Steve's Politics Blog

Naked Capitalism has the article Picking Apart One of the Biggest Lies in American Politics: “Free Trade”.

In the 1960s, Korea was an undeveloped nation whose major exports were human hair (for wigs) and fish, and their average annual income was around $400 per working family. Today it’s a major industrial power with an average annual per capita income of over $32,000, and it beats the US in its rate of college attendance, exports, and lifespan.

South Korea did all this in a single generation by closing its economy and promoting its export industries. A decade earlier Japan had done the same thing. Forty years earlier Germany had done it.

In July, 2009, with no evident irony or understanding of how South Korea went about becoming a modern economic powerhouse, President Obama lectured the countries of Africa during his visit to Ghana. As the New York Times reported: “Mr. Obama said that when his father came to the United States, his home country of Kenya had an economy as large as that of South Korea per capita. Today, he noted, Kenya remains impoverished and politically unstable, while South Korea has become an economic powerhouse.”

In the same day’s newspaper, the lead editorial, titled “Tangled Trade Talks,” repeated the essence of the mantra of its confused op-ed writer, Thomas L. Friedman, that so-called “free trade” is the solution to a nation’s economic ills.

The previous post Wolf Richter: It Starts – Broad Retaliation Against China in Currency War makes a nice complement to this post. If free trade closes off all the options to giving privilege to local industry, then one of the few options left to governments is currency devaluation.

As in all things economic, policy decisions are not binary decisions. A example of a binary decision would be the choice between having completely unhindered free trade or having no free trade at all. Another binary decision example would be to forbid the use of currency devaluation as a policy tool, or to engage in indiscriminate currency devaluation in order to get the most benefit for our exports.

In all such matters, there may be value in the use of a little bit of a policy, but it becomes toxic when applied in too large a dose. We need to discard our attitude that if a little bit of something is good, then a lot more of it has to be much better. Such careful thought is not promoted by jingoist media and a population that falls for such hype. Careful thought is also lost when individual legislators get hell bent on promoting a lot of some remedy without any thought to measuring how much is good, and how much is too much. It is about time Congress realized that this type of legislation is highly technical, and we should not use seat-of-the-pants techniques for applying them.

This also applies to tariffs and other protectionist measures. We should only apply them when they can be seen to be beneficial, and we should stop increasing them at the point where they become harmful. The measure of benefit and harm should include measuring the impact on the international situation. When we see that the policy is leading to a world wide race to see which country can be the most extreme, then we have probably passed the point of benefit and gone into the territory of harm.

With our current focus on income inequality, it may be time to realize that balance is what we seek in most things. Not too much of anything, and not too little.

attn has the article Sandra Bland Was Arrested Because She Failed the “Attitude Test”.

White people in the suburbs as they go about their business don’t get stopped, or maybe they’d understand this.

But people get tired. That’s one of the reasons we get these failures of the “attitude test”—it happens when people are done. They’re like, “Again? Really? I don’t get to go to the store? I don’t get to walk my kid to school? I don’t get to live in the world that everybody else lives in in a normal way without getting harassed, without getting hassled, without getting searched?” And you can be nice 364 days of the year and have one bad day, and you go to jail. Or you die. Because people just get tired. That’s what I see with clients. They’re just tired. They’re tired of it. And it’s like, how much more can you expect?

Consider how sick and tired you have to be to risk death. Have you ever been that sick and tired of something?

The whole article is something that the white fans of Bernie Sanders need to understand. I have taken the attitude test myself on a few occasions. Usually I start with the attitude that I am going to pass it with flying colors when there is the slightest possibility that I have actually done something wrong. I never fail it. On an occasion or two, under slightly better circumstances, I have played with taking the test. However, I always sense when it is time to stop pushing the boundaries. That’s called white privilege.

Naked Capitalism has the article Wolf Richter: It Starts – Broad Retaliation Against China in Currency War.

But devaluations are not free lunches. They’re desperate measures that demolish domestic consumption and real incomes (see Japan), business investment, and overall credibility. And capital flees. They can also heat up inflation. But many emerging market countries and their banks and corporations borrow in other currencies to get access to lower interest rates. That foreign-currency debt can’t be devalued or inflated away.

Instead, the opposite happens. Their struggling or battered economies have to service foreign-currency debt with their own devalued currencies. Commodity exporters are getting sapped additionally by plunging commodity prices. Then that foreign currency debt, that cheap easy money everyone got to used playing with, becomes an insurmountable pile of expensive debt in a currency they can’t control and whose exchange rate might run away from them.

This is when a debt crisis begins to spiral elegantly through the emerging markets, taking down banks, entire economies, and gobs of investors as it goes – or taxpayers in other countries if there is a bailout. It’s always the same story. But this time, it’s different: after years of global QE, low interest rates, and hot money sloshing through the system, the sums are larger, and the risks are higher.

