Thursday, September 19, 2019

Bear Market in Integrity Continues (2019 Update)

Things, people, and/or ideas believed to have integrity, now seemingly compromised...(the second third  fourth latest updated and expanded version). The bear market in integrity continues unrelentingly…2013, 2014, 2015, 2019 edition.

Carlos Ghosn
Sheryl Sandberg
Quantitative Easing 
Boeing Corp
Generic Pharma
Justin Trudeau
James Dyson
Kayne West
US Immigration Policy
Alan Dershowitz
Patisserie Valerie
Defined Benefit Pensions
Grant Thornton
John Humphrys
Susan Collins 
Ben Sasse
Lisa Murkowski
Tom Brady
Roger Daltry
Deutsche Bank
Danish Banking 
Elon Musk
Australian Cricket
US Gymnastic Trainers
UK Football Coaches
SAT Tests
US University Admissions
Louis CK
Al Franken
Wells Fargo
Anthony Weiner
Intel CPUs
Kobe Steel
Mitsubishi Materials
Johnson & Johnson Corp

Fantasy Sports
Mt Gox
NFL Football Air-Pressure
Bill Cosby
Pot Noodles
Michel Platini
"Kids Company" Charity
Student Loans
US Secret Service
Energy MLPs
Whole Foods Market
Bruce Jenner
American Police Conduct
Rachel Dolezal
Red Meat

Jimmy Savile (tnx Anon)
Rolf Harris (tnx Anon)
US Veterans Administration
The Red Cross
Justin Bieber
The London Gold Fix
Chris Christie

US Govt Agency Data Release
The UK National Health Service
Swiss Train Safety
Nick Clegg
IM Confidentiality 
BBC Management & Oversight
Risk Parity
Segregated Customer Accounts
Investment Consultants
Bloomberg Privacy
Dark Pools
London FX PM Closing Prices
Meredith Whitney

Reinhart & Rogoff
Jérôme Cahuzac
Japanese Yen
Jamie Dimon/JP Morgan
Banca Monte dei Paschi di Siena 
IKEA Meatballs

Wen Jiabao as "Humble Servant of The People
Lance Armstrong
Top Ten Lists
Austerity as an Economic Panacea
Harvard Students' Academic Honesty
BLS Statistics
Cyclical Recovery
Book Reviews
Strong Computer Passwords
'Organic' Food
Money Velocity
Undecided Voters
The Food Pyramid
Purity of '.999 Fine Gold Bars
Penn State Football
"Top of the Pops" 
Fareed Zakaria
The "risk-free" rate
LIBOR as a Benchmark
Public Sector Pensions
HFT as a Beneficial Provider of liquidity
Diversifying properties of Hedge Fund's
Einstein's Theory of Special Relativity 
Celtic Rangers
Macroeconomic Forecasts
John Paulson
FRB Open Market Operations
Standardized Educational Testing
Swiss National Bank
A Relaxing Cruise
WTI as Oil Benchmark 
Olympus Corp.
Payment Protection Insurance
HM Revenue & Customs
Sony Playstation Network
Social Mobility
Actuarial Return Assumptions for Pension Funds
Ryan Giggs
France   AAA
Boob Jobs
David Einhorn
Nuclear Power
Deepwater Drilling
Tiger Woods
Professional Cricket
Professional Cycling
High-Frequency Trading
Professional Baseball
Professional Tennis
Municipal Bond Underwriting
The Catholic Church 
Track & Field Athletics
NCAA Sports
US Congress
UK Parliament
Analyst Research
Credit Ratings
Newtonian Physics
The Stock Market
The Food Pyramid
Incentive Stock Options
Reinsurance Brokerage 
Lou Dobbs
The Mortgage-Backed Securities Market
Hedge Funds
Social Security
Government Balance Sheets
Tooth Fairy

Errr ummm Professional Wrestling is starting to look good by comparison - at least it makes no pretensions to be anything other than it is. What's left?

Wednesday, March 06, 2019

Could Progressives Have Done More to Prevent Nasty Populism?

The rise of populism has caused both left and right to indict centrist’s seeming embrace of “neo-liberalism”, to further their own agendas, or to forensically assign blame for the current blight of Trump, Brexit, Five Star, Gilets Jaunes, Orban, etc. While neo-liberalism has always been multi-dimensionally-flawed I believe these indictments of Centrists are mostly unfair, and fall prey to the cardinal sin of revisionsm by ignoring the context of centrists’ appeasement with neo-liberalism across most western democracies.

Neo-liberalism means many different things to different people. While it’s history is long, it’s come to mean “laissez-faire” government, coupled with monetarist, supply-side orientation, restraint of social policies, and generally free trade in goods and cross-border movement of capital. It rose with popular support from the embers of 70s inflation, bloated states, and Volcker’s massacre, championed first by Thatcher and then by Reagan in a re-play of Weimar disorientation and Brunning’s smackdown. It has accompanied four decades of economic growth, laid the foundations for globalization, trade liberalisation and, subsequently, prepared the world for re-entry of China, Eastern-Europe, and India. It’s helped draw billions of people out of most extreme poverty, while also fostering rising inequality in industrialized nations (especially US/UK), industrial concentration, industrial hollowing, corporate rent-seeking, and with these, market-failures across many sectors.

