The Fed's Declaration of Independence is in Trouble

Katharina Pistor, Professor of Comparative Law at Columbia, wrote a really good book, Code of Capital, about the history of laws written to suit capital and the rich going all the way back to the origins of Limited Liability Companies (LLCs) in England in the middle ages. She offers a historical take on the independence of the Fed question:  

"If central banks don’t serve the people but are more beholden to finance, what can be done? Destroying central-bank independence is not a good idea, because it is more likely to cause another crisis than to solve the underlying problem. But this does not mean that we should preserve the existing system instead of seeking a new monetary settlement. It is high time to rethink how money should be managed in ways that benefit the people and how to ensure that whoever is tasked with this role is not captured by finance."

Pistor @ Project Syndicate

Claudia Sahm, Economist, Fed insider and credible big booster for the "independence" of the Fed: 

"Independent technocrats, not political operatives, setting interest rates is widely viewed as crucial for controlling inflation. Throughout history and around the world, there are examples of politicians advocating for lower interest rates to stimulate economic growth or reduce the government's borrowing costs. Such policies can increase demand beyond the economy’s productive capacity, leading to inflation. An independent central bank offers a bulwark to those political tendencies."

Stay-At-Home Macro 

Matt Stoller, Anti-Monopoly advocate and author of the great muckraking history, Goliath: The 100-Year War Between Monopoly Power and Democracy, begs to differ:

"It was only in the late 1970s, when Jimmy Carter picked Paul Volcker to promote a strong dollar abroad, that Wall Street developed modern thinking around “independence.” The idea was to kill this populist sentiment ["union power"/living wages], which was successful. Fed independence, along with the consumer welfare standard, cost/benefit analysis, and deficit-based fiscal analysis, structures neoliberalism." 

BIG

Mike Konczal, Economist, wrote Freedom from the Market, more sympathetic to labor and/or political claims than most economists, makes an additional case for an independent Fed: 

"No administration, and especially not the Trump administration, is eager to announce, "We need to cut rates because the labor market is weakening on our watch." Politically, that's a tough headline. Independent Fed officials, however, can cite labor market weakness to justify rate cuts in ways that communicate clearly to financial markets without political baggage.

It isn’t the most dramatic rationale for central bank independence.... But it is a feature. Losing transparency about what truly informs policy decisions is another potential cost of increased White House influence over Fed policy."

Mike Konczal on Substack

Krugman, Economist, journalist, he who breaks down the wonky side of economics as well as anybody, weighs in on the independent Fed question with some history and opposition to Trump's power grab:

"The important thing for the rest of us to understand is that while there are legitimate arguments for (but also against) modest rate cuts later this year, there is no reasonable case for the mega cuts Trump is demanding.

Which does not, unfortunately, mean that he won’t eventually bully the Fed into giving him what he wants."

Krugman

My theoretical sympathies lay with the historians and populist protesters. The Fed is rigged for Wall Street and against labor and taxing the rich. Always has been. There has to be a better way. 

But the prospect of Grump at the helm of the Fed is unnerving, and triggers my residual Econ 101 conservatism. What can I say: it sounds correct and plausible to me that a careful, deliberate, predictable approach to Fed monetary policy encourages business planning and growth. And, by contrast, impulsive, self-serving, unpredictable monetary policy, like Trump's tariff wars, would make business planning and growth more difficult. How big a difference this would make I don't know but steady as she goes goldilocks growth is over half the battle with monetary policy, as far as I can tell. And as we all know steady as she goes is anathema to Trump's melodramatic performative spectacle politics. 

The Fed needs reform but does not deserve the destruction Trump brings to everything he touches. 

But my guess would be markets are pulling for Trump, he lacks discretion but is neoliberal to the bone like them. They like tax cuts for the rich and cost-cutting austerity politics for everybody else. But Tariffs and forced deportations, especially the way Grump is going about them, do appear to be wildly inflationary and deflationary at the same time, stagflationary, which most business people know can't be good for business in the long run. 

The word is Trump wants to lower interest rates, which would make it easier for regular people to buy cars and homes and would presumably be quite popular. Economist Ha-Joon Chang argues much higher inflation than the Fed target of 2% encourages higher growth rates but higher prices hit workers and the bottom half first and hardest and governments, especially ones like this one, are slow, if not condescendingly opposed, to helping workers and consumers keep pace with an inflationary economy. 

