Quick and Easy . . . NOT!

by wj

For the past week, we have mostly been focused on the family separation fiasco. Understandably. But in some senses this has been just another distraction effort (after all, they have now gone 3 steps forward and 1 step back; probably without general notice of the net movement). Meanwhile, there have been other things going on which will end up having a bigger impact on more people, both in the US and worldwide.*

I speak, of course, of the trade war that has gotten rolling since the beginning of the month. Look at what’s happened.

We slapped tariffs on steel and aluminum, wherever it comes from. Including Canada, which is tightly integrated with the US economy. Just for openers, note that we have a net trade surplus in steel with Canada. That is, we export more steel to them than we import from them. Note also that there are US companies which use types of steel that only comes from Canadian foundries. Steel production is not readily interchangeable. That is, just because a foundry makes one type of steel doesn’t mean that it can readily switch to making another kind. So there are companies (in the Midwest heart of Trump country) which are looking at closing down because the tariffs make it impossible for them to turn out products at a profit.

At the beginning of the month, we slapped tariffs on a bunch of EU and Chinese products as well. Not surprisingly, they responded by placing tariffs on a bunch of US products. Also, not surprising, they were a lot smarter about what they targeted: soybeans, Harley-Davidson motorcycles, Jack Daniels whisky, etc. In short, stuff produced by Trump supporters. Even normally supine Republican Senators are actually standing up and demanding that the administration quit hurting their constituents.

In response, we are now escalating to more products, especially Chinese ones. But there are a couple little problem here. First, the companies that produce the stuff we are putting tariffs on don’t comprise a major part of the Chinese economy. In particular, we aren’t looking at industries employing lots of Chinese workers.

Second, we are looking at inputs to US industries which are significant. Pretty obviously, at each step we are doing things which are going to damage ourselves far more than the Chinese.

Third, what we are looking at here is a battle (in the case of China) between a largely free market economy and a mercantilist economy. Which is to say, China is already set up to provide government support to the industries which are hurt. Meaning that they can keep going far longer than we can.

Where does this all end? There seem to be two principal options:
1) Trump backs down and removes the tariffs. I have no idea how he will rationalize doing so while getting nothing, but he has demonstrated an ability to do so in less likely circumstances.
2) The whole world economy gets plunged into a recession. Except for the US, which gets hit harder. We don’t start crawling out until we have new people in charge. And even then, it’s going to take quite a while to rebuild the institutions which are being trashed by our actions, e.g. the WTO.

If I was a Republican running for office, I would be at least as worried about the economy crashing before November as I would at being tarred over the family separation mess. Because this is not going to end quickly. And it is definitely not going to be easy on us.

* I do not at all wish to minimize the horror that has been going on. Just to be clear.

Comments

[byomtov]

1) Trump backs down and removes the tariffs. I have no idea how he will rationalize doing so while getting nothing, but he has demonstrated an ability to do so in less likely circumstances.

This is my bet. And his supporters will swallow whatever claim he makes about the wonderful things he accomplished with the tariffs.

This is the strategy, after all. Do something, anything, and claim wonderful results, regardless of the actual results.

"The fools in town are on our side, and that's enough in any town." I despair.

[bob mcmanus]

Oh, I start with the Rodrik Trilemma

"It says that democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full."

Most progressives rather optimistically think they can surrender sovereignty but the alphabets (WTO,IMF) haven't been so great for some understandings of democracy.

And off topic, I am offended today by...somewhere..."the white settlement of the West" which erases a very important part of black history, the post-civil war migration of freedmen west, especially areas around the OK panhandle, N NM, and Kansas, areas particular to that offsite discussion

Timeline Nicodemus is worth googling

Said settlement was unfortunately temporary but the enforcement arm by the
Buffalo Soldiers was probably more significant

"From 1866 to the early 1890s, these regiments served at a variety of posts in the Southwestern United States and the Great Plains regions. They participated in most of the military campaigns in these areas and earned a distinguished record."

...and as far as I can, black soldier killed a whole lot of Comanches and Apaches, with much national recognition (many MoH voted by Congress) although perhaps the Kiowa were already largely beaten

Here without a link, where Custer's request for a white regiment is noted, but the history is unclear.

"They played a role in the Washita campaign (Oklahoma) in 1868-1869, which included the massacre of Cheyenne Indians led by Custer and his 7th Calvary."

I will withhold judgement of why anyone would insist insist on "white settlement."

[bob mcmanus]

Oh, that's just a little unfair, I think

The link is to Rodrik's original post on the Trilemma in 2007

After Brexit this is from 2016, in which Rodrik admits he got it wrong

"My generation of Turks looked at the European Union as an example to emulate and a beacon of democracy. It saddens me greatly that it has now come to stand for a style of rule-making and governance so antithetical to democracy that even informed and reasonable observers like AEP view departure from it as the only option for repairing democracy."

Complicated, but most far left critics of neoliberalism believe that it will always be democracy that suffers from free trade because national borders are useful for capital arbitrage of labour and regulation.

For the record, my own bad-Marxist position is absolutely open borders for people and labour and borders closed to capital, radical capital controls and prohibitive tariffs.

Until the technocrats surrender.

[bob mcmanus]

Lastly, what choosing the free trade/democracy parts of the trilemma would mean is the abandonment of national sovereignty

Instead (besides the technocratic machine) of "Germany" having a veto over policy, the citizens of Germany would have a vote and representation in say the Eu Parliment, and if outvoted by the citizenry of Europe, would be forced to pay taxes and fund Greek reconstruction or IOW the usual forms of fiscal and political union we enjoy and loathe in the US.

Militaries of course would no longer be under "national" control.

[wj]

Bob, explain to me the difference between Germans paying via the EU for reconstruction in Greece and Californians paying via the Federal government for reconstruction in Louisiana.

