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Another take on Cantor

Thursday, June 12, 2014

There's been a lot of speculation about why Eric Cantor went down in flames. The basic reason may be the main: the man is an asshole. But I'm persuaded by this view that this is the argument that clinched the deal with the voters:

But there’s no question that conservative economics professor David Brat succeeded in channeling a strain of right-wing populism to target Cantor, and plausibly so, as a corporate stooge and progenitor of crony capitalism. Lee Fang at Republic Report did the most thorough work on this:

“All of the investment banks, up in New York and D.C., they should have gone to jail.”
That isn’t a quote from an Occupy Wall Street protester or Senator Elizabeth Warren. That’s a common campaign slogan repeated by Dave Brat, the Virginia college professor who scored one of the biggest political upsets in over a century by defeating Majority Leader Eric Cantor in the Republican primary last night […]
Brat told Internet radio host Flint Engelman that the “number one plank” in his campaign is “free markets.” Brat went on to explain, “Eric Cantor and the Republican leadership do not know what a free market is at all, and the clearest evidence of that is the financial crisis … When I say free markets, I mean no favoritism to K Street lobbyists.” Banks like Goldman Sachs were not fined for their role in the financial crisis — rather, they were rewarded with bailouts, Brat has said.
Brat, who has identified with maverick GOP lawmakers like Representative Justin Amash of Michigan, spent much of the campaign slamming both parties for being in the pocket of “Wall Street crooks” and D.C. insiders. The folks who caused the financial crisis, Brat says, “went onto Obama’s rolodex, the Republican leadership, Eric’s rolodex.”
In particular, Brat took aim at Cantor’s work on the STOCK Act, which was prompted by a conservative economist who found major stock gains from members of Congress and staffers in industries where they had inside knowledge. Cantor openly watered down the STOCK Act before passage. If you’re trying to paint your opponent as a corporatist who looks out for himself and his buddies over his constituents, this would top the list.

The oft-repeated claim that Brat won by framing Cantor as somehow pro-immigration (which comes from a couple off-hand remarks and not any real actions) actually goes together with this. Brat made an economic argument on immigration about how the U.S. Chamber of Commerce wants to import cheap labor to take away “your” jobs. This has a nativist element to it, and it was certainly used as a rallying cry by right-wing radio talk show hosts. But even when Brat says that immigration won the race for him, he says it in terms of Cantor “supporting the U.S. Chamber agenda.” The key ad on this showed Cantor in a picture with Facebook’s Marc Zuckerberg. It’s all coherent with the idea of Cantor as handing corporate America whatever they want.

…

I hope we can agree that Brat’s campaign strategy of playing on the resentments of a handful of voters who aren’t getting by in this economy means nothing for the policies he’ll actually pursue. Given Brat’s ideological leanings, he will probably react to regulatory capture and Wall Street corruption by arguing that financial institutions need to be freed from burdensome government oversight and have the market discipline any untoward behavior.

Via Naked Capitalism

A few days ago I noted a similar phenomenon in Europe. There, as here, the right plays on working and middle class (actually everyone but the .01%) resentments with no intention of actually addressing the root causes of the problems once they get in. In fact, Brat's “libertarian” philosophy would only exacerbate the problem. But here, as in Europe, the allegedly left party (and yes, that would be the Democrats) has neither attempted to capitalize on those resentments or do anything about them. In fact, the party is almost apologetic about backing programs like Social Security, which at least provide minimal protections against the predations of Wall Street.

The Democrats appear to be figuring that Hillary will skate into office in 2016, and that the country will be safe in her corporatist hands for four to eight years. That may, in fact, be what happens in 2016, but it may just be putting off the inevitable day when the right will capitalize on Democratic inaction by sweeping into power. They already control the courts, and Pat Leahy is making sure that won't change. Come 2020 they'll no doubt steal some more states through gerrymandering, since the Democrats historically lose big in years ending in zero. (Funny about that). It is more likely to happen in Europe, but it can happen here.

