Decline of the Empire

What Would Hunter Thompson Do?

A few links, one graph and some music.

What Would Hunter Thompson Do? (not the actual title, Counterpunch, hilarious, must read).

A trucker explains why we Americans are totally fucked (Vox interviewer doesn't get it)

NPR celebrates the DNC (Hillary hagiography, fawning, suck up, brown-nose, ass-kissing, have a bucket handy)

The DNC was one big corporate bribe (The Intercept, lots of disgusting details, bucket again)

Our Next Secretary of the Treasury? (The Intercept again, "shadow banking" is such an ugly term)

Meanwhile, our phony economy is limping right along, but Vladimir Putin and Donald Trump are the only thing the media can talk about (Reuters spin below).

The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength.

Underlying strength?

Gross domestic product increased at a 1.2 percent annual rate after rising by a downwardly revised 0.8 percent pace in the first quarter, the Commerce Department said on Friday. The economy was previously reported to have grown at a 1.1 percent pace in the first quarter.

Economists polled by Reuters had forecast GDP growth rising at a 2.6 percent rate in the last quarter.

Whoops! OK, ready?

While the drop in inventories weighed on GDP growth last quarter, that is likely to provide a boost to output for the rest of the year. The Federal Reserve said on Wednesday that near-term risks to the economic outlook had “diminished.”

The government also published revisions to data going back to 2013 through the first quarter of 2016 (graph below from the WSJ).

batter, batter, batter, shhhwing batter! 

Have a nice weekend.

 

The Audacity Of Self-Serving Bullshit

The Huffington Post tells the story Democrats want us to internalize. Their front page title for that story is The Audacity of Hope.

Optimism versus pessimism. Hope versus despair. Light versus dark

John Cassidy at The New Yorker quotes Obama to the same effect.

What came out of Cleveland “wasn’t particularly Republican—and it sure wasn’t conservative,” Obama continued. Rather, it was “a deeply pessimistic vision of a country where we turn against each other, and turn away from the rest of the world. There were no serious solutions to pressing problems—just the fanning of resentment, and blame, and anger, and hate. And that is not the America I know.”

That America, Obama said, was “full of courage, and optimism, and ingenuity.” It was “decent and generous”—a place where people are “working hard and starting businesses . . . engineers inventing stuff, and doctors coming up with new cures . . . a younger generation full of energy and new ideas, not constrained by what is, ready to seize what ought to be.” And, “most of all,” a place where Americans of every creed, ethnicity, and sexual orientation are “all pledging allegiance, under the same proud flag, to this big, bold country that we love.”

The America Obama "knows" is not the America I know. And unlike Obama, who lives in the Imperial Capital, I actually live in the hinterlands beyond the capital called "America".

Debt Trap Debbie

This week we've got the DNC. The big news (today) is that Debbie Wasserman Schultz has been forced to resign her position as party chair because a Wikileaks e-mail release shows that the party apparatus supported Hillary and opposed Bernie all the way. And since that Wikileaks break-in was apparently carried out by officially encouraged (if not sanctioned) Russian hackers, the even bigger news is that Vladimir Putin is attempting to influence the American election by sabotaging the Democrats.

If Putin wants to hack hypocritical Democrats, more power to him. The problem I have with this recent coverage is the complete omission of this story, which made the rounds in early June, 2016—

Wasserman Schultz has been a close ally of the predatory [payday lending] industry for years, dating back to her time in the Florida statehouse around the turn of the century. But it wasn’t until this spring, when the official leader of the Democratic party used her heft within the caucus to urge other Democrats to help ensure payday lenders could evade regulation nationwide, that her long advocacy for 400 percent interest rates and endless debt traps for the working poor became a political liability.

True Colors Shining Through

Elizabeth Warren campaigned to be Hillary's VEEP pick in the last few months, which I thought was sad and pathetic. And had she been plucked from the Senate, where she's actually done some good, that would have been sadder still.

But there was no need to worry about the defanging of Warren. Hillary picked Virginia senator Tim Kaine, who was waging his own more effective campaign for the office.

After Trump's Speech, Today's Keyword is 'Dark'

The usual disclaimer — we don't make this stuff up. Weekend open thread.

These are headlines which are often different from the underlying URL. That means somebody in charge stepped in and changed them.

Donald Trump and the Dark Soul of the GOP (Mother Jones)

His Tone Dark, Donald Trump Takes G.O.P. Mantle (New York Times)

Donald Trump's Dark Vision (Bloomberg)

Donald Trump Takes America on a Journey to the Dark Side (NBC)

Donald Trump's Dark Dark Convention Speech (New Yorker)

It’s Donald Trump’s Party Now (Huffington Post, quote below)

Clinton’s campaign and supportive super PACs, meanwhile, sent out dozens of emails challenging Trump’s facts as the speech was delivered. Clinton campaign chairman John Podesta also scolded Trump’s generally fearmongering tone.

