2:00PM Water Cooler 5/3/2019

By Lambert Strether of Corrente.

Readers, I must finish up a second post, one that demands some care due to its subject matter. So today’s Water Cooler will be an open thread. –lambert UPDATE I thought the first post was pretty good, too. Maybe if I’d titled it “Why Information Technologists Shouldn’t Be Let Near Political Systems, Because They’re Pig-Ignorant About How Politics Really Works,” but honestly, I process so much yelling these days that perhaps my headlines are a little dry.

Here is a conversation starter from Stoller:

On the one hand, this would imply that Biden could convert a plurality into a majority and not butcher the race, as he has butchered every previous race. OTOH, my nightmare scenario is a brokered convention, and a Biden/Harris ticket. So….

And here is a conversation starter on Sanders. Politico digitized the cable-access TV show that Sanders created in the late 1980s; the post is well worth a read (“[The show] is part of Sanders’ four-decade end run around the media”). Here is a Sanders ally’s cheeky response, timely for our baseball discussion a couple of days ago:


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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 (CC):

CC writes: “The aspen catkins are out here along the front range of Colorado.” It’s important to look up!

Bonus plant (Mark K):

Mark K writes: “This is a sign on a tree in Elizabethtown, Pennsylvania, that I was careful not to read.” Although the picture includes plants, the subject is not really a plant, so I’m adding this as a bonus. Semantics!

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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.

117 comments

  1. cocomaan

    Harris is pretty obviously involved in the whole smollett/fake lynching hoax. I’m sure that they’ll steer from her.

    Reply
      1. Cal2

        The Anti-Lynching Law: Harris sponsored it and it passed after Smollett’s “attack”.

        https://newsone.com/3846357/anti-lynching-law-senate/

        Michelle Obama pushed for it to be handed to the feds from the local police. The whole thing collapsed.

        https://www.nbcnews.com/feature/nbc-out/harris-booker-call-attack-black-gay-actor-attempted-modern-day-n964326

        Google “Images Michelle Obama Smollett”

        Of course, it might just be one big coincidence, because we know how honest Chicago politics are….

        “Harris is polling at 4 percent among Democrats in the most recent Post-ABC survey…” LoseWithKamala2020!

        https://www.washingtonpost.com/politics/2019/05/02/after-barr-hearing-president-trump-singles-out-sen-kamala-harris/

        Reply
          1. False Solace

            My impression is that under Jim Crow, Blacks lacked the protection of the law. Under those circumstances more laws wouldn’t have helped. It’s not like a person could have lynched a rich white person with no legal consequences. And yes, in hindsight there are several Confederates who should have been hanged for their actions, pre and post war.

            Reply
                1. Cal2

                  My files are incomplete, and I have relied on a rememembored rmemory.
                  Here’s a start of fact checking:

                  “The Negro Holocaust: Lynching and Race Riots in the United States, 1880-1950” states that, contrary to present-day popular conception, lynching was not a crime committed exclusively against black people. Between the 1830s and the 1850s the majority of those lynched in the United States were whites. From 1882-1968, some 4,743 lynchings occurred in the United States (not all lynchings were recorded). Of these, 3,446 or 73 percent were black and 1,297 (27 percent) were white.”
                  https://www.montgomeryadvertiser.com/story/opinion/2017/09/25/many-whites-were-lynched-fighting-racism-opinion/700690001/

                  “Out of the 4,743 people lynched only 1,297 white people were lynched. That is only 27.3%. Many of the whites lynched were lynched for helping the black or being anti lynching and even for domestic crimes.”

                  https://www.naacp.org/history-of-lynchings/

                  May have confused this number:
                  “As Stewart E. Tolnay and E. M. Beck note in their book A Festival of Violence, 60 percent of white lynching victims, but only 39 percent of black lynching victims, were accused of murder…”

                  How to define?
                  “Unlike the Tuskegee data, EJI’s numbers attempt to exclude incidents it considered acts of “mob violence” that followed a legitimate criminal trial process or that “were committed against non-minorities without the threat of terror”. So blacks got counted and whites didn’t?

                  Reply
                  1. Lambert Strether Post author

                    Thanks for the link to the Montgomery Advertiser, which moves 60% down to 27%. I think it’s undeniable that lynching was used as a method of enforcement against Black people in the Jim Crow era, but presumably the new law applies to all, and that’s a good thing, whatever the occasion of its passage.

                    If the implication, much like the argument that “the Irish were slaves too!” because of indentured servitude, is that black and white lynchings were equivalent, that’s not so. From the National Review, of all places:

                    the lynching of blacks was qualitatively different from, say, cowboys hanging bandits or Hatfields forming an informal firing squad to execute a McCoy who had killed one of their own clan. There were two major differences between frontier rough justice and racial lynchings.

