Thomas Piketty on equality through taxation

June 4, 2020

Thomas Piketty’s Capital and Ideology is the most comprehensive study I know about the causes of economic inequality.  He gathered a vast amount of data and made sense of it.  To read my comments on his research, click on this, this, this and this.

In the last chapter, he outlined proposals for a “participatory socialism” to make society less unequal.  He saw three main ways to do this: (1) taxation, (2) reform of corporate governance and (3) educational reform.  This post will be about taxation.  I will take up the other two later.

His plan is based on steeply graduated income taxes, inheritance taxes and new taxes on wealth.  These were to be used to finance a wealth endowment of 60 percent of average wealth to every citizen at age 25 and a guaranteed income of 60 percent of average income.

He does not make absolute equality his goal, but he would allow a much narrower band of inequality than exists today.

I’ve long been indignant at the growing extremes of inequality in my country and the abuses of power of the very rich.  Reading Piketty forces me to think about just how much equality I want and how much I would give up to attain it.

Piketty wrote in earlier chapters of Capital and Ideology about how higher taxes have often been the key to greater national power and wealth.

One of history’s mysteries is how it was that European nations could defeat great Asian empires, such as the Ottoman Empire, the Mughal Empire in India or the Manchu (Qing) Dynasty in China, when, prior to the Industrial Revolution, they were equal in wealth and technology to the European nations.  It was the Chinese, for example, who invented gunpowder.

Piketty’s answer is that the Europeans gained an advantage through a higher level of taxation.  Tax revenue across Europe and Asia prior to the modern era was roughly 1 to 2 percent of national income.  This gave a king or emperor enough revenue to reign, but not to exercise tight control over his realm.

This changed in Europe, during the wars of the 16th and 17th centuries, when military competition forced kings to increase their revenues to 8 to 10 percent of national income.

Click to enlarge

The greater revenue enabled kings to become absolute monarchs, exercising almost as much control over their citizens as a 20th century president or prime minister.  It also enabled them to put armies in the field that the Turks, Persians, Indians, Chinese and Japanese could not match.

Western governments’ revenue was bumped up again in the early 20th century, to 30 to 50 percent of national income.  This made possible the total wars of the early 20th century.  But it also gave governments enough money to pay for universal public education, old age pensions, public health and the other services of the welfare state.

This was only tolerable because the Western nations had grown rich enough that their people could give up a big fraction of their incomes to government and still enjoy a high material standard of living.

It would not have been possible in, say, France in the time of Louis XIV.  The taxes he levied to finance his wars reduced the peasantry to misery and, in some cases, starvation (because the nobles enjoyed most of the national income, but paid no taxes).

The same conditions may exist in poor African countries today.  But in rich Western countries, it is technologically and economically feasible to raise taxes revenues to 50 percent of national income, which is necessary for PIketty’s program.

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The riots: Some complicated truths

June 2, 2020

The following is from the Moon of Alabama blog.

It’s true that people engaged in peaceful protests.

It’s true that people engaged in lawless looting.

It’s true that provocateurs have committed acts of vandalism and sometimes carry umbrellas.

It’s true that Antifa exists and that they don’t advocate gently placing flowers in the gaping hole of a long gun.  [snip]

It’s true looters come in all shades and sizes.

It’s true some desperate people are taking things they need.

It’s true some opportunistic people are taking things they want.

It’s true opportunistic government thugs suddenly shifted the Covid-19 rationale for using contract tracing to a catch-them-rioters rationale for using contract tracing.

It’s true the policy infrastructure for enacting martial law has been a long-term, bi-partisan project.

It’s true that now is the time to realize what’s at stake, but instead of acting collectively for our mutual benefit, the cognitive challenge of accepting that all these things can be true at the same time will keep us tied to one of these things to the exclusion of all the others.

Source: Moon of Alabama

Here are my additions to the list of complicated truths.

Policing is necessary.  Policing is stressful.  Some police officers risk their lives in order to avoid killing.  Some police killings are justified and unavoidable.  Not all victims of unjustified killings are black.  Not all unjustified killings are done by whites.

American police have become increasingly militarized during the past few decades.  This has been promoted by the federal government under both Democratic and Republican administrations.

If you are a middle-class white person living in a suburb, chances are the police will serve and protect you.  If you are a poor black person living in a big city, chances are the police will harass you on a daily basis.

There is great variation in the number of police killings in big American cities.  Professional standards and training in good practice is correlated with fewer killings.  Lack of personal accountability is correlated with more killings.  Diversity training, as it is now, makes little difference.

