2:00PM Water Cooler 6/18/2018

By Lambert Strether of Corrente.

Trade

“Oil rises ahead of OPEC, pressured by China tariffs” [BOE Report]. “Adding extra pressure are global trade tensions. U.S. President Donald Trump last week pushed ahead with tariffs on $50 billion of Chinese imports, starting on July 6. China retaliated by imposing import duties on U.S. products, and suggesting that crude oil tariffs were planned… U.S. bank Morgan Stanley said in a note to clients that the trade spat meant that economic ‘downside risks have risen’. U.S. oil exports have boomed in the last two years as shale oil production has surged, with China becoming one of the biggest buyers.”

“Expect more fallout this week from President Donald Trump’s announcement Friday that $50 billion in goods from China will face new 25 percent tariffs” [Politico]. “A senior administration official told told reporters that the tariffs were aimed at pressuring China to make structural changes to its policies that facilitate theft of U.S. technology and undermine U.S. access to the Chinese market, ‘regardless of how you feel about the trade balance.’ That implies that a deal satisfying the United States wouldn’t necessarily entail a direct and immediate reduction in the trade deficit. But given Trump’s laser-like focus on the trade balance, all bets are off. Also note that the first tranche of tariffs, on $34 billion in goods, is scheduled to take effect July 6, which isn’t nearly enough time for China to make bureaucracy-shaking changes to prevent the tariffs from happening.”

Politics

2020

But Federal taxes don’t fund Federal spending:

Stop trapping us in the austerity box!

2018

“Competitive Fight for U.S. House Brings Big Jump in Ad Spending” (map) [Bloomberg]. “The intensity of the fight for the U.S. House is playing out on the nation’s television screens where the number of campaign ads is up more than 50 percent from where it was at the same point in the most recent comparable election year.” With handy map.

UPDATE IA More like this, please:

UPDATE IA: “How Polk County funneled $844,000 to private schools through a corporation despite its ban on religious funding” [Des Moines Register]. “Polk County routed $844,000 in public money to nine Catholic schools and one Christian academy in 2012 and 2013 — despite state law and county policies that prohibit public funding for religious institutions. The county paid out the money in the form of grants to a corporation set up to pass the money on to the schools, a Des Moines Register investigation has found.” And the called quote: “Official who recommended grants: ‘I ain’t apologizing for it’.”

IA-01: “In Iowa, Republicans and Democrats fight for elusive independent voters, whoever they are” [WaPo]. “Nearly 40 percent of voters here are not affiliated with a political party, making them unpredictable in this era of sharply partisan politics. The group includes Iowans who are fed up with the federal government, tired of gridlock in Congress and distrusting of the major political parties. They are credited with playing a major role in Trump’s victory in the district and are expected to decide this fall’s midterm elections in the state.”

WI: “Shell-shocked Democrats regroup in Wisconsin” [Politico]. “Interviews with nearly two dozen local party officials, candidates and operatives here describe an ongoing effort marked by unprecedented organizing and millions of dollars from out-of-state donors — a reflection of the party’s urgency in reshaping the 2020 landscape in the upper Midwest, a Democratic bulwark that Trump toppled in 2016…. Already, more than $7 million has been committed this year toward efforts to reclaim Wisconsin. In recent months, billionaire Democrat Tom Steyer’s NextGen America has designated $2.5 million to register and turn out young voters. Eric Holder’s National Democratic Redistricting Committee has spent $675,000 on the midterm elections so far. The Democratic Governors Association has reserved about $4 million in air time in preparation for a top-of-the-ticket brawl with Gov. Scott Walker in the fall.” So here we are, 140 days before the election, and we’re relying on squillionaires like Steyer and Covington and Burling sleaze merchants like Eric Holder to handle what should be a core party function: Voter registration. (Oh, and we’re going to turn out young voters. Heaven forfend we should simply aid citizens to enter the democratic process; reminds me of how the legal galaxy brains in the Gore campaign only challenged results in counties they thought they would in, in Florida 2000.)

UPDATE NY “Trial of former SUNY official Alain Kaloyeros to begin Monday” [Newsday]. “The trial of former SUNY official Alain Kaloyeros, who is accused of joining Todd Howe, an ex-lobbyist who had long-standing ties to Gov. Andrew M. Cuomo and close aides, in steering $1 billion in upstate development deals to Cuomo campaign donors begins Monday in federal court in Manhattan. The twist: Unlike in a quid pro quo bribery scheme, Kaloyeros isn’t charged with getting anything back. Instead, prosecutors say the physicist — whose success in attracting nanotechnology research money to SUNY led to an $800,000-a-year salary — hired Howe and tailored bids for large campaign donors to keep his job and stay in Cuomo’s good graces after Cuomo became governor.” A billion! That’s real money!

UPDATE NY-14 “The Queens Machine That Turns Foreclosures Into Cash” [Village Voice]. Great lead: “The three lawyers who run one of the largest Democratic organizations in America have more than one way to get rich.” More: “With its large swath of working-class homeowners, Queens was arguably New York City’s ground zero for the housing crisis…. Southeast Queens, home to a large African American population, was hit particularly hard by predatory lenders…. The end result of this system is beleaguered Queens homeowners walking into court to face judges who owe their livelihoods to the three men. Friedheim recalled an otherwise pro-tenant Queens judge once paying particular deference to Gallo, knowing the firm he came from. She soon found out why. ‘It’s totally machine-connected,’ Friedheim said. ‘That’s how it is.'” This is an ugly and tangled story, but I’m not seeing a smoking gun that implicates Crowley. Readers? And do we have any readers from Queens?

UPDATE DC: “In DC primary, minimum wage is the main topic of discussion” [Associated Press]. “The actual election in November is even more of a formality in the District of Columbia, where the Republican Party holds little sway. The greatest question mark surrounds a divisive ballot initiative that would change the way that restaurants and bars pay their tipped employees. Initiative 77 would eliminate the “tipped minimum wage” — the two-tiered system under which restaurant and bar owners pay servers, bartenders and bussers a lower hourly wage with the expectation that they will be compensated with tips from customers.” “Divisive.” Oh.

* * *

“Conclusive proof that it is Trump’s policy to separate children from their families at the border” [Business Insider]. An extraordinarily ugly DHS form. So that’s dispositive.

UPDATE “How Trump Came to Enforce a Practice of Separating Migrant Families” [New York Times]. This reads like a good tick-tock on the decision-making by this administration, and previous administrations.

UPDATE The material I accidentally deleted follows–

“Democrats intensify fight for immigrant children — and bludgeon Trump and Republicans ahead of midterms” [WaPo]. “Democrats, actively denouncing [the Administration’s] zero-tolerance policy, have remained united against the GOP measures but are pushing a bill by Sen. Dianne Feinstein of California to immediately block family separations.” CA-04, CA-07, CA-10, CA-21, CA-25, CA-39, CA-45, CA-48, CA-49, CA-50…. Good if this happens! If we want to think seriously about policy, we would do several things: (1) center activist demands like abolishing ICE (and Joe Lieberman’s DHS, too, while we’re at itMR SUBLIMINAL You forgot the DEA!; (2) consider how U.S. support for murderous regimes, the DEA’s “War on Drugs,” and the destruction of Mexican agriculture fuel immigration (and asylum), for starters; the parallel to the mayhem and chaos our wars have induced in the Middle East, leading to emigration to the EU, is exact; and (3) be consistent and universal in our values, in particular family separation in the carceral state, especially privatized prisons. And that’s before we consider death and suffering in the interior, by U.S. citizens (“deaths of despair”). Of course, we’re not doing any of those things. Sanders, in particular, is not addressing #2.

“Beto O’Rourke, Veronica Escobar lead Father’s Day march on tent city housing separated immigrant children” [Texas Tribune]. “Others attending the demonstration included Lupe Valdez, the Democratic nominee for governor; Democratic state Reps. Mary González of Clint and César Blanco and Lina Ortega of El Paso; and Gina Ortiz Jones, the Democrat challenging U.S. Rep. Will Hurd, R-Helotes; and Julie Oliver, the Democrat running to unseat Republican U.S. Rep. Roger Williams.”

“Trump digs in on immigration amid family separation crisis” [Associated Press]. “To Rep. Adam Schiff, D-Calif., the administration is ‘using the grief, the tears, the pain of these kids as mortar to build our wall. And it’s an effort to extort a bill to their liking in the Congress.'” True, but rather rich from the Party that spent several decades telling the de-industrialized working class that they have “nowhere else to go.” No grief, tears, pain for children there, eh? And no extortion, either. I appreciate the liberal thirst to regain the moral high ground, but if they would look downward, they’d see they’re standing in sand. Or mud.

“Child Separation and History: the Canadian Residental Schools” [The Incidental Economist]. “There is a closer historical parallel than Nazi Germany: the treatment of indigenous children in Canada…. The system lasted well into the 20th century. About 150,000 children were taken from families and sent to the residential schools. Many children suffered physical and sexual abuse. The Canadian Truth and Reconciliation Commission estimated that 6,000 children died, but the count may be much higher. Many families were never notified that their child had died. That the number of dead children is uncertain is itself an indicator of how the system neglected them. What is the lesson from Canada? Most importantly, mass separation of children from their families can be grievously harmful to those children. Unless a child is in imminent danger of abuse or neglect, don’t do it! However, all of Canada was harmed by the residential schools. The policy greatly added to the social inequity and distrust between the colonial and indigenous communities.”

“Trump and the Baby Snatchers” [Charles Blow, New York Times]. “I don’t have a long treatise to issue here, no meandering argument. I am simply outraged beyond my ability to articulate it. This practice of family separation must end, and Trump and every other politician who was silent about it or worse, endorsed it, must be held to account at the ballot box.” Blow makes a strong argument for amnesty for the entrepreneurs who built the marijuana market and were sent to jail for decades during the war on drugs, thereby being separated from their families.

2016 Post Mortem

“Commentary: For Trump supporters, DOJ IG report amounts to ‘Told ya so'” [Bloomberg]. “FBI agents getting meals, drinks and tickets to sporting events from reporters? Agents sending “vive la resistance” messages making oversight decisions in Trump’s case? Not to mention the new revelation of the 26-year-old New York Times reporter engaged in a romantic relationship with a 57-year-old Senate Intelligence Committee staffer—one of the committees overseeing the RussiaGate probe. Plot twists like these would be laughed out of a script meeting…. The actions of the FBI or DOJ may, in the end, be defensible. No legal line may have been crossed. But for people who elected Donald Trump because they felt like their government viewed them as a problem to be solved and not as citizens to be served, the IG report confirms what they’ve feared all along.”

“EXCLUSIVE: Hillary Clinton speaks at 8th grade graduation in San Francisco” [ABC 7 News]. “Former Secretary of State Hillary Clinton arrived at San Francisco’s Hamlin School today for a very hush, hush appearance. She spoke at the private school’s 8th grade graduation ceremony.” Annual tuition: $34,500.

Realignment and Legitimacy

“Maine Voters Overrule Their Leaders” [The Atlantic]. The headline kinda makes you wonder who’s doing the leading… “In 2016, Mainers approved the use of ranked-choice voting in a referendum, becoming the first state in the nation to adopt the so-called instant runoff method. The following year, however, the legislature voted to delay the new system for five years, until 2022, citing concerns about whether ranked-choice voting conflicted with the state constitution. The courts declared that the system would be in place for this year’s primaries, allowing voters to test out ranked-choice voting and simultaneously decide whether to keep it. And so on Tuesday, the people of Maine overruled the politicians they elected to represent them, voting in yet another statewide ballot initiative to maintain the system they had already approved and veto the law delaying it. In a boost to advocates who want to expand ranked-choice voting nationwide, the most recent ballot measure passed with a larger margin—nearly nine points compared to four points in 2016—than the first referendum did. ‘Enough is enough,’ Kyle Bailey, campaign manager for the Committee for Ranked Choice Voting, told me in a phone interview. ‘We’re going to decide how we’re going to elect our politicians. The politicians aren’t going to decide that for themselves.‘” I voted last Tuesday using RCV; it’s not hard; and it allowed my to express my preferences more precisely than the first-past-the-post ballot did.

