How would reparations actually work?

Image via Huffington Post

REPARATION: the making of amends for a wrong one has done, by paying money to or otherwise helping those who have been wronged (Dictionary.com)

The question of reparations to African-Americans is on the national agenda.  This post is not an argument for or against.  It is an examination of questions as to how reparations might work.  Specifically, these questions—

1. What are reparations?
2. What would African-Americans be compensated for?
3. Who would receive the reparations?
4. Who would pay the reparations?
5. How much would the reparations be and what form would they take?

Reparations are payments by a government, corporation or other institutions for harm done by a morally or legally wrong action.  They resemble the legal principle of legal liability to compensate victims for harm done though negligence or wrongdoing, such as Ford Motor Co. compensating victims of the exploding Pinto.  The difference is that reparations are accompanied by an apology and an admission of wrongdoing.

Reparations are compensations for injustice, but they do not, in and of themselves, remove the causes of injustice.  They are not intended to be an anti-poverty program.

Reparations for slavery would not, in principle, be a payment by white American individuals to black American individuals.  

They would be payments by a continuing entity called the United States, or one of its subdivisions, based on what that entity did to protect and promote slavery.  

All citizens, whatever their ancestry, place of origin or time of arrival, are part of that entity and share responsibility for what it did.

The Supreme Court’s interpretation of the Constitution and civil rights laws forbid making legal distinctions based solely on race.  So even if you believe that African-Americans as a whole deserve compensation, you can only pass Constitutional muster by showing a line of cause and effect from specific wrongs to specific individuals. 

One theory of reparations is that they should go to descendants of American slaves because the trauma of slavery is not limited to just one generation.   Slavery is a main reason the descendants of slaves are where they are in American society.

To make that work, you would have to have some method – even a rough one – of identifying those descendants.

Next you would have to determine what form the reparations would take.  If it is tp be a cash payment, you would have to have some way of calculating the amount.  

One proposal is to take the estimated value of the product of U.S. slave labor and divide it by the number of American families who are descendants of enslaved people.  Another is to give each such family the estimated present-day cash value of 40 acres and a mule.

Alternative proposals are for reparations in the form of college scholarships, small-business loans or home financing.

Slavery is not the only wrong for which reparations are called.  Redlining is another.  The U.S. government refused federal housing loans to black families except in all-black areas, in effect mandating racial segregation.

Some say reparations for redlining should take the form of housing grants or low-interest mortgage loans to present-day residents of the redlined area?  If so, should they go to all residents of these areas or just the African-American residents?

Reparations also have been paid to, among others, descendants of black victims of massacres, victims of police abuse and persons involuntarily sterilized as part of eugenics programs.  The latter two groups are not exclusively black.

A last question is whether reparations should be once and for all, or whether they should be continuing and open-ended.

Rx: assisted suicide for sick, elderly poor?

What used to be called “mercy killing” has become acceptable.  Some U.S. states allow physicians to prescribe life-ending drugs under certain circumstances.  Some nations allow physicians to administer these drugs.

Overall I think this is a good thing, but recently stories have been coming out of Canada that indicate that its MAiD (medical aid in dying) program is used as a substitute for providing welfare assistance for the poverty-stricken elderly poor.  There are only a handful of these cases on record, and the facts aren’t clearcut, but they are important as possible precedents.

Most of the world’s rich countries have a big problem of paying for medical care for their increasing elderly populations.  It is easy to imagine assisted suicide programs as solutions to that problem.

Canada’s MAiD program is one of the world’s most extensive such programs.  In 2021, it was used by 10,058 Canadians – about 3 percent of Canada’s recorded deaths that year.

When it started in 2016, the MAiD program required that applicants’ deaths be “reasonably foreseeable.”  Now it is available to anyone who has a “serious and incurable illness, disease or disability” that is irreversible with “enduring and intolerable” suffering.  Next year Canada is expected to allow MAiD for mental health reasons.  It is considering allowing euthanasia for “mature” minors – children under 18 who meet the same requirements as adults.

The safeguards are that applications have to be approved by two physicians, the process takes 90 days and, in theory, applications are not to be approved if they are for reasons of inadequate financial and social support.

But Conor Gallagher and Alexander Raikin, in articles linked below, give examples of how lack of financial and social support tipped the balance for people who were able to cope with their medical problems.

For example, a man in Medicine Hat named Les Landry had his disability benefits cut off when he reached age 65 and started receiving an old age pension, for some obscure reason.  The latter isn’t enough to cover his needs, so he is going to apply for MAiD.  “I really don’t want to die,” he said.  “I just can’t afford to live.”

He has medical problems that qualify him for MAiD.  But that’s not the reason he’s using it.

Canada offers a suicide hot line, where counselors try to offer hope to people who are thinking of committing suicide.  It also offers a hot line for people who are seeking medical assistance in dying.

One man was hospitalized because he had suicidal tendencies.  When in the hospital, he was euthanized under the MAiD program.

The misunderstood legacies of the New Deal

Franklin D. Roosevelt’s New Deal had two legacies – a welfare state and a warfare state.

Admirers of FDR focus on the legacy of the 1930s – the creation of Social Security and strengthening of the social safety net, the massive public works programs and job programs, the guarantee of the right to collective bargaining and the growth of a powerful administrative and regulatory state.

But just as important – maybe even more important – is the legacy of the 1940s. The New Deal programs mitigated the Great Depression, but they did not end it.  That only happened with the coming of World War Two and an economic boom based on war production.

The war economy made possible the re-industrialization of the United States.  Wartime investment in manufacturing capacity produced seeming miracles in production that carried over into peacetime for decades.

The New Dealers established military bases in Europe and Asia, the beginning of the empire of bases that exists to this day.  They built the Pentagon.  They created the OSS and then the CIA.  They created the atomic bomb and incorporated the A-bomb into American military strategy.

If not for FDR and the New Deal, the atomic bomb would not have come into existence when it did.

It is not just that Roosevelt personally authorized the research program that produced the atomic bomb.  Without the New Deal’s great hydroelectric projects on the Tennessee and Colombia rivers, the U.S. would not have had the industrial capacity to create a uranium bomb (at Oak Ridge, TN) and a plutonium bomb (at Hanford, WA).

