By Lambert Strether of Corrente.
“Singaporean Prime Minister Lee Hsien Loong will visit the White House this week, giving President Barack Obama an opportunity to restate his case that the TPP is too important to the country’s leadership role in the Asia-Pacific region to delay, an administrative official said” [Politico].
“When Obama rolls out the red carpet for Singapore Prime Minister Lee Hsien Loong on Tuesday, one of the main goals will be “lifting up the benefits” of the TPP, said Daniel Kritenbrink, top Asia policy adviser at the White House National Security Council” [TPP]. “Lifting up”? And: “‘TPP is going to be great for the American economy, for American workers and American companies,’ Kritenbrink said.”
“The U.S. Chamber of Commerce and several companies have been stepping up their arguments for the trade deal, but even getting a vote would require pro-trade lawmakers to override the incoming president and populist sentiments coursing through the grass roots of both parties” [Wall Street Journal]. Unfortunately, the political establishments of both legacy parties hate the populist sentiments, and wish to exclude them from power, the Republicans by doing a McGovern on Trump, the Democrats by hippie-punching.
The body language of the dominant Democrat faction says that TPP is very much on the agenda:
A Sanders delegate held up an anti-TPP sign when Obama spoke and was then barred from the floor “to preserve order.” https://t.co/nPc4XxKCrE
— The Intercept (@theintercept) August 1, 2016
And NC readers know that the wiggle room in all the putatively anti-TPP statements by Democrat leaders is ginormous. Google, Facebook, Amazon, and eBay all endorse TPP; if an incoming Democrat administration doesn’t somehow manage to drag TPP over the finish line, it would be a major counterpoint to Gilens and Page on oligarchic policy dominance.
“The trouble with the TPP’s copyright rules” (PDF) [Canadian Center for Policy Alternatives]. “As the Trans-Pacific Partnership (TPP) negotiations neared a conclusion in 2015, the intellectual property chapter generated enormous concern from copyright experts who feared it would dramatically alter the balance between the interests of creators and users. Those concerns were borne out by the final text, which significantly exceeds international norms, pays short shrift to user interests, and requires legislative changes in many countries including Canada.”
Readers, I’m eliminating “The Trail” coverage from Water Cooler’s 2016 election coverage, for a few reasons. First, the political class, across the board, is working actively for one candidate, as if they were extensions of that candidate’s campaign. Hence, at least insofar as material generated in the Acela corridor goes, there’s no news to aggregate. Second, and as a result of the first, the volume and toxicity of the talking points in this election is so great that it’s starting to affect my health; when I find myself drinking most of a bottle of wine, instead of the glass I had planned, it’s time to re-assess. The surreality is worse than I’ve ever seen in my thirteen years of daily blogging on politics, and that includes the run-up to the Iraq War, when the political class also lost its mind; the opportunity cost of investing in such surreality is simply too great, particularly when I could be improving other coverage. So, for the remainder of the campaign, I’m going to focus on topics that are not bright shiny objects or clickbait: on policy, money, understanding the voters (in ways that go beyond the material that appears under Class Warfare), and institutional issues within the parties. Where I focus on the “horse race,” it will only be in swing states. Finally, I don’t expect volatility to cease on November 8; I believe the political class suffers from a legitimacy crisis, which the election will not solve. Readers may wonder if I have a dog in this fight, and the answer is yes: I want divided government and gridlock. It’s always possible to make thing worse!
Adding, this doesn’t mean that you can’t talk about the campaign trail; this is, after all, the Water Cooler. But we will look with extreme prejudice at no-value-add talking point retailers, me-too’s, drive-by’s, and anything that looks inorganic (that is, a party operative pushing a party line).
“The Future of H-1B under the Next President” [Upon Closer Inspection]. “Trump and Clinton actually agree on one crucial aspect of foreign tech worker policy — Staple a Green Card, a proposal to give automatic green cards to foreign STEM students earning grad degrees in the U.S. As I have explained before, if Staple in enacted, it really won’t matter what happens with H-1B; even if Congress were to seriously clip the wings of the Infosyses (won’t happen anyway), Disney, SCE, Abbott etc. will just hire the Staple workers. In other words, no matter which candidate wins the presidency, he/she will support Staple. This should be a very sobering thought to everyone who is concerned about the foreign tech worker issue. If U.S. techies really did organize, I believe their first priority should be to try to derail Staple.”