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Krugman, wishful thinking, and the fall of the House of Cantor

Wednesday, June 11, 2014

I don't normally take issue with Paul Krugman, and I heartily wish I could buy into his take on the Cantor defeat, but I don't think the evidence is there:

In other words, being a hard line conservative, which to be fair involved some career risks back in the 60s and into the 70s, became a safe choice; you could count on powerful backing, and if not favored by fortune, you could fall back on wingnut welfare.

And Eric Cantor, who got into politics long after the Reagan revolution and for the most part made his career post Gingrich, came across very much as a movement conservative apparatchik. He took very hard line stances, but never seemed especially passionate; he was, arguably, basically a careerist, and as such was fairly typical.

Maybe that’s what the primary voters sensed.

Whatever the reason, it turns out that being a movement conservative apparatchik is no longer a safe career choice. This is a very big deal. Conservatives, as I said, will always be with us. But the structure that shaped them into a cohesive movement is now starting to unravel, at a time when movement progressivism — which is much less cohesive and much less lucrative, but nonetheless now exists in a way it didn’t 15 years ago — is on the rise.

via Conscience of a Liberal

We'll probably find that there were local reasons for Cantor's fall, but the fact of his fall does not bode ill for movement conservatism, or even for Cantor. He will be on wingnut welfare as soon as he leaves office, so there's no change there. He will make more money than he did as a Congressman; or at least he will make more money legally than he did. He will be replaced by a man who will be as subservient to the puppet masters as was Cantor, assuming the Republican wins. The puppets may change, but the people pulling the strings remain the same, and as long as the puppets perform to their liking, the show will go on.

I note that a number of commenter's on Krugman's website have made the same point.

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Just another day

Wednesday, June 11, 2014

There was another school shooting yesterday; this time in Oregon.

Mass shootings have now become such a regular event that it takes something special to get them on the front page. The Arizona shooters made it, but they had to work on it. Maybe it was draping that “Don't tread on me” flag on their victims.

As these events become routine the response becomes more and more predictable. The act is dismissed as that of a mentally unstable individual, and no attention is paid to the fact that he or she (usually he, but we just had a she) would have been unable to wreak such havoc were not the technological means of wreaking so easily obtained.

The NRA has won, not by diminishing the number of such incidents, but by creating conditions that make them so commonplace that we don't give them a second thought. Hey, shit happens-what are you gonna do?

The only thing likely to change this is if someone brings a gun to the Supreme Court and starts spraying. But, of course, our “Second Amendment rights” are not operative in those hallowed halls.

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Charter School Madness

Monday, June 9, 2014

The swine belly up to the trough:

Tax benefits and real estate investment may also explain why Wall Street is so hot on raising money for charter schools. On Monday night, April 28, 2014, hundreds of Wall Streeters gathered at Cipriani in Midtown Manhattan to raise funds for Success Academy Charter Schools. Former Florida Governor and GOP presidential contender Jeb Bush gave the keynote address. The dinner was chaired by hedge fund manager Daniel Loeb. Loeb is the founder of Third Point LLC and chairman of the board for Success Academy. The gala raised at least $7.75 million for Success Academy. Also attending were Kyle Bass of Hayman Capital Management, Joel Greenblatt of Gotham Asset Management, Boaz Weinstein of Saba Capital, John Paulson of Paulson & Co. and Erik Prince, the founder of Blackwater USA.

