Category: Economics

National Combustion, Part 1: Political Disintegration and the Potential for Civil War

Foretastes of a new American civil war

If a new civil war comes to the United States of America, it will  not come in the form it did in the 19th Century, with two large intact geographic blocks—the Confederacy and the Union–each with their own military locked continuously in armed conflict. It’s likely to take one of two tracks: (1) a coup attempt, like the January 6 insurrection; or  (2) it will look more like the late 20th Century convulsions in Northern Ireland, known as “The Troubles,” marked by scattered and sporadic acts of violence inflicted by loosely networked paramilitary groups.  In Northern Ireland, more than half the 3,500 people killed were civilians, in a conflict that spanned about 30 years from the late 1960s to the late 1990s.

We are getting foretastes of something similar, now largely committed piecemeal by individual right wing “lone wolves” terrorizing racial, ethnic, and religious minorities, LGBTQ communities, and increasingly school board members, electoral officials, businesses that openly support progressive causes, law enforcement, and members of the judiciary.

The overall effect is to sow fear and mistrust broadly among citizens, citizen groups, and institutions. The intent of each violent individual is narrow, but the cumulative impact is wide, and deep.  If paramilitary groups like those in Northern Ireland grow in strength in the U.S., the cumulative impact will be all the greater. What’s more, horrifically lethal weapons and ammunition now widely available in the U.S. and being stockpiled by extremists make individuals and groups far more powerful than those in Northern Ireland of the 1990s. The death toll from a low-level but widespread civil war in the U.S. would dwarf the numbers in ‘The Troubles’ of Northern Ireland.

Partisan divisions and proliferation of weaponry make for a combustible mix  that threatens a breakdown in the institutions that so far have kept America relatively stable.

The attempted coup on January 6, 2021, the attempt by a militia to kidnap and kill the governor of Michigan in 2020, and many individual hate crimes—mostly associated with white supremacy—are symptoms of what social scientist and historian Peter Turchin calls “political disintegration.”  The conditions and causes for disintegration follow a pattern seen many times before in history among various states, and more often than not the outcome is bad for democracy.

One of the more common outcomes is civil war. The objective of the Michigan militia was expressly to start a civil war. Likewise, that was the express hope of Dylan Roof,  who shot nine Black parishioners in a church in 2015. These are just two of the highest profile evildoers among many extremists who have sought, or advocated for, a civil war.

In his recent book End Times, Turchin illuminates the patterns of social and political disintegration from the past that closely resemble what is happening around us today. Continue reading “National Combustion, Part 1: Political Disintegration and the Potential for Civil War”

Debt Ceiling Impasse: Biden Needs to Go on Offense

Delay is the enemy

Let there be no mistake: Republicans are forcing the current debt ceiling crisis for political purposes. It is not about fiscal responsibility. If it were, the Republicans would not have cavalierly raised the debt ceiling three times during the Trump presidency, thereby pumping up the debt by about $7 trillion.  The Republican debt ceiling hostage-taking is calculated to push the economy south sufficiently to undermine Biden’s economic policies through the 2024 election. If the result is a recession or a depression does not matter that much to them, as long as it creates economic pain and thereby gets votes in 2024. True conservatives—the Party siding with rich people and corporations—would prefer it be only a recession, but if driving the economy over a cliff is what is required to boot Democrats out of power, they’re on board  The MAGA Republicans who have contrived the deficit dilemma really have no political philosophy apart from fear and detestation of the federal government, and a concept of individualism bordering on anarchy. So they don’t care either way. These are bad people who cannot be counted on to act in good faith.

These bad people—either by extreme action or through the tacit threat of extreme action to include physical violence—are the ones driving the debt ceiling crisis.  Their main strategy is intimidation. This strategy of intimidation is what stayed Merrick Garland’s hand in pursuing Trump and Trump henchman over the stolen documents case back in 2021  and continuing into 2022.  It is also delaying President Biden’s hand in his fight with House Republicans over the debt ceiling.

Let there also be no mistake regarding House Speaker Kevin McCarthy’s shows of negotiating with the White House: the MAGA Republicans are capable of, and willing to, sabotage any compromise between McCarthy and the President at the last minute.

Continue reading “Debt Ceiling Impasse: Biden Needs to Go on Offense”

Reasons to Hate the Debt Ceiling

Battles over the debt ceiling cripple the economy

As of this writing (November 21, 2022), Republicans are poised to take over the House of Representatives next year, and one of the weapons they are expected to use to scare people with is the federal debt ceiling.  If the debt ceiling is not raised, all sorts of economic havoc could result, based on the failure of the government to pay its bills, and even go into default after a short lag time.  A default would send shock waves throughout the global economy, and make the U.S.—both government and the private sector—a less desirable entity to do business with.