“Time to ditch Rawls?” [Global Inequality]. “The changes over the past two decades have been, I believe, so remarkable that the typology offered by Rawls has lost its relevance. Migrations, driven by economic reasons and thus by global inequality, does not have a place in Rawls. But they do exist in real life where economic migrants from Africa and Asia into Europe or Mexico and Central America into the United States number millions. But the theory that says that this should not happen is of no use when these things do happen. Finally, Rawls grossly underrated the importance that people attach to income and wealth for their happiness. Importance of pecuniary incentives has only increased with globalization since income differences have become more visible.” Do we have any political scientists in the house?
“Trump to consider recognizing Russian control of Crimea” [USA Today]. Lots of frothing and stamping on this one!
“[Filmmaker Alexandra Pelosi’s] interviewees are mostly rich white men who donate enormous amounts to political, specifically presidential, campaigns. You may think that “Does Money Talk?” is missing a “Duh!” at the end, and watching the film won’t change your mind, as Ms. Pelosi asks one financier after another why he gives away so much money and hears a series of variations on “because it’s the right thing to do.” [New York Times]. “[S]he uses her sense of the absurd and her access — gained in part through her status as a daughter of the California congresswoman Nancy Pelosi — to present the American political system as a mostly lighthearted farce.” Oh. “Lighthearted farce.”
“By 2012 the vice president of the Skolkovo Foundation, Conor Lenihan—who had previously partnered with the Clinton Foundation—recorded that Skolkovo had assembled 28 Russian, American and European ‘Key Partners.’ Of the 28 ‘partners,’ 17, or 60%, have made financial commitments to the Clinton Foundation, totaling tens of millions of dollars, or sponsored speeches by Bill Clinton. Russians tied to Skolkovo also flowed funds to the Clinton Foundation.” [Peter Schweizer, Wall Street Journal, “The Clinton Foundation, State and Kremlin Connections”]. “What is known is that the State Department [under Clinton] recruited and facilitated the commitment of billions of American dollars in the creation of a Russian “Silicon Valley” whose technological innovations include Russian hypersonic cruise-missile engines, radar surveillance equipment, and vehicles capable of delivering airborne Russian troops.” (Schweizer is the “Clinton Cash” producer.)
UPDATE “Charles Koch, the industrialist billionaire, told allies Sunday that rumors that he would support Democratic presidential contender Hillary Clinton were “a blood libel.” The patron of a network of political and philanthropic groups, however, added that he could not support Republican nominee Donald Trump” [Time].
UPDATE “What Donald Trump intuitively understands, and what all too many Republicans do not, is that for much of the GOP rank-and-file, 2016 is not 1984. Instead, the 21st century has felt like a disaster. From this vantage point, celebrating the status quo just seems perverse” [Salon].
UPDATE “The Democratic Party’s nominee can’t escape the past, and her embodiment of an exclusive, second wave feminism reminds Black women of the interlocking oppressions they’ve faced, said Evelyn M. Simien, Professor of Political Science at the University of Connecticut and author of Historic Firsts: How Symbolic Empowerment Changes U.S. Politics” [For Harriett]. Simien: “African American women have always viewed white women in this kind of class-based relationship whereby she is more privileged [and] has greater resources economically to pursue her own life goals and careers. Surely, Hillary Clinton is just that.”
When I watch, with horrified fascination, the merger of the Democrat and Republican establishments — Iraq-war instigator Robert Kagan raising money for Clinton, for example — into a single, amorphous entity, it reminds me of this passage from William S. Burroughs’ Naked Lunch (which is most definitely not NSFW). My objective correlative for the state of the 2016 race:
Later the boy is sitting in a Waldorf with two colleagues dunking pound cake. “Most distasteful sthing I ever stand still for,” he says. “Some way [The Buyer] make himself all soft like a blob of jelly and surround me so nasty. Then he gets wet all over like with green slime. So I guess he come to some kinda awful climax…. I come near wigging with that green stuff all over me, and he stink like a old rotten cantaloupe.”
“Well it’s still an easy score.”
The boy sighed resignedly; “Yes, I guess you can get used to anything. I’ve got a meet with him again tomorrow.”
It’s hard to look away, isn’t it? (Oh, and for “the boy” think, say, Ezra Klein.)
“Open Letter to Bernie Sanders from Former Campaign Staffers” [Defend Democracy Press]. “A Sanders/Stein campaign would be more popular than Hillary Clinton and more successful against Trump. If polling shows you in the lead before the election, we trust that Secretary Clinton would do the right thing and not be a spoiler.” (Regarding “trust”: That’s exactly what Democrat Mitchell did not do in the three-way between her, Eliot Cutler (Independent), and Paul LePage (Republican). As she faded to third, Mitchell could have thrown her votes to Cutler, defeating LePage. She did not.) This letter is interesting because many of the signatories are Sanders field organizers and directors. Will they organize for the Greens if Sanders does not run on the Green ticket? Do the Greens, as a party, have the organizational capacity to incorporate them, if they do? (Readers know my views on this.)