Under Harry Truman, FDR’s chosen successor, the U.S. government chose to continue its wartime alliances, maintain its overseas bases, incorporate atomic weapons into the nation’s war strategy and maintain full employment through war spending.

Two important positive things about the wartime New Deal, from the progressive standpoint, are that it gave the labor union leadership a place at the table in war planning, and that it at least gave lip service to the need for civil rights and equal employment opportunity for African Americans.  Both these things were needed for full war mobilization, and also for Democratic electoral victory.

I don’t deny the idealistic and reforming impulses behind the New Deal.  They were an important part of its legacy, but they weren’t the only part.  Idealism seldom wins without being allied to someone’s interests. 

Michael Hudson on the clash of capitalisms

THE DESTINY OF CIVILIZATION: Finance Capitalism, Industrial Capitalism or Socialism by Michael Hudson (2022)

When I studied economics as a college undergraduate, I was taught there are three factors of production – land, labor and capital. And three sources of income – the rent of land, the wages of labor and the profit or interest from capital.

Land includes not just the soil itself, but all natural resources.  Labor includes all productive effort, whether of brain or brawn.

Capital, as I was taught, is the force multiplier. It includes everything that increases the productivity of land or labor – farm tractors, railroads, computers, steam engines, electric power plants, research laboratories, anything that increases or improves production.

So the landlord is a parasite, the worker is a contributor to society, but the capitalist supposedly is the driving force for progress.

Here’s the rub.  Financial capital is productive only when it is used to create physical or human capital.

But there’s no law that says financial capital has to be used productively.  In fact, most so-called “investment” consists of buying assets and collecting the income, with no value added. 

Michael Hudson, in his brilliant new book, The Destiny of Civilization, says that’s what’s happening in the U.S. specifically and also the broader world today.  Industrial capitalism, which, for all its faults, is productive, is being replaced by finance capitalism, which is parasitic.   

So much of the world’s resources go to paying off debts—government debt, business debt, mortgage debt, student debt—that too little is left over to provide for the wants and needs of ordinary people.  

So much of the world’s income goes to holders of debt that too little is left for those who do the actual work of society.

According to Hudson, the classical economists, from Adam Smith to John Maynard Keynes and including Karl Marx, thought that the chief economic problem was the rentier – the person who draws income from ownership of assets, without producing anything of value themselves.

The French economist Thomas Piketty has written massive tomes that show how the income from ownership of assets – whether land, government bonds, corporate stocks or something else – over time exceeds the rate of economic growth.

This leads to an ever-growing concentration of wealth, which ends only when some event – usually revolution, war or an economic crash – wipes out the value of the assets. This is the process that the Austrian economist Joseph Schumpeter called “creative destruction.”

In the United States and countries that follow its lead, classical economics has been replaced by the so-called neoliberal economics.  Its guiding principle is that financial capital must be preserved at all costs.

This is why, just as one example, the Obama administration bailed out the banks following the 2008 financial crisis, but did not use authority granted by Congress to help the struggling mortgage-holders.

Karl Marx was fascinated by industrial capitalism’s power to increase productivity and increase wealth.  This form of capitalism, as he saw it, laid the foundation for a future utopian worker-ruled socialist state.  Finance capitalism, in Hudson’s view, leads nowhere.

Hudson says that today civilization is today at a fork in the road: 

• one path leading to a neoliberal neo-feudalism dominated by a rentier oligarchy ruling over the indebted many.
• the alternative path is broadly mixed-economy industrial capitalism leading to socialism.

Watch out for the coming oil shock in the USA

This just in from Ian Welsh.

Recently read a smart lad who noted a few simple things:

1. Biden’s been releasing oil from the Strategic Petroleum Reserve (SPR).

2. The SPR has basically two types of oil: sour and sweet.

3. Biden has been releasing almost all sour since that’s what most US refineries need.

4. At the current rate of release, the SPR runs out of sour crude to release around March.

[snip]

Of course, when Biden stops releasing oil, either because he’s out or because he chooses to stop after the election or the holidays are over, then prices are going to spike if sanctions are still in place against Russia and/or Russia is unwilling to sell to the West.  As a bonus, the government will need to buy oil itself to stock the reserve back up.

[snip]

What this means for Americans is that there’s a very good chance of a big inflation spike after the election.  It might hold off for as long as spring, it might start a few weeks after the election.  It won’t just hit gas prices, oil is important for much more than driving cars, so it’ll rip through the entire economy.  Stock up on what you need before the election if you can.

And let this be a lesson that GDP means very little when the chips are down.  Who cares if you have Hollywood and lots of fast food stores and Google and FaceBook?  What matters is what you grow, dig up, refine and make.

Javier Blas of Bloomberg News suggested President Biden could make up the different by getting Saudi Arabia to pump more oil, but Biden’s attempts to get Middle Eastern “allies” to help out by increasing oil production have ended in failure.

LINKS

When Is the Next Oil-Driven Inflation Spike in the US?  December to March by Ian Welsh.

“We’re going to have to talk about oil again” on Quiz Chad Had a Rack Twitter thread.

The US Is Depleting Its Strategic Petroleum Petroleum Reserve Faster Than It Looks by Javier Blas for Bloomberg News.

Eastern Kentucky after region’s worst flooding

Eastern Kentucky, one of the poorest areas of the USA, has been devastated by the worst floods in the history of the region, the result of climate change and the wreckage of watersheds by strip mining.

Tarance Ray, one of the Trillbillies, wrote an article about it in The Baffler.

Will anything meaningful be done to help the flood victims?  Or prevent future floods? he asked.  Not likely, he answered; not by the present powers that be.

When several complexes of “training thunderstorms” established themselves over Eastern Kentucky on July 25, pounding the Kentucky River watershed with upwards of fourteen inches of rain over the next five days, the conditions were ripe for a catastrophically fatal outcome.

First of all, the Kentucky River watershed had been subjected to many decades of strip mining, which decreases the soil’s ability to retain water. So, when the rains came, the water was funneled into creeks—and peoples’ homes.

