2:00PM Water Cooler 8/10/2018 | naked capitalism

2:00PM Water Cooler 8/10/2018 | naked capitalism

“[Economy Secretary Ildefonso Guajardo] on Thursday remained tight-lipped about the likelihood that NAFTA talks could wrap up by the end of the month, but said negotiators are ‘doing [their] best to do it as fast as possible.’ Top U.S. and Mexican officials have been aiming to finish up a deal this month in an effort to get a deal signed by Mexican President Enrique Peña Nieto before he leaves office on Dec. 1” [Politico]. “President-elect Andrés Manuel López Obrador and Peña Nieto’s teams ‘are on the same page about wanting to wrap this up before AMLO takes office. No new administration wants to handle a major trade [deal] renegotiation in its first months,’ a source close to the talks told Morning Trade.”

“U.S. fisheries could get hooked and sunk by the Trump administration’s proposed new tariffs on a wide variety of fish imports from China. An estimated $900 million worth of fish and seafood on that list is caught in the U.S. and sent to China to be made into items like fish sticks and fillets” [Wall Street Journal]. “Sending fish to China to be breaded, seasoned, portioned or packaged has grown recently, as domestic seafood-processing plants faced high costs and labor shortages. That helped make China the top source of seafood imports to the U.S., with 1.3 billion pounds sent last year. Now U.S. companies fear they’ll get caught up in tariffs on those goods.” • I guess a labor arbitrage chant starting with “Gimme an L!” would be tediously long…

“China should cut its losses in the trade war by conceding defeat to Donald Trump” [Xu Yimiao, South China Morning Post]. “Some serious discussions are going on in China as the country faces an escalating trade war with the United States, slowing domestic growth and increasing investment restrictions in the US and Europe. There seems to be recognition that the previous playbook drafted by hardliners has not worked and Beijing needs to change its strategy. Beijing’s strategy of a tit-for-tat retaliation over tariffs has clearly failed. In fact, this strategy escalated the conflict. The direct retaliation after the US announced the first batch of 25 per cent tariffs on US$50 billion in Chinese goods (with the increase from US$34 billion just finalised and coming into effect on August 23) brought few benefits for China. If anything, it gave the US an excuse to plan for a new batch of tariffs covering US$200 billion in Chinese goods. To be fair, it is possible that the US would have escalated the conflict even if China had not retaliated, but whatever the case may be, China’s strategy did not work.” • I don’t know the Chinese press well enough to know if this is reporting, a trial balloon in the (Hong Kong-based) SCMP, or what. It makes me wonder about Xi. And it also makes me wonder about what’s going on i the interior of China, and what fragilities a trade war might reveal. For example, this thread:

The Chinese cops have impressive logistical skills. One might ask how and why they became so very good.

“Commentary: Believe it or not, the GOP could keep the House” [Michael Graham, CBS]. “‘Republicans must re-elect almost all of their 36 incumbents whose districts are R+7 or less, put special effort into the eight open seats rated toss-ups or lean Republican…and go hard after the handful of open Democratic seats that lean Republican.’ ‘If they do this they might—just might—hold the House,’ Rove believes. And he’s not alone. ‘No, this election is not ‘baked,” says Stanford University political scientist Doug Rivers. In a podcast interview this week, Rivers and fellow Stanford academic David Brady argue that while the GOP numbers are bad, they might not be quite bad enough for Democrats to win the majority.” • Cheerleading, of course, but Rove isn’t dumb, whatever else he may be.

“US midterms: Ivanka Trump ‘to be dispatched to suburban districts’ where president’s hardline policies are turning off supporters” [Independent]. “A recent Marist poll found only 30 per cent of women approved of the president. It found that around sixty per cent of suburban women strongly disapproved of him and, as a result, the Democrats had a 30-point advantage with this demographic. Even most white women, a group that Mr Trump won two years ago, said they were more likely to vote Democratic rather than Republican.”

KS Governor: “Kansas governor’s aide: Kobach promise on count not enough” [Associated Press]. “In his letter, [Kansas Governor Jeff] Colyer suggested [that gubernatorial candidate and current Secretary of State Kris] Kobach’s guidance to county officials ‘may serve to suppress the vote.’ He added that circumstances obviously increase the likelihood that one of the candidates may seek a recount, or even the possibility of litigation.’ • So the AG is proffering advice on how to count the votes in his own race? Chutzpah! More: “Kobach told reporters Wednesday that he knew of no significant reports of irregularities in Tuesday’s primaries, outside of in reporting results from the state’s most populous county. There, Johnson County in the Kansas City area, results were delayed by .” • Move along, people, move along. There’s nothing to see here. (And, as readers know, problems “uploading data” go away with hand-marked paper ballots, hand-counted in public. It’s almost like the two-party system is allergic to this solution for a reason….