[bob mcmanus]

explain to me the difference between Germans paying via the EU for reconstruction in Greece

Uhh, none? I thought that was the point I was making. And I wasn't aware that the Germans were doing so currently. In a Democratic EU, it would no longer be a choice of the Germans, just as Californians have no more "sovereignty" over fiscal policy than is determined by their US population share...actually Germany is split into many factions, not internally unanimous any more than California is, although that is the way much policy is treated.

Of course, the Germans and Greeks could no longer have separate independent, or technocratically independent monetary policies.

[bob mcmanus]

Umm, must be careful here...

the 2nd Rodrik link, after Brexit, is bnecessary reading.

Rodrik I think imagined that the partial surrender of national sovereignty and the weakening of national democracy would lead to an increase in European Democracy.

And to some extent that is what has happened. But the EU integration was very carefully managed in order to provide benefits to certain classes and clients (social issues create neoliberal globalist constituency which is even opposed to national democracy) while retaining national sovereignty and arbitrage opportunities for capital...

...very complicated, so much so that apparently even Rodrik didn't see it* coming.

[bob mcmanus]

In any case, I was hoping, since I have not modeled it, that someone could help me imagine what borders open to people but closed to capital would look like.

I think, think, IIRC, that Europe was like that to some degree in the 18th century?

It would make "citizenship" very questionable, but I have never much cared about that, wanting US elections wide open to anyone in the world to vote, counting on large numbers to avoid catastrophe.

[bobbyp]

Rodrik's trilemma is a reformulation of the classic project management theorem: "You can build it fast; you can build it cheap; you can build it to the highest standards of quality. Pick any two."

[liberal japonicus]

Lastly, what choosing the free trade/democracy parts of the trilemma would mean is the abandonment of national sovereignty

I'm not a big fan of national sovereignty. A necessary 'evil' (for various values of evil) but given that national sovereignty is premised on the idea that a nation can do with its citizens anything that it wants, it is problematic. So for Rodrik's trilemma, I'd go with giving up national sovereignty.

Rodrik's admission of not being right

But I now have to admit that I was wrong in this view (or hope, perhaps). The manner in which Germany and Angela Merkel, in particular, reacted to the crisis in Greece and other indebted countries buried any chance of a democratic Europe. She might have presented the crisis as one of interdependence (“we all contributed to it, and we are all in it together”), using it as an opportunity to make a leap towards greater political union. Instead, she treated it as a morality play, pitting responsible northerners against lazy, profligate southerners, and to be dealt with by European technocrats accountable to no one serving up disastrous economic remedies.

But was Rodrik wrong this time or was he wrong all the time? It seems that there will constantly be people choosing to treat these things as morality plays, and we just have to keep going back and resetting the table and trying again to have a transnational consensus that respects individual human rights and attempts to create a framework for local democracy. Just because Merkel and the EU didn't get it right this time does not mean that they will always get it wrong.

I think a lot of what you see around the world is a reaction to this dismantling. It's not clear that things will turn out ok, and so the allergic reaction to neo-liberal assurances that everything is fine are understandable. But a lot of this flailing looks like people for whom National sovereignty is a touchstone and they can't admit that it can't last.

[bob mcmanus]

I can take the sacrificing of sovereignty humorously far (Bristol and Bangladesh can vote for Mayor of Butte) but democracy over sovereignty does mean something like that. What we lose is the privilege of geographical identity.

Nancy Fraser expanded her recognition + redistribution to include representation, ie, stakeholders, interested parties not now represented (sometimes symbolic, mostly real if small power) should be. To me, for instance Poles resident in Britain absolutely should get to vote on Brexit.

But for now, I will give up free trade to get democracy back. I won't give up free movement of people, which means I'm kinda a Brexit mess, Remain while disliking most Remainers.

[liberal japonicus]

Didn't you just complain about Scotland not being able to get its shit together in reference to the fire in Glasgow?

Geographic identity is being weakened as we move more and more. Trying to keep it means Japanese lamenting about birth rates but not being able to accept immigration. It's not sustainable.

Democracy over sovereignty is black and white, I'd prefer something like democracy > sovereignty or you end up with a mess like Brexit or the Rohingya.

[bob mcmanus]

1) I think I said Scots. I have limited time, but since I saw several Eastern European names connected with the Glasgow Library I have been looking for how international or global the Library, Art School, and previous restoration effort was. As are most universities and cultural projects anymore.

2) My desired restrictions on movement of finance capital are to be considered a temporary prophylactic measure. The free movement of people would involve the global movement of intellectual social cultural capital in ways that are currently happening to a discomfiting degree.

3) Every once in a while I binge on a vblogger, last week a guy "Abroad in Japan."Usual expatriate English co-teacher in Yamagata, then Sendai. Around 1 million global followers. God knows he is probably getting somethings wrong.

Is he the representative of Sendai to me? Takes quite a lot of work, or at least some, to find other useful sources. I can find some (a expatriate koto player, for one), but I am unusual. Is that my problem, or Sendai's? Should "Sendai" realize this and use him as intermediary, depend on him for global popular communication?

There are of course many Sendai-centered networks and nodes, business oriented for example, I am not aware of.

Losing control of identity is part of globalization.

Is Rohingya a problem of a lack of sovereignty for the Rohingya, or too much for official and sovereign Myanmar?

Perhaps the Hague can solve their Trump problem with charges, extradition, rendition, a military excursion.

[bob mcmanus]

Ps: In light of all the above comments, don't ask me how much I care if Assange or Putin "interfered" with the election.

[bob mcmanus]

One last, concerning rendition.

Since Nobel Obama tells us (liar) that Pakistan knew nothing of the Osama operation, a very clear precedent has been established about small scale operations in the search for redress of grievances and the irrelevance of national sovereignty concerns that could be used by various actors now, or could have been used say by Yemenis, many factors more of whom have died due to Obama support of Saudi Arabian genocide than died on 9/11.

[liberal japonicus]

Sendai is a city that I lived in for 5 years and I have fond memories and a lot of friends still there. I'd happily answer any questions you have, you only have to ask nicely. What is it that you want to know about Sendai? What is it that you think the world should know about Sendai? Is there some massive misconception about Sendai running loose in the world?

