Wednesday, January 27, 2021

Socialism For The Rich

When the pandemic has been reigned in, Tom Friedman writes that we have to have a conversation about what has become conventional wisdom over the last forty years -- socialism for the rich, capitalism for the rest:

This new consensus has a name: “Socialism for the rich and capitalism for the rest,” argues Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, author of “The Ten Rules of Successful Nations” and one of my favorite contrarian economic thinkers.

Socialism for the rich and capitalism for the rest — a variation on a theme popularized in the 1960s — happens, Sharma explained in a phone interview, when government intervention does more to stimulate the financial markets than the real economy. So, America’s richest 10 percent, who own more than 80 percent of U.S. stocks, have seen their wealth more than triple in 30 years, while the bottom 50 percent, relying on their day jobs in real markets to survive, had zero gains. Meanwhile, mediocre productivity in the real economy has limited opportunity, choice and income gains for the poor and middle class alike.

The best evidence is the last year: We’re in the middle of a pandemic that has crushed jobs and small businesses — but the stock market is soaring. That’s not right. That’s elephants flying. I always get worried watching elephants fly. It usually doesn’t end well.

We have bailed out companies that are zombies:

Sharma wrote in July in a Wall Street Journal essay titled “The Rescues Ruining Capitalism,” that easy money and increasingly generous bailouts fuel the rise of monopolies and keep “alive heavily indebted ‘zombie’ firms, at the expense of start-ups, which drive innovation.” And all of that is contributing to lower productivity, which means slower economic growth and “a shrinking of the pie for everyone.”

As such, no one should be surprised “that millennials and Gen Z are growing disillusioned with this distorted form of capitalism and say that they prefer socialism.”

In the 1980s, “only 2 percent of publicly traded companies in the U.S. were considered ‘zombies,’ a term used by the Bank for International Settlements (BIS) for companies that, over the previous three years, had not earned enough profit to make even the interest payments on their debt,” Sharma wrote. “The zombie minority started to grow rapidly in the early 2000s, and by the eve of the pandemic, accounted for 19 percent of U.S.-listed companies.” It’s happening in Europe, China and Japan, too.

During the pandemic, big countries have prospered. Small businesses have closed. As Hamlet said, "The time is out of joint."

Image: QuotesGram


Tuesday, January 26, 2021

Good Bye And Good Riddance

The Canadian political scene is being reconstituted. Some of its ugliest practitioners are leaving the stage. Susan Delacourt writes:

It appears to be sweeps week in Canadian politics — when troublesome political players get swept right out of the action.

Justin Trudeau’s Liberals tossed an MP out of caucus on Monday amid controversy over conspiracy theories, just a few hours after Sen. Lynn Beyak decided to shut down her racism-infused political career, effective immediately.

These exits come hot on the heels of last week’s resignation of governor-general Julie Payette and the ouster of a neo-Nazi funded MP, Derek Sloan, from the Conservative caucus.

The Liberals made no bones about why they ousted Ramesh Sangha from their caucus:

Sent out as a succinct, “he’s fired” missive by Chief Government Whip Mark Holland, it said Liberals were shutting down that kind of trouble in its tracks, within its own ranks.

Conservative Leader Erin O’Toole has been drawing some sharper lines too; not just with his own ouster of Sloan last week for taking donations from a neo-Nazi. 

The Conservatives still have some toxic MP's:

On Monday, one of O’Toole’s Conservatives, Kerry Diotte, was standing up in the Commons to call Trudeau “wimpy” and Calgary MP Michelle Rempel Garner was being chided for shouting “what the hell” in the direction of the government. So this is clearly a work in progress.

There are lessons to be learned from what happened south of the border. The Republicans should have taken Donald Trump out of the game early. Now their collective I.Q. is a negative number. Political parties destroy themselves when they coddle the crazies.

Image: Pittsburgh Post Gazette

Monday, January 25, 2021

Making Government Work



Joe Biden has talked a lot about unity. But, E.J. Dionne writes, unity is being overtaken by urgency:

Senate Democrats won their 49th and 50th seats in Georgia’s two runoff elections earlier this month, which gave them the majority thanks to Vice President Harris’s tie-breaking vote. This meant that the Senate had to be reorganized to recognize the shift in control. The outlines of an organizing resolution were already there from the last time the Senate was split 50-50, in 2001.

