Wednesday, August 29, 2018

Marrying NAFTA and The TPP: The "US-Mexico Trade Agreement"

I really am not sure where to begin with this latest farce, Trump's announcement yesterday of a supposed US-Mexico Free Trade Agreement.  Of course there was the farce of him trying to make the announcement with a live phone call between him and outgoing Mexican President Pena-Nieto (to be replaced on Dec. 1 by leftist populist Obrador), which took awhile to get going.  There is the problem that some details appear to be unresolved, but most importantly that Pena-Nieto insisted four times that Canada needed to be part of the deal for it to be accepted in Mexico, including with his last words to Trump, while Trump seems fine with just having a tow-nation deal leaving Canada in the dust, or perhaps hoping that Canada will simply be forced to sign onto this deal as is, which it might.  But for Congress to approve it prior to Obrador coing into office, given Congress's 90-day waiting period on such legislation, Trump has four (now only three) days to get Canada to sign on.  Prospects for that and Mexico also passing it before Dec. 1 do not look too good, maybe not much better than the prospects of actually getting North Korea to denuclearize.

So what is in this deal?  Most of the publicity has been about its automobile section, which some in the US hope will increase automobile production in the US, although that is not definitely the case.  The two main parts are to increase the  portion of parts made in North America from 62.5% to 75% in order to avoid facing tariffs.  This apparently would affect Toyota, Nissan, and Mazda most severely, but hardly any other  non-North American producer.  Maybe some of those companies might shift some production to North America, maybe at least production of parts, but there is no reason to believe any such increase will go to the US ra4ter than to Mexico, although probably some would.

The other part is that at least 40-45% of production must come from workers earning more than $16 per hour. Offhand that looks like it might help US workers.  However, average US auto wages are $22 per hour while Mexican average auto worker wages are $10 per hour.  This may help Mexican workers get higher wages, but it is not obvious it will do much for US auto workers.

Of course this is the big  stick Trump is using on the Canadians: if they do not get on board with this agreement, they will face tariffs... But this is a potential mess given the complicated supply chains between the Canadian and US auto industries, and it is notable that the US auto industry has not supported imposing tariffs on foreign cars, precisely because of this.

Trump wants to rename the agreement as "NAFTA" supposedly has "bad connotations."  Well, why would it not with him having repeatedly denouncing it as "the worst trade deal ever"?  But the hard fact is that it is still legally in place, and apparently he cannot unilaterally just end it.  Congress must approve, and apparently there are many in Congress not willing to do that without Canada being in place for any replacement agreement.  Trump can call it whatever he wants, but at best this is a minor change in the still-existing NAFTA.

Now as a matter of fact there  are some parts of this agreement that look like improvements.  These would include tightened environmental and labor union rules for Mexico, as well as stronger property rights protections for US intellectual property, although some would question if this latter is really so great: making Mexicans pay more for US Big Pharma drugs?  Also, the bottom line of the auto part of this would raise car prices for consumers in both nations.

However, here is the great irony.  Both Mexico and Canada have already agreed to these environmental, labor, and intellectual property rights rules. They did so when they signed on to the Trans-Pacific Partnership (TPP) agreement, which in fact both of them are still parties to.  Trump removed the US from this almost immediately after becoming president, also denouncing the TPP as something just awful, even though the US led the negotiations for it to come about.  So the US is out of it, but all the other 10 nations, including both Mexico and Canada, have followed Japan's leadershp to continue  with the agreement and make it happen.  So accepting these conditions on the part of Mexico was not a big deal at all. They have already done so, just not with the US.

Which leads us to a bizarre bottom line.  With NAFTA actually still in place, and with these portions of this agreement already in place for Mexico (and for Canada if it joins in) in the TPP deal, this makes rhis agreement basically a marriage bwtween NAFTA and the TPP, both agreements that Trump has denounced, but now he is keen on a combination of them. The only part of it that cannot be characterized as that is the automobile part, but if Canada does not go along with that, the whole thing will probably end up going kaput anyway, much like the North Korean denuclearization.  But, hey, globla stock markets rose on the news, presumably on the grounds that it means Trump may be less likely to initiate a full-blown global trad war in the near future, whatever becomes of this odd possible NAFTA-TPP going by whatever new name.

Addendum, next day: I have removed the erroneous "Free" from Trump's proposed title of the agreement, with Mexico not yet accepting this title. Also, I corrected an error regarding the percentage parts requiring higher paid workers. It is 40-45%, not 50%.

Barkley Rosser

Tuesday, August 28, 2018

Mohammed Bin Salman Of Saudi Arabia In Trouble?

This is what Juan Cole reports today from several sources.  Supposedly, as I reported here earlier, even though it was supposedly denied, the Saudi ARAMCO IPO deal is off.  The new reports have it that the final decision on this came from King Salman of Saudi Arabia, the father of the power hungry Crown Prince, Mohammed bin Salman (MbS), who has been the main advocate of the IPO as part of his Vision 2030 plan.  The king has up until now pretty much let MbS have his way on many matters, from economics, to foreign policy, to social policies (some of this good, e.g. letting women drive and putting the religious police in a book), and to dissent, including jailing lots of leading Saudi figures as well as womens' rights advocates, including havint a 29 years female Shia activist beheaded. 

In terms of the IPO, supposedly Salman was unhappy about the required transparency on financial and oil reserves issues. There are rumbles that he is unhappy about some of the other matters, with indeed MbS making major messes of a number of things, such as the disastrous war in Yemen and the failed embargo against Qatar, still stupidly in place.  He is also probably not happy about some of those arrests last year, although much of this is murky.  However, the most important bit in these rumors is that King Salman iis reportedly so unhappy that he is contemplating replacing MbS with somebody else as Crown Prince.  Indeed, MbS is in trouble.

Now probably this last part is just wishful thinking by some in Saudi Arabia, leaking such rumors. Very likely the family link will dominate, unless Salman were to replace MbS with one of his full brothers.  But it is believable that MbS may be facing some reining in, especially if indeed Salman was responsible for the ultimate cancellation of the ARAMCO IPO deal.

OTOH, given the nasty history of MbS, I admit to being a bit concerned about Salman's future, with, for example, MbS's predecessor as Crown Prince, Mohammed bin Nayef, finding himself arrested and held in his own palace until he agreed to step aside as CP.  I note that Salman is old and reported not to be in the best of health.  It may well be that we shall learn soon that his health has worsened, and that he has somehow suddenly decided to abdicate in favor of his Crown Prince...

