Reminder: When the Very Very Rich Are Done With Us, They Plan to Leave Us Behind

The spa in the Europa One compound in Germany. Europa One spans 76 acres and has 228,000 square feet of living area — one of the many "safe spaces with amenities" being built for the rich, tailored to these Coronavirus times, according to the LA Times

by Thomas Neuburger

For them, the future of technology is really about just one thing: escape.

This is your periodic reminder that:

• After the predatory rich have extracted all the wealth they can from those of us who work to sustain their luxuries;

• After they've poisoned the earth and despoiled its fruits, turned most of it to muck, so that only the places they inhabit are habitable;

• After the chaotic wars, famines and droughts; after the cross-border conflicts, the drone strikes on dangerous refugee camps to thin the herd, the death delivered by those with power to stem the angry tide of those without it;

• After all the pandemics and diseases have taken their toll;

• After the world has started to go wild again, a riot of weeds in our ancient agricultural garden;

After all that, the predatory wealthy will abandon us, create a place that nurtures only themselves — they and the professional classes they can't live without — and live there forever, leaving the wreck they left behind to us.

Consider this, from 2018 (emphasis added):

Last year, I got invited to a super-deluxe private resort to deliver a keynote speech to what I assumed would be a hundred or so investment bankers. It was by far the largest fee I had ever been offered for a talk — about half my annual professor’s salary — all to deliver some insight on the subject of “the future of technology.”

I’ve never liked talking about the future. The Q&A sessions always end up more like parlor games, where I’m asked to opine on the latest technology buzzwords as if they were ticker symbols for potential investments: blockchain, 3D printing, CRISPR. The audiences are rarely interested in learning about these technologies or their potential impacts beyond the binary choice of whether or not to invest in them. But money talks, so I took the gig.

After I arrived, I was ushered into what I thought was the green room. But instead of being wired with a microphone or taken to a stage, I just sat there at a plain round table as my audience was brought to me: five super-wealthy guys — yes, all men — from the upper echelon of the hedge fund world. After a bit of small talk, I realized they had no interest in the information I had prepared about the future of technology. They had come with questions of their own.

They started out innocuously enough. Ethereum or bitcoin? Is quantum computing a real thing? Slowly but surely, however, they edged into their real topics of concern.

And what were their "real topics of concern"? How to abandon the broken world they made and leave us in the dust.

Which region will be less impacted by the coming climate crisis: New Zealand or Alaska? Is Google really building Ray Kurzweil a home for his brain, and will his consciousness live through the transition, or will it die and be reborn as a whole new one? Finally, the CEO of a brokerage house explained that he had nearly completed building his own underground bunker system and asked, “How do I maintain authority over my security force after the event?”

The Event. That was their euphemism for the environmental collapse, social unrest, nuclear explosion, unstoppable virus, or Mr. Robot hack that takes everything down.

This single question occupied us for the rest of the hour. They knew armed guards would be required to protect their compounds from the angry mobs. But how would they pay the guards once money was worthless? What would stop the guards from choosing their own leader? The billionaires considered using special combination locks on the food supply that only they knew. Or making guards wear disciplinary collars of some kind in return for their survival. Or maybe building robots to serve as guards and workers — if that technology could be developed in time.

It took the author a while to get it, but he finally did:

That’s when it hit me: At least as far as these gentlemen were concerned, this was a talk about the future of technology. ... For them, the future of technology is really about just one thing: escape.

Despite its starkness, there's too much forgiveness in this piece. "For all their wealth and power, they don’t believe they can affect the future." Not true. They're the ones who created it.

If you think all this is speculative, consider the Covid-era luxury bunkers the wealthy are already building to "self-isolate" in comfort.

Be warned. Asking to not be prey won't work all, and it never has. Trying to "move the corporatists to the left" is an exercise that only ends in failure — or co-dependency.

In a democracy, as fanciful as the term may be when applied to the United States — in a democracy that doesn't survive, like Mubarak's Egypt did, by parking tanks on street corners, the wealthy are kept in place by the people alone. They really can be removed if the people want to remove them.

Whether the process is orderly, though, depends on the Left. We already know what rebellion from the Right looks like. It looks like Trump.

 
 

Capitalism, Infinite Growth, Climate Change & Manufactured Hopelessness

by Gaius Publius

The video above comes in two parts — the first four minutes or so deals with the title problem, and the last two minutes offers a solution. Note those two sections and the points they make as you watch. I'll address each point separately below.

Capitalism, Infinite Growth and Climate Change

We seem to have turned the corner on American belief that climate change will result in a bad end for us unless we stop it or alter its trajectory. Most Americans, however secretly, have come at last to that conclusion, even if (or perhaps because) they think the "us" in the previous sentence is "other people," the un- or soon-to-be-born.

Even Republican office holders are starting to affirm the obvious trajectory of climate change, not to mention ordinary Republican voters of all stripes and kinds. Yes, there are still deniers and agnostics in the mix, but I don't think they represent the majority of the nation any more. That tide has turned, if only just.

We have also likely turned the tide on the notion that infinite economic growth, defined as "more cans and bottles for you, more and greater wealth for the rich," can be sustained, though most don't realize it yet. Watch the first four minutes of the video above and ask yourself — Who doubts the main point made? Is there anyone you know (or know of) who thinks we can have "infinite growth on a finite planet" and survive?  Likely no one.

It's the connection pf infinite growth to capitalism that hangs people up. Most don't see yet that infinite growth — more cans of coke, more terrible fast food restaurants, more smart phones you can't repair — is required for our present economic system to continue to function. They don't see the present economy, defined as the production of "things," as requiring infinite growth. Does a corner grocery store need infinite growth to survive? they ask. Obviously not. And isn't a corner grocery store "capitalism"?

But today's capitalism isn't the world of the corner grocery store, where the owner who lives upstairs can do well by earning enough to meet his or her expenses, year after sustainable year. That world has become this one, a world of giant companies eating giant companies in order to grow, absorbing others to ensure they're not the next prey, because quarterly earnings can never be said to be flat when market analysts come calling.

No large publicly owned company can survive with no growth — it will die or be absorbed into another large company. And at some point, all of this growth will end. Grow or die is one of the marks of late stage capitalism, with "die" the inevitable end of all of them.

Just as late stage capitalism is unsustainable, by the way, so too is infinitely increasing income inequality, a situation into which we're heading, both nationally and internationally. The image of a world collapsing under the burden of extreme wealth inequality brings to mind one of the most memorable lines from the video above:

"Imagine what it means for your personal security as a heavily armed civilian population gets angrier and angrier about why this was allowed to happen."

Sound familiar? Sound like it may be nascent now?

Why Don't We Choose Differently?

All of the above situations suggest a grand "problem statement" — one that American citizens, indeed world citizens, are coming to grips with as we speak. Is this train's journey sustainable into the future? If not, how do we get off?

Just as the first four minutes of the video engender fear, the final two minutes water the tree of hope, suggesting that humankind can fix these problems if only it wishes to. I too believe that we can fix these problems — hold at bay a collapse due to the twin tsunamis of wealth inequality and climate-cause chaos — at least within limits, if we choose to. In fact I've offered an "Easter Island solution" to the problem of addressing climate change, offered it many times:

You're a villager on Easter Island. People are cutting down trees right and left, and many are getting worried. At some point, the number of worried villagers reaches critical mass, and they go as a group to the island chief and say, "Look, we have to stop cutting trees, like now."