                    First, as a rule, whites were lynched only when suspected of a felony, but blacks could be lynched for minor crimes and breaches of etiquette. As Stewart E. Tolnay and E. M. Beck note in their book A Festival of Violence, 60 percent of white lynching victims, but only 39 percent of black lynching victims, were accused of murder. While two-thirds of black lynching victims were accused of capital crimes (rape or murder), the balance were accused of property crimes or minor offenses, and about a quarter were lynched for either unknown reasons or breaches of racial etiquette. The most infamous instance of this is the case of Emmett Till, a 14-year-old boy who was tortured and murdered in 1955 for directing unwelcome flirtation towards a white woman in a Mississippi grocery store.

                    Second, white-on-white lynchings tended to be fairly expeditious extra-judicial executions. Lynchings of blacks were often gruesome affairs with torture preceding the murder and mutilation following it.

                    Reply
  2. Samuel Conner

    Re: Biden and balanced budgetness, I earnestly hope that wider understanding of MMT progresses swiftly enough in the next year that JB is destroyed (metaphorically, of course) in the primaries.

    Reply
    1. Pat

      MMT or not. I hope that Joe Biden’s long history of being on the wrong side of every economic issue if you are not a banker or a broker gets aired over and over. Along with how he helped form our corporate friendly judiciary above and beyond Thomas.

      I never want to hear from someone that they had no idea what Joe really represents if he gets the nomination because you know damn well it WILL become part of the campaign then.

      Reply
      1. NotTimothyGeithner

        HRC had a narrative of being a secret liberal. Obama fought those dastardly Republicans existed as a narrative and was certainly helped by the GOP’s behavior.

        I believe Stoller is jumping to conclusions about Democratic voters. There is a reason presumed front runners often disappear such as Lieberman. This is on C-SPAN, but its not nightly news fodder. For the most part, Biden is just a name that randomly appears. 95% of Democrats have never seen this. I largely blame the politico class even the good ones for not pushing back, even at harmless narratives such as Leslie Knope’s Biden crush.

        Joe Lieberman was once considered to be the man to beat Shrub, but then people learned about him.

        Reply
        1. WJ

          “For the most part, Biden is just a name that randomly appears. 95% of Democrats have never seen this.”

          And with the DNC-mandated civil and unified and policy-free primary, they probably never will!

          Reply
          1. richard

            Yes, that “unity” pledge will really come back to bite Bernie in the butt if he’s not able to make clear how Biden is not like him, or like anything the people have been asking for since the 2008 crash.

            Reply
            1. Lambert Strether Post author

              You can’t paper up unity. And if there were real unity, you wouldn’t need the paper. The Democrat nomenklatura is really getting weirder and weirder.

              Reply
              1. richard

                It really can’t help getting weirder and weirder, as the ground they’re sworn to defend (“unity”, “civility” and idpol) gets more and more remote from lived experience. Never that close to begin with, and drifting away. Wave bye-bye.

                Reply
            2. nippersdad

              It sounds like there are going to be all kinds of organizations out there ensuring that there are questions about Gabbard’s/Gravel’s/Sanders’ foreign policy chops as well.

              “National Security Action, for instance, offers foreign policy strategy and advice to all of the campaigns. The goal is to help Democrats avoid damaging internecine warfare on the left’s more divisive foreign policy topics, such as the US-Israel relationship, military spending and the war in Afghanistan.”

              https://www.politico.com/story/2019/05/03/2020-foreign-policy-advisers-1301083

              And the National Security Action group sounds like a who’s who of all the people who have a lot to lose if foreign policy were to change.:

              https://nationalsecurityaction.org/who-we-are

              Foreign Policy for America appears to be an astroturfing organization for the MIC.:

              “Through FP4America Action Network, we support our members to impact elections through phone banking, canvassing and fundraising.

              https://www.fp4america.org/#our-work

              I doubt that there will be much civility in this primary given the people who are going to ensure that foreign policy, at least, remains as it is.

              Reply
          2. John k

            Bernie is instinctively polite and civil, wants to talk policy. It’s an easy pledge for him… remember he didn’t want to talk about the emails.
            But the army of Bernie supporters didn’t make any such pledge. All of joes dirty laundry will be on display before the first primary.
            Plus, the press is not as anti Bernie and for an anointed one as before. Quite a few critical articles of joe have already appeared. The ideal ‘not Bernie’ is a neolib too young to have left a paper trail, like butt or Beto… but imo there’s too little there there to do well in the debates. IMO this era has moved past hope and change, now ready for believable material benefits. Some bits of the press see this, ready to move on. Anyway, my fond hope.

            Reply
        2. a different chris

          >I believe Stoller is jumping to conclusions about Democratic voters.

          I got the impression, no better than yours of course, that Stoller was talking about the Pelosi/Schumer “We Are The Party”* types, not the silly little peons that show up for caucuses and primaries.

          *I don’t know French, but there must be a version of “L’État, c’est moi” that fits their outlook.

