[kenberg]

johnu, on 2019-December-28, 16:25, said:

World's Richest Gain $1.2 Trillion in 2019 as Jeff Bezos Retains Crown


When you are talking about wealth disparity, and income disparity, there is this. 25% increase in wealth To be fair, much of it is stock market paper profits that could dive in value tomorrow, but much has been converted into real estate, various businesses, intellectual property, cash equivalents, etc.

Obviously not all are Americans, but for those that are, they wouldn't even notice a 2% wealth tax when their net wealth would still have increased 23% instead of 25%.

This thread continues to be useful to me in unexpected ways.

1. I had never heard of Kylie Jenner, of Kylie Cosmetics, or Ulta Beauty. My wife Becky has also never heard of Kylie Cosmetics but she did buy something from Ulta. She does not know if Ulta is the same thing as Ulta Beauty.

2. I live in D.C. so I was aware that the Nationals won the World Series. I have never heard Baby Shark ,doo-doo,doo doo, doo doo. I am very grateful for this.


3. I have no idea what a viral earworm is. Sounds like something that needs medical attention.


4. I do know who Jeff Bezos is. I have no idea what Blue Origin is. I didn't know that he got a divorce, Sorry about that Jeff. About Amazon. I remeber when Amazon was just getting started and there were all of these financial experts warning against investing any money in this stupid idea.


5. Etc.




Perhaps I will post something with more substance later, don't hold your breath, but right now I am just stunned by the extent to which I have no idea of what's going on. In high school a teacher suggested that I write a term paper on Freud and I asked "Who's Freud?" I seem to be returning to that state.

[y66]

From Brad Plumer and Coral Davenport at NYT:

Quote

WASHINGTON — In just three years, the Trump administration has diminished the role of science in federal policymaking while halting or disrupting research projects nationwide, marking a transformation of the federal government whose effects, experts say, could reverberate for years.

Political appointees have shut down government studies, reduced the influence of scientists over regulatory decisions and in some cases pressured researchers not to speak publicly. The administration has particularly challenged scientific findings related to the environment and public health opposed by industries such as oil drilling and coal mining. It has also impeded research around human-caused climate change, which President Trump has dismissed despite a global scientific consensus.

But the erosion of science reaches well beyond the environment and climate: In San Francisco, a study of the effects of chemicals on pregnant women has stalled after federal funding abruptly ended. In Washington, D.C., a scientific committee that provided expertise in defending against invasive insects has been disbanded. In Kansas City, Mo., the hasty relocation of two agricultural agencies that fund crop science and study the economics of farming has led to an exodus of employees and delayed hundreds of millions of dollars in research.

“The disregard for expertise in the federal government is worse than it’s ever been,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University, which has tracked more than 200 reports of Trump administration efforts to restrict or misuse science since 2017. “It’s pervasive.”

Hundreds of scientists, many of whom say they are dismayed at seeing their work undone, are departing.

Among them is Matthew Davis, a biologist whose research on the health risks of mercury to children underpinned the first rules cutting mercury emissions from coal power plants. But last year, with a new baby of his own, he was asked to help support a rollback of those same rules. “I am now part of defending this darker, dirtier future,” he said.

This year, after a decade at the Environmental Protection Agency, Mr. Davis left.

“Regulations come and go, but the thinning out of scientific capacity in the government will take a long time to get back,” said Joel Clement, a former top climate-policy expert at the Interior Department who quit in 2017 after being reassigned to a job collecting oil and gas royalties. He is now at the Union of Concerned Scientists, an advocacy group.

Mr. Trump has consistently said that government regulations have stifled businesses and thwarted some of the administration’s core goals, such as increasing fossil-fuel production. Many of the starkest confrontations with federal scientists have involved issues like environmental oversight and energy extraction — areas where industry groups have argued that regulators have gone too far in the past.

“Businesses are finally being freed of Washington’s overreach, and the American economy is flourishing as a result,” a White House statement said last year. Asked about the role of science in policymaking, officials from the White House declined to comment on the record.

The administration’s efforts to cut certain research projects also reflect a longstanding conservative position that some scientific work can be performed cost-effectively by the private sector, and taxpayers shouldn’t be asked to foot the bill. “Eliminating wasteful spending, some of which has nothing to do with studying the science at all, is smart management, not an attack on science,” two analysts at the conservative Heritage Foundation wrote in 2017 of the administration’s proposals to eliminate various climate change and clean energy programs.

[johnu]

awm, on 2019-December-28, 16:58, said:

If you invested in the S&P500 you would’ve gained about 25% on the year (between rise in the index and the dividends). This was an unusually good year for the market (for contrast, in 2018 you would’ve more or less broken even). Stock market valuations have a lot to do with the wealth of billionaires, but probably aren’t the driving factor behind wealth inequality. Although I’d support a small wealth tax (2% seems okay to me, 6% not so much) the real problem is getting wages to rise in line with productivity for the rest of the work force.

For average wealth folks, most of their wealth is tied up in their house (if they even own a house) which may have gone up around 5% on average (some areas may have gone up more, some areas had no increase or even negative growth). Most of their other "wealth", auto/truck, furniture, household goods are depreciating in value. And if they do have stock, a diversified portfolio would include a good percentage of fixed income type of investments that wouldn't come close to 25% increases.

Maybe the problem with average people is that they don't manage their money well, not that they need higher wages. Fernando Marcos accumulated maybe 10 billion dollars on an official salary of no more than $13,500 a year. His wife was reported to have had 3000 pairs of shoes which I believe was explained as due to using coupons and buying during sales.