Krugman contends cutting interest rates by 3%, as Trump has bragged in the press he would do, would be wildly inflationary. But the bigger risk with Trump, I think, is he yanks rates up and down as market swings fail to deliver the results he wants. 

"For The Lover in You," True Mathematics (1991)

 

In a way this is just another golden era hiphop song about "gold diggers" but True Mathematics gets all philosophical about it: "When the material girl in you comes out will the lover in you see what the love is about?" And, crucially, the funk is sharp and bouncy as it could be. TM is Kenny Houston, sidekick on some Public Enemy albums. Surprised he doesn't rap more as he gives as good as he gets from the Bomb Squad: Carl Ryder (aka Chuck D), Hank Shocklee, and Eric "Vietnam" Sadler. I like the original but TM's version is popping; similar funk vintage to Young MC's "Bust a Move" (1989) or EPMD'S "You Gots To Chill" (1988). Hiphop or rap music is, basically, funk made with turntables, a mixer, a synth/sampler, a drum machine, and a rapping DJ or MC. If you like funky beats and pop hooks this cannot miss. In a classic hiphop persona, the disinterested observer of human relations, "some guys will use you/some guys will love you," TM raps, "But I'm neither one/just here to observe."  

The original comes from Shalamar's 1980 album Three for Love: 

Dollar trap or empire by invitation? The global political economy of the dollar system.

"This succinct and powerful analysis adds a key element of political economy that is often missing from arguments over the dollar system, all too often phrased in national terms. We talk as though the rest of the world as a collectivity suffers the unequal terms of trade implied by America’s exorbitant privilege. It is often said that the “safe asset” status of US Treasuries is ultimately grounded in America’s national military power. Both claims have an element of truth to them. But as Atkeson et al remind us, global investors flock to the United States not simply because the United States supplies protection, or serves as a unique issuer of “safe assets”, but because investing in America offers outsized returns thanks to the country’s lop-sided domestic political economy. America is a great place for corporates to make profit and that is ultimately what attracts investors and accounts for a large part of America’s net foreign liabilities. Managers of foreign capital enthusiastically buy into the American profits bonanza."

-Adam Tooze @ Chartbook

Super curious speculations about the global political economy of the dollar system, of which I probably understand about half. So for the sake of trying to organize my own partial understanding and for the curiosity of the equally economic literacy challenged I summarize: 

There is an old economic saw that goes, more or less: If you owe the bank $100 that's your problem but if you owe the bank $100 million that's the bank's problem; it's usually attributed to mid-20th c oil magnate J. Paul Getty but its actual origins are older and murkier.*

The US owes the world, our bankers in this respect, so much that defaulting on that debt or devaluing the dollar is viewed as a threat to foreign economies heavily invested in the dollar system. Some people call this the "Dollar Trap." Countries become dependent on dollars and their stable growth value. 

One large factor reinforcing foreign investment in the dollar system-- and so making it more invitational than just a trap-- is that returns, profit returns, interest rates, are better in the US, and in the dollar system than anywhere else. This is attributable (significantly, if to an uncertain degree) to reduced labor claims on corporate profits (which US economists refer to euphemistically as "higher productivity") in the US. Likewise, the priority placed on "share value" in the stock market reinforces this anti-union, anti-labor, anti-government bias in the US, which makes foreign investment more lucrative than places where labor (and/or the state) take a bigger piece of the pie. This is particularly so in other developed capitalist states like Germany or Singapore or Norway or Japan, etc. 

So in a terribly dreary twist domestic inequality, living wages, public infrastructure, are casualties to a booming dollar system; and so foreign investment in the dollar is hedged by domestic austerity measures for workers and the public good, health care, environment, whatever, in the US. You know, all that "waste, fraud, and abuse" stuff. In the ultimate boomerang that which makes the dollar invitational to foreign investors makes it an austerity trap, the "dollar trap" at home, for labor and the caring economy in the US. 