          Reply
          1. NotTimothyGeithner

            https://twitter.com/matthewstoller/status/1124302004623376385

            Aside from the name-calling, I agree with Nate’s point. Democrats don’t care about Biden’s track record because they think Obama did a great job and associate Biden with Obama. I just don’t happen to agree with the majority of Dems on Obama’s record, but they are the majority.

            I think he is being pretty clear. He just doesn’t grasp Democratic voters on the ground didn’t see Obama lobbying for TPP, they saw a promise for no more bad trade deals and Republicans being loathsome. Maddow never touched on this stuff.

            The problem isn’t that people like Obama as much as they know so little about Obama.

            Reply
        3. JohnnyGL

          “HRC had a narrative of being a secret liberal.”

          “Obama fought those dastardly Republicans existed as a narrative and was certainly helped by the GOP’s behavior.”

          After having sold lies like this….Russia-gate starts to look like, well, not so out of the ordinary on the story-telling front?

          Reply
        4. Lambert Strether Post author

          > I believe Stoller is jumping to conclusions about Democratic voters.

          I think “plurality” is what is in question. And Democrats not coming to grips with Obama as a party is both true and Stoller’s hobby-horse.

          The issue is whether Biden’s plurality grows or shrinks. How many of the dogs are eating the dog good because the love it, and how many are sniffing the can because it seems familiar. Based on past form, it shrinks. He’s already insulting the press. That won’t help when his first major gaffe comes.

          Reply
  3. John k

    Reading joes quote from 1995 informs me of why Obama picked him… they were blood brothers on the grand bargain. Dodged a bullet there. But how can his polls be so high when he’s got so much baggage?

    I’ve changed… used to dislike Feinstein for the wrong reasons…her vote defeated the balance budget amendment after previously promising in her re-election to support it, maybe the one good thing she’s done in the senate. Another bullet that went astray.

    And for all the bad things in the last few decades, we’ve avoided ww3.

    Reply
      1. JohnnyGL

        AMLO and his party in Mexico, and also many in the labor movement in Mexico. They’ve won some wage hikes. Obama might have done a better job preventing that.

        Trump humiliated the Mexican political class so badly that they couldn’t rig it hard enough to stop him!

        Reply
          1. JohnnyGL

            Lambert, I’ve read you for many years now. I know you weren’t serious. :)

            However, I do think that political space seems to have been opened up by Trump, specifically, to get AMLO elected, and perhaps raise Mexican wages a bit. I didn’t see that coming in 2016. :)

            Reply
      2. John Beech

        Me, for one.

        Lambert, seriously, have you forgotten 2012 when during a hot mic with Medvedev, the President of the United States asked him for more space and pledged he’s have more flexibility after the election? Are you seriously saying you’re OK with this? What has President Trump done that’s so evil as to warrant the level of attack he gets from the MSM as compares to this from Saint Obama? Just wondering.

        https://www.reuters.com/article/us-nuclear-summit-obama-medvedev/obama-tells-russias-medvedev-more-flexibility-after-election-idUSBRE82P0JI20120326

        Reply
    1. NotTimothyGeithner

      But how can his polls be so high when he’s got so much baggage?

      Besides fraudulent polls leaving people 50 and under off, people don’t know Biden. He’s just a name from a small state next to a major media market. He pops up in interest stories, but he’s not the local elected for Philly or Washington papers and avoided scrutiny. He wasn’t in the leadership, so he rarely had responsibilities.

      There is a reason he came away with less than 1% in Iowa and New Hampshire despite his supposed strong draw with working class whites. In many ways, he’s an innocuous white guy who won’t offend the he-man woman haters. And many Democrats haven’t quite grasped Republicans simply hate members of Team Blue for being in Team Blue, so Biden seems like an easy answer. He’s never led on an issue Republicans would rage about, so now the Republicans can’t say mean things. Again, Biden is an easy answer.

      Reply
    2. James

      And for all the bad things in the last few decades, we’ve avoided ww3.

      Until you consider the GWoT anyway. Granted, it’s been a bit of a one sided affair so far. DC and those who cannot by law be named wage it, and the rest of the world – including ordinary Americans themselves – suffer all the casualties.

      Reply
    3. PKMKII

      But how can his polls be so high when he’s got so much baggage?

      There’s two important points I’ve seen made about Biden’s current polling. One, Biden does well in polls that are phrased as “which of the following 20+ candidates do you like the most?” However, polls that are phrased, “who are you going to vote for?”, most people are still saying they don’t have a choice yet. Second, the parse-down in the polls show that roughly half of Biden supporters, self-reporting, know little to nothing about his policies. He’s riding on name recognition at the moment.

      What should be the real focal point right now is not the polling, which this early on is meaningless (at this point in 2003, Lieberman had a commanding lead in the polls) and instead look at the state of the ground games. It makes for less sexy, easily digestible headlines, but will play a much greater role in turnouts.