“The pull to vote third-party may be particularly strong during this presidential election. The 2016 race is poised to ask Americans to choose between a pair of historically unpopular candidates. Voting for the lesser of two evils is hardly an attractive prospect. It only makes sense that people would be look for alternatives. Walking around the grounds of the Wells Fargo Center, Stein was quickly surrounded by more fans. From there, she headed into the heart of the political establishment for even more interviews—undoubtedly hoping to find a few more converts” [The Atlantic].
UPDATE What you didn’t see at the Democrat National Convention [Vox]. Buried under the moralizing is important and (mostly?) unreported data from the convention floor:
But in the arena, Clinton couldn’t hold the audience; it wasn’t hers to hold. There were just too many pockets of dissent and rejection.
Chants of “No more war!” and “No TPP!” felt liable to erupt at any moment. The back of the California delegation booed for 20 or 30 seconds at a time.
What sounded on TV like oddly-timed “Hillary” and “USA!” chants were usually attempts by Clinton supporters to drown out attempted disruptions. In the arena, you’d hear a buzzing undercurrent for a few seconds, then an over-strident “Hillary!” chant surge dutifully to meet it.
Pockets of Bernie Sanders supporters in Day-Glo T-shirts refused to participate in the “card stunt” at the end of the speech. Cards distributed to audience members was supposed to turn the audience into a living bunting of red and white; it ended up looking like an awning someone had tried to deface with a highlighter.
The interruptions weren’t constant, but they were frequent enough. Even after one round of boos subsided, it was hard to return attention to the speech instead of bracing for the next one. The arena never felt uncontrolled, in the literal sense. But despite the amount of energy the Democratic Party poured into the spectacle, the dissenters managed to signal-jam the vibe.
So that explains why I didn’t see the card stunt on TV. And I heard a little chanting on NPR, which I was watching, but the camera never panned to the floor. Odd, that.
“How Ohio Will Be Won” [Politico].
Purchasing Managers’ Manufacturing Index, July 2016: “The manufacturing PMI posted a sizable improvement” [Econoday]. “The rise in export orders is a major positive in this report, underscoring the benefits of this year’s depreciation in the dollar and also perhaps hinting at a general rebound in global demand.”
Institute for Supply Management Manufacturing Index, July 2016: “[T]he new orders index which remains extremely solid, at 56.9 and pointing to future strength for employment as well perhaps as slowing for future deliveries (slowing in deliveries is an indication of strength in demand, of congestion in the supply chain)” [Econoday]. “If the ISM orders pan out, the economy looks to get a second-half lift from its lagging sector, the factory sector.” Then again: “The ISM Manufacturing survey remained in expansion for the fifth month after 5 months in contraction – but slightly declined. The key internals likewise declined” [Econintersect]. And: “New orders have direct economic consequences. Expanding new orders is a relatively reliable sign a recession is NOT imminent. However, New Orders contraction have given false recession warnings twice since 2000. This month new orders declined but remains in expansion.”
Construction Spending, June 2016: “Overall construction spending is up only 0.3 percent year-on-year to deepen what is a declining trend. These results will weigh on the expectations for the first revision to second-quarter GDP which came in at a very soft 1.2 percent in last week’s initial estimate” [Econoday]. “But there’s definitely upward pressure building in other housing data, pressure that points to eventual strength in construction spending.” And: “The headlines say construction spending slowed, and was significantly below expectations. The backward revisions make this series wacky – but the rolling averages significantly declined. Private construction now has little growth while public construction is in contraction” [Econintersect]. “Simply bad.”
Housing: “Most housing reports leave out examples of what you are actually getting for with your money. That is understandable but the press does a poor job of looking beyond the overall trend. Maybe if they showed a picture of the property, they would actually knock some common sense into people. They can still ask questions like “how much did you pay for that crap shack?” That might be a starting point” [Dr. Housing Bubble]. “nstead, what you get is a play-by-play commentary of where we are at. The market today is inflated and we are living through a rental revolution. The stock market has been on a non-stop move upwards since 2009. We have yet to face any small correction and as many people are seeing this year, expect the unexpected. One easy way to see the mania in the market is to look at small homes for sale and how they are being pitched. Today we take a look at a small home in Orange County.”
ETFs: “Swedroe: Arbitrage Capital Increases Market Efficiency” (new academic study) [ETF.com].
Bank Lending: “The deceleration that began with the peak in oil capex continues” (chart) [Mosler Economics].