Economic growth and transformation in the 1980s led to general popular acceptance in the public psyche on grounds of economic efficiency and positive externalities. Some see this resulting from policy success, and while some is, I view it through an “Iceland analogy” where (like Iceland’s meltdown) the Volcker induced pain was so deep and thorough, that when authorities removed their foot from the economy’s head, and loosened fiscal policy, there was only one direction for things to go – both for the economy and the national zeitgeist.

Neo-liberalism is, was, and always will be, far from perfect. Humans have spent the better part of our modern history tinkering with “what works” and what doesn’t in social and business organization, and the limitations of policy and structure. In the process, we’ve discovered what are likely the effective (pragmatic) boundaries of taxation, regulation, fiscal, and monetary policies, as well as nuances of democracy, and human rights. As a result, we know that: Government is not universally bad, inept or inefficient (but certainly has the capacity to be); both fiscal and monetary policy have roles to play and differ according to circumstance and regime; we ignore the social impacts of economic policy and income/wealth distribution at our peril (ask Nicholas II!); trade is good, and unfettered globalization can hollow-out industries; immigration has strong economic benefits but also has social consequences; that mobile capital is pre-disposed to rent-seek and arbitrage both regulation and tax; and that markets often fail – whether from privatised monopolies, natural monopolies, or collusive oligopoly. But don’t always use this knowledge, and since it’s emergence in 1981, forces who gain parochially from “purer” policy (be it tax, regulation, environment) have organized to prevent The State from using and applying this hard-won knowledge.

Clinton and New Labour, and then Obama thereafter, are accused mostly by the more ambitious left - both academics and politicians – of embracing neo-liberalism and thereby neglecting the social consequences thereby creating the present populist backlash. I’ve also heard it from think-tankers, writers/journalists and academics blithely blaming the failure of centrists. And I have a problem with this. Not a problem with the fact that neo-liberalism has contributed to the populist backlash (I agree to some extent), but rather that Centrists should shoulder the blame for this.

Both history and policy analysis are contextual and incremental. In all but the most extraordinary times, we are bounded by prevailing sentiments. Progressives, Democrats, Liberals, Social Democrats have been in ideological opposition to the prevailing societal narrative since Reagan/Thatcher’s success and popular pursuit of neo-liberal agenda(s). Legislative majorities and electoral considerations in this environment further constrain policy options. Consider Walter Mondale in 1984, which was a defining electoral moment. Mondale, a Minesota Democrat, a sensible pragmatic progressive suggested: “We might have to raise taxes”, in a debate, and was requited with one of the most resounding defeats in electoral history. Ditto for Dukakis in 1988 whose opponent GHW Bush’s catchphrase “Read my lips – No new taxes” produced an equally decisive result. Would a more radical left have fared better? Hardly. Would a harder left manifesto by Kinnock have led to a labour victory with similar constraints? No.

By 1992, in the US, Clinton and the progressives understood the impediments. Ditto Labour/Blair in ‘97. Claim more of the center, assuage fears on the economy. One can wish all one wants for a pure and fanciful but unpopular manifesto, but in the end nothing gets done if you don’t have power. And even if legislatively, it proves difficult, you will have prevented the worst-case erosion from more conservative agendas. Now that you had power – albeit with slim and fickle popular vote majorities, what could you do. As said, you could prevent further erosion, tinker on the edges of social policy, but giving is easy – taking away is hard. Ambitious social agendas require spending, and the lessons from Mondale remain. And legislative majorities short-lived and easily obliterated by an economic mis-step, and constatntly shifting and challenged at State levels. Their best hope was go with flow, expand the economy and opportunity. Their achievement was continuing to foster growth, pursuing sounder social and environmental policies, and being less mean-spirited than the conservatives. Is that something to be proud of? Were they unwitting stooges of global capital, manipulated by industrialists to shaft The People? Not in the main. Both Clinton & Obama arrived with ambitious plans to tackle healthcare and failed. The failure resulted from broken democratic process, cynical lobbying and media distortion, and corrupt subterfuge across party lines, but not an embracement of neo-liberalism by the center. This is indicative of being in power, but remaining in opposition to the prevailing (probably contentious and often wrong) economic narrative. But one thing is certain: social policies, and economic policies with the most negative negative externalities upon The People, were less bad, and illiberal social agendas delayed or stymied during progressive rule.
That alone made would have made co-opting neo-liberalism worth it.

It’s useful to denigrate one’s predecessors in order to set oneself apart and cut a new path. But this carries dangers as zealots are everywhere (on both sides). Impugn the historical reality of pragmatic centrism, and one may open the path to von Hindenberg-National Socialist coalitions in response. By all means, I believe journalists, activists, academics, think-tankers and politicians, should make the case for reducing inequality, increasing opportunites, crackdowns on crony-capitalism and corporate rent-seeking, better education, transport, housing, regional policies for changing economic geographies, and more humane immigration policies. But do not destroy the efforts of pragmatists who’ve throttled the corrosive effects of ideologically-driven neo-liberalism. There is too much at stake.