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Saturday, December 31, 2016

Re: [socialist-econ] NYTimes: Snatching Health Care Away From Millions

And it's gonna take fundamentally different thinking.   Thanks, John. 

Sent from my iPhone

On Dec 31, 2016, at 7:30 AM, John Case <jcase4218@gmail.com> wrote:

A great rundown on disaster of killing the ACA. But the blame is all on Comey and "those who put Trump over the top" -- a reference I suppose to the deplorable "white working class" of his previous post. Not a word on the weaknesses and contradictions of the ACA, or, indeed, of liberalism itself. 

It's going to take deeper thought than this to get out of this message.


Snatching Health Care Away From Millions http://nyti.ms/2hyzKgh

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NYTimes: Snatching Health Care Away From Millions

A great rundown on disaster of killing the ACA. But the blame is all on Comey and "those who put Trump over the top" -- a reference I suppose to the deplorable "white working class" of his previous post. Not a word on the weaknesses and contradictions of the ACA, or, indeed, of liberalism itself. 

It's going to take deeper thought than this to get out of this message.


Snatching Health Care Away From Millions http://nyti.ms/2hyzKgh

Friday, December 30, 2016

Fwd:



Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: December 30, 2016 at 6:51:02 PM EST
To: Stewart <acuff.stewart@gmail.com>

The road began deep in a valley

Climbed toward the sun

Dipped again to the sea

And so it followed on its run

Taking me

On the long journey

To become what I was to be

Hardly smooth but mostly happy

In a life of struggle and fight

Never ending.

Sent from my iPhone

Eastern Panhandle Independent Community (EPIC) Radio:EPIC radio returns -- Paris on the Potomac - What's it all about

John Case has sent you a link to a blog:



Blog: Eastern Panhandle Independent Community (EPIC) Radio
Post: EPIC radio returns -- Paris on the Potomac - What's it all about
Link: http://www.enlightenradio.org/2016/12/epic-radio-returns-paris-on-potomac.html

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Re: Obama Strikes Back at Russia for Election Hacking [feedly]

this is an interesting news analysis and opinion article by John Wojcik: http://www.peoplesworld.org/article/could-a-dangerous-campaign-against-russia-spin-out-of-control/

On Thursday, December 29, 2016 at 4:41:13 PM UTC-6, moderator wrote:


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Obama Strikes Back at Russia for Election Hacking
// NYT > Business

The Obama administration said it was tossing out 35 intelligence operatives and imposing sanctions on Russian intelligence services and officers.
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Thursday, December 29, 2016

Decoding 2016: David Axelrod with Joel Benenson [feedly]

Decoding 2016: David Axelrod with Joel Benenson
http://politics.uchicago.edu/news/entry/decoding-2016-david-axelrod-with-joel-benenson

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More U.S. Workers Have Highly Volatile, Unstable Incomes [feedly]



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More U.S. Workers Have Highly Volatile, Unstable Incomes
// Working In These Times

The U.S stock market may be at record highs and U.S. unemployment at its lowest level since the Great Recession, but income inequality remains stubbornly high.

Contributing to this inequality is the fact that while more Americans are working than at any time since August 2007, more people are working part time, erratic and unpredictable schedules—without full-time, steady employment. Since 2007, the number of Americans involuntarily working part time has increased by nearly 45 percent. More Americans than before are part of what's considered the contingent workforce, working on-call or on-demand, and as independent contractors or self-employed freelancers, often with earnings that vary dramatically month to month.

These workers span the socioeconomic spectrum, from low-wage workers in service, retail, hospitality and restaurant jobs—and temps in industry, construction and manufacturing—to highly educated Americans working job-to-job because their professions lack fulltime employment opportunities given the structure of many information age businesses. As Andrew Stettner, Michael Cassidy and George Wentworth point out in their new report, A New Safety Net for an Era of Unstable Earnings, what all these workers have in common are highly volatile, unstable incomes and a lack of access to the traditional U.S. unemployment insurance safety net.


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Critical points in history and social media [feedly]



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Critical points in history and social media
// UnderstandingSociety




Recent posts have grappled with the interesting topic of phase transitions in physics (link, link, link). One reason for being interested in this topic is its possible relevance to the social world, where abrupt changes of state in the social plenum are rare but known occurrences. The eruption of protest in numerous countries across the Middle East and North Africa during the Arab Spring is one example. Essentially we can describe these incidents as moments when ordinary citizens are transformed from quiescent members of civil society, pursuing their private lives as best they can, to engaged activists assembling at great risk in large demonstrations. Is this an example of a phase transition? And are there observable indicators that might allow researchers to explain and sometimes anticipate such critical points?

There is a great deal of interesting research underway on these topics in the field of complex systems and communications theory. The processes and phenomena that researchers are identifying appear to have a great deal of importance both for understanding current social dynamics and potentially for changing undesirable outcomes.

Researchers on the dynamics of mass social media have addressed the question of critical transitions. Kuehn, Martens, and Romero (2014) provide an interesting approach in their article, "Critical transitions in social network activity" (link). Also of interest is Daniel Romero's "An epidemiological approach to the spread of political third parties", co-authored with Christopher Kribs-Zaleta, Anuj Mubayi, and Clara Orbe (link).

Here is the abstract for "Critical transitions":

A large variety of complex systems in ecology, climate science, biomedicine and engineering have been observed to exhibit tipping points, where the dynamical state of the system abruptly changes. For exam- ple, such critical transitions may result in the sudden change of ecological environments and climate conditions. Data and models suggest that detectable warning signs may precede some of these drastic events. This view is also corroborated by abstract mathematical theory for generic bifurcations in stochastic multi-scale systems. Whether such stochastic scaling laws used as warning signs for a priori unknown events in society are present in social networks is an exciting open problem, to which at present only highly speculative answers can be given. Here, we instead provide a first step towards tackling a simpler question by focusing on a priori known events and analyse a social media data set with a focus on classical variance and autocorrelation warning signs. Our results thus pertain to one absolutely fundamental question: Can the stochastic warning signs known from other areas also be detected in large-scale social media data? We answer this question affirmatively as we find that several a priori known events are preceded by variance and autocorrelation growth. Our findings thus clearly establish the necessary starting point to further investigate the relationship between abstract mathematical theory and various classes of critical transitions in social networks.

They use the idea of a tipping point rather than a phase transition, but there seems to be an important parallel between the two ideas. (Here are a few prior posts on continuity and tipping points; link, link.) Here is they define the idea of a critical transition: "A critical transition may informally be defined as a rapid and drastic change of a time-dependent dynamical system" (2). The warning signs they consider are formal and statistical rather than substantive: increasing variance and rising auto-correlation:

Two of the most classical warning signs are rising variance and rising auto-correlation before a critical transition [10,28]. The theory behind these warning signs is described in more detail in Appendix A. The basic idea is that if a drastic change is induced by a critical (bifurcation) point, then the underlying deterministic dynamics becomes less stable. Hence, the noisy fluctuations become more dominant as the decay rate decreases close to the critical transition. As a result, (a) the variance in the signal increases, due to the stronger fluctuations and (b) the system's state memory (i.e., auto-correlation) increases, due to smaller deterministic contraction onto a single state [10,11]. It can be shown that both warning signs are related via a suitable fluctuation–dissipation relation [29]. (2)

Below are the data they present showing statistical associations of hashtag frequencies for impending known events -- Halloween, Thanksgiving, and Christmas. The X panels represent the word frequency of the hashtag; the V panels represent the variance, and R represents autocorrelation on the time series of word frequency.




It is plain from the graphs of these variables that the frequency, variance, and autocorrelation statistics for the relevant hashtags demonstrate a rising trend as they approach the event and fall off steeply following the event; so these statistics post-dict the event effectively. But of course there is no value in predicting the occurrence of Halloween based on the frequency of #halloween earlier in October; we know that October 31 will soon occur. The difficult research question posed here is whether it is possible to identify warning signs for unknown impending events. The authors do not yet have an answer to this question, but they offer a provocative hypothesis: "These time series illustrate that there is a variety of potentially novel dynamical behaviors in large-scale social networks near large spikes that deserve to be investigated in their own right." (4). This suggests several questions for future investigation:
How do we define when a critical transition occurs in the data for an a priori unknown event? For a priori unknown events, is there a possibility to identify hashtags or other aspects of the message which allow us to determine the best warning sign? Can we link warning signs in social networks to a priori unknown critical transitions outside a social network? Which models of social networks can re-produce critical transitions observed in data? 