The chief, who's also CEO of a wood products company, checks his bottom line and orders the cutting to continue.

Do the villagers walk away? Or do they depose the chief?

There's always a choice ...

It's a simple solution, and certainly not unique to me. Naomi Klein, for example, brings it up in a different form every time she speaks — depose the chief and run the island ourselves.

So what prevents us from choosing that?

Manufactured Hopelessness

For the answer I'll turn to David Graeber. This is from his excellent book Debt: The First 5,000 Years (quoted here, my emphasis throughout). Graeber begins:

There is very good reason to believe that, in a generation or so, capitalism itself will no longer exist – most obviously, as ecologists keep reminding us, because it’s impossible to maintain an engine of perpetual growth forever on a finite planet, and the current form of capitalism doesn’t seem to be capable of generating the kind of vast technological breakthroughs and mobilizations that would be required for us to start finding and colonizing other planets. Yet, faced with the prospect of capitalism actually ending, the most common reaction – even from those who call themselves ‘progressives’ – is simply fear. We cling to what exists because we can no longer imagine an alternative that wouldn’t be even worse.

This is in line with the video presenter's idea, that fear is our natural reaction to this awareness, and fear can lead us to make changes.

Graeber then explains why, instead of experiencing fear that spurs us to action, we're gripped by fear that locks us to inaction:

How did we get here? My own suspicion is that we are looking at the final effects of the militarization of American capitalism itself. In fact, it could well be said that the last thirty years have seen the construction of a vast bureaucratic apparatus for the creation and maintenance of hopelessness, a giant machine designed, first and foremost, to destroy any sense of possible alternative futures.

He means "militarization" as a metaphor, that the apparatus, the "giant machine" he's talking about, is a form of capitalism that's been weaponized and propagandized as a defense against its own consumer base, which is all of us. When has any major company's commercial not had as its secondary message, "We're doing this because we want to help you," whatever else the primary message — for example, "This $1000 drug is your only hope" — may be?

Every bought commercial paints its purchasing corporation as noble, as the solution, when in fact its purchaser is the problem. That description is true even of those benign-appearing car ads that offer off-road "freedom" to wage slaves chained to cubicle farms. The fault is never the corporate-dominated life; the solution is the corporate-dominated life. Or so says the commercial. Do the wage slaves of the car companies buy those cars to experience freedom?

"You can't have that"

In the passage above, Graeber, writing in 2011 about manufactured hopelessness, also presciently reminds us of Hillary Clinton's virtual campaign slogan, "You can't have that." This still serves as a slogan for the current neoliberal "support" for Medicare for All — in Al Franken's words, it's "aspirational," something to want but never to expect to get.

Graeber then exposes the inner workings of the apparatus of manufactured hopelessness:

At its root is a veritable obsession on the part of the rulers of the world – in response to the upheavals of the 1960s and 1970s – with ensuring that social movements cannot be seen to grow, flourish, or propose alternatives; that those who challenge existing power arrangements can never, under any circumstances, be perceived to win. To do so requires creating a vast apparatus of armies, prisons, police, various forms of private security firms and military intelligence apparatus, and propaganda engines of every conceivable variety, most of which do not attack alternatives directly so much as create a pervasive climate of fear, jingoistic conformity, and simple despair that makes any thought of changing the world seem an idle fantasy. Maintaining this apparatus seems even more important to exponents of the 'free market,’ even than maintaining any sort of viable market economy. ...

Economically, the apparatus is pure dead weight; all the guns, surveillance cameras, and propaganda engines are extraordinarily expensive and really produce nothing, and no doubt it’s yet another element dragging the entire capitalist system down – along with producing the illusion of an endless capitalist future that laid the groundwork for the endless bubbles to begin with.

He concludes:

Finance capital became the buying and selling of chunks of that future, and economic freedom, for most of us, was reduced to the right to buy a small piece of one’s own permanent subordination.

In other words, there seems to have been a profound contradiction between the political imperative of establishing capitalism as the only possible way to manage anything, and capitalism’s own unacknowledged need to limit its future horizons, lest speculation, predictably, go haywire. Once it did, and the whole machine imploded, we were left in the strange situation of not being able to even imagine any other way that things might be arranged. About the only thing we can imagine is catastrophe.

A being can nibble on itself from time to time, but it cannot eat itself forever and live.

"Consumed with that which it was nourished by"

In the capitalist vision of infinite growth, we see, to paraphrase Shakespeare's words...

...the glowing of such fire
That on the ashes of its youth doth lie,
As the death-bed whereon it must expire
Consumed with that which it was nourished by.

In other words, that which feeds it, eats it. Infinite growth, the fuel of late-stage capitalism, can only burn it down to a bed of ashes that lingers briefly warm, then dies. 

What drags us into hopelessness is the carefully manufactured illusion that there is no possible economy but a "free market" economy, despite (a) the fact that no free market ever existed anywhere, and doesn't exist now; and (b) that successful communal — non-competitive — markets exist everywhere around us.

Start by looking within your own family. Or at any community that sustains its weaker members rather than feeds on them. At Social Security, say. Or Medicare.

Medicare isn't "aspirational," Mr. Neoliberal. It's already here. How do we know we can have that? Because we already do have that. We just want a little more of it.

GP
 

Rebellion in the States. Is Single-Payer Healthcare Coming to California?

The rebellion against Trump-led capitalism is just getting started. Could the Obama presidency have brought out this many people to oppose the bipartisan predatory consensus? (source; click to enlarge)

by Gaius Publius

One of the few blessings of the dawn of the Age of Trump (not being sarcastic; "Age of Trump" will turn out to be a turning point in U.S. political history) — one of those few blessings will prove to be the rebellion of the states (or the "Rebellion of the States" if things really get going). Again, not being sarcastic.

In addition to the "rolling civil war" among the people the Trump-led Republicans will enflame and enable, we should see a breakaway from the national government and its toxic rule (literally) by those states with the guts or muscle to do it.

(Side note: As I write this, three hundred marchers just walked past my window, some carrying union signs — the Musicians' Union was represented — chanting "Power to the people. Down with Trump" in a #NotMyPresidentsDay march. "Down with Trump" has a Nixonian directness to it, and we're just a month in. The GOP plan to destroy the last remnant of the social contract in the U.S. will be relentlessly pursued, in my opinion, with predictable and disastrous consequences for everyone. Batten down.)

The rebellion will be joined on many fronts — some, like the courts, more orderly than others, like whatever will happen after Beauregard Sessions-issued testosterone shots are administered to police at the next BLM rally. One of those fronts will be the reaction of state governments, which are even now starting to break away from national, federal policy.

Enter California and SB 562.

Defying the Bipartisan Predatory Consensus

If the federal government is now going to even stop pretending to protect us from the bipartisan predatory regime — for example, how else would you describe the health care system in the U.S.? — the states, some of them anyway, will increasingly step in. California has stepped in with the introduction of SB 562, a bill that aims to enact state-wide single-payer health care. Where Vermont failed (I think for lack of size of population), California may well succeed.

Some of the particulars, from a useful California civic website called Call Your Government:

SB 562 – Single payer healthcare for California
The Basics

• California state Senators Ricardo Lara and Toni Atkins have introduced a bill, SB 562, which aims to establish a single-payer healthcare system covering all California residents.

• Full text of the bill is here. It’s sponsored by the California Nurses Association, and the bill as written is not yet complete. Lara and Atkins intend to make changes in the coming months, and I imagine input from constituents and other legislators will be a big part of that.

