Dissecting the BoJo phenomenon
Excerpt:
How can someone with demonstrably questionable morals and a more than casual relationship with the truth reach such a powerful position? One word springs to mind: entitlement. Boris comes from a long succession of posh, upper-class, bumbling idiots who were destined for greatness only because no one has ever or will ever tell them they’re not. Boris went to Eton, a sort of Hogwarts for wankers, where you get taught Latin and tax avoidance whilst wearing full evening dress. These people have never spoken to a real person in their life, apart from perhaps their chauffeur. Then on to Oxford, where Boris Johnson was part of the infamous Bullingdon Club, a fun elite social club for the boys. Activities included smashing up restaurants and burning 50-pound notes in front of homeless people, allegedly. “But you know, it was great fun at the time.” And the British government is full of them, entitled arseholes — sorry, sorry — entitled assholes with a Bentley and a nanny making decisions for us all about things that they will never understand. Aristocrats running the fifth-largest economy in the world whilst allowing 30 percent of British children to live in relative poverty. Where the rich get richer and the poor literally get hungrier. Millionaires who spend their time in government giving tax breaks and P.P.E. contracts to their rich mates. Cannibals, self-serving parasites, tapeworms in tiaras, swimming through the intestines of the state, sucking all the goodness out of it for their own repugnant gratification.
Check out the full video rant here.
Plundering Africa
Léonce Ndikumana and Econ4’s James Boyce describe something you won’t find in economics textbooks:
In the imaginary world of a perfect market economy, natural resources would be a blessing and capital would flow to the countries where it is most scarce. Africa would be a net recipient. The Angolan people would prosper from the proceeds of oil extraction; Ivorians would thrive as the world’s top cocoa exporter (45 per cent of global production); and South Africans would enjoy the fruits of mineral abundance.
Yet, this is not happening. Natural resources are instead a hunting ground for quick wealth extraction and offshore accumulation. Cross-border capital flows are driven, not by relative scarcity in Africa, but by the relative secrecy available in foreign havens.
Read more here.
Political thumbs on the energy scales
The northern plains states in the US could be the “Saudi Arabia of wind energy.” But in North Dakota, the political leverage of the coal lobby tips the scales:
David Saggau, the chief executive of an energy cooperative, tried to explain the losing economics of running a coal-fired power plant to a North Dakota industry group more than a year ago.
Coal Creek Station had lost $170 million in 2019 as abundant natural gas and proliferating wind projects had cut revenue far below what it cost to run the plant…. “We made folks aware that the plant was for sale for a dollar,” Saggau, of Great River Energy, told the Lignite Energy Council during an October 2020 virtual meeting. “We’re basically giving it away.”
A renewable future was at hand. Winds come howling over the Missouri River in the heart of North Dakota — at the site where Lewis and Clark spent their first frigid winter — and Great River Energy planned to supply wind power over Coal Creek’s valuable transmission line. NextEra Energy, EDF Renewables and other powerhouse firms were racing to lock landowners into leases to harvest some of the most powerful and sustained winds in the country.
But that new clean-energy future never materialized in this part of coal country, with a landscape that has been mined for more than a century and has the scars and sinkholes to prove it. And the sale of Coal Creek Station, which received its last major permit approval earlier this month, illuminates the United States’ halting transition to renewables. Even in places such as North Dakota, where supply and demand align with clean energy, culture and politics pose major obstacles.
In these rural North Dakota counties, local officials passed ordinances that blocked wind and solar projects. State officials rallied to save Coal Creek, and a politically connected North Dakota energy firm stepped in to prolong its life, promising someday to capture its carbon emissions and store them underground.
Read the gory details here.
The fallout of dirty money
The American banking system’s welcome mat for kleptocrats and their stolen loot has come at a big price at home as well as abroad. Reviewing two new books on the subject – The Wealth Hoarders by Chuck Collins and American Kleptocracy by Casey Michel – Jake Bernstein highlights the impact on real estate markets:
The Patriot Act allowed the treasury secretary to exempt industries from customer due diligence. Six months after its enactment, the Bush-Cheney Treasury Department issued exemptions for the real estate industry, lawyers holding escrow accounts for clients, private equity, and hedge funds. All were subsequently abused by kleptocrats and other malefactors, but US real estate in particular has been a staggeringly attractive destination for dirty money. Global Financial Integrity, a Washington-based think tank, recently tallied more than one hundred publicly reported real estate money laundering cases in the US over the past five years and arrived at the figure of $2.3 billion worth of transactions.
Ironically, what makes real estate in America alluring to the international criminal set is our rule of law. Property rights are generally protected in the United States. Disputes are adjudicated by an independent judiciary. Under this safety blanket, real estate assets appreciate….
In cities like New York and Miami—or London and Vancouver—high-end residential real estate buyers, often cloaked in anonymity, have crowded out locals and compounded inequality, turning metropolises into playgrounds of the global elite.