Just the threat of a default makes other countries jittery—when, they ask themselves, will the U.S. actually default because of political wrangling?  Recurring battles over the debt ceiling weaken our position versus the developing BRICS countries (Brazil, Russia, India, China, and South Africa) as well as established economies in the West.

What seems scary about the “national debt” and deficit spending

The “national debt” consists principally of the total of all the Treasury bonds, Treasury bills, and Treasury notes held by entities such as yourself, if you happen to hold a U.S. savings bond, as well as by the U.S. government itself. Currently the breakdown among all bondholders is about 36% held by American individuals and companies, 39% held by the U.S. federal government (used for such things as the Social Security Trust Fund, Medicare, and federal pensions) and 25% held by foreign investors such as China and Japan. The latter proportion strongly suggests that the U.S. government cannot be “held hostage” by foreign bond holders.

Continue reading “Reasons to Hate the Debt Ceiling”

Joe Biden’s Perfect Storm

A storm of woes haunts the Biden presidency

*COVID-19 Original
*COVID-19 Delta
*Fox News
*Divisive social media
*Donald Trump
*Russia
*Countless claims that Biden lost the 2020 election, believed by 78%
of Republicans
*Trump toadies Kevin McCarthy, Elise Stefanik, et al
*Trump thugs Marjorie Taylor Green, Paul Gosar, Matt Gaetz, et al
*Senate obstructionist Republican team, head thug Mitch McConnell
*Senate obstructionist pseudo-Democratic tag team Manchin-Sinema
*Militant House progressives
*Pigheaded House moderates
*Anti-Mask rebellions
*Anti-Vaccine rebellions
*Republican governors taking every opportunity to undermine his authority
*Anti-democratic Republican state legislatures
*Sinister conspiracy theories
*Bloodthirsty crazed dupes of conspiracy theories
*Threats against his life rising along with deadly threats against all office-holding Democrats (and some non-Democrats who refuse to be intimidated by the thugs)
*Emboldened white supremacists
*Irresolute Attorney General
*Bungled Afghanistan pullout
*Chinese saber-rattling
*A tsunami of pandemic-rebound shopping
*Oil price shocks
*Clogged supply chains

and now . . . 

The headline in the November 10, 6:24 pm story in The Hill was: “Biden Gets Inflation Gut Punch.”  Sure enough, just when it looked like a coalition of moderates and progressive Democrats was going to stitch together enough of the remains of Biden’s Build Back Better legislation to have all House Democrats call it a win, along comes inflation to poison the deal.

The result of too many dollars chasing too little capacity as the economy ramps up boosts inflation, and makes big government spending—of the magnitude that would benefit Americans up and down the economic ladder—enough of an inflation risk to stall or starve Biden’s Build Back Better legislative agenda.

Continue reading “Joe Biden’s Perfect Storm”

Budget Policy, Taxation, and Gratuitous Suffering

[Preamble: Along with the prospect of a massive national infrastructure program has come talk of the necessity of raising taxes in order to pay for it—from Democrats as well as Republicans. That talk is a mistake. My apologies for writing the third post on this subject in the last month, but I realize I have failed to convey the importance of it. Perhaps it’s better to frame it in the negative: how balancing the budget produces not just suffering, but gratuitous suffering. ]  

The tax and budget debate and gratuitous suffering

Continuing to talk about federal deficits and taxation is  dull, particularly when politicians from Bernie Sanders to Paul Ryan trot out the same tired commonplaces about taxing the rich (Sanders) and saddling future generations with crushing debt (Ryan & his successors).  Arguments from Left and Right are both couched in the paradigm of either balancing the federal budget or courting future disaster. Stuff we’ve heard countless times before, and just as irrelevant now as in the past.

Cloaked by the dullness is the true human cost of decision-makers getting bogged down in  meaningless arguments about budget deficits and taxes, while those who bear the greatest costs of the decisions have little voice.

The bogging-down leads to what Modern Monetary Theory champion Stephanie Kelton terms “gratuitous suffering.” Kelton:

It is just about the worst kind of suffering, because we have the capacity to do better, and to do better for our fellow Americans. To do better by others.  And if we can improve economic life for millions of people without creating harm, why wouldn’t we do that? 

