By Lambert Strether of Corrente.
“For G-7, Trump’s racism and misogyny are ok, but his trade policies are intolerable” [Eyes on Trade]. “Most G-7 leaders have worked to build warm relationships with Trump, despite his xenophobia, racism, misogyny, climate denialism, warmongering and corrupt business self-dealing. But apparently, taking on the trade status quo was a bridge too far. That is a bitter irony, given that the trade and financial policies that the G-7 has relentlessly promoted created the political context that helped to make Trump president. Decades of U.S. presidents from both parties and their G-7 counterparts have pushed international economic policies that have created expansive new rights and powers for multinational corporations and hurt working people.”
“Lawmakers, industry groups and corporations spent months and millions of dollars trying to sway President Donald Trump away from imposing tariffs on China and igniting a trade war between the world’s two largest economies. But for Trump and those closest to him, it was always going to end this way” [Politico]. “‘I always believed he was deadly serious about China from the very beginning,” said Stephen Moore, a conservative economist and outside White House adviser, recalling his time with Trump during the campaign. “I’m not at all surprised that we’ve come to this point. I am a little surprised that China hasn’t been more conciliatory. But I think Trump can’t back down, he just can’t. He has to stand toe to toe with China.'” • Moving on from the bargaining stage?
“Soybeans are on the front lines in the burgeoning global trade war. U. S. soybean exports surged in the second quarter and the value of the exports nearly doubled from April to May, the WSJ’s Paul Kiernan reports, in a sign of how global trade is shifting in the face of tit-for-tat sanctions between the U.S. and China. Many experts believe the export rally reflects efforts by buyers to get their crops ahead of China’s retaliatory tariffs on soybeans. Recent data suggests China was already bulking up buying from Brazil this spring, and U.S. farmers say they are starting to feel the pain from a downturn in prices” [Wall Street Journal].• One angle on this story: Chinese Tariffs Hit Trump Counties Harder. I’m betting that, for these voters, “it’s in the price.” We’ll see.
“Is she back? Talk emerges that Hillary Clinton is plotting her 2020 comeback and prepping to take on Donald Trump a second time” [Daily Mail]. “Clinton’s larger-than-life name in Democratic Party carries a hefty weight as Democrats have been locked in an ideological fight since the 2016 election with no clear leader emerging to lead the party through the next few years. Liberals were furious the party establishment worked against Bernie Sanders to ensure Clinton the presidential nomination. And leftist candidates, such as self-proclaimed socialist Alexandria Ocasio-Cortez’s stunning upset victory in the New York primary over Rep. Joe Crowley, have emerged this year as a result.” • Note the usual confusion between liberals and the left, presented here in unusually pure form: Liberals were perfectly happy with what the party establishment, itself liberal, did in 2016. The left opposed it, supported Sanders, and worked for ACO.
“An Electoral Fight Between Two Very Different Americas” [Charles Cook, Cook Political report]. “Of the 18 competitive and potentially competitive Senate races, those categorized in The Cook Political Report as Toss Up, Leaning, or Likely Democratic or Republican (so not Solid Democrat or Republican), just three are being fought in states that Hillary Clinton won in 2016. Most of the Senate battleground states are those with disproportionately rural and small-town populations, many in states that Donald Trump carried by massive margins. Conversely, the battle for the House runs primarily through suburban districts of a distinctly middle- and upper-middle-class variety. Roughly half of all competitive Republican House seats are in districts won by Clinton; even many of the Southern contests are in districts with plenty of transplants or a distinctly non-Dixiecrat flavor.”
“Not Just Joe Crowley: Many State Lawmakers Lost Primaries This Week” [Governing]. “New York’s congressional race wasn’t the only one with an upset on Tuesday. An anti-incumbent wave hit two states’ legislative elections.”
Realignment and Legitimacy
“Trump Isn’t Remaking The Supreme Court. Leonard Leo Is.” [HuffPo]. The Federalist Society. Naturally, Democrats will have voted for Trump’s nominee because credentials, so they will have no moral standing to virtue signal, on abortion or anything else. That won’t stop them from trying, of course.