During the current riots, it was safer to be a vandal or looter than it was to be a peaceful protester or journalist.

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The mysterious Minneapolis ‘man in black’

May 31, 2020

The man in black

I wondered whether this black-clad man was a police provocateur or a radical leftist provocateur.  There is a third possibility that I overlooked—that he is a right-wing provocateur.  [Added 6/4/2020]

A mysterious black-clad man, clad in black, with a respirator or gas mask, was walking around breaking windows in Minneapolis during the protest and riot there.

Some speculate that he was a police infiltrator, which, based on the history of protest, is a natural thing to think.

But by his garb, I think he is probably a member of the “black bloc,” a group of revolutionaries who been around at least since the 1999 riots protesting the World Trade Organization meeting in Seattle.

The “black bloc” is noted for their distinctive black gear.  They join in protests and try to escalate the violence, with the idea of forcing neutrals to take sides between revolution and reaction.

While the “black bloc” movement is international, there is an overlapping American movement called “Antifa” for anti-fascist.  They are street fighters, most of them white, who go after neo-Nazis, white nationalists and sometimes Trump supporters.

Like the neo-Nazis and white nationalists, the aim of the black bloc and Antifa is to eliminate the middle ground.  They seek to bring moderates into the violence and force them to choose between revolution and fascism.

Very often, in a protest, the first ones to initiate violence are police infiltrators and informants. Initial reports identified the man in black as a Minneapolis police officer.  But the Minneapolis police say the alleged culprit was on duty elsewhere at the time the video was shot.

USA Today reported that the man in black in the video was not the only one.

MINNEAPOLIS — Drifting out of the shadows in small groups, dressed in black, carrying shields and wearing knee pads, they head toward the front lines of the protest.  Helmets and gas masks protect and obscure their faces, and they carry bottles of milk to counteract tear gas and pepper spray.

Most of them appear to be white.  They carry no signs and don’t want to speak to reporters. Trailed by designated “medics” with red crosses taped to their clothes, these groups head straight for the front lines of the conflict.

Night after night in this ravaged city, these small groups do battle with police and the National Guard, kicking away tear gas canisters and throwing back foam-rubber projects fired at them.  

Around them, fires break out. Windows are smashed. Parked cars destroyed.

USA TODAY reporters have witnessed the groups on multiple nights, in multiple locations.  Sometimes they threaten those journalists who photograph them destroying property.

Source: USA Today

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Knight Rider theme for eight cellos, one cellist

May 30, 2020

This is a version of the Knight Rider theme song by London-based cellist Samara Ginsberg

Hat tip to Jason Kottke.

Bacteria, viruses and the human mind

May 29, 2020

The following is a quote that I read in the June issue of Harper’s magazine.  It is from the forthcoming book, The Unreality of Memory by Elisa Gilbert.

Viruses and bacteria hijack our minds and make us act weirdly.

For example, Toxoplasma gondii, a parasite found in cat feces, makes mice less afraid of cats; this is an evolutionary strategy, making it easier for the parasite to get from the mouse to the cat.

When it spreads to humans, it may increase their risk-taking.  One study found that people with toxoplasmosis, the infection caused by the parasite, “are more likely to major in business.”  An NBC News story suggested optimistically that the parasite “may give people the courage they need to become entrepreneurs.”

That would be an extreme case of a microscopic parasite altering the course of our lives.  But viruses and bacteria influence our everyday behavior as well.

A 2010 study, for example, found that people become more sociable in the forty-eight hours after exposure to the flu virus, a period in which one is contagious but asymptomatic.  The infected hosts, researchers found, were significantly more likely to head out to bars and parties.

I know of no evidence that coronavirus infection influences human behavior.  None whatsoever.  I am not hinting or implying that it does.

But, as a thought experiment, suppose it did.  How would the virus influence its hosts’ feelings, thoughts and behavior?  What changes would it induce to help itself survive, reproduce and spread?

Piketty’s stats and the problem with class conflict

May 28, 2020

The late Saul Alinsky used to say that politics is a struggle among the haves, the have-nots and the have-a-littles.  He said the outcome usually depends on which side the have-a-littles choose.

Reading Thomas Piketty’s big new book, Capital and Ideology,  reminded me I’d forgotten this important truth.

The USA and much of the rest of the world is governed in the interests of a political and economic elite and not a majority of the public.  I want a politics that represents the interests of the majority of the population.

But there are objective reasons why this is harder than it seems.  If you look at economic class in terms of a top 10 percent in income or wealth, a middle 40 percent and a bottom 50 percent, you see that there is a difference between the middle class (the have-a-littles) and the lower class (the have-nots)

I had come to think that the big problem of American politics is that so much of it is a conflict of the top 0.1 percent of income earners with the next 9.9 percent, leaving the rest of us behind.