According to The New York Times, the ten highest paid hedge fund operators with close ties to charter schools also includes David Tepper (number 1 at $3.5 billion in 2013), founder of founder of Appaloosa Management and New Jersey based “Better Education for Kids”; Steven A. Cohen (number 2 at $2.4 billion) of SAC Capital Advisors, which was forced to pay a $1.2 billion dollar penalty for insider trading, who has given over $10 million to the Achievement First charter school network; and Paul Tudor Jones II (tied for tenth at $600 million), founder of the Tudor Investment Corporation who has supported charter schools through his Robin Hood Foundation.

via Huffington Post

We will inevitably be paying tribute (in the oldest sense of that word) to Wall Street to educate our kids to be compliant serfs. It's already happening:

One month ago Dr. Steve Ingersoll and his wife Deborah were both charged with several counts of fraud, including defrauding Chemical Bank, the United States and tax evasion by a federal grand jury. The optometrist and wife team, along with his brother and another couple who owned a construction company engaged in a dizzy dance of money transfers and check writing to each other that eventually moved most of a business loan for renovating a church into a school in Bay City, Michigan, into Steve Ingersoll’s personal bank account. The reason for doing this appears to be avoiding paying taxes, and also covering up for money paid by him to him through advances taken from Grand Traverse Academy’s school funds, another charter school managed by Ingersoll.

…

Steve Ingersoll embodies the most glaring problem with charter schools in Michigan; too much taxpayer money being siphoned into management companies with very little oversight and for very poor returns. Bay City Academy did very poorly in achievement scores compared to other school districts in Bay City. Parents and politicians need to reconsider whether charter schools really offer an alternative for better education. What is mostly being revealed about the people who start and manage charter schools is it’s a quick way to make money at taxpayer expense. Public Schools have always been the better investment for educating Michigan’s children, and it’s time to put our money back into the institution dedicated to education rather than profits.

via Daily Kos

Once they get their snouts in, it's almost impossible to get them out. Our current governor is poised to hand our schools to Wall Street, and he'll no doubt get no arguments on that score from his opponent.

Filed in Corporate Crime, Education | | Comments (0)

Bad Moon Rising

Monday, June 9, 2014

Michael Hudson on the recent European elections:

The US press and newscasts make it appear that Europeans have voted against poor immigrants and foreigners. What they voted against the super-rich, the oligarchy. The “foreigners” being opposed include the United States insisting on drawing NATO into its wars in Libya,Iraq, Syria and Afghanistan – and now, subsidizing Ukraine to confront Russia. The “nationalist” parties voted against the EU constitution written by the oligarchy to favor the banks against labor. It is a neoliberal constitution that prevents governments from running budget deficits of more than 3% of GDP – except of course to bail out banks and bondholders. It centralizes foreign policy in a US- and NATO-appointed bureaucracy of “technocrats.”

The US press characterized Sunday’s May 25 vote opposing this bureaucratic circumventing of democracy as a vote against “democratic Europe.” This is an Orwellian description of what happened.

….

This is not democracy. It is oligarchic extremism. And yet the anti-EU voters seeking to recover power for their national governments to run budget deficits to lower the unemployment rate below its current 10.5% is called extremist.

The underlying issue on May 25 was whether voters would support more economic austerity and privatization sell-offs. It is obvious that they didn’t.

They also didn’t want a new Cold War with Russia, or yet more contributions to NATO to support US unipolar world. So when the nominally Socialist parties joined with the right-center to support more financial austerity, and centralization of Eurozone policy in the hands of unelected bankers, they suffered a resounding defeat.

…

A century ago the socialist, labor and social democratic parties had an economic program. It included progressive taxation, taxation of land and natural resources, and public infrastructure investment so as to prevent monopolies from occurring. This included a public banking system.

Today, the left wing has reversed all these policies. Tony Blair led the British Labour Party to make a right-wing run around the Conservatives, even to the point of privatizing railways and the Public/Private Partnership giveaway to the City of London. In America, Bill Clinton abolished Glass Steagall and deregulated derivatives trade. Then Barak Obama achieved what a Republican president could not have done: He is leading the fight for the Trans-Pacific Partnership to dismantle financial regulation altogether, along with public environmental regulation. He has escalated the Cheney-Bush military policy seeking to grab foreign oil and gas resources, most recently in Ukraine where Secretary of State Kerry’s and Joe Biden’s families have taken a kleptocratic position in that poor country’s gas resources.