Certainly, the language barrier serves as a wall and there are a lot of Japanese who are quite happy it is there. It becomes a bit more of a dilemma when it is some US town that depends on exports to keep the town's industry going and cheap imports from China to keep the WalMart stocked. While the cognitive dissonance may not be as great with Japanese, it's coming and it won't be pretty.

As far as the Rohingya are concerned, isn't it that they have no national polity to protect them? If you want to choose National sovereignty over individual human rights, they (and the Roma, Kurds, Dalits, Burakumin and tons of other groups) are probably out of luck.

Losing control of identity is part and parcel with the modern world. you aren't going to stop it, you can only acknowledge it will happen. If you are lucky and have privilege, you can shape your own identity to some extent, but that's about it. You can't recreate a world where your identity is sacrosanct.

[Michael Cain]

...explain to me the difference between Germans paying via the EU for reconstruction in Greece and Californians paying via the Federal government for reconstruction in Louisiana.

What reconstruction in Greece? Greece got into trouble because it was borrowing in order to pay its normal operating expenses: to deliver on promises to its citizens for salaries, pensions, medical care, etc. Such practices end -- usually painfully -- when the creditors turn off the spigot.

Most states in the US (49 of 50 IIRC, including Louisiana) are forbidden by their constitutions from doing that. It's one of the reasons that recessions are so painful for state governments: revenue goes down, demand for services goes up, raising tax rates becomes even less popular than usual, and borrowing is not allowed.

[wonkie]

I am not concerned about losing democracy to the WTO. I am concerned about losing it to the Republican party. I am very afraid of that. It has been a goal of the Republican party to create a one party kleptocracy and they are very very close to locking in success.

So I am rooting for economic disaster for the US. Sad to say, many voters--basically the R voters and many independents===vote based on their own immediate preceived self interest and are not motivated by abstract ideas or principles of teh common good or the welfare of anyone but themselves. So they will watch democracy disappear and not give a shit as long as their presonal well being is not obviously affected. So we need to have the Repubicans screw up the economy badly so that Repubicans lose enough elections to let the Democrats gets of decent people in judgeship, ungerrymander, throw out voter suppression laws. reinstate net neutrality and figure out how to reduce the dominance of rightwing billionaries on the news.

Its sad that we cannot depend on American citizens to protect representative government, but Republican voters have already made it clear that they will vote in authoritarianism with no qualms at all.

[russell]

As if on cue....

York PA
Menomonee Falls WI
Kansas City MO

Although I think the KC plant is already being scaled back.

[wj]

What reconstruction in Greece?

Definitely poor phrasing! I was trying to point generally to the transfers of money from the more developed EU countries (e.g. Germany) to the less developed ones (e.g. Greece).

[wj]

vote based on their own immediate preceived self interest and are not motivated by abstract ideas or principles of teh common good or the welfare of anyone but themselves. So they will watch democracy disappear and not give a shit as long as their presonal well being is not obviously affected.

But we had exactly the economic meltdown you say you want a decade back. And it didn't seem to have a lasting impact. Arguably that got some people to vote for Democrats in 2008. But it seems not to have had a lasting impact. Any thoughts on how many times the lesson has to be repeated in order to stick?

[russell]

we had exactly the economic meltdown you say you want a decade back

folks could blame that one on Wall Street. justifably.

trade policy is a different kettle of fish.

[wj]

Want to bet that they won't find something other than trade policy, and the party executing it, to blame this time?

[hairshirthedonist]

Rodrik's trilemma is a reformulation of the classic project management theorem: "You can build it fast; you can build it cheap; you can build it to the highest standards of quality. Pick any two."

This was my immediate thought upon reading that.

[bob mcmanus]

There Won't Be a Blue Wave Newsweek, I think

The economy is looking great...for Trump.

I am not clear, historically, if isolation and trade wars, autarchy etc inevitably cause crashes, or as a response to crashes are always unpopular. Thinking about the early twenties, for instance.

But 2009 and austerity and the tolerance of years of high unemployment while Wall street thrived is the kind of "mistake" that destroys a party for a generation or more. As Hoover found out.

The Party could have helped in 2009-2010 by pushing hard enough to force choices. There are reasons it didn't happen.

The only answer is to find an anti-establishment candidate that can explicitly run against her own party while appearing to be running against Republicans. Or both.

We had one in 2016.

Current Polls, FWIW 538

Biden, the insurance company candidate, has a strong lead.

Gillibrand, down at 4%, kinda surprises me, but as a Democrat, I am sure she is spending all her time hoovering :) up corporate cash, and may pass the others with paid media in 2019. Same may be true of Booker and Patrick, Obama's favorite.

I might enjoy in a way, if possible, a Romney-Patrick 2020 election, two Bain Capital VP's slugging it out for populist credibility.

[Lurker]

The EU is, at the moment, an imperfect being. However, I would like to point out that unlike Bob claims, borders don't really allow arbitrage against capital movements.

I am old enough to remember the great depression of the early 1990's that my country, Finland, went through. Before the euro, capital movements in Europe were really wild, and a small country did not have a lot of leverage against them. For all their "independent" monetary policies, Nordic countries needed to follow the Bundesbank really closely. In an exemplifying case, Germany changed its central bank rate upwards while Denmark held its own constant. The capital outflow from the country nearly emptied the currency reserves of the Danish central bank in a matter of hours, forcing the Danes to follow German lead.

Similarly, an unchecked national regulation is likely to trigger a ruinous race to bottom in all standards. Only a large market, like the EU, can actually dictate standards and rules to large corporations. And it does. Think of the general data protection regulation! Or the environmental protection directives, or work time directive.

The Union is a tool for good, and it is much more democratic than e.g. the USA, even as currently constituted. If you compare the Council with Senate, and Parliament with the House of Representatives, you'll note that both are much better representative. The small countries do have a larger representation in the Council than their population would warrant, but the discrepancy is much less than in the Senate, because the complex voting rules are less counter-majoritarian.