“Nancy Pelosi: ‘They Come After Me Because I’m Effective” [Rolling Stone]. “Pelosi is one of the most powerful women in global politics. She gets credit for securing passage of much of the legislation in the Obama legacy, including the Recovery Act, Wall Street reform and especially the Affordable Care Act. “Nancy Pelosi has been one of the most transformational figures in the modern Democratic Party,” says Democratic National Committee chair Tom Perez.” • All “achievements” of dubious merit.” More:
What’s the Democratic message?
[PELOSI:] We’ve had for a year, working with the Senate, our agenda: Better Deal. Better jobs. Better pay. Better future. It took eight months or so to put it together, to come to agreement. The members shaped this. It wasn’t something where I said, “This is what I think it should be. Now sell it.” It was: “What do you think it should be?” It’s very important that it spring from the members.
And when people say, “Well, it doesn’t inspire me”… It inspires me. Because it’s about the economy. No matter the other stuff we disagree on, the financial stability of America’s working families is the unifying force in our caucus. That’s why these people are Democrats, not Republicans.
Readers, am I too jaundiced? Is this message from Democrats what’s coming through to you? (Not to tip my hand, but oddly, the interview does not include the word “Russia.”)
“The Liberal Backlash Is Coming” [Paul Waldman, The American Prospect]. “But right now we’re seeing something extraordinary: a liberal backlash, potentially equal in potency to what we’re used to seeing from the right. The left is already mad because of their own sense of loss, and it’s about to get much worse.” • Indeed. Given that liberal Democrats have managed to foment a warmongering Red Scare when out of power, one shudders to think (see Our Famously Free Press) what they’ll do when they take power again. It won’t be pretty.
“The Church Left is Proving My Point” [Benjamin Studebaker]. “A couple days ago, I wrote a piece about the tendency for left wing organizations to behave like church communities rather than strategic political organizations. I told a story about an upcoming election at the East Bay DSA branch in California, criticising one of slates for taking unstrategic positions and using church tactics––to target those who publicly do not embrace their platform in every detail. Anxious to prove everything I said correct, this slate and its supporters have immediately begun coming after me in precisely the ways I anticipated. They have begun personally targeting me, attempting to depict me as some kind of heretic or sinner.”
There are no official stats of interest today.
Crapification Watch: Thrown over the transom by two alert readers. Thread:
Things that happen in Silicon Valley and also the Soviet Union:
– waiting years to receive a car you ordered, to find that it's of poor workmanship and quality
– promises of colonizing the solar system while you toil in drudgery day in, day out
— Anton Troynikov (@atroyn) July 5, 2018
Commodities: “America Has a Cheese Problem That’s Only Going to Get Worse” [Time]. “Currently, the U.S. has 1.39 billion pounds of cheese in storage, according to the Department of Agriculture and that equates to roughly 4 pounds of cheese for every American. Why so much? There are two main factors. Cheese is piling up due to a dwindling demand for milk, yet farmers are on target to produce a whopping 218.7 billion pounds of milk by December. On top of that, cheese, butter and milk powder store better than fluid milk, resulting in a surplus of cheddar and Swiss. Extra cheese means lower prices, which spells trouble for farmers. The current price is at $15.36 per 100 pounds, which is a dollar below the average for 2017.” • This being American cheese, I think we should say “cheddar-like product.”
Commodities: “Is the rally in cobalt a flash in the pan? Some of the battery-sceptic funds certainly think so” [South China Morning Post]. “Call them battery sceptics. Bets on surging demand for electric vehicles have made cobalt and lithium hot commodities, but some investors say the outlook is leaving them cold… Producers may add 815,000 metric tonnes of lithium to the market by 2025, surpassing a 460,000-tonne increase in demand during that span, according to BofA analysts including Michael Widmer. The expansion in output could cause prices of lithium carbonate to plunge to US$10,000 a tonne, just over half the current average price in Asia so far this year, the bank said… In the case of cobalt, supply will exceed demand by 652 tonnes this year, and that will widen to 20,842 tonnes next year, Wood Mackenzie forecasts. The surplus is expected to send prices tumbling to an average of US$62,502 a tonne in 2019, down 23 per cent from the forecast for this year.”