“The Surprises In Maine’s Primary Election Results, And What They Portend For November” [Maine Public Radio]. Mal Leary, MPR political correspondent: “Well, the ranked-choice voting folks did exactly what they said they needed to do, and that is they got a lot of unenrolled voters to show up at the polls. And we can say that by looking at the total turnout for folks who were running for governor, roughly 250,000 people voted in the ranked-choice voting question. When you look at how many people have cast ballots for governor, both Republicans and Democrats, it’s still a little under 200,000. That’s a big difference. That’s a lot of unenrolled voters that the ranked-choice voting supporters got out to the polls. And I think it made a really big difference to them.”

“So who won 2 of Maine’s Democratic primary contests? Scanning, scanning …” [Portland Press-Herald]. “It’s a time-consuming process that election officials expect to bleed into Monday, at least. The ranked-choice tabulation, meanwhile, is not expected to happen until Tuesday, although that timeframe could change.” New voters showed up at the polls. And reporters need to wait to file their horse-races stories. Somebody call the w–a-a-a-m-bulance!

* * *

“Liberal Democracy Is Under Attack” [Der Spiegel]. “The upshot is that global politics are currently dominated by a handful of men — and only men — who have nothing but contempt for liberal democracy and who aspire to absolute control of politics, of the economy, of the judiciary and of the media. They are the predominant figures of the present — and the decisions they make will go a long way toward shaping the future ahead. The globalized, high-tech, constantly informed and enlightened world of the 21st century finds itself in the middle of a slide back into the age of authoritarianism.” Wowsers. I’ve helpfully underlined the material Thomas Frank of Listen, Liberal! would find especially intriguing…. (I’ve been listening to a lot of Thomas Frank lately. I can’t understand why he doesn’t have a forum here, in this country….

UPDATE “It Can Happen Here” [Cass Sunstein, New York Review of Books]. “Milton Mayer’s 1955 classic They Thought They Were Free, recently republished with an afterword by the Cambridge historian Richard J. Evans, was one of the first accounts of ordinary life under Nazism.” Lambert here: I cannot recommend Richard Evans’ three-volume history of the Third Reich highly enough, and They Thought They Were Free is excellent, too. More: “With our system of checks and balances, full-blown authoritarianism is unlikely to happen here, but it would be foolish to ignore the risks that Trump and his administration pose to established norms and institutions, which help preserve both order and liberty. Those risks will grow if opposition to violations of long-standing norms is limited to Democrats, and if Republicans laugh, applaud, agree with, or make excuses for Trump—if they howl with the wolf.” Ironically, Cass Sunstein, the “nudge theory” expert and Obama administration advisor, was also an advocate for “cognitive infiltration of extremist groups,” prefiguring the million-dollar troll army David Brock ran for the Clinton campaign. I won’t use the word “Stasi” but feel free to think it…

Stats Watch

Housing Market Index, June 2018: “Acceleration is not the indication from the home builders’ housing market index” [Econoday]. “The reading for traffic is the lowest since November and is not a good sign for the homestretch of the Spring housing season.” And: “A lot less than expected as the housing slump continues” [Mosler Economics].

Retail: The Electronic Entertainment Expo, commonly referred to as E3, which is a premier trade event for the video game industry, ended last week and top analysts are super-bullish. With gaming sales poised to grow an incredible 50% year-over-year in 2018, and grow annually a stunning 27% between 2017 and 2020, there could be some big upside for the top companies in the industry” [247 Wall Street]. Sanders better be making himself an avatar….

Retail: “Starting next month, Etsy is raising the transaction fee it charges sellers to 5% from 3.5%, and it will add a 5% fee on shipping costs” [Wall Street Journal]. Analysts and investors had suggested Etsy explore secondary revenue streams as growth slowed in in recent years and the company said it was working to find the right ‘balance’ between its technology and e-commerce functions. The response from Etsy’s users was mixed, with some makers vowing to close up shop and head for cheaper online marketplaces. But a general manager with Etsy said the changes were designed “with the benefits to our sellers in mind,” adding, “Etsy is only successful when our sellers are successful.'”

Shipping: “Cass Freight Index Report is strong again in May” [Logistics Management]. “The most recent edition of the Cass Freight Index Report from Cass Information Systems pointed to an ongoing thesis describing the state of the United States freight economy as “extraordinarily strong,” given the ongoing gains in freight shipments and expenditures…. [Broughton Capital Founder and Managing Partner Donald Broughton] added that the first five months of 2018 are so strong that barring a negative ‘shock event,’ 2018 will be a very strong year for the transportation sector and the economy…. ‘We have to go back to the easy comparisons of 2009-2010 to find such large percentage increases and the current comparison is anything but easy,’ Broughton wrote.”

Shipping: “Long freight trains are likely here to stay, given their vaunted status among railway investors–major railroads now report average train length with quarterly earnings, as a way to signal improving efficiency” [Wall Street Journal]. It occurred to me that the railroads could game their average train length by increasing the amount of slack in their trains, but I think I’m too cynical; the length of the sidings that allow one train to pass another are a real-world constraint on the lengths of trains. Oh well!

Shipping: “Changes in parcel landscape loom large as UPS, Teamsters knock heads again” [DC Velocity]. “The UPS Inc. of 2023 may be a very different company from the one that exists today. By then, brown drones may fill the skies. Package cars may operate with the driver in the passenger seat. Sunday deliveries may become routine. Local deliveries might be handled by citizen drivers using their personal vehicles instead of by professionals in the ubiquitous UPS vans. UPS robots could be walking parcels from one urban location to another. Deliveries may be made in 30 to 45 minutes after an order is received. Amazon.com Inc. may no longer be a big UPS customer, but rather a full-fledged competitor…. It is against this backdrop that UPS and the Teamsters union will hammer out collective bargaining agreements for the carrier’s small-package and less-than-truckload (LTL) operations to replace the five-year pacts that expire July 31. At stake are the livelihoods of 268,000 employees, relationships with 1.5million regular customers, and the direction of the $100 billion U.S. parcel market, and, by extension, the nation’s commerce.”

Shipping: “Public trucking companies are logging some of their best results in years, but Wall Street is wary of whether the boom can last” [Wall Street Journal]. “Chattanooga, Tenn.-based U.S. Xpress Enterprises Inc. returned to public markets Thursday…, the second trucker to complete an initial public offering in the U.S. since 2010, excluding those done via acquisitions. But shares priced lower than expected, signaling investor concern that robust demand for trucking may have a limited window.”

Shipping: “Analysts expect it will get harder and more expensive for companies to ship goods as demand increases in late summer and early fall, when shipping volumes typically peak” [Wall Street Journal]. “Analysts say large retailers and manufacturers have an advantage in the current market because they have contracted rates for much of their freight and don’t have to rely on the spot market, where shippers book last-minute transportation and pricing is more volatile. But surging volumes mean some carriers are turning down loads that take them out of their way or refusing to deliver to locations known for long wait times at the loading dock.”

Shipping: “Business Is Booming at the Panama Canal” [Wall Street Journal]. “Ships moving natural-gas and petroleum-product exports from the U.S. are the fastest-growing business for the Panama Canal, with annual revenue from tolls growing more than 20 times over the past two years….. Rising prices for ship fuel favor crossings through Panama that cut sailing time from Asia to the U.S. East Coast by more than 10 days compared with crossing the Suez Canal.”

Concentration: “Maybe the Big Four Auditing Firms Do Need to Be Broken Up” [Bloomberg]. “So far, it’s hard to know what’s happening. One U.S. study, using data through 2013, found no relationship between the quality of firms’ audit work and their aggregate consulting billings — but did find such a link at the individual audit- client level. In 2017, the International Forum of Independent Audit Regulators reported deficiencies in 40 percent of the audits its members inspected, down from 47 percent in a 2014 report. But again, interpreting these numbers isn’t straightforward: They depend on what regulators choose to inspect and how tough they choose to be. Anecdotal evidence suggests that auditors’ work still leaves much to be desired.”

The Bezzle: “Tesla Short Sellers Sitting on $14 Billion Bomb That’s Ready to ‘Explode'” [247 Wall Street]. “As of the end of May, short sellers held nearly 31% of the outstanding float of Tesla Inc., a total of just over 39 million shares. That is a virtual tie with the highest level of short interest in Tesla in the prior 12 months….

The Bezzle: “Audi CEO Rupert Stadler arrested on emissions scandal investigation” [FreightWaves]. “The story has been unraveling itself for close to three years now, with evidence against the company mounting every year. Nonetheless, CEO Stadler had long swum under the radar, but the scandal has now gone too far for the company to turn things around. Last year, Zaccheo Giovanni Pamio, the head of thermodynamics in the diesel engine development department of Audi, was caught lying to the U.S. Environmental Protection Agency with charges of wilful law-flouting that ran deep into the higher management of Volkswagen and Audi. Various investigations are going forward as the German government is looking to see if the emissions test cheating was a concerted effort by all the major automakers to violate antitrust laws and breach EU air pollution standards knowingly. Audi, on its part, has been vociferous in its denial that its higher management were collectively involved in the scandal – a defense that has been gradually falling apart. With the arrest of CEO Stadler, the number of current and ex-executives of the company that are under the scanner have come to 20.” From The Department of “Is Everything Run Like CalPERS?”

The Bezzle: “The SEC Will Leave Good ICOs Alone” [Bloomberg]. “[William Hinman, the Director of the Division of Corporation Finance at the Securities and Exchange Commission] suggested that, at least in limited cases, the SEC agrees with the notion that cryptocurrency startups can raise money by selling tokens (or token contracts) as securities early on before launching their network, but then flip into non-security ‘utility tokens’ once their networks are running and the tokens are usable.”

The Bezzle: “Two Former Roadrunner Transportation Executives Charged Over Accounting” [Wall Street Journal]. “The indictment alleges that in 2014, Messrs. Wogsland and Naggs identified more than $7 million in misstated accounts and then left them on Roadrunner’s books until early 2017 in order to boost the company’s financial performance. The accounts included ‘old, uncollectable customer debts with static balances; understated and increasing liabilities for historic debt owed by terminated drivers; and overstated accounts for licenses and other ‘prepaid assets’ that no longer had any actual value,’ according to a Justice Department press release.” Well, well. Presumably these practices are not ubiquitous.s

The Bezzle: “Ohio looks toward future of e-schools as ECOT assets are sold off” [Cleveland]. “Funding of e-schools was at the heart of the battle that forced the closure of what was once the largest charter school in Ohio and once the largest online school in the nation. For years, Ohio paid online schools for each student that was enrolled, but test results were poor and the state never made sure students participated in classes from their computers at home. After a 2015 charter reform law increased requirements to track student work, the Ohio Department of Education began demanding records of how long students spend on e-school websites. That led to two findings against ECOT, one for $60 million and another for $20 million, when it could not show students working online enough hours.”

Five Horsemen: “In late morning trade, Facebook and Amazon are at record highs” [Hat Tip, Jim Haygood].

Five Horsemen June 18 2018

NakedCap Mania-Panic Index: “After Friday’s mild market decline, the mania-panic index dipped to 63 (complacency) as the plurality of new highs over new lows continued to deteriorate” [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.)

Mania panic index June 15 2018

Health Care

“The Limits to Trump’s Medicaid Freedom for States” [Governing]. “[I]t turns out that there are limits to what the Trump administration will let states do. Here’s what CMS has already declined, and what’s still up in the air….” Declined: waiver for “three-year time limit for people to use Medicaid” (KS); “[Dropping] eligibility from 138 of the federal poverty line to just 100 percent” (AR). Pending: work requirements for Medicaid beneficiaries (AL, KS, MS, OK, SD); “drug test Medicaid applicants and deny them health care if they test positive” (WI).