The Parliament is truly a democratic institution, though Germans are sorely under-represented, but that has been a price they've been willing to pay. Having multiple-member district system ensures proportionality and a rather good representation of political minorities compared to the House.

So, while you can claim that Greeks' knowingly committed fiscal fraud could have been handled more humanely, that is a result of our current imperfect Union. Yet I maintain that the EU is the only way to prevent the unfettered destruction of welfare state by the markets.

[byomtov]

My desired restrictions on movement of finance capital are to be considered a temporary prophylactic measure.

Prophylactic against what?

And under what conditions would they be removed?

[wj]

And so it begins:
https://www.bloomberg.com/news/articles/2018-06-25/harley-davidson-to-shift-motorbike-production-to-counter-tariffs

A thing to bear in mind: tariffs might get cut again. But once production has moved (in response to trade policy) is isn't coming back. Even if it's an iconic American brand like Harley.

[bob mcmanus]

Prophylactic against what?

Capital flight, outsourcing, etc.

I only know that the current regime is failing, and I do not want to restrict the movement of people. That means if 5-20 million want to move to Britain, they can.

The idea is frankly to force domestic fiscal stimulus on a massive scale, to motivate the rich and corporations with visions of pitchforks and tumbrels.

The model is the Bretton Woods era, discussed in the links.

And under what conditions would they be removed?

Global Worker Political Solidarity.

[wj]

Capital flight, outsourcing, etc.

When we have companies which have huge stocks of cash overseas, and are not repatriating them, how is "capital flight" a problem. They aren't sending capital overseas, they are leaving it there. Controls which make it harder to move capital would appear to be exactly the opposite of what is needed.

The idea is frankly to force domestic fiscal stimulus on a massive scale

But when we have companies sitting on piles of cash (even after raising dividends), how would forcing them to keep more money in country increase domestic spending on their part? They are currently not spending because they don't see profitable ways to do so. Having more capital in hand seems unlikely to magically create such investment opportunities.

Now if you wanted to just massively increase taxes on corporations, and have the government spend money on infrastructure, etc.? Then you might, maybe, have something. But unless I have missed something, that isn't what you are talking about.

[russell]

Want to bet that they won't find something other than trade policy, and the party executing it, to blame this time?

Nope.

[Nigel]

Trump is about to put his brinkmanship, and the loyalty of his base to the test:
https://www.politico.com/story/2018/06/25/iowa-republicans-trump-midterms-667171

My guess is that China will think a Trump hobbled by a Democrat congress slightly easier to deal with than the current incarnation.

[CharlesWT]

Now if you wanted to just massively increase taxes on corporations, and have the government spend money on infrastructure, etc.?

Wouldn't this just exacerbate the current problem of capital staying out of the country? Capital tends to flow to where it can best be utilized. Create a hostile environment and it will go elsewhere.

[hairshirthedonist]

Who do you think the government is going to pay to build all this infrastructure? The Chinese?

[CharlesWT]

As for restricting the flow of capital, even China is having difficulty doing so. Part of the high west coast property values is due to Chinese nationals buying up properties.

[wj]

Wouldn't this just exacerbate the current problem of capital staying out of the country?

I would think so. But restrictions on capital controls would do even more to make the problem worse. IMHO. Which was what I was trying to convey.

[Michael Cain]

Definitely poor phrasing! I was trying to point generally to the transfers of money from the more developed EU countries (e.g. Germany) to the less developed ones (e.g. Greece).

The EU is fundamentally a business union -- one currency, consistent regulation and tariffs, open internal markets, free movement of capital and workers, some centralized funding for research. Full stop. The EU doesn't tell its members what their public pensions should look like, or public health care, or tax levels, or rigor of tax collection.

Perhaps welfare transfer payments from richer EU countries to poorer ones should be EU policy. In the US, the states sat down in advance (Congress) and said, "Here's how big the public pensions should be. Here's how high the taxes will be. Here's how rigorously we will collect those. Here's the implicit transfers from rich states to poor ones." So far, the EU members have been unwilling to do that. The rich members perhaps because they think the compromise pension would be too generous. The poor members perhaps because they think the pension would be too small, or the taxes too high.

I'm not holding my breath waiting for the EU to take steps in that direction.

[wj]

The EU doesn't tell its members what their public pensions should look like, or public health care, or tax levels, or rigor of tax collection.

And which of those does the US Federal government do? Maybe something on health care. Maybe. But the others? Not noticably.

[Lurker]

Michael Cain,

the Greek fiscal problems arose of multiple rounds of government-sanctioned fraud. Greeks simply falsified their national statistics to allow themselves to the eurozone, and to keep clear of the fiscal targets set by the treaties governing it.

However, there are mitigating factors. One was the fact that major German banks actively involved. They gave loans to a country that they knew was falsifying its records. Secondly, while the Greek government was using the loans for corrupt or pork-barrel investment projects and subsidies, Greece is ultimately a very poor country. Much of the money went to really poor population, in a country that has a bad infrastructure and little industry to speak of.

So, many Europeans in countries that have not been falsifying their statistics as blatantly, are justifiably angry. Especially Germans, who steadily endured quite real domestic hardship to ensure the competing power of their industry have a reason to be mad at Greeks. They have truly betrayed a trust put in them. However, the Greek governmental malfeasance should have been stopped earlier. Allowing Greeks to get as deep into debt as they did was the fault of the institutions of EU. Similarly, the inter-governmental easing of Greek debt mainly has helped the big German banks escape the unscathed.

It would have been more just to allow Greece simply stop payments and write off their sovereign debt unilaterally, and then saving the three big D-banks individually, if they had been unable to take the banks. Now we, as European taxpayers, have essentially taken over the Greek debt, which Greece will never be able to pay back. It would have been wiser to show the world that all EU member states have the sovereign ability to cancel their debts at will, because this would have markedly increased the risks and interest rates of EU member state debt. Now, we left the moral hazard intact, and Greeks are still up to their ears in debt.

[CharlesWT]

The EU doesn't tell its members what their public pensions should look like, or public health care, or tax levels, or rigor of tax collection.