The issue is that the oligarchs will not allow any country to stimulate their own domestic economy by stimulating domestic demand for goods and services. The only way out, seems to be to export to other countries. This selling of goods abroad will keep employment high. However, you cannot have a world where each country is trying to get ahead by increasing its exports to other countries while lowering consumption in their own country. Ultimately, who is going to be left in the world to buy stuff? This strategy is the ultimate race to the bottom.

What country is big enough and powerful enough to try to reverse this contest to see whose workers can produce more while consuming (eating) less? Only the United States of America has a politician, Bernie Sanders, vying for leadership of the country, and one who understands this ultimate issue.

Democracy Now has the article Sen. Bernie Sanders: From Greece to Puerto Rico, the Financial Rules Are Rigged to Favor the 1%.

And let us not forget a little bit about history. Let us not forget what happened after World War I, when the Allies imposed oppressive austerity on Germany—on Germany—as part of the Versailles Treaty. And I think all of you who know anything about history understand what happened. And that is, the Germany economy collapsed, unemployed skyrocketed, people were pushing their money around in wheelbarrows to buy a loaf of bread. And the result of all of that massive discontent was that —– —— and the —- Party won an election and took power. And you all know the results of that.

I have omitted the words from the quote that no one dare speak. It tends to shut off the conversation before it can even begin. That is a shame, because sometimes those words are appropriate.

The Laura Flanders Show has this great interview Cornel West on Bernie Sanders, Michael Eric Dyson, Trans Rights, and B.B. King | #GRITtv.

In an exclusive new interview on The Laura Flanders Show, author, activist and public intellectual Dr. Cornel West responds to criticism from MSNBC host Michael Eric Dyson and discusses Bernie Sanders, Palestine, Black Lives Matter, B.B. King, and the LGBT movement. Dr. Cornel West has written or edited dozens of books, including classics like Race Matters, and Democracy Matters. His most recent is Black Prophetic Fire, written in conversation with Christa Buschendorf. He has also been an outspoken supporter of the causes others won’t touch. and an equally outspoken critic of President Barack Obama. He was the civil rights elder most warmly embraced by Black Lives Matter activists on the ground in Ferguson and Baltimore.

CBS News has the article Space elevator could lift people 12 miles into the air.

A Canadian space company was recently awarded a patent for a space elevator that would reach about 12 miles (20 kilometers) above the Earth’s surface.

For the really curious, here is what the articles are leaving out – US Patent 9085897 “Space Elevator”. Here is the patent on the US Patent Office web site.

I was just looking for this article that I posted on the Sturbridge For Bernie Sanders page. I had trouble finding it there, and I can’t seem to find it here, so I am going to post it now and never lose it again.

Here is the excerpt I posted from The Seattle Times article Not first disruptive tactic for activist who shut down Bernie Sanders’ speech.

Finally found an article that presents some, perhaps, verifiable information about the lead protester.

“Johnson, listed on a Facebook page as the contact person for the Westlake Park protest, told black radio station TWiB Monday night that she is a devout evangelical Christian who had supported Sarah Palin in high school. She added that her views are now far to the left.”

The contact info she lists on the Facebook page mentioned in the article is the following:

MEDIA CONTACTS: Marissa Johnson (360)840-6234 blacklivesmatterseattle@gmail.com

New Economic Perspectives has the article Why Bernie Sanders Should Add a Job Guarantee to His Policy Agenda.

Discussions of the ‘politically possible’ always remind me of a favorite quote: “Argue for your limitations, and sure enough they’re yours.”

Bernie Sanders’ issues page reads like a list of everything we’ve been told is not politically possible. And yet he’s getting record breaking support, precisely because people are tired of being told that something cannot be done–that it is impossible to get money out of politics, or that tackling inequality and racial injustice is unrealistic, or that securing a living wage is a political nonstarter.

Bernie has unapologetically rejected sclerotic visions of what is ‘politically possible’. And now he should add the Job Guarantee (JG) to his list of issues. Indeed, he already has the key ingredients—a bold proposal to eliminate unemployment by creating 13 million decent-paying jobs, a living wage, and a federally-funded youth job guarantee, which Sandy Darity correctly called a stepping stone (a pilot program) to a blanket job guarantee for all.

As a first step to gently letting people in on the secret of why we don’t need to raise taxes to “pay” for Sanders’ proposals, he might start by telling people that we need to raise taxes to take back the $29 trillion that the fed gave to the oligarchs to bail out the banks, and start using the money for programs that will help all the people. Clearly giving all that money to the oligarchs did not work. Let’s put the money to work where it should have been put in the first place. Putting new money to work without taking back the misplaced money would be inflationary. The inflation is already in the stock market. We can’t let the inflation spread to the average consumer.

If we can make the above explanation go viral, the idea of how to explain tax increases on the wealthy might even reach the ears of the Sanders’ campaign itself.