Class Warfare

“The Death of a Once Great City” [Harpers (page 2)]. “What plagues New York, though, is not only the astounding rise in housing prices, disruptive as that is. It is also the wholesale destruction of the public city. Many of the city’s most treasured amenities, essential to its middle-class character and built up for decades through the painstaking labors of so many dedicated individuals—working people and philanthropists, labor leaders and social workers, reformers and politicians—have now been torn away. Look at almost any public service or space in New York, and you will see that it has been diminished, degraded, appropriated…. The reasons for the subway’s breakdown are legion. But the more telling lesson here is that a tax on the wealthiest New Yorkers to restore even the most vital public good cannot be so much as entertained.” Much discussion of these and similar issues at the last New York meetup. It would be interesting to see if meetups in other cities that are “optimistic, diverse, dynamic, moving forward,” like New York.

News of The Wired

“Human single neuron activity precedes emergence of conscious perception” [Nature]. “One of the greatest challenges of cognitive neuroscience is bridging the gap between the binary activity of single neurons and the complexity and vividness of conscious experience.” And when we solve that challenge, imagine the possibilities for marketing!

“Some people can feel it on their own bodies when others are touched, hit, or stroked — and researchers are trying to figure out why” [Business Insider]. “Mirror-touch synesthesia.” I wonder if people can be trained to do this.

“Decades-old PGP bug allowed hackers to spoof just about anyone’s signature” [Ars Technica]. “For their entire existence, some of the world’s most widely used email encryption tools have been vulnerable to hacks that allowed attackers to spoof the digital signature of just about any person with a public key, a researcher said Wednesday. GnuPG, Enigmail, GPGTools, and python-gnupg have all been updated to patch the critical vulnerability. Enigmail and the Simple Password Store have also received patches for two related spoofing bugs… The flaw, indexed as CVE-2018-12020, means that decades’ worth of email messages many people relied on for sensitive business or security matters may have in fact been spoofs. It also has the potential to affect uses that went well beyond encrypted email.” Not to defend Trump, but you will note that he set up a physical channel with the North Koreans, one of whom brought him a package, and a private verbal channel with Putin (in the conversation the political class went nuts about because no staffers were present). I cannot, however, recall a similar episode with Xi. Or am I overthinking this? Reader?

For quiet car fans:

IMNSHO, the most obnoxious variety of mobile phone is the walkie talkie, where you get to hear both sides of the conversation, with the sound coming from the speaker so distorted that you can’t help but listen to it. Well, the other day I had to listen to a bunch of teenagers trying to arrange a sleepover using Alexa. TEENAGER: Alexa, text Mom _____….” ALEXA: “I’m sorry, I don’t understand.” TEEN: “[etc.].” Took them about ten minutes and they never did organize it (each one of ’em had to try). That’s just as obnoxious as a walkie-talkie, in my book. Nobody seems to consider virtual assistants as as source of sound pollution in public spaces. But they are.

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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 (SV):

SV writes: “Have wanted these guys for so long in our garden…I forget why! But the paucity of pollinators is getting frightening.”

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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.

199 comments

  1. cynician

    >>”But Federal taxes don’t fund Federal spending:”

    Fine – they don’t. But the real issue is why the bill has no co-sponsors. If all of Congress woke up tomorrow with crystal-clear recognition of MMT, most of them still won’t fund free college, and still won’t want to tax financial transactions – because that will go against the interests of their donors.

    Bernie is right on this one – right to pitch the choice of what to finance in this way.

    1. Roger Smith

      But Federal taxes don’t fund Federal spending:

      To add on here, I have always been confused by this as no one seems to supply to complete mechanics. Recently I saw, I believe Lambert, saying that currency could just be created to fund these programs. What does the entire picture look like? Where do the taxes collected go? And if currency is minted, is the potential downside on that end devaluation of the standard unit (if too much is created)?

      1. fibble

        The money doesn’t go anywhere when the Fed collects taxes. It’s just numbers in a computer. Money is effectively “destroyed” when the government collects taxes.

        For a fuller picture of the mechanics as you say, the Government creates money when it spends, and destroys money when it collects taxes. To avoid “devaluing” the currency, the Government must take care to maintain a proper balance between the creation and destruction of money (Spending and Taxing).

      2. voteforno6

        The taxes don’t “go” anywhere. Taxation simply takes money out of circulation. It’s the flip side of spending, which puts money into circulation.

        Sure, inflation is a problem. That’s one of the reasons why taxes are needed.

        *Of course, this all only applies to governments which issue their own currencies.

      3. Chris

        Where do the taxes collected go.

        They just go. A government collecting taxes destroys units of its fiat currency. On the other side of the ledger, government spending creates new money.

        The purpose of taxation is threefold:
        1) the level of taxation, balanced against spending, controls the amount of money in circulation;
        2) the targeting of taxation serves to redistribute wealth within society; and
        3) the necessity of paying tax creates a demand for the currency.

        A government issuing its own fiat currency can spend as much as it likes without the need to collect taxes first. Unfortunately, the current US government chooses to spend on welfare for oligarchs and baubles for the military rather than on concrete material benefits for the many (such as guaranteed jobs, universal healthcare and free tertiary education).

        1. Oregoncharles

          Caveat: it isn’t destroyed if the taxes are payed in actual currency. That’s unusual, these days, but certainly possible. Fees frequently are.

          However, that has no effect on the logic of the situation. It simply spares the Mint the trouble of printing new bills to spend. In that case, we would talk about “in circulation” vs. “out of circulation.” (To be clear: this is a clarification, not an objection.)

      4. todde

        Accounting Entries for Tax Payments:

        Bank’s Books:
        Debit Customer checking (bank liability)
        Credit Federal Reserve (bank asset)

        Federal Reserve Books:
        Debit Bank Reserves (FED liability)
        Credit Treasury Account (FED Liability)

        1. Procopius

          Excuse me, it’s been so many decades that maybe I’ve gotten confused, but shouldn’t it be the other way around? For a private company asset values are debits and liabilities are credits. I never took the course on government accounting. /pedant

      5. Adam Eran

        Good questions, Roger. First of all, if taxes fund government programs, where do taxpayers get dollars to pay taxes if government doesn’t spend them out into the economy first?

        The real world is “spend, then tax,” not “tax and spend.”

        What’s the common name for the dollars left in the economy, after tax is collected? Answer: “National Debt.”

        That “Debt” is not like household debt, it’s like bank debt. If you have a checking account, that’s your asset, but the bank’s liability (i.e. “debt”). And when you write a check, you assign a portion of the bank’s debt to you to the payee. Currency is just checks made out to cash in fixed amounts. It appears on the books of the Fed as a liability too. You might take a look at Randall Wray’s monetary history article for some insight into what happens when we ignore this, too.

        Where do taxes go? Warren Mosler says if you went to the Treasury building in D.C. and paid your tax with physical currency, after having marked your bill “paid,” they would shred the money. The dollars go to the same bit bucket the withdrawals from checking accounts go. They are a social construct, not a commodity. They go to the same place scorekeepers keep the points for the scoreboard…[poof!]

        Taxes are necessary, however, to make the money valuable. Here’s Warren Mosler ‘splaining it.

        You can also see a pictorial representation of the flows in J.D. Alt’s Diagrams & Dollars article.

        This is good stuff, and you’re asking the right questions. Stick to it, and you’ll get that satori moment…😉

        1. Roger Smith

          Would it be correct to say then that the National Debt, being the government’s liability, is largely based on the wealth and assets of the uber rich who squat on it instead of return it to its final resting place?

          Then going back to the “balance the budget” nonsense, spending MORE on those with no currency power will stimulate the economy, so long as the amount given doesn’t short available resources/goods?

          Thanks!

          1. el_tel

            I think you’ve identified something that certain MMT experts say in the attempt to “reframe the debate” – namely that the national debt is also the accumulated savings of the non – governmental sector. (I may not have this exactly right but I believe that’s the gist of it). Eliminate the debt and you eliminate the bonds that underpin the guaranteed income of pensioners. (You can of course pay pensioners directly from govt without the bonds that enable the City to take its cut but as a stepping stone the above argument can be used.)

      6. John k

        Gov can spend essentially without limit until a shortage of real goods. This could be food, fuel, or labor… gov did do this during Vietnam war by drafting engineers for cannon fodder while simultaneously hiring hordes of them for the moon program, sharply boosting engineer salaries (to my benefit)
        Today vast quantities of unused labor of all types exist, also rebar and concrete… could be harnessed in needed infra. Little inflation would result, though fed would be alarmed at the thought of any wage rise, even though wages have lagged profits.

        1. paul

          I try to explain taxation as a balancing function to my pals, it sits nicely with peoples’ desire for order and sense.

      7. John Zelnicker

        @Roger Smith
        June 18, 2018 at 2:20 pm
        ——
        “And if currency is minted, is the potential downside on that end devaluation of the standard unit (if too much is created)?”

        This is a common question based on a misconception.

        We are taught that an increase in the supply of a commodity or product without a similar increase in demand will cause the price of the commodity or product to decrease. This is basic supply and demand dynamics. However, currency is not a commodity or product, so its value does not depend on the quantity issued or the demand for it. In fact, as long as an economy falls short of full employment, there will be continuing demand for additional money in that economy.

        Printed currency and minted coins are produced to allow people to convert their dollar bank holdings into a physical representation to be used for transactions or to stuff in a mattress. They are not created by government spending, but rather they are distributed to banks to provide that physical form in exchange for the bits and bytes representing the customer’s dollar bank balance.

    2. Pat

      It will also appeal to folks like me who think that many taxes are designed to encourage or discourage certain situations, and not just sin taxes. See, a financial transaction tax will by its very nature discourage a certain amount of computer run trading designed to make very small profits off of large volume transactions. Discourage in this case meaning make unprofitable.

      But I’m wild and crazy that way.

      1. Spring Texan

        Yep, FTT is a win-win because of discouraging speculation, it’s a fantastic bonus!

      2. JohnnySacks

        Glad I read farther into the comments because I was going to basically say the same. Anyone who thinks rapid trading somehow is beneficial to the stock market is seriously delusional, unless of course a tsunami of profits is flowing into their account due to it. Then to hell with the rest of the world – burn it down as long as I’m rich because, after all, it’s all about me.
        Not sure why taxation can’t be sold as a way to encourage or discourage specific behaviors, it seems to work with tobacco.

    3. Big River Bandido

      The entire outstanding student loan debt in this country is less than the cost of a single, defective F-35.

      Even though MMT tells us that Federal taxes don’t fund Federal spending, I still like the comparison of costs.
      Budgets are moral documents — nowhere will you find a clearer statement of priorities than how a person or an institution spends its money. Framing issues in this comparative way can illustrate a sense of warped priorities, and that has value in political discourse.

          1. Synoia

            Yes, and in the 1.5 billion, we have created an aircraft OS, an operating system. Think of it as Windows for the aircraft.

            And when it becomes available to Boeing, and not Airbus, watch the “UN-subsidized” Boeing win repeatedly.

    4. Summer

      “If all of Congress woke up tomorrow with crystal-clear recognition of MMT, most of them still won’t fund free college, and still won’t want to tax financial transactions – because that will go against the interests of their donors.”

      Bingo. It’s not a numbers, currency, or financial theory problem, it’s a belief system/ideology problem.

    5. Elizabeth Burton

      Bernie is right on this one – right to pitch the choice of what to finance in this way.

      Agree. It’s fine for those of us who understand the reality to complain about what is essentially a gesture, but that’s just it—it’s a necessary gesture because the majority of the population believes taxes do fund the government. Ignoring that fact is intellectual elitism, and condemning something like this proposed tax as irrelevant doesn’t help the progressive movement progress.