Shipping: “Economic expansion for the rest of the year will have to go through distribution centers” [Wall Street Journal]. “Inventory retrenchment proved a major drag on the U.S. economy in the second quarter, with the ‘destocking’ by businesses shaving gross domestic product growth nearly in half. The WSJ’s Eric Morath and Jeffrey Sparshott report the fifth straight quarterly decline in private inventories subtracted 1.16 percentage points from overall growth, the largest drag from inventories in two years. The question hanging over the business world, and shipping and logistics businesses, is whether the long-running effort to pare back stock levels will leave companies needing to start replenishing their stocks soon. The WSJ’s Jon Sindreu writes that would boost to the U.S. economy in the near term, but an inventory rebound will depend on whether consumers keep buying at a strong pace, triggering a push for goods on shelves.”
Shipping: “[UPS] reported lower than expected earnings in its Supply Chain and Freight segment Friday. Revenue increased by more than 13% to $2.5 billion in part from the acquisition of Coyote Logistics, but profit dropped more than 7% from $207 million to $192 million in what executives said is a soft freight shipping market. [Wall Street Journal, “UPS Profit Slips at Supply Chain and Freight Segment”]. “Much of UPS’s freight business comes from less-than-truckload, or LTL, shipping, a market that has been weak for over a year.”
Supply Chain: ‘Amazon.com Inc. on Thursday reported in its third consecutive record profit, nearly doubling its prior high-water mark, and its fifth straight quarter in the black” [Wall Street Journal, “Amazon Posts Another Blockbuster Profit”]. “Amazon’s revenue jumped 31% including a 58% gain at its Amazon Web Services cloud computing unit. The company also more than doubled its operating margin, which historically has been razor thin, and issued a cheery outlook for the coming quarter…. The results show Amazon moving toward investors’ long-held hope of consistent profitability after a lengthy period of heavy investments and quarterly losses.”
Political Risk: “Two key gauges of Chinese factory output in July showed conflicting results, with one that focuses on larger state-owned companies flagging and the other, on smaller private companies, soaring” [Wall Street Journal, “Muddled Glimpse of Chinese Economy Emerges From New Data”]. “The mixed numbers present a muddled view of the economy…. Large state-owned companies, well represented in official PMI data, would be expected to do better in the current environment of generous state spending and easy money polices given their preferential access to state funding and projects. And private companies, better reflected in the Caixin index, would tend to face greater difficulty in periods of state-directed growth given the danger of getting crowded out. Weakness in recent private investment reflects this.”
The Bezzle: “With fully autonomous vehicles expected to hit the road by 2020, automobile manufacturers and ride-hailing rivals have become unlikely allies” [MarketWatch]. “The common bond is a vision of a driverless ride-hailing future, in which margins rise for ride-hailing companies and automotive companies avoid destruction as consumer sales drop.” I sure hope we can get all those lane markings painted in time.
Honey for the Bears: “Deutsche Bank Says U.S. GDP Flop Is a Sign of Secular Stagnation” [Bloomberg]. But: “Signs of healthy consumer spending continue to confidence among Fed officials about the underlying strength of the U.S. economy.” Eat, drink, and be merry…
Honey for the Bears: “Having just one firm [Bank of New York Mellon, since JP Morgan just pulled out] in the business of making sure traders deliver cash and securities as expected will pose a fresh test for a sprawling market whose functioning has come under scrutiny since the financial crisis. Many analysts already worry that liquidity, the capacity to trade quickly without moving prices, has been falling when markets come under stress.” [Wall Street Journal, “This Boring Service Is Suddenly a Big Concern for Treasurys”]. “The change, deep in Wall Street’s financial plumbing, reflects pressure from new regulations as well as banks’ efforts to cut back less-lucrative activities.” I know that Wall Street is not like a household, but if I have to go “deep within the plumbing” in my house — or even think about it — that’s not a good sign. Ever.
Today’s Fear & Greed Index: 78, Extreme Greed (previous close: 79, Extreme Greed) [CNN]. One week ago: 85 (Extreme Greed). (0 is Extreme Fear; 100 is Extreme Greed). Last updated Aug 1 at 12:05pm. B-o-o-o-o-r-r-r-i-n-g….
“Some big names in the insurance industry are waving the white flag on Obamacare.” [Motley Fool].
“Algorithmic Labor and Information Asymmetries: A Case Study of Uber’s Drivers” (PDF) [International Journal of Communication 10(2016), 3758–3784]. From the abstract:
Through a nine-month empirical study of Uber driver experiences, we found that Uber does leverage significant indirect control over how drivers do their jobs. Our conclusions are twofold: First, the information and power asymmetries produced by the Uber application are fundamental to its ability to structure control over its workers; second, the rhetorical invocations of digital technology and algorithms are used to structure asymmetric corporate relationships to labor, which favor the former. Our study of the Uber driver experience points to the need for greater attention to the role of platform disintermediation in shaping power relations and communications between employers and workers.