Also of interest for issues raised previously in Understanding Society is Romero, Kribs-Zaleta, Mubayi, and Orbe's "An epidemiological approach to the spread of political third parties" (link). This paper is relevant to the topic of the role of organizations in the spread of social unrest considered earlier (link, link). Their paper uses the example of Green Party activism as an empirical case. Here is their abstract:

Abstract. Third political parties are influential in shaping American politics. In this work we study the spread of a third party ideology in a voting population where we assume that party members/activists are more influential in recruiting new third party voters than non-member third party voters. The study uses an epidemiological metaphor to develop a theoretical model with nonlinear ordinary differential equations as applied to a case study, the Green Party. Considering long-term behavior, we identify three threshold parameters in our model that describe the different possible scenarios for the political party and its spread. We also apply the model to the study of the Green Party's growth using voting and registration data in six states and the District of Columbia to identify and explain trends over the past decade. Our system produces a backward bifurcation that helps identify conditions under which a sufficiently dedicated activist core can enable a third party to thrive, under conditions which would not normally allow it to arise. Our results explain the critical role activists play in sustaining grassroots movements under adverse conditions.

And here is the basic intuition underlying the analysis of this paper:

We use an epidemiological paradigm to translate third party emergence from a political phenomenon to a mathematical one where we assume that third parties grow in a similar manner as epidemics in a population. We take this approach following in the steps of previous theoretical studies that model social issues via such methods. The epidemiological metaphor is suggested by the assumption that individuals' decisions are influenced by the collective peer pressure generated by others' behavior; the "contacts" between these two groups' ideas are analogous to the contact processes that drive the spread of infectious diseases. (2)

Their approach makes use of a system of differential equations to describe the behavior of the population as a whole based on specific assumptions. It would seem that the problem could be approached using an agent-based model as well. This paper is relevant to the general topic of critical points in social behavior as well, since it attempts to discover the conditions under which a social movement like third-party mobilization will accelerate rather than decay.

Also of interest to the topic of large dynamic social processes and social media is R. Kelly Garrett and Paul Resnick, "Resisting political fragmentation on the Internet" (link). Here is their abstract:

Abstract: Must the Internet promote political fragmentation? Although this is a possible outcome of personalized online news, we argue that other futures are possible and that thoughtful design could promote more socially desirable behavior. Research has shown that individuals crave opinion reinforcement more than they avoid exposure to diverse viewpoints and that, in many situations, hearing the other side is desirable. We suggest that, equipped with this knowledge, software designers ought to create tools that encourage and facilitate consumption of diverse news streams, making users, and society, better off. We propose several techniques to help achieve this goal. One approach focuses on making useful or intriguing opinion-challenges more accessible. The other centers on nudging people toward diversity by creating environments that accentuate its benefits. Advancing research in this area is critical in the face of increasingly partisan news media, and we believe these strategies can help.

This research too is highly relevant to the dynamic social processes through which largescale social changes occur, and particularly so in the current climate of fake news and deliberate political polarization.

(It is interesting that social media and the Internet come into this story in several different ways. Google employee and Egyptian activist Wael Ghonim played a central role in the early stages of activation of the uprisings in Cairo in 2011. His book, Revolution 2.0: The Power of the People Is Greater Than the People in Power: A Memoir, is a fascinating exposure to some of the details of these events, and the short book Wael Ghonim... Facebook and The Uprising in Egypt by Dhananjay Bijale specifically addresses the role that Ghonim and FaceBook played in the mobilization of ordinary young Egyptians.)


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Map of World Billionaires by Country and Origin [feedly]



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Map of World Billionaires by Country and Origin
// The Big Picture

Source: How Much

The post Map of World Billionaires by Country and Origin appeared first on The Big Picture.


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Open Society Needs Defending [feedly]



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Open Society Needs Defending
// Project Syndicate

Open societies are in crisis, and various forms of closed societies – from fascist dictatorships to mafia states – are on the rise. Because elected leaders failed to meet voters' legitimate expectations and aspirations, electorates have become disenchanted with the prevailing versions of democracy and capitalism.


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Obama Strikes Back at Russia for Election Hacking [feedly]



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Obama Strikes Back at Russia for Election Hacking
// NYT > Business

The Obama administration said it was tossing out 35 intelligence operatives and imposing sanctions on Russian intelligence services and officers.
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What it means if Trump names China a currency manipulator [feedly]



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What it means if Trump names China a currency manipulator
// L.A. Times - Business

President-elect Donald Trump has vowed to name China a currency manipulator on his first day in the White House.

There's only one problem: It's not true anymore. China, the world's second-biggest economy behind the United States, hasn't been pushing down its currency to benefit Chinese exporters...


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T. Rex: Engineering Fantasy [feedly]



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T. Rex: Engineering Fantasy
// EconoSpeak

Global warming? "It's an engineering problem, and it has engineering solutions."

According to Rex Tillerson, Donald Trump's choice for Secretary of State, adapting to climate change is an engineering problem that has an engineering solution. A soundbite from a Council on Foreign Relations presentation by Tillerson has been widely reported. But it is worthwhile to consider his full answer and its context.
Here are the question and answer:

 Transcript:

QUESTIONER: Hi, I'm David Fenton. 

Mr. Tillerson, I want to talk about science and risk, and I agree with you that's the way we must proceed. So, as you know, it's a basic fact of physics that CO2 traps heat, and too much CO2 will mean it will get too hot, and we will face enormous risks as a result of this not only to our way of life, but to the world economy. It will be devastating: The seas will rise, the coastlines will be unstable for generations, the price of food will go crazy. This is what we face, and we all know it. 

Now -- so my question for you is since we all know this knowledge, we're a little in denial of it. You know, if we burn all these reserves you've talked about, you can kiss future generations good-bye. And maybe we'll find a solution to take it out of the air. But, as you know, we don't have one. So what are you going to do about this? We need your help to do something about this. 

TILLERSON: Well, let me -- let me say that we have studied that issue and continue to study it as well. We are and have been long-time participants in the IPCC panels. We author many of the IPCC subcommittee papers, and we peer-review most of them. So we are very current on the science, our understanding of the science, and importantly -- and this is where I'm going to take exception to something you said -- the competency of the models to predict the future. We've been working with a very good team at MIT now for more than 20 years on this area of modeling the climate, which, since obviously it's an area of great interest to you, you know and have to know the competencies of the models are not particularly good. 

Now you can plug in assumptions on many elements of the climate system that we cannot model -- and you know what they all are. We cannot model aerosols; we cannot model clouds, which are big, big factors in how the CO2 concentrations in the atmosphere affect temperatures at surface level. The models we need -- and we are putting a lot of money supporting people and continuing to work on these models, try and become more competent with the models. But our ability to predict, with any accuracy, what the future's going to be is really pretty limited. 

So our approach is we do look at the range of the outcomes and try and understand the consequences of that, and clearly there's going to be an impact. So I'm not disputing that increasing CO2 emissions in the atmosphere is going to have an impact. It'll have a warming impact. The -- how large it is is what is very hard for anyone to predict. And depending on how large it is, then projects how dire the consequences are. 

As we have looked at the most recent studies coming -- and the IPCC reports, which we -- I've seen the drafts; I can't say too much because they're not out yet. But when you predict things like sea level rise, you get numbers all over the map. If you take a -- what I would call a reasonable scientific approach to that, we believe those consequences are manageable. They do require us to begin to exert -- or spend more policy effort on adaptation. What do you want to do if we think the future has sea level rising four inches, six inches? Where are the impacted areas, and what do you want to do to adapt to that? 

And as human beings as a -- as a -- as a species, that's why we're all still here. We have spent our entire existence adapting, OK? So we will adapt to this. Changes to weather patterns that move crop production areas around -- we'll adapt to that. It's an engineering problem, and it has engineering solutions. And so I don't -- the fear factor that people want to throw out there to say we just have to stop this, I do not accept. 

I do believe we have to -- we have to be efficient and we have to manage it, but we also need to look at the other side of the engineering solution, which is how are we going to adapt to it. And there are solutions. It's not a problem that we can't solve. 

