit behind the wheel. The electronic gadget is not a license to ignore road signs. But while there are plenty of such anecdotes we aren’t hearing from the many who didn’t get lost because they had GPS.

    At any rate an interesting article. Thanks.

    1. PlutoniumKun

      I agree, they are very different tools. Much as I like the convenience of a GPS, or using google maps to plan trips, there is nothing like a paper map at the right scale for planning a trip. If I want to go for a hike, or if I’m planning a cycling holiday, I always start with a paper map, and when navigating on open land or forest, a map is still best I find (not least because there are no battery or connection worries).

      The worst thing about GPS maps is that there is evidence that they actually degrade peoples natural spatial awareness. People who follow satnavs all day end up entirely dependent, even in places they should be very familiar with.

      The good news is that I think many people realise this. A year ago I did a navigation course for night time hiking. The trainer said that teenagers were amongst the most enthusiastic about learning compass and map navigation, they recognise its a key skill, even if they end up using gps’s for most of their actual hikes.

      1. BobW

        In the 80s, when I drove in L. A. for business I relied on a Thomas Guide. Spiral bound books with up-to-date maps. Never steered me wrong. GPS then was the size of a small suitcase, and not as accurate as it is now.

      2. Lambert Strether Post author

        > there is nothing like a paper map at the right scale for planning a trip.

        And it’s amazing, or not, that after what, a solid decade of existence, you can’t use Google Maps to construct an itinerary.

    2. Yves Smith

      Absolutely not true re GPS. I was in a cab where the GPS lady talking out loud was clearly and utterly confused as to where the car was, and stayed confused during the entire 40 minute ride, much to my and my driver’s amusement…and this was on a big freeway in the middle of FL. And I hardly ever see GPS in action, so this was a very high % of my sample.

      Blind faith in technology is not wise.

      1. PlutoniumKun

        Sort of related to Brexit – 2 years ago I was driving from Donegal to Dundalk with friends – this is an unusual route which pretty much parallels the border with Northern Ireland. The ‘correct’ route dips in and out of the border about 4 times. Unusually for me, I didn’t bring a map, I relied on satnav. On the return, there was an accident on the main road, and the diversion took me first into Northern Ireland, and then onto minor roads.

        The satnav got hopelessly confused, and in the absence of a map I partly followed its instructions, partly just navigated by the sun (just headed east when in doubt). It took me an amazing route through what was once known as ‘bandit country’, a chaotic network of minor roads, once controlled by smugglers and off-limits to security forces due to IED’s. It was quite fascinating (fortunately, I wasn’t in a hurry), but it did make me wonder what sort of trouble it could have led me into if it was in the days of the troubles, or post-Brexit.

        1. makedoanmend

          Sure didn’t yee get see lovely ‘Blaney and skirt the lovely hills of the Cross.

          Seriously, though, yee’d want to go up above Cross and ask for a Kelly. There’s more Kelly clans up yonder than border crossings (tarmac and not) and that’s saying something.

      2. Carolinian

        But I wasn’t advocating blind faith. Map navigating GPS units are only as good as their maps. These do go out of date causing the unit to seem to wig out if you are on a road that has changed or is new.

        What I was saying is that satellite position reporting–latitude and longitude–is very reliable and within a few feet. What you do with it is up to you.

  18. KFritz

    Re: Harley Davidson

    Hells Angels are required to ride Harleys.

    Sonny Barger is the most famous ‘Angel.’ In his Wikipedia article, you can read Sonny’s low opinion of H-Ds. He prefers Japanese cycles. Harley’s market share will continue to shrink because the imported bikes are better.

    1. rd

      The Harley-Davidson workers should petition Scott Pruitt to have EPA promulgate noise ordinance environmental legislation requiring imported motorcycles to be louder. That should help level the playing field for H-D motorcycles allowing the factory to stay open.

  19. Left in Wisconsin

    That In These Times article is painful. Kate Bronfenbrenner tries to educate two book-smart union lefty types about the realities of unionism.