Real Estate: “Brick-And-Mortar Retail Isn’t Dead: Just Look At Who’s Moving Into Toys ‘R’ Us’s Empty Stores” [Forbes]. “It’s not just those emptied Toys “R” Us locations that are getting new leasing interest. Kimco detailed in April that it’s seen over 3,000 net new store openings this year from “trending and growing” retailers — from Sprouts Farmers Market, Planet Fitness and GoHealth urgent care to traditional retailers Dollar General, Dollar Tree and Sephora…. Yes, the U.S. is still over-stored: A 2017 Cowen study found that the per capita shopping center square footage that American consumers get is at least four times more than that of their U.K. and French counterparts…. However, those dynamics and downbeat headlines don’t translate to any dismal retail apocalypse scenarios. Changing consumer behavior has simply given the traditional brick-and-mortar retailers and shopping-center developers a big wake-up call and forced them to reinvent and answer the new fancies of consumers.” • This guy’s never encountered the retail wasteland at the Bangor Mall (though to be fair, there’s a Sephora inside JC Penney’s). Although who knows, perhaps in five or ten years I’ll be more optimistic…
Retail: “Amazon Prime Day Set to Damage Major Retailers” [247 Wall Street]. “Amazon Prime Day is one week away. For 36 hours, during Prime Day, which spreads over July 16 and 17, e-commerce company Amazon.com Inc. will offer countless deals to many of its Prime members, who number over 100 million worldwide. The event will grab hundreds of millions of dollars in sales, much of which could have gone to traditional retailers. The size of the blitz is extraordinary. The products available to Prime members range from clothing to consumer electronics, household items, food and outdoor furniture.” • Amazon’s central planning role is reinforced by the fact that it doesn’t have to show a profit, unlke “traditional retailers.” • But it’s all good, because Jeff Bezos is going to use his loot to build a rocket ship and get himself off-planet. Jackpot!
Retail: “PX, I love you” [DC Velocity]. “One of the largest retailers in the country is a 123-year-old operation with a highly exclusive customer list—to shop at this store, you must have served in the U.S. armed forces…. Despite that stipulation, the Army & Air Force Exchange Service (AAFES)—also known as the ‘Exchange’ or the PX (an Army abbreviation for ‘post exchange’)—has grown to become the 56th largest retailer in the country, operating some 2,700 stores on Army and Air Force bases in all 50 states and more than 30 countries worldwide… When the Exchange opened the electronic doors of its website to an expanded audience last Veterans Day—Nov. 11, 2017—the orders came pouring in as expected. In fact, the number of orders placed on ShopMyExchange.com over Veterans Day weekend was nearly triple the number from the previous year, as newly eligible military shoppers logged in to take advantage of the tax-free deals [Just like Amazon! Oh, wait…] and the ‘family connection.'” • Socialism!
Shipping: “Truckers warn the hiring isn’t keeping up with rising shipping demand and that this spring’s freight capacity constraints will worsen as seasonal demand picks up. That will make this fall’s recruiting push even more urgent” [Wall Street Journal].
Shipping: “Shortage of Truck Drivers Hits New York Businesses, Pushes Up Wages” [Transport Topics]. “Since trucks account for about 70% of all goods shipped in the United States, the shortage is creating what some are calling a ‘drivers’ market,’ where companies are offering higher wages and shorter trips to make the jobs more attractive to workers, experts said.” • Oh the humanity!
