How the ratings agencies triggered the financial meltdown

Matt Taibbi has come out with an excellent article that looks at the role of the ratings agencies, those institutions that are supposed to protect the interests of investors by providing accurate ratings for the investments issued by companies, in causing the financial collapse of 2008. Their role has been criticized before (I wrote about it back in 2008 here and here) but Taibbi says that recent revelations show that their culpability is even worse than was thought.
[Read more…]

Surprising backing down by Trump

One of the things that Donald Trump is notable for is the way he acts on wrong-headed impulses and then his reaction to criticisms of them. His tendency is to double down, to lie and make up stuff to support his earlier decisions, since his whole mode of operation is to give his followers the impression that his judgment is infallible and that any fault lies with his critics. Given that he and his family are grifters who see nothing wrong with using their positions for private gain, I was not surprised that he decided that the next G7 meeting that the US is hosting would be held at his own Doral resort in Miami. It would be a huge windfall for the property that has had declining revenues since 2015.
[Read more…]

Boris Johnson acts like a spoiled brat

It looks like the US is not the only nation with a petulant, childish head of state. In the UK, prime minister Boris Johnson, already a fan of Donald Trump’s oligarchic-friendly policies and brash style, seems to also be an admirer of his practice of doubling down on wrong-headed actions and words when criticized for them, and trying dubious methods to circumvent what is required of him by the usual norms and even the law.

The UK parliament had passed a law that required the UK to ask the EU for an extension to the October 31 Brexit deadline if a deal was not passed by October 19. Johnson failed to meet that deadline. But Johnson had vowed never to ask for an extension, saying that he would rather “be dead in a ditch”. Since parliament blocked his deal, he was faced with defying the law and risk being taken to court or backing down. So what does he do? He sends a letter to the EU asking for an extension that was unsigned, accompanied by another letter signed by him saying that he did not want an extension. You can read the letters here and here.
[Read more…]

Why America has ‘low-road capitalism’

While Bernie Sanders calls himself a democratic socialist and Elizabeth Warren also is promoting progressive policies, we should be clear that neither is a socialist in the classical sense. They are advocating a system similar to certain other developed countries, all of whom are fundamentally capitalist but with policies to smooth out its rough edges. So how did it come to be that the US, when compared to many other developed nations, has much greater inequality, no universal health care, low wages ,high job insecurity, and a rotten social safety net.

Matthew Desmond has a good label for what we have in the US. He calls it ‘low road capitalism’. In an article (pages 30-40) in the 1619 Project that I discussed earlier that looked at the massive impact that slavery had on the history f the US, he says that many of the current ills in the US can be traced straight back to the way that slaves were exploited. Slavery enabled employers to impose harsh working conditions on slaves but even after slaves were freed, there was a determined effort to not give them anything but the barest minimum. That impacted the entire society since the floor for treatment of workers was set so low.
[Read more…]

When speed kills

I understand that the capitalistic system, at least in theory, is based on businesses competing with each other to provide the best product for the lowest price and that as a result the consumer benefits. But what concerns me is when the drive to be better is based on a metric that is not really that important. Unlike safety and quality which are good metrics, one metric of dubious value is speed of service. Because of the drive for speed, we have online retail giants like Amazon, already under fire for the awful conditions under which its workers have to labor and the poor wages it pays, boast about the rapidity with which it delivers the product to your door.
[Read more…]

Here comes yet another Brexit cliffhanger!

If anyone had hopes (or fears) that Brexit drama would end today with the UK parliament voting to approve the deal that Boris Johnson had agreed upon with the EU and thus leave the EU on October 31, those were shattered when, despite his wheeling and dealing, cajoling, and threats, the vote was 322-306 on a plan that withheld support from the deal until further conditions were met. The plan was put forward by a former Conservative cabinet member, Oliver Letwin. As a result of this vote, the government did not put forward its withdrawal plan for a vote and so today was yet another humiliating defeat for Johnson, who as prime minister has a 100% record for defeats by his ruling Conservative party, a record that will be hard to beat.
[Read more…]

Rugby World Cup quarterfinals begin today

All the group matches have been completed in the World Cup with the top two teams from each of the four groups moving on to the next quarter-final knockout stage. On Saturday, England will play Australia while New Zealand plays Ireland. On Sunday, Wales plays France while Japan plays South Africa.

A major typhoon Hagidis hit Japan during the tournament forcing organizers to cancel some matches and treat them as drawn games. Whether this might have affected the group results is hard to say. Intransitive discussed the implications of the cancellations
[Read more…]

Trump gets outmaneuvered by Erdogan

Yesterday, Donald Trump released a letter sent by him to Turkish president Recep Tayyip Erdogan warning him about dire consequences if his actions in Syria went too far, though he failed to specify what that limit was. The wording is so absurd and childish that you know that Trump himself must have authored it and he seemed very proud of the tough talk in it. It looks like a parody letter, instead of one sent by one head of state to another. You really should read it for yourself to appreciate it.

[Read more…]

The politics of celebrity absolutions

Comedian and daytime talk show host Ellen DeGeneres was recently seated next to former president George W. Bush at a Dallas Cowboys football game in the special luxury box owned by wealthy owner of the team Jerry Jones. She was clearly pleased to be with Bush and was shown laughing and generally having a good time with him. When she was criticized for this, she gave the following apologia on her show as an example of how we should all get along with people with whom we might disagree.

“I’m friends with George Bush. In fact, I’m friends with a lot of people who don’t share the same beliefs that I have. We’re all different, and I think we’ve forgotten that that’s OK that we’re all different. … Just because I don’t agree with someone on everything doesn’t mean that I am not going to be friends with them. When I say be kind to one another, I don’t mean only the people that think the same way you do. I mean be kind to everyone.”

[Read more…]

Democrats duck from the truth about the American empire

Jon Schwarz writes that in the Democratic debate on Tuesday, none of them grappled with the fact of how American imperialism has been a bipartisan debacle years in the making and the incoherence on what to do about the current situation with Turkey, Syria, and the Kurds is just a manifestation of it. His view is a more fleshed out version of my briefer reaction.
[Read more…]