      We have 70 years of “balance the budget” propaganda to overcome. We also have a situation where Bernie Sanders needs to get his name attached to as much legislation as he can manage, because one of the clubs used to bludgeon him last time was that he never did anything for all his years in government. Because all of the many things he did accomplish were done by adding to other people’s legislation.

      He knows as well as anyone this tax isn’t going anywhere, at least not until after next January. He also knows he needs to shore up his resumé if he’s going to be effective two years from now.

      1. ChrisPacific

        I think it’s fine to present it as offsetting and non-inflationary. I don’t like implying a direct dependency, because if it succeeded it would make Wall Street speculators the sugar daddies of free higher education, and become a huge new barrier to meaningful regulation. Think of the poor students being denied an education, and all that.

        If a framing is needed, how about treating it as an investment in the workforce of the nation, and debt financing it? People finance investment with debt all the time if they think they can generate a positive net return. Why is it only bad when the government does it?

      2. Lambert Strether Post author

        > We have 70 years of “balance the budget” propaganda to overcome

        So we’d better start now, then!

        I’m really not saying that Gunnels should go full MMT. But he doesn’t have to make the (false) revenue raising idea the central selling point. What’s wrong with a straightforward assault on Wall Street speculation?

        1. kgw

          John Kenneth Galbraith put this “spend and tax” very well in his little book “The Culture of Contentment.” He was speaking against the monetarists, the interest rate perverts, who had “forgotten” about it.

        2. NotTimothyGeithner

          My sense is there is sufficient belief in wasteful spending such as aircraft carriers that “cost” of programs such as Medicare For All won’t bother anyone who wasn’t opposed to the idea of universal healthcare.

          Noted budget hawk and supporter of pay as you go, Nancy Pelosi, has never batted an eye at government spending. She couldn’t get her caucus united to oppose “Putin’s puppet” latest requests for more MIC waste.

      3. Procopius

        Minor quibble — it’s a lot more than 70 years. FDR ran on balancing the budget in 1932. It was a major political plank throughout the ’20s for both parties. In the 19th Century it was presented as the only solution to the “panics” that the gold standard produced regularly.

    1. Stephen V.

      Indeed it is. Just learned about the food potential : research is ongoing. Love the fact they propagate on rhizomes!

    1. Oregoncharles

      Salon is dishonest, and so is Digby, in particular.

      I quit going there after I caught them censoring the comments to promote the Russia! fearmongering, then couldn’t get an answer out of them.

      1. Procopius

        Yes, I used to adore digby, but since she became a fanatic Russia hater much (most) of what she writes is unreliable. Or perhaps I should phrase that as, “… much of what she writes is counter to the information I trust.”

  2. Scott

    A couple of energy links for today.

    The first is about NextEra, the largest producers of solar and wind power in the world. One thing that this article serves to emphasis is to focus on what companies actually do rather than what their marketing/branding says they do. The company’s decisions were largely based on economics rather than policy or the CEO’s ego.

    http://www.morningstar.com/news/dow-jones/TDJNDN_201806184000/how-a-florida-utility-became-the-global-king-of-green-power.html

    The second is from the EIA and suggests that the use of autonomous vehicles is likely to increase miles traveled. I don’t see anything good about this possibility as increase vehicle use is additional wear on roads, more traffic and more energy consumption (even if it is renewable).

    https://www.eia.gov/todayinenergy/detail.php?id=36492

    1. roxan

      I’ve had a hard time getting milkweeds to grow. I planted milkweed seed about two years ago, with no result. Suddenly, this summer–they came up! But…they seem to have some kind of disease that curls the leaves. The largest died. I recall milkweed being large and hardy perennials. What’s the problem?

      1. Stephen V.

        Yes! Same here with the suddenly part. But so many came up I didn’t worry about the few that died… I can’t say our usual hard clay is that great so am not sure what the problem is. Some are 5 ft high and I would say they are well worth a try.

    2. Oregoncharles

      It’s a different species here, but I’ve had little luck with them, and that’s putting in plants. But then, I’ve never seen a Monarch here. The only large butterflies we get are swallowtails – one fluttered by today.

  3. NotTimothyGeithner

    The Hillary Clinton graduation speaking engagement is hysterical. I particularly enjoyed the part about the Secret Service removing seating so former candidate Adlai….I mean HRC could appear. I wonder if she will go to a public school… it could be one in a rich area.

    1. Carolinian

      Perhaps the real question is did she get paid $300,000 and did the school have to pay for her private jet?

      1. polecat

        Were the kids required to wear purple ribbons before entering scholastic version of the seventh circle of Hell ?

    2. ambrit

      How many school custodial workers had to be sold for medical parts to pay her speaking fee?

    3. anonymous

      Hillary Clinton gave a speech at UCLA a couple of years ago to the tune of $300,000

      https://www.cbsnews.com/news/behind-the-scenes-of-hillary-clintons-300000-speech-at-ucla/

      Separately, Hillary is tweeting up a storm about the #FamiliesBelongTogether crisis.

      Why doesn’t she offer to house one of these families?

      She and Dems are using this via ActBlue to fund-raise, *ostensibly* for the immigrant families….

      As I understand the situation: the children are being separated from their parents so that the kids are not in the same holding areas as large numbers of adults, including strangers. Would the cost be prohibitive to keep families together when detained?

  4. roxy

    “EXCLUSIVE: Hillary Clinton speaks at 8th grade graduation in San Francisco” [ABC 7 News] “Around 9:45 a.m. agents stopped all cars and foot traffic for the block and then Clinton and her entourage arrived.” Graduation from 8th grade. How long until her royal highness shows up at a kindergarten “graduation”?

    1. NotTimothyGeithner

      I don’t think the appearance is at issue as much as the asking price for tuition (unless Hillary, a leader of the Democratic Party makes regular appearances at less endowed schools) and reducing the seating for Adlai’s arrival.

      1. Elizabeth

        I’m wondering if Hillary got paid for this appearance? It’s not like her to give unpaid speeches.

        1. MyLessThanPrimeBeef

          Perhaps she’s learned…good publicity is money too.

          Or perhaps her lesson has been ‘don’t ask for cash-on-delivery.’

          “You can pay later, after I’ve achieved my goal.”

          That was how commerce progressed in the past.

        2. NotTimothyGeithner

          The Clinton Foundation operated on a shoe string budget until after November 2, 2004 when the money started to flow in. Its weird how that works. This is just a return to the norm. Bill was working as a wing man for that Epstein pig.

          She may have to work on her marketability, only making appearances at kid events held at the Hyatt to drive up her asking price which I imagine is not $200K anymore.

  5. dcblogger

    So here we are, 140 days before the election, and we’re relying on squillionaires like Steyer and Covington and Burling sleaze merchants like Eric Holder to handle what should be a core party function: Voter registration

    this reflects upon Politico as much as the Democrats. The real muscle in this election has been working since 2017. My friends in Minnesota and Wisconsin tell me that door knocking began in January. But Politico does not talk to the sort of people who organize door knocking.

      1. voteforno6

        If I based my opinion of the Democratic Party solely on my interactions with them, my impression of them would be that one of its core party functions is to get money from me. Actually, that might be their only party function.

        1. Big River Bandido

          The Democrats are a political party in name only. In actuality, they’re nothing but a small network of consultants and con artists, who serve to enrich each other.

          1. MyLessThanPrimeBeef

            They do throw in virtue-signalling for free…likely they do for the love of it.

            In doing so, they cheapen virtue, and make non-virtue banal.

          2. Whoa Molly!

            Re: “In actuality, they’re (Dems) nothing but a small network of consultants and con artists,”

            That would explain very nicely why no voter registration, or policy—but plenty of identity politics and “Russia, Russia”!

        2. Amfortas the Hippie

          if i base MY opinion of teh demparty solely on my interactions with them, I would think that they don’t exist.
          In texas, this is the biggest difference between the party of today, and the party of 20-30 years ago.
          hell, a landline and an answering machine with a minimum message of support(“you’re not alone”) would be cheap.
          but in my county, and the 5 surrounding counties, this minor effort is apparently a bridge too far….at least since 08.
          A caveat: I know about and pay attention to the rural texas hill country. i have no idea what goes on in the city, as far as demparty visibility/existence.

      2. drumlin woodchuckles

        Patient and persistent voter registration could be a core movement function in the meantime. With enough Real Democrats performing enough Core Functions long enough and effectively enough, there might emerge enough Real Democrat Movements and cadre formations to where they could all start linking up and conquering pieces of the Democratic Party within their reach . . . and then start purging and expelling all the Catfood Clintonites from those pieces of the Party.

        ” Can the Catfood. Make the Party democratic again.”

      3. polecat

        What is ‘core’ to the DemoNCrats .. besides of course, magaphoning false virtues to the chumps .. while sucking $$$ any which way they can into their cynically merciless .. and forever toxic, blackhearted maws ? /r

      4. Stillfeelinthebern

        I’ve been active in this effort with the Democratic Party in Wisconsin. We’ve asked over and over for a voter registration component. It has not happened. Lambert is absolutely correct. They (DPW) do not care about voter registration.

    1. Left in Wisconsin

      I hope you are right. In my deep blue next of the woods, the election has been a non-issue until now, which seems kind of strange as you would imagine a lot of excitement.

      Separately, the D gov primary is one election that could really use ranked choice voting. There isn’t a lot separating the 10 candidates, but there is some. My guess is that the primary winner will get less than 30% of the vote – very possibly less than 25% or even 20% – and will still have high unknowns or no opinions going into the general.

      1. Lambert Strether Post author

        > the D gov primary is one election that could really use ranked choice voting

        If RCV increases turnout, as it did in Maine, then every election could really use it.

  6. Wukchumni

    YOSEMITE NATIONAL PARK, Calif. — John Muir, the naturalist who was most at home sleeping outdoors on a bed of pine needles in the Sierra Nevada, called giant sequoias the “noblest of God’s trees.”

    For three years, some of the most striking examples of these towering marvels were off limits to visitors in Yosemite National Park. After a $40 million renovation — the largest restoration project in the park’s history — the Mariposa Grove, a collection of around 500 mature giant sequoias, reopened last week.

    https://www.nytimes.com/2018/06/18/us/yosemite-sequoia-mariposa-grove.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region&region=top-news&WT.nav=top-news
    ~~~~~~~~~~~~~~~~~~~

    That’s a lot of money to ‘renovate’ a grove in the land of the giants, most of which aren’t close to any asphalt, thus not in need of our financial ‘help’.

    Come south to Sequoia NP if you really want to see thick groves of the giants, here where one might contain 3,000 to 5,000 of the red pillared columns, and if you go just a little off the beaten path, you might have a grove to your lonesome.

    We spent the past few days @ Redwood NP, and the stands of Sequoia Semperverins here are magnificent, but not really approachable all that much, as are their sidekicks in the Sierra.

    Thick rainforest understory in the coastal groves, versus ‘gangs’ of giants that crowd out anything from growing pretty much, in an odd turf war.

    1. drumlin woodchuckles

      Perhaps the relevant parts of the Park Service would say what the renovation money was spent for. Perhaps it was for bio-remediation or bio-combat against eco-threats and dangers to the trees.

      1. Oregoncharles

        It may have been for paving the trails, so foot traffic won’t kill the roots, as it can.

  7. diptherio

    Re: Walkie Talkies

    One of the factors that walkie talkies have over cell phones is their lower frequencies, <500 Mhz, which creates much less/no health risks compared to cell phone frequencies in the Ghz range. Also, they can be used in rural areas without adequate cell service. And unlike cell phones, the service is distributed and not dependent on corporate service providers, and is so more robust, especially in emergency situations. So they've got their advantages…but yeah, they can be obnoxious.

      1. drumlin woodchuckles

        Cancer. Cell phones cause cancer.