Barkley Rosser

Monday, August 27, 2018

Are We Alone In The Galaxy (Or Maybe Even The Universe?)

In 1938 Orson Welles put on a radio show in New York City that dramatized the famous novel by H.G. Wells, _The War of the Worlds_. This novel is about an invasion of Planet Earth by intelligent beings from Planet Mars, with this invasion just  barely being defeated.  Several movies have been made of this famous novel, probably the first to present this now long-running sc-fi theme of our planet being invaded by aliens from outer space.  However, whar was especially important about this particular radio performance 80 years ago is that many people turning on their radios and hearing ongoing reports of a Martian invasion of New Jersey is that many people believed it and a temporary panic ensued.  Lots of people thought it highly likely that Mars was inhabited by intelligent beings who were a threat to us.

How things change.  Now we have sent several vehicles to Mars, where not only are there not dangerously threatening intelligent beings, but we have yet to find any signs of even single-cell life, although the recent discovery of some actual water there may yet possess the possibility that some simple form of life is there, or perhaps was, although increasingly the search for probably only single-cell life to moons of Jupiter and Saturn, with no luck so far.  If there are intelligent space aliens, they are on planets in other star systems.  However, until recently, given over 100 billion stars in our Milky Way galaxy, various estimates of the probabilities involved had it as near certain there is life elsewhere in the galaxy, and also highly likely that there is intelligent life of some source, probably on multiple planets.  And we have indeed discovered "exo-planets" around many stars (I note that my brother-in-law, Michael Werner, has long been a major leader of the search for these exo-planets using the Spitzer infrared telescope).

These calculations suggesting a high probability of intelligent life elsewhere triggered the initiation of the Search for Extra-Terrestial Intelligence (SETI) about a half century ago, sending out various messages hoping to get a reply from somebody out there.  So far there have been no replies.  This has begun to shift views to the point that now we have flipped to the opposite view of that held in 1938: now we have commentators suggesting that the probability of life is much lower than previously thought, that we arose from a very curious and special set of circumstances, these so weird we may in fact be alone in the galaxy, and even possibly in the entire observable universe.

A recent example is an article in the latest Scientific American (September, 2018): "Alone in the Milky Way" by John Gribbin (subtitle, "Why We Are Probably the Only Intelligent Life in the Galaxy").  He notes a sequence of supposedly "improbable coincidences" necessary for even simple life to arise, much less technologically advanced intelligent life like we are.  Supposedly we are lucky that earth was formed late in the life of the galaxy, allowing us to accumulate lots of metals.  Also, supposedly only a narrow band of the galaxy will support life: too close to the center too many "accidents" and too far not enough metals for building rocky planets. Then there is the matter of having a rocky planet just the right distance from a star in a Goldilocks position: not too hot and not too far.  Gribbin notes that it only took a billion years from earth's beginning to get single-cell lift, but much longer periods to get to more complicated forms, with the jump to multiple-cell organisms onl coming 700 million years ago.  Then there is the matter of actually evolving beings as smart as us, with Gribbin noting that our ancestors nearly went extinct about 70,000 years ago.  He says this string of events is so improbable that probably we are "alone in the Milky Way."  Many are now taking such arguments seriously, with Tyler Cowen at Marginal Revolution just a few days ago posting an estimatte of "the economic value of the [observable] universe" (about 60 septillion dollars, supposedly), with this estimate being based on the assumption of one planet per galaxy like ours with beings like us and economies like ours.

All this may be correct, but I have a suspicion that this is one of those swings that is going too far in the opposite direction of what was previously widely believed,in short, an intellectual fad.  For starters, SETI has only been at it for about half a century.  If some intelligent beings have heard us and responded, their message will need to get back to us, which means that the effective distance of SETI is only about 25 light years.  The Milky Way is 100,000 light years across, so SETI has effectively reached only a tiny portion of our galaxy, tiny to the point of miniscule.  I could poke at some other of the pieces of the argument, but will not go beyond this point here.  My guess is that the probability of intelligent life in our galaxy is higher than Gribben estimates, although maybe not as high as thought several decades ago.

This said, I came to the bssic conclusion that we may be rarer than previously thought some years ago, indeed due to thinking about the non-response to our SETI transmissions.  This led me to come to a similar ultimate conclusion as Gribbin does in his article: that if we are so alone and special, then this puts on us as a species a special responsibility to manage our planet and ourselves especially carefully.  I definitely think this.  Indeed, I came to this point at the very end of my 2011 book, Complex Evolutionary Dynamics in Urban-Regional and Ecologic-Economic Systems: From Catastrophe to Chaos and Beyond, at the end of a chapter contemplating the problem of climate change.  I closed the main text of the book by quoting Nasssim Taleb from his book, The Black Swan:

"Imagine a speck of dust next to a planet a billion times the size of the earth.  The speck of dust represents the odds in favor of your being born, the huge planet would be the odds against it.  So stop sweating the small stuff. Son't be like the ingrate who got a castle as a present and worried about the mildew in the bathroom. Stop looking the gift horse in the mouth - remember that you are a black swan."

To this I attached a footnote, the actual last thing in the book (except for a mathematical appendix), which says (p. 211),

"A broader perspective of this involving planets is the absence so far of any signals indicating life on other planets by [SETI] that has going on for decades now...The apparent rarity of life such as ours, at least in our region of the galaxy, suggests that we may face a greater responsibility than we thought for the proper care and stewardship of our planet and its global ecosystem and noosphere."

Gribbin concluses (p. 99) that, "And if our planet is so special, it becomes all the more important to preserve this unique world for ourselves, our descendants, and the many creatures that call Earth home."

Barkley Rosser

Friday, August 24, 2018

Hannity as Goebbels

Joseph Goebbels famously said that if you want to convince a populace of A Big Lie (fake news), then you do it by repeating it, over and over and over again.  For a long  time I havebou been keeping an eye on Hannity, reportedly nightly conversing with Trump after his show.  What struck me some time ago how repetitive the core pats of his introductory monologue are.  I have increasingly noticed that pro-Trump people seem to believe pretty much all of this super-repeated core Hannity-Trump lies. And I have seen noe systematic or regular effort to offset this Goebbelsian Big Lie repetition.  So, here I am going to make a small attempt to point out some of the worst lies Hannity Big Lies about.

