2:00PM Water Cooler 7/21/2017

July 21, 2017

2:00PM Water Cooler 7/21/2017

By Lambert Strether of Corrente


“Scott Garrett’s days as President Donald Trump’s pick to lead the Export-Import Bank could be numbered as the president looks to drop his nomination amid growing resistance from industry, according to West Wing aides and Trump advisers” [Politico]. “Garrett has become a political headache for the White House and its economic agenda thanks to intensifying lobbying against the nomination by companies that rely on the agency to guarantee loans for foreign buyers of U.S. exports. Treasury Secretary Steven Mnuchin has also been pressing for the president to dump him, according to White House officials. Garrett, a New Jersey Republican who lost his House seat last year, opposed the existence of the bank while in Congress and has not convinced stakeholders that his views have changed. In 2015, he said the agency ’embodies the corruption of the free enterprise system.’” He’s probably right, but I’ve never understood why conservatives make the Exim bank a poster child, when there are so many other fatter targets, like the big banks.

“WHITE HOUSE ANNOUNCES ANOTHER DEPUTY USTR PICK: The White House filled out its picks for the top ranks at USTR late Thursday with the selection of C.J. Mahoney as deputy U.S. Trade Representative in charge of investment, services, labor, environment, Africa, China and the Western Hemisphere. Mahoney is a partner at the law firm Williams & Connolly, where he focuses on international disputes and arbitration. The Yale Law School and Harvard alumni has clerked at the Supreme Court for Justice Anthony Kennedy and at the U.S. Court of Appeals for the 9th Circuit” [Politico].

“Politically, however, both [Mexican and Canadian] envoys appeared to recognize that Trump spent a huge amount of political capital promising to overhaul the nearly quarter-century-old agreement — so while they might not want to go as far as the U.S. administration may push them, they would have to take some steps to rework [NAFTA]” [Politico].



“Dems see huge field emerging to take on Trump” [The Hill].”‘We’re seeing huge excitement out there for Democrats as we fight for policies that support American families and expand economic opportunity, while Republicans are working to strip away healthcare from millions and are led by one of the most unpopular presidents in history,’ Sabrina Singh, deputy communications director for the Democratic National Committee, said in response to questions about the possible field of candidates.’” Eeesh. Can’t Singh even be bothered to use the mushy cliche “working families”? That wouldn’t play well with suburban Republicans, I guess….


Clearly, what Democrats need to do is double down on Russia.

About that new Democrat slogan (“A Better Deal: Better Skills, Better Jobs, Better Wages”):

Note again, that “better” does not imply good (Democrat to dying cancer patient: “How are you feeling?” Patient: “Oh, better, I guess…” Democrat: [Pumps fist, covertly checks the morphine drip for excess, because controlling costs is important…]).

And it’s not even original [Newsweek]. “The Democrats’ tagline is eerily similar to that of Papa John’s: ‘Better Ingredients. Better Pizza. Papa John’s.’” Another Democrat consultant cashes a fat check and blows town…

Health Care

“Can Republicans Do the Impossible on Health Care?” [Slate]. “Republicans have no path but a lot of resolve. It will require a miracle to pass one of these bills. But strange things can happen when the majority party insists on it…. If McConnell can find a way to keep all senators onboard, save Collins, through a mix of payoffs and pledges, they can get on the bill and begin the open amendment process…. The trick for McConnell will be to prove to the senators concerned about Medicaid cuts that this is enough money without losing the conservatives (or rank and file) who are getting seriously uncomfortable with the amount of money being thrown around…. And this is where we hit the dead end.” Still, you’ve got to kill it with fire. We saw TPP rise from the dead at least once before Trump killed in, and even so, The Trade Blob is using TPP body parts for other deals.

Trump Transition

I don’t generally talk of court news here, but this looks fun:

“Spicer resigns as press secretary, Scaramucci to be White House communications director” [WaPo]. The boy jumped off the burning deck

“Anthony Scaramucci is nothing if not likable. In fact he is aggressively likable because he figured out long ago that his ingratiating personality was his strongest trait. Let’s be honest, The Mooch is a salesman who somehow got involved with trading. SkyBridge Capital was a fund of funds, predicated not on strategy or investing acumen but on getting people’s money by putting their trust in Anthony Scaramucci. He’s not a financial genius but he is a staggeringly talented manager of relationships. In some respects, he’s the opposite of most of Trump’s senior staff. He doesn’t have the leonine business reputation of Gary Cohn but he is infinitely more liked than the widely despised Kellyanne Conway and harder to ignore than clowns like Sean Spicer or zealots like Steve Bannon? [DealBreaker]. “Scaramucci can do this job because he’s a hard charger obsessed with spinning things into gold. He’s the self-created success story and master salesman that Trump purports himself to be. In fact, if Trump is about to set his presidency on fire with a purposeful constitutional crisis, the only guy even capable of talking his way out of it is Anthony Scaramucci.” Pass the popcorn.