It's also possible global use of the dollar is viewed more as a debt "trap" or lucrative "invitation" based on global asset positions. In modern times until maybe two decades ago the amount of foreign assets owned by the US and foreign ownership of US assets was more or less equal. Since then the imbalance has shifted dramatically towards foreign ownership of US assets exceeding US investment in foreign assets by nearly $29 trillion. This is not like Trump's crude Tariff obsession with balance of trade numbers that leave out lots of relevant economic exchange. The claim here is that the imbalance in foreign assets works against the value of the "invitation" and increases the sense that investment in the dollar system is a "trap" that foreign states will look for ways to escape. 

My general understanding, woefully limited, is that the dollar system has proven remarkably resilient because ultimately it makes global trade easier and more profitable than the Euro or China's RMB or any other currency and has been doing so since WW2. There is some stabilizing hegemonic power in a single currency system that is conducive to global growth and prosperity, or let's say the belief that it does possess this power has survived some pretty big disruptions, which includes on and off non-stop Cold Wars and getting off gold in 1972. 

But will the dollar system survive Trump? Can labor and the caring economy ever escape the dollar trap? Can the dollar stay relevant in the global energy transition of the 21st c if the US opposes and cuts investment in that transition? Stay tuned to Professor Tooze to find out, he of a comically pompous accent is in no way to blame for my crude misinterpretations of his super interesting work.

*- Reportedly, Grump likes this economics proverb as well and relates it in his speeches this way: "If you owe the bank a million dollars, you got a debt problem. But if you owe the bank a billion you actually own the bank." In business terms Trump has always wanted to be a chip off the old block. Using size and scale of business projects to extort concessions and profits from other smaller stakeholders is a business model specialized in by his father the real estate developer, Fred Trump 

"Combination Pizza Hut and Taco Bell," Das Racist (2008)

 Das Racist, Heems and Kool A.D., their chosen collective name a commercial perversion from the start, score an unexpected hit in 2008. It blows up on My Space (I know, at this point that sounds like The Jetsons), which means it has been streamed enough that now it has its own page on Wikipedia. Heems and AD are on their cell phones in "the combination Pizza Hut and Taco Bell on Jamaica Avenue" in NYC but can't find each other. 

They sound perplexed but also like mildly amused stoners, they could be Harold and Kumar at White Castle, but the punky insistence of the hook over and over urges annoyance and speculation. Maybe they're celebrating and/or satirizing fast food combo places, like Black rappers naming special places in their home neighborhoods. Like Dick's in Sir Mix-a-Lot's "Posse on Broadway." My favorite guess is a suggestion that there are actually two combination Pizza Hut and Taco Bell's on Jamaica Avenue, as if they'd never met before. Real mysterious like Repo Man! The song is simultaneously mocking and a irrepressibly goofy dance track, two South Asians from Brooklyn doing their hiphop best. And not bad at that. I think Backpacker hiphop applies but I'm not entirely up on these matters. Anyway, a sly banger, Heems tapping an epic and massive dance club record from 1991, Masters At Work "The Ha Dance (Pumpin' Dubb)." 

Das Racist were unable to match the success of their debut viral sensation but I really like Heem's Eat Pray Thug album from 2015. Raw and cringingly catchy stuff about the immigrant experience before the fascist purge began. Hopefully they've reached that point in their lives where their one-hit wonder is a source of pride as it ought to be. 

Hot Tub Time Machine: Soul Hits of the '70s

 "Love Rollercoaster," Ohio Players (1975): "Say what?" Number 1 in 1976 and a monster at school dances and probably the discos, I hadn't been to one quite yet. Dr. Funkenstein, George Clinton, doesn't like the disco blahs but discos sure do like the funk. Bohannon, Eddie Kendricks, Archie Bell, Earth, Wind, & Fire, Isley Brothers, Kool & The Gang, Jimmy Castor, War, Chic, and the Ohio Players could all be funky as it gets and were big hitmakers in the discos. 

"Shake, Shake, Shake (Shake Your Booty)," KC & Sunshine Band (1976): As a pretentious pimply adolescent I resisted KC's lyrics, which all more or less encourage you to shake your booty. Not that I was opposed to shaking my booty, properly lubricated, but couldn't they be not so freakin' obvious about it?! Now I think the dancing dogma accentuates KC's singular focus on making irresistibly catchy Latin funk pop. This or "Get Down Tonight" my Sunshine Band peaks. They emphasize the fun in funky.  