Almost all of it has to do with Hillary Clinton, a "whataboutism," argument; Trump may have done some questionable things, but whatabout Hillary and her emails and so much more?  After all, at Trump rallies they still chant "Lock her up," although reportedly in West VA a few days ago there was less enthusiasm and a lot of empty chairs. 

A caveat is that this is not some super defense of Hillary.  One more or less accurate bit in the usual Hannity rant is that Hillary and the DNC treated Bernie Sanders badly and unfairly.  But I simply note for now that Bernie himself totally supported her, even as we know some people who voted for him voted for Trump. And, of course, she should have spent more time in Wisconsin and MIchigan rather than such effluvia as Arizona and (gag) Utah.  She was not on top of things, although in the case of the third surprise swing state, Pennsylvania, that was where she was on the last night of the campaign in Philadelphia, trying to get the vote out.  She knew that one was crucial, and she lost it.

So now we must deal with crucial issues.  Part of Hannity's standard every evening monologue is that James Comey and Peter Strzok (sp?)  were total Dem stooges plotting to do Trump in.  But most of us know that she had a solid lead until Comey came out within two weeks of the election that she was back under  investigation on her emails, only to learn about two days before the election that there was nothing of any importance in these emails, already well known.  That  turned the polls and she lost.  The one possible offset would have been if the FBI had also reported that the Trump campaign was under investigatiion for Russia links, but they did  not do so. The key person on that matter was Peter Strzok, now super Trump enemy in the ongoing Hannity propaganda, and recently improperliy fired, even as he pointed this out, but, hey, in an email with his mistress he said they might block Trump. They are both in trouble  for those emails, even though they did not act to block him, which they might actually have been able to do if they had leaked all this Russian crap after Comey came out with his empty accusation against Hillary that did her in and gave us this disastrous president.

I am not going to cover all the regular reported lies of Hannity in his monologue, but here  are a few. So he posits that Hillary was personally responsible for the FISA warrant on Carter Page, coming supposedly from the "discredited Steele dossier, from a foreigner using Russian sources."  Ooops.

So the foreigner using Russian sources is Christopher Steele, rarely given his full name in the Hannity monologues, a former British MI6 agent who focused on Russia, and long accepted by all US intel agencies  as a reliable source from our supposedly closest ally (aside from possibly now enemy Canada, blame Canada!).  Which brings us to the fundamental lie of Hannity, that  the Steele dossier has been "discredited."  This is the central lie now believed by anybody who watches Hannity as their main news/opinion source. No, it has not been discredited, quite the opposite.  Not a single thing in that dossier has been discredited or is even in serious doubt. The vast majority of it has been in fact independently verified.  What is true is that some parts of it remain unverified, even as none of it has been proven false.  Among those parts is its most famous accusation of a peeing incident in Moscow.  Weirdly Hanniity and friends have ended up focusing on this shocking item, somehow turning the  failure to fully verify it into making the entire dossier "discredited."  Really.

On other parts of this, no, it was not Hillary's campaign that was primarily responsible for this mostly accurate  dossier. The funding for it initially came in the primary campaign from the Bush family, given their deep connections with serious intel, including especially British intel. Hillary was a minor player on this dossier.

It did not trigger the  FISA investigations of Carter Page.  He had  been under scrutiny for his numerous Russian ties for years, with this dossier simply one among other pieces of evidence for  renewing an investigation of him. 

I shall address one other issue in his usual rant. Regularly he charges that Hillary was responsible for "giving US uranium to Russia."  The decision on the US-Russia uranium deal in 2011 (maybe a year earlier or later, not important), was made by an interagency committee, chaired by the then Sec of Energy, who is the big player in US nuclear policy. Nine agencies were on that committee, one of the State, then run by Hillary.  The Canadians were also a major player on this, strongly supporting the deal (a very complicated matter, if not in Hannity's eyes).  The committee's decision was unanimouis, with some flunky of Hillary's on the committee going along with it. And, in fact, aside from a few odd bits, no US uranium was exported as a result of this agreement, although Russia  has earned some income from uranium sales within the US.  This is supposed to be the  ultimate "Hillary running for the Russians, so pay no attention to Trump doing so, and  lock her up!!!"

There is quite a bit  more that is totally false in Hannity's standard rant that Trump regularly tweets about. But this is all I shall deal with for now, but it is pretty core stuff.

Barkley Rosser

Wednesday, August 22, 2018

The Nastiest Motives of Nasty People

"Economists are active militants against the concept of the lump of labor, that is, the popular idea that the total number of jobs or of working hours is fixed (Walker, 2007)."
The quote is the first line from a 2017 paper by Tito Boeri, et al. It gives me confidence that at least some of the time my message is getting through.

The image below is from a 2018 report published by the Roosevelt Institute. It tells me there is still a huge amount of work to be done teaching people about the ideological deceptions of the so-called lump-of-labor fallacy.

At times, over the last 20 years or so – never mind how long precisely -- I have felt like Captain Ahab in pursuit of the whale as I have wrestled with the so-called "lump-of-labor fallacy." Having finally sized the beast up, I am convinced that the fallacy claim is little more than a "pasteboard mask" behind which, "some unknown but still reasoning thing puts forth the mouldings of its features." That hitherto unknown thing is a theodicy, or, perhaps it would be more accurate to call it theo-dicey in recognition of its treachery.

A theodicy is "an attempt to reconcile the goodness and justice of God with the existence of evil," Jonathan Cook explained in Inscrutable Malice: Theodicy, Eschatology, and the Biblical Sources of Moby-Dick. In the case of the fallacy claim, it is not the goodness and justice of God, per se, that is at stake but the rationality and benignity of the capitalist system, the "invisible hand" that supposedly impels narrowly self-interested actions to promote the general good of society and the tendency toward equilibrium by means of which prices and quantities of trade "find their own level."

"The great merit of the capitalist system, it has been said, is that it succeeds in using the nastiest motives of nasty people for the ultimate benefit of society." To seek to intervene wantonly in such a divinely-ordained contrivance is thus to exhibit an unseemly absence of faith. Austin Robinson's sarcastic remark, quoted above, is usually mangled and mis-attributed to John Maynard Keynes, who, to be sure, did indeed comment (half-jokingly?) on the need to "pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not" and who saw avaricious money-making as a "comparatively harmless channel" for "dangerous human proclivities" that might otherwise "find their outlet in cruelty, the reckless pursuit of personal power and authority" -- as if the two pursuits were mutually exclusive rather than complementary. But we haven't even gotten to that alliterative "paradox of poverty in the midst of plenty" yet.