But, in the past, The EU has accused Ireland of engaging in unfair trade practices for having a lower tax base than other members of the EU.

[Lurker]

Michael Cain,

your example of public pension systems is great. The difference is larger than you describe. First of all, there is the question: what is a public pension? In some countries, the public pension is a fixed rate paid to everyone over a certain, nationally-defined age. In some others, like Germany, the public pension is based on the earnings of the retiree, but only up to a certain limit, while public service has a completely separate system, and private sector has private, complementary plans. Yet others, like Finland, have a pension benefits system which integrates a minimum pension system with a theoretically unlimited earnings-based pension benefit that encompasses both private employees and civil servants.

Some countries finance the pensions directly out of taxes. Some have a separate payroll tax. Some have public pension-fund systems, with complex rules for membership and eligibility. And naturally, the private retirement schemes are always integrated to the national systems on some level.

So, instead of thinking that the issue is like agreeing upon a common level of social security system benefit, the complexity of an theoretical Union-wide retirement scheme is like integrating the SSS, 401(k)s, private corporate retirement plans and the civil and military retirement benefits of federal, state and local governments into a single system.

[Lurker]

CharlesWT,

the key word is "accused". The Union dpes not have the formal power to set its member states' tax rates. So, we can denounce the Irish tax rates as being imdicative of a race to bottom, but we cannot do anything about it, as lomg as everything happens above-board.

It changes a lot, nonetheless, if you can show that a country has given partisan taxbreaks to some companies in violation of its own laws, or enforced the laws unfairly. In such case, it becomes a case of unauthorised state subsidy, and the Commission has very strong powers to get involved. That takes a lot of patient actuarial work, however.

[wj]

Michael, apologies. It occurs to me from Lurker's comment that perhaps by "public pensions" you meant something like Social Security. Rather than, as I assumed, something like pensions for public sector workers. (That being a topic of some interest here, as they have gotten way out of hand.)

[bobbyp]

And which of those does the US Federal government do? Maybe something on health care. Maybe. But the others? Not noticably.

The EU is a monetary (Euro Central Bank) and business union with open borders for the flow of people and capital. However, unlike the US it is not a political union. There is no central fiscal policy for things like defense, infrastructure, social security (pensions), or, when needed, countercyclical spending (unemployment benefits, deficit spending). Contrary to what you question implies, federal spending is indeed "noticeable" all the time, and especially in times of economic stress.

Greece was borrowing in a currency it did not control; they were fibbing and 'living beyond their means' (misaligned incentives); the banks lent with the more or less implicit guarantee by the ECB that they would be paid back; and when the shit hit the fan, the Germans fell for the siren call of "austerity".

Perfect storm.

[Lurker]

bobbyp,

It was not just the siren call of austerity. Germany had, in fact, undergone voluntarily a decade-long period of austerity during a boom. This involved actual personal hardship for many low-income Germans. Seeing that Greece had been throwing money out of the window, borrowed on German faith and credit, was really morally offensive. I can understand the reaction to punish Greece for its misdeeds.

Of course, one answer to the issue would be greater European solidarity. We do have, already, have in place a number of programs funnelling Union money to areas in need of development. Those programs could be expanded. However, bankrupting one's country cannot be a way to get ahead.

[Nous]

All the talk about borders, sovereignty, and the crisis of the Westphalian System has me rereading Hendrik Spruyt's The Sovereign State and Its Competitors and thinking especially about his arguments about why the Sovereign State became the dominant model over something like the Hanseatic League.

Michael Cain's description of the EU as a business union gets at some of this, I think, and makes me wonder if something like The Hansa may find new life in the coming future. Protocol and cooperation is becoming more important than sovereignty and one of the strengths of the nation state - its ability to enforce technological standardization - has lost its practicability in an age of rapid technological development and information flows.

Think we are about to hit another point of political and economic punctuated equilibrium.

[Michael Cain]

It occurs to me from Lurker's comment that perhaps by "public pensions" you meant something like Social Security.

This. I should have been clearer.

[hairshirthedonist]

Think we are about to hit another point of political and economic punctuated equilibrium.

The text as worded here appears to describe something benign. The subtext might be scary as hell, to be filed under the "A Lot Worse Before Better" category.

[bob mcmanus]

OT: Bad summer so far here, and it's still early

BBC headline:Temperatures reach 30C in UK!
Check your city here to compare

Dallas = 35C at the very top

Above Delhi, Islamabad, Cairo

Checking Weather Channel = What? That's only 93 with a 67 dew - 98 HI. Shoot, we have been 10 degrees hotter already and its still almost spring

[CharlesWT]

The last really over the top hot summer in the Dallas area was in 1980. That was also a year with a large influx of people from rustbelt states. I suspect that more than a few of them thought they had made a serious mistake in spite of what they were leaving behind.

[Lurker]

Nous,

one of the strengths of the nation state - its ability to enforce technological standardization - has lost its practicability in an age of rapid technological development and information flows.

I beg to disagree. The technological standardization is, at the moment, at its historic high. While there are unstandardised areas of consumer software production, these are simply a small part of our economy.

Most engineering fields have a well-defined set of standards, and the national and international standardising agencies are compiling standards for ever-new areas of application. Even better, these standards are often followed by the actual products.

In Europe, the EU has been a strong factor for standardisation. Simply the fact that most portable devices (with the exception of Apple) use micro or nano USB for charging is a result of an Union-enforced European standard. (Even Apple claims compatibility by shipping dongles with its products.)

I would say that your comment shows that you are woefully unaware of the wonderful world of "harmonised European standards".

[hairshirthedonist]

I would say that your comment shows that you are woefully unaware of the wonderful world of "harmonised European standards".

Which are not the product of a single nation-state. Maybe I'm misunderstanding, but you seem to be making nous' point rather than refuting it.

[Nous]

Correct, hairshirthedonist. And woe to the individual nation state that defies the harmonized standard, sovereignty be damned.

