You've successfully subscribed to The Political Economy of Everything
Great! Next, complete checkout for full access to The Political Economy of Everything
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.
Success! Your billing info is updated.
Billing info update failed.

Newsletter 11-6-2020

Colin Powers
Colin Powers

Hi everyone. Thanks for subscribing. If you have the means, please consider becoming a paying member. If you have the inclination, please pass this newsletter around to others who might enjoy the read. Now, onto this week's edition of No Craic, Mad Craic, and Great Craic. Cheers.

No Craic

(1) On election day here in the US, the Israeli Civil Administration--the department of the Israeli Defense Forces that is responsible for governing and administering the entirety of the occupied Palestinian territories--demolished the homes of a community in the north of the Jordan Valley. 74 people in total, of which 41 are children, currently lack shelter. The sheds and enclosures that these people use for livestock were also bulldozed, as were their make-shift water, power, and sanitation systems.

The Jordan Valley is, of course, Palestinian land, and unambiguously so, at least according to international law. Alas, Israel is one of the only states in the world to have never delineated its official borders, and does not recognize any of the UN sanctioned resolutions concerning its legal geography. In the case of the Palestinians, this allows it to regularly seize land across the Armistice Line of 1949, and to destroy Palestinian residential spaces (in Area C especially) at its own discretion.  

Video, provided by the Israeli NGO B'Tselem, documents the carnage here.

(2) I know I have been harping on about the fiscal crunch facing state and municipal governments here in the US, but its importance cannot be overstated.

An example may be illuminating. Per the Wall Street Journal, the state government of New York has lost about $30 billion in revenues this year due to COVID. The city of New York has lost about $12 billion. When you add in losses suffered by the Port Authority and other public entities, the aggregate hit to state and city finances total about $59 billion.  

This is pertinent because balanced budget provisions written into New York's state constitution--and the constitutions of most other states--do not allow for deficit spending. As a result, though fancy accounting and bond issuances can provide a slight reprieve, revenue losses wind up requiring near commensurate expenditure cuts, absent the arrival of federal aid.

Since the original stimulus package agreed to back in March, no such federal intervention has been made available. With the Republicans now likely to hold the Senate, moreover, federal help under a Biden presidency will likely remain fairly meager as well. The consequences in terms of employment, growth, social welfare, etc., will be devastating and long-lasting.

(3) According to Moody's Analytics, 15.7% of American renters are likely to be evicted by the end of 2020. For a state-by-state breakdown, see the map below.

These numbers are genuinely harrowing. More than 1/4 of New Yorkers, North Carolinians, Minnesotans, North Dakotans, and Mississippians are currently vulnerable to a loss of housing.

If nothing fundamentally changes going forward, as the likely President-elect told his supporters would be the case in June of 2019, we are set for a humanitarian crisis.

(4) If you are wondering how the Democrats managed to chip away at their House majority despite the historic vulnerability of the Republican party, consider the fact that Robby Mook is currently president of the super PAC that steered the party's electoral strategy for the chamber.

For those unfamiliar with Mook's work, he is a dunce, asshole, and one of the people most responsible for Hillary's disastrous 2016 campaign. Amongst many other things, Mook personifies the epistemological folly compromising contemporary Democratic politics. The blind faith he and his fellow travelers ascribe to spreadsheets and the superficial, hastily collected pieces of quantitative data that populate them defies reason or credulity.

Allowed to fail upward as all the other insiders in our political system are, one can expect Mook will continue to climb the ranks of the Democratic party hierarchy despite having now presided over two colossal f ups. The ignorance he and the rest of the consultant class demonstrate when it comes to basic social scientific methods--and their proud unwillingness to learn from past mistakes--are certain to deliver us all to revanchist rightwing populism soon enough.

(5) Though I won't dive much further into the election--you can read others for wiser and more considered takes--I need also make note of California's tragic Yes vote on Prop 22.

After threatening a capital strike and spending more than $200 million on advertising and messaging, the coalition of Uber, Lyft, Doordash, Instacart, and Postmates managed to convince 58% of Californians that it is in the public interest that non-profitable tech firms making no tax contribution continue to treat their labor force as independent contractors. While the courts will still have their say, the legal consolidation of the gig worker means firms operating in these spaces (the parties listed above included) need not abide by prevailing labor laws as concerns minimum wages and the like and need not provide their workers with basic employment benefits. Saliently, the Prop also stipulates that this policy can only be reversed by a 7/8 majority vote in both chambers of the California state legislature. If this should stand, Prop 22 will amount to a corrosive legislative coup of the worst kind, one made all the more heartbreaking by its popular mandate. Read Alex Press here for a full analysis.