A wealth tax seems to be an equitable solution to the fact that the tax code has been perverted so that billionaires pay a smaller overall tax rate than working class people.

[y66]

awm, on 2019-December-28, 16:58, said:

Although I’d support a small wealth tax (2% seems okay to me, 6% not so much) the real problem is getting wages to rise in line with productivity for the rest of the work force.

According to Noah Smith (Feb 2019) at Bloomberg, wages have largely kept pace with productivity since 2010 which is not to suggest that the gap that opened in the 70s, 80s and early 90s is not a big problem that remains to be solved.

[johnu]

It sounds so reasonable for moderate Democratic politicians to find common ground with right fringe Republicans.

‘Nothing Less Than a Civil War’: These White Voters on the Far Right See Doom Without Trump

Quote

But this October morning was “Trumpstock,” a small festival celebrating the president. The speakers included the local Republican congressman, Paul Gosar, and lesser-known conservative personalities. There was a fringe 2020 Senate candidate in Arizona who ran a website that published sexually explicit photos of women without their consent; a pro-Trump rapper whose lyrics include a racist slur aimed at Barack Obama; and a North Carolina activist who once said of Muslims, “I will kill every one of them before they get to me.”

“They label us white nationalists, or white supremacists,” volunteered Guy Taiho Decker, who drove from California to attend the event. A right-wing protester, he has previously been arrested on charges of making terrorist threats.

“There’s no such thing as a white supremacist, just like there’s no such thing as a unicorn,” Mr. Decker said. “We’re patriots.”

Unfortunately, Democrats are more likely to get cooperation from these fringe groups than most elected Republicans in Congress.

[y66]

From Ross Douthat at NYT:

Quote

Nothing much happened in America in the 2010s. The unemployment rate declined slowly but steadily; the stock market rose; people’s economic situation gradually improved. There were no terrorist attacks on the scale of 9/11, no new land wars to rival Iraq and Vietnam. The country was relatively calm: Violent crime and illegal immigration trended downward, teenage delinquency diminished, teen birthrates fell and the out-of-wedlock birthrate stabilized.

In Washington, D.C., only two major pieces of legislation passed Congress, both of them predictable — a health insurance expansion under a Democratic president, a deficit-financed tax cut under a Republican. No enduring majorities were forged; control of government was divided for seven out of the 10 years. There were few bipartisan deals, even as the policy fads that came and went — education reform, deficit hawkishness — left underlying realities more or less the same. Inertia and inaction were the order of the day.

If this doesn’t sound like a complete description of the decade — well, it isn’t. It’s a provocation that leaves out a lot of important indicators (the opioid epidemic and the collapsing birthrate above all), that deliberately doesn’t mention populism, the Great Awokening or Donald Trump, and that ignores the feeling of crisis, the paranoia and mistrust and hysteria, that have pervaded our public life throughout the later 2010s.

But the provocation represents a truth that’s important for interpreting all that paranoia and polarization and mistrust — because even if you believe that the mood of crisis, the feeling that the liberal order might be cracking up, is the defining feature of the departing decade, you still have to reckon with why that feeling has crested so powerfully in a period surprisingly short on world-altering events.

Consider, by way of contrast, the prior decade to this one. Between 2000 and 2009, the United States experienced the Florida recount and the dot-com bust, suffered the worst attack on our shores since Pearl Harbor, launched two major foreign invasions, attempted and failed at the transformation of the Middle East and entered the worst economic meltdown since the Great Depression. Meanwhile disruption was everywhere: Newspapers perished, partisan cable networks ascended, the smartphone took over the world, and the Amazon-Google-Facebook internet consolidated into something like its current shape.

Compared to this litany, the 2010s look a little uneventful, don’t they? Even if you declare Obamacare a big [expletive] deal and grant Trump’s election world-historical significance, even if you bring in European dramas like Brexit and the Syrian refugee crisis, even if you pretend self-driving cars are really happening (just as soon as they learn to drive in rain …) … even then, the last decade’s disruptions don’t quite measure up.

So why does the psychology of the 2010s, relative to the country’s mental situation in the Bush or Clinton era, feel so disappointed, distrustful, and deranged?

Let me suggest, as one possible answer, that we consider American history since the end of the Cold War as a three-act play. The first act, the 1990s, was a period of hubris, when we half-believed that we were entering a new age of domestic dynamism and global power — that our leaders deserved trust again, that the emerging digital age would be a blessing, that our innovators were on the threshold of great discoveries and our military was ready to spread liberty’s blessings round the world.

The 2000s, in turn, were an era of nemesis — when the most overstretched expressions of that ’90s hubris, from the Pets.com version of the new economy to the Bush doctrine to the exurban housing boom, all met their grimly-predestined fate. In one bust after another, in failed wars and Wall Street fiascos alike, the confidence of the Nineties collided with unavoidable realities, and Rudyard Kipling’s gods of the copybook headings made their inevitable return.

But as the 2000s ended, the revenges of reality had not yet been properly interpreted. The failed administration of George W. Bush was there as a scapegoat, Barack Obama was there to play the savior, and first liberals and then some ideological conservatives insisted that in fact everything would have been fine, the optimism of the 1990s indefinitely extended, if only Bush taken their preferred policy course instead.

Bush was, indeed, an unsuccessful president, but this conceit was false, and the gradually-unfolding revelation of its falseness made the 2010s an era of disillusionment, in which the knowledge we gained mattered more than the new events that we experienced. The sense of crisis, alienation and betrayal emerged more from backward glances than new disasters, reflecting newly-awakened — or awokened, if you prefer — readings of our recent history, our entire post-Cold War arc.