[bob mcmanus]

I was in Dallas in 1980. Yeah, I'm scared we are going to get one of those.

Yeah sure, the 112-113-113-112 (~44.5C) run ws terrible, but what I remember with a normal humidity around here, what broke me and made me mean was the

+90 degree morning lows.

[bobbyp]

Germany had, in fact, undergone voluntarily a decade-long period of austerity during a boom.

This was a political choice they made. They also had a policy that deliberately built up a German "trade surplus" with respect to the rest of the EU. This turned out to be, let us charitably say, "unwise". Absent a common fiscal policy, there was no way to recycle this surplus as is done in the US by the federal government's taxing and spending power.

This involved actual personal hardship for many low-income Germans.

Again, if true, this was a German political choice, and has really nothing to do with allegedly profligate Greeks.

Seeing that Greece had been throwing money out of the window, borrowed on German faith and credit, was really morally offensive.

So when a bank recklessly loans funds, who is at fault? The lender or the borrower? A question for the ages!

I can understand the reaction to punish Greece for its misdeeds.

I can understand it. I cannot condone it. This is simply collective punishment. Where is the punishment for the Germans for insisting on running a trade surplus within the EU?

Of course, one answer to the issue would be greater European solidarity. We do have, already, have in place a number of programs funnelling Union money to areas in need of development.

For the most part, agree. But then again, I am an evil One Worlder, and definitely of two minds when it comes to "national sovereignty".

Thanks.

[wj]

Typically, standards start in one place. They get mandated there (usually, although not always, by a government). If it is a "big enough" part of the industry, those standards get propagated across the entire industry . . . and remain, even if that locale's part of the industry drops substantially.

It happened with little things, like screw threads. It happened with railroads -- that's why we have time zones! It happened with car pollution. It is in the process of happening with IT.

Sometimes, it gets done by either a monopolist or a consortium of the companies which dominate an industry. Occasionally, the technical people involved are the ones who create the standard (think SAE standards), but the rarely have the clout to make their ideas into an industry standard all by themselves.

But most often, it's a government which makes the standards happen. As noted, it doesn't take a government to maintain the standard once it has been generally adopted. But getting it to that general adoption seems to require the kind of coercion that governments are most likely to have available.

[bobbyp]

The last really over the top hot summer in the Dallas area was in 1980.

The irresponsibility of panglossian libertarian observations about climate change never ceases to amaze.

Look at this and note the level of recent average annual temperatures.

Or this.

[Nous]

wj - It happened with little things, like screw threads. It happened with railroads -- that's why we have time zones! It happened with car pollution. It is in the process of happening with IT.

Pollution standards are one of the reasons I would argue that we are seeing a breakdown of nation state sovereignty (which is not the same thing as government, though you elide them in your argument). The Kyoto Accords are another example, like the EU harmonization, of the sort of pressure being put on the Westphalian System's model of sovereignty. The US was for it until Trump was agin' it, now the US is agin' it and the US has lost a lot of its international influence in the process because it insists on pressing its sovereignty to the detriment of its allies and in contravention of its own promises.

Also as a result of the abandonment of the US commitment to the Kyoto Accords, individual states and cities have been declaring their own commitment to international cooperation independent of the US federal government. Combine that with the way that the US constitution reduces the political influence of US cities and you have yet another tension on territorial sovereignty.

It's adding up.

[CharlesWT]

Regardless of what has happened since 1980 climate-wise, the north central Texas summer was an outlier that's still outlying.

"It was 30 years ago this week[Aug 2010] that a 42-day string of 100 degree days - the longest heat wave by far in the region's history - was broken. For one day. More triple digits followed, and when autumn mercifully arrived, temperatures had hit the century mark 69 times."
Dallas-Fort Worth heat wave of 1980 still seared into memories

[bobbyp]

Regardless of what has happened since 1980 climate-wise, the north central Texas summer was an outlier that's still outlying.

Then the point of bringing to our attention was, what, exactly?

[CharlesWT]

Then the point of bringing to our attention was, what, exactly?

bob mcmanus(04:25 PM) triggered a memory fetch...

[bob mcmanus]

Thanks bobby, those were good if depressing articles.

All coalmine canaries are outliers.

[wj]

Donald J Trump:

Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse - be patient! #MAGA

Naturally he is surprised . . . by something that anyone with 2 brain cells to rub together could have (and did!) predicted. And it's only the first shoe to drop.

[CharlesWT]

Looks like politicians and bureaucrats are finding it harder to confine and extort corporations.

[byomtov]

Capital flight, outsourcing, etc.

I don't understand. You want people not to be able to invest in foreign countries because you don't like the fact that they invest in foreign countries?

You don't want workers in poor countries to get hired by companies elswhere?

This makes no sense to me.

[bob mcmanus]

You want people not to be able to invest in foreign countries because you don't like the fact that they invest in foreign countries?

It may be in violation of house style, but I tend to skip insulting questions.

[wj]

How is that question insulting?

[Countme-a-Demon]

Again, with the bakers:

https://thecaucus.blogs.nytimes.com/2012/08/22/va-baker-is-in-the-spotlight-at-ryan-rally/?mtrref=t.co

Seems like the baker could have followed McKinney's advice and not been an asshole. Maybe had a little chinwag with Biden on the issues over a crossaint. Maybe not sold his baker's ass to Ryan.

We are the ones hitting back. And it's high time.

[bob mcmanus]

Two books open, data dumps foisted cause annoyed

1) One is Michael Hudson on the American School

Protecting industry through selective high tariffs (especially 1861–1932) and through subsidies (especially 1932–1970).

Government investments in infrastructure creating targeted internal improvements (especially in transportation).

A national bank with policies that promote the growth of productive enterprises rather than speculation.

You know who hated tariffs? Slavers! (Rentiers, extractors) Are you with the slavers or with the abolitionists?