ALAN MURRAY: But let's stick with that for just a second. I mean, Exxon Mobil, before you became CEO, was very aggressive and overt in challenging and mounting a public relations campaign against the sorts of things that Mr. Fenton just managed. You changed that when you came in. But I guess the question I'd ask -- I was at my daughter's graduation last weekend, and the graduation speaker said that global warming is the great challenge of your generation. Do you agree with that? Would you agree that it's in -- at least one of the top five challenges of the generation, or do you personally think that it's been way overblown? 

TILLERSON: No, I think it's -- I think it's a great challenge, but I think it's a question back to priorities. And I think, as I just described based on our understanding of the system and the models and the science and that there are engineering solutions to adapting, that we think it's solvable. 

And I think there are much more pressing priorities that we as a -- as a human being race and society need to deal with. There are still hundreds of millions, billions of people living in abject poverty around the world. They need electricity. They need electricity they can count on, that they can afford. They need fuel to cook their food on that's not animal dung. There are more people's health being dramatically affected because they could -- they don't even have access to fossil fuels to burn. They'd love to burn fossil fuels because their quality of life would rise immeasurably, and their quality of health and the health of their children and their future would rise immeasurably. You'd save millions upon millions of lives by making fossil fuels more available to a lot of the part of the world that doesn't have it, and do it in the most efficient ways, using the most efficient technologies we have today.

And we continue, and have for many, many years, talked on our energy outlook about the importance of ongoing energy efficiency, continuing to carry out economic activity with a lower energy intensity. And we've been very good as a country at doing that. We've been very good globally at doing that. And there's more potential in it.

"My philosophy is to make money. If I can drill and make money, then that's what I want to do." -- Rex Tillerson, to Charlie Rose, March 2013. To be sure, Tillerson's answer was in response to the question, "is your philosophy 'Drill, baby, drill!'?"

Andreas Malm cited Tillerson's comments, both on drilling to make money and on engineering being the solution to climate change in the context of a discussion of geo-engineering in the penultimate chapter of Fossil Capital: The Rise of Steam Power and the Roots of Global Warming. There he highlighted the incongruity that advocates of geo-engineering are typically antagonistic to the idea of a planned economy, yet the geo-engineering they promote would require centralized planning and international coordination of unprecedented, prodigious scale and complexity:

Planning the economy is the ultimate taboo; planning the climate is worthy of close consideration, an idea cognate with genetic engineering, GPS systems, smart devices, in vitro meat, drone warfare and other natural elements of late capitalist hypermodernity. Fossil capital would die in a transition; geoengineering may give it a new lease on life; what began as real subsumption of labour must end as real subsumption of the biosphere. There is that nagging feeling that a fleet of airplanes packed with sulphur are far more likely to show up than a special Ministry for a Transition to a Low-Carbon Future. It has become easier to imagine deliberate, large-scale intervention in the climate system than in capitalism.

When Tillerson spoke about an engineering solution to climate change, he talked about managing the consequences, adapting to higher sea levels and relocating agriculture. He didn't specify trying to reverse global warming through blocking incoming solar radiation. But building dikes against rising sea levels and massively relocating agriculture are also forms of geo-engineering when undertaken on such a large scale. No less than schemes to block solar radiation, adaptation projects would require planning and coordination.

But engineering solutions also require something that Tillerson has little confidence in: the competency of models to accurately predict the severity and consequences of climate change. Tillerson's insistence that there will be engineering solutions to engineering problems proceeds immediately after his dismissal of numbers that are "all over the map" -- numbers that would be crucial to the success of engineering solutions!

What exactly is going on here?

Robert Fletcher and Crelis Rammelt refer to "Lacanian fantasy" in "Decoupling: A Key Fantasy of the Post-2015 Sustainable Development Agenda." Such a fantasy enables, simultaneously, both the promise of a future solution and an alibi for not achieving that solution in the form of a "disavowal," which proclaims, in effect, "I know very well, but still..." The concept of decoupling GDP growth from carbon emissions and, by implication, from fossil fuel consumption, is the obvious complement to Tillerson's engineering solution, in that the fantasy of decoupling envisions mitigation of climate change, while Tillerson's fantasy envisions adaptation to the changing climate.

In its 2011 report on decoupling, the United Nations Environmental Program was more comprehensive in its disavowal of its solution than was Tillerson in his curt dismissal of the competence of climate models. Fletcher and Rammelt summarized that disavowal in the following excerpt:

Anatomy of a Disavowal 

While asserting the necessity of dramatic decoupling for any hope of genuine sustainable development, in short, UNEP simultaneously admits that: (1) there is virtually no evidence that (absolute) decoupling works; (2) the conceptual basis for even imagining its possibility is weak; and (3) even if it were possible, it would be politically infeasible. A clearer case of disavowal would be difficult to identify. 

This disavowal is necessary because there are in fact fundamental tensions within a neoliberal capitalist economy, between the concerns for poverty alleviation, environmental protection, and profit generation that the decoupling proposal asserts are reconcilable. Biophysical growth—no matter how 'dematerialized'—remains finite, and thus far, growth of the global financial system has, as evidenced below, continued to increase natural resource extraction in absolute terms. A reversal of that trend is nowhere in sight. At the same time, economic growth in and of itself will do nothing for poverty alleviation without strong redistribution policies that are contrary to strict market logic. Considered together, these problems raise serious questions concerning the viability of a SDG agenda rooted in the idea of decoupling. 

To paraphrase from the UNEP's disavowal, (1) there is virtually absolutely no evidence that an engineering adaptation to climate change will work; (2) the conceptual basis for even imagining its possibility is weak: according to Tillerson himself, "the competencies of the models are not particularly good"; and (3) even if an engineering solution were physically possible, there is no reason to expect that it would be any more politically feasible than decoupling GDP growth from fossil fuel consumption.


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Paul Krugman: Why Corruption Matters [feedly]



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Paul Krugman: Why Corruption Matters
// Economist's View

 "So how bad will the effects of Trump-era corruption be?":

Why Corruption Matters, by Paul Krugman, NY Times: Remember all the news reports suggesting, without evidence, that the Clinton Foundation's fund-raising created conflicts of interest? Well, now the man who benefited from all that innuendo is ... giving us an object lesson in what real conflicts of interest look like as authoritarian governments around the world shower favors on his business empire. ...

And his early appointments suggest that he won't be the only player using political power to build personal wealth. ... America has just entered an era of unprecedented corruption at the top. ...

Normally, policy reflects some combination of practicality — what works? — and ideology — what fits my preconceptions? And our usual complaint is that ideology all too often overrules the evidence.

But now we're going to see a third factor powerfully at work: What policies can officials, very much including the man at the top, personally monetize? And the effect will be disastrous. ...

But what's truly scary is the potential impact of corruption on foreign policy. Again, foreign governments are already trying to buy influence by adding to Mr. Trump's personal wealth, and he is welcoming their efforts.

In case you're wondering, yes, this is illegal, in fact unconstitutional, a clear violation of the emoluments clause. But who's going to enforce the Constitution? Republicans in Congress? Don't be silly.

Destruction of democratic norms aside, however, think about the tilt this de facto bribery will give to U.S. policy. What kind of regime can buy influence by enriching the president and his friends? The answer is, only a government that doesn't adhere to the rule of law.

Think about it: Could Britain or Canada curry favor with the incoming administration by waiving regulations to promote Trump golf courses or directing business to Trump hotels? No — those nations have free presses, independent courts, and rules designed to prevent exactly that kind of improper behavior. On the other hand, someplace like Vladimir Putin's Russia can easily funnel vast sums to the man at the top in return for, say, the withdrawal of security guarantees for the Baltic States.

One would like to hope that national security officials are explaining to Mr. Trump just how destructive it would be to let business considerations drive foreign policy. But reports say that Mr. Trump has barely met with those officials, refusing to get the briefings that are normal for a president-elect.

So how bad will the effects of Trump-era corruption be? The best guess is, worse than you can possibly imagine.


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Links for 11-28-16 [feedly]



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Links for 11-28-16
// Economist's View

The Politics of Job Polarization - Simon JohnsonExploding myths about the gig economy - VoxEU When Is Responsible Democratic Governance Possible? - Brad DeLong In India, Black Money Makes for Bad Policy - The New York Times The liberal elite's Marie Antoinette moment - Wolfgang Münchau The Electoral Consequences of Globalization - Capital Ebbs and Flows What is the role of character in action? - Understanding Society Not understanding the right - Stumbling and Mumbling Is Trump really serious about protection? - Gavyn Davies
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The Enemy Within: Bribes Bore a Hole in the U.S. Border [feedly]

 ... So that's the kind of wall he means...