The lump-of-labor fallacy's alleged -- albeit unsubstantiated -- assumption of a "fixed amount of work to be done" rewords a staple of 19th century classical political economy, the "certain quantity of work to be done" determined by the number of workers who could be profitably set in motion by a previously-accumulated capital consisting of subsistence goods – a "wages fund." Who did or didn't say "a certain quantity of work" or "a fixed amount of work" is the key evidence for or against the fallacy claim and, consequently, the theodicy claim.

The "certain quantity of work" also happens to be symptomatic of the adaptation from religious to secular theodicy. Classical political economists didn't invent a static universe. They inherited it from the same natural law enlightenment of the old Great Chain of Being as their Panglossian optimism. Montaigne's proposition that "one man's gain is another's loss," and Machiavelli's notion of a "fixed quantity of happiness" in the world at any one time are notable specimens, as was Francis Bacon's observation that "the increase of any estate must be upon the foreigner (for whatsoever is somewhere gotten, is somewhere lost)…"

Originally overt and unabashed in the wages-fund doctrine of 19th century vulgar political economy, the static premise has had to go incognito in modern academic economics, masked behind simplifying assumptions, methodological conventions, ceteris paribus, dead metaphors, unexamined analogies and reams of "math." Unlike theodicy proper, the political economy dispensation didn't set out to make suffering bearable for the sufferers, but only to yield, all too lustfully, to a temptation whose role as "a component of the self-consciousness of European humanity" must never be underestimated.

Misattributions are commonplace. Often it is simply the assignment of a saying to a historical celebrity because, "who ever heard of Austin Robinson?" Mark Twain, Abe Lincoln, Gandhi, Stalin and Winston Churchill are said to have said many a saying they never said.

Sometimes, though, the intention is to put incriminating words in the mouth of a bogeyman or to burnish an obscure opinion by attributing it to some illustrious personage. In the case of the lump-of-labor fallacy, the false attribution of a fallacious belief to the economically-naïve workers or trade unionists is a disavowal and projection of the economists' own unacknowledged -- possibly subliminal -- convictions about the inherent rationality and benevolence of the market-deity who cunningly enlists "the nastiest motives of nasty people for the ultimate benefit of society [except, of course, for that obligatory residual of 'poverty in the midst of plenty']."

The temptations of theodicy are formidable. Neither was Marx exempt, with his "dialectical" projection of a revolutionary proletariat, forged in abjection and class struggle. Even the truth, as Ernest Tuveson remarked in a review of Melville's The Confidence Man, "is no guaranty of either happiness or freedom." But what we can do is to expose and repudiate the facile satisfactions of the economic pseudo-theodicy we know and to re-evaluate those perspectives that the econo-theodicean orthodoxy has condemned or discounted.

To recap: in the manuscript, A Certain Quantity of Work to Be Done, I develop the following theses:

  1. The lump-of-labor fallacy claim is not a substantive argument but a performative one that disavows and projects the unacknowledged and now illicit founding premise of the economists' own core commitment – sometimes fervent, sometime reluctant – to the intrinsic rationality and benevolence (or at least, "efficiency") of private property and market exchange.
  2. This core commitment emerged, along with its accompanying storyline, in early modern natural law political thought from the same mold as rational theodicy with which it shared both its optimism and founding premise of a static universe in which there was a "fixed amount of happiness" at any given time (Machiavelli) and one man's profit was another's loss (Montaigne).
  3. The metaphysical "mechanisms" purportedly producing public benefits from private vices, the invisible hand that leads people to contribute to the public good although they have only their self-interest at heart, the process by which the volume of trade and prices "find their own level" – in short, the hypothesis of equilibrium, are deductions from the zero-sum "conservation principle" of a closed system.
  4. The defects and pitfalls of rational theodicy have been analyzed, criticized and satirized by philosophers from Voltaire and Kant to Sartre and Levinas, the latter two specifically in the context of the industrially-augmented atrocities of the 20th century. The large debt of economic thought to theodicy has also by discussed by Joseph Vogl, John Milbank and others. My original contribution is to trace the process of disavowal and projection that has both insulated economics from scrutiny of its hypocritical fealty to a noisily disavowed premise and stymied efforts to establish alternatives to an ethically-bankrupt, intellectually-moribund status quo.
  5. Maurice Dobb and Robert Hoxie are two economists who defended the positions that mainstream economists derided as fallacious. Ira Steward's eight-hour theory was disparaged by the orthodox. Although Sydney J. Chapman's theory of the hours of labor was at one time considered canonical, it too was unceremoniously substituted by a view more congenial to the mathematical modeling of mid-20th century macroeconomics. 
  6. Building on the insights of these authors -- and of Marx, who explicitly rejected vulgar political economy's "so-called labour fund" – I have proposed the perspective of labor power as a common-pool resource. From this perspective, In the final chapters, I analyze how long hours of work "immiserate" workers subjected to them and how progressive reduction of the hours of work might be used as a policy to reduce greenhouse gas emissions and thus combat climate change.

According to James McCleary in 1912, there was an "oft-repeated error" behind statements from union leaders made to the congressional committee on labor, which he sat on. "It was rarely if ever put into words, but it was the unspoken major premise of many an attempted syllogism, the unstated basis of many an appeal." A half century later, steel industry executive William Caples stated that the alleged error was "one of the most tenaciously held and generally least articulated of trade union beliefs..."

I have researched the lump-of-labour fallacy and its surrogates, and would have to concur with McCleary and Caples about the lack of articulation of a belief that is presumably so widespread. I wonder if you can help me out here? Can you cite statements from advocates of work-sharing, for example, that clearly demonstrate a belief in a "fixed amount of work"? And, no, that wouldn't include statements advocating a certain policy that you infer "implies" such a belief.

In "A Certain Quantity of Work to Be Done" I cite half a dozen examples of orthodox political economists stating precisely that phrase or a close approximation of it as an empirical premise -- and not a hypothetical one. Can you find just one from the labor side? 

Saudi ARAMCO IPO Definitely Cancelled

Reuters reports that the proposed IPO by Saudi ARAMCO, which would have been the world's largest, has definitely been canceled.  I have posted previously posted about delays in the IPO and rumors it would be cancelled.  Now it has been.