"You're Everything I Need," Major Lance (1975): By the '70s and the disco era Major Lance is a throwback, raw early '60s soul, like early Motown but still a little rougher around edges, more mistakes and sometimes more enthusiasm and that all-join-together churchy musical energy that made soul music sizzling hot in 1963 and still a dance music breakdown-sound, which Sly took to glorious pop heights, favorite in the '70s discos. Especially big in the discos of northern England and dubbed Northern soul. 

"The World," Sweet Inspirations (1970): A lot of early gay disco was taking Philadelphia International, Motown, or Atlantic soul music like this, as DJ's naturally started with a special appreciation for the longer stuff, more time between record transitions, Eddie Kendrick's "Girl You Need A Change of Mind" or The Temptations "Papa Was A Rollin Stone," both going way past five minutes, for early disco examples, and then stretching these proto-disco models even longer, lovingly adding symphonic intros and outros, elaborately funky bridges, endless buildups and exquisite climaxes. Producer Tom Moulton made a whole career out of this. This Atlantic single is more country than Moulton's mixes, the Sweet Inspirations bring more churchy old school fervor into the disco, but the mix conveys Moulton's kind of disco love for original soul music sources. Some of the love behind the Sweet Inspirations should also be credited to Jerry Wexler as well, the guy who coined the phrase rhythm & blues. The SI's were backup singers for Aretha, Elvis, Dusty, and a bunch of other Wexler production credits, and put out eight albums of their own between 1967 and 1979. 

Solar Power Boom Times in Global Economy

 Against all the big bad things happening on the planet (and despite all the best efforts of the Republican-led Congress in recent weeks), this [unprecedented expansion in solar energy production] is a very big and hopeful thing, which a short catalogue of recent numbers demonstrates:

• It took from the invention of the photovoltaic solar cell, in 1954, until 2022 for the world to install a terawatt of solar power; the second terawatt came just two years later, and the third will arrive either later this year or early next.

• That’s because people are now putting up a gigawatt’s worth of solar panels, the rough equivalent of the power generated by one coal-fired plant, every fifteen hours. Solar power is now growing faster than any power source in history, and it is closely followed by wind power—which is really another form of energy from the sun, since it is differential heating of the earth that produces the wind that turns the turbines.

• Last year, ninety-six per cent of the global demand for new electricity was met by renewables, and in the United States ninety-three per cent of new generating capacity came from solar, wind, and an ever-increasing variety of batteries to store that power.

• In March, for the first time, fossil fuels generated less than half the electricity in the U.S. In California, at one point on May 25th, renewables were producing a record hundred and fifty-eight per cent of the state’s power demand. Over the course of the entire day, they produced eighty-two per cent of the power in California, which, this spring, surpassed Japan to become the world’s fourth-largest economy.

• Meanwhile, battery-storage capability has increased seventy-six per cent, based on this year’s projected estimates; at night, those batteries are often the main supplier of California’s electricity. As the director of reliability analysis at the North American Electric Reliability Corporation put it, in the CleanTechnica newsletter, “batteries can smooth out some of that variability from those times when the wind isn’t blowing or the sun isn’t shining.” As a result, California is so far using forty per cent less natural gas to generate electricity than it did in 2023, which is the single most hopeful statistic I’ve seen in four decades of writing about the climate crisis.

• Texas is now installing renewable energy and batteries faster than California; in a single week in March, it set records for solar and wind production as well as for battery discharge. In May, when the state was hit by a near-record-breaking early-season heat wave, air-conditioners helped create a record demand on the grid, which didn’t blink—more than a quarter of the power came from the sun and wind. Last week’s flooding tragedy was a reminder of how vulnerable the state is to extreme weather, especially as water temperatures rise in the Gulf, producing more moisture in the air; in late June, the director of the state’s utility system said that the chances of emergency outages had dropped from sixteen per cent last summer to less than one per cent this year, mostly because the state had added ten thousand megawatts of solar power and battery storage. That, he said, “puts us in a better position.”