GA-10: “Former congressional candidate charged with murder in Aiken” [Augusta Chronicle]. “[Kellie Lynn Collins] was a Democratic candidate for the 10th Congressional District seat in 2018, but withdrew from the race for personal reasons and wasn’t on the ballot. According to a file from the Federal Election Commission, [the victim was identified as Curt Cain] was Collins’ treasurer.” • It’s been quite a year so far… .

MN-01, MN-08: “Democrats’ hopes to take House could stumble in Minnesota” [Associated Press]. “Voters in the sprawling farm country south of Minneapolis and in the economically struggling Iron Range along the Canadian border give Republicans in those two congressional districts perhaps their best chance anywhere for flipping Democratic seats. Democrats need to pick up 23 seats in November to retake the House, but the odds grow long if they lose districts they currently hold… ‘Minnesota is going to be ground zero for control of the House,’ said Corry Bliss, director of the Conservative Leadership Fund, a super PAC aligned with House Speaker Paul Ryan…. Former U.S. Rep. Steve Israel of New York, who served four years as chairman of the Democratic Congressional Campaign Committee, agreed.” • Steve Israel. Aaugh! Aaaugh!

OH-12: “The Table Is Set for Democrats to Take the House” [Eugene Robinson, RealClearPolitics]. “[OH-12], encompassing the northern suburbs and exurbs of Columbus, has been regarded as an impregnable GOP stronghold for more than three decades. Trump won it in 2016 by 11 points. Faced with polls showing a tight race, Trump staged a last-minute rally there Saturday in an attempt to drag Balderson across the finish line. By the slimmest of margins, he may have succeeded. But if Ohio-12 is competitive, if it’s not a safe Republican district anymore, then a host of similar districts across the nation are also up for grabs in November.” 100% of the vote is now counted (with provisionan ballots still to come in). The New York Times has a handy chart:

The Liberal Democrats Have Lost Their Minds

“There Are Better Ways to Mock Trump Than Joking That He’s Putin’s Gay Lover” [Mother Jones]. • Finally.

Realignment and Legitimacy

UPDATE “Backlash and Stigma: Rethinking Restraint in the Age of Trump” [Duck of Minerva]. “[W]hat if stories like the decline of Ivanka’s clothing brand matter more than we think? In isolation, these kinds of stories appear as inconsequential distractions. Taken together, they form a broader genre of reporting focused on the rising personal costs of serving under Trump. This genre of reporting is important because it points to two crucial political processes occurring around the Trump administration right at this moment: backlash and … In Goffman’s classic definition, a stigma is an attribute which is seen as ‘deeply discrediting’ by a community. In effect, a person becomes tainted with a ‘spoiled identity’ and becomes vulnerable to public ostracism and ridicule… [W]hereas shaming is widely treated as a rhetorical maneuver, Goffman was at pains to stress how a social stigma can be a crippling social, political, and economic liability. From being excluded from valuable networks of patronage, to being professionally blacklisted, the effects of a social stigma can be severe…. To an extent we can already see the dynamics of this stigma at play: the White House is struggling to fill positions and former staff are being shunned by prospective employers.” • This is an insightful article, well worth a read, though the scope is International Relations (not focus of this extract).

Two comments: First, we might see stigmatization insofar as it affects staffing for the Administration as an exercise of class power by the 9.9% who form the liberal Democrat base. (Such an exercise would obviously be carried out for a Sanders administration as well; “Bernie Bro” in the 2016 primary was liberal Democrat stigmatization, for example.) Second, it seems to me that liberal Democrats have essentially gone into the stigmatization business: the calling out, the shaming, the blaming. For example, their focus following the OH-12 results was… The Greens, who were addressed in such fingerwagging terms as “Do I get a cookie now?”, “Don’t tell me you care about the environment,” and (of course) “Russian meddling. Why else would anyone cast a protest vote in Ohio?” Stigmatization has its good points as a tactic, I suppose, but I’m not sure that liberal Democrats have the moral standing to do it, having, so far as I can tell, no fixed principles whatever. Their stigmatization of Putin and Trump as gay lovers is a fine example of this.

“Hackers at convention to ferret out election system bugs” [Reuters]. • I’m not even going to bother saying what you know I’m going to say.