Thus, for instance, our Afghanistan and Libyan follies weren’t nearly as important or destructive as our Iraq debacle of the prior decade, but they were more revelatory — in the sense of demonstrating that humanitarian interventions and nation-building projects don’t work out any better with liberal technocrats in charge than under Cheneyites, that there wasn’t a simple “good war” waiting to be fought by smarter people once the Bush-era cowboy spirit went away.

Or again, the election of Trump probably wasn’t the moment of authoritarianism descending — but it was an important moment of exposure, which revealed things about race relations and class resentments and the rot in the Republican Party and the incompetence of our political class that inclined everybody to a darker view of the American situation than before.

Or yet again, what changed in our relationship to Silicon Valley in the 2010s wasn’t some new technology or business model, but our gradual realization of what those technologies and business models were doing to our minds, what they probably weren’t doing for social or economic progress, and how the internet might need to be resisted rather than just happily embraced.

Even the apparent trend toward secularization, the decade’s most notable religious shift, partially reflected a pattern in which Americans who had effectively ceased practicing Christianity years earlier finally made that disaffiliation official.

Meanwhile, in case after case the 2010s were a decade when cranks were proven right and the establishment wrong about developments from prior decades — about the wisdom of establishing Europe’s common currency, about the economic and political consequences of the turn-of-the-millennium opening to China, about the scale and scope of sexual abuse in elite institutions (not just the Catholic Church, though the cranks were right there, too).

In this sense the Jeffrey Epstein scandal was an appropriate capstone for the decade. Epstein’s worst crimes belonged to the 1990s and the 2000s rather than the 2010s, but the full revelations only arrived now, in the age of disillusionment, adding to the retrospective shadow cast across the entire political and journalistic class.

And that shadow feels deeper, in a way, because of the stability with which this essay opened. The 2010s were filled with angst and paranoia, they pushed people toward radicalism and reaction — but they didn’t generate very much effective social and political activity, beyond the populist middle finger and the progressive Twitter mob. They exposed the depth of problems without suggesting plausible solutions, and they didn’t produce movements or leaders equipped to translate disillusionment into programmatic action, despair into spiritual renewal, the crisis of institutions into structural reform.

It is this peculiar cultural predicament — the combination of disillusionment with stability, radicalization with stalemate, discontent and derangement with sterility and apathy — that I keep calling decadence. Whether it will last another 10 years is an open question; a catastrophe or a renaissance might be just around the corner. But as we usher out the 2010s, this decade of distrustful stability and prosperous despair, it has no rival as the presiding spirit of our age.

re: "The sense of crisis, alienation and betrayal emerged more from backward glances than new disasters" -- perhaps I'm overreacting but it feels like the countdown to the end of the world as we knew it before the advent of climate change has started and that the sense of crisis has everything to do with this and the absence of recognition and leadership needed to avoid even worst case scenarios.

[Winstonm]

y66, on 2019-December-29, 00:16, said:

From Ross Douthat at NYT:


re: "The sense of crisis, alienation and betrayal emerged more from backward glances than new disasters" -- perhaps I'm overreacting but it feels like the countdown to the end of the world as we knew it before the advent of climate change has started and that the sense of crisis has everything to do with this and the absence of recognition and leadership needed to avoid even worst case scenarios.

I get the sense that this feels like Rome would have felt circa 28 B.C.E.

[sharon j]

johnu, on 2019-December-28, 23:48, said:

It sounds so reasonable for moderate Democratic politicians to find common ground with right fringe Republicans.

‘Nothing Less Than a Civil War’: These White Voters on the Far Right See Doom Without Trump


Unfortunately, Democrats are more likely to get cooperation from these fringe groups than most elected Republicans in Congress.

I Live in the Phoenix area of Arizona. I have driven through the area where "Trumpstock" was held. As I drove through this area, I always wondered "what do these people do? I also wondered "why would you choose to live here?" There is no obvious source of employment nearby. There are no signs of farming (no water I imagine) or livestock (again no water or anything for the animals to graze on, I imagine). I read the wiki and it appears the area was sold in 2.5 acres parcels for $695.00 each, $10.00 down and $10.00 per month. (The wiki doesn't say when this happened) Perhaps they love the President so much because a "threat of Muslim and Latino immigrants" might want to take away their jobs? I don't know. But I would be very surprised if most of them don't need and receive public assistance. The very idea they think Trump cares about them makes me scratch my head and wonder why?

[kenberg]

sharon j, on 2019-December-29, 13:09, said:

I Live in the Phoenix area of Arizona. I have driven through the area where "Trumpstock" was held. As I drove through this area, I always wondered "what do these people do? I also wondered "why would you choose to live here?" There is no obvious source of employment nearby. There are no signs of farming (no water I imagine) or livestock (again no water or anything for the animals to graze on, I imagine). I read the wiki and it appears the area was sold in 2.5 acres parcels for $695.00 each, $10.00 down and $10.00 per month. (The wiki doesn't say when this happened) Perhaps they love the President so much because a "threat of Muslim and Latino immigrants" might want to take away their jobs? I don't know. But I would be very surprised if most of them don't need and receive public assistance. The very idea they think Trump cares about them makes me scratch my head and wonder why?

I like to think that I have a fair intuitive grasp of people from various backgrounds. I seem to get along with cops and with professors, for example, so there might be something to it. But the location you describe? Small town, isolated, in the desert? Prison industry? It's not me. And at some point I just have to walk away.