The reports say that there were multiple factors.  There were problems with finding a venue for the IPO, with the last candidate being the exchange in Riyadh.  There were reports that what was originally planned to be a public offering had turned into a private one.  But even with this there were issues about transparency, especially regarding oil reserves.  At the heart of the problem in the end were unresolvable conflicts between the Saudi government and the  company Saudi ARAMCO, ironic given that the government owns the company supposedly.  The report did not specify which part of the Saudi government was involved, although one would assume the Ministry of Petroleum.  But in the end probably the crucial decisionmaker was the arrogant and incompetent Crown Prince, Mohammed bin Salman (MbS).

Barkley Rosser

Saturday, August 18, 2018

Is Aretha The Equal Of Michelangelo?

In the Washington Post of August 17, Chris Richards declared that the performance by Aretha Franklin of the title cut on her 1972 gospel-soul album, "Amazing Grace" "deserves to be compared to everything Michelangelo ever painted."  Now  I am not prepared to go that far, but  when I learned she had died, it was this particular song by her on that album (which I have in vinyl from when it first came out) that I wanted to hear and played prior to seeing this over-the-top remark by Richards.

Nevertheless, it is an incredible performance. She has been underappreciated for some time partly because she has been so widely imitated for so long. Her basic sound has become simply what most singers, especially female ones, do all the time, with even the cheesy pop Idol shows turning what has become a cliche into a joke.

So her great innovation was to introduce  into US pop music melisma, the making multiple notes out of a single syllable of text. This has become an overdone cliche.  But it was Aretha who moved this standard of gospel music with its African origins into pop music, with possibly only southern Indian Carnatic vocal music matching this tradition.

In any case, Aretha's 1972 version of  "Amazing Grace" is the ultimate expression of gospel Melisma, far beyond what anybody else has ever done, even if it does not quite match "everything Michelangelo painted."

Barkley Rosser 

Wednesday, August 15, 2018

Kevin Hassett In Lie Lie Land

I feel sorry for Kevin Hassett.  Of course he made a complete fool of himself two decades ago with his book on Dow 36,000 (still some ways away) with James Glassman, but he has had a good amount of time to get over that embarrassment.  When he was appointed CEA Chair for Trump, he was of the few appointments Trump made that received praise, especially in the  area of economics.  Pretty much everybody else appointed was some combination of corrupt (a bunch of those), incompetent (see abysmal forecasting record of Lawrence Kudlow, NEC Chair), or just plain insane (see warmongering Peter Navarro).  A longtime economist at the AEI and a former adviser of earlier GOP presidential candidates, Hassett had a conservative but mostly pretty respectable record, as well as being known as a nice guy.  Even many people on the left said nice things about him at the time of his appointment.  Indeed, he was not obviously corrupt, incompetent, or insane, despite some mistakes here and there (see Dow 36,000 in particular).

Anyway, after getting appointed and Trump becoming president, Hassett has largely disappeared.  Near  as I can tell, the main time he surfaces  was when the CEA put out the Economic Report of the President, the main ongoing official function of the CEA.  For decades the CEA was viewed as the main body providing economic policy advice to presidents, and often the CEA Chair  actually was the top individual economic adviser to the president, although who that is at any point in time has always ultimately been a matter of personalities.  But then for reasons that remain mysterious to me, Bill Clinton created this new body when he came in, the NEC. It  (and especially its Chair) was supposed to communicate to the media and Congress, it apparently being viewed that CEA Chairs were too abstract or in the clouds or whatever to engage in such communications.  But the question became which of these  would have the presidential ear, and more often than not these NEC Chairs have been closer to presidents than CEA Chairs, even though more often than not the case has been that the CEA Chairs have known more about economics than the NEC Chairs.  This is ceetainly the case now, with the incompetent Kudlow regularly identified as being Trump's "top economic adviser," while the much more competent Hassett has been largely invisible.

Before getting into more recent events, let me note that the Economic Report of the President Hassett and his CEA staff put out avoided making actually incorrect statements, at least that I am aware of. Of course data favorable to the administration was emphasized and arguably overly optimistic projections were made regarding the future impacts of policies, especially the tax cut.  But then this is normal CEA behavior in most administrations, putting as positive  spin on actual data and making optimistic, but not off-the-wall projections of policies.  So far so good, or at least not too bad.

Indeed, up until very recently at least the CEA was playing it straight, although in doing so some of its findings were prevented from being publicized.  Thus in early June there were leaked reports that the CEA had determined that Trump's tariffs would damage future economic growth of both the US and also the rest of the world's economy.  When asked about these reports, Hassett had no comment other than to follow the line put out by Kudlow and some others that the tariffs will bring about a move to greater free trade and thus to greater growth.  So far there is little evidence that this is likely to happen, but it is indeed a not absurd thing to say.  It is the official line of the administration, which in fact clearly recognizes that at least the near term effects of the tariffs are damaging to many.  Thus we have Trump's move to provide aid to farmers harmed by foreign tariffs.  And then we had horrendously corrupt Commerce Secretary Ross at one point lecturing those injured to the effect that "gains" are not achievable without some "pains."

But now we find Hassett not only surfacing but doing so in a way to support serious distortions with much more seriously manipulated data.  This involves Trump's exaggerated claims regarding employment increases and especially those for African Americans.  Trump has been repeatedly making exaggerated claims about employment increases and unemployment rate declines, but he went completely off the deep end into lie lie land a few days ago.  He claimed to have "created" more jobs for African Americans since coming into office than Obama did during his entire time in office.  As it turns out the total increase in African American jobe under Obama was nearly ten times what was claimed by Trump.  That there had been a boo boo on this matter was admitted by Sarah Huckabee Sanders, the mistake was so blatant.

This is where Hassett stepped in with some carefully rigged numbers that Sanders could cite to provide a partial comeback after this admission of substantial error.  Hassett was quoted on job growth during the "first 20 months of each administration."  Oooops!  Quite aside from what happens in the first months of an administration not really having much to do with policy of that administration, Trump has only been president for 17 months, not 20.  Hassett gave to Obama the massively horrendous final quarter of the Bush administration while Trump was credited with reasonably decent performance in the final quarter of the Obama administration. The periods compared were the 20 months following the elections.  These changes made Trump's record look much better relatively.  This is beyond merely looking at the best side of data, it is outright lying, and Hassett's name is on it,

So now Hassett can be viewed as a full-blown member of the Trump administration.  He has joined the rest of it in Lie Lie Land.