That didn’t stop Senate Minority Leader Mitch McConnell (R-Ky.) from balking. He demanded that Senate Majority Leader Charles E. Schumer (D-N.Y.) promise that Senate Democrats wouldn’t challenge the filibuster rule for the next two years. The current filibuster rule means that most bills need 60 votes to pass. Essentially, McConnell was telling Democrats to give up any power they might have to force action if the GOP persistently blocked Biden’s initiatives. 

It is a recipe for unrestrained minority rule.

The Republican Party has been fiercely dedicated to minority rule for decades. That's what their gerrymandering and voter suppression has been all about. It's clear they propose to operate as they have in the past. That presents the Democrats with a problem:

So, as Biden would say, here’s the deal: He and his party should indeed make every effort to negotiate with Republicans to win what support they can get. Bipartisanship is great when it works, so it’s constructive that Brian Deese, the head of the White House’s National Economic Council, is meeting with moderates and moderate conservatives, including Collins and Romney, to try to find common ground. What Democrats can’t afford, Sen. Chris Van Hollen (D-Md.) said in an interview, is the “long drawn-out process” that characterized the party’s approach during the early Obama years on both economic stimulus and health care.

This means being willing to move quickly to what is known as the reconciliation process, which would allow passage of economic relief on a simple Senate majority.

“We should give Senate Republicans a very short amount of time to signal if they want to be partners in moving the country forward, or if they intend to be obstructionists,” Van Hollen said. “And the early signaling is that they are reverting to their obstructionist mode.”

Reconciliation rules are largely limited to bills involving money. Eventually, Democrats will have to take on the filibuster itself. They might do this piece by piece if obstruction prevails on particular bills, notably democracy reform efforts.

Already, conservatives are preparing to characterize any remotely progressive proposals from Biden as evidence that he is moving “hard left.” Moderate Democrats should not take the bait — and the early signs are that they won’t.

For decades, the Republicans' prime directive has been to make sure that government doesn't work. Biden's future rests on his being able to make government work -- and to do big things.



Sunday, January 24, 2021

How To Deal With Domestic Terrorists

Recent events in Washington have pushed an old question into the spotlight: How should we deal with domestic terrorists? Robin Sears writes:

There is no more sensitive dilemma in a democracy than limits to free speech and political conviction. The United States is again seized with the question, except this time the terrorists are on the right. FBI counterterrorism teams will probably return to the massive surveillance they performed on Black activists and American Communists. In Canada, we need to assess how to manage the threats posed by white supremacists and Nazis as well.

In Germany today, the challenge also comes from the right. A special forces group in the German army was found to be home to hundreds of extremists, some of whom seemed to have hoarded massive arms dumps, and apparently planning the murder of leading politicians. Their intelligence community has been harshly criticized for their failure to uncover this.

Similarly, the FBI has always been accused of treating white terrorists far more lightly than Black activists. In Canada, the same was true until recently. CSIS’s predecessor, the RCMP Security Service, spied on Tommy Douglas, along with many other politicians and trade union leaders. Even today CSIS has refused to release what files they held on one of Canada’s most revered political icons.

There was a time when the terrorists were on the left side of the political spectrum:

West German Chancellor Willy Brandt’s Ostpolitik — his effort to deepen diplomatic relationships with the Soviet Union to be able to win recognition of West Germany by Moscow and to attempt to stabilize relations during the Cold War — was condemned by the German right, and by Washington.

As a balancing act Brandt had imposed a loyalty oath, or “radical decree” on the German public service in 1972. It unleashed a storm of controversy within his party and within Europe. It was compared to Hitler’s loyalty oaths. Privately, Brandt was deeply stung by the attacks, but he argued passionately that a democratic state needed the tools to prevent subversion.

German terrorists like the Red Army Faction — also known as the Baader–Meinhof Gang — were murdering judges and business leaders, and openly calling for the deliberate infiltration of Marxist activists into German public institutions. Both Baader and Meinhof had been public servants. Brandt argued to friends that pledging not to attempt to overthrow democracy must be a baseline commitment for anyone serving the German people.

Loyalty oaths are just plain stupid -- and complicated. Today, most democracies have legislation to deal with foreign terrorists, but not domestic terrorists. Any such legislation could easily run afoul of rights and freedoms.

But we should give some thought to the problem.