I once drove from Las Vegas to LA so maybe I drove through it or near it. It was long ago, maybe 50 years ago, but I do recall that a good part of the trip was very barren.

[y66]

From Katherine Stewart and Caroline Fredrickson at NYT:

Quote

Why would a seemingly respectable, semiretired lion of the Washington establishment undermine the institutions he is sworn to uphold, incinerate his own reputation, and appear to willfully misrepresent the reports of special prosecutors and inspectors general, all to defend one of the most lawless and corrupt presidents in American history? And why has this particular attorney general appeared at this pivotal moment in our Republic?

A deeper understanding of William Barr is emerging, and it reveals something profound and disturbing about the evolution of conservatism in 21st-century America.

Some people have held that Mr. Barr is simply a partisan hack — willing to do whatever it takes to advance the interests of his own political party and its leadership. This view finds ample support in Mr. Barr’s own words. In a Nov. 15 speech at the Federalist Society’s National Lawyers Convention in Washington, he accused President Trump’s political opponents of “unprecedented abuse” and said they were “engaged in the systematic shredding of norms and the undermining of the rule of law.”

It is hardly the first time Mr. Barr stepped outside of long-established norms for the behavior of attorneys general. In his earlier stint as attorney general, during the George H.W. Bush presidency, Mr. Barr took on the role of helping to disappear the case against Reagan administration officials involved in the Iran-contra affair. The situation demonstrated that “powerful people with powerful allies can commit serious crimes in high office,” according to Lawrence Walsh, the independent prosecutor in that case. According to some critics, Mr. Barr delivered the partisan goods then, as he is delivering them now.

Another view is that Mr. Barr is principally a defender of a certain interpretation of the Constitution that attributes maximum power to the executive. This view, too, finds ample support in Mr. Barr’s own words. In the speech to the Federalist Society, he said, “Since the mid-’60s, there has been a steady grinding down of the executive branch’s authority that accelerated after Watergate.” In July, when President Trump claimed, in remarks to a conservative student group, “I have an Article II where I have the right to do whatever I want as president,” it is reasonable to suppose this is his CliffsNotes version of Mr. Barr’s ideology.

Both of these views are accurate enough. But at least since Mr. Barr’s infamous speech at the University of Notre Dame Law School, in which he blamed “secularists” for “moral chaos” and “immense suffering, wreckage and misery,” it has become clear that no understanding of William Barr can be complete without taking into account his views on the role of religion in society. For that, it is illuminating to review how Mr. Barr has directed his Justice Department on matters concerning the First Amendment clause forbidding the establishment of a state religion.

In Maryland, the department rushed to defend taxpayer funding for a religious school that says same-sex marriage is wrong. In Maine, it is defending parents suing over a state law that bans religious schools from obtaining taxpayer funding to promote their own sectarian doctrines. At his Department of Justice, Mr. Barr told law students at Notre Dame, “We keep an eye out for cases or events around the country where states are misapplying the establishment clause in a way that discriminates against people of faith.”

In these and other cases, Mr. Barr has embraced wholesale the “religious liberty” rhetoric of today’s Christian nationalist movement. When religious nationalists invoke “religious freedom,” it is typically code for religious privilege. The freedom they have in mind is the freedom of people of certain conservative and authoritarian varieties of religion to discriminate against those of whom they disapprove or over whom they wish to exert power.

This form of “religious liberty” seeks to foment the sense of persecution and paranoia of a collection of conservative religious groups that see themselves as on the cusp of losing their rightful position of dominance over American culture. It always singles out groups that can be blamed for society’s ills, and that may be subject to state-sanctioned discrimination and belittlement — L.G.B.T. Americans, secularists and Muslims are the favored targets, but others are available. The purpose of this “religious liberty” rhetoric is not just to secure a place of privilege, but also to justify public funding for the right kind of religion.

Mr. Barr has a long history of supporting just this type of “religious liberty.” At Notre Dame, he compared alleged violations of religious liberty with Roman emperors forcing Christian subjects to partake in pagan sacrifices. “The law is being used as a battering ram to break down traditional moral values and to establish moral relativism as a new orthodoxy,” he said.

Barr watchers will know that this is nothing new. In a 1995 article he wrote for The Catholic Lawyer, which, as Emily Bazelon recently pointed out, appears to be something of a blueprint for his speech at Notre Dame, he complained that “we live in an increasingly militant, secular age” and expressed his grave concern that the law might force landlords to rent to unmarried couples. He implied that the idea that universities might treat “homosexual activist groups like any other student group” was intolerable.

This form of “religious liberty” is not a mere side issue for Mr. Barr, or for the other religious nationalists who have come to dominate the Republican Party. Mr. Barr has made this clear. All the problems of modernity — “the wreckage of the family,” “record levels of depression and mental illness,” “drug addiction” and “senseless violence” — stem from the loss of a strict interpretation of the Christian religion.

The great evildoers in the Notre Dame speech are nonbelievers who are apparently out on the streets ransacking everything that is good and holy. The solutions to society’s ills, Mr. Barr declared, come from faith. “Judeo-Christian moral standards are the ultimate utilitarian rules for human conduct,” he said. “Religion helps frame moral culture within society that instills and reinforces moral discipline.” He added, “The fact is that no secular creed has emerged capable of performing the role of religion.”