Barkley Rosser

Friday, August 10, 2018

"as a"

Kwame Anthony Appiah has an op-ed in Sunday's New York Times dissecting the “as a” locution, in which one first announces one’s gender, race, sexual orientation, or class position before making an argument during a public discussion.  He interprets it as a claim to represent the entire group defined in the preparatory clause, and explains why this claim is invalid; better you should begin with “speaking for myself”.  But I disagree with his interpretation of what “as a” means; I think it communicates speaking from rather than speaking for.

From my experience, “as a” is an acknowledgment that one’s view of the world is limited by one’s background and identity.  It’s a way to anticipate the criticism that what is being said is not universal or “true” in some objective but unattainable sense.  Of course, that limitation can be valorized in different ways.  If an oppressed identity is being invoked—or even better, an intersectionality of multiple oppressed identities—the partiality of perspective is even a strength, because it brings to the fore experiences and ideas that have historically been marginalized.  By the same token, if one is speaking “as a” member of a dominant identity, the limitations are pernicious because they reinforce what has been unfairly imposed over the same long duration.

From an epistemological perspective, the immediate problem is that the “as a” formulation conflates two different consequences of the speaker being positioned in the world rather than above or outside it.  One has to do with differences of experience, the other with proclivity to believe.

As a white man, I have had a host of experiences that people who are not male or white would not have had, and vice versa.  This is important.  It’s a reason to pay more attention to those whose experiences are different from ours.  But, as Appiah would be quick to point out, each individual has a unique set of experiences, even of those aspects of life that are structured by racial, gender or other norms.  As an analogy, consider two children growing up in the same family: same parents, same house, same sequence of family events.  As most of us have learned directly or from others, it’s possible, even likely, that different children experience these “same” things in radically different ways, to the point they can barely agree on the essential facts.  Were the parents permissive or controlling?  Fair or playing favorites?  Did they get along with each other or carry on running warfare?  One kid may say one thing, a sibling something else.  And so it is with our entire course through life: experience does not come out mass produced from the identity factory, each a perfect replica of the others.

Moreover, experience can both inform and mislead.  Or to put it differently, our subjective encounter with the world can be a valuable source of information or a source of error.  The analogy here is to the value of autobiography compared to biography: which is a “truer” account of a person’s life?  There is no general answer.  If I write my own story, I have access to observations and feelings no one else can possibly know about, except if they hear it from me.  That’s a big plus.  On the other hand, I am, as we all are, prone to misperception and misjudgment, thinking one thing happened when the reality was different.  An external biographer would be able to tell me many things about myself I could learn from.  (A good friend plays this same role.)  The larger point is that the set of experiences referenced by the “as a” prefix is not in any general sense validating or invalidating.  These experiences are real and ought to be reflected on, but not used in a mechanical way to add or subtract credence from what the speaker is saying.

The second function is belief, as captured by theories of ideology.  (I’ve written about this before here.)  One’s position in the world, and the interests one has because of it, affect the likelihood of believing ideas that are related to those interests.  (“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”  Upton Sinclair)  Prefacing a remark with “as a” can be a useful signal to listeners, and even oneself, to pay close attention to potential biases.  “As a white male from an upper middle class background, I’ve always thought that society was basically fair, and the best people were the ones who got ahead.”  Signal recorded.  But it is crucial to remember that ideology is about belief, not truth.  You can be deeply biased but also right.  Thus whether ideological factors matter depends on what the question is.  If we are interested in the truth value of alternative analyses—of texts, events, judgments—it doesn’t matter at all if particular arguments reveal biases.  If we are interested in why some ideas are widely held and others aren’t, we ignore ideology at our peril.

I’ll close by being honest.  I’m a teacher.  When I hear a student preface a remark with “as a”, I initially cringe.  Most of the time this reflects a mechanistic worldview in which one’s place in a few sweeping social categories determines experience which then determines truth content.  I feel like stopping everything and spending an hour, a week, a year on epistemology.  But sometimes there are exceptions, where “as a” is absolutely appropriate and illuminating.

Thursday, August 9, 2018

Would Serious Climate Change Mitigation Policy Increase World Hunger?

That’s the finding of a recent study published in Nature Climate Change, “Risk of Increased Food Insecurity under Stringent Global Climate Change Mitigation Policy” by an international team of 22 researchers.  (Coauthorship like this is why god created et al.)  The abstract has made the rounds of the blogosphere, including Marginal Revolution, which is where I found it.

The article reports an integrated assessment model (IAM) exercise in which various scenarios are run, each consisting of a climate piece (how agriculture will be affected by climate change) and a climate policy piece (how steep a carbon tax is imposed and how it impacts production and consumption).  More tax, less climate change and vice versa.  The unsurprising result is that, if the tax is universal and large it will raise food prices, putting millions more people at risk of hunger.

But where does all this extra money collected in carbon taxes go?  That was not addressed: “In most models, carbon tax revenue stays outside of agricultural sectors both on the producer and consumer sides, and is not properly redistributed to affected people.”  That’s all they say about carbon revenues, but it’s enough to explain why climate policy is portrayed as a threat to the world’s poor.  In any sensible approach, carbon taxes or moneys collected from carbon permit auctions are returned to the people who pay them in a progressive manner, so those with the lowest incomes come out ahead.  (They get back more in rebates than they pay in higher prices.)  The simplest way to do this is with an equal per capita dividend.

I did a simple back-of-the-envelope calculation of the effect of a global carbon price rebated via an equal lump sum payment everywhere.  For every dollar of this price, $12.5 billion is effectively transferred from upper to lower income countries.  (Details will appear in my climate change book when it appears next year.)  Of course, there are large political and administrative problems to overcome in setting up such a system, but they are not insurmountable, especially since higher income countries can decide (or negotiate) how to divvy up carbon revenues between those destined for national versus international rebates.

So, yes, a global carbon tax as modeled by the Nature Climate Change team would make the poor poorer, but the one additional tweak of recycling the money on an equal per capita basis would lead to the opposite effect.

