By Lambert Strether of Corrente
TPP/TTIP/TiSA
“A political firestorm is building over the protections for drug companies in Obama administration’s massive international trade deal, threatening support for a key piece of the president’s legacy” [WaPo]. (How I hate that “legacy” trope. Obama cares about cashing in from his bunker in the Presidential Library, and golf.) Meanwhile, Big Pharma is whining, which they would, and the USTR says wait to read the deal. Because it’s gonna be a surprise!
“I didn’t think TTIP could get any scarier, but then I spoke to the EU official in charge of it” [Independent].
When put to her, Malmström acknowledged that a trade deal has never inspired such passionate and widespread opposition. Yet when I asked the trade commissioner how she could continue her persistent promotion of the deal in the face of such massive public opposition, her response came back icy cold: “I do not take my mandate from the European people.”
Those honest, blunt Brussels bureaucrats! So different from our own political class!
“The broader region is not choosing between China and US, but each and both. Despite friction with China, the Philippines expressed interest in the TPP, but stayed out for economic reasons, as did Indonesia and Thailand. Myanmar, Laos and Cambodia are not economically ready for the TPP” [Economic Monitor].
In the “containment déjà vu” scenario, the exclusive TPP contributes to the militarization of the Asia-Pacific, while economic benefits decrease. Instead of unity, fragmentation triggers friction. Economic growth dims. The “Asian Century” fails.
In the “much ado about nothing” scenario, the US Congress torpedoes the deal in the short term, or bilateral and multilateral trade deals in the region mitigate the TPP’s discriminatory effects over time.
In the “inclusive free trade” scenario, the TPP serves as a foundation for a truly Asia-wide FTA; one that has room for China, the US, and 21st century currency arrangements. China and the US conclude a bilateral investment treaty. Growth accelerates and economic relations broaden across South, East and Southeast Asia.
Only the last scenario can sustain the promise of the Asian Century.
2016
The Voters
How a majority perceives a future majority vote [WaPo]. Hint: Scale free networks are intrinsically non-majoritarian. Bonus hint: What kind of network do you think best describes our political economy?
Policy
“Bush unveils ObamaCare replacement plan” [The Hill]. Always the tax credits with these guys.
The Debates
“Why Sanders may not enjoy his first faceoff with Clinton as much as he might expect” [WaPo]. An audible licking of chops.
“Will the Debate Be Hillary Clinton’s Moment of Economic Truth?” [Bloomberg]. An audible whetting of knives.
“Newsletter Essential Politics: 5 things we’d ask at the Democratic debate” [Los Angeles Times].
“Clinton tacks to the left ahead of Democratic debate” [Reuters]. Don’t. Don’t. Don’t believe the hype.
UPDATE Axelrove sticks in the shiv: “But [CLinton’s] task, as the undisputed front-runner and putative nominee, will be to give Democrats reason to believe.” What, they don’t already have it? [David Axelrod, CNN]. And:
There has been a strange disconnect between Clinton and Democratic voters this year and a sense of resignation, rather than excitement, about her candidacy. This challenge is reflected in the contrast between the large, enthusiastic crowds Sen. Bernie Sanders is drawing with his populist crusade and the more tepid reaction Clinton is generating. (To be fair, the word from the trail is that for all the jitters about the relative size of her crowds, she is connecting well in the small rooms and town hall meetings, which is meaningful in the early states.)
On “small rooms and town halls”: As I’ve been saying. Again, that’s how the Clinton 2008 primary campaign won the popular vote (if all the votes are counted) and all the large states, after the caucus state debacle in February; the great uncovered story from that time, sadly.
UPDATE Hit piece from Reuters on Bernienomics [Reuters].
The Trail
“The stealthy, Eric Schmidt-backed startup that’s working to put Hillary Clinton in the White House” [Quartz]. Groundwork, it’s called:
“We’re not trying to obfuscate anything, we’re just trying to keep our heads down and do stuff,” says Michael Slaby, who runs the Groundwork. He was the chief technology officer for president Barack Obama’s 2008 campaign, a top digital executive for Obama 2012, and the former chief technology strategist for TomorrowVentures, Schmidt’s angel investment fund.
Uh huh. Here’s Groundwork’s logo, which sends rather a different message:
Nothing obfuscatory there! I like the digitized Cthulu tentacles below the surface, don’t you? Ph’nglui mglw’nafh Cthulhu R’lyeh wgah-nagl fhtagn!
“Bernie Sanders exceeds Obama’s historic 2008 run in crowds, donors and polling” [Raw Story]. Though with a different demographic.
“How Bernie Sanders Connects With His Crowds” [New York Times].
“The Betty White of American Politics: Why Bernie’s Young Fans Love Him” [National Journal]. Maybe they sense he’s not a lying weasel?
Keith Ellison endorses Sanders [The Hill].