Within this ideological framework, the ends justify the means. In this light, Mr. Barr’s hyperpartisanship is the symptom, not the malady. At Christian nationalist gatherings and strategy meetings, the Democratic Party and its supporters are routinely described as “demonic” and associated with “rulers of the darkness.” If you know that society is under dire existential threat from secularists, and you know that they have all found a home in the other party, every conceivable compromise with principles, every ethical breach, every back-room deal is not only justifiable but imperative. And as the vicious reaction to Christianity Today’s anti-Trump editorial demonstrates, any break with this partisan alignment will be instantly denounced as heresy.

It is equally clear that Mr. Barr’s maximalist interpretation of executive power in the Constitution is just an effect, rather than a cause, of his ideological commitments. In fact, it isn’t really an interpretation. It is simply an unfounded assertion that the president has what amount to monarchical powers. “George III would have loved it,” said Douglas Kmiec, a law professor at Pepperdine who once held Mr. Barr’s position as head of the Justice Department’s Office of Legal Counsel, of Mr. Barr’s theory. It’s almost beside the point to note, as the conservative lawyers group Checks & Balances recently wrote, that Mr. Barr’s view of history “has no factual basis.”

Mr. Barr’s constitutional interpretation is simply window dressing on his commitment to religious authoritarianism. And that, really, gets to the heart of the matter. If you know anything about America’s founders, you know they were passionately opposed to the idea of a religious monarchy. And this is the key to understanding the question, “What does Bill Barr want?”

The answer is that America’s conservative movement, having morphed into a religious nationalist movement, is on a collision course with the American constitutional system. Though conservatives have long claimed to be the true champions of the Constitution — remember all that chatter during previous Republican administrations about “originalism” and “judicial restraint” — the movement that now controls the Republican Party is committed to a suite of ideas that are fundamentally incompatible with the Constitution and the Republic that the founders created under its auspices.

Mr. Trump’s presidency was not the cause of this anti-democratic movement in American politics. It was the consequence. He is the chosen instrument, not of God, but of today’s Christian nationalists, their political allies and funders, and the movement’s legal apparatus. Mr. Barr did not emerge in order to serve this one particular leader. On the contrary, Mr. Trump serves a movement that will cynically praise the Constitution in order to destroy it, and of which Mr. Barr has made himself a hero.

This guy is way scarier than Trump.

[Winstonm]

y66, on 2019-December-29, 22:21, said:

From Katherine Stewart and Caroline Fredrickson at NYT:


This guy is way scarier than Trump.

Who would have thought Christians would become the enemy, because they have such a great history of tolerance - if you discount a few small details like the Crusades and Inquisitions.

[y66]

The great American tax ripoff of 2017 continues.

In Trumpworld, corporate malfeasance is just another word for job creation.

[y66]

From Joe Nocera at Bloomberg:

Quote

Twenty years ago, writing in Fortune magazine, I dubbed the 1990s “the Nasdaq Decade.” And why not? Practically from the moment the browser company Netscape went public, the tech stocks that dominated the Nasdaq stock exchange only went up. Cisco Systems Inc. rose 125,000% in the 1990s. Dell Technologies Inc. was up 72,000%. Shares of EToys quadrupled on their first day of trading in 1999. The Nasdaq itself rose 685%.

But a few months after the decade ended, the internet bubble burst, and by 2002 the Nasdaq had declined 78%. The tech highfliers that had soared in the 1990s either went bankrupt or their valuations crashed back to earth.

Financially speaking, the 2010s have been characterized by corporate mergers, aggressive activist investors, out-of-control CEO pay and “maximizing shareholder value.” But more than anything, it has been a decade awash in private equity deals. I therefore dub it the private equity decade. And I’ll admit that I’m rooting for private equity to get a comeuppance similar to the one that took place in tech after the Nasdaq decade.

Private equity deals have been part of the financial landscape for decades, of course. Who can forget KKR’s $25 billion leveraged buyout (as they were called then) of RJR Nabisco in the late 1980s — a deal memorialized in the classic book “Barbarians at the Gate?” Indeed, some of the biggest private equity deals on record — TXU Energy, First Data, Alltel, Hilton Worldwide — took place in the frothy years before the 2008 financial crisis.

What was different in the 2010s was less the size of the deals as their proliferation. In 2009, private equity firms completed 1,927 deals worth $142 billion, according to the financial data firm Pitchbook. By 2018, there were 5,180 private equity deals worth $727 billion.

Why so many deals? One reason is more firms are holding more capital than they know what to do with; Bain & Co. recently estimated that private equity firms have a staggering $2 trillion in “dry powder” that they need to deploy. But another reason is that there just aren’t as many big deals available as there used to be, so firms have had to move down the food chain to find companies willing to be bought out. Many, if not most, of the deals in the past few years have been for less than $500 million. I half expect the bodega down the street to be bought out.

What has also become clear this decade is the high-minded rationale the private equity industry once used to justify its deals has largely evaporated. You don’t hear much anymore about how taking a company private will remove short-term incentives, impose necessary restructuring, yadda, yadda, yadda.

The main thing private equity has done this decade is to pile debt onto companies — imposing repayment costs while pulling out fees and dividends that have no bearing on what the private equity firm has actually done. Famously, Toys “R” Us went bankrupt because it was buried in private equity debt. So did Gymboree, Sports Authority, Linens ’n Things, and many others. In 2017, when the Limited announced it was shutting down its 250 stores — and throwing its employees out of work — the private equity firm that owned it, Sun Capital Partners Inc., reported to investors that it had nearly doubled its money, thanks to the dividends and fees it had paid itself.