Shipping: “The shipping industry’s biggest growth market right now may be on the beaches of South Asia. Weak freight rates are pushing shipowners to scrap a record number of the biggest oil tankers this year” [Wall Street Journal]. “Ocean carriers are struggling with overcapacity that’s tamped down shipping prices and made continued operations for many very large crude carriers a tough sell, particularly for those that have to go through a costly recertification process after 15 years on the water. A rebound in commodity prices has made the hulls of the big tankers even more valuable.” • Let’s hope, this time round, we burn as few Pakistani workers to death as possible…
The Bezzle: “Nissan Says It Found ‘Misconduct’ in Exhaust, Fuel Economy Tests” [Industry Week]. “Nissan Motor Co., the Japanese carmaker that was embroiled in a vehicle-inspection scandal last year, said an internal check found employees had falsified exhaust emission and fuel-economy data at five local factories. The way the tests were conducted deviated from prescribed norms, the automaker said in a statement on Monday, adding it also found employees filed inspection reports based on altered measurements. This data manipulation happened to the sampling test, part of the final car inspection process, the automaker said.” • This keeps happening….
The Bezzle: “A Strange New Twist In The Satoshi Nakamoto Saga” [Safe Haven]. “On June 29, someone claiming to be Satoshi Nakamoto posted a 21-page excerpt from what he claims to be a literary work. In the excerpt, he promises to reveal his full identity soon…. What the man needs to do is to move the 980,000 or so genesis bitcoins that are associated with him and everybody will forever hold their peace. That stash has remained unmoved for nearly a decade in the deepest cold storage in the space. The true Satoshi Nakamoto ought to have access to the cryptographic keys to that giant vault.” • Maybe he wrote them down and then lost the slip of paper?
The Bezzle: “Stiglitz, Roubini and Rogoff lead joint attack on bitcoin” [Financial News]. “Joseph Stiglitz, Nouriel Roubini and Kenneth Rogoff have renewed their assault on the cryptocurrency believing it will be subject to further sharp and damaging falls as authorities crack down on criminals using bitcoin to launder money and avoid taxes. Stiglitz, the Nobel Prize-winning economist, told Financial News: ‘You cannot have a means of payment that is based on secrecy when you’re trying to create a transparent banking system. If you open up a hole like bitcoin then all the nefarious activity will go through that hole, and no government can allow that.'” • Prosecution futures, as Yves has said from the very beginning.
Transportation: “Cybercrime regulations over ‘smart’ connected vehicles and its impact on civil liability” [FreightWaves]. “Ensuring the integrity of the vehicle is vital, which would [good luck with that]. The vehicle also needs to be available to the driver at all times, and should not lose out on key functionalities while it is on the highway…. In case of accidents, one of the angles to distribute liability would naturally fall on the vehicle owner, and the onus is on the local jurisdiction to decide on the extent of liability to be taken up by the owner. And in such situations, taking up insurance over autonomous vehicles specifically for hacking and cybercrime could be a way forward. OEM companies and software providers would have to understand their liabilities in the future as legislations would be set in place to suit the times. But as it stands now, the IT security act does not cover this situation, essentially letting them off the hook from any cybercrime issue that crops up from connected vehicles.” • Ain’t “permissionless innovation” grand?
“Why you might want to wrap your car key fob in foil” [USA Today]. More convenience. But for whom? And not just my car key fob, surely?
Five Horsemen: “Four of the Fab Five are up in late morning trade, while Facebook — which reached a new high on Friday — is flat” [Hat Tip, Jim Haygood].
NakedCap Mania-Panic Index: “After Friday’s vigorous market pop, the mania-panic index rose to 45 (worry) as the VIX volatility index subsided and new highs strengthened their margin over new lows” [Hat Tip, Jim Haygood]. (The NakedCap mania-panic index is an equally-weighted average of seven technical indicators derived from stock indexes, volatility (VIX), Treasuries, junk bonds, equity options, and internal measures of new highs vs new lows and up volume vs down volume … each converted to a scale of 0 to 100 before averaging, using thirty years of history for five of the seven series.)