There’s a reason Knott County has had the highest number of flooding fatalities: its narrow valleys created virtual traps in the face of rushing water, pinning people to the ground at the exact moment they needed to be anywhere but.

Whitesburg, Kentucky

The … [town of]  Neon is the best example of what this looks like.  Just a few miles upstream from it is an old strip mine. When the water came through that area, it ran through the community like a stampede of bulls. Neon is now a wasteland of twisted metal. There are cars in houses, houses on top of houses, an entire building unmoored from its foundation. City Hall has had to set up in a muddy parking lot under a pop-up tent and a camper van.

Even further upstream from Neon, in a community called McRoberts, I saw something I’d never seen before: two cars freestanding end-to-end on a bridge rail, completely mangled and disassembled but perfectly preserved in their disassemblage, like they’d been pinned to something larger while the water stripped them apart, piece by piece. It now remains like a statue, a testament to the power of deluge.  [snip]

More than twenty-three thousand lost electricity.  Roads and bridges have collapsed, leaving entire communities inaccessible. Others, like Neon, are without running water and waste disposal, and it may be months before this can be fixed.

While President Joe Biden declared the flood a major disaster on July 29, it was another two days before the state’s first FEMA mobile registration center opened to help residents access relief; additional centers did not reach Knott, Breathitt, and other counties until August 2.

You can easily talk yourself out of criticizing this delay until you concede that, yes, OK, we do live in the wealthiest, most technologically advanced society in human history, so surely something else must be going on here.

The Inflation Reduction Act won’t

The supporters of the Inflation Reduction Act claim it will raise $739 billion to fight inflation, reduce the deficit and pay for new investments in energy, but Benjamin Studebaker writes that it will do nothing of the kind.  First, it is spending over a 10 year period, so the true amount is $73.9 billion annually.

He said this is less than 10 percent of the Department of Defense budget, 1 percent of the overall federal budget and 0.3 of a percentage point of the U.S. annual gross domestic product.  

The American Society of Civil Engineers estimates that it would cost $2.59 trillion to raise U.S. infrastructure—roads and bridges, dams and levees, water and sewerage systems and the electric power grid—to adequacy.

Daniel Hemel says the bill will do next to nothing to reduce inflation, and its provisions for fighting climate change are offset by giveaways to fossil fuel companies, but it does provide for price cuts for a handful of prescription drugs.  

“It’s a devil’s bargain, but it had to be,” he writes.

He could be right.  This could be the best that Congress is capable of, given current political reality.  If that’s true, Heaven help us.

LINKS

The Inflation Reduction Act Is Not Designed to Reduce Inflation by Benjamin Studebaker.

Inflation Reduction Act: A complete breakdown of what the bill will and won’t do by Daniel Hemel for Slate.

How Covid-impaired is the US government?

This chart shows which Biden Cabinet members have had Covid.  Lloyd Austin, the Secretary of Defense, and Xavier Becerra, the Secretary of Health and Human Services, have each had it twice.

Joe Biden, Jill Biden and Kamala Harris have each had Covid.  Donald Trump and Hillary Clinton have had it.

There is a non-trivial chance that a Covid infection will result in organ damage, including brain damage, even if you’re vaccinated.  Read Lambert Strether’s article for details.

 I don’t rule out the possibility that brain damage is already occurring at high levels of government.  This is not sarcasm (well, not completely).

LINK

Will “Living With Covid” Even Be Possible? (Because What About the Brain Fog)?  by ‘Lambert Strether’ for Naked Capitalism.  Strongly recommended.

How the mentally unfit became cannon fodder

The blogger known as Nikolai Vladivostok called my attention to a book entitled McNamara’s Folly: the Use of Low-IQ Troops in the Vietnam War by Hamilton Gregory (2015).  It’s shocking.  Here’s a review, by Arnold Isaacs for the Modern War Institute at West Point.

On the day in 1967 when Hamilton Gregory reported to a Tennessee induction center to begin his service in the U.S. Army, a sergeant presented him to another young man who was also headed to Fort Benning, Georgia, to start basic training.

The other new soldier’s name was Johnny Gupton, or so Gregory calls him. “I want you to take charge of Gupton,” the sergeant told Gregory.  Before they boarded the bus to the airport, the sergeant handed Gregory Gupton’s paperwork along with his own, to carry on the trip.

In the next hours and days, Gregory discovered why the sergeant had put Gupton in his care. Gupton could not read or write. He didn’t know his home address or what state he was from, so he could not send the pre-stamped postcard the new recruits were given at Benning to tell their families they had arrived.  He didn’t know his next of kin’s full name, didn’t know that there was a war in Vietnam, and couldn’t tie the laces on his combat boots.

How did a man so obviously unfit for service get drafted? A slipup? Far from it. Gupton was one of more than 350,000 other young men drafted during the Vietnam war under a deliberate policy requiring that nearly a third of all military recruits should be drawn from men with general aptitude test scores at the bottom or for a certain percentage below the minimum standard.

This while draft boards around the country made it shockingly easy for middle class, better educated men to avoid serving — just ask Bill Clinton or Donald Trump or Rush Limbaugh.  The policy was known as Project 100,000.  Its principal promoter was Lyndon Johnson’s defense secretary, Robert McNamara.

Hamilton Gregory — who was not drafted but enlisted voluntarily — was troubled and outraged by his experience with Johnny Gupton and subsequent encounters with other low-IQ draftees. During his Army service he raised questions about the policy with various superiors, and after his discharge, while making a career as a journalist and author, he kept on tracking down official documents and seeking out personal accounts.

The evidence he accumulated over more than 40 years makes the story he tells in McNamara’s Folly not just convincing but ironclad.  Its conclusion is ironclad too: U.S. draft policy during the Vietnam war was a moral atrocity.

Project 100,000 troops were killed or wounded in Vietnam at higher rates than in the U.S. force as a whole, but the unfairness didn’t stop there. More than half left the service with less than honorable discharges — not surprising, for men who weren’t mentally fit to be soldiers to begin with.