“Automatic Voter Registration Gains Bipartisan Momentum” [Governing]. “Oregon was the first state, in 2015, to adopt an automatic voter registration (AVR) system. Since then, 12 states and the District of Columbia have passed similar laws, and 20 states this year have introduced automatic voting registration proposals, according to the Brennan Center for Justice. The Massachusetts House approved the bill 130-20 in June, and the state Senate unanimously passed it two weeks later.”

Stats Watch

Consumer Price Index, Juliy 2018: “Consumer prices slightly accelerated their creep higher in July” [Econoday]. “Accounting for almost 60 percent of the monthly increase for the overall index in July was the index for shelter…. Yesterday’s producer price report was slightly weaker than expected and calmed inflation fears but but today’s data on consumer prices shows core inflation reaching the highest level in nearly 10 years and may lead to more hawkishness at the Fed.” And: “Fuel oil and used cars were the main driver for year-over-year inflation. Core inflation is now above 2.0 % year-over-year” [Econintersect]. And: “Key Measures Show Inflation increased YoY in July” [Calculated Risk]. “Overall, these measures are mostly above the Fed’s 2% target (Core PCE is close).”

ECRI’s WLI Growth Index: “ECRI’s WLI Growth Rate Index At 45 Week Low” [Econintersect]. “Even with the general downward trend in this index over the last 6 months, the forecast is for modest (approaching insignificant) growth six months from today.”

Commodities: “Saudi crude output discrepancy confuses oil market” [Kallanish Energy]. “Saudi Arabia has reportedly approached independent price reporting agencies and analysts to review their forecasts for the country’s monthly crude oil production, following huge discrepancies for July. Officials told OPEC delegates last weekend Saudi Arabia cut its July oil output by 200,000 barrels per day (Bpd), to 10.29 million barrels per day (Mmbpd), driving crude oil prices up on Monday. However, earlier estimates by secondary sources showed the kingdom boosted production instead. Certain discrepancies are somehow expected in data reported by countries and governments, but the fact OPEC’s de facto leader is pushing for changes on independent estimates is something new and for some, worrying. ‘,’ John Hall, chairman of consultancy Alfa Energy, told the Wall Street Journal, but ‘they could lose credibility and it could increase (price) volatility.’” • Odd. I don’t follow the oil markets at all, because I assume they’re gamed top to bottom. (Maine has the winter highest heating oil usage in the country, and everybody believes that the market is rigged, down to the cashiers at the convenience stores.) Just a blooper, or something more important? Can readers comment?

Commodities: “Labor is proving to be one of the toughest commodities for mining companies to manage this year. Roughly 1,500 workers at Australian alumina refineries and bauxite mines owned by Alcoa Corp. are on strike…, following labor unrest at mines run by Glencore PLC in South Africa and BHP Billiton Ltd. in Chile” [Wall Street Journal]. “Such actions stoke volatility in global commodity markets, affecting the prices of a broad range of products. Alcoa’s refineries in Western Australia account for roughly 7% of global alumina supply, and a strike could drive up prices on products from cars to beer cans.” • Um, labor isn’t alienable. It’s labor power that’s the commodity.

Shipping: “White House postal reform plan should leave parcel pricing alone, group says” [DC Velocity]. “A newly formed group of parcel shippers has asked the Trump administration to avoid suggesting any reforms to the U.S. Postal Service’s (USPS) business that could result in an increase in its shipping and package rates, saying USPS’ package operation is already profitable at current prices and only its private sector rivals would benefit from any upward rate adjustments. The group, which calls itself ‘The Package Coalition,’ said it is concerned that a White House task force review of USPS’ operations and pricing may ‘become an effort’ to force it to raise prices well beyond what is required to cover its parcel costs and to effectively compete with private-sector rivals.” • Whatever the White House reform efforts are, I doubt that they’ll include a Post Office Bank (once pushed by Elizabeth Warren, but she’s been silent for some years. Probably the donor class hates it, but I don’t see why we don’t hear about this from the left.

The Bezzle: “‘Buy bitcoin with credit card’ is on the rise on Google and sparking bubble fears” [CNBC]. “Google Trends says the search term ‘buy bitcoin with credit card’ is around its historic peak, notes Nick Colas, co-founder of Data Trek Research and the first Wall Street analyst to take the digital currency seriously…. While the phrase is only about 3 percent of all bitcoin searches, it is on the rise. The popularity and curiosity of using leverage to get in on the action come as bitcoin’s price continues to scale new heights.” • No more numbers than that. Interestingly, when I searched for the phrase, no Google ads came up, even though the first five hits were all companies selling that transaction.