      Reply
      1. polecat

        And to think that Joe L. Was a heartbeat away from the presidency … thank HeyZeus HIS ox got Gore’d !
        Now, Joe B. on the other hand … he couldn’t step off his tongue, if his political lifesaver depended on it. CRASH .. meet Bern !

        Reply
      2. Lambert Strether Post author

        > He’s riding on name recognition at the moment.

        Good point on the poll wording.

        IMNSHO, it’s partly “name recognition” but also partly “restoration,” along the lines of “there’s nothing wrong with America that a third Obama administration and a good binge-watch of the West Wing won’t cure.” There’s a segment of the Democrat voters that believes this, certainly. I think the “restoration” crowd is a subset of the “name recognition” crowd, but wouldn’t venture a guess on how big a subset.

        Reply
  4. DonCoyote

    Only in the Onion (for Now):
    Noncompete Clause In Lease Bars Tenants From Living Anywhere Else For 90 Days After Moving Out

    …adding that the restrictive covenant also prohibits accepting any short-term housing arrangement that may come up, such as a hotel room or friend’s apartment, for the full three months. “It would be perfectly fine for a former tenant to sleep in another location as long as they do so outdoors or in a makeshift form of shelter, and not within 150 miles of their previous place of residency.

    Reply
    1. Nat

      That is initially hilarious … and then terrifying to contemplate how plausible it could eventually be.

      Reply
  5. dearieme

    “we’ve avoided ww3”: thanks, presumably, to the handful of voters who ensured that Hellary lost last time.

    Who is going to be the new Hellary i.e. an enthusiastic warmonger?

    Reply
    1. James

      The list is long and growing everyday. But actually, that’s a bit of a trick question, as war mongering is one of the compulsory exercises now. Heavily weighted as well, I might add.

      Reply
  6. Katy

    I want to express huge thanks to everyone who attended the NC in MN meetup last night. It was a ton of fun, with great people and great conversation.

    Thanks especially to Yves Smith for initiating the meetup! I hope you enjoyed your short trip to our state; we were very happy to have you. Thanks also to Bill Black and June Carbone, who were able to visit as well.

    Thanks to Chuck L, who was instrumental in finding the venue and making sure people were able to find the place.

    Our award for person who drove farthest to get to the meetup was Ed from Idaho, who was passing through on his way to Illinois.

    Lambert, now it’s your turn. You are welcome anytime. :)

    Reply
    1. Jerry B

      Any feedback from NC readers attending the Milwaukee, Wi meetup?

      My wife and I drove from the Chicago suburbs to Appleton, WI in the morning to hunt for an apartment. We drove back in the late afternoon and our way back we decided to stop in at the meetup at Water Street Brewery in Milwaukee. We arrived early around 4:30 pm and periodically checked with the hostess but did not see anyone. There was a group in the back room but they were not from NC. Since this was my first meetup, I was not able to recognize anyone which did not help. We stayed until around 5:10pm and then due to both of us being exhausted from the day trip to Appleton, left to go back to the Chicago. I hope the Milwaukee meetup was well attended!!

      Since my wife and I are relocating to the Appleton, WI area (Neenah,Wi) I hope to attend the next Milwaukee meetup and now the Minneapolis meetup will be a shorter drive as well.

      Reply
  7. aj

    More from the public access Bernie show. Aside from it taking place at a mall (who goes to those anymore right?), this whole interview could have taken place yesterday and sounded about the same. Scary that not much has changed in 30 years.

    https://youtu.be/4AwCZIJunBI?t=862

    Reply
  8. Wukchumni

    Bernie would’ve been a good little league coach, all too often I was saddled with coaches who played their son too often, or couldn’t hit a fungo in practice to save their lives.

    …the Bad News Berns

    Reply
    1. ambrit

      It well could be the other way round.
      My nightmare Democrat 2020 ticket is Hillary/Michelle.
      “Because America needs two mommies.”
      Still, the equation is: Biden + Anyone = Trump 2.0

      Reply
      1. ChrisAtRU

        #Concur

        If 2016 was the “Battle of The Unfavorables”, 2020 will be the “Battle of The UnBelievables” – no one is (really) gonna believe anything either of them have to say. With many Trump voters facing up to the fact that he was just another rich dude with disdain for the poors, it will be left to Trump supporters to push run-of-the-mill GOP-or-die vote totals where they need to be electoral-college wise. But will voters who pulled the lever for Trump and realized their folly go for Biden?! My guess: #HellNo … in addition, the same people who sat it out in 2016 are gonna sit it out in 2020 if Biden is the Dem nominee.

        Prediction:
        Biden chalks up another popular vote presidency for #TeamDem. The 2020 version of the “Did-not-Vote would have won the election” gets posted online. #EightYearsOfTrump

        Reply
        1. Whoamolly

          Hillary/Michelle might actually win.