Gratuitous, because there is a way out, but getting out requires something that almost no one on the public stage is talking about: to shed the mindset of having either to balance federal spending with taxes, or having to rectify crushing debt somewhere down the road with even greater taxes.

If you—despite your generous impulse to provide tens of millions of people with economic relief through government spending—still worry yourself about terrible future costs incurred by relief given in the present, then just stop worrying. Worrying about balancing the budget keeps getting  in the way of real economic progress.

For a 5-minute primer on Modern Monetary Theory and how it does away with concerns over budget deficits, watch Stephanie Kelton below:

Continue reading “Budget Policy, Taxation, and Gratuitous Suffering”

Stop Asking That Question!

COVID-19 Relief Bill draws another round
of pointless reiterations of
“how-are-you-going-to-pay-for-it?”

Those who had the patience and tolerance to wade through my earlier post on Modern Monetary Theory (find here) might not need to read the rest of this one. This one is something of a rehash of the reasons not to pay attention to the tired refrain, in respect to a government spending program, “how are you going to pay for it?”

Specifically, how are you (that is, we the taxpayers as distinct from zillionaires whose tax bills are barely a blip on their balance sheets) going to pay for the $1.9 trillion COVID Relief Bill, without bankrupting future generations?

It seems, from most of what I’ve been seeing and hearing, just about everyone on the political Left and Right is still buying  into “The Deficit Myth”—the fertile soil from which the how-are-you-going-to-pay-for-it commonplace sprouts. In the view of both sides, the National Debt looms as colossally menacing to American financial welfare as was Sauron’s redoubt Barad-Dur  to the welfare of the peoples of Middle Earth.

Interestingly, neither current Federal Reserve chairperson Jerome Powell nor past Fed chairperson and now Secretary of the Treasury Janet Yellen are sounding alarms about national debt risk caused by a $1.9 trillion economic stimulus.  Powell, to the contrary (and to the discomfort of fiscal conservatives dismayed to find out that Powell is not exactly Their Guy), has been advocating a big stimulus bill for months in order to head off another deep recession.

Continue reading “Stop Asking That Question!”

The Fix for the Economy You Never Hear About: Slaying the Budget Deficit Myth

Forget the mantra, “how are you going to pay for it?”

On page 182 of  The Deficit Myth,  author Stephanie Kelton quotes Alan Greenspan expressing the key idea that underpins Modern Monetary Theory (MMT)—that’s the theory that shows we can dispense with pointless agonizing over federal budget deficits. Deficit spending is the bugaboo that looms menacingly over every proposal to spend big on some government program—the bugaboo that elicits the refrain, “How are you going to pay for it?”

The bugaboo can be easily slain, and  conservative Alan Greenspan was just the man for the job.

The Greenspan quote at the end of this paragraph is an answer he gave to famous deficit hawk Congressman Paul Ryan in a hearing about entitlement reform.  Ryan was hoping to elicit Greenspan’s endorsement of privatizing social security—Ryan’s premise being that government-supported Social Security was insecure due to  impending deficits, and that “personal retirement accounts” were the remedy.  Greenspan, however, disappointed him. His answer was, “I wouldn’t say pay-as-you-go benefits are insecure. There’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

Whoa! Was Greenspan—chairman of the Federal Reserve at the time, and self-described “lifelong libertarian Republican”—really pulling the rug from under Paul Ryan’s cherished agenda to wrest safety-net programs away from the federal government and hand them over to his big-money donors? Was he really saying that the federal government could pluck money out of thin air to fund an entitlement?

Continue reading “The Fix for the Economy You Never Hear About: Slaying the Budget Deficit Myth”

Biden’s Challenge: to Unbreak America

Taming a raging fire

If someone tallied the number of times Joe Biden used the words “unity” and “together” in his inaugural address, it would have run over a dozen, but whatever the score was, it’s a measure of the dominant theme of Joe Biden’s inaugural address: in unity is strength, and unity is achievable.

And yet, when Biden spoke to the reality of political conflict at this time, his words were those of hope, but his tone was plaintive. “Politics doesn’t have to be a raging fire,” and “we must end this uncivil war.” These phrases hang in the air like pleas for reconciliation.  But who will answer them?

Of the host of challenges facing Joe Biden, from a pandemic out of control to the plundering of the planet, the “raging fire” of politics and the fuel that feeds it are the most fundamental. We will get past the most toxic phase of Covid-19 in a matter of time. But most of the other problems—economic inequality, racial injustice, an inequitable health care system, environmental breakdown, our allies’ mistrust—will remain intractable without an end to the uncivil war.