So where is the left?

Today’s political situation is much like 1968, when George Wallace – a “southern cracker” – was the only candidate talking about economic policy and urged withdrawal from Vietnam. He was shot.

via Michael Hudson

All true, and while it may be true that most Europeans were not voting against immigrants or foreigners, the only candidates on offer that are addressing their actual concerns are primarily interested in advancing a right wing agenda, which is very much, as always with the right, bottomed in racism. They can't cause too many problems if they hamstring the toothless European Parliament, but if the oligarchs do nothing about the recession (and they won't), then we can all look forward to a right wing lurch in European countries when it comes to voting for national Parliaments that do, indeed, have power.

It is truly amazing that our government, along with the European governments, seems oblivious to the dangers posed by the austerity regime. Cue John Fogarty.

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All Hail Harry Reid

Tuesday, June 3, 2014

He just gets better with age:

Senate Majority Leader Harry Reid (D-NV) on Tuesday said that billionaires controlled American politics because of the lack of campaign finance laws.

“I’m here because of the flood of dark money into our nation’s political system poises the greatest threat to our democracy that I have witnessed during my tenure in public service,” he said during a Senate Judiciary hearing. “The decisions of the Supreme Court have left the American people with a status quo in which one side’s billionaires are pitted against the other side’s billionaires.”

“So we sit here today with a simple choice: Do we keep the status quo and argue all day and all night forever about whose billionaires are right, whose billionaires are wrong, or we can work together to change the system to get this shady money out of our democracy and restore the basic principles of one American, one vote,” Reid remarked.

via Raw Story

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Scott Brown digs in

Tuesday, June 3, 2014

A couple of days ago I passed on the news that Scott Brown has been exposed as the grifting front man for a grifting penny stock company.

Well, that might not be fair. Scott might not be smart enough to even know he's grifting.

To recapitulate:

The Globe on Sunday reported the size of the stock grant that Brown received last year for his service on an advisory board for Global Digital Solutions, a tiny, publicly traded company based in West Palm Beach that says it is in the firearms business.

The stock was initially worth $1.3 million, though it has declined by more than half since then. Company officials did not respond to interview requests Monday.

The company, created 19 years ago to sell cosmetics before switching first to telecommunications and then to firearms, has only a “virtual office,” no current products, no revenue, no patents, no trademarks, no manufacturing facilities, and no experience developing weapons, according to its most recent corporate filings.

Financial professionals have said the stock is risky and the company’s changing business focus raises red flags for investors.

via The Boston Globe

Brown may not be in on the grift, as the value of his stock grant has declined precipitously (including about a 50% reduction from its already reduced value in the day since the Globe's original article) and there's nothing he can do about it, as he's barred from selling the stock for a while. So, in Brown's defense, maybe he was conned too, as have been all the investors who plunked down their money on the strength of his endorsement; investors who could otherwise have bought into whatever Glenn Beck is pushing lately.

In his own inimitable way, Brown is defending the company and his involvement, skillfully (well, not really) avoiding admitting that he did nothing in return for the stock grant:

“It’s a startup company that I’ve been on the board for, what seven, eight months, offering any type of advice when asked,” Brown said in a brief interview after a campaign event at a local gas station highlighting his energy plans.

…

“Yeah, it’s a legitimate company,” Brown said. “It’s filed the appropriate paperwork. It’s doing what every other startup company does.”

…

“If the company does well, then everybody does well,” Brown said Monday. “If it doesn’t, there are many companies that are in the startup process trying to come up with good ideas, trying to create jobs — ultimately — and we’ll see where it takes” us.

I guess that last paragraph makes sense, or could if Humpty Dumpty got to work on it, and maybe it's not a total non sequitur, though that's a harder case to make. I guess what Brown is trying to say is that his new bosses are “job creators”, which they may be, as sooner or later there's probably going to be work for a bankruptcy trustee.