“Will Republicans Draw a Red Line on Trump Powers?” [NBC News]. Betteridge’s Law…

A propos:

Realignment and Legitimacy

“How the Left Can Win in the South” [The Nation]. “The Vermont senator lost all 11 states that made up the Confederacy to his opponent, Hillary Clinton—and most of them by huge margins… As the Democratic primary showed, the left needs to be able to win in the South in order to gain national power. This, however, will require a new approach, one that prioritizes the votes of working-class people of color over those of suburban Republicans losing their stomach for the antics of the Trump administration. There is historical precedent for such a multiracial progressive campaign in the South—including one that Sanders himself was a part of. In 1984 and 1988, Rev. Jesse Jackson ran for president on a platform that tied social-justice issues like police accountability, voting rights, and civil rights to economic issues like farm debt.” Yep. “They work every day.”

“Authenticity Is Key to Democratic Chances” [Charles Cook, Cook Political Report] [Just give me a moment to collect myself….] “‘In the end,’ [Democratic operative Jesse Ferguson] concluded, ‘there is no magic wand to create the type of candidate Democrats need to win in 2018—no perfect biography or policy agenda that will unlock the keys to those 24 districts needed to take control of Congress away from Trump. The surest path to victory in this uncertain political climate lies within an adapted version of Shakespeare’s wise words: to thine own self, and to thine voters, be true.’”

Lambert here: I should have warned the English majors to put down their coffee. Shakespeare, in Hamlet, puts “to thine own self be true” into the mouth of Polonius, the head of a sleazy political family at the Danish court*, who played a key role in getting the murderous and incestuous Claudius onto the Danish throne, and continues to service him. (In other words, Polonius is exactly the sort of person that a Democrat operative would identify with.) Polonius, who clearly considers himself an expert in both human nature and the arts of intrigue — hence his “To thine own self….” advice to his son– is also incompetent enough to get himself killed; Shakespeare’s irony, in other words, makes Polonius a John Podesta figure. Further, at least according to some interpretations of the play, Hamlet — I’m putting this very crudely — is conflicted between his own desires for procrastination and evasion, and his knowledge that avenging his father (hence, overthrowing the usurper) is his duty and that rising to the occasion is the right thing to do. If Hamlet had followed his own — and Ferguson’s! — advice to be “true” to himself, he would have booked for Wittenberg, left Claudius on the throne, and there would have been no play! * When I was in London, I went to see a production of Hamlet (Financial Times review: “Andrew Scott is an outstanding Hamlet at the Harold Pinter Theatre, London.”) The production made the sleaziness and modernity of the Danish court crystal clear. What a cesspit!

“Maine lawmakers back roads bond; GOP stalls LePage-backed student debt relief” [Bangor Daily News]. Maine Governor Paul LePage is nothing if not an authentic Mainer. But here he is, allying with Democrats (!) on student debt relief (!!). Of course, what LePage should have done, years ago, was gut the administrative layer of the University of Maine system, splitting the take between increased faculty salaries and decreased student tuition, and at a stroke defunding his liberal Democrat political enemies. LePage’s problem, really, is that he’s much too nice a guy. Oh, and note that, contra Cook and Ferguson above, LePage isn’t relying on authenticy alone he — just like Trump — is making a policy-based appeal as well.

Mike Huckabee takes out a Communist Party card:

Stats Watch

There are no official releases today.

Honey for the Bears: “Trumped up expectations as reflected in the various surveys continue to fade, and fall in line with the decelerating ‘hard data’” [Mosler Economics]. Good summary, with charts, of Mosler’s perspective on “the economy” generally. Being a Maine bear, I find it congenial. “Reporter: What do you think of the depression? Mainer: We’ve always been depressed!”

Disemployment: “Currently no state has an unemployment rate at or above 7% (light blue); Only two states and D.C. are at or above 6% (dark blue). The states are Alaska (6.8%) and New Mexico (6.4%). D.C. is at 6.2%” [Calculated Risk].