• All this is dwarfed by what’s happening in China, which currently installs more than half the world’s renewable energy and storage within its own borders, and exports most of the solar panels and batteries used by the rest of the world. In May, according to government records, China had installed a record ninety-three gigawatts of solar power—amounting to a gigawatt every eight hours. The pace was apparently paying off—analysts reported that, in the first quarter of the year, total carbon emissions in China had actually decreased; emissions linked to producing electricity fell nearly six per cent, as solar and wind have replaced coal. In 2024, almost half the automobiles sold in China, which is the world’s largest car market, were full or hybrid electric vehicles. And China’s prowess at producing cheap solar panels (and E.V.s) means that nations with which it has strong trading links—in Asia, Africa, South America—are seeing their own surge of renewable power.

• In South America, for example, where a decade ago there were plans to build fifteen new coal-fired power plants, as of this spring there are none. There’s better news yet from India, now the world’s fastest-growing major economy and most populous nation, where data last month showed that from January through April a surge in solar production kept the country’s coal use flat and also cut the amount of natural gas used during the same period in 2024 by a quarter. But even countries far from Beijing are making quick shifts. Poland—long a leading coal-mining nation—saw renewable power outstrip coal for electric generation in May, thanks to a remarkable surge in solar construction. In 2021, the country set a goal for photovoltaic power usage by 2030; it has already tripled that goal.

• Over the past fifteen years, the Chinese became so skilled at building batteries—first for cellphones, then cars, and now for entire electric systems—that the cost of energy storage has dropped ninety-five per cent. On July 7th, a round of bidding between battery companies to provide storage for Chinese utilities showed another thirty per cent drop in price. Grid-scale batteries have become so large that they can power whole cities for hours at a time; in 2025, the world will add eighty gigawatts of grid-scale storage, an eightfold increase from 2021. The U.S. alone put up four gigawatts of storage in the first half of 2024.

Bill McKibben @ NY-er

So astonishingly positive of a story I'm still looking for cracks thinking they got to be there, right? 

What about the Chinese dominated rare earth minerals, lithium, mining elements I really know nothing about but thought I understood were essential to solar panel production? Isn't their scarcity a big obstacle? (Isn't their scarcity why Grump is talking about taking over Greenland and Canada?) Nope. Some think with rapid gains in solar technology all the minerals needed will be mined and circulating in the global economy by 2050. To produce the solar power needed will require transitioning about half the corn fields of the midwest to solar but this would not threaten food security and is quite doable, infers McKibben; depending on how the voters in Iowa feel about this, I cautiously suppose. 

One of the most striking parts of this explosion in solar technology story is how wrong the forecasters have gotten this growth. Fifteen years ago conventional economic wisdom said solar would never be cheap enough to be viable in free markets. McKibben shares that the closest forecasts to the meteoric growth in solar have come not from industry, who have obstructed green energy development at every step, but from environmentalists and even they underestimated the scales of the growth noted above. 

China is obviously leading this boom and transition. Maybe one of the most hopeful aspects of this story is how in the real economy there's all kinds of evidence of open trade and cooperation between China and the US and other parts of the world expanding solar together. 

That's not what we get from the current gov and in a lot of media, which tends to framing the relationship between the US and China as always adversarial, win/lose, zero sum, the new cold war 2.0 battle of world superpowers. 

For instance, the republicans are actually doubling down on drill baby drill, as if in direct opposition to China's green energy boom. But is there any long game to this strategy beyond garish TV/online spectacle fueled by Big Oil? I did semi-recently learn in some Vaclav Smil books that some material production will likely resist or be more difficult to transition off fossil fuels, like heavy metals, steel, military weapons, airplanes. If this still holds, maybe Grump's braintrust figures they've lost the coming green energy economy so they are banking instead on fossil fuels to retain significant power in the coming century, particularly because of their likely long-run importance to military production. 

It would certainly make sense the US would have to maintain a solid position in fossil fuel production until the relevant national security questions are resolved. Still not clear why this strategic position would require hostile attacks on alternative energy production that benefits everyone? 

Except as a crony capitalist gift to Big Oil! 

So much of Grump 2.0 appears so incompetent and destructive, so obviously fueled by hysterical racist panic that it is hard to imagine how it can last or even survive the disasters it only seems to know how to make worse. Like attacks on FEMA?! Why would anyone oppose FEMA helping people in weather disasters?   

I don't know but on the bright side it appears solar energy production is booming in spite of all the opposition and beyond anyone's predictions. And decarbonizing our energy system remarkably quickly. 

Yay for our side: Future humanity!  