Who to call

• Your state legislators. Normally, I would specify your senators specifically, as that’s the house to which this bill has been introduced, but this is such a far-reaching effort, it seems appropriate to call your assemblymembers as well and offer your thoughts. The bill should head next to the Senate’s health and appropriations committees.

News coverage

• San Francisco Chronicle
• LA Times
• The Mercury News
• KPBS
• KQED
• Sacramento Bee

In-depth

It’s rare that I get an email press release that feels like actual news. Usually, it’s legislators and lobbyists trying to draw my attention to a photo op or their opinion on something newsworthy, but it’s seldom that the content of the release is in and of itself newsworthy. When I opened this one, I can’t say I was entirely surprised, but it is a doozy: Senators Ricardo Lara and Toni Atkins have introduced legislation to create a single-payer healthcare system in California. [...]

My suspicion is that the presence of Trump in the White House and Paul Ryan's wolves at the door of everyone without the money to finance a political campaign will make this bill quite attractive — even against the inevitable onslaught of "don't you dare" advertising by the drug and insurance industries.

As the writer notes, the country is indeed "bracing itself" — in my view for a great many unpleasant things. Could the Ryan-Trump Plan, whatever it turns out to be, turn out to be the spur that turns the ACA into single-payer, state by state? The writer continues (my emphasis below):

It’s not just the political muscle that progressives are flexing but also the timing that makes this bill newsworthy. With Republicans in control of Congress and the White House, the country is bracing itself for the gutting or likely repeal of the Affordable Care Act, or Obamacare. State legislators in California have promised to shield the state from such a rollback, as its effect would be most significant in the union’s most populous state where lawmakers have leaned into the ACA, engaging in policies like the optional Medicaid expansion and creating a robust healthcare market known as Covered California.

Last year, MediCal, the state’s Medicaid program, celebrated its 50th anniversary, and I attended a panel on it in Sacramento. The general feeling among most of the folks I interviewed was that California is a leader in areas like healthcare. California isn’t the first state to try this, but most efforts have failed due to a lack of public support. Vermont was the only state that ever got to implementation of such a program but discontinued it in 2014.

It will be interesting to see how this one plays out. In the past, the political cost of such a system has been too steep for American politicians to pursue (consider the political capital President Obama spent to pass the modest reforms of the ACA), but Californian progressives seem ready for a fight. The state voted overwhelmingly against Trump and has largely been seen as a bastion of resistance to his policies, having hired former Attorney General Eric Holder in anticipation of legal fights with the administration.

The writer notes, correctly in my view, that a Ryan-Trump assault on the health care system, coupled with the Trumpian assault on every other thread in this loosely stitched-together society, will stiffen many spines among progressives. Note the reference to Obama in the final paragraph above.

Note also the reference to Holder in the final paragraph above. Let's hope Mr. Holder doesn't make this act of resistance less bold than it's otherwise likely to be. After all, if something like this isn't successfully done, people are going to die. This is not academic.

Facing the Fire With a Gale-Force Wind at Our Back

Stay tuned. These are indeed world-historical times, and things are just starting to heat up. We have four years of this ahead of us. We may be looking into a raging fire, but a gale-force popular wind is building behind us. Exactly where you want a fire-facing wind to be.

GP
  

Why So Many Celebrities? They Are the Masks that Humanize Corporations

The Coca-Cola organization without the smiling celebrity mask (source)

by Gaius Publius

On this side of the Atlantic, George Monbiot is an underappreciated writer. The piece I'm about to quote makes just two main points, but they are stunning. The subject under consideration: Why is the modern world awash in celebrities, from actors who've "done something" to people like the Kardashians, who appear to have done nothing at all but "be famous."

We've even just elected our second celebrity president, a man known more as a "brand" than as person, the first being Reagan. Why did we do that?

Why are there so many of celebrities, and what do they really do? Is it something about the media, or the 20th century nationalization of publicity, that creates these people — for example, via the earlier movie fan magazines and now television and the Internet? Or is media not the cause? Is the presence of all these celebrities in our media a result of something else, of something more hidden from us?

Monbiot thinks he has the answer to the question "why so many celebrities?" and I think he's right. His two main points:

▪ Corporations are lifeless predatory monsters. They need human faces to make them look like our friends. This is like putting a face-like mask on a robot before it asks you out to dinner ... to eat you. Celebrities act as their masks and supply those human faces.

▪ At the same time that celebrities humanize the corporations that use them, they themselves become less human, productized, marketed (by themselves and others) as things — masks or "brands" — good mainly for their utility to the corporate world that employs them.

As Monbiot puts it in his piece: "Celebrity is not harmless fun – it’s the lieutenant of exploitation." The essay is called "Imaginary Friends". Here are two excepts, each making one of the two points above.

Celebrities As Human Masks for Inhuman Products and Entities

About the first point, Monbiot writes (my emphasis):

The rise of celebrity culture did not happen by itself. It has long been cultivated by advertisers, marketers and the media. And it has a function. The more distant and impersonal corporations become, the more they rely on other people’s faces to connect them to their customers.

Corporation means body; capital means head. But corporate capital has neither head nor body. It is hard for people to attach themselves to a homogenised franchise, owned by a hedge fund whose corporate identity consists of a filing cabinet in Panama City. So the machine needs a mask. It must wear the face of someone we see as often as we see our next-door neighbours. It is pointless to ask what Kim Kardashian does to earn her living; her role is to exist in our minds. By playing our virtual neighbour, she induces a click of recognition on behalf of whatever grey monolith sits behind her this week.

An obsession with celebrity does not lie quietly beside the other things we value; it takes their place. A study published in the journal Cyberpsychology reveals that an extraordinary shift appears to have taken place between 1997 and 2007. In 1997, the dominant values (as judged by an adult audience) expressed by the shows most popular among 9-11 year olds were community feeling, followed by benevolence. Fame came 15th out of the 16 values tested. By 2007, when shows like Hannah Montana prevailed, fame came first, followed by achievement, image, popularity and financial success. Community feeling had fallen to 11th; benevolence to 12th.

Which leads to two sub-points:

A paper in the International Journal of Cultural Studies found that, among the people it surveyed, those who follow celebrity gossip most closely are three times less likely than people interested in other forms of news to be involved in local organisations, and half as likely to volunteer. Virtual neighbours replace real ones.

The blander and more homogenised the product, the more distinctive the mask it needs to wear. This is why Iggy Pop is used to promote motor insurance and Benicio del Toro is used to sell Heineken. The role of such people is to suggest that there something more exciting behind the logo than office blocks and spreadsheets. They transfer their edginess to the company they represent: as soon they take the cheque that buys their identity, they become as processed and meaningless as the item they are promoting.

An American example — the nameless person cast as "the most interesting man in the world" is needed to put a face to a product few can recall by name, especially now they've retired the old, nameless "most interesting man" and hired a nameless younger replacement.

You can even apply the idea to something much less bland and far more objectionable, like the Republican Party. You need a celebrity as outlandish as Trump to market that product, to take your eyes off what's really underneath. None of the other members of their vaunted "deep bench" could have done a tenth of what Trump accomplished as an obscuring mask for the vile set of policies known as "Republicanism."

Trump was a good mask because the party's "customers" saw Trump and not the party or its goals. With any of the others as the party's virtual face, most people would see right through them to the Republicanism beneath. As masks they'd be worthless, transparent, obscuring nothing.