The top 0.1 percent, in this interpretation, are the millionaires and billionaires that Bernie Sanders denounces.  The next 9.9 percent, very roughly speaking, are highly paid professionals, the “professional managerial class,” who tend to be more socially liberal, but whose economic interests are different from the majority.

Matthew Stewart wrote a good article about this in The Atlantic a couple of years ago.  The conclusion is that we the American majority have to stop thinking we have to choose between the plutocrats and the PMC and unite in our own interests.

That would make sense if economic inequality were the same as it was in Britain, France or Sweden around the turn of the previous century, as reflected in the chart above (taken from Piketty’s book)

But it’s not.  There is now a big middle class, in between the top 10 percent and the bottom 50 percent, as shown in the chart below (taken from an article co-authored by Piketty).

Click to enlarge.

In western Europe and the USA, the middle 40 percent aren’t doing too badly.  They’re open to the politics of a Margaret Thatcher or a Ronald Reagan.

Instead of claiming a larger share from the haves, they’re told they need to worry about the claims of the have-nots.  Even in parts of the world where economic inequality is greater than in Europe or the USA, there is a middle class with something to lose.

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Thomas Piketty and the politics of inequality

May 27, 2020

Reasonable people differ on the amount of economic inequality that is tolerable.  But I think almost anyone would set some upper limit.

In today’s USA, a single individual, Bill Gates, is wealthy enough to buy the city of Boston for the assessed value of its property.  The size of Jeff Bezos’ wealth is almost unimaginable.

Meanwhile four in 10 Americans lack enough cash on hand to meet an unexpected $400 expense without going into debt.

Why is this acceptable?  I’ll describe the ideas of the great French economist Thomas Piketty in his new book, Capital and Ideology.  Then I’ll discuss some of the things Piketty left out.

Piketty said the fall of Communism in the Soviet bloc and China discredited egalitarianism and validated the market economy.  Leaders of Western capitalist countries felt they were in a position to tell the working class that there is no alternative.

Even before that, the economic stagnation of the late 1970s discredited the welfare state.  The USA had both high unemployment and high inflation, which was considered theoretically impossible.  One diagnosis was that the welfare state had reached its limit, that it was in a state of deadlock because of the inability to satisfy all claimants.  This had been predicted by Friedrich Hayek in The Road to Serfdom.  He said that only a fascist dictator would be able to break the deadlock.

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Ronald Reagan and Margaret Thatcher presented a different answer.  Dial back to welfare state, cut upper-bracket tax rates and allow rich people and corporations to accumulate wealth.  They will invest that wealth and the workings of the free market will assure that this works for the benefit of all.

As Piketty pointed out, none of this worked out as promised.  Cuts in marginal tax rates did not result in job creation, economic growth or anything else that was promised.

So why do Reaganism and Thatcherism still prevail?

One reason is that the historic left-wing parties abandoned the working class.  The Democrats in the USA, the Labour Party in Britain and the French socialists came to represent an educated elite rather than laborers and wage-earners.

Politics in these countries has come to be a conflict of elites, between what Piketty called the Merchant Right and the Brahmin Left.  It is like the conflict between the nobility and the clergy in the European Middle Ages and the conflict between landowners and business owners in 19th century Britain.

In the USA, many progressives see today’s politics as a conflict between the plutocracy, whose power is based on wealth, and the professional-managerial class, whose power is based on their academic credentials and their positions in organizations.  Wage-earners are not represented.  Piketty showed that the same conflict exists in other countries.

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Piketty on the sacredness of property rights

May 27, 2020

When English settlers first dealt with American Indians, there was a fundamental misunderstanding of the nature of property rights.

The Indians had no idea of buying the exclusive right to use a tract of land, keep everybody else off it and sell the land to someone else.

Thomas Piketty pointed out in his new book, Capital and Ideology, that, in fact, this was a fairly new idea even for the English and other Europeans.

The idea of absolute property rights did not exist in the European middle ages. Someone might have a hereditary right to grow crops on a certain tract of land, a second person the right to 10 percent of all crops grown on the land, a third person the right to grind grain produced on the land for a fixed fee, and so on.

Furthermore the right to land use was not so much bought and sold as inherited.

Medieval France was what Piketty called a “ternary” society—a society in which political power and property ownership were divided between a hereditary noble class who “fought for all” and a priestly class who “prayed for all,” leaving very little for a lower class who “worked for all.”