Our Famously Free Press
Shudders to Think (1):
1. I really need to stop ruining my Sunday with Twitter, but before I go enjoy actual life, a few words on "objective" political journalism — & here I refer specifically to the odd amalgamation of habits & strictures that dominate mainstream US political reporting.
— David Roberts (@drvox) July 8, 2018
Shudders to Think (2):
There is no reason to believe that Glenn’s fanatical hatred of the Democratic Party comes from anything other than the same well of sincere bad judgment that makes him think McCarthyism was about being on the receiving end of some nasty tweets.
— Matthew Yglesias (@mattyglesias) July 8, 2018
“We Have No Idea How Bad the Us Tick Problem Is” [Wired]. “Around the world, diseases spread by ticks are on the rise. Reported cases of Lyme, the most common US tick-borne illness, have quadrupled since the 1990s. Other life-threatening infections like anaplasmosis, babesiosis, and Rocky Mountain spotted fever are increasing in incidence even more quickly than Lyme. Meat allergies caused by tick bites have skyrocketed from a few dozen a decade ago to more than 5,000 in the US alone, according to experts. And new tick-borne pathogens are emerging at a troubling clip; since 2004, seven new viruses and bugs transmitted through tick bite have shown up in humans in the US.”
“A Video Excerpt from The Well-Placed Weed: The Bountiful Life of Ryan Gainey” [Southern Spaces]. ” [Gainey] had a way of ‘making things look spontaneous. . .that were planned.’ Most gardeners work to eliminate weeds, but Gainey would allow them to pop up in certain areas. To visitors, these would appear as happy accidents, but they were deliberate, as Gainey explained in his 1993 book The Well-Placed Weed from which our documentary takes its title. Gainey’s gardens feature a fascinating give-and-take between the structured and the free-flowing.” • One more book for summer reading? Not sure….
“The Best Books on Con Artists, According to True-Crime Experts” [New York Magazine]. “Fascinated by the language of the underground, Maurer introduced phrases like “shills” and “the payoff” to the mainstream, giving us the vocabulary to discuss con artists.”
“A Small Window into the Soul’s Corruption” [Once Upon a Time….]. From May, still germane: “[N]othing these executives offer for public consumption can be credited, not when they’re in the midst of battles over control, market domination, and massive amounts of wealth.” Arthur is talking about Facebook executives, but the case seems more general…
“Illinois governor profits off ICE detention center contracts” [Politico]. “In his most recent statement of economic interests, the multi-millionaire Republican governor disclosed earnings from a private equity fund that owns Correct Care Solutions, a for-profit health care provider that has millions of dollars in government contracts with jails and prisons across the country, including immigrant detention centers. The governor said he relinquished investment decisions to a third party… Still, Rauner’s disclosures indicate that he’s earning income from the group, which reports annual revenue of $1 billion [that’s real money!] The financial connection between a sitting governor and for-profit ICE detention contractors is one that immigration rights groups insist is a clear conflict of interest. They also point to Correct Care Solutions’ track record involving dozens of lawsuits alleging wide-ranging negligence.” • It would be nice if, instead of yammering about (a tendentiously select group of) babies, we could follow the money. Of course, that might raise awkward questions….
“Private tax collection agencies lose money while going after the poor” [WaPo]. Final paragraph: “In the case of the IRS, that poor service seems to be by design.” Hard to believe that the neoliberal playbook is being applied to the IRS just as much as the Post Office or the Veterans Administration, but then one remembers that the fermiers généraux were one of the more delectable features of the ancien regime…
“With Greed and Cynicism, Big Tech is Fueling Inequalities in America” [Monday Note, Medium]. “Recently, a CEO of a roaring unicorn in Silicon Valley drew my attention to the following: ‘If you compare Amazon’s stock price over the recent years against the cost of housing and the rise of homelessness in Seattle, the progression is identical…’ He is mostly right…. .The exemptions granted to Amazon (or Apple which is also looking for another campus, or Tesla, or Foxconn), is part of a zero-sum game in which the contribution will come at the expense of something else…. Tesla’s tax effect on the Nevada economy offers a perfect example: the fiscal profligacy granted by elected officials to attract the company’s huge battery factory translated into tax hikes for local residents and cuts in bus routes, among other things. To add insult to injury, Tesla decided to sell $131million in tax credits (about 10 percent of its expected tax benefit) to Nevada casinos” • 247 Wall Street comments: “Yup. And as near as I can tell, the problem is getting worse. With no end in sight.”