          Don’t think Michelle wants the grief tho. Her recent book shows a realistic, smart person who is not consumed with ambition

          Brokered convention, here we come.

          Reply
        2. NotReallyHere

          I have to say I don’t agree. Unless it’s Bernie or Tulsi I really believe the Russia Russia thing is going to hand trump a landslide.

          Let’s see what the IG report on campaign spying brings in the next couple of months, but check out the comments on the nyt article – linked below – where the Dems media appear to be moving from dismissing it as mad conspiracy to trying to normalize if (“ the techniques were standard and spying was justified”)

          https://www.nytimes.com/2019/05/03/opinion/trump-campaign-spying-fbi-russia-.html

          When even nyt commenters are saying this is totally off, it tells you something.

          Reply
      2. polecat

        OOOh .. THAT’s mighty scary, ambrit … new material for a Ditsney PsyFy/Fantasy/Horror Flick perhaps ??

        We call it ‘The Whine, The Witch, and The Wookie’

        Reply
      3. richard

        I just don’t understand how libs don’t get this. trump will tear biden apart in 874 different ways, and he has nothing on bernie but red scare, which teams him up with the establishment and msm. not a good look for donnie.
        donnie either has the fake populism or he has nothing. bernie takes that away, and corporatejoe hands it back to him on platter.

        Reply
        1. Yves Smith

          Biden may get knocked back in the debate in June. A politically plugged in commentator said that Biden is too stupid to be President, and it won’t be possible to cover that up at the debates.

          Reply
          1. Olga

            I was going to say that a VP debate back in 2008 would give us a clue…. but then I remembered that he must have been debating ms. alaska (am I wrong? somehow, I cannot even recall a VP debate in 2008 – and I’m sure I would not have missed it – if just for the amusement value). Anyway, if one were held, he likely came out smelling like a rose (or a giant of intellectual thought – so hardly a clue).

            Reply
            1. The Rev Kev

              For the 2008 VP debates, there is a Wikipedia page on them at-

              https://en.wikipedia.org/wiki/2008_United_States_presidential_debates

              Biden did debate Palin and it is on YouTube at-

              https://www.youtube.com/watch?v=89FbCPzAsRA

              But be warned! If you watch it, that will be 92 minutes of your life that you will never get back again. However, there is a transcript of this debate at-

              https://www.nytimes.com/elections/2008/president/debates/transcripts/vice-presidential-debate.html

              Reply
          2. EricT

            They’ll do the Bush debate strategy. He’ll have a “hearing aid” that will allow someone to give him talking points. You’ll know it when he distract-stutters during the debate.

            Reply
            1. Lambert Strether Post author

              Would you rather have a beer with Joe Biden?

              I saw a video of Biden in Iowa recently, and he did seem to have some sort of mush-mouth problem. The poster attributed it to health issues (which would also explain why the press is kept at a distance) but a poor connection via an earbud to his “producer” might produce the same result.

              Adding: I didn’t link to it because the provenance was unsound. Turns out I was right; it’s a fake.

              Reply
    2. Partyless Poster

      What’s scary is from all I’ve read so far Biden is actually worse.
      Hard to tell until its too late though.

      Reply
      1. anonymous

        Biden was all in for TPP — very scary.
        (funny how TPP seems so long ago in election cycle memory.) Hope that’s not forgotten in the debates, where Biden will likely be short and vague on any policy plans — much less his own record. Sanders will prove he was the right choice all along in 2016.

        Reply
  9. verifyfirst

    I have a question about MMT, which I am working to understand, albeit in (very) small bite sized pieces appropriate to my aging mind…

    If banks create money by making loans (sounds right), why do banks need deposits? (And ultimately–if loanable funds don’t matter–does it make any difference if I keep my money is alternative, community oriented banks like the Self Help Credit Union?).

    Thanks!

    Reply
    1. Samuel Conner

      My ageing mind may be able to help. First, what is the point of a bank? My understanding is that, ideally, banks exist (from the standpoint of the government authority that issues banking licenses) to provision the private sector with intelligently underwritten credit. Borrowers bring their business plans (or consumption, or investment plans) to a bank and a loan officer makes a (hopefully intelligent) decision about whether to extend credit to the would-be borrower. If the loan officer agrees to extend credit, a Note is created for the bank to document the loan and a deposit in the name of the borrower is created.

      So far in this story, the bank does not need to accept deposits from private entities (whether individual or corporate depositors). What would be the bank’s reason for doing that?

      Banks need “reserves” (numerical balances denominated in dollars in accounts in the banks’ names at the Federal Reserve) in order to make payments (to other banks). These reserve balances are used to make payments between banks (the need for this is described below). Banks get reserves by borrowing, either from other banks, from the Fed, or from private citizens. These borrowed reserves cost something (the overnight interbank lending rate, or the Fed’s discount window rate, for example) and if private lenders (individuals or corporations) are willing to accept a lower rate of interest on their deposits than the bank would have to pay to get its reserves from somewhere else (interbank market or the Fed’s lending facility), then it is favorable to source reserves by accepting deposits.