One private equity skeptic, Daniel Rasmussen, conducted a study to see the effect private equity firms had on the companies they bought. Using a database of 390 deals with more than $700 billion in enterprise value, he found that:

In 54 percent of the transactions we examined, revenue growth slowed. In 45 percent, margins contracted. And in 55 percent, capex spending as a percentage of sales declined. Most private equity firms are cutting long-term investments, not increasing them, resulting in slower growth, not faster growth.

Instead, he continued, there is a new paradigm for understanding the PE model:

As an industry, PE firms take control of businesses to increase debt and redirect spending from capital expenditures and other forms of investment toward paying down that debt. As a result, or in tandem, the growth of the business slows. That is a simple, structural change, not a grand shift in strategy or a change that really requires any expertise in management.

In other words, whatever larger purpose private equity might have once had, the 2010s exposed an industry that cared about lining its own pockets — often at the expense of the companies it bought. It has become dealmaking for its own sake.

It seems to me that there are two likely consequences for the devolution of private equity in this decade. The first is that when the business cycle finally turns, the consequences for the thousands of companies carrying private equity debt are likely to be severe. As increasing amounts of capital have chased deals this decade, purchase prices have increased drastically. Rasmussen reports that in 2013, private equity deals were done at an average of 8.9 times adjusted earnings. Today, that number has risen to 11 times adjusted earnings. That means the debt loads are becoming heavier.

The second consequence is political. If the Democrats take the Senate or the presidency — or both — the private equity model is going to be under sustained attack. Titans like Henry Kravis and Steve Schwarzman will be hauled before Congress and berated for the industry’s practices. Already, Elizabeth Warren has put forth a proposal to rein in private equity — she calls it the “Stop Wall Street Looting Act.” Among other things, it would give workers rights when a bankruptcy takes place and would put private equity firms “on the hook for the debts of companies they buy.”

One other thing: In this decade of growing income inequality, nothing symbolized the gap between the haves and the have-nots like private equity. When it can walk away enriched while companies it owns go bankrupt — is that really the way capitalism is supposed to work? Perhaps the 2020s will be the decade when it starts to work for everyone again.

Talk about finding hope again.

[barmar]

y66, on 2019-December-30, 12:35, said:

The great American tax ripoff of 2017 continues.

In Trumpworld, corporate malfeasance is just another word for job creation.

And remember when they said that the tax breaks would pay for themselves? They aren't.

[y66]

From Joe Biden Confronts a Demagogue and a Dilemma by Francis Wilkinson at Bloomberg:

Quote

The New York Times headline, dated December 27, was clear: “Joe Biden Says He’d Defy Subpoena to Testify in Trump’s Senate Trial.”

The New York Times headline, above an Associated Press story, dated the next day, December 28, was fuzzier: “Biden Leaves it Unclear if He Would Honor Senate Subpoena.”

One day later, December 29, the New York Times headline reached a possibly final — but who can say? — conclusion after the meandering journey of the preceding days: “Joe Biden Says He Would Comply With a Senate Subpoena, Reversing Course.”

The road to the White House may be winding, but that’s a lot of swerving.

President Donald Trump has made it abundantly clear that he intends to keep smearing Biden, falsely alleging that the Democrat abused his power as vice president to insulate Biden’s son and his son’s Ukrainian employer from a criminal investigation. (That Trump still lacks a shred of evidence for this charge, months after deploying wide swaths of the executive branch to advance it, is strong indication that no evidence exists or ever will.) In addition to pressuring Ukraine to investigate Biden, with the intent of spritzing his smear with a vapor of legitimacy, Trump has publicly requested that China investigate Biden as well.

To beat these scurrilous attacks, the former vice president needs more than consistent headlines; he needs a steady strategy. So here’s the question for armchair political strategists: Which one of the three distinct positions announced in the headlines above offers Biden the best chance of defanging Trump?

Answer: None of the above.

Yes, it’s a trick question. But more than that, it’s a democratic crisis. Biden bungled his response both to the smear and to the question of whether he would testify about it under oath. (Democrats must contest Republicans while also buttressing the Trump-battered rule of law; a legitimate Senate subpoena must be obeyed.) Trouble is, there is rarely a good way to respond to such smears, because the advantage almost invariably rests with the liar.

Whoever wins the Democratic nomination in 2020 will face some version of Trump’s attacks — like “crooked” Hillary and “corrupt” Biden — and will confront a similar quandary about responding. Ignore the smear and it spreads unchallenged. Engage and you generate hot embers to be fanned by an eager news media, which can generally be counted on to ignore even the most blatant bad faith by one of the disputants.

The asymmetry between a Democratic Party largely seeking to preserve democratic norms and government accountability and a GOP increasingly devoted to accumulating and exercising white Christian conservative power free of traditional legal or ethical constraint has been apparent for years. Books have been published. Academic papers have been written. Essays have detailed the danger. Yet bothsidesism, the unwillingness of mainstream arbiters to differentiate fact from fantasy or good faith argument from deliberate deception, persists.

The failure is more pronounced, and more perilous, when it comes to Trump, whose mental plumbing has leaked bad faith over a lifetime of personal corruption. Almost seven decades after Senator Joseph McCarthy slashed through the tapestry of American political culture, varying the number of communist spies he claimed to have found in the State Department in accord with the trajectory of the sun or the severity of his hangover, here we are — once again flummoxed by a demagogue so contemptuous of truth that he can’t be bothered to keep his lies straight.