“Tonight, Donald Trump painted a dark picture of an America in decline,” Podesta wrote. “And his answer ― more fear, more division, more anger, more hate ― was yet another reminder that he is temperamentally unfit and totally unqualified to be president of the United States.”

All Google News search results for "Trump + speech + dark" (includes sources not listed above, for example, Slate, WaPo, MarketWatch).

Just heard the word dark multiple times on NPR as Washington media insiders discussed the speech (Diane Rehm Show).

Just a couple observations:

• Elite echo chamber. Apparently the Huffington Post got the memo late and were forced to play catch-up — Former George H.W. Bush Speechwriter Calls Trump’s RNC Speech ‘Very Dark And Frightening’.

  HuffPo figured it out — you're supposed to put the word "dark" in the headline!

• And yet, these elite motherfuckers can not figure out why millions of Americans are going to vote for Donald Trump, given the echo chamber arrayed against them.

Have a nice weekend.

Here's a nice but dark piece of music by jazz pianist Gerald Clayton.

 

Imagine A World Where...

This is a brief follow-up to Bad Climate News Keeps Pouring In (April 8, 2016). That one was about observed negative effects of cloud feedbacks on climate sensitivity. Now, a  new study released last week in the journal Nature yields more bad news about the role of clouds in global warming. This is not unexpected.

I'll quote the end of the Slate story about the finding.

Taken in context with other recent studies, the new results show the net effect of climate change on clouds could in fact be to encourage warming, in contrast to the consensus from just a few years ago.

In the most recent full-scale Intergovernmental Panel on Climate Change report, released back in 2013, the consensus was that, on balance, changes in cloud albedo have tended to cool the climate in the more than 200 years since humans began burning fossil fuels at a hefty clip. But the error bars on this assessment were huge, wide enough to include the possibilities that clouds could potentially offset about half of global warming, or actually cause warming themselves.

By taking the first comprehensive look at the clouds themselves, the new study demonstrates that changes in clouds are probably causing more warming, not cooling, and the authors expect this warming feedback to continue. That clarity is good news for scientists who have been working for decades on this problem, but the findings could be bad news for the rest of us.

The Triumph Of Hope Over Experience

Commenting on second marriages, Samuel Johnson, who is quoted by his biographer James Boswell in 1791, called them the "triumph of hope over experience." It doesn't seem to have occurred to anyone since that this wonderful phrase expresses a fundamental insight into the human condition.

A recent article by James Lind reminds us of why this is true. It's called Our Greatest Enemy: Optimism — why optimistic groupthink is a threat to humanity. I couldn't agree more.

In his first inaugural address, President Franklin Delano Roosevelt declared, “So first of all, let me assert my firm belief that the only thing we have to fear is … fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

FDR was wrong. Far worse than nameless, unreasoning, unjustified terror is nameless, unreasoning, unjustified optimism which leads to catastrophic blunders that would not have occurred if potential costs and risks had been properly weighed in advance. The greatest thing we have to fear is … optimism itself.

Let The Chips Fall Where They May

New polls indicate that Hillary and Donald are basically deadlocked, even in swing states like Ohio, Pennsylvania and Florida. This virtual tie follows the disgraceful corruption which let Hillary walk in the wake of that e-mail server nonsense Just now, in The Atlantic, a mainstay of the elite media, I read the following:

The collapse of [Hillary's] credibility was totally predictable, and totally avoidable. That makes Clinton’s actions particularly galling to Americans like me, who would never vote for Trump but who don’t want to condone her conduct; who don’t know whether they can trust her; and who now face a hard choice: Vote for Clinton, vote for a candidate outside the two-party system, or don’t vote at all.

Clinton is still more likely than not to be the next president. But it didn’t have to be this close.

Now, after that so-called "terror" attack in France—this looks like another big brain gone haywire—Donald apparently has Fox News on speed-dial. He's talking up the "war" on radical Islam. You can't wage war on big brains gone haywire. Every time this kind of shit happens, and it happens a lot lately, Donald gets a boost. 

“I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose any voters, OK?”

All this human nonsense will go on and on and on ... basically forever, which may not be a long time if you use the appropriate time-scale. In the here and now, my "don't vote" position gets stronger every day. Voting to influence predictably absurd outcomes is futile. I'm outta the game.

So I say let the chips fall where they may. In the future, if things get really, really bad in this country, people might say to me j'accuse — "You stayed home. You only have yourself to blame. Shame on you!"

And I will reply — "Sorry, I didn't see the point of pissing in the ocean to raise the sea level."

Have a nice weekend.

 

Dissecting Our Rigged Economy

In the last year or so there has been a spate of articles by liberal economists exploring the causes of and possible solutions to declining productivity and increasing inequality in the United States. Not only has economic growth been anemic, but what growth we've gotten has not been inclusive, which means the top earners continue to receive an outsized share of the income gains as they have for the past 35 years.

