Category Archives: Politics

A New America arises, perhaps with Trump as its first leader

Summary: Updates on two predictions I’ve made, each a window into the New America now arising on the ruins of the old. What horrific attacks has China made on America with the information hacked from the government’s files? When will the Donald flame out, leaving the Presidential campaign safely in the hands of stuffed shirts — loyal servants of the 1%?  {1st of 2 posts today.}

Project New America

A strength of the FM website is its predictions. Sometimes wrong (see the smackdowns page), our overall record is very good (see these hits). Tracking forecasts is important, as we’re locked into news cycles run by amnesic journalists who report with little recollection of the past. Gurus with records of almost always wrong reappear with new predictions and no mention of their frequent failures. Past events reported as certain apocalypses are forgotten.

Remembering has become a radicalizing action.  Here are two blasts from the past worth revisiting.

(1)  The hack into Federal employee records by “China”

“I believe this infobomb has done catastrophic damage to US security.  How?  Big data + bots (made smarter via AI) will be able to turn this data into a decisive instrument of warfare.”
John Robb at Global Guerrillas, 24 June 2015. Broadcast to the Left via Naked Capitalism.

One of great bursts of American pants wetting, between We’ll ALL Die from Ebola and Protect Me from the ISIS Terrorist Under My Bed., as the hack of the Federal employee records — allegedly by China (“we don’t know” are words that burn the tongues of officials). In August I said “My guess is that on this day next year (8-5-2016) we’ll add the OPM hack to the list of hysteria outbreaks in America which had little or no serious results.”

Status so far after 89 weeks (1 year, 8 months) from the first hack in March 2014: no reports of significant results. Even more significant, after months of investigations the US government has provided no reliable data showing that China was responsible for the hacks. For more about this now forgotten but once “game-changing big story”…

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Mike Lofgren: Republicans Are Revolutionaries, Not Conservatives

Summary: Here’s another article describing how America has begun what might be a pre-revolutionary situation. Both Left and Right have revolutionary aims, but only the Right has captured and harnessed one of the major parties. Great changes often come in unnoticed “on little cat feet“, and only roar after they’re well-established.

“’Republicans this year don’t want managers, they want transformers,’ conservative Iowa radio host Steve Deace, a Cruz supporter, told The Hill. ‘They don’t want reform, they want revolution. They don’t want a better government, they want a new government. The ground has shifted and the grassroots conservatives have taken the establishment’s preeminence away.’”
— From “Governors flop in Republican race“, Jonathan Easley, The Hill, 8 Nov 2015.


Republicans Are Revolutionaries, Not Conservatives

by Mike Lofgren
Posted at Bill Moyers & Co, 9 November 2015
Posted here with the authors’ generous permission.

There is much to commend in Thomas Schaller’s recent piece describing the built-in structural advantages that the Republican Party enjoys in the American electoral system. Some analysts believe this advantage derives from the systematic gerrymandering of legislative districts; others declare it a result of a voluntary demographic “sorting” of Democrats into metropolitan areas and Republicans to exurbia. Schaller sees that it is both and that the two phenomena reinforce one another.

Structural bias: It’s worse than you think

That said, the structural imbalance in the American political system is even more pronounced than Schaller depicts. The “small state” bias in the Senate that he condemns derives from the Connecticut Compromise during the Constitutional Convention in 1787, the agreement that gave each state equal representation in the United States Senate. It was initially favored by smaller Northern states, which were then growing less rapidly in population, but after incorporation of the infamous three-fifths rule allowing states to include slaves in their head count for representation in the House, it became a tool of the reactionary Southern oligarchy to block any tampering with slavery for the next seven decades.

Yet even after the three-fifths rule and slavery were abolished amid the greatest effusion of blood in American history, the same elements that controlled the antebellum Senate continued to have a lock on that chamber until the 1960s. Ira Katznelson has described in persuasive detail how the many reforms – sweeping in their scope – that President Roosevelt believed were necessary both to save capitalism from itself and to modernize the United States were delayed and watered down by the Southern bloc controlling the Senate. And it took another thirty years after that to end Jim Crow.

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Corporate profits are the market’s foundation, shaping a new America

Summary: Corporate profits have rising to an amazingly large share of our national income, powering the stock market while GDP and household income lag far behind. This has played a large role in shaping the New America of the 21st C. What caused this rise? What might reverse it? See my column at Wolf Street for answers.

Corporate Profits Are the Stock Market’s Foundation.
What Will Break Them?
The hidden Key to Regime Change in the Stock Market.

The daily flow of economic statistics misleads even sophisticated analysts into watching the short-term trends while forgetting the long-term basics that often determine events – as we see today, with analysts chattering about beats of quarterly earnings and expectations for Friday’s employment report.

The first plays a pointless manipulated game. The second concerns an impossible-to-accurately-predict, heavily revised, slow-changing metric (non-farm payroll growth has been 1.7% – 2.2% year-over-year for the past 15 months).

Larger factors drive the stock market, creating the macroeconomic foundation for bull and bear markets. One of the most dramatic trends of the past generation has been the rise in corporate profits. It has helped reshape America, powering a three decade long bull market. What created it? What will end it?

Read the rest at Wolf Street!

A way to break the gridlock on the climate change debate

Summary: The public policy debate about climate change consists largely of people tossing confetti at one another, with the reasonable people either pushed to the sidelines or buried. There is a simple step that both sides can agree on, with the potential to break the gridlock. Here’s a brief version of my proposal.