      That’s my understanding of why banks accept deposits.

      I mentioned “payments” as the reason banks need reserves. Another story:

      Bank “A” makes a loan to person “a”, creating a deposit in the amount of the loan, and receiving the Note documenting the loan terms.

      Person “a” writes a check to person “b”, drawn against the deposit at Bank “A”.

      Person “b” then deposits the check. If Person “b” deposits the check into an account in his own name at Bank “A”, then no reserves are needed; Bank “A” debits person “a” ‘s deposit account and credits person “b”‘s deposit account — just changing numbers in spreadsheets.

      If person “b” deposits his check into an account at a different bank, say bank “B”, then Bank “A” has to pay Bank “B” funds (reserves) equal to the amount of the deposited check. This is done by transferring reserves from Bank “A” ‘s reserve account at the Fed to Bank “B” ‘s reserve account at the Fed.

      ——

      People who understand the underpinnings of the banking system better than me are invited to clarify and correct. I THINK that the reason (or a reason) this interbank payments thing happens at the Fed is to impose a solvency constraint on private banks in order to prevent them from recklessly lending without limit into unwise or fraudulent purposes.

      Reserves are created at need by the Sovereign, and private lenders use them and have to pay to borrow them from the Sovereign, or from other banks, or from currency users. Without the need to “source” reserves, private banks could create “money” without limit which would lead to obvious problems.

      Reply
    2. Samuel Conner

      Regarding the 2nd question, whether to maintain one’s deposit account at a large national bank versus a local community bank or credit union, since deposits cost banks less than interbank loans or overnight loans from the Fed, if one keeps one’s funds in a small community-oriented bank, one is helping to lower their cost of funds (needed to make interbank payments, not to make loans per se).

      And, as small community-oriented banks or credit unions may be more interested in extending credit into the local economy than a large bank might be, this might be a better way to bank from the standpoint of the well-being of the local economy.

      Again, I welcome clarification and correction.

      Reply
  10. Wukchumni

    We spent the morning discussing how veterans are faux fawned over in every which way, but how does it change when Big War can’t get it up anymore and we’re forced to retrench our far flung outposts and bring active military home, cashing out far more than are being inducted?

    Do they just get ignored, the veterans parking spaces @ Lowe’s that are cheek by jowl next to the handicapped ones, get painted over and anybody can pull in now, banners on lamp posts that say “Torrance Salutes PFC Jones!” get pulled down, no more tv commercials with a veteran as the focus, etc.

    It’d be easy to turn it all off within a week or so and excise any evidence, the last refuge for a scoundrel of a nation, us.

    Reply
    1. Carolinian

      faux fawned

      I don’t think it’s faux. People are genuinely grateful that someone else gets paid to go commit mayhem on the behalf of the US so they don’t have to think about it. Those “thank you for your service” folk are sincerely shallow.

      Although in fairness keeping up with the latest twists and turns of USG policy can be a full time occupation. You can’t necessarily blame people for tuning out.

      Reply
    2. Summer

      Most soldiers wouldn’t want War since a good deal join for “benefits” and a job.
      There are some looking and itching for a Big War, but not necessarily overseas.

      Exclusive: Army Investigating Soldier’s Alleged Leadership In Neo-Nazi Terror Group | HuffPost
      https://m.huffpost.com/

      Reply
  11. Knifecatcher

    I finally got around to watching the “Knock Down the House” documentary and found it quite good.

    One of my favorite parts was when AOC and her boyfriend absolutely savage the Democratic party consultant class, using one of Joe Crowley’s mailers to point out how fantastically inept the are. Fun stuff.

    Reply
  12. Wukchumni

    We haven’t had a 4 syllable President since Eisenhower and if you’re looking for a dark horse candidate, Hickenlooper is your man.

    He could go with ‘I Like Hick’ to sway the rural vote.

    Reply
    1. epynonymous

      We should nominate the tallest Democrat, regardless of policy… Because they’ll be most likely to win! 😊

      I also read there was a study of rank in West Point. A top preditive factor was the angle of their jaw…

      Reply
  13. JohnnyGL

    https://twitter.com/zachdcarter/status/1124299782246285313

    File this one as exhibit #5467 of “dems don’t want to govern”. Whether or not you think impeachment is a good idea, Pelosi’s just flat out called it a ‘crime’, in her own words, and won’t prosecute, meaning pursue impeachment. She really would have preferred that Mueller do it all by himself, but Mueller also said, “I ain’t stepping on that hornet’s nest” and kicked the ball to Barr, who downed it, which is why he was picked for the job.

    I don’t think pursuing impeachment is a political winner, per se. But it seems ridiculous for Pelosi to accuse someone of a crime and insist on doing nothing to fix it.

