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Citizens United, Thoroughly Debunked

Citizens United, Thoroughly Debunked

I admit I haven’t paid too much attention to debates over Citizens United, since I regard the direction taken by regulation, control over who may contribute to political campaigns and how much they can put up, to be misguided.  I would like to see comprehensive control over how much money can be spent on behalf of candidates, period.  (I would also like to see a mandate that all such contributions be funneled through an intermediary, like a public political finance fund, that keeps the identities of donors hidden from recipients.)  While CU has been yet another blow to democracy, the demand that plutocrats use one vehicle to flood the system rather than another is second best.

That said, I was struck by this new critique of CU.  Its authors, Jonathan Macey and Leo Strine, base their analysis on a point I was familiar with in the context of economic debates over the Jensenian shareholder rights theory of the firm, but its application to CU is obvious once you think about it.  The article ranges over a number of topics, but here’s the core, taken from the abstract:

In this Article we show that Citizens United v. FEC, arguably the most important First Amendment case of the new millennium, is predicated on a fundamental misconception about the nature of the corporation. Specifically, Citizens United v. FEC, which prohibited the government from restricting independent expenditures for corporate communications, and held that corporations enjoy the same free speech rights to engage in political spending as human citizens, is grounded on the erroneous theory that corporations are “associations of citizens” rather than what they actually are: independent legal entities distinct from those who own their stock…..[C]orporations do not have owners, they have investors who have contract-based, financial interests in the firms and limited management rights.

The best ideas often seem obvious once they are put forward, but the trick is to see them in the first place.

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Is the Ecological Salvation of the Human Species at Hand?

Is the Ecological Salvation of the Human Species at Hand?

In “De-growth vs a Green New Deal,” Robert Pollin relies on the same blurring of distinctions that Robert Solow employed 46 years earlier in his condemnation of The Limits to Growth as “bad science.” Nicholaus Georgescu-Roegen pointed out Solow’s obfuscation in the article that inspired the term “degrowth.” That historical context is vital for understanding why Pollin’s “blueprint for ecological salvation” is no advance over Solow’s.

In “Is theEnd of the World at Hand” Solow scolded the “bad science” of The Limits to Growth report on the grounds that its authors’ model assumed “that there are no built-in mechanisms by which approaching exhaustion [of resources] tends to turn off consumption gradually and in advance.”[1] Solow cited increases in the productivity of natural resources to illustrate the importance of the price system as the built-in mechanism of capitalism for “registering and reacting to relative scarcity.”

According to Solow, between 1950 and 1970, consumption of iron in the U.S. increased by 20 percent while the GNP roughly doubled. Consumption of manganese rose by 30 percent. Copper consumption increased by one-third, as did lead and zinc consumption. These increases represented productivity gains ranging from 2 percent per annum for copper, lead and zinc to 2.5 percent for iron. Meanwhile, productivity of bituminous coal rose by 3 percent a year during the same period.

There were, Solow conceded, some “important exceptions, and unimportant exceptions.” Among the more important ones was petroleum, “GNP per barrel of oil was about the same in 1970 as in 1951: no productivity increase there.” Nevertheless, Solow was confident that “no one can doubt that we will run out of oil… [s]ooner or later, the productivity of oil will rise out of sight, because the production and consumption of oil will eventually dwindle toward zero, but real GNP will not.”

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BRETT KAVANAUGH: A MULTIPLE TRAIN WRECK IN MANY DIMENSIONS

by Brad Delong (originally published at Grasping at Reality with at least Theree Hands)

BRETT KAVANAUGH: A MULTIPLE TRAIN WRECK IN MANY DIMENSIONS: MONDAY SMACKDOWN

Clowns (ICP)

I confess that I have been procrastinating on various things. Why? Because I have been unable to tear my eyes away from the multiple train crash that is the confirmation process… the career… the life of Brett Kavanaugh. My view of this is a third- or fourth-hand view. It is the view of Georgetown Prep from Sidwell Friends. And it may well be wrong. But I think that it is right. So, with that warning, here goes:

The first… oddity… is Brett Kavanaugh‘s reaction to Christine Blasey Ford. It really ought to have been something like this:

 

I cannot say that I have a good memory of this, and I am not certain I am remembering the incident that was clearly very traumatic for her. I was drunk. I think she was drunk. From my perspective, we were roughhousing, and I was hoping she would let me see her tits. When it became clear she clearly was scared, Mark and I backed off.

I was in an unhealthy liberal culture in my high school and college years. When I was young and irresponsible, I was young and irresponsible. I hope I have learned to be a better person since then. I am now trying hard to be my best possible self.

I was too much of a dork and a dick back then to call her up the following day to apologize. And I have not been my best self in shirking my duty to apologize to her, to repent, to atone. It maybe too late now— better late than never Is not always true. But if better late than never is true in this case, I would like to say: I do regret my actions at what I believe was that incident and at other incidents where I was young and irresponsible. But I am not a rapist. I do not like to force myself I’m scared, struggling women.