Why is it so hard to see the obvious?

It is hard to make a man understand something, if his salary depends on his not understanding it.  [==Upton Sinclair]

To see what is under one’s nose needs a constant struggle.  [==George Orwell]

Have the courage to believe what you know.  [==French movie director Yann Arthus-Bertrand]

∞∞∞

Ian Welsh, one of my favorite bloggers, wrote a long list of obvious things that people in authority didn’t and do not seem to see. 

Obviously Iraq did not have WMD.  Obviously neither the Iraq nor Afghan occupations would succeed. 

Obviously letting Covid rip will cause a mass disabling event which will severely damage our societies.

Obviously China does not regard the US in specific as a friend, since for 12 years the US has publicly stated, over and over again, that China is enemy #1. 

Obviously Russia would not let Sevastapol be taken away from them. 

Obviously Russia would not let Ukraine join NATO.

Obviously offshoring our industrial base to China would make them stronger and us weaker. 

Obviously immiserating our working class would make them hate the liberal order and vote against it when possible (Brexit/Trump, etc…)

Obviously China has food and energy problems and obviously having Russia as a friend helps fix those problems. 

Obviously China cannot trust the West to supply it, since the West has sanctioned China.

Obviously the West hates China’s government and wants it replaced and obviously the Chinese government doesn’t like this and prefers Russia, which does not want to overthrow their government. 

Obviously Putin must win his war, or he will lose power and be killed.

Obviously bailing out the rich in 2008 led to a sclerotic economy which cannot fix problems because central banks made a rule that incompetent rich people will be allowed to stay incompetent.

And so on, and so forth, with 39 more items.  Read the whole thing and tell me whether there is any item you would dispute.

Why is it so hard to see the obvious?

Joe Biden is trying to privatize Medicare

Branko Marcetic wrote a good article for Jacobin magazine about how President Biden is planning to privatize Medicare.

Over the past year, seniors around the country have been getting letters from the Centers for Medicare and Medicaid Services (CMS) informing them that they needn’t worry, but their doctor was now part of something called a direct contracting entity (DCE).

“Your Medicare Benefits have not changed,” the letters stress no less than twice. “NO ACTION NEEDED,” they blare.

If you take it from CMS, DCEs are simply a collection of different health care providers “who agree to work together to keep you healthy” — an innovative new payment model to keep health care costs down and raise the quality of care up. For its critics, the initiative is something far less benign.

“What direct contracting does is turn the public side of Medicare into a corporate goldmine,” says Diane Archer, president of Just Care USA.

Under traditional Medicare, when a beneficiary gets care from a doctor, a hospital or any other health care provider, the program reimburses that provider directly at a set rate.

Direct contracting adds a third party into the mix: Medicare makes a monthly payment to a DCE, which then decides what care a beneficiary will get, and uses that money to cover a specified part of their medical expenses — pocketing whatever they don’t spend as profit.

While making cost-saving efficiencies usually means cutting out the middleman, direct contracting adds one in.

In other words, as with health insurance, the less the physicians get paid, the higher the profit for the companies.

Critics like Physicians for a National Health Program warn that the program comes with the same kinds of pitfalls as Medicare Advantage, the program that for the first time carved out a role of private insurers in the public Medicare system, when it was passed as part of a Reagan-era deficit reduction bill forty years ago.

One is “upcoding,” the notorious practice where Medicare Advantage insurers make their patients appear less healthy than they really are, the better to drive up the payments they get from Medicare.

I say: “Keep your hands off my Medicare.”

LINK

Direct Contracting Entities: Wall Street Control of Traditional Medicare by Physicians for a National Health Program.

Joe Biden Is Quietly Pursuing the Creeping Privatization of Medicare by Branko Marcetic for Jacobin.

Warren Warns: Corporate Vultures Are Circling Medicare on Biden’s Watch by Jack Johnson for Common Dreams.  [Hat tip to Bill Harvey]

The Dark History of Medicare Privatization by Barbara Caress for The American Prospect.  [Hat tip to Bill Harvey]

Business monopolies push prices upward

Matt Stoller reports that 60 percent of recent U.S. price increases are caused by businesses exercising monopoly power.  He says the recent surge in inflation cost $2,126 per American.

What can be done about it?  Stoller says:

1. Strengthen laws against price-fixing.
2. Impose an excess profits tax.
3. Strengthen anti-trust laws against business concentration in general.
4. Revive laws against price discrimination against small businesses.

LINK

Corporate Profits Drive 60% of Inflation Increases by Matt Stoller for BIG.

Covid coming back

Daily U.S. Covid cases set new record as of Dec. 30, 2021.

One of the reasons Joe Biden defeated Donald Trump in the 2020 elections was because of Trump’s mishandling of the coronavirus pandemic.

Trump downplayed the seriousness of the pandemic and made it into a political issue.  He discouraged testing and gathering of data because it made him look bad.  

On the other hand, his administration deserves credit for Operation Warp Speed and the rapid development of effective vaccines.

Biden’s rhetoric is better, but his administration’s actions fall short of what is needed.  His administration’s leaders talk as if vaccination is a way to prevent the spread of the virus.  The vaccines now in use are not sterilizing.  You can catch the virus from a vaccinated person.

He talks as if vaccines are the answer to everything.  Being vaccinated will cut your risk of death or being hospitalized, but catching the virus can still do long-term damage to you.  The way to protect from infection is to make cheap Covid tests available to everyone.

His administration ignores the fact that we now know that Covid-19 is spread as an aerosol, like fog or cigarette smoke, and not in droplets.  So we should pay less attention to cleaning surfaces and more to proper ventilation.

Some of these failures are a result of the long-term hollowing out of public health and medical capacity.  Some originated with Anthony Fauci and the Centers for Disease Control rather than Trump or Biden personally.  

But they are the ones with the ultimate responsibility and power.  When the ship goes aground, the captain is responsible.  He can’t fix everything overnight, but he can begin.

Like Trump, Biden prioritizes getting back to normal.  Like him, he pushes responsibility onto state governments.  We the people need something better than leaders who take the path of political least resistance.