The “legitimate company” that “filed the appropriate paperwork” is, alas, besides being without an avocation, homeless:

Global Digital lists a prestigious address in West Palm Beach with a majestic view of the water and the Island of Palm Beach as its headquarters.

A reporter who went to the address Friday found the company was not listed on any building directory. A receptionist in the suite listed as the company’s address told a reporter: “They’re not here. It’s by appointment only.”

The building directory lists another company at the suite: HQ Global Workplaces, which advertises that it provides clients with an address and access to furnished conference rooms as needed. Global Digital reported in a securities filing that it signed a 12-month lease last year for a “virtual office” in West Palm Beach for $299 per month.

via The Boston Globe

These are the folks, by the way, who were claiming that they were going to buy the Remington Arms Company.

It grieves me that Brown is a lawyer. Our profession may have become over populated, but I still cherish the notion that it takes a certain amount of brains to get to hang “Esq” after your name. Brown is living proof that a low IQ is no bar to entry into our profession.

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Good news/Bad news

Sunday, June 1, 2014

If Joe Costello, writing here at Naked Capitalism is correct, and I suspect that he is, the oil industry may be in for a period of decline:

Over the last year, some deep truths about oil and the oil industry have begun to bubble to the surface. Not necessarily that they were ever hard to see, but they were easy to obscure and maybe more importantly, without too much effort, ignore. No longer. Spread across the oil companies’ quarterly reports and the pronouncements of government agencies from the U.S. Energy Information Agency to the International Energy Agency are the hard facts that the era of cheap oil is over. It’s impacting the U.S. and global economies and forcing a fundamental rethinking and restructuring of our economic activities and thinking.

…

With the global recession, supply constraints gained a short reprieve as demand slackened, going down over 12% in the U.S. and over 20% in parts of Europe. Yet, after a brief dip, oil prices remained stubbornly high. For the past two years, even though the global economy remains lackluster, oil remains at $100 barrel. In the past year, the tightening supply and growing cost of any new oil began showing-up in the quarterly reports of the oil companies, who despite having plus a $100 barrel prices, revealed increasingly small profit margins, growing expenditures for all new oil and declining production. In the second quarter of 2013, the oil companies balance sheets became increasingly alarming led by Exxon’s 57% profit decline and eight consecutive quarters of production declines.

This disruption continues with the oil companies 2014 first quarter reports. All five top oil companies announced declining production numbers despite increased expenditures. At an oil conference last month, the Houston Chronicle reported Chevron CEO John Watson stated, “That new reality for our industry is that costs have caught up to revenues for many classes of projects. Essentially, for a company like mine and many others, $100 a barrel is becoming the new $20 in our business.”

This is an extremely important development, especially for an industry which for over a century printed money. The oil industry is now becoming ever more capital intensive, not a printer of a money, but a growing capital black hole. Yet incredibly, as shareholders begin to grumble, the old majors begin to cut their expenditures and divest of future reserves to maintain non-sustainable dividend levels. The Los Angeles Times reports, “Exxon’s capital and exploration expenditures fell 28 percent in the first quarter(2014), which helped deliver higher profits even though oil and gas production fell 5.6 percent.”

Obviously, not a long term strategy, but what is the oil industry’s long term strategy? Well for the last few years, we’ve heard a lot about the great “shale revolution,” even President Obama hailed it in his 2012 State of the Union speech. Yet, as oil analyst Chris Nedler stated, “Shale’s not a revolution it’s a retirement party.”

via Naked Capitalism

I confess I can't do the piece justice, and I really encourage you to read it. It will be interesting to see if the oil companies simply fade away, as the railroads did in the face of competition from gasoline powered vehicles, or whether it will legislate its way into long term relevance. That is, will we the taxpayer be forced by a bought Congress to continue relying on fossil fuels as the price ratchets ever upwards. Or, put another way, will our politicians stay bought and more faithful to their purchasers than their predecessors who were owned by the railroads?