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The Enemy Within: Bribes Bore a Hole in the U.S. Border
// NYT > Business

Over the last decade, nearly 200 Homeland Security workers accepted bribes to let immigrants and drugs into the country, a New York Times review found.
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Tuesday, December 27, 2016

Re: [socialist-econ] On Krugman And The Working Class [feedly]

Tim Duy is not 'Left'. He is professor of economics at U of Oregon, and a recognized expert on globalisation. 



On Dec 27, 2016 4:29 PM, "Stewart Acuff" <acuff.stewart@gmail.com> wrote:
Krugman is brilliant economist, but he's not a campaign guy. Politics is science--and art, empathy, repetition, connection, affinity. The Clinton campaign got the science but not the art. Look at how Warren speaks to our class and Sherrod and 

Sent from my iPhone

On Dec 27, 2016, at 3:13 PM, Samuel Webb <swebb1945@gmail.com> wrote:

Krugman had become a punching bag for some on left. He may not get everything right, but he gets a lot more right than most of his critics, including this one. Sam

On Tue, Dec 27, 2016 at 1:12 PM, John Case <jcase4218@gmail.com> wrote:


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On Krugman And The Working Class
// Economist's View

Tim Duy:

On Krugman And The Working Class, by Tim Duy: Paul Krugman on the election:

The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn't) and anger on the part of the less educated at liberal elites whom they imagine look down on them.

To be honest, I don't fully understand this resentment.

To not understand this resentment is to pretend this never happened:

"You know, to just be grossly generalistic, you could put half of Trump's supporters into what I call the basket of deplorables. Right?" she said to applause and laughter. "The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it. And unfortunately there are people like that. And he has lifted them up."

Clinton effectively wrote off nearly half the country at that point. Where was the liberal outrage at this gross generalization? Nowhere – because Clinton's supporters believed this to be largely true. The white working class had already been written off. Hence the applause and laughter.

In hindsight, I wonder if the election was probably over right then and there.

Krugman continues:

In particular, I don't know why imagined liberal disdain inspires so much more anger than the very real disdain of conservatives who see the poverty of places like eastern Kentucky as a sign of the personal and moral inadequacy of their residents.

But they do know the disdain of conservatives. Clinton followed right along the path of former Presidential candidate Mitt Romney:

It was the characterization of "half of Trump's supporters" on Friday that struck some Republicans as similar to the damning "47 percent" remark made by their own nominee, Mitt Romney, in his 2012 campaign against President Obama. At a private fund-raiser Mr. Romney, who Democrats had already sought to portray as a cold corporate titan, said 47 percent of voters were "dependent upon government, who believe that they are victims" and who "pay no income tax."

There was, of course, liberal outrage at Romney.

Krugman forgets that Trump was not the choice of mainstream Republicans. Trump's base overthrew the mainstream – they felt the disdain of mainstream Republicans just as they felt the disdain of the Democrats, and returned the favor.

I doubt very much that these voters are looking for the left's paternalistic attitude:

One thing is clear, however: Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.

That Krugman can wonder at the source of the disdain felt toward the liberal elite while lecturing Trump's voters on their own self-interest is really quite remarkable.

I don't know that the white working class voted against their economic interest. I don't pretend that I can define their preferences with such accuracy. Maybe they did. But the working class may reasonably believe that neither party offers them an economic solution. The Republicans are the party of the rich; the Democrats are the party of the rich and poor. Those in between have no place.

That sense of hopelessness would be justifiably acute in rural areas. Economic development is hard work in the best of circumstances; across the sparsely populated vastness of rural America, it is virtually impossible. The victories are – and will continue to be – few and far between.

The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people. Which is akin to telling many, many voters the only way possible way they can live an even modest lifestyle is to abandon their roots for the uniformity of urban life. They must sacrifice their identities to survive. You will be assimilated. Resistance is futile. Follow the Brooklyn hipsters to the Promised Land.

This is a bitter pill for many to swallow. To just sit back and accept the collapse of your communities. And I suspect the white working class resents being told to swallow that pill when the Democrats eagerly celebrate the identities of everyone else.

And it is an especially difficult pill given that the decline was forced upon the white working class; it was not a choice of their own making. The tsunami of globalization washed over them with nary a concern on the part of the political class. To be sure, in many ways it was inevitable, just as was the march of technology that had been eating away at manufacturing jobs for decades. But the damage was intensified by trade deals that lacked sufficient redistributive policies. And to add insult to injury, the speed of decline was hastened further by the refusal of the US Treasury to express concern about currency manipulation twenty years ago. Then came the housing crash and the ensuing humiliation of the foreclosure crisis.

The subsequent impact on the white working class – the poverty, the opioid epidemic, the rising death rates – are well documented. An environment that serves as fertile breeding ground for resentment, hatred and racism, a desire to strike back at someone, anyone, simply to feel some control, to be recognized. Hence Trump.

Is there a way forward for Democrats? One strategy is to do nothing and hope that the fast growing Sunbelt shifts the electoral map in their favor. Not entirely unreasonable. Maybe even the white working class turns on Trump when it becomes evident that he has no better plan for the white working class than anyone else (then again maybe he skates by with a few small but high profile wins). But who do they turn to next?

And how long will a "hold the course" strategy take? One more election cycle? Or ten? How much damage to our institutions will occur as a result? Can the Democrats afford the time? Or should they find a new standard bearer that can win the Sunbelt states and bridge the divide with the white working class? I tend to think the latter strategy has the higher likelihood of success. But to pursue such a strategy, the liberal elite might find it necessary to learn some humility. Lecturing the white working class on their own self-interest hasn't worked in the past, and I don't see how it will work in the future.


----

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Re: [socialist-econ] On Krugman And The Working Class [feedly]

Krugman is brilliant economist, but he's not a campaign guy. Politics is science--and art, empathy, repetition, connection, affinity. The Clinton campaign got the science but not the art. Look at how Warren speaks to our class and Sherrod and 

Sent from my iPhone

On Dec 27, 2016, at 3:13 PM, Samuel Webb <swebb1945@gmail.com> wrote:

Krugman had become a punching bag for some on left. He may not get everything right, but he gets a lot more right than most of his critics, including this one. Sam

On Tue, Dec 27, 2016 at 1:12 PM, John Case <jcase4218@gmail.com> wrote:


----
On Krugman And The Working Class
// Economist's View

Tim Duy:

On Krugman And The Working Class, by Tim Duy: Paul Krugman on the election:

The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn't) and anger on the part of the less educated at liberal elites whom they imagine look down on them.

To be honest, I don't fully understand this resentment.

To not understand this resentment is to pretend this never happened:

"You know, to just be grossly generalistic, you could put half of Trump's supporters into what I call the basket of deplorables. Right?" she said to applause and laughter. "The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it. And unfortunately there are people like that. And he has lifted them up."

Clinton effectively wrote off nearly half the country at that point. Where was the liberal outrage at this gross generalization? Nowhere – because Clinton's supporters believed this to be largely true. The white working class had already been written off. Hence the applause and laughter.

In hindsight, I wonder if the election was probably over right then and there.

Krugman continues:

In particular, I don't know why imagined liberal disdain inspires so much more anger than the very real disdain of conservatives who see the poverty of places like eastern Kentucky as a sign of the personal and moral inadequacy of their residents.

But they do know the disdain of conservatives. Clinton followed right along the path of former Presidential candidate Mitt Romney:

It was the characterization of "half of Trump's supporters" on Friday that struck some Republicans as similar to the damning "47 percent" remark made by their own nominee, Mitt Romney, in his 2012 campaign against President Obama. At a private fund-raiser Mr. Romney, who Democrats had already sought to portray as a cold corporate titan, said 47 percent of voters were "dependent upon government, who believe that they are victims" and who "pay no income tax."

There was, of course, liberal outrage at Romney.

Krugman forgets that Trump was not the choice of mainstream Republicans. Trump's base overthrew the mainstream – they felt the disdain of mainstream Republicans just as they felt the disdain of the Democrats, and returned the favor.

I doubt very much that these voters are looking for the left's paternalistic attitude:

One thing is clear, however: Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.

That Krugman can wonder at the source of the disdain felt toward the liberal elite while lecturing Trump's voters on their own self-interest is really quite remarkable.