That would’ve been the same thing to do. The non-psychopathic thing to do. The normal thing to do. The Manly thing to do.

But Brett Kavanaugh and company did not do that. Why not?

I think the balance of the probabilities has to be that he was, more likely than not, poisoned by his upbringing, and perhaps especially by his upbringing in the right wing of the Catholic Church of Pope Paul VI and John Paul II—their moral imbecility in the age of artifical birth control is truly wondrous.

I think it is more likely than not that he did and perhaps does have a particular kink: enjoying destroying female agency, through intoxication and a little light restraint, perhaps especially when women find themselves of multiple minds, with hopes, fears, regrets, and anticipation. Perhaps especially when there are no hopes and anticipations but only fears and regrets.

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Mainstream Media Says Trump Triumphs Over Iran!

Mainstream Media Says Trump Triumphs Over Iran!

That would be several stories in both the New York Times and the Washington Post over the last two days: Trump’s policy against Iran is a great success and it  is completely reasonable and justified. This reporting and columnizing has followed three tracks.

One was in a column yesterday in WaPo from Mark Thiessen of AEI, generally pro-Trump.  His column was about how Trump in general doing well on foreign policy, although with no mention of the trade war.  He did not spend much time on Iran, but it is a success, so obviously so it does not need much discussion.   He fulfilled a campaign promise and showed he is strong, and of course it is so justified he did not waste time defending it.  However, he made no comment on how Iran has responded to this supposedly gloriously successful policy, and in fact Iran has basically done nothing.

Anouher thrust in both papers have been reports of the release of the State Department’s annual report  on terrorism.  As in past years the report again without question names Iran as the world’s “leading state sponsor of terrorism,” something that Trump and politicians of both parties have regularly repeated without a shred of embarrassment.  Juan Cole points out several problems here.  For starters, there is not a single terrorist act that happened last year (this report covers 2017) that can be blamed on Iran or any of the groups it supposedly supports.  The single piece of evidence on Iran’s supposed terrorist threat to the US is that in February two supposed Hezbullah “operatives” were arrested in Michigan.  There is not even a claim that these “operatives” were even planning a terrorist act, much less actually carried out one.  As Cole notes, Hezbullah is the dominant force in the Lebanese government, and it is well over a decade since anybody has tied that organization to an actual terrorist act. As it is, Cole notes that the report notes a 23% decline in terrorist acts from 2016 to 2017, with most of that due to a reduction of acts by ISIS in Iraq especially.  Who helped shut down ISIS in Iraq?  Iran-supported gropus, but the report fails to note that, just as it fails to note ongong Saudi support for terrorist actions.

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A bold forecast: there will be no autumn surge in housing this year

A bold forecast: there will be no autumn surge in housing this year

The big issue this year in housing is whether increased mortgage rates and higher prices have merely resulted in a deceleration in the increase in new housing sales and construction, or whether housing is actually rolling over.

As I’ve written several times in the last month, there is accumulating evidence that it is actually the latter: housing has at very least plateaued. The acid test will be what happens in the next four months. Here’s why.

(As an aside, as I recently learned from reading a biography of Mark Twain, who hid out during the Civil War in Nevada and California, the “acid test” is a real thing.  Real gold does not dissolve in acid, but “fool’s gold” a/k/a iron pyrite, does. So there.)

Let’s start by going back seven years, which is the last time mortgage rates were higher than they are now, and before house prices bottomed. Here’s what mortgage rates (blue, left scale) and the least volatile housing metric, single family housing permits (red, right scale), look like:

Note a few things:

  •  mortgage rates declined nearly 2%, from 5% to 3.3%, from 2011 through mid-2013.
  •  during that big decline, single family permits rose over 60%.
  •  during the “taper tantrum” of 2013, mortgage rates rose back to 4.6%
  •  permits stalled for a year after the tantrum, and established a new, less steep trend line that was broken to the downside by this week’s August housing permits report.
  •  after mid-2013, mortgage rates established three meaningful intermediate lows: in early 2015, mid-2016 (due to “Brexit”), and mid-2017.
  •  each of these three intermediate lows in mortgage rates coincided with a temporary acceleration of the growth in housing permits
  •  mortgage rates have just made a new 7 year high, reaching 4.87% this week.

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Is this Short Covering, or Are the Suckers Flooding the Market?

Via ElNuevoDia at LG&M, “Gamblers are now betting that Kavanaugh will not be confirmed.”

The market in question, at PredictIt, seems rather straightforward. Note, though, that the contract only opened five days ago (18 September) and traded consistently in the 60-70% range through yesterday (22 Sep), closing at 61% and only reaching as low as 55%.