 LINKS

Don’t Be Too Cavalier About Omicron – Long Covid Is Still a Real Risk by Elizabeth Yuko for Rolling Stone.

Administration’s Obvious Covid Fail: Officially Abdicates as Case Count Hits Record; Scientists and Press Misrepresent Data to Put a Happy Face on Omicron by Yves Smith for Naked Capitalism.

The very bad day at the CDC by Eric Topol for Ground Truths.

Covid Cases Fill More New York City Hospital Beds, Threatening Halt on Elective Surgeries by Greg B. Smith for The City.

A Myth Is Born: How CDC, FDA and Media Wove a Web of Ivermectin Lies That Outlive the Truth by Linda Bonvie and Mary Beth Pfeiffer for Michael Capuzzo’s Rescue substack.

The humiliation of Joe Biden

The Build Back Better bill was a list of Joe Biden’s campaign promises in legislative form. For months, President Biden and the Democratic leadership in Congress have been weakening the bill in hope of appeasing Senators Joe Manchin and Kirsten Sinema.

Now, after all these months and waste of work by administration and congressional staff, Senator Manchin has announced he won’t support the bill even in its gutted form.

Manchin, Biden early 2021

There will be no political retaliation as a result of this, either from the Biden Administration or the Senate Democratic leadership. I can imagine Senator Mitch McConnell would do to any Republican who stymied the Republican legislative program.

This is not only a defeat for Joe Biden. It is a public humiliation.

A year or so into President Barack Obama’s first term, I wondered whether he was a progressive who was very weak and naive, or a conservative who was very cunning. I decided the latter was true.

I don’t have the same question with Biden. Defeat of his program may have been unavoidable, but he didn’t have to set himself up to be made to look like a fool.

Obama failed to deliver on his campaign promises, and the opposition party swept with mid-term congressional elections. Most political observers expect the same thing to happen again.

LINKS

The Democrats Go Full Gotterdammerung as Manchin Makes DOA of BBB Official by Yves Smith for Naked Capitalism.

Build Back Better Now DOA: Next Phase of US Economic & Political Crisis Begins by Jack Rasmus.

The case against infrastructure

STRONG TOWNS: A bottom-up revolution to rebuild American prosperity by Charles L. Marohn Jr. (2020)

I wish I’d read this book before I posted anything on my blog about infrastructure.  Charles L. Marohn Jr., an engineer and land-use planner, calls attention to something important and obvious, once pointed out, but which I overlooked.

It is that infrastructure involves a maintenance cost as well as a benefit, and the cost can and often does exceed the benefit.

When you buy a house or a car, the longer you have it, the more it costs to keep it in repair.  The same is true of public roads, water and sewerage systems,  and other physical infrastructure.

The long-range cost of maintaining a road or a water and sewerage system can exceed the economic benefit of the system.  Benefit can be measured in the willingness of the property-owner to pay taxes and fees in return for the benefit, or in the revenue per acre from the land whose value is enhanced by the infrastructure.

Neglect of this truth is a main reason why so many American cities are in financial trouble these days.  The other reason is the financial obligations, such as employee pension funds, that they’ve taken on over the years.

Something beneficial was done, or some problem was solved, in the short term by taking on a long-term obligation.  Future growth was supposed to take care of the long-term obligation.  For many decades, it did.

I’ve posted a good bit on my blog about declining infrastructure.  I’ve quoted estimates by the American Society of Civil Engineers about the huge cost to bring existing U.S. infrastructure up to snuff.

But I failed to make a distinction between spending to maintain existing infrastructure and spending to build new infrastructure.  As I’ve said, it’s not feasible to be constantly building new stuff if you can’t afford to keep up the old stuff.  I can’t figure out from news accounts how much of President Biden’s infrastructure bill is for maintenance and how much is for new construction.  

Marohn wrote that the USA doesn’t need one brick of new infrastructure, but only to maintain what it’s got.  I wouldn’t go so far, but I understand what he’s getting at.

We in the USA have come to the end of the era of growth, Marohn wrote.  U.S. cities are limited by what they can afford, and should not make capital investments that do not produce a return.

Now, this kind of reasoning sounds like the rationale given for red-lining poor and majority-black neighborhoods in the bad old days.  The decision to disinvest became a self-fulfilling prophecy.  Nowadays this is understood to have been a terrible wrong, whose consequences continue today..

But Marohn argued that the poor neighborhoods aren’t usually the ones that don’t pay their way.  He gave examples from his home city of Brainerd, Minnesota.  

On one side of a street is an Old and Blighted Block, on the other a New and Shiny one.  On one side are  nine marginal businesses, including a pawn shop, a bankruptcy attorney, a couple of liquor stores, a barbershop and a neighborhood restaurant.  On the other is a Taco John restaurant franchise, with plenty of green space and off-street parking.

But the assessed value of Old and Blighted is $1.1 million.  New and Shiny is only $620,000.  Furthermore the Old and Blighted businesses hire local accountants, attorneys, printing shops and other services; it’s not known whether Taco John does.  And the nine marginal businesses may well employ as many full-time equivalent workers as Taco John.

One man’s experience with monopoly drug prices

Will Astor, a semi-retired journalist in Rochester, N.Y., the city where I live, depends on drugs to keep his prostate cancer in check.  Recently his physician put him on a new drug, abiraterone, a generic form of Johnson & Johnson’s brand-name Zytiga.

His monthly co-pay: $1,700 a month.  The total cost of the drug: $11,000 a month.  How much would Zytiga have cost? J&J wouldn’t say.

I was under the impression that generic drugs, which can be sold when the brand-name drugs are no longer under patent protection, were cheaper than the brand-name drugs.  But Astor’s research indicated that this is only true when two or more companies make the drug.  When only one company makes a generic drug, it is only slightly less than the brand-name version.

Some countries set drug prices, based on the cost of manufacturing plus a reasonable mark-up.  The Biden administration’s Build Back Better bill passed by the House of Representatives includes a provision allowing the federal government to negotiate drug prices for Medicare patients, which is now forbidden.  Republicans in the Senate oppose that provision of the bill, and it may not pass.