    Things are going to get worse before they get better but, given that things have been getting worse since 1947, it would be at least slightly reassuring if our state of understanding was no so limited.

    1. makedoanmend

      Given the poor state of unions, there is little practical work that book smart lefty members can engage in unless they decide to organise non-union places of work. Their chances of success are dismal, to say the least. However, it’s a start and a learning experience – of only learning to deal with continual defeat.

      On the other hand, during the strikes in universities in the UK this year I know of several book smart lefties, being university workers, who were intimately involved in organising. They has some slight successes but they know they have much work before them on the organising front as well doing their day jobs.

      Many European unions were directly and indirectly involved during the early years of the 20th century in education for working people and almost by definition were leftist given the nature of the class ridden societies in which they operated.

      It’s good to know, however, that there are people like Professor Bronfenbrenner around who can pass knowledge onto other people.

      On separate note, I find that some unions have become doppelgangers of corporations, with all the neoliberal bs about hierarchies, onerous bureaucracies, PR and the such.

    2. makedoanmend

      “Kate Bronfenbrenner is director of labor education research at Cornell University, Chris Brooks is a staff writer and organizer with Labor Notes and Shaun Richman is a former organizing director at the American Federation of Teachers.”

      [ source: ]

      I tend to agreed with Professor Bronfenbrenner’s take on the problems that US labour and labour unions face. Her points were well made and more compelling compared to the other writers imo.

      However, I rather fail to detect any lefty bookish tendencies in the either Chris Brooks or Shaun Richman other than that which normally attaches to those who lobby for labour unions.

      On the other hand, I know several lefty bookish types who were intimately involved in the University strikes in the UK this year. The only had minor successes or none but they still spend quite a bit of time working for the unions and all the employees in the universities whilst doing their day jobs.

      They, of course, work with other members of their unions who are not lefty types as well.

    3. makedoanmend


      “Kate Bronfenbrenner is director of labor education research at Cornell University, Chris Brooks is a staff writer and organizer with Labor Notes and Shaun Richman is a former organizing director at the American Federation of Teachers.”

      [source: In The Times authors link]

      1. Left in Wisconsin

        I’m not at all opposed to book-smart lefties – I often claim to be one. It’s just that the discussion seemed entirely unmoored from contemporary reality except when KB chimed in and there seemed to be a one-upping effort to quote obscure work from decades past. I don’t know what to make of the fact that the one guy was AFT organizing director, except that I don’t have much memory of successful AFT organizing over the past several decades.

  20. ChrisPacific

    Good article from Keen and I think he makes some valid points. I think the discussion has the potential to improve the theory if carried through to a conclusion.

    I strongly disagree with the final tweet about how people should just bury their differences because “our enemies would love to see you scrapping in public”. This is political thinking. If MMT engages on that level then it will lose (and even if it wins, it risks turning into the kind of magical/religious theory detached from evidence or reality that mainstream economics is currently). If it is to prevail then it must be by superior scientific legitimacy and predictions that do a better job at predicting reality. That process requires open and constructive debate.

  21. The Rev Kev

    “Australia to seek diplomatic backup against Russia over MH17 atrocity”

    cat’s-paw also cats·paw (kăts′pô′)
    n. pl. cat’s-paws also cats·paws
    1. A person used by another as a dupe or tool.

    Turnbull and Bishop would never go off on their own to make a stand like this. That would require making a courageous decision. I would guess that they are being put up to it by the UK and the US but more to the point, this has the Atlantic Council paw-prints all over it. The whole idea of punishing Russia relentlessly until they say that they are guilty of this is just moronic. Maybe this is the tool to wreck the FIFA World Cup in Russia in a fortnight’s time since the Skripal poisoning never had long legs. There is ‘form’ for this sort of caper.

  22. Big River Bandido

    The Axios story in Class Warfare:

    rare, candid and bracing talk from executives atop corporate America, made at a conference Thursday at the Dallas Fed: …Americans should stop waiting for across-the-board pay hikes coinciding with higher corporate profit; to cash in, workers will need to shift to higher-skilled jobs that command more income.