I don't know that the white working class voted against their economic interest. I don't pretend that I can define their preferences with such accuracy. Maybe they did. But the working class may reasonably believe that neither party offers them an economic solution. The Republicans are the party of the rich; the Democrats are the party of the rich and poor. Those in between have no place.

That sense of hopelessness would be justifiably acute in rural areas. Economic development is hard work in the best of circumstances; across the sparsely populated vastness of rural America, it is virtually impossible. The victories are – and will continue to be – few and far between.

The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people. Which is akin to telling many, many voters the only way possible way they can live an even modest lifestyle is to abandon their roots for the uniformity of urban life. They must sacrifice their identities to survive. You will be assimilated. Resistance is futile. Follow the Brooklyn hipsters to the Promised Land.

This is a bitter pill for many to swallow. To just sit back and accept the collapse of your communities. And I suspect the white working class resents being told to swallow that pill when the Democrats eagerly celebrate the identities of everyone else.

And it is an especially difficult pill given that the decline was forced upon the white working class; it was not a choice of their own making. The tsunami of globalization washed over them with nary a concern on the part of the political class. To be sure, in many ways it was inevitable, just as was the march of technology that had been eating away at manufacturing jobs for decades. But the damage was intensified by trade deals that lacked sufficient redistributive policies. And to add insult to injury, the speed of decline was hastened further by the refusal of the US Treasury to express concern about currency manipulation twenty years ago. Then came the housing crash and the ensuing humiliation of the foreclosure crisis.

The subsequent impact on the white working class – the poverty, the opioid epidemic, the rising death rates – are well documented. An environment that serves as fertile breeding ground for resentment, hatred and racism, a desire to strike back at someone, anyone, simply to feel some control, to be recognized. Hence Trump.

Is there a way forward for Democrats? One strategy is to do nothing and hope that the fast growing Sunbelt shifts the electoral map in their favor. Not entirely unreasonable. Maybe even the white working class turns on Trump when it becomes evident that he has no better plan for the white working class than anyone else (then again maybe he skates by with a few small but high profile wins). But who do they turn to next?

And how long will a "hold the course" strategy take? One more election cycle? Or ten? How much damage to our institutions will occur as a result? Can the Democrats afford the time? Or should they find a new standard bearer that can win the Sunbelt states and bridge the divide with the white working class? I tend to think the latter strategy has the higher likelihood of success. But to pursue such a strategy, the liberal elite might find it necessary to learn some humility. Lecturing the white working class on their own self-interest hasn't worked in the past, and I don't see how it will work in the future.


----

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Re: [socialist-econ] On Krugman And The Working Class [feedly]

Krugman had become a punching bag for some on left. He may not get everything right, but he gets a lot more right than most of his critics, including this one. Sam

On Tue, Dec 27, 2016 at 1:12 PM, John Case <jcase4218@gmail.com> wrote:


----
On Krugman And The Working Class
// Economist's View

Tim Duy:

On Krugman And The Working Class, by Tim Duy: Paul Krugman on the election:

The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn't) and anger on the part of the less educated at liberal elites whom they imagine look down on them.

To be honest, I don't fully understand this resentment.

To not understand this resentment is to pretend this never happened:

"You know, to just be grossly generalistic, you could put half of Trump's supporters into what I call the basket of deplorables. Right?" she said to applause and laughter. "The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it. And unfortunately there are people like that. And he has lifted them up."

Clinton effectively wrote off nearly half the country at that point. Where was the liberal outrage at this gross generalization? Nowhere – because Clinton's supporters believed this to be largely true. The white working class had already been written off. Hence the applause and laughter.

In hindsight, I wonder if the election was probably over right then and there.

Krugman continues:

In particular, I don't know why imagined liberal disdain inspires so much more anger than the very real disdain of conservatives who see the poverty of places like eastern Kentucky as a sign of the personal and moral inadequacy of their residents.

But they do know the disdain of conservatives. Clinton followed right along the path of former Presidential candidate Mitt Romney:

It was the characterization of "half of Trump's supporters" on Friday that struck some Republicans as similar to the damning "47 percent" remark made by their own nominee, Mitt Romney, in his 2012 campaign against President Obama. At a private fund-raiser Mr. Romney, who Democrats had already sought to portray as a cold corporate titan, said 47 percent of voters were "dependent upon government, who believe that they are victims" and who "pay no income tax."

There was, of course, liberal outrage at Romney.

Krugman forgets that Trump was not the choice of mainstream Republicans. Trump's base overthrew the mainstream – they felt the disdain of mainstream Republicans just as they felt the disdain of the Democrats, and returned the favor.

I doubt very much that these voters are looking for the left's paternalistic attitude:

One thing is clear, however: Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.

That Krugman can wonder at the source of the disdain felt toward the liberal elite while lecturing Trump's voters on their own self-interest is really quite remarkable.

I don't know that the white working class voted against their economic interest. I don't pretend that I can define their preferences with such accuracy. Maybe they did. But the working class may reasonably believe that neither party offers them an economic solution. The Republicans are the party of the rich; the Democrats are the party of the rich and poor. Those in between have no place.

That sense of hopelessness would be justifiably acute in rural areas. Economic development is hard work in the best of circumstances; across the sparsely populated vastness of rural America, it is virtually impossible. The victories are – and will continue to be – few and far between.

The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people. Which is akin to telling many, many voters the only way possible way they can live an even modest lifestyle is to abandon their roots for the uniformity of urban life. They must sacrifice their identities to survive. You will be assimilated. Resistance is futile. Follow the Brooklyn hipsters to the Promised Land.

This is a bitter pill for many to swallow. To just sit back and accept the collapse of your communities. And I suspect the white working class resents being told to swallow that pill when the Democrats eagerly celebrate the identities of everyone else.

And it is an especially difficult pill given that the decline was forced upon the white working class; it was not a choice of their own making. The tsunami of globalization washed over them with nary a concern on the part of the political class. To be sure, in many ways it was inevitable, just as was the march of technology that had been eating away at manufacturing jobs for decades. But the damage was intensified by trade deals that lacked sufficient redistributive policies. And to add insult to injury, the speed of decline was hastened further by the refusal of the US Treasury to express concern about currency manipulation twenty years ago. Then came the housing crash and the ensuing humiliation of the foreclosure crisis.

The subsequent impact on the white working class – the poverty, the opioid epidemic, the rising death rates – are well documented. An environment that serves as fertile breeding ground for resentment, hatred and racism, a desire to strike back at someone, anyone, simply to feel some control, to be recognized. Hence Trump.

Is there a way forward for Democrats? One strategy is to do nothing and hope that the fast growing Sunbelt shifts the electoral map in their favor. Not entirely unreasonable. Maybe even the white working class turns on Trump when it becomes evident that he has no better plan for the white working class than anyone else (then again maybe he skates by with a few small but high profile wins). But who do they turn to next?

And how long will a "hold the course" strategy take? One more election cycle? Or ten? How much damage to our institutions will occur as a result? Can the Democrats afford the time? Or should they find a new standard bearer that can win the Sunbelt states and bridge the divide with the white working class? I tend to think the latter strategy has the higher likelihood of success. But to pursue such a strategy, the liberal elite might find it necessary to learn some humility. Lecturing the white working class on their own self-interest hasn't worked in the past, and I don't see how it will work in the future.


----

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A Secular Religion That Lasted One Century [feedly]

Case: If you think revolutionary ideology is dead, get ready for some rude awakenings

----
A Secular Religion That Lasted One Century
// Economist's View

Branko Milanovic:

A secular religion that lasted one century: The death of Fidel Castro made me think again of the idea that I had for a while about our lack of understanding of what is the place of communism in global history of mankind.  We have thousands of historical volumes on communism, and similarly thousands of volumes of apologia and critiques of Communism, but we have no conception of what its position in global history was—e.g. whether colonialism would have ended without communism, whether communism kept capitalism less unequal, whether it promoted social mobility, or made transition from agrarian to industrial societies in Asia much faster etc.  As Diego Castaneda mentioned in today's tweet, we probably will not be able to assess communism for a while, probably until the passions that it arose have died down.