A pharmacist at the University of Rochester Medical Center found Astor a charity, called the Assistance Fund, that gave him a one-year grant to cover virtually all of his co-pay.  That’s fortunate for him, although he has no guarantee the grant will be renewed, but of course this isn’t available to most people.

Astor wrote a well-researched article about the high price of generic drugs in the Rochester Beacon, a local on-line publication. It’s well worth a look.

LINK

Life-Threatening Costs by Will Astor for the Rochester Beacon.

The infrastructure bill: Better than nothing?

Correction: The spending is for a five-year span, not 10 years as I originally wrote.

Click to enlarge. Source: New York Times.

The bipartisan infrastructure bill is better than nothing.  Whether it will be enough to do the job is another question.

Some news articles call it a $1.2 trillion infrastructure plan, but it only includes some $550 billion.  The rest is money that is normally spent each year for highways and other projects.

All these figures are for a planned five-year span.  If the proponents quoted the annual budget cost, they wouldn’t seem so huge.

More spending is certainly needed.  The latest infrastructure report of the American Society of Civil Engineers gives a dismal picture of frequent water main breaks, un-maintained highways and flood control levees whose location and condition aren’t even known.

It says $2.69 trillion in infrastructure investment is needed over the next 10 years, although not all of that would necessarily have to come from the federal government.

I am sure that figure is based on deterioration continuing at the same rate as it is.  The expected climate-related increase in destructive storms and floods will almost certainly increase the strain on roads, rail systems, water and sewerage systems, dams and levees.

The ASCE gives the U.S. a C-minus grade (mediocre, requires attention) on infrastructure overall, which is up from D-plus (poor, at risk) in its previous report, which was in 2017.

The ASCE attributes the improvement mainly to action by state and local governments.  For what it’s worth, the ASCE is a supporter of the Biden infrastructure bill.

The original idea was to have a omnibus bill that would include infrastructure improvements, climate change mitigation and improvement of the social safety net.

The emergency measure enacted last year—the eviction moratorium, the student debt collection moratorium, extra funding for unemployment insurance, etc.—have run out or will soon run out.

A lot of people are going to be hurting next year, and blaming Democrats for not keeping their promises.

Although increased infrastructure spending will create jobs and help the economy, but it won’t be in time to affect the 2022 election.

I blame Senators Joe Manchin and Krysten Sinema for being spoilers, I blame President Biden, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi for lack of leadership and I blame Senate Minority Leaders Mitch McConnell and Republicans generally for their irresponsible and blindly partisan obstructionism.

But the problem is deeper and more systemic.  Blaming individuals implies that it is by accident of personality that Manchin or McConnell choose to do what they do, and also by accident that people like Manchin or McConnell are in a position to do the damage they do.

We have a political system that prioritizes the wants and needs of monied interests over the public, and makes it nearly impossible to do what’s plainly necessary.  Maybe I’m over-optimistic in sticking in the word “nearly.”

LINKS

American Society of Civil Engineers 2021 Infrastructure Report Card.

What’s in the $1.2 trillion infrastructure package by Heather Long for The Washington Post.

The Infrastructure Plan: What’s In and What’s Out by Actish Batia and Quoctrong Bai for The New York Times.

How Democratic Party Progressives Got Outmaneuvered by Their Corporate Wing by Dr. Jack Rasmus.

Is This the End of the Unreformable Democratic Party? by Michael Hudson.

The economic consequences of the pandemic

SHUTDOWN: How Covid Shook the World’s Economy by Adam Tooze (2021)

Adam Tooze is possibly the world’s foremost economic historian.  He wrote thick, comprehensive books on the Nazi economy (Wages of Destruction), the war debts crisis of the 1920s (The Deluge) and the 2008 financial crisis (Crashed!).  

His strengths are his international perspective (he is a British subject, educated in Germany who now teaches at Columbia University) and his deep understanding of high finance and how it affects society, politics and the overall economy.

Shutdown is not like his other books. It’s slim, and it is being published while the pandemic is still going on, not from the perspective of history.  This is because he thinks his message is too urgent to wait.

What is his message?

It is that we the public are on the brink of a new era, an era when our worst crises will not be the result of tyranny, corruption and human folly, but blowbacks from our natural environment.

And we are woefully unprepared for this. The coronavirus pandemic had taken 3.2 million lives, including half a million American dead, as of April, when Tooze completed his book.  The number is up to 4.5 million now.

The pandemic resulted in tens of trillions of dollars in economic loss. Yet only tens of billions has been spent on vaccine development, and much less than that on getting the vaccine to the public.

COVID-19 was not a black swan, a completely unpredictable event. It was a grey rhino, an event that many predicted, but were ignored. The climate crisis has bred other grey rhinos—devastating fires, floods, droughts and superstorms.

Tooze wrote that the reason we are unprepared is that the neoliberal policies of the past 50 years have stripped the governments of the USA, UK and much of the Western world of the capacity to respond to emergencies.

The neoliberal philosophy is that, in order to maximize efficiency, institutions should spend no more than they absolutely need in order to function. This means that there is no reserve capacity in case of emergencies, and hospital emergency rooms in the USA are overflowing with Covid patients.

What’s needed, he wrote, is something like the Green New Deal supported by Bernie Sanders, Alexandria Ocasio-Cortez and others.  Governments must spend whatever is necessary to be prepared for the predictable crises that lie ahead, and do it in a way that creates full employment and puts money in the pockets of working people.

The International Monetary Fund has estimated that a successful global vaccination program would add $7 trillion annually to the world economy by 2014.  Tooze said others estimate that such a vaccination program would cost $50 billion to $100 billion. Yet governments of rich countries, which have spent trillions of dollars on economic stimulus programs, say this is unaffordable.

Tooze quoted the great economist John Maynard Keynes: “Anything we can actually do, we can afford.”  

That is, if the human and physical resources to accomplish a goal exist, and the political will to accomplish the goal exists, the problem of finance can be solved.  People generally understand this in wartime.  Why not in peacetime?