    Reply
    1. JohnnyGL

      Also, the tone, the body language…she looks really frustrated at being embarrassed like this “we are at a really, really challenging place”. Trump knows she won’t change her mind on impeachment. She doesn’t believe in it or have the courage. He’s taunting her and daring her to do it. He knows she won’t.

      Reply
      1. Chris Cosmos

        We have no way of knowing what arrangements there are between Trump and Pelosi because actual political deals cannot be published in the MSM. But, at any rate, it is pretty obvious that impeachment would backfire due to the simple fact that there is no obvious crime and that the trial in the Senate would go nowhere.

        Reply
        1. JohnnyGL

          “there is no obvious crime” — You or I may have our opinions about whether there was or wasn’t. That doesn’t really matter.

          Pelosi FLAT OUT said there was a crime. If she thinks there’s a crime, how can she justify NOT impeaching?

          To paraphrase Trump, If he shot someone in broad daylight on 5th Avenue, would Pelosi then be moved to impeach? What would he have to do?

          If the Republic really is in danger, as the hyperbolic among us like to say sometimes, then it’s because the Democratic Party leadership won’t offer any real resistance. They’ve demonstrated it repeatedly. Stoller’s right. They refuse to wield power.

          Reply
            1. Dwight

              I agree Russiagate would blow back in Dems’ faces. Pelosi can’t Trump impeach because her party would be incriminated, just like Pelosi couldn’t impeach Bush because she and her party were complicit in torture, war, and illegal surveillance. I’ll see what Lindsay Graham has to say later – this is my own opinion.

              Reply
          1. Samuel Conner

            Maybe it was a “crime”, but not a “high crime”.

            And while I don’t like DJT’s demeanor, that in itself is not grounds for impeachment.

            Pulling tongue out of cheek, I’m not too thrilled with the prospect of a President Pence.

            Reply
      2. John k

        She’s good at counting noses. I bet the blue dogs won’t vote to impeach, and certainly the reps won’t. Pretty embarrassing if she held a vote and lost.

        Reply
  14. Polar Donkey

    A couple pieces of anecdotal evidence of slowing economy. April has been a slow month in restaurant business here in Memphis. Slower than last year. Also, I had a friend go to Jazz Fest in New Orleans last weekend. Said the attendance was down substantially from the year before.

    Reply
    1. Arizona Slim

      And here’s a data point from Tucson, and, yes, I am posting from inside of said space:

      The last surviving coworking space just announced that it’s closing on June 30.

      Yours Truly noticed the vacancy rate starting to climb during the summer of 2018. And, in February, all three of the staff quit. (They all left for other jobs, and one of those jobs is with WeWork’s mothership in San Francisco.)

      Only two of the staffers were replaced, and the position that was eliminated was the sales manager. Hmmm, in a place with a lot of vacancies, wouldn’t some selling help to turn things around?

      Meanwhile, there’s this:

      https://www.bloomberg.com/news/articles/2019-04-29/wework-files-confidentially-to-hold-initial-public-offering

      Reply
      1. ambrit

        The “For Sale” signs in front of the ‘cheaper’ houses here in the American Deep South are staying up longer than memory says they did last year. Also, some of the “Off Brand” eateries are closing, in late Spring, early Summer, when their business should be picking up.
        ‘Want Ads’ in the local shopper paper are down too. Even some of the more egregious ‘come on’ “employment” ads are now ‘missing in inaction.’

        Reply
  15. marym

    John Kelly joins board of company operating largest shelter for unaccompanied migrant children

    …Friday, Caliburn International confirmed to CBS News that Kelly had joined its board of directors. Caliburn is the parent company of Comprehensive Health Services, which operates Homestead and three other shelters for unaccompanied migrant children in Texas.

    Prior to joining the Trump administration in January 2017, Kelly had been on the board of advisors of DC Capital Partners, an investment firm that now owns Caliburn.

    During Kelly’s tenure, the administration pursued ambitious changes to immigration enforcement, and the average length of stay for an unaccompanied migrant child in U.S. custody skyrocketed.

    Reply
  16. polecat

    So, being that it’s a glorious spring day … polecat’s out in the yard .. groovin on the burst of flora, as in this instance, a sour cherry espalier in it’s fullest bloom … and what does he find, but a robust specimen of an inch worm .. well, make that an 1 1/2+” .. I swear with my own eyes that it was a stick, a brough, a small twig .. until it did the ‘loop’ thing ! Had me rattled for a micro-second. VERY cool in its mimicry, right down to the color & texture of the real thing. Hey, wasn’t The THING a mimic too ?? .. anyways, since pie cherries are the bomb here, yours truly give said non-metric worm a free, and hopefully not too exhilarating, transport to a fine, tasty maple, which we don’t consume.
    A win-win for both man and minute beastie !

    Ok, we now bring you back to unreality .. which is the up-n-coming presidential elephan-titus vs donkey-gonged show.