“Which Households Have Negative Wealth?” [Liberty Street]. “We estimate that 15.1 percent of the households in the U.S. population have net wealth less than or equal to zero, while 14.0 percent have strictly negative wealth. ” And:
What are the characteristics of households with negative wealth? We find that the heads of such households are younger than their counterparts in households with non-negative wealth—an average age of 43 compared to 51. They are also slightly less likely to have a college or postgraduate degree—43 percent and 12 percent, compared with 45 percent and 15 percent, respectively. Moreover, we find the association between having negative wealth and the head of household’s age to be stronger for those with a college degree and especially so for those with postgraduate degrees. These results are consistent with standard life-cycle models of consumption and savings, which predict that agents smooth the marginal utility of consumption by incurring debt—for instance, student loan or credit card—when young and then steadily increasing savings until retirement. In particular, those models predict that young and educated households might have negative wealth as their incomes will likely grow with age so that they will be repaying what they have borrowed when young.
But good news! There’s a way out–
UPDATE “Why Peter Thiel Believes Young People’s Blood Is the Ultimate Medicine” [Inc.]. The practice of younger people’s blood transfused into his own veins is known as “parabiosis,” which does seem to qualify for the word of the day:
There are widespread rumors in Silicon Valley, where life-extension science is a popular obsession, that various wealthy individuals from the tech world have already begun practicing parabiosis, spending tens of thousands of dollars for the procedures and young-person-blood, and repeating the exercise several times a year. In our April 2015 interview, Thiel was seemingly explicit that parabiosis was something he hadn’t “quite, quite, quite started yet.” A Thiel Capital spokesman said nothing had changed since then.
Thiel seems to be carrying the notion of “human resources” very far; perhaps, even, too far.
“We tell students they need a bachelor’s degree to get ahead. But for too many, the numbers no longer add up” [Boston Globe]. “But just how true is this truism about college lifting low-income students out of their circumstances, Horatio Alger style? In fact, like the actual story of author Horatio Alger, who was born into a well-established family and graduated from Harvard, there’s more myth than truth. ” Rather a stretch story for the Boston Globe.
“At the very bottom of “the [Olympic] Movement” — beneath the IOC members who travel first-class and get paid thousands of dollars just to attend the Olympics, beneath the executives who make hundreds of thousands to organize the Games, beneath the international sports federations, the national sport federations and the national Olympic committees and all of their employees — are the actual athletes whose moments of triumph and pain will flicker on television screens around the globe starting Friday” [WaPo]. “But by the time that flood of cash flows through the Movement and reaches the athletes, barely a trickle remains, often a few thousand dollars at most. For members of Team USA — many of whom live meagerly off the largesse of friends and family, charity, and public assistance — the biggest tangible reward they’ll receive for making it to Rio will be two suitcases full of free Nike and Ralph Lauren clothing they are required to wear at all team events.”
News of the Wired
“How to Eat Like a French Woman” [Vogue].
“The Blog That Disappeared” [New York Times]. Google’s terms of service not meaningful; film at 11.
“Meet Moxie Marlinspike, the Anarchist Bringing Encryption to All of Us” [Wired]. Reads like a hagiographical beat sweetener, to me.
UPDATE “However, earlier this month, Anders Eklund, of Sweden’s Linköping University, published the latest in a series of papers showing a deep flaw in how researchers have been using fMRI. This flaw, Eklund and his colleagues believe, could ruin the results of as many as 16,500 neuroscience studies over the last 20 years.” [Quartz]. I’m not so sure this is a bad thing; the last thing we want the squillionaries getting their hands on is reproducible brain science.
* * *
Readers, feel free to me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant (AM):
AM writes: “From my mother in law’s garden in Rehoboth, MA.” Pollinators. In Maine, I think this is the loveliest part of the summer. All the plants are established and furiously growing and seeking to flower; and the blights haven’t hit yet.
Readers, if you want to send me some videos of plants in whole systems (bees and blossoms, for example, or running streams) — I can use them to practice with FFmpeg and hopefully post them. Because of download times, they’ll have to be measured in seconds, rather than minutes. Thank you! Adding, I got another one today! Please keep sending them; they will ultimately appear!
* * *
Readers, if you enjoyed what you read today, please use the dropdown to choose your contribution, and then click the hat! Your tip will be welcome today, and indeed any day. Water Cooler will not exist without your random acts of kindness.