Shipping: “The ongoing trend of consolidation in the ocean cargo carrier arena is being confronted with more scrutiny by regulatory agencies” [Logisitics Management]. “Two agreements related to the west coast and trade flows between the United States and Asia were addressed this week by the Federal Maritime Commission, as were recent developments regarding government linked ocean carriers… The FMC reviews agreements under the Shipping Act to assure that participating parties do not engage in anticompetitive behavior that results in unreasonable increases in rates or decreases in service, or other prohibited acts.”

Shipping: “Wal-Mart Stores Inc. is telling its for-hire motor carriers that if they also haul goods for Amazon.com Inc., they will have to stop doing so in return for keeping Wal-Mart business, a leading transport and logistics consultant said today” [DC Velocity].

Retail: “Sears Holdings Corp.’s new agreement with Amazon.com Inc. marks an important step for the troubled retailer and for the online giant that’s provided Sears its biggest competitive threat. Sears will start selling its Kenmore line of refrigerators and stoves on Amazon’s website: [Wall Street Journal] “[This] pushes Amazon more deeply into the large-appliance business, one of the few corners of retail where it has yet to penetrate deeply. Both companies will upend their supply chains to make the plan work. Amazon will buy the Kenmore inventory, but it will reside in Sears’s warehouses, and a Sears distribution unit will ship the goods to customers’ homes and have them installed. Sears is hoping the tie-up brings more foot traffic while Amazon is effectively taking in more real estate, and a distribution operation to go with it.” I know I’ve asked this question before — and it may be a stupid one — but since Amazon keeps doing this, why isn’t it valued more like a large appliance business, or a low-margin food business, or an airfreight company, as opposed to being a high flyer? The expection of future monopoly rents?

Retail: “Amazon’s Treasure Truck is rolling out nationwide” [Los Angeles]. “Amazon customers can receive a text message highlighting the deal of the day when the circus-themed Treasure Truck is nearby. Offerings appear to be a hodgepodge of products, including must-have electronics, meal kits and pool floats. People who opt to buy the day’s featured item from their smartphones can then pick it up at the truck, so the vehicle is kind of like a mobile pop-up shop.” This reminds me forcibly of the vendor carts and night markets of Southeast Asian countries like Thailand. Of course, that’s Third World stuff… Anyhow, short the dollar stores?

The Bezzle: “FTC probing allegations of Amazon’s deceptive discounting” [Reuters]. “The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which looked at some 1,000 products on Amazon’s website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them. An analysis found that in 61 percent of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6.”

The Bezzle: “The Decline Of Investment In San Francisco Startups” (charts) [Tom Gunz]. “The slowing of venture investment more broadly across the US serves as a backdrop to San Francisco’s particularly strong correction… Ultimately, I don’t believe there’s any real driver for a reduction in San Francisco startup fundraising activity that’s meaningful or important. It’s just so happens that startups in the valley are having a strong six months while San Francisco startups are raising less.”

The Bezzle: “Over the last four years, The Iron Yard has led the code school industry in preparing students for careers as software developers. The industry as a whole is still young and its leaders face the challenge of a nascent market, as well as the demands facing all institutions in the higher education marketplace” [Iron Yard]. “In considering the current environment, the board of The Iron Yard has made the difficult decision to cease operations at all campuses after teaching out remaining summer cohorts. We will finish out summer classes completely, including career support.” For-profit coding bootcamp goes belly up. Idea: Move to Appalachia!

The Bezzle: “In A Desperate Bid To Provide Shareholder Value, Snapchat Enters The Can’t-Miss Legacy News Business” [DealBreaker].

Media: “Audiobooks get a glitzy makeover” [The Economist]. “Audiobooks have come a long way in the last decade. What was once the dustiest corner of the publishing industry’s shelf is now growing faster than any other, with sales in the UK worth an estimated £99m a year. “For years the industry was focussed on ebooks,” says Philip Jones, the editor “The Bookseller”, a magazine for the book industry. “But in a sense audiobooks are the true revolution, thanks to the availability of downloads on smartphones.” Once upon a time, listening to an audiobook on the go meant meant lugging around multiple cassettes and a Sony Walkman; these days all you need is a phone and headphones.”

“Only Perfect Hedge Is In a Japanese Garden” [Across the Curve]. Best headline EVAH! Good to see AtC back in action.

Five Horsemen: “With its 10.6% gain since July 6th, Facebook has caught up to Amazon” [Hat tip, Jim Haygood].

Five Horsemen July 21

Today’s Fear & Greed Index: 72 Greed (previous close: 76, Extreme Greed) [CNN]. One week ago: 64 (Neutral). (0 is Extreme Fear; 100 is Extreme Greed. Last updated Jul 21 at 1:35pm. Back to mere greed. Pour Mr. Market a double!