    The neoliberal wet dream. Workers should just “shift to higher-skilled jobs”. Just like that.

    1. JTFaraday

      Well, I kind of think that the US has a wholly inadequate welfare state and this stands to only intensify as more and more people fail to personally fund their own retirements, as they will. If employers want low wage employees, then the US needs to belatedly step up and become a proper social democracy. Sometimes you have to work with what is.

      And in all honesty, I think that if a citizenry demands that employers fund all its social costs, then it is effectively disenfranchising itself. Why would we do that?

      1. pretzelattack

        i haven’t heard anybody demand employers fund all social costs, but people are demanding a living wage. if employers refuse to pay that, so the executives can make more money and the stock price rises, then we need to move to a system which is not owned by the elites.

        1. JTFaraday

          That’s because it’s so naturalized we don’t even think about it. But, yes, Americans think income from employment should fund every individual from cradle to grave. Public education was traditionally the allowable exception, the exception that neoliberals are trying to normalize through privatization.

          I think this is a deeply disenfranchising way of thinking (or not thinking).

          So you want to give a job controlled by you? How does this change anything?

          1. pretzelattack

            haven’t seen that, never heard that. most americans support medicare and social security, which is income from government. agree lots of things are now getting privatized, but that’s pushed by corporations and the politicians they buy, not a grassroots sentiment. for that matter, i’ve never heard americans objecting to inheritance, income from other means like the stock market or dividends, etc. americans object to employers using increasingly lax regulations to screw them on salary, it is true, and the fact employers like walmart often get to write the regulations via lobbyists just rubs salt in the wound.

            1. JTFaraday

              No, social security basically replicates the results of labor market competition in retirement. Any time in unemployment costs you retirement income.

              If you have anything other than the most basic coverage under Medicare, it’s actually what I would call expensive.

              It’s true that people who have unearned market income don’t object to that income, the alternative is so dire. And that’s why they are going to fight labor for every last penny.

              That may be dumb in the long run, but in the long run we’re all dead.

  23. The Rev Kev

    “That Is What Power Looks Like”: As Trump Prepares for 2020, Democrats Are Losing the Only Fight That Matters”

    Quote: ‘Donald Trump dominates our attention universe to the point where he blocks out the sun. Is it any wonder that people don’t have any idea what Democrats stand for?’

    Does anybody know what the Democrats stand for these days? From what I can see, it is suppressing progressives, stacking the elections with ex-military & spook candidates, taking money from Wall Street, putting the boot into ordinary Americans, fighting against education and never, ever having a universal free health-care system. Thanks Trump!

  24. Jeff W

    “The Amazing Psychology of Japanese Train Stations”

    That (great) article mentions my favorite “hassha merodii” (“train departure melody”)—“The Third Man Theme” at Ebisu station—but, inexplicably, doesn’t explain why that particular tune is played there:

    The station and the surrounding area are named after the Yebisu beer brewery that had been located nearby. (In fact, the train station, developed in 1901, owes its existence to the presence of the brewery, built in 1889.) Sapporo Brewery, which acquired Yebisu, has used that “The Third Man Theme” in its commercials one way or another for over two decades to promote its “luxury” Yebisu brand. So that theme might have been just about the only conceivable choice for the train station named after and closely associated with the beer company.

  25. Procopius

    I’m unclear why this isn’t being loudly framed as a casus belli, right now.

    Holy smoke, Lambert, are you sure you really want to have a war? I don’t see, if Australia declares war on Russia, how the U.S. cannot follow suit, and with this bunch of incompetents running things, nothing good can come from it. Or did you mean for them to declare war against Ukraine? After all, they had a supply of Russian-built anti-aircraft missiles, too.

  26. EoH

    Two comments – about the NYT article on excess antibiotics in food and a related article in the Guardian about the ineffectiveness of chlorine-washing of chicken – lost to the ether. Perhaps the filter needs tweaking.

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