Biden and the progressives

I’m not sure what to make of President Biden.  He says good things about labor rights, economic inequality, high drug prices and curbing monopoly power.  He listens to progressives and has appointed progressives to important positions in his administration.

The economic legislation he has proposed will materially benefit the majority of Americans.  More importantly, unlike Presidents Obama and Clinton, he hasn’t proposed anything that will be actively harmful, such as deregulating the finance industry or unconditionally bailing out crooked Wall Street financiers.

The question is my mind is: Does he really mean what he says?  Or is he, like Obama and Clinton, merely setting up a plausible excuse for failure?

The economic legislation he originally proposed was an omnibus bill to build needed infrastructure, invest in “human capital” and expand the welfare state.  To get it passed, he and the Democratic leaders in Congress agreed to split the infrastructure part from the welfare part, but on condition that the infrastructure bill wouldn’t be enacted unless the Build Back Better welfare bill also was enacted.

Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona were two of the Democrats who pledged to support the Build Back Better bill.  But now they’re gone back on their word and now oppose the bill.  My morning newspaper reported that President Biden is trying to find out what they would be willing to settle for.

But what is the point of negotiating with people who won’t keep their word?

If Lyndon Johnson had been President or Senate Majority Leader, Manchin and Sinema would be stripped of their committee assignments, no bills they introduced for the benefit of their states would come up for a vote and they would be cut off from support by the Democratic Senatorial Campaign Committee—not just because they opposed their party’s program, but because they broke their word.

Another key test for President Biden is the filibuster.  A majority in the Senate has the power to change the rules so that laws can be enacted with 51 votes (or 50 plus the Vice President’s vote).  If the filibuster isn’t broken, the Democasts won’t be able to pass their voting rights act, Republican state legislatures will be able to rig the election laws and Democrats will likely lose the 2022 midterm elections.

One reasonable change in the filibuster is to restore it to its original meaning, which was unlimited debate.  Require those who want to delay a vote to go on the floor and keep talking, rather than just register their opposition and go home.  If President Biden and the Democratic leadership won’t even do that, they are not serious.

COVID-19 and the war on populism

Hat tip to Bill Harvey.

Thomas Frank had a good interview last week on the Breaking Points TV show.  It’s worth watching.

He talked about how failure to control the spread of the COVID-19 virus, instead of being blamed on the failed health care system, is instead blamed on people who are skeptical of established authority.

The problem is that there are good reasons to be skeptical of authority.  It was Anthony Fauci, who is nowadays considered to the voice of science, who in the early days of the pandemic said that it was not to be taken seriously, it was just like the ‘flu, and that masks were useless.

It was the Centers for DIsease Control that, in the early days, advised the U.S. government not to screen air travelers coming in from China. 

Established authority nowadays tells us that vaccination will prevent the spread of the disease, when, so far as is known, it merely suppresses the symptoms and does little or nothing to stop the spread.

Nobody is being called to account for this.  The bulk of the press, the political establishment and the medical establishment say that everything that has gone wrong, and everything that is predictably going to go wrong, is the fault of right-wingers who refuse to get vaccinated.

There are all kinds of reasons why people don’t get vaccinated.  There are medical reasons.  There are economic reasons.  There are religious reasons.

And of course there are conspiracy theorists who think the pandemic is a Democratic hoax.  I don’t share their views, of course, but conspiracy theories flourish in times like these, when established authority can’t be trusted.

Whatever the reasons people have for not getting vaccinated, ridicule and scapegoating are not good methods for bringing them around.  They are, however, good tactics for diverting blame for failure from the people in charge.

The plan is for all Americans to get COVID

The Biden administration’s plan for fighting COVID-19 is for all Americans to get vaccinated. But that won’t stop the spread of the disease.  Being vaccinated just means you’re less likely to die or need hospital care if you get it.

But there is nothing in place to stamp out the disease and very little to stop the spread of the disease.  This means that all of us Americans are bound to get it, sooner or later.

I’m in favor of vaccination.  I’ve received two shots myself.  I would like as many people as possible to get vaccinated.   Mandatory vaccinations are nothing new.  Schools and other institutions have every right to require masking and vaccinations.

The thing of it is—the vaccines now available are not sterilizing vaccines, at least not as far we know.  They do not kill the virus, just rally the body’s defenses to resist it.  Other things being equal, a vaccinated person is just as potentially infectious as an unvaccinated person.

The way to stop the spread of the virus would be to require everyone entering an indoor public space to be tested, whether vaccinated or not.  As in China, there would be a temperature check, and everybody running a temperature would get a test.

Those infected would be isolated and treated until the infection goes away.  Do this long enough and the virus dies out.

Why isn’t this being done?  Probably because the U.S. pubic health system and medical care system don’t have the capacity to carry it out.

Of course, there are other ways to slow the spread.  Indoor ventilation would be a big help.  Indoor masking also would be a big help. 

But the disease won’t be stopped until there are treatments that kill the virus, as penicillin kills bacterial infections.  There is no national effort to develop one.

The Biden administration is content to push vaccination alone, vaccination and nothing else, and it blames people who don’t get vaccinated for the spread of the disease. 

The unvaccinated are conflated with deplorables who believe in crazy conspiracy theories, and both groups are conflated with Trump voters.  They will be the scapegoats for the comeback of COVID-19 this winter.

I’ve even heard people say that the unvaccinated do not deserve to be treated for the coronavius. 

Would such people say that cigarette smokers do not deserve medical care lung cancer? that sexually active gay men do not deserve medical care for AIDS? that people who’ve attempted suicide, and failed, deserve no medical care at all?

Public schools can be petri dishes for coronavirus

Back during the George W. Bush administration, Carter Mecher was head of a White House task force charged with making a plan to prevent pandemics.  He was contacted by Robert Glass, a scientist at Sandia National Laboratories, who’d been running computer simulations of pandemics.

Glass’s models indicated that kindergartens and schools were potential petri dishes for the spread of contagious disease.  I don’t think this would have been surprising to most parents and teachers.

At that time, there were more than 100,000 K-12 schools in the U.S., with 50 million children in them.  There were 500,000 school buses in operation, compared to 70,000 in the regular U.S. transportation system.  On an average day, school buses carried twice as many passengers as the entire public transportation system.