"Baby, You're My Kind," Blossom Dearie (1972)

Reportedly, Blossom was first admired for her piano playing. Bill Evans was a fan. She develops her impossibly sweet and wry vocal style only after she was already playing with the big jazzers. This playfully coy sweetheart number is a little late in her career, she's pushing 50, the 1950s are generally recognized as her prime. It's a duet with Pete Morgan, a British jazz bassist and longtime collaborator. Unassumingly simple romantic joy is Blossom's philosophy; her confidence an expression of her commitment. Sui generis. 

Three-Legged Scam of the Modern GOP

 To appropriate a phrase long used to describe the GOP coalition, it’s the “Three-Legged Stool” of Trump-GOP subterfuge. The three legs of the swindle—let’s call this the “Three-Legged Scam”—are as follows:

1. Deficits pose a civilizational threat to our country and the American experiment, but only when a Democrat is in the White House.

[Trump's tariffs and his hostile posturing towards our trade partners pose a bigger threat to US deficits than the liberal spending of any Dem admin, ever. I believe quite a bit in Stephanie Kelton's deficit myth, certainly as it pertains to military spending, but to my understanding global demand for the dollar, which Grump threatens and has reduced, insures our deficit.]

2. Deficit concerns don’t constitute a case against tax cuts for the rich, because they will unleash massive growth and generate revenues that more than offset those lost to the tax cuts.

[Zombie economics. This has been discredited for decades by economists like Krugman but remains fundamentalist creed to the rich business classes, for obvious reason.]

3. But deficit concerns do require deep cuts to the social safety net, which won’t hurt the truly needy because they’re largely aimed at targeting the fraud that’s riddling the system and creating a massive class of welfare parasites.

[Austerity for the many is socialism for the rich. The government must insure for everyone-- national security, public safety, housing, food security, education, health care, child care, senior care, etc-- what private markets, unregulated, provide only to a privileged few in the economy who can afford these services. Is there waste in gov, of course, but does that waste hold a candle to the waste accrued by billionaires? No. It is looking increasingly like DOGE is going to cost more than it saved, and still it is being celebrated by repub officials. The three-legged scam makes the rich richer and poor poorer. That's it.]  

Greg Sargent @ TNR came up with the Three-Legged Scam. I'm the italics. 

A Fourth of July Question: Can America Recapture Its Populist Soul?

Matt Stoller's take on the traditional July 4th US Independence Day oration in the year 2025. My abridged cut and paste follows. Read the whole thing at Stoller's substack Big: 

“Is there not growing up among us a class who have all the power without any of the virtues of an aristocracy? We have simple citizens who control thousands of miles of railroad, millions of acres of land … who choose the governors of sovereign states as they name their clerks … and whose will is as supreme with the legislatures as that of a French king sitting in bed of justice.” - Henry George, 1879

The most famous [July 4th] oration is one we know about today, it’s Frederick Douglass’ speech in 1852, asking “What to the Slave is the Fourth of July?” 

Douglass didn’t reject America, though his was a biting speech. He lauded the greatness of the American founders for their high ideals and accomplishments, while pointing out they were not extended to the large slave population. “The rich inheritance of justice, liberty, prosperity and independence, bequeathed by your fathers, is shared by you, not by me,” he said. “The sunlight that brought light and healing to you, has brought stripes and death to me. This Fourth July is yours, not mine. You may rejoice, I must mourn.”

In 1861, Lincoln offered the framework of economic equality in a speech about the Civil War, with a specific focus on the oligarchy of Southerners who thought the hired or enslaved worker was an inherent class, that capital came first, and it put people to work. That was not true, he argued. Capital deserved a fair return, but, he noted, “Labor is the superior of capital, and deserves much the higher consideration.”

Lincoln’s political economy framework was populist, viewing the basis of American republicanism as the hired laborer turned small proprietor. “The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself,” he said, “then labors on his own account another while, and at length hires another new beginner to help him. This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all.” 

The heir to the abolitionists in the late 19th century was another thinker and political actor - Henry George, who focused, as Douglass did, on land values. In his 1879 book Progress and Poverty, lauded by many former abolitionists and their children, George showed that urban land values drove inequality. Land, which cannot be created or destroyed, increased in worth not based on the effort of the owner, but based on whether there was social activity occurring around it. As such, an owner increased rents based on work he himself did not do, extracting unfairly from both labor and capital.