    Reply
    1. Wukchumni

      A number of the apple trees need thinning out, 1 tiny orb where a cluster of 5 used to be, and then putting up coddling moth traps & large red plastic balls painted with sticky stuff that lures flies/insects to a strange variety of large apple hanging from the tree way early.

      Last year I filled up a 5 gallon plastic bucket with little green apples that didn’t make the cut

      Reply
      1. Oregoncharles

        I’m excited because my seedling peach tree has fruit on it for the first time! Too much, of course, so I thinned it – rather lightly. And the seedling plum next to it has at least a few fruits. (OTOH, my attempt to grow tea from seed, which I bragged about here, is down to just one survivor. But I’m harvesting tea from the parents!)

        In the meantime, of course, the Frost peach, the old reliable for around here, is on its last legs, down to just one live branch. Sadly, peaches just don’t live that long. We’ll see how the new seedling does – and there are two more that need another year or two.

        Reply
    1. Lambert Strether Post author

      I think Cuomo controls the New York state local oligarchy, so I doubt DiBlasio will be allowed to go very far.

      Of course, all these guys now get to go on TV and some of them will probably become talking heads, and that’s a nice little living. Not to be cynical…

      Reply
  17. The Rev Kev

    Open comment? OK. Something that I saw this morning that got my gears grinding. Back in the 90s you had mobs like Microsoft and AOL try to cut of sections of the internet for their users so that they would have full control. It was described as ‘gardens’ at the time which is ironic when you think that a garden is an artificial environment. Well Facebook has finally managed to set up a massive ‘garden’ and jam themselves into so many human inter-reactions. Now comes the cost of when you let a tech billionaire decide what you can and can’t see and acting like a 17th century Puritan cross Big Nanny, this time here in Australia.
    There is an ad by the Road safety program comparing what happens when you have a modern car crash into a car from 20 years ago with two people acting a crash test dummies. It has been on TV a long time but Facebook has banned it, goddammit. This is a ROAD SAFETY CAMPAIGN and you can see it in the article below. Just recently I saw on image of a 23 year-old guy who was in a car crash but did not have a seat belt on. The poor guy basically had a massive cavity where his face used to be as it went into the steering wheel. And he was still alive and now his life as he knew it is gone. You don’t f*** with road safety – but Facebook does.
    And this was on top of Facebook banning from its site a cancer awareness campaign by cancer survivors because there was semi-nudity. Too much flesh which made the feel uncomfortable. These people have been doing good work for years but it was all too much for Facebook. Below is an article on these two later stories for those interested. God, I really despise Facebook-

    https://www.dailymail.co.uk/news/article-6989283/ANCAP-claims-Facebook-banned-advertisement-containing-crash-test-dummies.html

    Reply
    1. cm

      Yes, I’ve been listening to NPR this week, and was amused they don’t even pretend to cover both sides. IMO current US propaganda is worse than Pravda ever was

      Venezuala should come out in support of a Clinton coup.

      Reply
      1. Samuel Conner

        I was ruminating on the same — Maduro could declare Trump illegitimate and recognize HRC as the legitimate head of state of US. Could call on US military to protect American democracy.

        Fun stuff.

        Reply
  18. allan

    Area theocrat loses his mind:

    Mike Pence accuses centrist Joe Biden of ‘advocating a socialist agenda’ like other 2020 Democrats [CNBC]

    For some definition of “socialist”. Mike is much more coherent when he’s demanding
    that the Fed drop the full employment half of its dual mandate [Reuters, 2011] … oh, never mind …


    White House Escalates Feud With Fed
    [WSJ,2019]

    … “The economy is roaring,” Mr. Pence said Friday in a CNBC interview, not long after the Labor Department reported the jobless rate had fallen to 3.6% in April, the lowest level in 50 years. “This is exactly the time not only to not raise interest rates, but we ought to consider cutting them.” …

    The party of the president is a powerful drug.

    Reply
    1. Samuel Conner

      This is fun — evidently Pence thinks that the time to raise interest rates is when the economy is doing poorly.

      The one thing that I like about the idea of “President Pence” as fallout from impeachment is that one could enjoy the spectacle of him losing to the non-entity the D establishment will maneuver into the nomination.

      Reply
  19. Altandmain

    Does anyone else think that there will be more DNC efforts to rig the 2020 primary?

    This time going in, Sanders has name recognition and there is no possibility of a corporate media blackout.

    Reply
    1. anon in so cal

      One has to wonder how and why Russia and/or Putin allow US ambassador Huntsman inside the country.

      “US Ambassador to Russia Jon Huntsman calls US aircraft carrier deployed to Mediterranean “100,000 tons of diplomacy” aimed at “demonstrating” to Russia it must “cease destabilizing activities around the world “. Lots of luck with that “diplomacy”, Jon. ”

      https://twitter.com/GarethPorter/status/1122892055578128384

      Reply

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