Biden, and whomever Trump attacks next, cannot count on the news media to hold Trump accountable. And the proliferation of right-wing propaganda ensures that every emerging fact-based consensus will be targeted for destruction. McCarthy, who lacked a White House balcony from which to rally the nation’s dark side, had fewer political resources at hand than Trump has now yet still managed to be a “galvanizer of mobs,” as Richard Rovere called him.

Democratic candidates will have to get used to defending themselves with a sufficiently strong counterpunch that it puts Trump on the defensive. David Doak, a former Democratic strategist (and my one-time partner) Tweeted that Biden should agree to testify under oath before the Senate impeachment trial — provided Trump does likewise.

Trump, who instinctively kicks “for the groin” as McCarthy once did (Rovere again), lacks the courage or character to survive a bout of sworn public testimony. He’ll never agree to it. But in an asymmetrical political environment, in which non-demagogues pay a truth tax, Doak’s suggestion is the kind of defensive/offensive combo that a Democrat will have to level against Trump. It entails risk. But it beats three days of rhetorical wandering, seeking a safe passage that doesn’t exist against a man who will say anything, and frequently does.

[kenberg]

y66, on 2019-December-31, 15:29, said:

From Joe Biden Confronts a Demagogue and a Dilemma by Francis Wilkinson at Bloomberg:

Some people are prepared to say: "Here is who I am. If you like who I am, vote for me. If you do not like who I am, vote for the other guy."

Biden might have once had that trait. It's pretty clear he does not now have that trait.

There is a cost to making your position clear, people might not like your position. I think there is a bigger cost in having one position one day, another position the next day, and a third position the third day.

For some reason this rule does not apply to DT. Maybe it is the tweet mentality. Nobody expects a tweet to actually be a thought out statement. More like a burp.

[y66]

From Adam Liptak at NYT:

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WASHINGTON — As Chief Justice John G. Roberts Jr. prepares to preside over the impeachment trial of President Trump, he issued pointed remarks on Tuesday in his year-end report on the state of the federal judiciary that seemed to be addressed, at least in part, to the president himself.

The two men have a history of friction, and Chief Justice Roberts used the normally mild report to denounce false information spread on social media and to warn against mob rule. Some passages could be read as a mission statement for the chief justice’s plans for the impeachment trial itself.

“We should reflect on our duty to judge without fear or favor, deciding each matter with humility, integrity and dispatch,” he wrote in the report. “As the new year begins, and we turn to the tasks before us, we should each resolve to do our best to maintain the public’s trust that we are faithfully discharging our solemn obligation to equal justice under law.”

The nominal focus of the report was the importance of civics education, but even a casual reader could detect a timely subtext, one concerned with the foundational importance of the rule of law.

Chief Justice Roberts began his report, as is his custom, with a bit of history, recalling a riot at which John Jay, an author of the Federalist Papers and later the first chief justice, was struck in the head by a rock “thrown by a rioter motivated by a rumor.”

Jay and his colleagues, Chief Justice Roberts wrote, “ultimately succeeded in convincing the public of the virtues of the principles embodied in the Constitution.”

“Those principles leave no place for mob violence,” the chief justice wrote. “But in the ensuing years, we have come to take democracy for granted, and civic education has fallen by the wayside. In our age, when social media can instantly spread rumor and false information on a grand scale, the public’s need to understand our government, and the protections it provides, is ever more vital. The judiciary has an important role to play in civic education.”

The report seemed to continue a conversation with Mr. Trump about the role of the courts.

In 2018, the two men had a sharp exchange, with Mr. Trump suggesting that federal judges carry out the wishes of the presidents who appointed them and Chief Justice Roberts defending the independence and integrity of the judicial branch.

The exchange started when Mr. Trump called a judge who had ruled against his administration’s asylum policy “an Obama judge.” In response, the chief justice said the president had misunderstood the role of the federal courts in the constitutional system.

“We do not have Obama judges or Trump judges, Bush judges or Clinton judges,” Chief Justice Roberts said in a statement. “What we have is an extraordinary group of dedicated judges doing their level best to do equal right to those appearing before them. That independent judiciary is something we should all be thankful for.”

Mr. Trump took issue with the chief justice’s statement on Twitter. “Sorry Chief Justice John Roberts, but you do indeed have ‘Obama judges,’” Mr. Trump wrote, “and they have a much different point of view than the people who are charged with the safety of our country.”

On Tuesday, the chief justice returned to his theme. “We should celebrate our strong and independent judiciary, a key source of national unity and stability,” he wrote. “But we should also remember that justice is not inevitable.”

The friction with the president has only added to the delicate spot the chief justice will find himself in when he takes on his constitutionally assigned duty to preside over Mr. Trump’s Senate trial. Mr. Trump has repeatedly pinned the future of his presidency on the trial, the details and timing of which have not been set.

Chief Justice Roberts’s report concentrated on the central role the judiciary has played in educating the public, notably by issuing accessible decisions, in both senses of the word.

“When judges render their judgments through written opinions that explain their reasoning, they advance public understanding of the law,” he wrote. “Chief Justice Earl Warren illustrated the power of a judicial decision as a teaching tool in Brown v. Board of Education, the great school desegregation case. His unanimous opinion on the most pressing issue of the era was a mere 11 pages — short enough that newspapers could publish all or almost all of it and every citizen could understand the court’s rationale. Today, federal courts post their opinions online, giving the public instant access to the reasoning behind the judgments that affect their lives.”

Current Supreme Court decisions in major cases are much longer than the ruling in Brown. Citizens United, the 2010 campaign finance decision, was 176 pages long, with roughly the same number of words as “The Great Gatsby.”