The death of Fidel Castro is a useful marker because he was the last canonic communist revolutionary: the leader of a revolution that overthrew the previous order of things, nationalized property, and ruled through a single party-state. We can pretty confidently state that no communist revolutionary  in that canonic mould that was so common in the 20th century, from Lenin, Trotsky, Stalin, Mao, Liu Shaoqi, Tito and Fidel will arise in this century. The ideas of nationalized property and central planning are dead. In a very symmetrical way, the arrival of Utopia to power that began in glacial Petrograd in November 1917 ended with the death of its last actual, physical, proponent, in a far-away Caribbean nation, in November 2016.

Let me go over some grossly simplified ideas that, perhaps one day, I will expound more fully in a book format. ...


----

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On Krugman And The Working Class [feedly]



----
On Krugman And The Working Class
// Economist's View

Tim Duy:

On Krugman And The Working Class, by Tim Duy: Paul Krugman on the election:

The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn't) and anger on the part of the less educated at liberal elites whom they imagine look down on them.

To be honest, I don't fully understand this resentment.

To not understand this resentment is to pretend this never happened:

"You know, to just be grossly generalistic, you could put half of Trump's supporters into what I call the basket of deplorables. Right?" she said to applause and laughter. "The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it. And unfortunately there are people like that. And he has lifted them up."

Clinton effectively wrote off nearly half the country at that point. Where was the liberal outrage at this gross generalization? Nowhere – because Clinton's supporters believed this to be largely true. The white working class had already been written off. Hence the applause and laughter.

In hindsight, I wonder if the election was probably over right then and there.

Krugman continues:

In particular, I don't know why imagined liberal disdain inspires so much more anger than the very real disdain of conservatives who see the poverty of places like eastern Kentucky as a sign of the personal and moral inadequacy of their residents.

But they do know the disdain of conservatives. Clinton followed right along the path of former Presidential candidate Mitt Romney:

It was the characterization of "half of Trump's supporters" on Friday that struck some Republicans as similar to the damning "47 percent" remark made by their own nominee, Mitt Romney, in his 2012 campaign against President Obama. At a private fund-raiser Mr. Romney, who Democrats had already sought to portray as a cold corporate titan, said 47 percent of voters were "dependent upon government, who believe that they are victims" and who "pay no income tax."

There was, of course, liberal outrage at Romney.

Krugman forgets that Trump was not the choice of mainstream Republicans. Trump's base overthrew the mainstream – they felt the disdain of mainstream Republicans just as they felt the disdain of the Democrats, and returned the favor.

I doubt very much that these voters are looking for the left's paternalistic attitude:

One thing is clear, however: Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.

That Krugman can wonder at the source of the disdain felt toward the liberal elite while lecturing Trump's voters on their own self-interest is really quite remarkable.

I don't know that the white working class voted against their economic interest. I don't pretend that I can define their preferences with such accuracy. Maybe they did. But the working class may reasonably believe that neither party offers them an economic solution. The Republicans are the party of the rich; the Democrats are the party of the rich and poor. Those in between have no place.

That sense of hopelessness would be justifiably acute in rural areas. Economic development is hard work in the best of circumstances; across the sparsely populated vastness of rural America, it is virtually impossible. The victories are – and will continue to be – few and far between.

The tough reality of economic development is that it will always be easier to move people to jobs than the jobs to people. Which is akin to telling many, many voters the only way possible way they can live an even modest lifestyle is to abandon their roots for the uniformity of urban life. They must sacrifice their identities to survive. You will be assimilated. Resistance is futile. Follow the Brooklyn hipsters to the Promised Land.

This is a bitter pill for many to swallow. To just sit back and accept the collapse of your communities. And I suspect the white working class resents being told to swallow that pill when the Democrats eagerly celebrate the identities of everyone else.

And it is an especially difficult pill given that the decline was forced upon the white working class; it was not a choice of their own making. The tsunami of globalization washed over them with nary a concern on the part of the political class. To be sure, in many ways it was inevitable, just as was the march of technology that had been eating away at manufacturing jobs for decades. But the damage was intensified by trade deals that lacked sufficient redistributive policies. And to add insult to injury, the speed of decline was hastened further by the refusal of the US Treasury to express concern about currency manipulation twenty years ago. Then came the housing crash and the ensuing humiliation of the foreclosure crisis.

The subsequent impact on the white working class – the poverty, the opioid epidemic, the rising death rates – are well documented. An environment that serves as fertile breeding ground for resentment, hatred and racism, a desire to strike back at someone, anyone, simply to feel some control, to be recognized. Hence Trump.

Is there a way forward for Democrats? One strategy is to do nothing and hope that the fast growing Sunbelt shifts the electoral map in their favor. Not entirely unreasonable. Maybe even the white working class turns on Trump when it becomes evident that he has no better plan for the white working class than anyone else (then again maybe he skates by with a few small but high profile wins). But who do they turn to next?

And how long will a "hold the course" strategy take? One more election cycle? Or ten? How much damage to our institutions will occur as a result? Can the Democrats afford the time? Or should they find a new standard bearer that can win the Sunbelt states and bridge the divide with the white working class? I tend to think the latter strategy has the higher likelihood of success. But to pursue such a strategy, the liberal elite might find it necessary to learn some humility. Lecturing the white working class on their own self-interest hasn't worked in the past, and I don't see how it will work in the future.


----

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California, at Forefront of Climate Fight, Won’t Back Down to Trump [feedly]



----
California, at Forefront of Climate Fight, Won't Back Down to Trump
// NYT > Business

An elevated role on climate change is a sign of how California, one of the world's 10 largest economies, plans to resist the incoming administration's policies.
----

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Monday, December 26, 2016

Fwd:



Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: December 26, 2016 at 5:44:27 PM EST
To: red-ink <red-ink@earthlink.net>, Stewart <acuff.stewart@gmail.com>
Subject: Fwd:

This old tree

Majestic in its fight

Against lightning, time and fire

Stands against all the might

The elements send, it's top once a spire

Now a guide for life and living right

It's winter browned leaves show life that refuses death or dire

Warnings for centuries dark or bright

This tree calls us to its sight

So we can learn to stand and struggle and fight

Till we've weathered this storm. 
Sent from my iPhone

Begin forwarded message:

From: Stewart Acuff <acuff.stewart@gmail.com>
Date: December 26, 2016 at 5:30:17 PM EST
To: Stewart <acuff.stewart@gmail.com>, red-ink <red-ink@earthlink.net>



<photo.JPG>



Sent from my iPhone

Trekking the Gold Trail: Misinvoicing in Primary Commodity Exports [feedly]



----
Trekking the Gold Trail: Misinvoicing in Primary Commodity Exports
// TripleCrisis

Léonce Ndikumana

Introduction

Exports of primary commodities are an important driver of growth in many developing countries. However, high resource endowment exposes these countries to the vagaries of large swings in commodity prices. And if "natural capital accounting" is applied so as to count the full cost of non-renewable resource depletion, the World Bank finds that 88 percent of African countries are net losers: the incoming profits and investment are less than the outgoing value of the minerals (World Bank, 2014). Moreover, resource-rich countries suffer from losses in foreign exchange and tax revenues resulting from under-reporting of export proceeds. Indeed, trade misinvoicing is a major concern in a global system characterized by lack of transparency and skewed distribution of gains from trade. Incentives for trade misinvoicing arise from the existence of opportunities for profit maximization and access to foreign exchange out of the control of the regulating authority. These opportunities are made possible by regulation of tariffs, customs procedures, export subsidies, and exchange controls, among others.

The issue of trade misinvoicing has been a long-standing concern in the economics profession since the seminal work by Jagdish Bhagwati in the 1960s.[1] The work was inspired by an even older strand of literature concerned with the consistency of partner data on international trade back in the 19th century.[2] Interest in the problem of trade misinvoicing gained momentum in the 1980s in the context of the debt crisis;[3] since then it has taken prominence in academia and in the policy arena.[4]

Trade misinvoicing is defined as either perverse discrepancies or excessive normal discrepancies in partner trade statistics estimated through the comparison of exports as reported by the exporter and imports as reported by the importer. There are perverse discrepancies when recorded imports are significantly lower than recorded exports plus the cost of transport, insurance, and duties. This could reflect either export overinvoicing or import underinvoicing.  Trade misinvoicing may be driven by factors associated with the country of origin or the destination of trade flows or both. Estimates of trade misinvoicing do not therefore permit to assign a priori the respective share of responsibility on the basis of the estimates of trade misinvoicing alone.