“Hollywood” [Caitlin Johnstone]. “In Hollywood they get the people who are the best at being skinny while pretending to do things, and they never stop pretending to do things. They pretend to make movies and they pretend to be artists and they pretend to be basically decent people who haven’t lost touch with their humanity at all while doing unspeakable things behind locked doors guarded by armed security guards. They watch the world age around ageless plastic faces through medicated eye holes and remember less and less often what life was like before this catastrophe started.”
“BrightFarms Raises $55 Million in New Funding Round” [Wall Street Journal]. “Indoor farming startup BrightFarms Inc. said Thursday it has raised $55 million in a new funding round to open more hydroponic greenhouses across the U.S. as it seeks to capitalize on rising demand for locally grown food.” • I always thought of “local food” as being grown in actual soil*, but what do I know? More: “The crops are grown in glass-roofed, 140,000 square-foot farms near metropolitan areas.” • Enabling, for the paranoid, blue city secession…. NOTE * I’m smelling a business model for pre-packaged terroir. The Juicero types just didn’t think big enough about what to put inside their plastic bags…
News of The Wired
“Michael Pollan: Why I started taking LSD and what it helped me to do” [Sidney Morning Herald]. “Are psychedelic drugs, like youth, wasted on the young? Could middle age be the ideal time to try some consciousness expanding – to ‘shake the snow globe’ as one neuroscientist puts it… ‘,” [Pollan] says, ‘to prepare you, escort you through the journey and be there if you get into trouble – and people do. Also a good guide will help you integrate the experience into your life.'”
“What I learned from a Taipei alley” [Remains of the Day]. “While filming in a cram school district of Taipei, I posted this photo of an alley to Instagram, wondering in my caption why American alleys did not contain such a density of food stalls and stands and restaurants…. In the American consciousness and pop culture, the alley is a place of danger and grime. It’s where Bruce Wayne’s parents were shot and Batman birthed, a place of drug deals, prostitution, gang fights, and dumpsters. This squalid reputation may trace back to the functional roots of the alley in America.”
“The Death of the Public Square” [Franklin Foer, The Atlantic]. “What is God? It is only a subject that has inspired some of the finest writing in the history of Western civilization—and yet the first two pages of Google results for the question are comprised almost entirely of Sweet’N Low evangelical proselytizing to the unconverted. (The first link the Google algorithm served me was from the Texas ministry, Life, Hope & Truth.) The Google search for God gets nowhere near Augustine, Maimonides, Spinoza, Luther, Russell, or Dawkins. Billy Graham is the closest that Google can manage to an important theologian or philosopher. For all its power and influence, it seems that Google can’t really be bothered to care about the quality of knowledge it dispenses. It is our primary portal to the world, but has no opinion about what it offers, even when that knowledge it offers is aggressively, offensively vapid.”
… vita brevis, especially on the Twitter:
I love this cartoonist. Back later. Helen.? pic.twitter.com/RKavTRv1ac
— helen warlow (@HWarlow) July 6, 2018
The New Yorker got this, too, totally wrong, didn’t they?
— Mikko Hypponen (@mikko) July 5, 2018
I wonder if Alexa records dog barks, and whether Amazon uses the data. I bet the answers are yes, and yes.
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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 (TH):
TH writes: “This rose lives in a residential garden in Northridge, California. (The unfortunate mildew attack against the foliage doesn’t seem to have affected its ability to produce beautiful blooms).”
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