The Bezzle: “Poll: Some Investors Use a Credit Card to Buy Bitcoin and Then Carry Over the Balance” [LendEdu]. From 2017: “LendEDU polled 672 active Bitcoin investors… ‘1. Which of the following best describes how you funded your account to purchase Bitcoin?: 18.15% of Bitcoin investors answered ‘I used a credit card to fund and purchase.’”

Mr. Market: “Dow tumbles more than 200 points as a currency crisis in Turkey rattles Wall Street” [MarketWatch]. “U.S. stock-index benchmarks slumped to start Friday trade, tracking a global equity retreat fueled by a mounting currency crisis in Turkey, which raised the alarm for possible contagion into other markets.”

Honey for the Bears: “Another stock market risk: GDP growth is slowing across the globe” [MarketWatch]. “A moderation of growth does not mean contraction, and it doesn’t mean that a recession is imminent. However, slowing growth — both in the U.S. and abroad — would likely be another headwind for an equity market that is trading near record levels. ‘Things are looking good in the U.S. in terms of earnings and data, but things aren’t as rosy if you look to China, emerging markets or Europe. Weakness in those regions could eventually become a headwind for the U.S.,’ said Suzanne Hutchins, senior portfolio manager of the $1.5 billion Dreyfus Global Real Return Fund, which is run out of the investment boutique Newton.”

Honey for the Bears: “The only economic discussion the Left needs is how to deal with the coming crisis” [Tax Research UK]. ” Labour is not going to face anything that looks remotely like being normal. It will inherit the most almight mess. And then some pretty radical thinking is actually going to be needed.” • Not just the UK!

Health Care

“Trump Administration Sinks Teeth Into Paring Down Drug Prices, On 5 Key Points” [Kaiser Health News]. “But experts who pay close attention to federal drug policy and Medicare rules say the administration is preparing to incrementally roll out a multipronged plan that tasks the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration with promoting competition, attacking the complicated drug rebate system and introducing tactics to lower what the government pays for drugs.” More: “Currently, Medicare pays the average sales price plus 6 percent to doctors or hospitals when they purchase drugs, a pricing mechanism that can benefit the providers if the drug costs go up. If there were a third party buying the drugs, it would ‘have a huge effect,’ Bach said.” • Which is why the biggest possible “third party” — we might call it…. a “single payer” — would have the greatest possible “effect.” Clever, Obama-like tactics of tinkering round the edges won’t work for Trump, either.

Our Famously Free Press

Bad news, good news:

The contradiction here is that Facebook really is private property; it presents itself as being for public purpose, but that’s just marketing (“You are the product,” and very much you shaped in certain ways, once with dark patterns and the dopamine loop, now overtly).

“Quis Custodiet Ipsos Custodes” [Steve Slick, Lawfare]. A review of Loch Johnson’s Spy Watching: Intelligence Accountability in the United States. This sentence leaped out: “[Johnson] concludes that the trigger for intensive investigation by these [Congressional Oversight] committees is sustained media attention, although Johnson acknowledges that leaks in recent years of electronic surveillance programs by former NSA contractor Edward Snowden fueled months of front-page reporting but generated only a modest legislative response.” • Slick treats the “intelligence community” and the media as if they were two separate institutions, such that the latter can check the former. But if there’s any lesson to be learned from the current RussiaRussiaRussia moral panic, it’s that the relationship between both institutions involves considerable overlap, not to say incestuous, albeit anonymized, relationships. (We might also give consideration to the idea that leaders in the intelligence community, as army generals before them, have discovered that it’s quite lucrative, personally, to become a talking head.) So Slick’s headline has more layers of irony than we might have thought at first reading.


“Costs of Extreme Heat Are Huge, But Hard to Quantify” [Climate Liability News]. “In terms of costs, heat-related climate impacts are likely to be in the billions of dollars, considering risks to health and mortality, economic disruption, and cooling expenses. Currently these costs are shouldered solely by taxpayers, but the climate liability lawsuits targeting the fossil fuel industry are trying to shift that burden. New York quantified its costs in its complaint against five major oil companies—recently dismissed by a federal judge but the city says it will appeal—as it faces skyrocketing costs related to heat. ‘Heat kills more New Yorkers than any other natural hazard and disproportionately impacts communities of color and the elderly, which is why the City is tackling this challenge with unprecedented investments in heat mitigation and adaptation programs,’ said Jainey Bavishi, director of the Mayor’s Office of Recovery and Resiliency. According to the city’s complaint, if emissions are not significantly reduced, scenarios project temperatures at or above 90 degrees F for 33 days per year by the 2020s, 57 days per year by the 2050s, and 87 days annually by the 2080s. In other words, ‘by the 2050s, today’s worst heat waves are expected to become ordinary summer days.’” • Somehow, I don’t think the insurance industry has priced any of this in… Readers?