I'll provide some links at the end of this post for those who want explore these issues further.

The basis of Bernie's campaign was that the U.S. economy is rigged to favor top earners. Broadly speaking, that is correct, but what does "rigged" mean?

Economists (and Elizabeth Warren) discuss this lack of inclusiveness in terms of "monopoly rents" or "rent-seeking" or simply "rents". What do these terms mean? (Dean Baker).

“Rent” is used to refer to an income that is generated that exceeds what would be needed to meet the same economic purpose given an alternative set of institutional arrangements.

In this sense, “rents” are accruing due to patent and copyright protection if it would be possible to generate the same amount of innovation or creative work at less expense with an alternative institutional structure. In the case of CEO pay, the question is whether it would be possible to induce the same amount of effort from comparably skilled individuals at lower pay in a different institutional structure.

The unfortunate phrase "institutional arrangements" refers in the real world to political or regulatory decisions (or neglect) which have altered the structure of markets in such a way as to increase the monopoly power of a few key players across all our major industries (e.g., finance, airlines, pharmaceuticals, telecommunications, etc.). 

These changes in market structure to favor the few were accomplished by various means: lack of oversight leading to concentration of market power through mergers and acquisitions, outright government subsidies to industry in various forms, including explicit subsidies to the equities and housing markets (among others) by the Federal Reserve to create a trickle down "wealth effect" in those markets, changes in the tax structure which increase the concentration of wealth, etc.

For example, saying a bank is "too big to fail" is the ultimate subsidy. That bank has effectively been removed from the market. TBTF means the bank is immune to market forces which might, in theory, put it out of business.

That is what it means to say we have a "rigged economy." Here are a few resources not linked in above.

In today's New York Times — With Competition in Tatters, the Rip of Inequality Widens

From Obama's chief economic advisor Jason Furman — Productivity, Inequality, and Economic Rents. Furman gives us a "good news"/"bad news" scenario. Here's the bad news.

The bad news, however, is that rents have beneficiaries and these beneficiaries fight hard to keep and expand their rents. As a result, political reforms and other steps aimed at curbing the influence of regulatory lobbying are important for reducing the ability of people and corporations to seek rents successfully. Such actions would help ensure that economic growth in the decades ahead is robust, sustainable, and widely shared.

From the legendary economist Robert Solow — The Future of Work: Why Wages Aren’t Keeping Up. And see this excellent commentary on Solow called Free lunch: economic rent and the social contract.

From Joseph Stiglitz — Rewriting the rules of the American Economy

And finally, for a little perspective, my essay Moral Failure In Liberalized Market States.

Separate But Equal?

Last week two unarmed black men were killed by white police officers for no reason at all.

A few days ago, a black man and ex-military man named Micah Xavier Johnson shot and killed five police officers sniper-style at a black protest march in Dallas, Texas. There is more than ample evidence that Johnson had become completely unhinged before his attack on Dallas police officers.

In short, there is ample evidence that Micah Xavier Johnson's big brain had gone haywire.

In the wake of all this, humans have once again become very, very confused. Here is only one example among thousands I could cite.

Black lives matter. Blue lives matter. Both statements must be made true if the heartbreaking loss of life in Dallas is to have any meaning.

The killing spree that left five police officers dead and seven others wounded should be classified as an act of domestic terrorism. The shooter, identified as 25-year-old Micah Xavier Johnson, apparently believed he was committing an act of political violence. Our duty, to honor the fallen, is to ensure that Johnson’s vile and cowardly act has the opposite impact from what he sought.

Johnson ... said he was motivated by hatred over the deaths of two more black men ... at the hands of police.

Before I get into this, I want to say that all human lives matter depending on where you're standing. The lives of those in your social in-group matter a lot more than the lives of those outside it. The antagonistic groups we're interested in today are 1) police officers and 2) black people who are not police officers.

First, and just to get this point out of the way, Johnson's "killing spree" was totally meaningless unless one deems it meaningful that humans have big brains which can go haywire and often do. If you follow that uncomfortable truth to the end of the line, you risk becoming a social pariah. Few take that path!

Secondly, what we see above is that the shooting or abuse of unarmed black men by white police officers, which is routine in the United States, has been conflated with the actions of a single black man whose big brain had gone haywire. These incidents are taken to be separate but somehow equal. What's wrong with this picture?

I'll tell you what's wrong with it — in the former case, we're talking about a real and alarming trend reflecting implicit racial bias, whereas in the latter ("killing spree") case, we're talking about a one-off. Big brains go haywire all the time, but let's be specific:

How many times have black men armed with assault rifles carried out sniper-style attacks on white police officers?

Never! — until last week (as far as I know, and read here). Certainly there's no trend.