In the past two hours, more than 20,000 transactions has occurred, which is greater than the volume on any previous day, with no trade higher than 60, and none in the past hour above 42. (It is 9:13 EDT as I write this.) The 24-hour graphic is impressive in its consistency:

until it’s not.

The open question is whether the buyers at the lower level are the same people who were selling in the 60s and 70s (the ratio of Trades to Shares is roughly 2:1; some of the previous activity was clearly coverage) locking in a profit against new, relatively low-information buyers, or if the route is on.

It appears the opportunity for buying at the bottom has passed; it remains to be seen if the market will stabilize at low levels or recover as time passes without new information and/or the termination of the contract.

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Catch 22.4

As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of that society, and never can exceed that proportion. — Adam Smith, The Wealth of Nations

An”invisible hand” reaches up out of the subterranean depths of that “whole capital” periodically to re-establish the “certain proportion,” which lies somewhere between 20 and 25 percent. The average from 1948 to the end of 2017 was 22.43434%. It looks rather like this:

Household and non-profit net worth and GDP track each other quite nicely from 1948 to 1973 until “something happens” in 1973. (What could that “B”?!) After 1973, net worth underperforms GDP until sometime in the late 1990s when a series of wild gyrations commences. As you can see from the chart, though, the authorities have the situation well in hand and nothing could possibly go wrong.

Henry Hoyt in 1886 and Leo Amery in 1908 chided Smith’s “fallacy” of “terminological inexactitude” and the consequence of ignoring the fact that the capital of a nation, “grows by the exercise of the qualities and energies of which it consists.” Well, yes, but to some extent those qualities and energies are bound up in the possession of assets whose market values at any particular time can be aggregated. The amount of work to be done is not fixed but it is bounded. Hoyt and Amery had a point — but so did Smith.

It seems to me that my little chart above tells a story of how those bounds might even be stretched a bit — presumably by the expedients of easy credit, fiscal deficits and financial deregulation. But there seems to be inevitable leakage from stimulation to speculation and from speculation to Ponzi finance, as Minsky warned. From 1948 to 2016, the CPI-adjusted net worth of households and non-profits never exceeded five times real GDP (or GDP never less than 20% of Net Worth). At the end of the second quarter of 2018, GDP was 18.7% of Net Worth.

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In the News – Sunday Morning

Senator Grassley tweeting: “Five times now we hv granted extension for Dr Ford to decide if she wants to proceed w her desire stated one wk ago that she wants to tell senate her story Dr Ford if u changed ur mind say so so we can move on I want to hear ur testimony. Come to us or we to u,”

I like how tweeting brings out the intellect in people and especially our politicians. And Chuckie the tweeting senator does this on a public forum with Ford and Kavanaugh so everyone can read along with him.

In New Jersey’s 2019 ACA marketplace, fruits of reinsurance, individual mandate, and silver loading.

New Jersey’s Dept. of Banking and Insurance has posted individual market health plan prices for 2019. Thanks to the state’s new reinsurance program, state-based individual mandate, and silver loading (actively encouraged by DOBI), unsubsidized enrollees will see price drops from 2018. For the subsidized, it looks pretty much like status quo ante — although network changes and plan design changes could alter that picture.

As was the case last year, AmeriHealth has sewn up all the lowest price points. AmeriHealth and Oscar are offering discounted silver plans off-exchange — presumably because of silver loading (Cost Sharing Reduction, available only with silver plans and only on-exchange, is not priced into off-exchange silver). Horizon is not offering any off-exchange discounts, but it has dropped prices about 7% from last year. A few salient year-to-year comparisons below. Quoted premiums are for a 46 year-old — where they’re a clean 1.5 times the base rate posted by DOBI. Andrew Sprung at xpostfactoid

More states should follow New Jersey’s lead.

Further evidence that the tax cuts have not led to widespread bonuses, wage or compensation growth. Economics Policy Institute.

Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018 to assess the trends in bonuses in absolute dollars and as a share of compensation. The bottom line is that there has been very little increase in private sector compensation or W-2 wages since the end of 2017. The $0.03 per hour (inflation-adjusted) bump in bonuses between the fourth quarter of 2018 and the second quarter of 2018 is very small and not necessarily attributable to the tax cuts rather than employer efforts to recruit workers in a continued low unemployment environment.

Saving the Planet Doesn’t Mean Killing Economic Growth”

Noah Smith: Hickel cites analyses by the United Nations Environment Program and others showing that even big improvements in resource efficiency, encouraged by very high carbon taxes, will be unable to halt overall resource use or global carbon emissions. But this evidence doesn’t support Hickel’s conclusions, which rely on several misconceptions about the nature and the importance of growth.

Hickel doesn’t seem to grasp the fact of most economic growth happening in countries that are relatively poor. From 2010 to 2015 as determined by estimates by the IMF emerging markets, developing countries were responsible for about 70 percent of global output and consumption growth and advanced economies were responsible for the rest. World Bank’s forecasts for 2017-2019 are similar.