        Believe it now or believe it in twenty years. But eventually people will believe it. Years of exposure to steady doses of hand-held ” tobacco” held right upside the head.

  8. Carolinian

    Howl with the wolf? Oh brother. Is Sunstein still hooked up with Samantha Power? Cause they are made for each other.

    And don’t think the Cooler has mentioned the great Leslie Cockburn who, with her husband Andrew, scripted the Clooney/Kidman The Peacemaker and who gave birth to actress Olivia Wilde. I think she may also have some political views. She’s running as a Dem for Virginia 5th district.

  9. a different chris

    >Messrs. Wogsland and Naggs identified more than $7 million in misstated accounts and then left them on Roadrunner’s books until early 2017 in order to boost the company’s financial performance.

    Could be an interesting story. I know *nothing* about this, just saw the post and went and read the link. But what if these guys were only trying to keep the ship afloat? Their jobs, their co-worker’s jobs? The story didn’t show or even imply in any way that they were lining their pockets doing this. How could they, it was debt?

    Probably will just turn out to be your normal a-holes, but hey wouldn’t it be an interesting ray of light in the world of wage-slaves?

  10. JTMcPhee

    FBI report and “no legal line may have been crossed:”

    Remember, folks, that “legal lines” are the product of that thing called “legislation.” Which in the real world, and it’s ever more true, is the product of a kind of gerrymandering. So lobbyists (and some Solons, on their own initiative) arrange the enactment and repeal of legislation, to suit the preferences and advantages of their real paying constituency. And beyond that, of course, there’s the enforcement mechanisms, which in case people have not been attending, no longer bother with even those violations of law that are still “criminal,” and “exercise prosecutorial discretion” to not prosecute criminally, or even seek penalties that count and the injunctive relief that might jail or bar the malefactors who might, were there some threat of retribution, or even real significant regulation, pursue other courses in their looting behaviors.

    So let us not dumb ourselves down into accepting that “no legal lines have been crossed.” Because that should scarcely be the standard that power elites need to be held to, if the mopes are to have any chance of even surviving over the long haul — let alone the seriously damage planet we need, our children need, to survive.

    1. Summer

      “So let us not dumb ourselves down into accepting that “no legal lines have been crossed.” Because that should scarcely be the standard that power elites need to be held to…”

      About 500 to 1000 years too late, but better late than never (for holding elites accountable).
      Look at how long people put up with monarchies. Oh, wait…

    2. Procopius

      Well, that was why President Obama could say (had to say), “A lot of what they did was not illegal.” I always feel angry that he ignored the implication, which was that “some of what they did was illegal but the Justice Department decided that juries were too dumb to understand the cases so decided prosecuting would be too much hard work.”

  11. Big River Bandido

    In Iowa, Republicans and Democrats fight for elusive independent voters, whoever they are” [WaPo]. “They are … expected to decide this fall’s midterm elections in the state.”

    Typically for the Washington Post, this article covers all the “cultural” angles (“mostly white”, “a dozen Catholic churches”, “a sprawling John Deere” works), employs all the usual neoliberal tropes (“the area’s recent move to the right”), and of course the inevitable horse race aspects (“I think they can be won back over,” said some non-candidate).

    Also typically for the Post, this article fails to ask a single policy question.

    The only glancing allusion to policy came with Rod Blum’s boilerplate Republican nonsense about taxes, and Abby Finkenauer’s vague list:

    making health care more affordable, increasing the number of higher-paying jobs, rebuilding the state’s infrastructure and expanding job-training programs

    Making health care more affordable? Expanding job training? Really? This is nothing but Catfood Democrat Horsefeathers. I think the left can write off this race — you can’t displace a two-term incumbent with nothing, and neoliberal crap like this isn’t going to appeal enough to draw “whoever they are” voters to the polls in an off-year election.

        1. Summer

          The kind of “training” that will be bonanza for cost cutting middle men skimming of the top…you know, like the rest of the economy. They stick a middle man between the source and the would be beneficiaries and call that “capitalism.”

    1. ewmayer

      ‘making health care more affordable’

      Lemme guess – some kind of federally bccked ‘health care loans’ program, which will help ‘make health care more affordable’ the same way student loans ‘helped make college more affordable’ and govt tax breaks for homeowners, fed-backed mortgage programs and ultralow interest rates ‘helped make housing more affordable’.

      1. Summer

        Whenever the duopoly politicians speak of health “care”:
        1) They are talking about insurance, not care
        2) They are talking about affordable for the govt budget so that more can go down the MIC drain – not affordable for you and me. Business will get plenty of leeway to dump more costs on the pleebs as well. (When are we getting out of that BS, archaic, having your employer all in your healthcare business. I’m really getting a f work attitude anyway. Feels good, but you have to hide it.)

        Student loans went down the building development and administration drain.

        “Helped make housing more affordable” – I can’t even…

  12. Deschain

    I can tell you with a fair degree of certainty that the video game industry will not grow 50% this year. Double-digits, likely, but 50% is pure fantasy.

    1. MyLessThanPrimeBeef

      Had addictive video games been available cheaply in Russia circa 1917, would history have been different?

      “Bread is not so available here in St. Petersberg, but circuses are good.”

    2. Lambert Strether Post author

      Thank you. I’m trying to get a handle on “games” (as opposed to gaming). The last one I played was a version of Pong on my 512KE Mac. I spent like two days playing it. Then I removed it, and never put a game on my computer ever again. Other people’s views differ, and I grant I am totally out of step, especially with the bright young things of today.

  13. Big River Bandido

    UPDATE NY-14 “The Queens Machine That Turns Foreclosures Into Cash” [Village Voice].

    I live in this district, and this article strikes me as indeed a smoking gun of sorts. One of the side perks that Crowley has used as his political enforcement tool is his position as chairman of the Queens Democrat Party (a position he accepted even though he lives in Virginia, not Queens). Among the powers of the chairman are to appoint people to the places where they can cash in — probate and foreclosure courts.

    This is central to two of Ocasio-Cortez’ charges — that Crowley doesn’t even live in the district, much less represent its people. Even more damaging is the claim that he “profits off foreclosure”, which the article seems to support. The point isn’t whether Crowley receives financial gain from all this (although, with pay-to-play, who knows?) The point is that he controls the system and doles out the profits to his political supporters.

    1. JTMcPhee

      Just like Richard J. Daley did in Chicago… Smart enough not to live high on the hog and thus enable that venality criticism, but he directed all the city’s insurance business to a tiny little agency of which one of his sons was a principal, directed contracts for massive construction projects to the Crown family’s operations, used his control over city services to punish any adversaries, and generally ran the city and Cook County, and the “Democratic Machine” regime that owned the city, from his position as chair of the said Democratic Party. And brought us the Red Squad, http://www.encyclopedia.chicagohistory.org/pages/1049.html, the police riot at the ‘68 “Democratic” Convention. And the use of “urban renewal” to accomplish, like his tutee Obama, the demolition of Black neighborhoods to benefit the few, and facilitate concentrating them in crap housing where they could be arm-twisted to vote straight ticket Dem. And the Summerdale police scandal, http://articles.chicagotribune.com/2013-07-07/news/ct-per-flash-summerdale-0707-20130707_1_squad-cars-richard-morrison-chicago-cops, where cops used police vehicles to haul away the loot from businesses they burgled and strong-armed in broad daylight. And a host of other large and small bits of abuse and corruption. And lived out his life comfortably, and died “beloved” and cared for by family, and a plurality of Chicagoans, God help us. Beloved among other things for his Malapropisms and neologisms, like the Dme Convention “The police are not here to create disorder, they are here to preserve disorder.”

      Straight Machine politics —

    2. freedomny

      Hi BRB – I live outside NY 14 but in Queens. I’m curious – do you think her campaign has been successful/effective? What do you see as the challenges in that district?

  14. MyLessThanPrimeBeef

    From above:

    “Expect more fallout this week from President Donald Trump’s announcement Friday that $50 billion in goods from China will face new 25 percent tariffs” [Politico]. “A senior administration official told told reporters that the tariffs were aimed at pressuring China to make structural changes to its policies that facilitate theft of U.S. technology and undermine U.S. access to the Chinese market, ‘regardless of how you feel about the trade balance.’ That implies that a deal satisfying the United States wouldn’t necessarily entail a direct and immediate reduction in the trade deficit. But given Trump’s laser-like focus on the trade balance, all bets are off. Also note that the first tranche of tariffs, on $34 billion in goods, is scheduled to take effect July 6, which isn’t nearly enough time for China to make bureaucracy-shaking changes to prevent the tariffs from happening.”

    That compares with this NBC News story:

    Trump approves tariffs on a potential $50 billion worth of China goods …
    https://www.nbcnews.com/…/trump-approves-plan-impose-tariffs-potential-50-billion-…
    4 days ago – The Chinese have threatened to counterpunch with retaliatory tariffs and … American farmers in Trump-voting states may get hit hardest by a .

    If China is responding by targeting especially hard Trump voting states, if proven (which can be hard to prove such intent), would that be election meddling?

    Would that be political (contrasting with physical) ‘termination with extreme prejudice’ on a leader of another country (USA) by China, when Trump is working on pressure China to make policy changes, and is not trying to specifically take out Xi physically or politically.

  15. Summer

    Too bad the MSM media won’t do as much coordinated (with the politicos) and concentrated and bombastic reporting on the affordable housing situation, after all, where will all the immigrants live?

  16. 4corners

    Good grief. Any other NC readers weary of the immigration echo chambers? How many times do we have to suffer through the hackneyed comparisons to Nazis?

    Immigrants have been polarized to “hard working families” or “bad hombre animals”. Motives are either compassionate or mean. On this site, at least, I’d expect to see a more nuanced discussion of the issue.

    When I first noticed local chambers of commerce shed (crocodile) tears on behalf of migrants, I knew we were in murky waters. I credit NC for opening my eyes to the ravages of globalism and neoliberalism. But closer to home, I’m simply not convinced that recent high levels of immigration have not adversely affected labor in this country. I used to frame houses with my uncles, who made a decent living as carpenters. But thank heavens they’re retired now and don’t have to bid against immigrant labor. And no one cares to consider the externalities of so many low-skilled, low-wage families on social services.

    I believe we should be thoughtful about our immigration policies, and enforcement is a necessary part of that. This is not to excuse the practice of separating children from parents, which it seems the vast majority opposes, including myself. But I have yet to hear a cogent response from the “left” about who, how many, and why concerning immigration.

    I understand this is an emotional issue for many people, but I also think we should call a spade a spade. (Now, before I’m railed against in this comment section, please keep in my that 2:00 PM Water Cooler is my happy place, if not safe space.)

    1. Arizona Slim

      Here in southern Arizona, immigrant labor has displaced labor like the labor that 4corners’ uncles provided. House framers, roofers, the guys who pour concrete slabs.

      However, the skilled labor is still provided by Americans. Master electricians, plumbers, finish carpenters, HVAC technicians, and so forth.

      In many instances, the skilled laborers are Americans of Mexican descent, but they aren’t the immigrants. Their parents or grandparents were.

      1. ambrit

        Sorry to lluvar a su desfile Arizona Slim but, here on the Gulf Coast, skilled tradesmen from Mexico and points South are working on commercial jobs. The last bastion of nativist labour seems to be the Electricians Unions. All else have been reduced to ‘deplorablisme.’

      2. anonymous

        In the Los Angeles area, illegal immigrants have displaced African American labor in many non-skilled trades that once paid decent wages. Janitorial work is one example.