Continue reading “Biden’s Challenge: to Unbreak America”

Watch Out! Article V Constitutional Convention Nears Reality

Overhaul of the Constitution sounds tempting: don’t bite

There are some things that liberals don’t like sitting like bedrock in the U.S. Constitution.  In particular, the Electoral College to elect the president, and the assignment of two senators to each state.  Then there’s the First and Fourteenth Amendments when extended by the Supreme Court going back to the 1880s to give the same protections to corporations as to real breathing humans.

Liberals, as well as many conservatives, also dislike the scope of powers conferred on the U.S. President that have expanded over the years. At least they dislike them when the president belongs to the opposing political party. (As a Virginian, I would like to point proudly to our Senator Tim Kaine’s principled crusade to limit the chief executive’s license to conduct wars, starting with the Obama Administration.)

How might these anti-democratic features of the Constitution be remedied? In fact, Article V of the Constitution provides for a method to completely overhaul the Constitution.

Say that again? What we customarily have in mind when we think of amending the Constitution is passing an individual amendment with two-thirds vote in both houses of Congress, then ratified by three-quarters of state legislatures.  It’s what’s been done to add all 28 amendments (28 in 229 years) to the original 10 in the Bill of Rights. That cautious procedure is in Article V, but also in Article V is something truly radical: a full-blown Constitutional Convention called for by two-thirds of the states (34 out of the current 50). The Congress would then be required to hold the convention, and a new constitution coming out of it could eventually be ratified by “the legislatures of three fourths of the several states, or by conventions in three fourths thereof”—i.e., 38 out of 50 states.

Continue reading “Watch Out! Article V Constitutional Convention Nears Reality”

The Protein Predicament: Livestock’s Impact on Human and Environmental Health (and What to Do About It)

Report says red meat OK for human health

By now you have likely heard of a report recently published in the Annals of Internal Medicine that concludes “there’s no need to reduce red or processed meat consumption for good health,” as summarized in the Washington Post.

Beef: good (for protein), bad (for the environment, and probably for health), and kinda ugly (for aesthetics, if that matters)

Kaboom! Went the plunge of this report into the midst of what had been a gathering consensus about the many ill effects of a meat-heavy diet.

RECOMMENDATION: before you read the full Washington Post piece, first read its last two paragraphs (beginning with “Willettt says the panel’s conclusions and recommendations do not reflect the study’s findings . . .”  – emphasis mine).  They indicate that the editorial board of the Annals etc. have spun the data in favor of the red and processed meat industry. In the editorial itself, the writers bury concerns about the environmental impacts of meat consumption in the final paragraph.

If you read the complete piece in the Post, you will see that the conventional nutritional wisdom, that it’s healthier to eat less meat, still has solid  support among almost all nutritionists. Walter Willett pointed out that the study itself associates moderate reduction in meat production with a 13 percent lower mortality, and said,  “if a drug brought down the number of deaths to that degree . . .  it would be heralded as a success.” Certainly such a drug would be heralded as a success by a multi-billion dollar drug company.  There is no multi-billion dollar profit-making enterprise to curb the consumption of red meat.

Once the media, always on the hunt for controversy, had taken up the  report it went mainstream (as in the Washington Post, the New York Times etc.) accompanied by a glut of social media chatter. And then came a firestorm of backlash such as you can read of in a litany of objections from nutritionists, doctors, and researchers found on this page of WebMd.

The study is tainted by past ties of one of the research’s co-leaders to an industry trade group, the “International Life Sciences Institute” (ILSI)—a connection he did not disclose because technically the connection did not fall within the past-3-year reporting requirement for publication. While the earlier study—which incidentally was an attempt to allay health concerns about sugar additives—was published in December 2016 (less than 3 years ago), researcher Bradley Johnston said he was paid for the research in 2015 (more than 3 years ago).  Ergo he was not obliged to disclose the connection because the payment fell outside the 3-year window. . . .  Did he really think this was not going to come out? Did he really think that no one would suspect he might be eyeing future funding by the ILSI, having insinuated himself further into their good graces with the red meat study?  Maybe in the context of runaway mendacity and moral obtuseness in the twenty-teens he saw no reason to observe the spirit of disclosure rules.

Continue reading “The Protein Predicament: Livestock’s Impact on Human and Environmental Health (and What to Do About It)”