The “ternary” system existed in the Islamic world, India and many other parts of the world, and it casts its shadow over the present world.  Saudi Arabia and the Gulf states (mostly Sunni) are ruled by hereditary monarchs while Iran (mostly Shiite) is ruled by clerics.  In India, the descendants of Brahmins (priests) and Kshatriyas (warriors) are richer and more influential than the Vaishyas (farmers, craftsmen and traders) and Shudras (laborers).

In Europe, uniquely, priests were celibate.  They could not found dynasties.  This mean that the Roman Catholic institutions had to be corporations.  They had to have a continuing existence that was independent of who was in charge.  It’s not accidental that business corporations originated in Europe.

The French Revolution overthrew hereditary property rights and established what Piketty called “proprietarianism” or “the ownership society”—the idea that property rights were sacred, provided that the property was acquired through legitimate purchase.

The accepted story in France is that the revolutionaries divided up the aristocrats’ estates among the peasants and turned France into a nation of small landowners.  In fact, according to Piketty, the revolutionaries made arbitrary distinctions between land that was owned through hereditary privilege and land acquired through voluntary contract, and, in many areas,  property ownership remained almost as concentrated as before.

Piketty wrote that the revolution was one of history’s “switch points.”  He thinks it could have been more radically egalitarian than it was.

In fact, concentration of wealth in France at the beginning of the 20th century was even greater than at the time of the French Revolution.

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Piketty’s new book on economic inequality

May 26, 2020

The French economist Thomas Piketty made a big splash with Capital in the 21st Century (published 2013, translated into English 2014).  He showed why, all other things being equal, the rich will get richer and the rest of us will get less.

In different countries in different historical periods, the rate of return on income-producing property exceeded the rate of economic growth.  This was true whether the income-producing property was real estate, government bonds, corporate stocks or something else.

What this meant was that, in the absence of revolution, war or something else that wiped out the value of their assets, the rich would get richer and everybody else would be left behind.

Piketty’s new book, CAPITAL AND IDEOLOGY  (published 2019, translated 2020), is more ambitious and complicated.  He thinks it is an even better book that its predecessor and I agree.  It is a great work.

He looked at all the forms that economic inequality has taken in the past few centuries and all the different ways that inequality has been rationalized.  While his earlier book was based mainly on data from France, Great Britain and the United States, the new book tries to be global in scope.

He said it is important to understand not only the forms of economic inequality, but the reasons why people accept them.

His book covers several kinds of “inequality regimes”:

  • “Ternary” societies in which most wealth is controlled by hereditary kings and aristocrats and an established church or religious institution.
  • “Ownership” societies in which property ownership is regarded as a sacred right, superseding everything else.
  • Slave and colonial societies.
  • “Social democratic” societies, which limit the rights of property owners.
  • The hyper-capitalism of today, which is a backlash against social democracy and Communism.

The degree of inequality in any nation or society is not the result of impersonal economic law, he wrote; it is the result of choices that could have been different.  History does not consist of class struggles; it consists of a struggle of ideas and a struggle for justice.

To understand inequality, he wrote, it is necessary to understand the reasons for choices at various “switch points” of history—the French Revolution, the British constitutional crisis of 1911, privatization in Russia after the fall of Communism.

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The lives that don’t matter

May 24, 2020

In our time, political speech and writing are largely the defense of the indefensible.  (George Orwell, 1946)

The War Nerd: How Many Dead Yemeni Nobodies Does It Take to Equal One Washington Post Contributor?

Book note: Complicity by Iain Banks

May 22, 2020

The late Iain M. Banks (1954-2013) was known for a series of science fiction novels set against the background of a future society called The Culture, in which the mass of humanity lived in artificial habitats moving through interstellar space, watched over by artificial intelligences that protected and provided for them.

Members of The Culture lived indefinitely in comfort and safety and were enabled to engage in any possible activity or indulge in any possible pleasure that did not threaten the whole.

In a world where anything is possible, does anything matter?  What could members of The Culture do that would give their lives meaning or provide a plot for a readable novel?

In Banks’ novels, they engage in diplomacy, espionage and war withe the goal of bringing other sentient beings, human and non-human, into The Culture.

He wrote novels on this theme, which can be enjoyed as action-adventure stories or as portraits of a utopia (or is it a dystopia).  I read a few of them.  I thought the best was the first, Consider Phlebas (1987).  It was enjoyable both as an action-adventure yarn and also as an SF utopia—or is it a dystopia?

He also wrote non-SF novels as plain Iain Banks.  I never got around to reading them until recently, when I picked up a copy of his crime novel Complicity (1993).