        “Among its findings, the Commission notes that the illegal workers are estimated to account for as much as one-third of total immigrants in the United States, and that illegal immigration has tended to increase the supply of low-skilled, low-wage labor available. The Commission found also that about six in 10 adult black males have a high school diploma or less, and are disproportionately employed in the low-skilled labor market in likely competition with immigrants. Evidence for negative effects of such competition ranged from modest to significant, according to the experts who testified, but even those experts who viewed the effects as modest overall found significant effects in occupations such as meatpacking and construction”

        https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1756&context=key_workplace

    2. ambrit

      Well, as one who immigrated from Western Europe as a child and is a naturalized American citizen, I say, round all the ‘illegals’ up, and, if they are really political refugees, which assertion I can accept, train them, arm the s— out of them and transport them back home to take back control of their natal countries. Reverse regime change.
      If the Wobblies could do something similar during the Contra Diaz war in Mexico, we can do the same today.

    3. marym

      One would think – if good jobs for US citizens were the goal, or even an expected outcome, of their actual and intended harsh policies against illegal immigrants, legal immigrants, refugees, asylum seekers, and naturalized citizens – that Trump/Sessions/Miller would mention that.

      Yet they speak only of justifications for using state force and violence. They portray immigrants as violent criminals, invaders, and freeloaders of public benefits, not as workers or people who have anything to contribute. They disparage the diversity lottery with lies about how it works. They haven’t put forward any analysis of where and what jobs would open up, and which citizens and communities would benefit from that. Trump’s demagoguery promotes the idea to his following that exclusion, cruelty, and state violence directed at people not like them is of value in itself.

      This is a very dangerous time and white supremacy for its own sake, which is an explicit feature of the Trump/Session/Miller approach to policy, is a very dangerous ideology.

      1. Fiery Hunt

        “White supremacy” is doing a lot of work there, as Lambert is wont to say….

        As I don’t see much difference from the Obama Administration on immigration, was Obama and Holder also pushing the “white supremacy” agenda???

        1. marym

          Obama had many policies that were terrible for a number of reasons. I probably don’t disagree with any criticisms of them from the left as corporatist, militarist, or authoritarian; and it’s often people of color, domestic and foreign, that pay the highest price of policies that favor elite interests.

          However, I don’t see that he had an agenda to promote white supremacy. Trump, Sessions, Miller, Bannon when he was officially advising, have a history of words and actions on matters of race, religion, snd ethnicity. It’s not a secret history.

          Wth the exception of the domestic impact of tariffs (which I don’t understand enough to have an opinion) their major domestic policy initiatives have been banning, incarceration, harsh policing, deportation, disenfranchisement, and fear-mongering of the Other, largely directed to what end? As I said, it doesn’t seem to be some rational plan for jobs, or healthcare, or housing, for whoever of the non-rich who expect to survive those policies.

            1. dcblogger

              Wth the exception of the domestic impact of tariffs (which I don’t understand enough to have an opinion) their major domestic policy initiatives have been banning, incarceration, harsh policing, deportation, disenfranchisement, and fear-mongering of the Other, largely directed to what end? As I said, it doesn’t seem to be some rational plan for jobs, or healthcare, or housing, for whoever of the non-rich who expect to survive those policies.

              The only thing Trump cares about is attacking minorities.

              1. Freethinker

                Also, considering unions and federal emploees, yes, Trump attacks minorities. And, considering that a significant number of individuals in those groups are minorities, yes again, proof that Trump attacks minorities. However, in Trump’s evisceration of the EPA, the CFPB, and other federal agencies, his, taxation preferences, his lack of stewardship for the common welfare, etc. well, that evidence shows he attacks the majority, the working class.

                1. marym

                  I said his policies harmed people of color. It was in answer to whether I thought he had a white supremacist agenda, as I think Trumpians do.

                  I think Obama’s policies were evil for plenty of other reasons, some of which I named, but I don’t think the reason he thought it was ok to bomb, or deport, or incarcerate people was because he wanted to eliminate Islam or whiten the US population.

                  I do think it’s important to recognize white supremacy as a factor if it is one, just as it’s important to recognize militarism, corporatism, authoritarianism, misogyny, etc. when those are factors. Know your enemy.

                  1. Carolinian

                    Are you a mind reader? How do you know what his “agenda” is? Politicians often say lots of things just to get votes.

                    This thread is an interesting discussion and my two cents would be actions, not words, are the only things that matter. If the Obama policy on the ground was the same as the Trump policy then it quacks like a duck.

                    The problem with “agenda” is that it can also be used to mask all kinds of horrible policies on the so-called left side of the political divide. Syria is destroyed with hundreds of thousands dead? Sure, but we meant well so don’t blame us. Mistakes were made.

                    1. marym

                      You don’t think there can be more than one ideology/agenda/vision…whatever driving a particular policy? Or that to address that policy one needs to know something about that “whatever-we-call-it” in order to develop tactics and allies to support or oppose a policy?

                      As I said above, the Trump/Sessions/Miller history on racial issues isn’t a secret. The notion that their domestic policy prescriptions are somehow about jobs or security is as questionable as saying the same about Obama’s neoliberal economic policy or authoritarian surveillance and suppression of dissent.

                      If it’s possible to discern a neoliberal rentier [agenda] or a hegemonic militaristic [agenda], or an evangelical/dominionist [agenda], or some combination, behind any given policy, then it should be plausible to discern a white supremacist [agenda].

      2. Procopius

        One would also think that if the people whose children are being placed in camps entered the country at points other than regular ports of entry they would be talking about that. I saw Kirjsten Nielson say it in passing in an interview, but why didn’t she repeat the point, pound on it, say over and over these are not people following procedures to apply for asylum. She didn’t, so I believe that must not be the case. I believe they are detaining people at ports of entry who are properly applying for asylum. If anybody knows otherwise I would love to hear some evidence.

    4. drumlin woodchuckles

      This is why I reject the concept of “abolishing ICE”. If we don’t have a way to find and expel all the illegal aliens who are already IN this country ( millions and millions and millions), we will never be able to create the labor shortage needed to torture the employER class into hiring citizens again at “citizen” wages.

      Would a “kinder gentler ICE” which would remove all the illegal aliens in a kinder gentler way be nicer? Yes, it would, as long as it still got all the illegal aliens removed and a torturous labor shortage created.

      That said, the spiteful nastiness of family separation and legalized kidnapping can be exploited as a club, a wedge and a tire iron to beat the teeth out of Trump’s mouth with. If Trump’s teeth can be broken out of his mouth fast and hard and painfully enough, this particular little policy soupcon may be stopped in isolation, and illegal or asylum-seeking families can all be interned together in “family togetherness” holding camps.

  17. Summer

    “Democrats intensify fight for immigrant children — and bludgeon Trump and Republicans ahead of midterms” [WaPo].

    “(2) consider how U.S. support for murderous regimes, the DEA’s “War on Drugs,” and the destruction of Mexican agriculture fuel immigration (and asylum), for starters; the parallel to the mayhem and chaos our wars have induced in the Middle East, leading to emigration to the EU, is exact…”

    Indeed. The world has a foreign policy problem more than immigration problems.

    Also, as for the USA, concentrated and bombastic coverage of the affordable housing crisis is needed in this context. The MSM can’t seem to get it up for that. After all, where are all the immigrants going to live?
    Maybe they would care enough about lack of affordable housing if it was put in terms of affecting immigrants.

  18. Summer

    “Blow makes a strong argument for amnesty for the entrepreneurs who built the marijuana market and were sent to jail for decades during the war on drugs, thereby being separated from their families.”

    That would be too much like actual justice. Can’t have that here…

  19. MyLessThanPrimeBeef

    There’s 1 bill in the Senate to tax Wall Street speculators (a financial transactions tax). It’s S.805, the Inclusive Prosperity Act introduced by Sen. Sanders. It would raise enough revenue to make public colleges & universities tuition free. So far, it doesn’t have a co-sponsor

    It’s a good idea, but a better one is to use that money to house the homeless and make potable water free, first, and maybe subsidies for (or free) air ambulances and free college after them.

  20. Olga

    “With our system of checks and balances, full-blown authoritarianism is unlikely to happen here, but it would be foolish to ignore the risks that Trump and his administration pose to established norms and institutions, which help preserve both order and liberty. Those risks will grow if opposition to violations of long-standing norms is limited to Democrats, and if Republicans laugh, applaud, agree with, or make excuses for Trump—if they howl with the wolf.”
    Wow, Cass, do I have news for you… Not even sure where to begin. First of all, what checks and balances? Second, Trump is a symptom, not the cause… Third, what is your definition of FB authoritarianism? Might it include having your every step watched and/or listened to? Having your car license monitored? And that’s just white folks… let’s not get started with minorities (like being killed if you so much as disobey… remember Sandra B?). Oh, pueeze Cass, get some real-life experience first, before spouting nonsense.

  21. Summer

    Concentration: “Maybe the Big Four Auditing Firms Do Need to Be Broken Up”

    Imagine the cliff the economy will have to fall off before the alleged representatives enforce anti-trust laws.
    Not pretty. But it will take complete disaster for the greed to get a clue.

  22. Jeff W

    I really like Thomas Frank—a lot of what he says about the Democratic Party, the Clintons and President Obama is illuminating and, to me, spot on. (And he gets the absurdity of much of the policy-making that goes on.)

    My only problem with Frank is that he has, in my view, this curious blind spot—he talks about Barack Obama being a “disappointment,” how the Republicans “played him,” and all that, which is a variation on the Obama-is-weak/incompetent trope. He says elsewhere “I don’t really have the final explanation for why things didn’t work out the way I thought they should or hoped that they would.” Somehow it’s all too mystifying for him.

    For all his considerable perspicuity, Frank doesn’t seem to get that Obama was and is, as Adolph Reed, Jr. called him over two decades ago, a neoliberal; that he is, as New Yorker writer Larissa MacFarquhar described him in 2007, “deeply conservative.”

    1. NotTimothyGeithner

      I agree with your assessment of Obama, but I don’t believe Obama’s personal character is as important as the structure and class make up of the Democratic Party.

      Weak or a crummy guy aside, Obama did show he was capable of being moved. Take for example DADT’s repeal. The problem was not Obama but the liberal, bourgeois class who protected him. When they were removed or sided on the right side, he jumped. Obama himself is a reflection of that professional class versus being an independent entity.

      853rd dimensional chess and “no drama, Obama” were powerful narratives used to stifle dissent and wrap the “I’ve got mine” crowd in a form of protection and allowed them to remain ignorant of that administration. I see an element of celebrity culture/worship being at play. I saw Glen Greenwald defending Peter Daou’s tweets the other day taking on the Democratic Party and its rot. Daou who worships Hillary, the epitome of that rot, can make excellent points and diagnose the state of the party of the country succinctly (I think he only needed 140 characters and verification to do it), but his relative comfort means he is free to revel in celebrity worship.

      Look how far a guy like Bernie came despite no establishment support. Where would we be if Sanders could have pulled 10% of that early on. I have loathed Obama since 2006 when he was stumping for Lieberman in the primary and didn’t think much of his DNC speech or whiny books, but the problem isn’t Obama. Washington is still Hollywood for ugly people, and that professional class provides the accolades and crowds politicians crave. How do those people react if they started losing the Peter Daous on a grand scale? Daou’s recent tweets are simply better than anything the greatest orator in the history of ever has ever said. His comfort keeps him from pointing out the problem about his imaginary friend (HRC) in this case.

      Reed did note Obama or an unnamed candidate who has to be Obama because he provided enough details, but Reed also brought up that he represented a new class of candidates, peddling to (this is me) to bourgeois liberals or at least Republicans who wish the GOP wouldn’t cage children in such a public manner.

    2. Lambert Strether Post author

      Frank was a believer in 2008, sadly. Expanding on the passage you quote:

      No, you’re going to be surprised, but I say that because I lived in his state Senate district back in Chicago, so I voted for him when he ran against Bobby Rush. I’ve been a fan of his for a long time. Yes, I am, of course, disappointed with how things have worked out. I don’t really have the final explanation for why things didn’t work out the way I thought they should or hoped that they would. I think that’s going to be up to Obama himself one day writing his memoirs.