Trust can trump Uncertainty.”
Presentation by Leonard A Smith (Prof of Statistics, LSE), 6 February 2014.

The most important graph from the IPCC’s AR5

Figure 1.4 from the IPCC's AR5

Figure 1.4 from AR5: Estimated changes in the observed globally and annually averaged surface temperature anomaly relative to 1961–1990 (in °C) since 1950 compared with the range of projections from the previous IPCC assessments. Click to enlarge.

After 26 years of debate, US public policy on climate change remains paralyzed. Polls show that it ranks near the bottom of American’s concerns. We even remain poorly prepared for a repeat of past extreme weather, such as a major hurricane hitting an East coast city – let alone future climate. Both sides rehash their arguments, accomplishing nothing.

Climate scientists can begin to restart the debate and rebuild public confidence: re-run the climate models from the first three IPCC assessment reports (ARs) with actual emission data (from their future). See if they can show that models predict the observed global temperatures with reasonable accuracy. The cost of this project would be small compared to the overall funding of climate research and a dot compared to the potential costs of climate change.

The famous “spaghetti graphs” — one the most-cited graphics from the ARs — shows the forecast of models used in each report vs. actual global average atmospheric temperature. They tell us little, as in the above graph from the most recent AR. It packs too much information into one graph, but does not show what we most want to know: the accuracy of their forecasts. Each line represents a temperature forecast with specific assumptions of greenhouse gas (GHG) emissions.

How well do the models work if input with accurate GHG emissions? The answer can provide a fair test of the major climate models, one acceptable to both sides in the policy debate. A brief explanation of the models shows why.

{Read the full article at Climate Scepticism.}

“In an age of spreading pseudoscience and anti-rationalism, it behooves those of us who
believe in the good of science and engineering to be above reproach whenever possible.“
P. J. Roach, Computing in Science and Engineering, Sept-Oct 2004 — Gated.

Other posts in this series

  1. How we broke the climate change debates. Lessons learned for the future.
  2. A new response to climate change that can help the GOP win in 2016.
  3. The full version: climate scientists can restart the climate change debate – & win.

About the Putin-envy of Republican presidential candidates

Summary: There are many candidates vying to become the Republican’s Presidential nominee, but they offer a narrow range of policies — especially in foreign affairs. Here Bill Astore describes where they wish to take America. Unlike Putin, they’re serious.

The idol of the Republican Candidate for President!

Putin riding a bear

How Republicans Talk About Foreign Policy

By William J. Astore, from Contrary Perspective, 9 October 2015
Reposted with his generous permission

At the New York Times, Robert Draper had a fascinating article last month on how Republican candidates for president are positioning themselves on foreign policy.  Rand Paul excepted, all of the Republican candidates are calling for a more “aggressive” U.S. foreign policy, one that promises more military interventions and higher military spending.  The goal is apparently to show more muscle than President Obama, who has been “weak,” according to these same Republicans.

The language here fascinates me.  Again and again in Draper’s article, you see references to “a more muscular foreign policy.”  Showcasing muscles appears to be a favorite trope of Republican advisers, as is the need to be more “aggressive” overseas (Obama, of course, is viewed as being passive and timid).  Republicans according to Draper favor the “aggressive promotion of American values” (whatever those are), an aggression that will somehow avoid recklessness (good luck with that).  So, ISIS will be aggressively “destroyed,” even as the Middle East is stabilized by infusing it with “American values” (freedom? democracy? human rights?) promulgated by (as near as I can tell) American military muscle.

To cite just one example, consider this political ad featuring Senator Lindsey Graham, seen in his Air Force reserve uniform, highlighting his promise to “destroy” ISIS.

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While we sleep, corporate execs strip-mine America

Summary: Nothing shows how America’s reins are held by the 1% than our out-of-control corporations, enriching their executives at the cost of the future of their businesses — and ours. Here’s another status report on this sad but fixable story.

Executive Pay

The Q2 Buybacks Report by FactSet is, as usual, sobering reading. During the 12 months ending in June, companies in the S&P 500 spent $555.5 billion repurchasing their shares. For the first time since October 2009, buy-backs exceeded free cash flow (cash flow after capex); they’re borrowing to buy back shares.

For the past two years buybacks have run at the fantastic rate of ~$120 B per quarter — the same rate as in 2006-2007, with tech companies the leaders. In 2014 they spent 95% of their profits on buybacks and dividends (building the future is somebody else’s problem in corporate America).

Investors applaud this as a boost to share prices. Surprising to the naive, a decade of buybacks has reduced the S%P 500’s share count by only 2%. Share buybacks are one part of the triangle trade that transfers vast fortunes from shareholders to senior executives using stock options:

  • executives exercise their options when shares rise (i.e., the company sells shares to executives at a discount to current prices),
  • the executive sells those shares to the public,
  • the company buys back those shares from the public.

Net result: the company has less money, their executives have more, the share count is unchanged.

This is an example of how America’s senior executives have learned to treat running companies — even running them into the ground, as Carly Fiorina did at HP — as a sideshow to their real job of financial engineering (for their personal profit). During their boom the Japanese called these financial games zaitech (cursing it after their crash in 1989). Stock options, tax avoidance, earnings manipulation, mergers and acquisitions (almost all of which fail; see articles at CBS and HBR) — these are the paths to success for execs in New America.

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