The blank check department
There’s one US government department that doesn’t have big money worries:
Where are you going to get the money? That question haunts congressional proposals to help the poor, the unhoused, and those struggling to pay the mortgage or rent or medical bills, among so many other critical domestic matters. And yet — big surprise! — there’s always plenty of money for the Pentagon. In fiscal year 2022, in fact, Congress is being especially generous with $778 billion in funding, roughly $25 billion more than the Biden administration initially asked for. Even that staggering sum seriously undercounts government funding for America’s vast national security state, which, since it gobbles up more than half of federal discretionary spending, is truly this country’s primary, if unofficial, fourth branch of government.
Vaccine hesitancy: connect the dots
Inequality + erosion of public services -> mistrust -> vaccine hesitancy -> worse public health outcomes for all:
When people feel supported through social programs, they’re more likely to trust institutions and believe they have a stake in society’s health. Only then do the ideas of social solidarity and mutual obligation begin to make sense.
The types of social programs that best promote this way of thinking are universal ones, like Social Security and universal health care. Universal programs inculcate a sense of a common good because everyone is eligible simply by virtue of belonging to a political community….
If the world is going to beat the pandemic, countries need policies that promote a basic, but increasingly forgotten, idea: that our individual flourishing is bound up in collective well-being.
Read more here.
Climate resilience for whom?
Political economy isn’t only about the allocation of scarce resources among competing ends, but also among competing people and communities. Guess how it’s starting to play out in protection from the impacts of climate change:
The Biden administration has touted the program, called Building Resilient Infrastructure and Communities, or BRIC, as a model that should be expanded. The infrastructure bill provides billions more to the program.
But most of the first round winners were wealthy, predominantly white areas in a handful of coastal states, federal data show.
More than half the money went to California, New Jersey and Washington State. The largest single recipient was a $68 million flood-control project in Menlo Park, Calif., where the median household income is more than $160,000, the typical home costs more than $2 million and only one in five residents are Black or Hispanic. The project is in line to get $50 million from FEMA.
By contrast, FEMA rejected applications from places like Smithland, Ky., a town of just 240 people where the Cumberland and Ohio Rivers meet, halfway between St. Louis and Nashville. The town sought $1.4 million to build a levee along the riverbank, which has crested at flood levels three times in the past 10 years.
Profit-led inflation
Robert Reich connects the dots:
The underlying problem isn’t inflation per se. It’s lack of competition. Corporations are using the excuse of inflation to raise prices and make fatter profits.
In April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing “rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods”.
But P&G is making huge profits. In the quarter ending 30 September, after some of its price increases went into effect, it reported a whopping 24.7% profit margin. It even spent $3bn during the quarter buying its own stock.
It could raise prices and rake in more money because P&G faces almost no competition. The lion’s share of the market for diapers, to take one example, is controlled by just two companies – P&G and Kimberly-Clark – which roughly coordinate their prices and production. It was hardly a coincidence that Kimberly-Clark announced price increases similar to P&Gs at the same time P&G announced its own price increases….
You can see a similar pattern in energy prices. If energy markets were competitive, producers would have quickly ramped up production to create more supply, once it became clear that demand was growing. But they didn’t.
Why not? Industry experts say oil and gas companies saw bigger money in letting prices run higher before producing more supply. They can get away with this because big oil and gas producers don’t operate in a competitive market. They can manipulate supply by coordinating among themselves.
In sum, inflation isn’t driving most of these price increases. Corporate power is driving them.
Read more here.
How the blues blew it
There’s a huge difference between talking the talk and walking the walk. The record of “blue” states on housing, taxation, and education is, well, enough to make you wanna sing the blues.
Watch this powerful video here.
How Democrats lost the working class
It’s not just a matter of “culture wars,” explains Robert Reich:
Both Clinton and Obama allowed the power of the working class to erode. Both ardently pushed for free trade agreements without providing the millions of blue-collar workers who thereby lost their jobs any means of getting new ones that paid at least as well.
They stood by as corporations hammered trade unions, the backbone of the working class. Both refused to reform labor laws to impose meaningful penalties on companies that violated them or enable workers to form unions with simple up-or-down votes. Union membership sank from 22% of all workers when Clinton was elected to fewer than 11% today, denying the working class the bargaining leverage it needs to get a better deal.
The Obama administration protected Wall Street from the consequences of its gambling addiction through a giant taxpayer-funded bailout but let millions of underwater homeowners drown.
Both Clinton and Obama allowed antitrust to ossify – allowing major industries to become more concentrated and hence more economically and politically powerful.
Finally, they turned their backs on campaign finance reform. In 2008, Obama was the first presidential nominee since Richard Nixon to reject public financing in his primary and general-election campaigns. He never followed up on his re-election campaign promise to pursue a constitutional amendment overturning Citizens United v FEC, the 2010 supreme court opinion that opened the floodgates to big money in politics.
What happens when you combine freer trade, shrinking unions, Wall Street bailouts, growing corporate power and the abandonment of campaign finance reform? You shift political and economic power to the wealthy and you shaft the working class.
Read more here.