Georgists were pivotal in the Teddy Roosevelt and Wilson administrations, helping to structure the Federal Reserve and the national park system, as well as influencing a generation of politicians who made the New Deal. Georgeists ultimately won the debate [about political economy], created the New Deal in the 1930s, and the 20th century was a Georgist century.

Unlike the absurd libertarian view that government is an alien force, it’s right there in the Declaration [of Independence] that we establish a government to secure our rights.

In 1970, Milton Friedman, representing a new generation of would-be oligarchs presented a different set of values. He wrote an article in the New York Times preaching the shareholder theory of the firm, or absolute liberty for capitalist. “There is one and only one social responsibility of business,” he wrote, “to use its resources and engage in activities designed to increase its profits.” Friedman’s theory was ahistorical nonsense; Americans have used corporations in all sorts of ways, at its heart a firm is a state-chartered collective endeavor meant to help us mass people and capital to do something socially useful while offering a fair return on investment.

In America today, we have many of the same challenges faced in George’s day. There’s an out-of-control financial sector engaging in speculation over resources that should be managed for the public good, not just land, but things like data, natural resources, knowledge, and even low orbit space and the atmosphere. And there is an undercurrent of unsatisfied rage.  

***********

Love George. A real populist hero and seminal character in American history, and often mocked by mainstream economics as a one-issue crank and overlooked in the US history textbooks. 

George was calling out speculation and bankers in the Gilded Age; the original one, late 1800s. But if you do reduce him to his signature issue, ending land speculation, socializing private land holdings, and thereby ending private property as we know it, this one idea was comically out of step with the carrot Lincoln was dangling out there in his "free labor"/not slave labor, "free soilers" speech, quoted above. 

It's not just that the worker wants fair or living wages but believes, in Lincoln's classic telling, that they ought to get paid enough that if they work hard and they get the job done they ought to be able to save up a little and eventually own a home of their own or even go into business for themselves or strike out west for a piece of land of their own. Lincoln was translating the frontier spirit in American history into an expression of the American Dream for common labor or the common American worker. It's a crucial populist sentiment and was in the air that I breathed in the working class home I grew up in and I imagine is widespread in working class households, of any color or religious creed, going all the way back to Lincoln, or even Jefferson and Franklin. 

George thought, by contrast, everyone would be better off without private trading and speculation in land, and he might have been right, no question financial speculation has much to do with the crime of poverty, as he liked to call it, but so much for the republican experiment and the ownership society, still a big populist deal even today. People like the idea, the promise, that they can someday own their own little piece of the American dream.

Nonetheless, in actuality, Henry George was hardly a one-issue crank but a kind of dynamo for populist democratic uplift and opportunity. He is credited with almost single handedly instituting the use of secret ballots in elections, developing public utilities, and spreading the use of progressive taxes. He was the godfather of rent controls. He was a champion of the industrious little guy like few others in American history. It was said of his funeral procession in NYC, so grand was it, that in that time it was second only in size to Lincoln's. 

In his famous July 4th oration Douglass explains how the promise of equality is denied many Americans like him and then Lincoln explains how slavery undermines the rights of free labor. Many northerners still racist to the bone in the 1860s supported an end to slavery, or more specifically that it not be extended to new states and threaten the opportunities of "free soilers" spreading into the north and west. In other words, they were ready to fight a war to end slavery so as to protect the rights of free labor over race slavery or slave labor of any kind.

In the late 19th century, George, wrote and organized against the railroads and Robber Barons, urging governments, locally and nationally, to reform some of the worst abuses of private capital in the Gilded Age; abuses that were turning land rents and work into wage slavery. It's no wild claim to suggest George's efforts culminated in a farmer's populist movement and many Progressive Era reforms by the turn of the 20th century that protected workers and extended the rights of labor. 

Nor a stretch to suggest Stoller views America's "populist soul," in the 19th century anyway, as  embodied in the triumvirate of Douglass, Lincoln, and George. And now Stoller sees faint signs of real political rebellion, in the spirit of that triumvirate, brewing again; some populist George in democratic socialist NYC mayoral candidate Zohran Mamdani. Hope he's right.