Image: audible.com

Saturday, January 23, 2021

Intellectual Zombies

Joe Biden wants to unify his nation. But, Paul Krugman writes, he faces a tough slog:

Some, perhaps most, of the opposition he’ll face will come from people who are deeply corrupt. And even among Republicans acting in good faith he’ll have to contend with deep-seated cluelessness, the result of the intellectual bubble the right has lived in for many years.

Take Ted Cruz, for example:

Cruz is, or used to be, a smart man — ask him and he’ll tell you (although in my experience people secure in their intellectual bona fides don’t boast about their academic credentials). But he has spent many years pursuing power by trying to appeal to the worst instincts of the Republican base. Most notably, he has been among the leading voices pushing the false narrative of a stolen election and bears significant responsibility for the sacking of the Capitol.

Cruz isn’t stupid, he just imagines that voters are. What he’s really doing is offering us an early taste of the unprincipled opposition Biden can expect from the anti-democracy wing of the G.O.P., which appears to be most of the party.

And even Mitt Romney could well be a problem:

After the inauguration, Romney expressed opposition to a new economic relief package, declaring: “We just passed a $900 billion-plus package. Let’s give that some time to be able to influence the economy.”

Now, Romney has earned the presumption that, unlike other Republicans opposing relief, he’s honestly trying to do the right thing. But that’s an utterly clueless remark, indicating that he doesn’t understand what Biden’s proposed package is all about.

While coronavirus relief legislation is often called “stimulus,” that’s not what Biden is trying to do. The economy in 2021 isn’t like the economy in 2009, depressed because there isn’t enough demand; we haven’t fully recovered because we’re still on partial lockdown, with some activities curtailed by the risk of infection.

The goal of policy in this situation isn’t to pump up spending, getting people to eat out and travel. It is, instead, to help people, businesses and local governments get through the difficult period until widespread vaccination lets us go back to business as usual.

Both Cruz and Romney are not stupid men. But they illustrate what happens to those who join the Republican Party. They become intellectual zombies.

Image: ABC News

Friday, January 22, 2021

Julie, Julie, Julie

Julie Payette has resigned. The warning signs were there from the beginning. Susan Delacourt writes:

It took very few days after Payette’s announced appointment for some big red flags to emerge surrounding her life in Maryland, including a charge of second-degree assault (later dropped and expunged from the record) and an incident in which a woman died after being struck by a vehicle driven by Payette.

Nor did the PMO appointments division seem to do any research into Payette’s other forays into overseeing a workplace, such as at the Montreal Science Centre from 2011 to 2016, where employees lodged complaints very similar to the ones that have caused this latest, but largest downfall.

Had Payette wanted to run as a candidate in Trudeau’s Liberal party, her application would have been rejected on these grounds. But it was 2017 and the prime minister was a celebrity, Payette was a celebrity and what could possibly go wrong?

Four years ago, Americans elected a celebrity to the presidency. That didn't work out so well. I applauded Payette's appointment. But I assumed she was qualified for the job. I assumed she was like John Glenn -- a terrific astronaut and a skilled politician.

I was wrong.

Image: www.cp24.com


Thursday, January 21, 2021

What Now, Jason?

Joe Biden has cancelled the Keystone XL pipeline. That puts Jason Kenney in a very uncomfortable spot. David Climenhaga writes:

It’s been a Biden promise from the get-go. It’s easy to do with the stroke of a pen. It’s devoutly wished for by key segments of his base. And it doesn’t cost the United States anything, fanciful arguments about the economic benefits of the Keystone XL pipeline notwithstanding.

Let it never be asked, “Who could have seen this coming?” Damn nearly everybody who’s been paying attention did.

Kenney's folly is monumental:

Kenney’s crazy bet has to be near the top of the most irresponsible things ever done in Alberta’s history. Will there be a political price to pay for his irresponsibility? Given that history, it’s hard to say.

Keystone XL might’ve had a chance if New Democrat Rachel Notley were still premier… because, social licence.

But Notley isn’t premier, is she? No, it’s Kenney, the politician who excoriated the very idea of seeking social licence for Alberta’s carbo-intensive heavy oil projects.

He called the whole concept of social licence a myth. He called it a failure. He called it a lie.

So what happens now? And what will Justin Trudeau do? The rubber has hit the road.

Image: Next Alberta