Monday, August 6, 2018

Trump's Illegal Economic Sanctions Against Iran Start Up

Today, President Trump's promised abjuration of President Obama's hard-negotiated nuclear deal with Iran,the JCPOA, jointly agreed with Russia, China,  UK, France, Germany, the EU, and the Security Council of the United Nations. All parties agree that Iran has held to the agreement, so Trump's move is completely internationally illegal.  His move is supported by exactly four other nations on the planet, and only them: Israel, Saudi Arabia, UAE, and Bahrain, a group that contains about 0.5% of the world's population.  Of course the percentage rises by a couple of percent when we add Trump supporters who applaud him keeping a campaign promise, even though most of them have no idea what this is really all about.

It is clear that Trump has mostly done this to undo something Obama did, although he also very much likes pleasing the leaders of three of those nations,who have managed to get his ear. But it is not even obvious that the undoing of this agreement will actually help these nations, even though they clearly think so. The least important of them, Bahrain, might get a slight gain given that it is a majority Shia nation ruled by an oppressive Sunni elite.  Maybe putting Iran under economic pressure will reduced Iranian support for restive Bahraini Shia. But then, maybe the Iranians will respond by increasing their support. Both the KSA and UAE view themselves as jousting with Iran in the Persian Gulf, although Iran has never invaded or militarily threatened either.  They were not in danger, so they will not  be better off.  of course, the Saudis blame Iran for the success of the Houthi rebels in Yemen, where the Saudis have been heavily bombing for three years, killing many civilians. But most serious sources say that the Iranians support for the Houthis has been minimal in material terms, if not nonexistent.  But given how low that is, even a worsened economic situation in Iran seems unlikely to make them halt that minimum aid, and mostly the Saudis are scapegoating the Iranians for their failure to defeat the Houthis.

As for Israel, their main concern seems to be Iranian support for Hezbollah in Lebanon (and Syria) and Hamas in Gaza, although Hamas is a Sunni group.  Based on Trump's own statement yesterday, these are the main things he seems to be concerned about.  He wants Iranian support for those groups reduced. Maybe that will happen, but while in the past Hezbollah did  carry out terrorist actiffset ons in many places (Buenos Aires, for example), it is a long time since describing them as "terrorist" has been at all accurate.  They have long since become part of the ruling coalition in Lebanon. They have been tamed, but the Israelisare very unhappy that they were unable to outright defeat Hezbollah the last time they invaded Lebanon. But even if Iranian aid to them is reduced, it is unlikely that that would make much difference to an outcome id they were to reinvade Lebanon. And it should be kept in mind that prior to the 1982 Israeli invasion the Lebanese Shia were largely sympathetic to Israel, and there was no Hezbollah.  Just as with Hamas that they encouraged to offset the more moderate PLO, so the Israelis are themselves responsible for the very existence of Hezbollah.

Now it must be recognized that Trump's reimposition of economic sanctions will have an impact on Iran. Even though none of the other nations in the JCPOA support Trump's move, his threat to ban any company violating the sanctions from operating in the US is forcing some major European companies to leave Iran if they have much larger dealings in the US, even if their governments disagee with their moves.  The most prominent companies leaving Iran now are Total and Peugeot from France and Siemens from Germany, although apparently some smaller companies with little business in the US will continue. Another round of sanctions in November will target Iranian oil exports, although there is  reason to believe many nations buying oil from Iran will continue to do so then.  Nevertheless, for all its illegality, Trump's reimposition of sanctions will almost certainly damage the already struggling Iranian economy, with demonstrations against the regime periodically breaking out there.

Of course it would appear that what Trump and such aides as John Bolton and Mike Pompeo want, as well as the leaderships of the four nations listed above,is "regime change" in Iran.  The short run reaction so far has been a rise in support for the moderate Rouhani government by its hardline opponents.  As it is, the most likely outcome if the weakening economy weakens political support for the government will not be regime change but simply a takeover by the hardliners.  This group contains many who never supported the JCPOA, and they may well then leave it and return to enriching uranium to a high level.  This will increase the national security of any of those four nations?  That it would not is seen by the support for the JCPOA given publicly by many retrired Israeli military and intelligence figures.

Needless to say, there has been heightened warlike rhetoric between Iranian and US leaders.I regret that Rouhani felt he had to indulge in the first round of this.  Probably this is all just chest thumping noise, but it is clear that there are some among those four nations as well as in the US who would like the US to either bomb Iran or invade it.  Given how much larger and more powerful it is than Iraq under Saddam Hussein, this looks extremely dangerous, in light of what a disaster the invasion of Iraq turned out to be.  Of course, given that Iran is not involved in developing nuclear weapons and has remained in accord with the JCPOA, there is  no such justification for such an invasion, which would probably end up creating major problems for the Gulf nations, if not Israel, although I think the Saudi leadership is too egomaniacally stupid and incompetent to figure this out.

Yet another irony is that if either through triggering some kind of successful  democratic uprising that would overthrow the Islamic regime, or if one were to be installed a la Iraq after a "successful" invasion, this regime would demand to have civilian nuclear power, which is overwhelmingly supported by the Iranian population (although maybe aid to  Hezbollah and Hamas would end).   The opposition Greens, who were violently suppressed in 2009, supported civilian nuclear power.  Iran has been working for it since Eisenhower initially provided US support for it in Iran to the Shah.  In the end the outcome in terms of the nuclear issue, after who knows how much cost in lives and material, would be something like what we had with the JCPOA,a carefully monitored and controlled civilian nuclear program. But it is clear that Trump is not even thinking about any part of this aspect of the matter, so focused is he on scoring short run political points and pleasing a narrow set of allies against the vast majority of world opinion, as well as an agreement made by the US government.

I see little prospect this will end well and serious danger this could lead to a seriously bad outcome.  I have said it before, and I say it again: abrogating the JCPOA with Iran is by far Donald J. Trump's worst foreign policy mistake, even as few Americans realize it yet.

Barkley Rosser

Real Wages Decline

Trump and his allies have been loudly bragging about the second quarterly GDP growth rate of 4.1%.  It is quite possible that a growth rate of this sort may be maintained for another quarter or so, given the large fiscal stimulus put in place at the beginning of the year. How curious it is that that coincided with the peak of the US stock market, at least as measured by the Dow.

However, this is seriously overblown for the simplest of reasons: the rate of inflation is rising.  It has now gotten to rising at a 2.9% rate while nominal wages are rising at a 2.8%.  So real wages have declined by a 0.1% rate.  Real wages rose throughout nearly all of the Obama presidency, except for a couple of quarters.  But if one pays attention to Trump and his allies, one would have no idea of this development. Needless to say, as the price increases from the trade war kick in, this situation is  not likely to improve.