I have been struggling with trying to figure out a way to get Bernie Sanders to stop propagating the myth that “we need to raise taxes to pay for government programs”. It finally occurred to me (see above) that explaining what the taxes are really for is the obvious solution. No need to even mention the silly ideas of what taxes are for. Why give airing to and waste time on the silly ideas, when you can just talk about the good ideas?

Are you ready to start the fight to get people talking about the good ideas and leave the silly ones out of the conversation?

When the pundits ask Bernie Sanders about some silly idea or other, he usually goes almost straight to his pitch for the good ideas. He comes close, but not maddeningly close to ignoring the whole silly question. That is one of the things that I admire Sanders for. He can get the conversation onto the important topics without angering the interviewer.

Robert Reich has the Facebook post When the rollout of Obamacare was screwed up, conservatives blamed the government.

When the rollout of Obamacare was screwed up, conservatives blamed the government; when the NSA’s software didn’t work, it was supposedly government’s fault. Now, it seems, there’s a major problem with air-traffic control — and you can bet the right will blame the government.

The reality is that these glitches were the work of for-profit contractors and sub-contractors. A large and growing portion of government is contracted out to the private sector, which doesn’t always do the job as promised. The real questions are: Should the government do as much contracting out as it’s doing? And how can government do a better job monitoring what those contractors are up to?

What’s your view?

With 40 years of computer software engineering experience in the private sector, it just so happens that I do have an opinion.

With all the contracting out, there apparently are not enough people in the government who know how a software project should be managed. Therefore, they do not know when a private sector company is mismanaging a software contract.

As for the screw up in the ACA rollout, you cannot develop a software system that has lots of pieces that depend on each other and not test the system with all the pieces together until the last moments before going public.

In what is called a “top down design and implementation”, you design and implement each part starting at the top, the interface between that part and the rest of the world. With that kind of implementation strategy, you are able to do system tests with all parts working together almost from the very beginning of the project. The most tested part of the project is then the interfaces between the parts of the system.

If you wait until the end to put all the parts together and see how they work, you are going to wind up with massive surprises that are very difficult to fix. Do it the other way around, and the problems in the interfaces are found early when they are easy to fix.

If you don’t understand this as a manager or a contract overseer, you cannot detect a massive screw-up at the very beginning of a project when you can fire the contractors if you need to.

When I retired in 2006, there were still an awful lot of people in the software industry that hadn’t gotten the message about top down implementation. Our government seems to hire them all. Low-ball estimates are de riguer in private industry, just like they are in government contracting.

Many times when presenting a proposed project to managament, I wanted to start by asking, “Do you want to hear the estimates that will sell you on the project, or do you want to hear the truth?” After all, I had to compete with other presenters who wanted the corporate funding for their proposals. Sometimes the other person would win, and eventually I would be called in to rescue the other person’s project.

Almost everyone in the business has seen software projects that take on too much risk, go horribly wrong, but are rescued by herculean efforts of the project team. We used to call this “A diving catch”. The people who managed to rescue their own failing projects were richly rewarded for those diving catches. The people who ran projects smoothly from beginning to end were not so appreciated. If their project was so smooth, it must have been an easy one.

We project leaders who liked to manage risk to minimize it, often thought of putting in a few bugs so we could make what looked like a diving catch. Our sense of self-actualization never let us actually do it. We took our satisfaction from accomplishing one more project well done.

Sometimes I even worked for a manager who appreciated what my team and I had achieved. I seldom had problems of appreciation among the users of our products. That is in large part what made it all worth it.

YouTube has a video The Economy: Does More Government Help or Hurt – Stephanie Kelton only.

I am so glad that Bernie Sanders has seen fit to appoint Stephanie Kelton as Chief Democratic Economist on the Senate Budget Committee. I am just waiting for more of her ideas to come out in the national conversation, and even in the Presidential campaign.

Here is a video where she presents some of her ideas. It starts with a whole bunch of ideas that she is going to knock down in the second half of the presentation. Don’t look at just the first part and think you know what she advocates.

Be sure to look for the mention of $29 Trillion.

Has anyone asked about the government paying back the $29 Trillion the government created to buy the “troubled” assets from the banks? To whom would they pay it back? The banks don’t owe it because they sold “assets” to the government to get the money. The government doesn’t owe it, because they didn’t borrow it from anyone.

The government isn’t going to get all the money back, because most of the “troubled” “assets” aren’t worth the paper they were printed on. That’s why the banks needed to be rescued.

Imagine applying this sort of logic of creating money to buy things such as rebuilding our infrastructure or paying the tuition for higher education. In this case the government would “get it’s money back” because what they were paying for is actually worth what they are paying for it, and then some. It’s called return on investment which you would think capitalists would understand. So why do we need Socialists to explain this to the Capitalists?

Here is the announcement UMKC’s Stephanie Kelton is named chief Democratic economist on the Senate Budget Committee.