Celebrities Become Products

Once they become masks for others, celebrities become products themselves. While they're busy humanizing corporations, corporations are busy productizing celebrities. Monbiot:

The celebrities you see most often are the most lucrative products, extruded through a willing media by a marketing industry whose power no one seeks to check. This is why actors and models now receive such disproportionate attention, capturing much of the space once occupied by people with their own ideas. Their expertise lies in channelling other people’s visions. ...

You don’t have to read or watch many interviews to see that the principal qualities now sought in a celebrity are vapidity, vacuity and physical beauty. They can be used as a blank screen onto which anything can be projected. Those who have least to say are granted the greatest number of platforms on which to say it....

[But as] soon as celebrities forget their allotted role, the hounds of hell are let loose upon them. Lily Allen was the media’s darling when she was advertising John Lewis’s. Gary Lineker couldn’t put a foot wrong when he stuck to selling junk food to children. But when they expressed sympathy for refugees, they were torn to shreds. When you take the corporate shilling, you are supposed to stop thinking for yourself.

When celebrities take corporate money, in other words, masking and humanizing the product or operation, they become products as well, marketable only to the extent that they don't intrude an identity of their own onto the scripted (painted-on) identity the "mask" is intended to project.

Corporations As "Imaginary Friends" 

As to Monbiot's title, "Imaginary Friends" — for Monbiot the friends are the celebrities, and they are indeed imaginary. Kim Kardashian could be as imaginary as the Marlboro Man, a person who never existed, and none of us would know it. Celebrities are real to us in our minds alone, and we do imagine they are our friends.

But considering their function — to put a human face on the inhuman machinery of exploitation — it's easy to see that our actual "imaginary friends" are really the corporations themselves, whom we are taught to imagine as human, likable, even friendly, but who in fact would kill us the minute the cost-benefit analysis went their way but not ours. Is McDonald's your friend? Is WalMart?

How about Coke, the company that makes the happy fizzy drink? The Coca-Cola company is a nonhuman, profit-seeking corporation that is guilty of murder to protect its profits. Only its paid, smiling-mask faces want to "teach the world to sing."

The mask hides the psychopath beneath. And that's why we have celebrities, to keep us from noticing all that we're surrounded by.

GP
 

Three Ways a President Alone Can Rein In Prescription Drug Prices

High prescription prices are an industry problem, not a problem of "outliers" (source; click to enlarge)

by Gaius Publius

Along with many others, we recently wrote about Mylan's predatory price increases on the life-saving prescription drug product EpiPen. Then came the news that the interestingly named Valeant had increased the price of a prescription drug it had purchased, not developed, more than 2700%, apparently anticipating a growing lead poisoning crisis like the one in Flint, Michigan. ("Did your kids get sick from eating lead paint? We'll fix them right up ... for $27,000.")

At the end of the Valeant piece, I added a section that argued for an industry-wide — and Executive Branch-only — fix. Don't play Whack-a-Mole with individual companies, I argued. Whack drug prices industry-wide, or we'll always be chasing a shadow and fixing problems only when they're reported as scandals.

It turns out that Rep. Mark Pocan and a number of his colleagues have the same idea. From a letter Pocan wrote, and dozens of his colleagues signed, here are three specific suggestions that the next president can unilaterally enact, whoever she or he may be.

First, use existing statutory power to make sure that drugs developed in whole or in part by taxpayer funds are not monopoly-priced:

We believe your Administration should issue fair and transparent guidelines to ensure the public has access to lifesaving drugs developed using federally funded research. Specifically, you should instruct the Director of the National Institutes of Health to ensure that drugs researched and developed with taxpayer funds are kept accessible to the public by authorizing new competition for unaffordable, monopoly-priced medications—an existing statutory power granted by the Bayh-Dole Act (Pub. L. 96-517). This is an important step in deterring corporations from holding federally funded patented drugs from setting unreasonable prices.

This applies to a large number of drugs, by the way.

Second, there's existing authority to authorize prescription drug importation under some qualifications. Pocan, and frankly, the vast majority of the public, believes this authority should be used, and now.

Moreover, we also encourage your administration to explore implementing drug importation rules that are already part of U.S. law. Under authority from the Medicare Prescription Drug Improvement and Modernization Act of 2003, the Secretary of Health and Human Services can certify the importation of prescription drugs from other countries under specific qualifications. This regulatory action would pose no risk to public health and safety and could result in a significant reduction in the cost of prescription drugs to American families.

This authority, if used, should not be "triangulated" as a bargaining chip to negotiate just certain drug prices down. It should be applied as quickly, as broadly, and as aggressively as possible.

Put simply: The government is not in the business of making sure businesses make money — that's their job. The government has a Constitutional mandate to "promote the general welfare," the welfare, in other words, of the natural humans whose "consent of the governed" keeps that government in business.

(Remember the phrase "consent of the governed" and what it means. It's the ultimate source of any government's legitimacy. When a government is too captured and too corrupt to be tolerated, consent of the governed will inevitably be withdrawn. What happens next is too painful to contemplate, but once started, it's very hard to stop. In my view, we're nearer that point — the withdrawal of consent of the governed by large groups of people on both the left and the right — than anyone wishes to believe.)

Third, use authority that exists, but since Reagan, is almost never used, to curb monopolies (what used to be called violations of the "restraint of trade" prohibition):

We believe your administration also has the authority to address issues within the Federal Trade Commission [FTC] to more effectively combat monopolies held by pharmaceutical companies and the use of patent settlements to block all other generic drug competition for a growing number of branded drugs, also known as “pay-for-delay.” We are deeply concerned that pharmaceutical companies will continue this unethical and unlawful practice until necessary reforms are developed and implemented.

In the old days, the FTC was quite aggressive in blocking mergers and other monopolistic practices. Reagan simply stopped antitrust enforcement.

Capitalism without competition always leads to monopolies and oligarchies, and thanks to Reagan's refusal to maintain competition in our markets by enforcing the Sherman [Antitrust] Act, these formed in every major industry in America, from telecom to food and even the media.

Today, the Sherman Act is never used against the big boys. Big banks have grown out of control. Megastores like Walmart have wreaked havoc on local businesses, while telecom and cable companies like Comcast and AT&T have all of us in economic chains. Even our media has been consolidated.

Look at some of the companies that dominate the marketplace today. Google has 90% market share of internet search engines. Facebook has a 64% market share of social media sites. And Sirius/XM Radio has an astonishing 100% market share of satellite radio in this country.

The next president (and in fact, the current one, if he were so inclined) can fix that almost instantly. Of course, that president would need to understand her or his duty as being to the people (natural persons) and not to the profiteers.

But I have been told that this, by Hillary Clinton, is a reason for hope. So let's consider what Clinton proposes regarding prescription drug prices.

The Clinton Proposal and Its Problems

It's good that Hillary Clinton has a thoughtful proposal at her website (see link above) to address the problem of high prescription drug prices. The problem with the price aspect of the Clinton proposal (there are other aspects) is that it's mainly focused on "outlier" pricing, with this single exception:

Prohibit “pay for delay” arrangements that keep generic competition off the market. Hillary Clinton would prohibit “pay for delay” agreements that allow drug manufacturers to keep generic competition off of the market – lowering prices for Americans, and saving the government up to $10 billion.

Aside from that general action, none of the rest of what Rep. Pocan and his colleagues propose is included. For example, Clinton believes that Medicare should use its size to negotiate drug pricing down, but doesn't mention that this has been forbidden by Congress.