Chief Justice Roberts praised the many educational programs offered by federal courts across the nation in which students are invited to visit courthouses. He did not address the role that camera coverage of arguments at the Supreme Court, currently forbidden, could play in civics education.

The chief justice singled out, but did not name, a colleague, praising his exemplary educational work. “As just one example,” Chief Justice Roberts wrote, “the current chief judge of the District of Columbia Circuit has, over the past two decades, quietly volunteered as a tutor at a local elementary school, inspiring his court colleagues to join in the effort.”

That judge is Merrick B. Garland, who was nominated to the Supreme Court by President Barack Obama in 2016 but denied a hearing by Senate Republicans. Mr. Trump appointed Justice Neil M. Gorsuch to fill the vacancy.

That was an encouraging note to end the year on.

[y66]

From Dan Charles at NPR:

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In 2019, the federal government delivered an extraordinary financial aid package to America's farmers. Farm subsidies jumped to their highest level in fourteen years, most of them paid out without any action by Congress.

The money flowed to farms like Robert Henry's. When I visited in early July, many of his fields near New Madrid, Mo., had been flooded for months, preventing him from working in them. The soybeans that he did manage to grow had fallen in value; China wasn't buying them, in retaliation for the Trump administration's tariffs.

That's when the government stepped in. Some of the aid came from long-familiar programs. Government-subsidized crop insurance covered some of the losses from flooding. Other payments were unprecedented. The U.S. Department of Agriculture simply sent him a check to compensate him for the low prices resulting from the trade war.

"'Trump money' is what we call it," Henry said. "It helped a lot. And it's my understanding, they're going to do it again."

Indeed, a few weeks later, the USDA announced another $16 billion in trade-related aid to farmers. It came on top of the previous year's $12 billion package, for a grand total of $28 billion in two years. About $19 billion of that money had been paid out by the end of 2019, and the rest will be paid in 2020.

"President Trump has great affection for America's farmers and ranchers. He knows that they're fighting the fight and that they're on the front lines," Secretary of Agriculture Sonny Perdue told reporters while announcing the aid package.

The announcement aroused little controversy. "I was surprised that it didn't attract more attention," says Joe Glauber, the USDA's former chief economist, who's now a senior research fellow at the International Food Policy Research Institute.

Glauber says it deserves more attention, for a whole collection of reasons.

For one thing, it's an enormous amount of money, more than the final cost of bailing out the auto industry during the financial crisis of 2008. The auto industry bailout was fiercely debated in Congress. Yet the USDA created this new program out of thin air; it decided that an old law authorizing a USDA program called the Commodity Credit Corporation (CCC) already gave it the authority to spend this money.

"What's unique about this is, [it] didn't go through Congress," Glauber says. Some people have raised questions about whether using the CCC for this new purpose is legal.

Glauber sees a risk of "moral hazard" — a situation in which someone is shielded from the consequences of poor decisions. The decision to start the trade war was costly, he says, and the Trump Administration, by tapping the federal treasury, is avoiding the political fallout from that decision. "The sector that is hurt the most, and which would normally complain, all of a sudden it's assuaged by these payments. To me, that's a problem," he says.

Also, the payments are quite generous. According to studies by several independent economists, the USDA is paying farmers roughly twice as much as the actual harm that they suffered from the trade war. And the payments are based on production; the bigger the farm, the bigger the payments. Thousands of farmers got more than $100,000 each. According to an NPR analysis of USDA records of payments made through July 2019, 100,000 individuals collected just over 70 percent of the money.

Catherine Kling, an economist at Cornell University, says the government could at least have demanded some public benefits in exchange for that money. "I think it's a real lost opportunity," she says.

What farmers do with their land has a huge impact on water quality, wildlife and climate change, Kling says. The USDA has programs that pay farmers to help the environment, doing things like restoring wetlands.

The budget for those environmental programs is just a quarter of the size of this year's trade-related payments. So Kling's reaction to this year's farm bailout is, "Wow, [there are] so many things that money could get spent on that could really be beneficial to taxpayers, who are ultimately footing the bill."

On Capitol Hill, there has long been a quiet alliance between lawmakers who support farm subsidies and those who support food stamps, or SNAP. Together, they've supported the budget of the USDA, which runs both programs.

Events in 2019 tested that alliance, as the USDA helped farmers while restricting SNAP payments.

"They've already given out $19 billion to farmers, but they're cutting $5 billion from people in need!" says Congresswoman Marcia Fudge (D-OH), who sits on the House Agriculture Committee. "I don't even know how to describe it except to say that it is cruel, it is unfair, and it is clearly designed to support the president's base, as he sees it, as opposed to those whom he sees as being undeserving."

The USDA has not yet announced whether it will deliver another round of trade-related payments to farmers in 2020.

[barmar]

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For one thing, it's an enormous amount of money, more than the final cost of bailing out the auto industry during the financial crisis of 2008.

Isn't a big difference that the farmers needed this aid as a direct consequence of Trump's tariffs, while the financial crisis was not created by the government (except indirectly due to reduced oversight)?

[y66]

barmar, on 2020-January-02, 11:04, said:

Isn't a big difference that the farmers needed this aid as a direct consequence of Trump's tariffs, while the financial crisis was not created by the government (except indirectly due to reduced oversight)?

That's a fair point. However, it does not change the fact that tax payers are getting thricely screwed: by the tariffs on imported goods, by the taxes they pay to compensate farmers and at the polls by farmers who are happy to support our anti president as long as the cash keeps coming. Or that these payments are being made without explicit congressional approval.