2) Second book is Linda Matar, The Political Economy of Investment in Syria 2016. From Chapter Two, where I am reading

From the neoclassical perspective, investment in fixed capital is considered to move a certain stock of capital toward a desired future stock (the neoclassical-Hayekian perspective) for the purpose of profit maximisation. On the flip side, the determinants of investment are also affected by the cost of capital or by supply-side variables. In the demand-led approach (Keynes and Kalecki), investment is determined by effective demand and growth in income.

You could say the AS believed that high wages and high prices along with gov't spending created the effective demand that spurred investment. It also increased human capital and technological progress to increase productivity. If that sounds familiar, it was somewhat the post-WWII model we remember fondly.

Been around 50 years of aggregated neo-classical bs and new keynesian submission that I would have to fight through. But that wasn't science, it was looting and exploitation.

Also reading Perry Anderson, Lineages of the Absolutist State and a critical biography of Masaki Kobayashi that are not relevant.

[Countme-a-Demon]

"The first to wave the white flag....."

I didn't know they had a white one. They are always waving around the red, white and blue one. And whatever color the Russian flag is while they suck on the shirtless Putin.

A flag for every occasion.

True pigfucking Americans, that corporation.

I wonder if the MAGA types will boycott. Will Harley's CEO be asked to leave the Cracker Barrel in his leathers.

Probably not. The corporate mind wil hoist whatever false flag football they have to to peddle product.

Maybe even the Jolly Roger.

[bob mcmanus]

I also try not to argue but to point at my sources, cause inadequate and cause commonist.
It ain't about me, my arguments, information, and non-existent skills don't belong to me, and I should take no pride in such competition. This is not reliance on authority, but admission that I can never be such a thing.

I didn't build this thing.

[Countme-a-Demon]

"false flag football"

Apple's autocorrect is going to cause an inadvertent nuclear war one day.

[byomtov]

It may be in violation of house style, but I tend to skip insulting questions.

Also difficult ones.

[russell]

an interesting thread, thank you.

i want circle back to this:

note that we have a net trade surplus in steel with Canada.

this is a fact that is easily discoverable, and yet a lot of people are either unaware of it, or think it is false.

because certain parties in our public conversation are liars, or, worse, are utterly indifferent to the truth, and/or to facts as a measure of what is true.

and other parties in our public conversation believe them without question.

this is not a sustainable path. reality will out.

i don't know what to do about it.

[Michael Cain]

this is not a sustainable path. reality will out.

What's the political equivalent of Keynes's "The market can remain irrational longer than you can remain solvent"?

[wonkie]

But we had exactly the economic meltdown you say you want a decade back. And it didn't seem to have a lasting impact. Arguably that got some people to vote for Democrats in 2008. But it seems not to have had a lasting impact. Any thoughts on how many times the lesson has to be repeated in order to stick?

I dont think it ever gets learned for more than one or two election cycles. Conservatives and liberatrians appeal to selfishness and authoritarians appeal to the primitive tendency to act like cavepeople (territorial pack hunters). I think those tendencies are hardwired into all humans to varying degrees. There will always be politicians who appeal to the worst in human nature and the worst in human nature will always be present in the population.

[hairshirthedonist]

Not only does our president not know what due process is, he seems to think companies can be taxed on a company-specific basis. (Or who really knows what he thinks? Does he even know?)

https://jalopnik.com/trump-threatens-taxes-on-harley-davidson-like-never-bef-1827132783

[Countme-a-Demon]

Biker gangs, who kissed mp's ass, might turn on him when the violence starts.

Maybe they'll just switch to Vespas.

Vesperadoes.

[wj]

Or who really knows what he thinks? Does he even know?

On the evidence, no. He doesn't think, he just reacts (emotionally).

I haven't read thru the original tweets in detail. But from what's in the link it appears that he is only threatening to tax Harleys if they are made in the EU and imported back here. Having, no doubt, no clue that they are moving production in order to satisfy EU demand.

[Lurker]

Michael Cain,

How about Bonhoeffer's

Yet is this heart by its old foe tormented,
still evil days bring burdens hard to bear;
O give our frightened souls the sure salvation
for which, O Lord, you taught us to prepare.

A man cannot stay solvent to wait for the market to get rational, but you can stay moral even in the darkest circumstances.

[byomtov]

this is not a sustainable path. reality will out.

What's the political equivalent of Keynes's "The market can remain irrational longer than you can remain solvent"?

We can hope for Stein's Law to operate.

"That which cannot go on forever will stop."

[russell]

Vesperadoes.

I have a new aspiration in life.

I already have the man bag and the Italian loafers!

[russell]

and thanks for the Bonhoeffer, Lurker.

[Countme-a-Demon]

Bonhoeffer's parking space will be taxed

https://www.motherjones.com/kevin-drum/2018/06/republicans-use-church-tax-to-fund-millionaire-tax-cut/

Fuck republicans.

[Lars H]

Not only does our president not know what due process is, he seems to think companies can be taxed on a company-specific basis.

Just today the SCOTUS told him he could do it, as long as he comes up with a neutral justification for it in the order.

[Countme-a-Demon]

http://juanitajean.com/dont-be-uncivil/

I'm not liberal, I'm nuclear Comanche.

[Michael Cain]

Just today the SCOTUS told him he could do it, as long as he comes up with a neutral justification for it in the order.

And has a statute in hand that says "Congress authorizes the President to set tax rates on his own." Was that buried in the tax bill passed last year and I missed it?

[Countme-a-Demon]

http://www.theamericanconservative.com/dreher/the-passionate-intensity-of-the-worst/

From a link therein:
https://www.weeklystandard.com/jonathan-v-last/this-business-will-get-out-of-control

I know who started this threatening behavior. Second amendment remedies. Killing hundreds of government employees and their children. I remember the conservative filth at Tacitus years ago cheering on the Israeli murder of American activist Rachel Corrie, taunting her corpse.

Mp knows precisely what he is doing in the Republican Party. He knows precisely the violent imagery republicans have been thriving on, panting over, as they have threatened the Other, which means more than 50% of the population in this country for the past forty years.

His entire campaign was a call for brutal violence against his and the republican party's enemies.