About prescription drug importation, the only mention is "emergency importation." Is the importation authority in the Pocan letter broader than just "emergency importation"? Perhaps; his letter doesn't address that point. But even so, each of the references to emergency importation in the Clinton proposal would be triggered by "outlier" pricing. The Pocan proposal would make importation the norm in the broadest sense allowed by law.

Lastly, the first Pocan proposal, using the Bayh-Dole Act, is not mentioned by Clinton at all.

It's imperative that Hillary Clinton and Donald Trump be put on the record now regarding these three specific proposals — now, before either enters the White House. Remember our Rule 47, which reminds us that we'll never have more leverage with candidates in a close race than before the vote is taken. That means we have not many days to press them both on this life-and-death issue.

GP
 

While Flint Kids Are Poisoned by Lead, Valeant Charges $27,000 for the Leading Treatment

Valeant, a predatory drug company hoping to profit from the growth market in lead poisoning. A name worth remembering (source).

by Gaius Publius

Another tale of price-gouging by the out-of-control andn predatory pharmaceutical industry. This time, the perp is a company called Valeant (get it? brave, strong, noble; princely) and the drug is the leading treatment (because almost no competition) for lead poisoning, a drug called Calcium EDTA.

The amount of gouging is huge. Valeant bought the drug though an acquisition (which means none of their money went into its development), then raised the price ... 2700 percent, from under $1,000 to over $27,000.

Here's the story, from STATnews, an industry publication (my emphasis):

Huge Valeant price hike on lead poisoning drug sparks anger

A drug used to treat lead poisoning is causing a toxic reaction among hospitals and poison control centers after Valeant Pharmaceuticals jacked up the price more than 2,700 percent in a single year.

At issue is a decades-old, intravenous treatment for severe and life-threatening cases of lead poisoning, which occur infrequently, but generally require supplies to be on hand. Known as Calcium EDTA, Valeant acquired the drug in 2013 as part of a $2.6 billion deal to buy another company called Medicis.

After resolving manufacturing problems that caused shortages, Valeant pursued the hallmark strategy that made it infamous — taking sky-high price hikes. Before Valeant took control, the list price for a package of vials had been stable at $950. But in January 2014, Valeant boosted the price to $7,116. By December 2014, several more increases took the price to $26,927, according to Truven Health Analytics.

Ever since, poison control specialists have been angry, especially since there are few viable options and a French company sells its version for less. Their reaction is a case study in the exasperation doctors and hospitals feel at the multitude of price hikes of all sizes that they see month after month, the vast majority of which never make headlines but create frustration and squeeze budgets behind the scenes.

“This is a drug that has long been a standard of care, and until recently it was widely accessible at an affordable price,” said Dr. Michael Kosnett, an associate clinical professor in the division of clinical pharmacology and toxicology at the University of Colorado’s School of Medicine and a consultant to the California Poison Control System, who has contacted Congress. “There’s no justification for the astronomical price increases by Valeant, which limit availability of the drug to children with life-threatening lead poisoning.”

The article goes on to note: "For nearly two years, Valeant has been a poster child for pharmaceutical greed. ... [It] regularly bought companies and then boosted prices on some medicines to new heights. The plan, which largely eschewed investment in R&D, made the company a Wall Street darling."

That's not me saying that; it's the industry.

Banking on Profit from Flint and Other Lead-Struck Cities

Valeant has argued that the number of cases per year is small and the ingredients have a short shelf life. About that "purchase volume":

A Valeant spokesman maintains the current pricing is justified. “The list price increases over the past several years have enabled us to provide to the market consistent availability of a product with high carrying costs and very limited purchase volume of 200 to 300 units per year,” he wrote us.

But Valeant can read the news as well as you or I. In particular, the news in lead-poisoned Flint, Michigan, and other cities with similar problems. That story is widely reported. This is the Washington Post:

Untold cities across America have higher rates of lead poisoning than Flint

[Lead poisoning] has occurred not just in Flint but all over the country, for decades — and not from water, but (primarily) from the paint that colors old homes.

Data collected by the Center for Disease Control and Prevention shows that over 40 percent of the states that reported lead test results in 2014 have higher rates of lead poisoning among children than Flint.

To humans, that spells tragedy. To a pharmaceutical company, though, that spells profit. A commenter at the STATnews site notes (my emphasis):

Valeant doesn’t really care about its income from 50 cases of acute lead poisoning a year. What they really want to go after IMO is the huge market for kids and adults with subacute and chronic lead toxicity, for which chelating agents are also used depending on blood levels. Best example is lead contamination of the Flint, Michigan water supply with thousands of people exposed, some pretty sick. Moreover elevated lead levels have been found in the water supply of over 350 municipalities. Bottom line is that when you add all of these contamination sources together Valeant stands to make a killing, so to speak on EDTA.

Bernie Sanders is getting into the act:

While kids in Flint are poisoned by lead, Valeant charges $27,000 for the leading treatment. https://t.co/aHekRjp5A7

— Bernie Sanders (@SenSanders) October 11, 2016

Sanders, of course, is the source of my headline.

Don't Play Whack-a-Mole with Companies; Whack Drug Prices Industry-Wide

A final note from me. Mitigating this behavior — getting them to soften the assault a little, or telling them to "cut it out" — is not the solution. So long as they have the power to do this, they will do this, because that's what they do, that's what they hire their CEOs to do. Using power, especially the power of the Executive Branch to force a cap on drug prices, and enforce that cap relentlessly as an industry-wide standard, is the only answer that won't leave the public constantly vulnerable to the next predator.

Any other solution is playing whack-a-mole with one drug company after the next, and then only if the press catches them at it.

It's not the government's job to protect any company's profit. That's the company's job. It's the government's job to protect its citizens in cases like this. Period. No one in office should triangulate between these goals.

GP
 

Tom Morello: "I'm Working Hard To Change That-- Hillary Clinton Is Not"

Did you watch Tom Morello take on a pack of liberalish capitalism-apologists on Bill Maher's HBO show Friday? No? Me neither, but I caught it on YouTube. Watch the clip above and remember, "capitalism is a morally bereft system that harms much of the planet." And Hillary is, at the end of the day, Wall Street's candidate. No one disputes that; the Hillary part. The "grotesque economic inequality"-- built into the cake-- that Morello referred to when he spoke about Indonesian sweat shops making Nike shoes is not just inherent to capitalism, it isn't something Katie Packer and Andrew Ross Sorkin have probably not thought much about, nor about there own role in.

How about that for a nice short, to the point way to start the day? Now... about that realistic mix of capitalism and socialism, Bill Maher is so enamoured of as an all-American alternative to Trumpism...

BONUS Vid:

Samantha Bee has a lot to say about gun-nuttery and gun nuts and the politicians who exploit them. Well worth watching:

What's Called "Capitalism" Is Far from Any Model of Capitalism or Market

Predators and prey. The homeless and left-behind are at the bottom ("decomposers"). Most of everyone else is in the next layer up ("producers"). The rest, from the well-off to the wealthy, are "consumers." Interesting how that language works, isn't it? (source)

by Gaius Publius

A recent piece I did on the British Labour politician Tony Benn featured a speech that offered a "history of neoliberalism" (click here to read and listen). Near the beginning of the speech, Benn said, "This country and the world have been run by rich and powerful men from the beginning of time." Consider that for a moment, what that means about the arc of human history.