Barkley Rosser

Saturday, August 4, 2018

Mush versus Mush on Climate Change

The very long New York Times piece on climate change politics in the 1980s by Nathaniel Rich has attracted a lot of critical commentary—justifiably.  To say that the failure to achieve a political response was due to human nature, a genetic defect that prevents our species from planning ahead, is just lazy and wrong.  Were the scientists, environmentalists and other activists that did want to take action a bunch of mutants?  Haven’t humans acted with foresight (and also failed to act) since time immemorial?  “Human nature” explains everything and nothing; it’s what you invoke when you don’t want to do the digging a real explanation would require.

I wish the left had a solid response to this immobilizing mushiness, but instead it mostly offers its own version of counter-mush.  A case in point is Naomi Klein.  I’ve already written at length about her book This Changes Everything: Capitalism and the Climate, but I don’t want to let her latest piece at The Intercept pass without notice.

Klein rightly excoriates Rich, but then goes on to make this argument:

Capitalism, not human nature, is responsible for climate inaction.
Capitalism is an ideology that worships profit and “endless growth”.
Its purest form is neoliberalism.
The late 1980s was the high water mark of neoliberalism, so climate activism was suppressed.
We must reject capitalism by adopting the earth-centered philosophy of indigenous peoples.
Politically, this means embracing a caring economy of green jobs, meeting human needs and rejecting “extractivism”.

If this were just Klein’s own idiosyncratic viewpoint we could shrug and move on, but since it reflects what may be the main current in left thinking about the climate crisis, it matters that it turns what ought to be well focused and clear into a thick, gummy soup.

No, capitalism is not an ideology.  What makes Jeff Bezos a capitalist is not his belief system but his ownership and deployment of capital.  Capitalism is a system of institutions that give economic and political primacy to the possession and control of capital.  There is no single metric that captures the effect that a capitalist context has on an issue like climate change, but the starting point is surely anticipated capital gains or losses from a given policy.  (One way we can tell that existing policies are largely toothless is that their enactment had imperceptible effects on asset prices.)

Yes, the 1980s was the zenith of the modern neoliberal project, but there are currents within neoliberalism that support climate action.  One doesn’t have to be a fan of this school of thought to recognize that it’s not monolithic on environmental matters—or on racism, criminal justice, public health and other questions.

Countering a climate disaster is not about changing one’s philosophy of economic growth or living a more natural lifestyle; it’s about keeping carbon in the ground.  I’m all for shifting production to more socially beneficial purposes, but that’s not what will prevent temperatures from rising far into the red zone over the decades to come.  The problem is too much carbon in the atmosphere due to the burning of fossil fuels, so the solution is to collectively limit them.  That means either setting up a permit system, with a tight cap on how many permits can be issued, or taxing fossil fuels into unaffordability.  The main reason governments haven’t taken this path is business opposition, and not just from fossil fuel corporations.  What motivates Team Capital is not a shared philosophy, but the belief, probably justified, that really effective action would eat into the value of their investments.  Fighting climate action is as rational for them as cutting an unnecessary production cost or cultivating a new, profitable market.

If you look at it this way, the left has a crucial role to play in climate politics, to clearly spell out the difference between the rationality of capital and the rationality of the human race.  Everything else—the fixation on degrowth, the claim that action on climate requires concomitant revolutions in cosmology and lifestyle—is a distraction.  Which is not to say that delving into consciousness and how to live a good life are unimportant, of course, just that, on this particular issue, what the left should be offering is clarity.  It’s as if you had a plumbing problem in your house, called up a progressive plumbing service, and were told that the real problem is your failure to envision the hydrological cycle in its global fullness and reorient your use of all natural resources.  Yes but no.

To turn Klein’s thesis around, the tragedy is that our awareness of an impending climate catastrophe arose just at the time that the left had entered a state of maximum confusion and diffusion.  It’s not too late to change this.

Wednesday, August 1, 2018

Is The World's Largest Planned IPO Kaput?

That would the long planned and widely advertised IPO to sell 5% Saudi-government-owned ARAMCO, estimated at being worth US $2 trillion, making the planned IPO being at about $100 billion, well ahead of any that has happened in the past, the largest being $25 billion by AliBaba. This has been a crucial part of Crown Prince Mohammed bin Salman (MbS) has had this as a central part of his Vision 2030 plan to privatize and diversify off oil the Saudi Arabian economy.  Most of the publicity about it over the last year or so has focused on which exchange would get all the fees (easily up to $1 billion, still real money), NewYork, London, Frankfurt, or maybe even Riyadh, for hosting this massive IPO.

Now in the last few days there are numerous reports floating around the internet declaring that at a minimum this IPO has been postponed, with quire a few now saying that the IPO is completely off, that the Saudis are now looking at a different approach, although exactly what that is or will be is very much up in the air. Sorry I have been unable to make the link,but this can easily googled, a story out today on this from by Kurt Cobb, "Was ARAMCO IPO Destined to  Fail?" which obviously suggests that it is kaput, although the article recognizes it may simply have been postponed. He provides links to some other reports engaging in various bits of speculation.  So what has happened?

Cobb provides two leading reasons why the IPO may be off.  One is that they may not need the revenue as much as they did a year ago  because of the roughly 50% increase in oil prices.  This makes sense.  Going along with that is that apparently they seriously do not want to be open to some external audit of their reserves and finances and so on.  This also also looks reasonable, with certainly all of the non-Saudi exchanges would make such a demand.  Maybe they might not have this demanded on the Riyadh exchange, but it is not a large exchange, and even there such a demand might be made.

Now it might be that their finances are fine and they do not need the money the IPO would have brought in. However, some of the sources Cobb links to report that the Saudis are contemplating various peculiar schemes for, well, raising money.  One of these involves a scheme to have ARAMCO take over a Saudi refining company and then issue a bunch of bonds on it.  This  all sounds a bit fantastic and not too likely, but the hard fact is that Saudi finances are highly opaque, which is a main reason they supposedly do not want to do the IPO, and there certainly have been a variety of efforts by them to reign in public spending.  Higher oil prices have certainly loosened some of this pressure, but exactly what is going on is far from clear. But at a minimum, it appears that the ARAMCO IPO has at least been postponed and may be totally kaput.

Barkley Rosser