Well, you better get it done assholes before you it's done to you.

Every NRA missive is a thinly veiled threat to shoot liberals. It 's not the Democratic Party who has heavily armed militias on its side.

Push back?

You've no idea.

https://m.youtube.com/watch?v=xWGAdzn5_KU

We passed that point a long time ago.

You go down there, General.

[Countme-a-Demon]

Sing it.

http://www.lawyersgunsmoneyblog.com/2018/06/mexican-jew-fascist-fascism

Republicans will still murder Nancy Pelosi before they kill Waters.

[Countme-a-Demon]

When will Sarah Huckabee use that White House podium to condemn her c$nt cuck father's bandmate's promises to murder Hillary Clinton and Barack Obama?

[Countme-a-Demon]

Welp, probably too late for that request at 5:26pm.

https://talkingpointsmemo.com/livewire/trump-souring-on-sarah-huckabee-sanders-will-grade-briefings

Golly, I hope he doesn't berate her while she's eating!

She's going to be losing a few pounds if this keeps up.

She's a formidable looking lass. Maybe she'll punch the Prez hard enough to crush his lout racist face.

He can be a grabby guy, even during a job performance grading.

[russell]

I've been hanging out on political blogs for over 15 years now. Part of hanging out on political blogs is listening to right wing people talk about all of the liberals they're going to shoot with all the guns they have.

Seriously, it's a thing. You just learn to ignore it.

When the ACA was being discussed, Tea Partiers would come to the congressional town halls to loudly and deliberately shout down anyone who disagreed with them. The 2nd Amendment remedy types brought their firearms, open carry style, to make sure the point got across.

And so on and so on and so on.

Sarah Huckabee Sanders is asked to leave a restaurant and a guy in a MAGA hat is asked to leave a bar.

And suddenly the dire wolf of political violence is at the door, threatening to destroy our sacred bond of unity.

Where has the outrage been for the last 15 years? Seriously, where? Where have the TAC articles, and the National Standard editorials, and the op-ed page rants, been?

Where have all of the voices, conservative and otherwise, that are currently crapping a proverbial brick over le affaire Sanders been, for the last 15 (or more) years?

McK, Marty, you guys got all worked up because we were talking about whether it was appropriate for the courts to find it legal that some guy didn't get served a beer. It's going to lead to an avalanche of violence. It is, says McK, the beginning of tyranny!!

The beginning of tyranny, everyone.

Show me where you used that phrase, ever, about people open carrying AR-15's to a Congressional town hall. Or to an address by the POTUS to a veteran's group, for god's sake.

Show me. I want to see it.

Why is all this bullshit going on now? Because it's been going on for years and years. And nobody has done anything about it.

It's just pointed, ever so gently for that matter, civilly and politely even, at People Like You now.

Ponder that.

As an aside, the guy in the Splinter piece *was not* calling for, or looking forward to, political violence. He's making the point that it's a likely outcome if current policies continue in the direction they are headed.

Calling that a threat is like saying somebody is threatening you if they tell you not to jump off the roof, because you're going to fall and hurt yourself.

Don't jump off the roof. You're going to get hurt. That is my advice for Trump supporters, and for conservatives in general.

Electing Trump was a mistake. Fix it before everything gets broken. There's damned little I can do about it, I'm a lefty SJW in a blue state.

Fix this mess. Find a way. It's on you if you don't.

[Girl from the North Country]

It is, says McK, the beginning of tyranny!!

The beginning of tyranny, everyone.

Show me where you used that phrase, ever, about people open carrying AR-15's to a Congressional town hall. Or to an address by the POTUS to a veteran's group, for god's sake.

Show me. I want to see it.

Why is all this bullshit going on now? Because it's been going on for years and years. And nobody has done anything about it.

It's just pointed, ever so gently for that matter, civilly and politely even, at People Like You now.

Ponder that.

This, this, and this again. For fuck's fucking sake. (If anyone's offended, I apologise. It's a nod to Malcolm Tucker).

[cleek]

when discrimination happens to black people or Latinos or women, there's always some "conservative" around to tell us that it didn't.

when The Mouth Of Trump gets booted back to Mordor, the pearls can't be clutched hard enough.

the GOP is a cult.

[Countme-a-Demon]

https://www.eschatonblog.com/2018/06/this-town-needs-enema.html

[russell]

WHERE WAS THE OUTRAGE WHEN JOE BIDEN WAS DENIED SERVICE AT THE CRUMB AND GET IT BAKERY IN RADFORD [email protected]

Huh?

Yeah, I'm making a joke. Because it is a joke - the outrage, the sudden concern, all of it.

And yes, the cookie guy actually did refuse to serve Biden. Which is, you know, perfectly fine. Biden went to some other place and got his muffin there instead. And, life went on. As it should have.

Not a peep from TAC or Weekly Standard or the op-eds at the NYT or WaPo.

[russell]

hah! i was unaware of malcolm tucker!

if it's on netflix, I'm in.

[sapient]

So, we're abandoning civility now. Thank you,

For all y'all who want to be involved:

On Thursday, the Women's March is sponsoring a civil disobedience event in Washington, DC. (I'm not participating in that. I have other things going on, including a mini-protest event, but also trying to finish up some work so that I can do more volunteering. Also, getting arrested will p)

On Saturday, there's this going on everywhere. Find one near you!

On Sunday, it's about detention centers. I only have information about Farmville, VA, near me: https://www.facebook.com/events/208487209772661/

Not sure where to find others, but you know what to do: Google. Ask. Start it yourself.

[cleek]

and they defend the faux-pious showboats who won't bake the fucking cakes.
frauds.

[sapient]

Also, getting arrested will p

Oops, pressed send too fast. Way to end my sentence without offering an excuse.

I'm not yet ready to get arrested. For one thing, I have some family obligations. For another, I think I might have skills that would be useful while I'm not in jail. I think it would be brave and admirable to be arrested, but I need to think about it longer. If I accidentally get arrested doing what I'm doing? Yeah, that will suck. But I probably won't.