Near the end of his short talk, referencing the Thatcher (and Reagan) counterrevolution against the great populist gains of the 19th and 20th centuries, he said that this is "what the whole [modern] crisis is about, the restoration of power to those who've always controlled the world, the people who own the land and the resources and all the rest of it."

That radical re-transformation of the world back to control by its original and longtime owners, "rich and powerful men," was begun in England by Margaret Thatcher and several deliberate policies. Benn (my emphasis): "So privatization is a deliberate policy, along with the destruction of local democracy and the destruction of the trade unions to restore power back to to where it was."

Benn also mentions the role of crushing personal debt in the Thatcher de-democratization of her society:

What she said, and this is very clever, "You can buy your council house so you'll be a property owner. You may not be able to get a wage increase, but you can borrow." And the borrowing was deliberately encouraged because people in debt are slaves to their employers."

Notice that this re-transformation back to what was, this re-transfer of power to society's original owners, isn't about any ideology, any set of theories, any academic anything about "invisible hands" or mathematically correct economic models. This is about one group — "rich and powerful men" — reasserting control of the world, a control they've enjoyed since the virtual "beginning of time," since the first day "property" meant more than just personal property (what I carry and wear) and included ownership of fields, buildings and land itself.

That period, which started the day the first city-state, the first temple-state arose, lasted more than 5,000 years. For almost all of the time since humanity left the Stone Age, the mass of humans have been ruled by the rich and powerful, until the opening of a very brief window initiated, as Benn tells it, by the trade union movement of the mid-1800s.

That small window is now closing. We're watching the end, if we allow it, of this one-time-only freshwater teardrop in time, as it falls into the deep well of our salt-water civilized past. (And don't be confused. If that small window, the 250-year period of relative freedom, closes — if "rich and powerful men" regain full control as they have almost already done — they will also end the 5,000-year window of human civilization. Because, climate.)

Please don't take a short view of the times we inhabit together. This is what's at stake, now, this year, this election cycle, this decade — at most, this quarter-century, which is more than half over. To help with that larger orientation, I showed you Tony Benn's brief history, and also Tony Benn's optimism (scroll to the end for that). Now I want to show you two contributions on this subject by Noam Chomsky — a piece of analysis, presented here, and his pessimism, presented later, which I will try to counter.

Today, the analysis.

What's Called "Capitalism" Is Far from Any Model of "Capitalism" or "Market"

Simply put, we're not living in a "capitalist" economy, and present economic activity is not properly described by the word "market." To see and say that completely misses the facts. The economic "theory" we're guided by, if it can be called a theory at all, is what Benn described at the start of his speech: "This country and the world have been run by rich and powerful men from the beginning of time." The closest I can come to describing this "theory" is "predators and prey." For more than 5,000 years the predators — "rich and powerful men" — enjoyed complete control. "Capitalism" is what they're calling today's reassertion of that control.

But it's not by any stretch "capitalism," not even close. Noam Chomsky, in a recent interview with Jacobin magazine, says it quite well. First, from the introduction to the interview (my emphasis):

Throughout his illustrious career, one of Noam Chomsky’s chief preoccupations has been questioning — and urging us to question — the assumptions and norms that govern our society.

Following a talk on power, ideology, and US foreign policy last weekend at the New School in New York City, freelance Italian journalist Tommaso Segantini sat down with the eighty-six-year-old to discuss some of the same themes, including how they relate to processes of social change.

For radicals, progress requires puncturing the bubble of inevitability: austerity, for instance, “is a policy decision undertaken by the designers for their own purposes.” It is not implemented, Chomsky says, “because of any economic laws.” American capitalism also benefits from ideological obfuscation: despite its association with free markets, capitalism is shot through with subsidies for some of the most powerful private actors. This bubble needs popping too.

The interview ranges widely (feel free to read it all). I want to point to just one section, in which Chomsky characterizes what we insist on calling and defending as "capitalism" (my emphasis in italics):

[Q] How do you think that the capitalist system will survive, considering its dependence on fossil fuels and its impact on the environment?

[Chomsky] What’s called the capitalist system is very far from any model of capitalism or market. Take the fossil fuels industries: there was a recent study by the IMF which tried to estimate the subsidy that energy corporations get from governments. The total was colossal. I think it was around $5 trillion annually. That’s got nothing to do with markets and capitalism.

And the same is true of other components of the so-called capitalist system. By now, in the US and other Western countries, there’s been, during the neoliberal period, a sharp increase in the financialization of the economy. Financial institutions in the US had about 40 percent of corporate profits on the eve of the 2008 collapse, for which they had a large share of responsibility.

There’s another IMF study that investigated the profits of American banks, and it found that they were almost entirely dependent on implicit public subsidies. There’s a kind of a guarantee — it’s not on paper, but it’s an implicit guarantee — that if they get into trouble they will be bailed out. That’s called too-big-to-fail.

And the credit rating agencies of course know that, they take that into account, and with high credit ratings financial institutions get privileged access to cheaper credit, they get subsidies if things go wrong and many other incentives, which effectively amounts to perhaps their total profit. The business press tried to make an estimate of this number and guessed about $80 billion a year. That’s got nothing to do with capitalism.

It’s the same in many other sectors of the economy. So the real question is, will this system of state capitalism, which is what it is, survive the continued use of fossil fuels? And the answer to that is, of course, no.

By now, there’s a pretty strong consensus among scientists who say that a large majority of the remaining fossil fuels, maybe 80 percent, have to be left in the ground if we hope to avoid a temperature rise which would be pretty lethal. And it is not happening. Humans may be destroying their chances for decent survival. It won’t kill everybody, but it would change the world dramatically.

If you click that last link and scroll down, you'll get his sense of where we're headed as a species, in particular with respect to habitability and climate.

But your takeaway should be this. Economic predation by the powerful is not an economic system in any sophisticated sense, any more than organized bullies stealing every child's lunch money the minute she enters the building is a "system" in any complex sense. It's not even a "racket" if that term implies misdirection and a multi-step process. It's just boots on the neck and hands in the pocket.

Nor is such theft a "market" by any definition. It's simply theft, backed by the power of the bullies themselves, their fists, their clubs, and the power of the state that enables them for a cut of the prize.

Feel free to defend (or not) what this "system" is becoming. Just don't misdescribe it. It's not capitalism by any definition. Nor is it a market, unless a factory farm with a slaughterhouse at one end is a market. Don't confuse others; don't confuse yourself.

When we next return to Chomsky's speech, why he's wrong about Bernie Sanders.

GP

Tony Benn's Ten-Minute History Lesson on Neoliberalism

Margaret Thatcher, drinking your milkshake (source)

by Gaius Publius

I had a different piece set up for the next few days, revolving around a recent interview by Noam Chomsky (which Howie wrote about here) that touches on our so-called "capitalism" and also on the Bernie Sanders candidacy. But this video sets that up nicely. It's a ten-minute speech by long-time British politico and Labour Party member Tony Benn, sadly recently deceased.

Our thanks to the people at Naked Capitalism for bringing this to our attention. There it's presented without comment. I'd like to print some of the text, just to emphasize some of its points.

First the video. (I've bumped the start to about two minutes in, but you can back it up if you like.)

And now from a self-made transcript. You've seen all of these points before, but to see them assembled and rounded back to where it all begins is quite striking. My emphasis below:

This country and the world have been run by rich and powerful men from the beginning of time. ... The only real wealth in the world is land, and resources that lie under it, and the people. ...

In 1834, only 2% had the right to vote ... Out of trade unionism came the change ....