The viewpoint character in Complicity is a Scottish newspaper writer named Cameron Colby, who writes a series of exposes of rich and powerful people, based on tips from an anonymous source.

They include an arms merchant, a pornographer, a judge, a corrupt newspaper publisher and an businessman whose negligence killed a thousand people in an industrial accident overseas.

Colby had written that the world would be better off without such people, and a serial killer apparently took him at his word.

The evildoers in high places are killed off one by one in appropriate ways.  The negligent businessman is killed in an explosion.  The corrupt publisher is literally “spiked” [1].  The pornographer is killed in a sexually degrading way.  And so on.

The murders are described in the second person [2] in such an involving way and in such detail that they almost like seem like manuals of instruction.  I almost feel like these chapters should come with a warning that these parts of the novel are for entertainment purposes only and the reader should not try this at home.

Colby is a weak character, addicted to tobacco, alcohol, cocaine, computer games and kinky sex with a married woman. As the murders proceed, he himself becomes a suspect.

He tries to trap the killer and instead himself becomes the killer’s prisoner.  Instead of killing him, the killer tries to justify himself.

You agree that Nazi criminals tried at Nuremberg deserved to die? the killer asks.  You agree these criminals have done more harm than any individual murderer?  You agree they are never going to be brought to justice by legal means, least of all by your journalism?

Well, then?  What have I done wrong?

The killer spares Colby and gives him a chance to turn him in before he makes his getaway.

Complicity is gruesome and sordid.  I don’t recommend it to fans of Agatha Christie or Dorothy Sayers.  But it is compelling and I kept reading to find out what happened next.

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As the coronavirus lockdown ends (for now) …

May 21, 2020

Click to enlarge

The chart above, via Kevin Drum, shows that the United States has gotten off fairly lightly during the coronavirus pandemic, compared to other Western countries.

The USA has the most total deaths because it has the largest population, but the death rate is the key measure.  The USA is a big country.  Some parts of it are relatively safe and some aren’t, but overall things aren’t as bad as they might be—at least not yet.

 

Click to enlarge

The chart above, also by Kevin Drum, shows that the number of new deaths from the coronavirus is tapering off in Western countries.

As the lockdowns end, the death rates will probably rise again—hopefully not to their previous peak.  If they don’t rise, a lot of what epidemiologists have been telling us about contagion is wrong.  I expect we’ll learn the epidemiologists were right.

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What’s the world coming to? A rant

May 20, 2020

Things are getting worse faster.  Some French movie director once said: Have the courage to believe what you know.  I keep hoping that what I know—what I think I know—won’t prove to be the case.

U.S. domestic policy is steered by a selfish financial oligarchy, which we can call the neoliberals.

U.S. foreign policy is steered by a murderous national security establishment, which we can call the neoconservatives.

Civilization faces two threats, nuclear war and global climate change.

Neoliberals and neoconservatives are making both worse.  Because of them, the U.S. has restarted the nuclear arms race and is stepping up fossil fuel production.

They also are soaking up resources needed to provide basic public services, maintain infrastructure and provide a social safety net.  Manufacturing capability and governmental capability are being hollowed out because of failures to invest.

The neoliberal and neoconservative elite maintain their power by corrupting the democratic process.  One way is by creating a dependence on big donors to conduct political campaigns.  Another is through gerrymandering, voter registration purges, creating artificial difficulties in voting and using hackable electronic voting machines.

This year the USA faces a near-perfect storm— (1) a pandemic that nobody really understands, (2) unemployment exceeding Great Depression levels and (3) the likelihood of more floods, storms, fires and other weather- and climate-related disasters.

The powers that be give us only two choices – (1) shut everything down and deprive millions of people of their livelihoods or (2) open everything up knowing that hundreds of thousands of people may die.

It’s possible that the coronavirus pandemic will ease off sooner than predicted, but it won’t be the last pandemic and may not be the worst.

We’re headed toward an election in which, as in 1876, there may be a dispute as to who really won.  I don’t expect a new civil war, but then the historic Civil War came as a surprise.

The Bernie Sanders campaign showed the near-impossibility of bringing about meaningful political change within an existing political party.

The Greens, Libertarians and other small parties have virtually no chance of coming to power, and probably wouldn’t know what to do with power if they got it.

Maybe a national reform movement can be created through grass-roots organizing, but this could take decades—barring a societal collapse, which is more likely to bring to power demagogues and dictators than new FDRs.