      Or his third and fourth autobiographies [rimshot. laughter].

      Why on earth would anybody trust what Obama writes?

      I’m sure Frank isn’t a Kool-Aid drinker, but I think it takes a long time for complete self-awareness to surface (and who among us…). But at least he doesn’t deploy the Obama apologist tropes and his view of Obama’s failure — or success, right — in the Crash is appropriately caustic. When you say you expected the guy to be the second FDR and then say he muffed the greatest political opportunity to do good in generations, that’s not a mere love tap.

      1. freedomny

        BTW for all you Thomas Frank fans – he will be interviewed by Katie Halper on June 30 at Caviat in NYC – I think the tickets are $10….

  23. clarky90

    Re; “Liberal Democracy Is Under Attack”

    Undercover at the world’s most secretive society: Mail reporter infiltrates shadowy Bilderberg summit where the West’s power brokers set the world to rights

    “For the first time in its 66-year history a journalist penetrated security to go undercover at the hotel”

    http://www.dailymail.co.uk/news/article-5850053/Undercover-worlds-elitist-secret-society.html

    These rarely reported Bilderberg conferences call, to my mind, the secret conferences between the Nazis and the Bolsheviks in Brest, Poland, September 1939.

    They even had a celebratory, Nazis and Communists, military parade!

    https://en.wikipedia.org/wiki/German%E2%80%93Soviet_military_parade_in_Brest-Litovsk

    The Bilderbergers are deluded halfwits imo. Are they dreaming of an Artificial Intelligence Neo-God?

  24. ewmayer

    Next Mortgage Default Tsunami Isn’t Going to Drown Big Banks but “Shadow Banks” | Wolf Street

    Wolf repeats the loanable funds fallacy w.r.to traditional bank lending, but it’s not important to his argument here, which is to point out that at the the same time regular banks are pulling back from mortgage issuance in a big way, shadow lenders like LoanDepot and United Wholesale Mortgage are soaring. And by way of a reminder from 10 years ago, he notes:

    ‘Non-bank lenders do not take deposits, and thus have to fund their lending in other ways, including by borrowing from big banks and issuing bonds. They’re not regulated by bank regulators, and their capital cushions are minimal. During the last mortgage crisis, the non-bank mortgage lenders were the first to collapse – and none were bailed out.’

    The corollary question, “But if it’s true that the shadow banks borrow money from real banks, besides issuing bonds, wouldn’t that put the real banks at some risk?” is astutely asked by one reader in the comments section, and answered by another.

    1. MyLessThanPrimeBeef

      Real banks are big. Big banks are never at risk.

      Little people will be at risk of being reminded that they are little people when the government bails out big banks…again.

  25. Peter Falk

    It is about a shortage of cheap labor that the Democrats big business supporters need. They are willing to exploit children so that the borders will open with cheap labor for their REIT, etc. The issue of the children could be discussed like adults if that was the real issue. The Democrats owe their big supporters a return which is a free flow of exploited workers.

    1. danpaco

      The exact opposite is in fact happening. Stricter immigration law or increased enforcement of existing laws drives those that are illegal further underground and therefore more exploitable to unscrupulous employers.
      If the borders were “opened” as you say, labour rates would actually increase. Day labour rates in Toronto from illegal immigrants is on par with citizens (anecdotal evidence only) due to the fact that Canada doesn’t have such a draconian enforcement mechanism as the US.

      1. David

        due to the fact that Canada doesn’t have such a draconian enforcement mechanism as the US.

        Canada warns immigrants in U.S. about heading north of the border

        In what has become an increasingly regular mission, Canadian representatives visited the U.S this week to warn immigrants fearful over President Trump’s immigration crackdown that they can’t simply rush north of the border to find safe haven…

        In August, Royal Canadian Mounted Police caught more than 5,500 people trying to illegally cross from the U.S…

        Only about 8% of their asylum application have been approved, however, meaning the vast majority have been turned down and are being deported straight back to their home countries…

        “People seem to think that if they cross the border there’s this land of milk and honey on the other side,” Boissonnault [Randy Boissonnault, liberal member of Parliament] said from the Canadian consulate in Miami on Thursday…

        …The country [Canada] has been increasing the total number of immigrants it admits each year. It’s on pace to accept 310,000 permanent residents this year, with a goal of increasing the annual total to 340,000 by 2020.

        In 2016, 1,183,505 persons obtained lawful permanent resident status in the United States (source).

      2. drumlin woodchuckles

        No, its due to the fact that there is a thousand mile deep layer of United States between Canada and Mexico. If America were to facilitate the injection of several million illegal immigrants through America into Canada to work under the system you describe, it would be an interesting experiment of where wages in Canada would go.

        And since Canada’s Mulroney was an active co-equal co-conspirator with America’s Reagan in crafting NAFTA to begin with, it is only fair that several million NAFTAstinian Refugees be sent from America into Canada so the pain can be shared proportionally with the blame for NAFTA.

        1. MyLessThanPrimeBeef

          That would be cynical for Trump to offer safe passage straight from the south border to the north.

          I think some European countries did that…waving people through to their preferred destinations.

  26. ewmayer

    o UPDATE “It Can Happen Here” [Cass Sunstein, New York Review of Books] … “but it would be foolish to ignore the risks that Trump and his administration pose to established norms and institutions…”

    As Lambert might say, Sunstein’s invocation of the norms fairy is a huge tell here.

  27. ewmayer

    o The Bezzle: “Tesla Short Sellers Sitting on $14 Billion Bomb That’s Ready to ‘Explode’” [247 Wall Street]. “As of the end of May, short sellers held nearly 31% of the outstanding float of Tesla Inc., a total of just over 39 million shares. That is a virtual tie with the highest level of short interest in Tesla in the prior 12 months….

    Probably explains why Musk has been furiously buying back shares on his own dime, causing the price to soar from its recent lows back to within a few % of its ATH. Maybe another good shorting oppo coming up?

    1. The Rev Kev

      Bringing together this story and others that have appeared recently, wouldn’t it be funny if Musk’s Tesla company became the target of private equity firms in a hostile takeover. Actually, when I think about that, perhaps Musk ‘poisoned-pilled’ Tesla with all that debt to stop that possibility happening.

      1. drumlin woodchuckles

        Wouldn’t it be even more interestinger if somebody could take over Tesla despite all the poison pills and rescue it from its mental bondage to the Electric Car Fairy? And redirect its efforts to Plug-In/ engine-chargeable Hybrid Electric cars? Why has the hybrid electric concept become so unfashionable lately? Isn’t it still the most efficient energy-extractor from a given bunch of fuel? And you wouldn’t need mega firebomb batteries in a HYbrid electric because you would have an onboard engine to recharge the normal non-lithium batteries as needed on the road and on the go.

        1. Octopii

          The P100D range is over three hundred miles. Why add an extra fairly complicated noisy maintenance-intensive subsystem that’s unnecessary at this point?

    2. John k

      Shares up 1/3 recently.
      He spent 25 mil, bought maybe 80k shares.
      39 mil shares short, which is 1/3 of float, a huge amount,
      So he bought 1/4% of short shares, and moved the market up 1/3?
      Outstanding!
      Or another view, his timing was excellent, and his 25 mil is now about 33. More than I made this year.
      Either way, those on the hook for the borrowed shares are not crowing. Maybe tomorrow.
      I continue to think he’s moving the reduced-fossil needle in a good direction. The necessary energy revolution will have both winners and losers along the way, I’m not much concerned about the rich backers of horses that fade.
      We will see… he might flame out, in which case the rich shorters will celebrate. Or vice versa. Disclosure… im not backing any horse, having already lost big on a failed solar startup.

  28. JohnnyGL

    http://www.espn.com/soccer/united-states/story/3531891/landon-donovan-clarifies-supporting-mexico-in-world-cup-ad-campaign

    Dropping this in here because of who’s saying it and where he’s saying it. Taylor Twellman calls out Landon Donovan for doing ads with Wells Fargo and specifically cites the fake accounts rip off scandal. Twellman’s mostly mad about the Mexican team endorsement, but still, he criticized a corporate sponsor. Brave thing to do.

    I’d like to see more celebs/athletes criticize the endorsement deals of other celebs/athletes. Companies deserve more shame for their misdeeds.

    1. petal

      At the gym earlier tonight I was watching Highly Questionable on ESPN, and those guys also called him out for the Wells Fargo thing and mentioned “billion dollar mortgage fraud committed by WF”. To say I was shocked is an understatement. It was great.

      1. el_tel

        Whilst I don’t have access to that book, there are severe statistical and practical concerns with ranked voting. As shown by Yatchew & Griliches (1985: Review of Economics and Statistics; pp pp134-139) for any outcome data that is discrete (choose one from two/more – thus including FPTP, ranking systems of voting etc), correct aggregation – in the sense of correctly weighting each person’s “true strength of preference” – requires you to measure and if necessary “net out” different degrees of inconsistency. This inconsistency is (statistically) heteroscedasticity. For those who hate stats, the easiest (but not only) way to think of this is a person’s degree of certainty in their responses. It has been known for years from fields such as applied economics and marketing that people routinely demonstrate this phenomenon in rankings – in short, they’re good at top and bottom ranks but pay progressively less attention as they move from the ends towards the middle. This is one reason countries which use (even a modified version like Australia) such systems are finding increasing annoyance in the population as strange parties/candidates get into the Senate – candidates are not, in actuality, getting the same weight applied to their votes.

        Under FPTP when there is broadly only one underlying dimension – think of the Keynesian era in Western democracies – this problem was not severe. However, when people begin to vote on the basis of multiple dimensions (e.g. economics, identity politics, Europe etc), predictions break down and cross-party candidates (populists) who identify certain popular dimensions among likely voters get in. One proposed solution requires (arguably) the smallest tweak to FPTP whilst having the biggest impact in giving “wasted” votes a voice once again: most-minus-least voting (proposed by a former colleague of mine). People vote for most favoured candidate (as in FPTP), but they get a second vote, their LEAST favoured candidate. At the counting stage the most total is as now. BUT the least total for each candidate is subtracted from this. (You must use both your most and least vote for it not to be considered spoilt.) The winner is the candidate with the highest net most-minus-least vote. It would, for instance, have electrified the Republican Primary before 2016 – most of the large field of candidates would have encouraged their voters to put Trump as “least” whilst Trump simply couldn’t have eliminated all the “Bush-types” of this world. I doubt he’d have ended up as the candidate. The Democrat result is harder to call, given the superdelegates and much smaller field (three IIRC in the first Primary). Anyway the system discourages candidates from picking on minorities (provided they’re not TOO small).

        Interestingly, whilst it may look like a cut-down version of ranked voting, it isn’t – heteroscedasticity is much less of a problem (since people tend to exhibit closer degrees of certainty in what they love vs hate compared to love/hate vs somewhere in the middle). The remaining issue, for the statistical eggheads like me, is that the assumption must hold within people – thus to test it properly you would ideally need (say) 10 parallel universes holding the election to measure “consistency” properly (!!!) But there are other ways to get a handle on this – indeed in the UK 2017 GE YouGov’s “alternative” model was on the right lines (and got the result right) as was my model (which got me money at the bookies as I knew May’s majority was toast). Anthony A J Marley was my collaborator who is a math psych genius and has written a lot on voting, dealing with the issues that this book seems to discuss. A lot of his work is as technical as that book is (unfortunately) but he’s also written readable stuff. TL;DR: Ranking systems are not all they are made out to be – ask the average Australian voter.

        1. PlutoniumKun

          Nice to see you back posting here el-tel.

          Thats an interesting contribution – I do think ranked preference is better than most systems, but as you say, it does have its faults. The German system of insisting on a minimum 5% national vote in order to have a candidate elected I think has a lot of merit in removing fringe parties and candidates from governement.