Health Care

UPDATE “Spare Us Your Technocratic Handwringing Over Single Payer: This is Life and Death” [In These Times]. If the left doesn’t have a crisp answer to the neoliberal question: “How ya gonna pay for it,” then the left deserves to lose, NNU muscle or no. This article in fact makes a start by discussing taxes (and in California, Proposition 13). The article does not, however, make the point that it would be best for the currency issuer (i.e., the Federal Government) to handle the funding, not the states, to protect citizens against funding drops in downturns, if for no other reason.


“July 2017 Stormwatch: Climate Change” [Ecosophia]. This the new blog from John Michael Greer (the Archdruid). Greer gives the Naked Capitalism blog a nice shoutout, so I’m linking to his post as a courtesy; as usual, it’s interesting and well-written. Sadly, at least for readers, links to a Greer site are guaranteed to break. Not my blog, of course, or my content.

“Head of USCG warns that US not ready to tackle an oil spill in Arctic” [Splash 247]. “[US Coast Guard (USCG)] Admiral Paul Zukunft told a forum of the National Oceanographic and Atmospheric Administration (NOAA) in Washington DC that conditions in the frozen northern region would be far more difficult than those encountered in other places. Speaking from his experience as the federal on-scene co-ordinator for the 2010 Deepwater Horizon disaster in the Gulf of Mexico, Admiral Zukunft said that that incident – when an oil rig exploded and a well gushed crude from the ocean floor for nearly three months – managed to recover only 15% of the spilled oil. That was in calm conditions and with 6,000 ships helping in the recovery operation, the admiral said. A similar event in the Arctic would have to contend with much more hostile weather and wildlife, not to mention much less infrastructure. Fewer vessels and people would be able to help.”

Guillotine Watch

“Why Economists Fail to Make ‘Rational’ Judgments and Why You Should Too” [Philip Pilkington, Econintersect]. “[A] whole bunch of professional economists [were surveyed] to see if they could answer a basic question on the microeconomic theory of the ‘opportunity cost’… The results were not so good…. [T]here is only one correct answer!” Pilkington concludes: “The point is that the idea of opportunity cost is counter-intuitive to how many people (apparently 78% of economists!) actually think when they are weighing up their subjective preferences. This casts serious doubt on whether any theory of behavior based on it is useful for describing the real world. What’s more, trying to subject people to a normative view of how they should view this is an act in moral indoctrination. It has little to do with economics in any sense I understand that word.” Interesting twist!

Class Warfare

“The Survival Rate of Very Small Establishments” [Federal Reserve Bank of St Louis]. “Of the establishments that were operational in January 2007, the authors found that the smallest ones had a much higher exit rate by 2010. In particular, when weighted by employment, very small establishments closed at about twice the rate of larger ones. ‘Among workers at very small establishments, more than one in four were displaced because their shop did not survive the Great Recession, while that number was about one in six for workers at larger establishments,’ the authors wrote.”

“Drivers at FedEx Freight’s facility in Croydon, Pa., east of Philadelphia, voted yesterday to de-certify the Teamsters union as their bargaining representative, the second time in less than two weeks that unionized workers at a location of FedEx Corp.’s less-than-truckload (LTL) unit have voted out the Teamsters” [DC Velocity]. “Of FedEx’s three business units, only pilots at its FedEx Express air and international unit are unionized. FedEx’s ground delivery unit is non-union, and its drivers are independent contractors. There have been several unsuccessful efforts to organize at FedEx Freight. … Of the 16 petitions that were filed to represent workers at FedEx Freight, the Teamsters either lost or withdrew 12 of them. Besides Croydon and Charlotte, workers in South Brunswick, N.J., and Stockton, Calif., have voted for union representation.”

News of the Wired

“James Frederick Housel” [Seattle Times]. In memoriam Naked Capitalism commenter Isolato, who created this triptych for Water Cooler. Isolato gave me a lot of help and encouragement offline. And then, one day, his email server started bouncing everything…

“Original illustrations of our favorite German proverbs” [Open Culture]. “Did you know that there are about 250,000 proverbs in the German language, and that each proverb averages seven words?”

“How the Plastic Pink Flamingo Became an Icon” [JSTOR Daily]

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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 allegic 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 put it in the subject line. Otherwise, I will anonymize by using your initials. See the previous Water Cooler (with plant) here. Today’s plant (CC):

CC writes: “Picture of a flower on the side of a mountain carved by glaciers in Kenai Fjords national park outside of Seward, Alaska. I’m taking a break from Internet and news to enjoy an adventure with my family. Keep up the great work!”

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered.

To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


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