Joy Division vs New Order

From Ron Flipkowski's Politics Bulletin on Meidas+: 

… Agent Michael Feinberg’s resigned from the FBI: “The newly installed Special Agent in Charge of the FBI’s Norfolk Field Office, Dominique Evans, made clear to me that, at the direction of Dan Bongino, my career with the organization had—for all intents and purposes—come to an end. It would be an understatement to say that I had not expected this. In fact, I was in the midst of preparing for a potential move to DC to take on a new position at FBI headquarters.”

… “But, it turned out, I had made a terrible mistake: I had remained friends with someone who had appeared on Kash Patel’s enemies list. How did Bongino find out about this private friendship? I honestly don’t know. What business was it of his? None at all. Was I accused of any sort of misconduct? No. It didn’t matter. Under Patel and Bongino, subject matter expertise and operational competence are readily sacrificed for ideological purity and the ceaseless politicization of the workforce.”

… He said Patel and Bongino were going after him because he was friends with Peter Strzok: “Our own friendship began with a discovery that we liked the same bands and shared an interest in trying new restaurants. Most of our conversations since he left the Bureau have involved debating the relative merits of New Order versus Joy Division.”

Joy Division An Ideal for Living (1978): Maybe not Ian Curtis's best moments ("She's Lost Control"? "Love Will Tear Us Apart"? "Dead Souls"?) but JD's gothic riff rock power is right there on their debut 7". Manchester's Declaration of Independence from the '77 punk rock pack. 

New Order "Blue Monday" (1983): Best selling 12" single of all time. Dylan's "How does it feel?" recontextualized with epic bass bounce and a minor-key goth melody.  The electro-disco bass sound they picked up in NYC not long after The Clash did the same in the making of "The Magnificent Seven." After the understandably tentative feel of Movement, this single and their second album, Power, Corruption, and Lies, signal a great leap forward in terms of the rhythmic use of synths and electronics. Still elegiac but less claustrophobic and more seductively danceable.

Not the final word on the either/or question but I'm more a why-not-both kind of guy anyway. No say where Strzok and Feinberg are on this question but I'm more interested in what they think than Patel or Bongino, for sure.  

Big Tech Loses on AI Regulation Ban in Big Butt-Ugly Bill

"So what do we learn from this episode? First, we need public financing of elections. It’s become increasingly clear that financial dependencies make it almost impossible to make good policy. There were probably two dozen Republican Senators who would have opposed this provision openly if they didn’t have to rely solely on corporate funds for elections. In truth, this provision never should have been proposed in the first place, let alone have a bitter fight waged to block it. But the financing for elections creates awful incentives.

Finally, don’t be fooled by the lopsided vote, this AI regulation ban was much closer to being enacted into law than that. The attempt to eliminate the regulation of automated decision and AI systems will return. Big business is going to have an open checkbook going forward, amounts of money that are unfathomable, to enact their agenda. Ultimately, money buys time on TV, but it can’t buy votes. And that’s the reason that this AI regulation moratorium went down."

Matt Stoller @ Big

Weird to think of Bannon, Blackburn, and Hawley as heroes in any story but need to take wins where we can get them. Everybody, hopefully, has heard the repub BBB bill savagely cuts health care for poor seniors like my parents to justify renewing big tax cuts for the rich. I don't know if the cuts will in fact reach my parents, they're in hospice now and very close to the end of their lives. But they are people who could be hurt by these cuts. People who worked their whole damn lives and I think deserve health care that they cannot afford, and I cannot afford, until they pass away. Call me a socialist but this is how I see things. You know that part in the Declaration of Independence about how government's derive their powers from the consent of the governed? These are the kind of government powers I consented to. But there are rich people in congress still screaming for bigger cuts, without any suggestion maybe they ought to give up some of their tax cuts. There's also billions in this bill to expand ICE and support more forced deportations. Building their fascist police state. It slashes green energy investments to boost fossil fuel production. And like the WTO, like all neoliberals, they were trying to keep state governments from enacting regulations to protect citizens from any negative impacts of AI that might turn up. And I'm pretty sure these are more or less the same people that were warning us about the unintended consequences of AI only a few short years ago, primarily it would appear now to secure more state funding, but now think states shouldn't be allowed to regulate whatever they want to do with AI for ten years. Anyway, they lost that one, for now.