A recent report published by the United Nations Conference on Trade and Development (UNCTAD) (prepared by the author of this note) examines the extent of trade misinvoicing of primary commodity exports from five resource-rich developing countries—Chile, Côte d'Ivoire, Nigeria, South Africa, and Zambia (UNCTAD, 2016). The publication of the first version of the report in July 2016 generated interesting debates, partly motivated by the sheer values of export misinvoicing but also by what appears to be misconceptions regarding the nature of the data, the methodology and concepts used in the analysis. Some reactions to the report warrant a clearer exposition of the concepts and methodology of estimation of trade misinvoicing—which the new version of the report sought to clarify. Most fundamentally, there is a need for further improvements in the transparency of the reporting of trade statistics. The UNCTAD report and the debates that it has generated can be considered as a boost to further investment in knowledge generation in this area. This note presents some of the updated results using the case of gold exports from South Africa as an illustration, while responding to the main criticisms to the initial report. More detail is provided in the revised version of the report just published by UNCTAD (December 2016).

Highlights from recent evidence

Large discrepancies in partner trade data

Key results emerge from the analysis of primary commodity exports from the five developing countries covered by the UNCTAD report. First, the data show large unexplained discrepancies between the values of exports as declared by the exporting countries and the values of imports as declared by the trading partners. These differences vastly exceed reasonable costs of freight and insurance, providing prima facie indication of trade misinvoicing. Table 1 summarizes the results. However, these differences may also be due to other problems associated with the reporting of trade data, notably inconsistency in the classification of products between trading partners, inaccurate reporting of origin and destination of products, and lags in recording of imports. To the extent that the discrepancies are systematic, this casts doubts on the justification based on any of these possible data problems, pointing to evidence of trade misinvoicing. Only detailed analysis by country, product, transaction, and partner pairs can shed light on the sources of the discrepancies and the share that is attributable to trade misinvoicing as opposed to other factors.



Blind spots in the trade chain

Second, the analysis of the data reveals 'gray holes' or blind spots in the trading chain whereby exports recorded at the origin cannot be traced at the declared destination on the exporter's records. This phenomenon seems to be especially associated with what is referred to as commodity 'trading hubs', notably The Netherlands and Switzerland. For example, while Zambia's data shows that Switzerland is the top buyer of its copper (51 percent), no copper imports from Zambia appear in Switzerland's trade data. Similarly, a significant amount of Nigerian oil registered as exported to the Netherlands cannot be traced in the Netherlands' bilateral trade data. Some highlights are provided in Table 2.



Transit trade has been suggested as a possible explanation for the large discrepancies between partner trade data.  The question here is why exports are recorded as destined to a country when they are not shipped to that country. If a commodity is just "transiting" in a country, it should not be recorded as an export to this country. When commodity exports cannot be tracked from the origin to their ultimate destination, when intermediaries fail to report the values of the transactions it becomes impossible to assess whether the gains from commodity trade are distributed fairly, specifically whether the producer is earning a fair share of the market value of the exported commodities.

One criticism leveled against the methodology used to estimate trade misinvoicing is that the proxy for the cost of freight and insurance used in comparing partner trade data leads to inflated estimates of trade misinvoicing. Because information on the cost of transport, insurance, and duties is not systematically reported, the practice is to use 10 percent of exports as a proxy for these costs. South Africa is one of the few African countries that publish imports in f.o.b. and c.i.f. values. Taking the ratio of these two series yields an average ratio of 11 per cent over the 1980-2014 period. The 10 per cent used as a proxy is therefore quite reasonable. Obviously, the cost of freight and insurance varies by industry and country position relative to the markets. In the case of gold, for example, the cost of transport is expected to be relatively low, so the 10% proxy could actually be too high.  Nonetheless, it is not possible to attribute the estimated trade misinvoicing to an inaccurate proxy for the cost of freight and insurance.

The case of gold exports from South Africa

Among the results from the UNCTAD report, those on gold exports from South Africa have ignited the most spirited debate, including questions about the source of the data used, challenges to the methodology used in estimating trade misinvoicing, and questions on the interpretation of the results. This note seeks to shed light on this debate and offer new insights into the analysis of South African gold trade data while raising issues that deserve attention from policymakers.

The analysis

First of all, it is important to establish clearly what is being measured and analyzed. Gold exports are reported under two categories: monetary gold and non-monetary gold. The UNCTAD report focused on non-monetary gold [SITC code 971] and compared the data reported by South Africa to the values reported by its trading partners. The analysis in the initial report published in July was based on the data reported in Comtrade, a database managed by the United Nations.

The results in the July version of the UNCTAD report showed that while partner data indicated a cumulative amount of $116 billion in non-monetary gold exports from 2000 to 2014, South African data in Comtrade showed only $34.5 billion. The South African Revenue Services contended that the true value was $54.5 billion but it did not provide details on how this amount was calculated. Investigation of published government data sources shows little difference between the values reported in Comtrade and those in government sources. This was confirmed using data from the Department of Trade and Industry (DTI). This similarity is expected given that Comtrade only records the data as supplied by government sources.

In September, the DTI data showed substantial upward revisions of the values of gold exports, raising non-monetary gold exports to $62 billion. But this still left a gap of $54 billion compared to the value reported by trading partners. The data are summarized in Table 3.



Apples + oranges = gold?

A report by consultancy firm Eunomix commissioned by the South African Chamber of Mines claims to have reconciled the data reported by South Africa and its trading partners. According to the report, gold exports over the 15 year period from 2000 to 2014 amounted to $87.9 billion.

There are two issues with the results in this consultancy report. The main issue is that it does not distinguish between monetary and non-monetary gold exports. This means that the values in the Eunomix report cannot be compared to those reported by South Africa's trading partners. The second is that even if one accepted that apples could be compared to oranges, the comparison still leaves a substantial amount of gold unaccounted for, suggesting export misinvoicing of $19 billion.

Three key results

From the analysis of gold exports data in both the July edition of the UNCTAD report that relied solely on Comtrade and results in the revised version of the report using alternative government sources, the main conclusions remain unchanged. First, the data on non-monetary gold exports reported in Comtrade is similar to the data reported in government statistics, which is to be expected. Therefore, analysis of trade misinvoicing yields similar results regardless of which source is used.

Second, if we follow the classification of gold between monetary gold and non-monetary gold—as everyone should—then the analysis of export data shows substantial discrepancies between South Africa's exports and the values of its trading partners' imports of non-monetary gold.

Third, curiously, new government data series for monetary gold and non-monetary gold are merged starting from 2011. This seems to be a step back with regard to consistency and transparency in trade statistics. Such a move makes the analysis of trade misinvoicing impossible as it only considers non-monetary gold which is reported by trading partners.

Conflations and misinterpretations

The ongoing debate on trade misinvoicing in general and, in particular, some of the reactions to the UNCTAD report have revealed substantial confusion in the interpretation of the results and key concepts used in the analysis. First, partly because of inadequate explanation in the original UNCTAD report, the concept of trade misinvoicing clearly remains elusive for some uninformed readers and it gets conflated with other related but different concepts.

The concept of trade misinvoicing tends to be conflated with that of transfer pricing. Yet, the two phenomena are different. Transfer pricing generates no discrepancies between recorded exports and recorded imports for the simple reason that the same price is used and reported on both sides of the transaction. Firms resort to abusive transfer pricing by inflating prices so as to shift profits across territories and take advantage of differences in taxation regimes. Transfer pricing may indeed constitute an illicit financial flow; but it is not a mechanism for capital flight given that the outflow is recorded. Moreover, while transfer pricing results in tax revenue losses (e.g., as in the case of recorded profit repatriation), the associated transfer of profit itself does not constitute capital flight. It is difficult to ascertain the legality of transfer pricing because of the lack of consistent benchmarks for market prices especially for trade in services. The literature on capital flight has primarily been concerned with the fact that the flows are unrecorded, not with the legality of these flows. In that sense, the work on illicit financial flows is a welcome expansion of the analysis of capital flows and a major contribution to the policy debate.

There is also frequent confusion with regard to the implications of trade misinvoicing for capital flight. The literature defines capital flight as unrecorded outflows of capital from a country to the rest of the world through various mechanisms. Trade misinvoicing constitutes one such mechanism. Trade misinvoicing generates capital flight when exports are underinvoiced and when imports are overinvoiced. In contrast, underinvoicing of imports (under-reported or smuggled) does not result in capital flight. So is the more peculiar case of export overinvoicing. Note, however, that unrecorded imports constitute a cause of concern as they imply a loss of government revenue due to unpaid customs duties. Moreover, these imports must be paid for. Therefore, imports underinvoicing may be a symptom of a breakdown in regulation.