After securing the win, the collective market capitalization of Uber et al jumped by 10-20%. Plans to leverage their victory in the referendum in order to push for federal legislative change are also in the works.

That such a catastrophe for labor was ushered in by liberal Californian voters and orchestrated in the very city where the Democrats' most powerful congressional figure, Nancy Pelosi, resides, is appropriate and revelatory. Encapsulating the shortcomings of contemporary American liberalism in the starkest of lights--its selfishness; its individualism; its fashioning of the citizen as consumer; its susceptibility to the deceits and seductions of technologists; its privileging of rhetoric, symbol, and gesture and disregard for/ignorance of the meat and potatoes of a healthy society (wages and worker power)--California portends very bad things indeed.

(6) The Pentagon has given Lockheed Martin a $62 billion/10 year contract to produce F-16's for overseas buyers. The buyers aren't themselves named though it looks like Morocco and Taiwan are in on the early orders, according to Mark Thompson.

Scott Amey argues in the Thompson piece linked to above that the deal ultimately has less to do with national defense or any such abstraction and more to do with the Pentagon skirting budget rules so to lock-in long term public financing for its pals at Lockheed. That economic rationalities can now supersede security-related considerations when it comes to weapon sales is partially a function of a 2018 change to the U.S. Conventional Arms Transfer Policy.

Mad Craic

(7) Pope Francis is moving against the Vatican secretariat of state, largely as a result of the financial malfeasance we discussed a few weeks back. He has given secretary of state Cardinal Pietro Parolin three months to transfer all their holdings to another Vatican office, a move recommended by Cardinal George Pell back in 2014. The delay in implementing Pell's recommendations may follow from the fact that the Cardinal has spent the past few years standing trial for sexual abuse back in Australia. Pell was recently acquitted, though, and his return to Rome seems to have jump started the reform initiative.

We can only hope this will stop future Vatican financial managers from using Peter's Pence donations--moneys designated to aid the poor--for real estate speculation, movie productions (merits of Rocketman not withstanding), and subsidizing skeevy Italian middlemen.

(8) Even Ayatollah Khameini be slaying the US.

As you might expect, the comments section below this tweet quickly get lit as f. Some guy named Noam Blum delivers a great counter-punch, telling Khameini that "I rigged your mom."

(9) Another arrest warrant has been issued for the man in charge of Lebanese customs. Badri Daher, already detained due to investigations into his conduct in the lead-up to the port explosion in August, is now being charged with accepting a bribe, wasting public moneys, and allowing a drug smuggling Saudi royal to flee Lebanon without having paid a multimillion dollar fine owed to the state. Daher claims Lebanese President Michel Aoun, a one-time war criminal whisked out of Lebanon by the French government in 1991, told him to let the Saudi go.

The royal in question, Prince Abdel Mohsen bin Walid bin Abdulaziz, got nicked back in 2015 after he attempted to import two tons of Captagon pills--an amphetamine-based drug commonly used in the region at the mo--into Lebanon on his private jet. He apparently transported the pills in cardboard boxes marked "private."  

Great Craic

(10) Speaking of Saudi, Aramco has taken a bath this year. Q3 profits were down 44.6% year-on-year (Q2 were down 73.4%). The company still intends to distribute a quarterly dividend of $18.75 billion, the vast majority of which will accrue to the Saudi Arabian state, which is currently facing significant fiscal troubles.

Though little more than a rounding error in terms of government spending, in discussing the financial health of the Saudi state, I do feel obliged to remind the reader than three years ago, Muhammad bin Salman spent $475 million on Da Vinci's Salvator Mundi. This is funny not only by dint of this price being four-to-six time greater than the painting's valuation; it is also funny because that figure was reached after MBS and his ally in the UAE (Muhammad bin Zayed), thinking they were bidding against the Qataris during a closed auction hosted by Christie's in New York, drove the price skyward by ceaselessly attempting to outbid each other.

Have a good weekend.


Colin Powers

Colin received his PhD from Johns Hopkins School of Advanced International Studies in 2020. He is a two-time Fulbright Fellow.