Michael Lewis, author of The Premonition, told what happened next.  Becher decided to visit schools. He found school classrooms were more crowded than any other public space.  Chlldren sat, on average, three and a half feet apart; they could touch each other.

In hallways and at bus stops, young children crowded together.  They lacked the adult idea of personal space.  School bus seats were on average 40 inches wide, just wide enough for three children close packed together.

School bus aisles were narrower than aisles of regular buses. Paramedics used special stretchers for school buses because regular stretchers wouldn’t fit.

Becher made videos of homes where the ratio of children to floor space was the same as in public schools.  They looked like refugee prisons, Lewis wrote.

Glass had concluded that closing schools and reducing contacts among children were the key to controlling pandemics.

That doesn’t necessarily apply to the present situation, because teachers and children over 12 can get vaccinated.  Many schools try to practice social distancing, although this doesn’t protect from an airborne virus in an enclosed space.  Glass’s model assumed no vaccines and no treatments.

But vaccines don’t eliminate the danger.  They suppress the symptoms of the disease, but they don’t necessarily kill the virus.  Vaccinated people can still be spreaders of the disease.  And vaccines may not be 100 percent effective.

I don’t know what I’d do if I were a parent, except listen to the teachers rather than the politicians or the CDC.

Children in families with a lot of books in the home, who watch educational programs on TV and talk about current events and books around the supper table—the education of these children would not suffer all that much from school lockdowns.

But children in families without books in the home, children with parents who work multiple jobs and don’t have time for suppertime conversations, children who depend on school lunches for their main nourishing meal of the day—these children would be hurt a lot by long-term school closing.

Wearing masks can help some.  Good ventilation can help a lot.  Vaccine mandates for teachers and staff might help, but regular tests for the virus would help more.

The U.S. eviction crisis is (nearly) upon us

The eviction moratorium was a short-range solution to a long-range problem.  

The problem arose from income and wealth inequality, acquisition of housing property by speculatprs, and building and zoning regulations intended to keep the riff-raff out.  If the Covid-19 crisis hadn’t brought it to a head, some other crisis would have.

The eviction moratorium cannot continue forever.  Therefore, someday it has to stop.

LINKS

Evictions and the U.S. Supreme Court by Dr. Jack Rasmus

A vaccination-only anti-virus strategy

It seems as if the Biden administration intends to rely on vaccines alone to fight the COVID-19 virus.

The official advice is that once you get vaccinated, it’s safe to do anything you want, including spending time unmasked in poorly-ventilated indoor spaces.

That’s wrong.  Even if you’re vaccinated, you can be infected and you can infect others.  Masking, ventilation and other safety measures are still needed.

It’s true that availability of vaccines has dramatically reduced the death rate from COVID.  The chart above, showing waves of COVID infection before and after vaccines were available, indicates this.

Vaccination, however, does not confer 100 percent immunity.  The vaccines stimulate the immune system, so that, if you are infected, you are unlikely to experience symptoms of the disease and even less likely to be hospitalized. 

But they often fail to kill the virus.  You can be vaccinated and symptom-free and still be a spreader of the disease.

I’m in favor of vaccination. I got two shots of the Moderna vaccine as soon as I could, one in March and one in April.  I don’t take that as guaranteeing perfect safety.

It’s going to be a while before I eat a restaurant  meal indoors or watch a movie in a theater.  I may never take an airplane trip again.  I intend to wear a mask any time I am indoors with people I don’t know.

That’s not because I like masks.  I get short of breath when I wear one for a long time.  Everybody looks like they’re either terrorists, robbers or assisting in surgery.  But I can put up with this minor annoyance in order to reduce my own risk and the risk I create for others.

I understand that not everybody is willing to live as I do, or in a position to do so.  I am 84 years old, retired, unmarried, an introvert and a recluse. 

I don’t have to venture out into the world to earn my daily bread, and my temperament makes it easier for me than for most people to do without hugs and kisses.

Why the U.S. failed to avert the pandemic (2)

Like Michael Lewis’s The Premonition, Andy Slavitt’s Preventable is a story of how people in authority disregarded warnings and allowed the COVID-19 virus to gain a foothold in the United States.

But while Lewis described the efforts of a number of far-sighted prophets, Slavitt concentrates on just one—himself.

Slavitt is an interesting figure—a political operator and member of the professional-managerial class, who influences policy, moves back and forth between government and the private sector, but would be unknown to the public except for this book.

He was an investment banker with Goldman Sachs, a consultant for McKinsey & Co., and founder of a company called HealthAllies, and then worked for United Health Group after it acquired HealthAllies. 

He served the Obama administration as head of the Center for Medicare and Medicaid Services from 2014, and was a medical adviser to the Biden administration during its first few months.

His power comes from being embedded in a network of politicians, corporate CEOs, wealthy philanthropists and academics, who all answer his phone calls and listen to what he has to say.

Preventable is about how he tried to alert the public to the danger, while also trying, from behind the scenes, to influence the Trump administration to take action before it was too late.

His book is a good overview of the Trump administration’s pandemic response and of the inadequacies of the American medical care system generally.

Much of the criticism of Trump is based on a knee-jerk response to his vulgar and offensive comments on Twitter and elsewhere, which don’t matter, and on a gullible acceptance of charges of collusion with Russian and Ukrainian leaders, which were either bogus or trivial.

Slavitt did a good job of showing the real problem with Trump, which was his inadequacy as an administrator and leader.  Trump refused to face unpleasant facts.  He thought of policy only in terms of public relations, not in terms of consequences, and he failed to think ahead even about public relations.

He calculated that closings are unpopular and openings are popular, so he shifted responsibilities for closings onto governors of states while positioning himself as the champion of openings.

As damning as Slavitt’s portrait of Trump is, it will not change the minds of Trump’s admirers because of Slavitt’s obvious bias and partisanship. 

The only named persons he holds accountable for the COVID-19 pandemic are Trump supporters, members of Trump’s administration and Donald Trump himself.  Democrats get a free pass.