Trump: “Sheldon Adelson is looking to give big dollars to Rubio because he feels he can mold him into his perfect little puppet. I agree!” [@realDonaldTrump]. Trump: Right again!
The Hill
“The partnership behind a shuttered “clean coal” power plant has enlisted former Sen. Mary Landrieu (D-La.) to push for a revival of the federally-backed project” [The Hill]. Ka-ching.
Stats Watch
NFIB Small Business Optimism Index, September: “Overall, this report is moderate though the strength in employment could raise talk of strength for the October employment report” [Econoday]. “[S]mall businesses are reporting the most difficulty in finding qualified workers since 2007, pointing to the risk ahead of wage pressures.” And: “Three percent of owners reported that all their borrowing needs were not satisfied, historically low. Thirty-three percent reported all credit needs met, and 49 percent explicitly said they did not want a loan” [Econintersect]. They don’t want a loan?! So that’s why negative interest rates! Maybe if we just push harder on this string…
Ag: “Palm oil futures recover, as Malaysian supplies fall short” [Agrimoney]. “Output has been hit by a spell of dry weather coupled with heavy air pollution.” And the air pollution is due to Indonesis burning its forests — for palm oil plantations. So unsustainable practice props up futures, because of anticipated scarcity. Is that a weird set of incentives, or what?
“In the absence of fresh government data, a few private groups have stepped in to estimate how big this ‘gig economy’ thing actually is” [WaPo]. If you think of it as “the gig economy,” probably not very. If you think of it as “System D,” probably quite.
Honey for the Bears: “Make no mistake about it, just as Lehman Brothers was set up to take the fall for triggering the 2008 collapse, China is being groomed as the new scapegoat for the coming crisis. But China’s economic slump is only a symptom, not the disease” [Wall Street on Parade]. My priors: I’m a Maine bear. As we say up here: “Depression? What depression? We’ve always been depressed!”
Honey for the Bears: “Market-watchers have pointed to the recent spike in high-yield bond spreads and noted that this is the kind of move that happens as an economy goes into recession” (with handy chart) [Business Insider].
Honey for the Bears: “The $12.9 trillion U.S. government bond market — long considered the deepest and most liquid in the world — is now plagued by more bouts of turbulence than at any time since at least the 1970s. By one measure, outsize swings are occurring almost twice as often as statisticians would normally expect, according to data compiled by TD Securities” [Bloomberg]. “While nobody is saying the U.S. government bond market is broken and New York Fed researchers also concluded that HFT firms bring more accurate pricing and reduce the cost of trading, the stakes are high. Any worries about undue volatility in Treasuries have the potential to threaten confidence in a market that’s the benchmark for borrowers everywhere in the world.” (The Fed study driving this story.)
Honey for the Bears: “A goal of a 4% economy? That objective, mentioned frequently in the 2016 presidential race, is getting farther away, according to the latest projections from the staff of the Federal Reserve” [Market Watch]. “Minutes of the Fed’s Sept. 16-17 policy meeting disclose the Fed staff further trimmed its assumptions for the rates of productivity and potential growth over the medium term. The minutes did not specifically quantify the new forecast of the Fed’s in-house economists.”
The Fed: “Central bankers meeting at IMF say Fed shouldn’t delay on rate hikes” [Market Watch].
The Fed: “Fed Watch: Brainard Drops A Policy Bomb” [Tim Duy, Economists’ View]. “I think that this speech is a very deliberate action by Brainard to let Yellen and Fischer know that she will not got quietly into the night if they push forward with their plans.”
The Fed, Roger Farmer: “The only way to get out of the trap is to raise rates now and offset the contraction through simultaneous fiscal expansion” [Brad DeLong].
The Fed: “Inflation expectations for one-year ahead and three-year ahead slipped by another tenth of a percent in the latest New York Federal Reserve Bank’s inflation expectations survey, released Tuesday, but job-loss fears jumped notably, though are still below the 2015 peak” [Market News].
“49%: Share of auditor errors linked to the value of M&A deals” [Wall Street Journal, “The Big Number”]. “The percentage of auditor errors linked to M&A deals jumped over the past two years of inspections by the government’s auditing watchdog, according to a study by valuation advisory firm Acuitas Inc.”
Fear & Greed Index, October 13, 2015: 40 (-4); Fear [CNN]. Last week: 30 (Fear). (0 is Extreme Fear; 100 is Extreme Greed).
MH17 Report
“MH17 report release: As it happened” [BBC]. Live updates. Has the tape of Putin’s conversation with Obama been released yet?
“Dutch Safety Board: Buk missile downed MH17 in Ukraine” [AP].
“Ukrainian Prime Minister Arseny Yatseniuk said on Tuesday he had no doubt Malaysian Airlines flight MH17 was shot down over eastern Ukraine by Russian special forces because “drunken separatists” could not have operated the missile” [Reuters]. “I was too drunk” might work for bros in some situations, but I’m a little non-plussed to see it applied here.