I’ve pushed back against those who say Donald Trump is a new Hitler.  It is not just that he doesn’t have the political acumen or sense of purpose of a Hitler.  The Trump-as-Hitler meme ignores the degree to which the USA of 2016 had already adopted Nazi-like practices—unprovoked military aggression, contempt for international law, assassinations, torture, detention without trial.

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Is this our situation?

May 18, 2020

My old friend in south Texas e-mailed this.  I added an illustration.

My smart friends: Is THIS our situation?

1.) Nobody REALLY understands the coronavirus, although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

2.) Nobody REALLY understands the coming economic effects of the pandemic, although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

3.) Nobody REALLY understands accelerating climate change, although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

4.) Nobody REALLY understands the murky 2020 US presidential campaign, although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

It’s dismaying to think I could go on here.

5.) Nobody REALLY understands the current confusing international situation, although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

6.) Nobody REALLY understands what’s up with American education (student debt, testing mania, online education, privatizers, shut schools) although everyone agrees that things are going to be bad, and some quite knowledgeable people (as they seem to be) argue that things are going to be MUCH worse than official sources claim.

Surely I MUST be missing some blue sky somewhere, right?  Let me know.

The arrogance of power

May 16, 2020

Joe Biden and the limits of NYRB liberalism

May 13, 2020

I get e-mails from a long-time friend in south Texas in which he shares his thoughts about politics and the passing scene.  With his permission, here is one of them.  I’ve added a couple of illustrations and a link.

The New York Review of Books was launched in 1963, during a newspaper strike (remember unions?) that temporarily shut down the anodyne New York Times Book Review, a feature of the Sunday Times.  

In high school, I read the electrifying first issue of the NYRB in my hometown public library.  It featured in-your-face, hyper-literate take-no-prisoners review-essays two or three thousand words long, written by the best writers in New York.  

One early review of a biography of Patton used the word “fuckings-up.”  A letter to the editor in the next issue pointed out that the correct plural is “fuck-ups.”  I was hooked.

It’s now more than half a century later, and I’m still reading the NYRB—after a lot of twists and turns, on their part, and on mine.

Their NYRB editor before this one, Ian Buruma—who got bumped after a couple of issues for printing something by some Canadian guy with #MeToo trouble—promised “a wider range” of authors.  I took this to mean: more conservative authors, more often—and I think I was right.

But the word “conservative” here needs a gloss.  NYRB authors are never hard-shell conservatives—like some of the reviewers (e.g., Edward Luttwak) who turn up occasionally in the Times Literary Supplement to give readers a bracing glimpse of how things look from the other side.

No, NYRB essayists are conservative only in the sense of wanting to get back (in the WayBack Machine?) to where we were on the Monday afternoon before Election Day 2016.  Let me explain:

The current issue, for instance, features an article on “rebranding” the Democratic Party by one Joseph O’Neill, a novelist who teaches at Bard College, an upstate-New-York haven for rich hippie-kids. (Bard art majors are provided with their own studios.)

O’Neill’s thesis is that the Republicans and Democrats are like Coke and Pepsi, or Bud Lite and Miller Lite–which makes sense to me.  But O’Neill DOESN’T MEAN, as I would, that they’re two essentially identical products.  (Have you actually looked at the stuff Joe Biden has supported—and opposed—during his long career?)

No, O’Neill means instead that Pepsi can gain market share only by getting Coke drinkers to switch, and vice versa.  So, according to O’Neill, what the Democrats need to do is REBRAND themselves (he quotes legendary Mad Man David Ogilvy from the 50s, a candid, entertaining writer) so as to pull over low-info, “ideologically squishy” swing voters. It’s all a question of PR.

O’Neill goes into the tall grass here, talking in considerable detail about how the Democrats need to devalue the GOP “brand,” with its connotations of strength and patriotism, rather than just attacking Trump.  

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The irrelevance of old-time Keynesianism

May 12, 2020

John Maynard Keynes was one of the great economists of the 20th century,  Maybe he was the greatest.  He is the father of the idea of economic stimulus.

His insight was that, in a capitalist free-enterprise economy, economic growth depends on a growing mass consumer market, which depends on masses of the public having money in their pockets.

So when the economy stalls and people are out of work, the best way to stimulate the economy is to give the people more purchasing power.

J.M. Keynes

Once they started buying things, businesses would hire more people, and there would be a multiplier effect that spread through the entire economy.

The important thing, according to Keynes, was to get people back to work and earning money—no matter how.  He famously said that hiring workers to dig holes and fill them up again would be better than nothing.

In the pandemic lockdown, governments are doing exactly the opposite of what Keynes recommended.  The government is actively trying to prevent millions of Americans from going to work.  By staying at home, they help limit the spread of the virus.