Class Warfare

“Women’s group behind rebel memorials quietly battles on” [Associated Press]. “Most people might know the [United Daughters of the Confederacy (UDC)] as that group of mainly older women who dress in widow’s weeds and gather on Confederate Memorial Day to lay wreaths of boxwood and holly and sing mournful renditions of “Dixie” in honor of the estimated 260,000 Confederate service members who died in the Civil War . Seeing them arrayed in their broad-brimmed hats and red-and-white sashes, it would be easy to dismiss the Daughters as a quaint anachronism. That would be a mistake. As memorials have toppled and Confederate place names have vanished in the year since the Charlottesville riots, the Daughters have fought back with lawsuits aimed at stopping the removal of rebel monuments from public spaces. Heidi Beirich of the Southern Poverty Law Center counts the group among the leading proponents of the “cult of the Lost Cause” — noting it has distributed literature that claims most African-Americans were ‘ready and willing’ to serve slave owners and that northern nullification of Southerners’ rights forced the War Between the States.” • The past is not dead…. What this article does make crystal clear is that ascriptive identity doesn’t provide a readout of political views. Women are no more likely to be progressive than Obama was progressive because he was black (something it took liberal Democrats a long time to get their heads around, and some still haven’t). Hence the idiocy of “record numbers of women” in 2018 horserace coverage. How many are Daughters of the Conderacy? Or, for that matter, Daughters of the Neoliberal Era?

“As Schools Struggle, West Virginia Governor Still Owes Kentucky $2.5 Million in Taxes” [Governing]. “The billionaire governor of West Virginia said Monday that coal companies linked to his family have paid all the delinquent taxes they owe the state of West Virginia and its counties, but records show the companies still owe millions in Eastern Kentucky… The unpaid taxes in Kentucky come from a time when the coal companies were owned and controlled by [Governor Jim] Justice, who was elected governor of West Virginia in 2016 as a Democrat. He has since switched his party affiliation to Republican.” • Jim Justice is a real Democrat!

“Imperial Pink? The Wing Gears Up to Go Global” [Vogue]. A co-working space for women only. Membership fees: $2,350–$2,700 a year. Well, some women. Quite an enjoyable read, in its own way.

“A Guide to the Evangelical Celebrities and Pastors Dominating Hollywood” [The Cut]. “There are several youth-focused, Pentecostal megachurches springing up across the country, and [Justin] Bieber has attended just about all of them.”

Where you stand depends…

News of The Wired

“A Stanford University psychologist’s elegant three-step method for creating new habits” [Quartz]. “To create a real lifelong habit, the focus should be on training your brain to succeed at a small adjustments, then gaining confidence from that success, [B.J. Fogg, a psychologist and researcher at Stanford University] argues. To do that, one needs to design behavior changes that are both easy to do and can be seamlessly slipped into your existing routine. Aim for automaticity.”

“The Monarchy of Materialism: Understanding White Fragility” [Hampton Institute]. Weirdly interesting, and not the screed you might imagine from the title; I placed it between the links above and below for a reason.

“Probing the genetics of the mind” [Nature]. “Kandel’s attempt to biologize psychiatry is not for the sensitive; his focus is medication and compensating for faulty wiring, not gaining psychological insight into inner turbulence. At times, he proposes a less-than-convincing reframing: that because psychoanalysis is a learning process, which involves synaptic changes, the therapy is essentially a biological treatment. However, reading a book or watching a film will bring about synaptic changes, too — and we wouldn’t count either as primarily biological activities…. Bold propositions such as Kandel’s in The Disordered Mind blur the distinction between therapies involving medication or surgery and those that use behavioural and cognitive means.”

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Readers, feel free to contact me at lambert [UNDERSCORE] strether [DOT] corrente [AT] yahoo [DOT] com, with (a) links, and even better (b) sources I should curate regularly, (c) how to send me a check if you are allergic to PayPal, and (d) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! If you want your handle to appear as a credit, please place it at the start of your mail in parentheses: (thus). Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (TH):

TH writes: “Terranea Resort’s Mar’sel Restaurant kitchen garden.” I sorta used to have a kitchen garden, but now I have random clumps of herbs and some garlic scapes here and there.

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