Anyway, this is a mixed blessing for the rest of us. The oil companies will whither away into insignificance, one way or another. The only question is whether we'll survive their extinction.

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Scott Brown, grifter

Sunday, June 1, 2014

Unless you read the Boston Globe you've likely missed this one about rocket scientist Scott Brown, currently carpetbagging New Hampshire:

An obscure company in West Palm Beach that markets itself as a firearms manufacturer made a splashy announcement last summer: It was appointing Scott Brown, the former Massachusetts senator, to its advisory board.

Not revealed at the time was what Brown received in exchange for lending his name to the venture. But a report the company made to the Securities and Exchange Commission last month, which has not been previously made public, shows that Brown received stock that was worth $1.3 million at the time. Its value has declined considerably since then, as the stock price has fallen by half.

Global Digital Solutions Inc. does not yet sell or make guns. It has no revenue, no patents, no trademarks, no manufacturing facilities, and no experience developing weapons, according to its most recent corporate filings.

via The Boston Globe

Not to put too fine a point on it, Global Digital Solutions is a scam, which has used Brown to fleece potential investors. Or, am I being cynical?That's not what Global says:

His picture is prominently featured on the company’s website as an adviser.

Far be it from me to point out that Brown has zero expertise, although I suppose you could say that he does have experience scamming potential investors voters.

And, again, if the point was to attract fleece-able investors, Scott's appeal, once again, apparently stops at the Washington pundit class:

The company’s stock price did not move from 88 cents a share on the day Brown’s appointment was announced, and it has declined by 48 percent in the months since.

The truth is, that Scott Brown is the male Sarah Palin. He was briefly a Senator solely through a series of fortuitous events that, we can all give thanks, did not repeat themselves, and are unlikely to be repeated in New Hampshire. Like Sarah, every move he makes is designed to bring in the cash. He will not be terribly disappointed if he loses the election in November; in fact he may want to lose. The real money, as Sarah has shown, is in grifting.

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Soylent? Really?

Thursday, May 29, 2014

I make it a regular point to read the Times Tech Section, which appears every Thursday, the same day Apple posts a new free App on the App Store. Thursday must be a day favored by the tech gods.

Anyway, today it took a while for me to decide that today's column by Farhad Manjoo was not a belated April Fools Day edition:

I just spent more than a week experiencing Soylent, the most joyless new technology to hit the world since we first laid eyes on MS-DOS.

Soylent is a drink mix invented by a group of engineers who harbor ambitions of shaking up the global food business. Robert Rhinehart, the 25-year-old co-founder and chief executive of the firm selling the drink, hit upon the idea when he found himself spending too much time and money searching for nutritious meals while he was working on a wireless-tech start-up in San Francisco. Using a process Mr. Rhinehart calls “scientific,” the firm claims to have mixed a cornucopia of supplements to form a technologically novel food that offers the complete set of nutrients the human body needs for survival.

via the New York Times.

I took to my dictionaries. Could the term soylent have a generic meaning without reference to the Soylent Green featured in the movie of the same name? That substance, in case you missed the movie, consisted of reconstituted human bodies, fed to an unsuspecting populace in a dystopian future.

The answer is no, at least according to the Oxford English (Shorter) and the Merriam Webster dictionaries, as well as the Wolfram app that searches a number of databases. (I have not yet determined if it is accepted on Words with Friends)

Maybe I'm wrong, but I think the folks at Soylent really ought to give that moniker a re-think. There may have been worst product names in history, but the ones I've heard of usually involve a made up word that happens to be an offensive word in another language. This choice appears to have been deliberate.

Should this product fail, and I believe it will, I would really urge the folks at Soylent to offer their services to the Republican National Committee. I mean, we Democrats can use all the help we can get.

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