The [20th century] slumps were not acts of god ... but a direct result of too much economic power in the hands of too few men who behaved like a totalitarian oligarchy in the heart of our democratic state. The had and they felt no responsibility to the nation. ...

In wartime there are no economic arguments at all. I've never heard a general say, "I can't bomb Baghdad this month because I've exceeded my budget." In wartime you do whatever is required. We should adopt the principle that in peacetime you do whatever is required. People want jobs, they want homes, want a decent income, a good education, health care ...

When you come to the Thatcher period, this is what's so interesting. Thatcher was a much cleverer woman than we give her credit for. She knew perfectly well the strength of the labor movement lay in three sources of power. One was the trade union movement. So she took on the miners ...

What she said, and this is very clever, "You can buy your council house so you'll be a property owner. You may not be able to get a wage increase, but you can borrow." And the borrowing was deliberately encouraged because people in debt are slaves to their employers. That's how the whole thing began. The borrowing was a deliberate policy ...

She also attacked local government ... Local councilors now are agents of the Treasury. They can only spend money the Treasury give them on things the Treasury tells them they can spend it on. ...

And she attacked the public sector and privatized it. And this privatization is international. I met an old friend of mine, Kenneth Kaunda, the president of Zambia. ... He said, "We had a great debt and the IMF came along and said, 'We'll lift your debt if you sell off all your schools and hospitals to multinational corporations.'"

So privatization is a deliberate policy, along with the destruction of local democracy and the destruction of the trade unions to restore power back to to where it was. And what we're now back in, that's what the whole crisis is about, the restoration of power to those who've always controlled the world, the people who own the land and the resources and all the rest of it. And that is something we need to understand. ...

There's more in the speech besides just this. Check out his action as Postmaster (at 8:00). And his plan for the banks. And his statement about how popular his ideas are among actual voters. (Reminds us that Sanders has the same wind at his back; actual wishes of the people.)

There really is only one story in this country — the "flow of funds" story, the massive passing of money to the rich from everyone else. Whatever else we've been made to suffer, and are going to be made to suffer, comes from that one story. With that in mind, I'd like to close where Benn closes, and to ask you to return to these comments as we consider Noam Chomsky's remarks later in the week.

Benn:

It's very important to keep optimism. ... Progress has always been made by two flames burning in the human heart. The flame of anger at injustice. And the flame of hope you can build a better world.

Exactly. We'll come back to this when we turn to the Chomsky interview.

GP

For How Long Should Volkswagen Be Barred From Doing Business In America?

When Trump mentioned that he thought grasping, greed-driven hedge-fund managers and banksters should pay their fair share of taxes, the grasping, greed-driven hedge-fund managers and banksters doubled down on sabotaging his campaign. They are getting slime-ball lobbyists, like  Grover Norquist  and the Club for Growth, to "work on" the congressmembers the banksters own or rent. Club for Growth has already pledged to run millions of dollars of ads against Trump. Here's the first one:



When it comes to their pocketbooks, these monsters will do anything-- not almost anything-- to not give up a nickel, no matter what the damage to society, to the nation, to anyone. They may know where the best clothes money can be bought, but they are primitive, tribal and barbaric-- and they have gotten away with their sociopathic behavior for far too long. 

All week we've been getting to know a little about America's newest arch-villain, Martin Shkreli, the former hedge-fund manager-- and the love child of Voldemort, Scrooge, and Faust-- who jacked up the price of a life-or-death drug, for no good reason other than sheer greed and because he could, from $13.50/pill to $750/pill. And while Shkreli deserves his new status as a poster boy for grotesque antisocial behavior, he's not alone as the embodiment of what Pope Francis calls "the dung of the devil" when referring to the unfettered lust for money that has become so dominant in Western culture. 

As Bernie put it in a tweet yesterday after the Pope had finished speaking, "The pope is saying that money, the accumulation of money and the worship of money is not what life should be about."

As I was driving to the hospital for a day of cancer remission maintenance, I listened to an interview with Uri Gneezy, a professor of behavioral economics at UC San Diego, who wrote The Why Axis: Hidden Motives and Undiscovered Economics of Everyday Life. He made the point that fining corporations doesn't necessarily change sociopathic corporate behavior-- unless the fines are gargantuan and close to existential, and they take the behavior out of the realm of morality and into the realm of cost-benefit analysis. But the discussion wasn't about the execrable Martin Shkreli. 

It was about Volkswagen, the company founded in 1937 by the German Labour Front as an antidote to the then completely dominant luxury-car market, and run most recently-- until yesterday, when he was forced to resign-- by another Martin, Martin Winterkorn. Winterkorn, of course, refused to accept any personal responsibility for the criminal enterprise Volkswagen has turned into on his watch.

(Disclaimer: My first car was a VW van, and when I moved to Europe in 1969, I bought a second one, at the factory in Wiesbaden-- for $2,500, a fully equipped camper if you promised to export it out of Europe. I promptly drove to India and wound up living it in that van for several years.)

Professor Gneezy says the only way to really change the kind of behavior Volkswagen was engaging in-- and keep other corporations from doing the same in the future-- is to throw the book at them. (I believe I heard him use the word "execution," although that was probably just wishful thinking.) Germany may open a criminal investigation, but, given VW's outsize role in the German economy and what this scandal could do to it, that could well be part of a cover-up/wrist-slap strategy.

The Volkswagen emissions scandal will cost billions and could tarnish the entire German auto industry.

The company had made bold claims about being greener than other automakers, and had a reputation for reliability and quality engineering. Suddenly, the "Made in Germany" branding doesn't look so hot anymore after it apologized for cheating on diesel car emission tests.

...Here are seven key facts that show what's at stake:

1. The Volkswagen group accounts for roughly one in 10 vehicles sold globally.

2. The auto industry is the largest industrial sector in Germany, contributing about 2.7% to gross domestic product.

3. Some 20% of Germany's exports are made up of vehicles and parts.

4. Domestic auto sales and exports were worth 368 billion euros ($411 billion) in 2014.

5. Most German auto sales came from the Volkswagen group, which reported just over 202 billion euros in revenue in 2014.

6. Roughly 70% of Volkswagen vehicles are sold outside German borders.

7. Volkswagen employs nearly 600,000 people around the world, and more than a third of the 775,000 people who work in the auto industry in Germany.

That said, the editorial board of the Chicago Tribune knows how egregious the charges against VW are-- and they decided to share it with their readers, although without calling for VW from being barred from doing business in the United States.

There was a time when car shopping involved questions about price, performance and warranties. Maybe it's time to update the list of questions:

Do your vehicles accelerate unintentionally, as Toyota's did?

Do the ignition switches on your vehicles ever turn off suddenly while cruising on the highway, as GM's did?

Do your emissions systems evade federal law and secretly spew fumes, as Volkswagen's did?

The dangerous errors and calculating behavior of some auto manufacturers are astonishing.

Toyota paid a $1.2 billion penalty in 2014 to settle federal charges that it concealed safety defects that caused sudden-acceleration incidents. Last week, GM agreed to pay a $900 million fine for failing to disclose the installation of defective ignition switches that have been linked to the deaths of more than 100 people. Justice Department officials said that in both cases they would defer prosecution, giving the companies three years to prove they have changed their ways.

Now comes Volkswagen.

The U.S. Environmental Protection Agency says the German automaker slipped a "defeat device" into the emissions systems of diesel vehicles. In effect, the government charged, VW hacked its own engines to let its cars run dirty. The cars could detect when they were hooked up to a government pollution test and instantly the engine would clean up its act.