China’s contribution to global growth will be double the U.S. growth and India’s will be larger than the whole of the entire euro zone. The same is true of greenhouse gas emissions. Since about 1990, emissions from the U.S. and EU have fallen, while emissions from developing countries such as (and especially) China and India have exploded.

In 2017, the International Energy Agency estimated that the growth in energy-related carbon emissions in China and the rest of developing Asia was more than five times the growth in the European Union while U.S. emissions declined.

If Hickel and others succeed in stopping economic growth in developing countries, it will not be rich countries bearing the brunt of the change. It will be poor and middle-income countries such as India and China. The desperately poor African countries will not a chance at increased prosperity.

$600,000 in Debt and the Crisis is Worsening “The student loan default rate more than doubled between 2003 and 2011, and 40 percent of borrowers are expected to fall behind on their loans by 2023.”

There is a long history of Congress favoring financial institutions with laws and regulation blocking students from debt relief. Yet, our president can bankruptcy relief multiple times without any court or law blocking him. For him it is business as usual, getting a new loan to buy property and increase profits, pay the old loan with then new loan, and declaring bankruptcy when costs exceed cash inflow. Students do not have the luxury of gaming the system.

With the cost of an education in this country is only rising, borrowing is unlikely to slow. State funding for public colleges fell by $9 billion between 2008 and 2017, and the gap has been filled with tuition hikes. For the first time, half of all states relied more heavily on tuition last year than on government appropriations to fund higher public education. Americans now spend an approximate $30,000 per student a year to gain a college education or twice as much as the average developed country.

The IBR and Repaye programs put in place by well-meaning advocates has been a failure due to a lack of understanding in how to manage it yearly and with some servicers such as Naviente deliberating misleading students into multiple postponements of loans instead of into the income-driven repayment plans. The plans cap monthly payments at a percentage of the borrower’s income. It is not the first-time commercial interests have lied to students and taken a predatory approach on student loans. Naviente is being sued by five states and the CFPB.

Indian sailor Abhilash Tomy injured on disabled yacht.

A multinational rescue effort is underway to try to reach an injured sailor whose yacht is disabled in the South Indian Ocean.

Abhilash Tomy, a 39-year-old Indian naval commander, was competing in the 2018 Golden Globe Race. The race is a nonstop, 30,000-mile solo yachting competition that bars the use of modern technology. To me, this sounds like a lot of fun and a lot of work. I always like to sail as the quiet of the water is soothing.

Abhilash Tomy boat the “Thuriya,” hit a storm in the South Indian Ocean. The 36-foot boat was one of several hit by 80 mph winds and 46-foot seas midway across the South Indian Ocean on Friday, day 82 days of the race. Thuriya’s mast was broken about 1,900 miles southwest of Perth, Australia and “at the extreme limit of immediate rescue range,” according to media statements.

Organizers became concerned after Tomy sent a text message reading: “ROLLED. DISMASTED. SEVERE BACK INJURY. CANNOT GET UP,” and then was unheard from for nearly 15 hours. In a later satellite text message, the sailor gave his location and wrote: “ACTIVATED EPIRB (Emergency Position Indicating Radio Beacon). CANT WALK. MIGHT NEED STRETCHER.”

What is the White House Deflecting from Now?

It is no secret one of the strategies used by the White House is to deflect attacks on their agenda by creating another emer . . . spectacle . . . gency when the news and the opposition gets close to defeating their plans. The attack on Rosenstein as led by the NYT is just too easy, convenient, and laughable (almost). The deflections have happened too many times already. Trump holds Fire

Continuing on this path; “Kavanaugh Accuser Agrees to Testify” I am sure Grassley and other members of the Senate, Hatch, Cornyn, Cruz, Hannity, and the tier two Senators such as Flake, etc. will make this debacle into another shameful attack on Ford, women, and the truth. What, no women on the Repub side? I am sure the 4 women on the Dem side can support Ford and strike back.

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“What Keynes Ignored”

“What Keynes Ignored”

Ruth Sutherland wrote in The Daily Mail a couple of days ago:

Here is how Keynes “ignored” those “workaholic tendencies”:

Yet there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread. For we have been trained too long to strive and not to enjoy. It is a fearful problem for the ordinary person, with no special talents, to occupy himself, especially if he no longer has roots in the soil or in custom or in the beloved conventions of a traditional society. …

For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented.

To be fair to Sutherland, Keynes didn’t use the exact words “workaholic tendencies” so if she actually read the Keynes essay, she might have not comprehended the passages dealing with the training of “old Adam”… “too long to strive and not to enjoy.” On the other hand, it is entirely possible Sutherland didn’t read the essay but just assumed Keynes ignored the point she wanted to raise.

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