Gunz
Dear Old Blighty
Our Famously Free Press
“Twitter’s Moment] just reinvented the newspaper. It’s not just any newspaper though — it has the potential to be the best newspaper in the world” [Stratechery]. I hope this is true. Of all the Silicon Valley social media companies, Twitter’s good/evil net seems the best to me.
“McClatchy Expected To Close Foreign Bureaus By End Of Year” [HuffPo]. So wrong. As I’ve said: McClatchy, as Knight-Ridder, got Iraq right, so they’re being punished. And all the organizations that assisted the Bush administration in its WMD disinformation campaign are being rewarded.
“BuzzFeed will begin creating native video ads for politicians and political causes, the website will announce Monday” [Buzzfeed]. So either they make the ads look like Buzzfeed, corrupting their brand, or they don’t make the ads look like Buzzfeed, taking the politicians’ money for nothing. Which will it be?
“China—not online porn—is why Playboy is dumping nude photographs” [Quartz].
Gaia
“The enigma behind America’s freak, 20-year lobster boom” [Quartz]. A truly excellent long-form article on the Maine lobster fishery.
A long and powerful interview with (one of) permaculture’s founder(s), Bill Mollison [Mother Earth News]. “What does create stability is a diversity in the relationships between species. That is the basis of permaculture: to see how many interacting relationships one can build into an agricultural setup.”
“Say goodbye to Miami and New Orleans. No matter what we do to curb global warming, these and other beloved U.S. cities will sink below rising seas, according to a study Monday” [Japan Times]. All I can say is, I hope they’ve got insurance!
“Researchers urge medical marijuana over opioids to treat neuropathic pain” [Globe and Mail].
Corruption
“The Iowa Department of Revenue and Finance (IDORF) has proposed new administrative rules, effectively providing a tax cut worth tens of millions of dollars for Iowa manufacturers” [Bleeding Heartland]. “This is a serious overreach of executive power. And what is the stated purpose of this rule change? According to the notice, the rules are the “subject of a substantial confusion and controversy.” Furthermore, the change will eliminate “administratively burdensome distinctions…” How burdensome? $85,000. This is a very dense article, but well worth a read, and it would be interesting to know if the same slick move is being tried in other states.
“Rarely enforced SEC rules may give green light to earnings manipulation” [Francine McKenna, Market Watch]. “In fact, a new analysis finds, the enforcement of those [clawback] rules—meant to reclaim compensation paid executives whose companies restated financial results as a result of misconduct—has been virtually nonexistent since they were adopted in 2002.” Let the accounting control fraud continue!
How America’s literary archives are being looted [Literary Hub]. “Because the story of this country is written on the backs of single sheets of paper, the theft of archival material is nothing short of a disaster. Books, articles, long-form journalism, documentaries—all of our nonfiction, and a fair amount of our fiction relies in some way on what is in these archives.”
Class Warfare
“Some brains are better than others at certain things, simply because of the way they’re wired. And now, scientists are closer to being able to determine precisely which brains those are, and how they got that way” [Wired]. Filing this under class warfare because I have this crazy feeling “environmental factors” (and epigenetic ones) aren’t random. At all. Because–
“New Findings From War on Poverty: Just Give Cash” [Bloomberg]. National Bureau of Economic Research:
Our results indicate that there are large beneficial effects of improved household financial wellbeing on children’s emotional and behavioral health and positive personality trait development
Back to Bloomberg (quoting Nature Neuroscience):
The second big new piece of evidence comes not from economics, but from neuroscience. In a study published this year in Nature Neuroscience, a large team of neurologists led by Kimberly Noble found a correlation between child brain structure and family income. Simply put, family income is correlated with children’s brain surface area, especially among poor children. More money, bigger-brained kids.
As I keep saying: They don’t call it class warfare for nothing.
“On America’s crisis of Democracy” [George Scialabba, Los Angeles Review of Books]. A 2012 classic from Scialabba.
“The Man Who Builds Luxury Bomb Shelters for Paranoid One Percenters” [Vice]. Proverbs 28:1…
“Rich people are jerks, explained” [Vox].
News of the Wired
“Brain’s activity map makes stable ‘fingerprint'” [BBC]. Working out the premises for a science fiction novel on “brain fraud” here….
“Accurate, sexy, body-positive v*gina emoji are here” (NSWF, kinda) [The Verge]. It’s fascinating to see a global ideography being invented before our eyes.
“Someone just uploaded their complete collection of Kmart in-store background music” [Chart Attack]. Attention, shoppers…
“Podcast Host Mike Duncan Inks Book Deal” [AdWeek].
“But I Want It” [Slate]. Reminiscent of Louis CK’s “Why?” routine, but still fun!