The existing evidence clearly demonstrates that while trade misinvoicing cannot be measured precisely, the sheer magnitude of the estimates suggests that the problem is real and it must be tackled with all the attention it deserves. In the meantime, a healthy, dispassionate debate on the data, methodology and other aspects of the research on trade misinvoicing constitute an integral part of the learning process towards generating policy relevant results. In this context, it is clear that the frontier of research in this area lies at the disaggregated level. Only micro-level and institutional analysis can generate the much needed insights on the mechanisms of trade misinvoicing and the associated political economy implications.

Notes

[1] Bhagwati (1964, 1967).

[2] See Ferraris (1885) as cited in Morgenstern (1963, Chap. IX).

[3]  Lessard and Williamson (1987).

[4] Ndikumana et al. (2015), Patnaik and Vasudevan (2000); Beja (2006)

References

Beja, E. L. (2006). Was capital fleeing Southeast Asia? Estimates from Indonesia, Malaysia, the Philippines, and Thailand. Asia Pacific Business Review, 12 (3), 261-283.

Bhagwati, J. (1964). On the underinvoicing of imports [with application to recent Turkish experience]. Bulletin of the Institute of Economics and Statistics (Oxford University), 26, 389-397.

Bhagwati, J. (1967). Fiscal policies, the faking of foreign trade declarations, and the balance of payments. Bulletin of the Institute of Economics and Statistics (Oxford University), 29, 61-77.

Ferraris, C. F. (1885). La Statistica del Movimento dei Metalli Preziosi fra l'Italia e l'Estero (Rome).

Lessard, D. R. and Williamson, J. (Eds.). (1987). Capital Flight and Third World Debt. Washington, DC: Institute for International Economics.

Morgenstern, O. (1963). On the accuracy of economic observations. Princeton, N.J.: Princeton University Press.

Ndikumana, L., Boyce, J. K. and Ndiaye, A. S. (2015). Capital flight from Africa: Measurement and drivers. In S. I. Ajayi and L. Ndikumana (Eds.), Capital Flight from Africa: Causes, Effects and Policy Issues (pp. 15-54). Oxford: Oxford University Press.

Patnaik, I. and Vasudevan, D. (2000). Trade misinvoicing and capital flight from India. Journal of International Economic Studies, 14, 99-108.

UNCTAD. (2016). Trade Misinvoicing in Primary Commodities in Developing Countries: The cases of Chile, Côte d'Ivoire, Nigeria, South Africa and Zambia (Vol. December). Geneva: UNCTAD.

World Bank. (2014). 2014 Little Green Data Book. Washington, DC: World Bank.

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Re: [socialist-econ] Paul Krugman: The Populism Perplex [feedly]

Krugman as smart as he is is hindered by  2 things-- he is blinded by his clintonphilia. Remember his support for Clinton over Obama in 2008 and his support for Clinton against Bernie?  PK also doesn't get political tactics and strategy. The Clinton Campaign made a number of strategic blunders including running the election as a referendum against Trump instead if as a choice. Also, she didn't campaign on economic issues. She essentially quit campaigning on working class economic issues after the convention. Positions and policy don't make a campaign. 

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On Dec 26, 2016, at 3:08 PM, John Case <jcase4218@gmail.com> wrote:



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Krugman's answer (at least PK is honest): "I don't have a fucking clue".



Paul Krugman: The Populism Perplex
// Economist's View

 What should Democrats do to win the votes of the white working class?:

The Populism Perplex, by Paul Krugman, NY Times: ...what put Donald Trump in striking distance was overwhelming support from whites without college degrees. So what can Democrats do to win back at least some of those voters?

Recently Bernie Sanders offered an answer: Democrats should "go beyond identity politics." What's needed, he said, are candidates who understand that working-class incomes are down, who will "stand up to Wall Street, to the insurance companies, to the drug companies, to the fossil fuel industry."

But is there any reason to believe that this would work? Let me offer some reasons for doubt. ...

Any claim that changed policy positions will win elections assumes that the public will hear about those positions. How is that supposed to happen, when most of the news media simply refuse to cover policy substance? ...

Beyond this, the fact is that Democrats have already been pursuing policies that are much better for the white working class... Yet this has brought no political reward. ...

Now, you might say that health insurance is one thing, but what people want are good jobs. Eastern Kentucky used to be coal country, and Mr. Trump, unlike Mrs. Clinton, promised to bring the coal jobs back. ... But it's a nonsensical promise..., there may be a backlash when the coal and manufacturing jobs don't come back, while health insurance disappears.

But maybe not. Maybe a Trump administration can keep its supporters on board, not by improving their lives, but by feeding their sense of resentment.

For let's be serious here: You can't explain the votes of places like Clay County as a response to disagreements about trade policy. The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn't) and anger ... at liberal elites whom they imagine look down on them.

To be honest, I don't fully understand this resentment. In particular, I don't know why imagined liberal disdain inspires so much more anger than the very real disdain of conservatives who see the poverty of places like eastern Kentucky as a sign of ... personal and moral inadequacy...

One thing is clear, however: Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem.


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Is any bit of positive fiscal impulse worth the money? [feedly]



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Is any bit of positive fiscal impulse worth the money?
// Jared Bernstein | On the Economy

I'll be brief because I'm on vacation this week in an undisclosed location, but the hotel has solid wifi and the family's still snoozing away, so let's quickly talk a bit of fiscal impulse (FI).

The discussion starts with 'G' in the GDP identity: Cons+Inv+Gov't+Net Exports. An increase in G raises GDP, all else equal, and that's positive fiscal impulse (FI). It's nothing more than "the delta"–the change–in fiscal policy from one period to the next.

What can be confusing to people is that it's not the level, it's the change. So, if you're stimulus program spends $150 bn in year one and $100 bn in year two, FI in year two is negative.

I raise this because I'm encountering progressives who are compelled to be at least somewhat supportive of wasteful, regressive tax cuts, like those proposed by Trump, or the ones I just wrote about in Kansas, that happen to spin off some positive fiscal impulse. While we're closing in on full employment, there's still slack in the job market, such FI could help absorb remaining slack.

That's true, but there are two relevant questions: bang for the buck (multipliers), and the impacts of the cost of the tax cuts.

The Kansas cuts–particularly the zeroing out of the pass-through income–are instructive as these cuts have very low bang-for-buck in terms of jobs or incomes for middle and lower income folks. They just lower taxes for those who are already "highly liquid," i.e., they've got a bunch of money already and giving them more shouldn't be expected to boost spending (C) or investment (I) much. And since states must balance their budgets, they constrain G as well.

In terms of poor targeting, Trump-style cuts are similarly lame in terms of growth effects, as I discussed recently re the GW Bush tax cuts in the early 2000s. However, because they involve deficit spending–as I'm sure you've seen, the federal gov't can run deficits–they will generate some positive FI, which we could use.

But at what cost? The opportunity costs are twofold. First, there's the cost of tapping small versus larger multipliers: were team Trump to spend the money on infrastructure or target those with high consumption propensities, the FI would be stronger (btw, it should be noted that multipliers are smaller when the Fed's raising rates, albeit slowly and by small increments, than when they're lowering them).

Second, "permanent" tax cuts will mean a worsening of the revenue shortfall I've long worried about (the scare quotes are there because the R's may build some BS cliff into their tax plan to accommodate arcane budget rules, but the intention is permanence). That will provide an excuse for whacking Medicaid, Medicare, Social Sec, and much other spending that's important to the poor and middle-class. And yes, those folks are income constrained, so that part of 'G' gets spent and feeds back into growth.

To be clear, I'm not worried about higher budget deficits because I fear they'll crowd out private borrowing and lead to higher interest rates. That's not at all my reason for opposing a big tax cut. And I'm confident that even a highly regressive cut will generate some needed FI.

My reason for opposing such cuts, in the nation or in the states, is that they do little to boost demand and they whack desperately needed revenues. And while I recognize the argument that "hey, this is the best we're gonna get from team Trump," I will not go gently into that good tax fight.

****

Hey, I'm #10 on this list of allegedly influential economists. I've got no idea what that means, but I'll take it!


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