          In Ireland, there is a sort of default version of the ‘minus’ vote. As most large parties have more than one candidate in any election, this gives people the opportunity to vote tactically against the candidate from the party they dislike most. This does have the effect of disadvantaging those candidates who have a very strong level of support from his own supporters, but is actively disliked by opponents – he will see lower level preferences going to his less dislikeable running mate(s). Its a minor effect, but can be significant in tight elections. Its one reason its often said that the Irish parliament may not be very competent, but nearly everyone is very sociable.

          1. el_tel

            Thanks. For various reasons my contributions are likely to be rarer but this time I’ll try to stay rigidly on topic. One comment that always sticks in my mind from a more experienced colleague is that these systems can be great in theory… But mess up the moment those annoying humans are added to the mix!

            Yes given my background I find the Irish system interesting… I only wonder if its undoubted benefits can be achieved via a simpler system. People learn to game any system remarkably quickly…. The issue becomes “what system most encourages them to express their true preferences” (incentive compatibility in economics speak). Ranking doesn’t do well on that score. Most-least does better but no system (of course) is ideal.

    1. RUKidding

      Unsure why this appeals to Trump, albeit he seems to tweet about it when there’s need for a distraction of some sort. Certainly gets people talking about THAT, rather than, uh, other things…

    2. ewmayer

      OTOH, this sort of thing *is* rather along the lines of the kind of TV show I imagine Trump watching when he’s not watching the ‘news’ in search of ego-boosting mentions of his name and potential targets for tweet-trolling:

      https://www.imdb.com/title/tt0129398

      The Japanese have a popular SciFi ‘space force’ sub-genre, too.

  29. none

    > “So who won 2 of Maine’s Democratic primary contests? Scanning, scanning …It’s a time-consuming process

    I’m confused: what is causing the delay here? If they are optical-scan ballots then computers should be able to spit out the answer right away. Hand verification without a computer would take longer, but usually that’s only done in the event of a contested election, or if hand counting a small random sample doesn’t give a good indication of the overall outcome.

  30. bob

    This is hilarious-

    https://twitter.com/schwarz/status/1008698457589256192

    “Howard Dean is a senior advisor at Dentons, a gigantic legal/lobbying firm. “After this is over,” people who worked for Trump will have offices down the hall from him.”

    The whole thread is a good pile on-

    https://twitter.com/gthanku/status/1008767277783662592

    “Howard Dean sells himself to the highest bidder, one of which is Saudi-funded MEK, the militant terror cult that Bolton & Giuliani want to install in Iran post regime change. Here’s a pic of Howard Dean doing this in Paris, next to Giuliani.”

    https://twitter.com/vogon/status/1008748402480332800

    “hell, newt gingrich worked there until two months ago”

    1. RUKidding

      Thanks.

      It’s truly a shame how rapidly Howard Dean sold himself out completely.

      I think one problem is that a lot of these politicians have no clue how to do, uh, actual real work, plus they’re just too lazy to try. All they know is one form of prostitution or another (with apologies to sex workers the world over).

  31. The Rev Kev

    “Maine Voters Overrule Their Leaders”

    I think that Maine’s leaders have forgotten how good leadership works. It’s not very hard. You just see in which direction people are headed and then you just get yourself in front of that particular parade.

  32. bob

    UPDATE NY “Trial of former SUNY official Alain Kaloyeros to begin Monday

    The whole mess of trials around cuomo’s bagmen are being very badly reported on. Most of the corruption is centered geographically in CENTRAL NY. Near Syracuse/Utica.

    The biggest gasps and finger waging during the first trial were around a small subset of bezzle in the westchester area.

    It’s a shame the local newspapers in syracuse don’t put much effort into reporting on this stuff. The center of Advance media, and the Newhouse school, are both in Syracuse. Why the silence?

    Could the silence have anything to do with the $500 million NYS was going to give Syracuse University to build a new athletic stadium?

    COR was mentioned as the builder of that stadium before plans were even released. The deal fell apart after the first hints of investigation into the current trials were ongoing.

    Also mentioning that COR has sued to get paid for the work that they bribed Cuomo to get. Twice.

    https://www.syracuse.com/state/index.ssf/2018/03/cor_sues_ny_for_567000_the_state_wont_pay_because_of_pending_criminal_case.html

    They won.

    1. MyLessThanPrimeBeef

      For being a farm of the NFL, they get $500 million?

      That could have funded many more homeless shelters in New York.

      1. bob

        Not even a farm team anymore. For NFL. NBA, maybe.

        $500 million to a private school. No word on where that money ended up.

  33. JTMcPhee

    Lambert kindly reports information on the “housing market” every weekday, from the usual sources. Here’s just a little anecdote about housing and markets, from my neighborhood:

    Houses in my neighborhood sold down at the bottom of “the market” for $50-$60k. The price runup saw a high-price sale of about $250K, most houses in the $150-$200k. Now the houses on either side of mine are on the market. In both cases the ask was around $200K. Both houses went under contract within a couple of weeks. And in both cases, the buyers defaulted within two days of the closing. In both cases, my neighbors relate, the prospective buyers said they could simply not afford the “house of their dreams.”

    As I say, just an anecdote. Who really knows what was in the details? Or what the real current state of Real Estate ™ is? Bulls and bears, heavy on the bull…

    And another little bit: a Realtor! ™ involved in the sale of a friend’s house, from the firm that brokered the sale of one of my neighbor’s houses, apparently pulled a fast one on on the friend — talked her into signing blank documents (particularly bits about who pays closing costs, sticking her with $8500, a multiple of what it should have been), pushed her to closing without providing a settlement statement that would have disclosed the friend was obligated to pay TWO commissions totaling 12% of the sale price, and a bunch of other stuff like pushing papers through that the friend never saw and did not sign. So now the friend has to get a lawyer and try to undo the damage. And she is a nurse with disabled grandkid and disfunctional kids to deal with, who now gets to live in a trailer house.

    People need shelter. Though of course there are too many people, too much growth, too much paving over everything. And we are supposed to receive the news that the curves of price and sales and “development” are bending up, if they are, because that denotes that “the economy” is “growing” and thus “the boats are rising with the tide?” Or something. Because after all, Real Estate ™ is one of the legs of the three-legged stool that props up the Bubble Economy? And gee, why is ther no “council housing” here? And why is the norm, the ideal, the HGTV “want,” the ‘single family residence’?

  34. The Rev Kev

    “I can’t understand why (Thomas Frank) doesn’t have a forum here, in this country…”

    Oh, I think that we all have a pretty good why he has been shut out of the political discourse.

  35. BobWhite

    “Child Separation and History: the Canadian Residental Schools” [The Incidental Economist]. “There is a closer historical parallel than Nazi Germany: the treatment of indigenous children in Canada…. The system lasted well into the 20th century.

    Along similar lines in Australia was the “Aborigines Protection Act” (from 1905 to 1971), government officials would “remove any Indigenous child at any time and for any reason.” Of course, it was not a protection of Aboriginal people, but a way to eliminate them. Read more here: http://www.nma.gov.au/online_features/defining_moments/featured/aborigines_protection_act

    Also, a good film on the subject:
    Rabbit-Proof Fence

    The treatment of Native Americans in the US has always been (and still is) atrocious…

    1. MyLessThanPrimeBeef

      Natives in countries south of the US are still being evicted, even now, from their homes and driven north to the neoliberal cage of broken families, with malnourished kids, ever more homeless without shelter, and debt serfs who don’t have more than $400 to deal with any emergency in life.

  36. Rohan

    Thomas Frank’s video was very enlightening. It helped explain the Democratic party’s puzzling current disposition (I’m not well versed in US political history). Thank you Lambert.

  37. bradley fuller

    lets look at our history in 1789 congress passed and president Adams signed the alien act which gave the president power to arrest hold and deport any foreigner The law was a reaction to the increasing influence of the French of which our govt at the time equated that with the possibility that we (Americans) would be controlled by the Vatican (most French are Catholics) “History doesn’t repeat itself but it often rhymes,” attributed to Mark Twain

    1. MyLessThanPrimeBeef

      Depending on the situation, it can be a necessary option to avoid been regime changed, in many places around the world.

  38. Octopii

    The quiet car of the Acela 9:50 WAS-NYP the other day was most rudely disturbed by an extremely overweight gentleman napping (or perhaps slowly suffocating to death). There was a great deal of snorting, wheeling, blubbering, honking, and slurping from the seat ahead. Felt bad for the poor guy. But dear god was it annoying.

  39. VietnamVet

    “Liberal Democracy is under Attack” points out the rise of autocrats; i.e. Putin, Xi, Erdogan….; but, omits all discussion of the death of social democracy in the West, let alone, the intentional neoliberal shock crises that facilitate the rise of inequality. The one sure effect of climate change and forever wars is increased uncontrollable migration. Pulling children out of mothers’ arms won’t change that. Only, ending the wars and coups and providing employment will stop the mass movement of people. It is insane to build thousands of miles of walls on the Northern and Southern U.S. borders. The Pacific and Atlantic Ocean are effective borders if patrolled by the Coast Guard and Navy. But, only if the Middle Class is restored throughout North America.

    1. JTMcPhee

      I guess you don’t recall the borderlands like Florida and Texas and Louisiana, where the navy and Coast Guard were singularly ineffective in “interdicting” the influx of every kind of recreational and self-destructive drug, all through the ‘60s and ‘70s, and still these are porous borders just due to geography and landforms and water access. http://articles.sun-sentinel.com/2014-04-05/news/fl-drug-smuggling-routes-20140404_1_central-florida-south-florida-cocaine-shipments I believe the cartels are still running ever more sophisticated submarines from various “drug ports” to the US “market.” http://cimsec.org/narco-submarines-drug-cartels-innovative-technology/12314 And there of course has been and will be all kinds of corruption-assisted blind-eye or in-on-it actions by the supposed Forces Of Borderland Protection. http://drugwarfacts.org/chapter/corruption

      Interesting that a lot of the articles on the subject of the “drug trade” grudgingly applaud the business acumen and reach of the various drug cartels. And note how they converge in their modus operandi with the other massive supranational business entities, like Monsanto and Lockheed-Martin and Bayer and the rest…

      “Hey, it’s just business!” And Trade…

  40. Oregoncharles

    “a handful of men — and only men ”
    So Merkel and May don’t count? Very strange thing to say.

    1. JTMcPhee

      Yes, they should be given full female credit for their part in the way things are. As of course should Thatcher. Credit where credit is due. Much more gender-neutral. And all that. Props to the women for getting into the game as front line players, instead of just working behind the scenes… In the meantime, the concentration of wealth and looting of the planet, the game that’s afoot, accelerate…

    2. Mark Anderlik

      It seems to me that the combination of political democracy and economic oligarchy – hence “liberal democracy” – is failing primarily because of its internal contradictions. The ideals of democracy in our political life clash with the dictatorship of the boss in our economic life. Putin is an example of someone who accurately observes the dying of liberal democracy and sets himself as an example of what to replace it with – a kind of strongman oligarcic capitalism. In other words remove the democracy in “liberal democracy.” Variants of neoliberalism promise the same, as does variants of state capitalism like China and Vietnam. It remains that the antidote to these age-old variants of rule by the rich and powerful is people power wielded in both the political and economic realms. Democratic socialism remains the counter to both neoliberalism and state capitalism.

  41. flora

    Great links and comment in the “2018” category.

    Corruption and money laundering, the resurrection of a modern Tammany Hall. Thanks to SCOTUS, (Supreme Court Of The United States), for Citizens United and other like rulings. imo.

  42. Liberal Mole

    I belong to a large Etsy Team. The team itself is great and incredibly helpful. We greeted the new charges and offers with shrugs and dismay. Etsy has continually crappified their service and listings over the years. Pretty much all of us have to go off site to promote our shops already, and we have our own websites as well. So many of us will just reduce our listings to the required five needed to be a team member. As one member said, this is to serve their shareholders, and we makers are the meal.

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