Congress recently voted an economic bailout that was called a “stimulus” bill.   But economic stimulus was not, and is not, needed.  What is needed is an economic sedative, combined with an economic life support system.

We do not need employment for the sake of employment.  We need to have virtually necessary jobs get done, less necessary jobs put on hold and useless jobs not to be done at all.  We Americans as a nation have not yet figured out how to do this.

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Where are you most at risk of the virus?

May 10, 2020

The Risks – Know Them – Avoid Them by Erin S. Bromage, associate professor of biology at the University of Massachusetts Dartmouth.  Hat tip to Naked Capitalism.

COVID-19 Superspreader Events in 28 Countries: Critical Patterns and Lessons by Jonathan Kay for Quillette.

Is the U.S. capable of fighting the virus?

May 10, 2020

The question nobody seems to be asking is whether the United States has the operational capability for “test, track, and isolate” regardless of the party in power.  I don’t see how an automatic “yes” answer is possible.

What we have instead is a series of natural experiments, with the states as “laboratories of democracy” as it were, as we would expect in a Federal system.

And that’s before we get to parties.  If Trump had ordered Cuomo to shut down New York two weeks earlier, what would the reaction have been?  If Obama (or whoever) had ordered Florida to shut down before Spring Break, what would the reaction have been?

I started calling the United States a “failed state” more as a polemic forcing device than a serious diagnosis, but the more I watch how “our democracy” is meeting the #COVID19 challenge, the more I think the term is appropriate.  

Fortunately, under the leadership of Joe Biden…. Oh, what’s the use?

Source: Lambert Strether for Naked Capitalism

LINKS

How Covid Will Play Out in America by Ian Welsh [Added 5/12/2020]

We Knew the Coronavirus Was Coming, Yet We Failed Five Critical Tests by Elizabeth Rosenthal for Kaiser Health News.  [Added 5/12/2020]

The economic consequences of the lockdown (3)

May 9, 2020

The best thing I’ve read so far on this topic is an interview of Thomas Ferguson by Paul Jay.

They’re both interesting characters. Ferguson is a professor emeritus of political scientist and the best U.S. expert on money in politics.

Paul Jay

Paul Jay, along with Sharmini Perez, is a co-founder of The Real News Network, an alternative web-based news site.  Last summer they left or were ejected from the organization for reasons unknown to the public.  Jay has started a new podcast called theAnalysis.news.

In the interview, Ferguson made the point that, in the recent bailout, Congress chose to bail out big businesses with the expectation that this would enable them to hire laid-off and idled workers.

Instead, he said, most of the CEOs decided to keep the money and let working people fend for themselves.  Ferguson said it would have been far better to provide individual relief.  They would have spent money and helped to revive the economy when the lockdown ended.

Congress also should have provided aid to cash-strapped state, county and municipal governments, he said.  One economic effect of the lockdown has been to choke off tax revenue they need to provide essential services.  The federal government, unlike the states, has the power to create money and isn’t limited, as many states are, by constitutions requiring balanced budgets.

LINKS

Big Business Takes Cash As Workers Laid Off, States and Cities Go Bust, an interview of Thomas Ferguson by Paul Jay for theAnalysis.news.  A bit long, but comprehensive and highly recommended.

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The economic consequences of the lockdown (2)

May 8, 2020

Click to enlarge. Via Ian Welsh

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Click to enlarge. Via Calculated Risk

Looking at these numbers, I can understand why some U.S. governors are eager to end the lockdown and get people back to work.  But the economic system isn’t something you can turn on and off like an appliance.  The impact of business losses, wage losses and job losses won’t be wiped out by a re-opening,

There weren’t any good choices in dealing with the coronavirus pandemic, even if you decide to consider nothing except dollars and cents.  Sick, dying and scared people are bad for business, whether you have a government-ordered lockdown or not.

Also, the U.S. economy was fragile to begin with.  We U.S. citizens never fully recovered from the previous recession.  We were due for another one anyway.

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Dr. Tedros, the WHO, Africa and Chinese power

May 8, 2020

Nikolai Vladivostok is the blog handle of an Australian expatriate who has worked extensively in the Horn of  Africa.  He made four posts that contain good information about China, and its influence on the World Health Organization and Dr. Tedros Adhanom Ghebreyesus, the director of WHO, which I haven’t come across elsewhere.

Here are links to the four posts—all well worth reading.

Dr. Tedros

Trust WHO?

Who the hell is Tedros?

How did China wrest control of the WHO?