The scope of this scandal is stunning: Volkswagen said Tuesday that 11 million cars worldwide are fitted with the software responsible for the cheating. The company is setting aside $7.3 billion (about nine months' profit) to pay for the mess, including anticipated fines. But that's not the end of it.

In the U.S., Volkswagen will need to recall and fix 482,000 vehicles. The company faces fines under the Clean Air Act that could total $37,500 per car, as much as $18 billion. The Justice Department is reportedly pursuing a criminal investigation. VW's stock has plunged about 30 percent this week.

Volkswagen's global CEO Martin Winterkorn is under fire. Germany's economy minister is fretting about the damage the VW scandal has done to the country's reputation for reliable engineering.

Volkswagen didn't report its behavior; the company got caught by federal and California investigators. The rigged cars emitted up to 35 times the legally allowed amount of nitrogen oxide, a component of smog. Running dirty apparently improved acceleration and gas mileage. The cars involved in the U.S. include the diesel versions of the Jetta (2009-15); Beetle (2009-15); Golf (2009-15), Passat (2014-15) and Audi A3 (2009-15).

"Our company was dishonest, with the EPA and the California Air Resources Board," Michael Horn, Volkswagen's U.S. boss, said this week at a New York Auto Show event. "We have totally screwed up."

Winterkorn, in a video statement Tuesday, said he was "endlessly sorry" and acknowledged the company's culpability. "To make it very clear: Manipulation at VW must never happen again."

International competition has benefited consumers with far more reliable, technologically advanced, fuel efficient-- and fun-- cars. You're more likely to have a better shopping experience these days, thanks in part to Internet research tools. The Toyota and GM controversies do not seem to have shaken consumer confidence-- sales figures have generally been strong.

Perhaps VW can weather the storm too. But you have to wonder at what point consumers lose basic trust.

The fine the EPA is talking about-- $18 billion-- is the equivalent of VW's worldwide profits for the entire year and then some. Is that enough? Professor Gneezy seemed unconvinced. (Probably all the more so as it leaks out that Winterkorn is leaving his job with at least $32 million in severance, etc.) And this morning, it appears that the cheating scandal may not be confined to VW. Next up" BMW The stock price started crashing this morning as Auto Bild reported that its diesel engines were "significantly" exceeding regulatory limits, emitting nitrogen oxide levels that were 11 times more than the current limit set by the European Union.

Ian Welsh looks at the hankering of 57 percent of "East" Germans for the days of the Communist dictatorship

OMG, Martin Ritt's film adaptation of John Le Carré's The Spy Who Came in from the Cold turns 50 this year. Can it really be that long since the days when British spy Alec Leamas (played in the film by Richard Burton) crossed into the German Democratic Republic to burrow his way into the dreaded Stasi? Now, we're told, ex-East Germans look back at the days of the GDR as the good old days.

"Triumphalism of the 'we've won, so we don't have to treat the population well' variety may well yet bite capitalists, and all of us, hard."

-- Ian Welsh

by Ken

The other day Ian Welsh offered a post called "Happiness and Freedom: East German Version," which I approached skeptically. After all, I'm quite aware that, since German reunification, while former West Germans have deeply (and often loudly) resented the large sums the federal government has spent to nudge the economically "backward" lands of former East Germany upward in the direction of their more prosperous Western kin, former East Germans often have the feeling, for good reason, of being stranded in economic no-man's land. So it's only natural, isn't it?, that they might hanker for the "good old days" of the German Democratic Republic -- good times that we know never were.

But Ian covers the "nostalgia" factor -- and proceeds to lay out a powerful case that those erstwhile Easterners aren't imagining things, if you take the time to look at their present world through their eyes. And what they're seeing, he suggests, is of more than passing interest to us here in the heartland of Western capitalism.

Ian's jumping-off point is a Spiegel Online International piece by Julia Bonstein, "Homesick for a Dictatorship: Majority of Eastern Germans Felt better under Communism," which reports on new poll results released Friday. Ian begins by quoting this brief excerpt:

Today, 20 years after the fall of the Berlin Wall, 57 percent, or an absolute majority, of eastern Germans defend the former East Germany. “The GDR had more good sides than bad sides. There were some problems, but life was good there,” say 49 percent of those polled.

"The state with the Berlin Wall," Ian writes, "which people died to get across, is remembered fondly?" And he points out:

Some of this, as the article points out, is nostalgia.  Some of it is from people who were children or not even alive when East Germany fell.

The Spiegel interviewees, Ian notes, "tend to acknowledge the East German Stasi police state as bad, then wave it aside." And he says he's not surprised by the poll findings -- first because "the happiness and life satisfaction data for East Germany showed a precipitous fall after unification, as it did in Russia after Communism fell there" (a drop that "has been made up since" but was "huge"), and second because "there were things that East Germany, in particular, did well."

To start, it did community and civic association brilliantly: There were clubs for everything, people joined them, and they enjoyed them.

Happiness is strongly correlated to community: The sort of anomie which capitalist societies encourage, where you know hardly anyone well, destroys happiness.

Second, there wasn’t a great deal of inequality compared to modern capitalism. The research on happiness and equality is robust -- the more equal a society, the happier people are.

Third, everyone was more or less taken care of. They may not have been taken care of with the finest consumer goods, but they had enough food, shelter, and so on.

Fourth, they didn’t have to move much. Labor force mobility in Germany today isn’t terrible, but the sure knowledge that you can stay where you were born and grew up can be as much a comfort as anything else, and it means that you don’t leave behind your community -- your friends and family.

Capitalist transitions are brutal. The data from China is unambiguous: People moving from their ancestral villages to the city generally are never, personally, as happy as they were in the village.

LET'S LISTEN TO THAT ONE MORE TIME:
"CAPITALIST TRANSITIONS ARE BRUTAL"

Hmm, Ian has already sounded this theme, linking post-Communist East Germany and post-Communist Soviet Russia. And he begins to bring the theme home, asking, "How badly has your life been affected by the fact that your government spies on you 24/7?"

East Germany may have had huge numbers of informants, but London has cameras everywhere and “anti-social disorder orders,” which make virtually any behaviour cops want to call illegal, illegal. Nor was East Germany’s incarceration rate nearly as high as America’s is now, and so on.

Sure, “the police state” was bad, but that wasn’t, to people who lived there, necessarily the most important thing about being an East German. Westerners believe this because of relentless cold war propaganda. Then the USSR and the Warsaw Pact fell, and our lords and masters started building their own surveillance and police states.

And "it's a bad sign," he says, "when you aren’t even considered a better place to live than East Germany, with its Stasi."

The failures of the post-Soviet era are making that period look better and better. In Russia, there is a surge of nostalgia for the USSR, for reasons which are are remarkably similar. People are discovering that, as wonderful as Levis jeans are, there is a cost to the modern consumer society in terms of anomie, corruption, and economic precarity.

He recalls this "bitter joke" from '90s Russia:

Everything they [Communist authorities] told us about Communism was a lie. Unfortunately, everything they told us about Capitalism was the truth.

"And so the wheel turns," Ian concludes.

When capitalism, in a large region in one of the most successful countries in the West, has half the population thinking communism wasn’t so bad, something has gone off the rails. Triumphalism of the “we’ve won, so we don’t have to treat the population well” variety may well yet bite capitalists, and all of us, hard.

There is, by the way, lots of interesting material in the Spiegel piece, which is well worth a look.

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