How does Tedros manipulate the WHO?

N.V. described how the Chinese have extended their economic influence into Africa and used their leverage on African governments to influence United Nations agencies, including the World Health Organization, and how that paid off during the coronavirus pandemic.

I’ve been skeptical of U.S. Secretary of State Mike Pompeo’s attempt to blame China for the spread of the virus.  I see it as a cynical attempt to divert attention from U.S. failures and to weaken China politically.

But propaganda—systemic attempts to influence public opinion—is not necessarily false.  There is circumstantial evidence that the virus could have originated in a Chinese research lab (not a bio-warfare lab) and escaped into the world through negligence.  I don’t claim to know the whole story, but there certainly is something to investigate.

The Chinese government has used the coronavirus pandemic to increase its geo-political influence.  It presents itself to the world as a kindly helper—the opposite of the U.S. government, whose diplomacy is based on threats and naked self-interest.

As the old saying goes, you can catch more flies with honey than you can with vinegar.  But if you are a fly, it doesn’t matter how you are caught.

The economic consequences of the lockdown

May 7, 2020

Adam Tooze is one of the world’s outstanding economic historians.  He is the author of The Deluge: The Great War, America and the Remaking of Global Order, 1916-1931; The Wages of Destruction: the Making and Breaking of the Nazi Economyand Crashed: How a Decade of Financial Crises Changed the World.

In the interview above, he talks about the impact of the coronavirus on the global economy.  The actual interview begins about four minutes in.

He points out that ending the lockdowns won’t automatically restart the economy.  Ford and General Motors closed their plants without any lockdown order.

Labor unions that represented their workers protested working under unsafe conditions.  Suppliers were unable to provide necessary components on schedule.  And the automobile sales collapsed.  So what was the point of staying open?

Tooze also says that the talk of being in a war economy is wrong.  In a war economy, the objective is to mobilize everyone to produce war materials.  In a pandemic economy, the objective is to limit production to what is absolutely necessary. People should be paid to stay home to help limit the spread of the virus.

He doesn’t predict a second Great Depression, but neither does he rule it out.

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Social class in a time of pandemic

May 6, 2020

The coronavirus pandemic has shown us Americans how we are divided by economic class.  Robert Reich, the well-known labor economist, outlined the four main ones.

Robert Reich

The Remotes: These are professional, managerial, and technical workers – an estimated 35 percent of the workforce – who are putting in long hours at their laptops, Zooming into conferences, scanning electronic documents, and collecting about the same pay as before the crisis.

This group is doing fine.  Their main problems are boredom and not being able to deal with their normal activities.  Yet, interestingly, they get the bulk of the coverage in my local newspapers and in on-line newspapers I follow.

The Essentials: They’re about 30 percent of workers, including nurses, homecare and childcare workers, farm workers, food processors, truck drivers, warehouse and transit workers, drugstore employees, sanitation workers, police officers, firefighters, and the military.

Some of them are well-paid for the important work they do, and also are given what protection is available.  But many aren’t.  In a pandemic, janitors and cleaners are key to stopping the spread of infection.  They ought to get hazard pay and the equivalent of a military medal for their work.  Yet we mainly hear of the essential workers when they strike for better pay or better protection.

The Unpaid: They’re an even larger group than the unemployed – whose ranks could soon reach 25 percent, the same as in the Great Depression. Some of the unpaid are furloughed or have used up their paid leave. So far in this crisis, 43 percent of adults report they or someone in their household has lost jobs or pay, according to the Pew Research Center.

If the United States as a nation requires certain people to stay home in order to protect the rest of us, then we as a nation ought give them the means to stay home and still pay their bills.  If not, they can’t be blamed for defying the lockdowns.  We the public only hear of them when they engage in protest demonstrations.

The Forgotten: This group includes everyone for whom social distancing is nearly impossible because they’re packed tightly into places most Americans don’t see: prisons, jails for undocumented immigrants, camps for migrant farmworkers, Native American reservations, homeless shelters, and nursing homes.

Everybody, including movie stars and prime ministers, is vulnerable to the virus.  But people in jails, nursing homes, meat-packing plants and the like are the ones who are going to die in largest numbers.  When pundits or politicians say a certain number of deaths is acceptable, these are the people who are being written off.

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Countries that are beating the coronavirus

May 5, 2020

Click to enlarge

Countries Beating COVID-19 on Endcoronavirus.org.

Tale of Two Cities Redux: Hong Kong to Ease Its COVID-19 Restrictions, While New York City Situation Remains Dire by Jeri-Lynn Scofield for Naked Capitalism.