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On the Wrong Side of Globalization
- by Joseph E. Stiglitz
- March 15, 2014
- 7 min read
- original
The Great Divide is a series about inequality.
Trade agreements are a subject that can cause the eyes to glaze over, but we should all be paying attention. Right now, there are trade proposals in the works that threaten to put most Americans on the wrong side of globalization.
The conflicting views about the agreements are actually tearing at the fabric of the Democratic Party, though you wouldn’t know it from President Obama’s rhetoric. In his State of the Union address, for example, he blandly referred to “new trade partnerships” that would “create more jobs.” Most immediately at issue is the Trans-Pacific Partnership, or TPP, which would bring together 12 countries along the Pacific Rim in what would be the largest free trade area in the world.
Negotiations for the TPP began in 2010, for the purpose, according to the United States Trade Representative, of increasing trade and investment, through lowering tariffs and other trade barriers among participating countries. But the TPP negotiations have been taking place in secret, forcing us to rely on leaked drafts to guess at the proposed provisions. At the same time, Congress introduced a bill this year that would grant the White House filibuster-proof fast-track authority, under which Congress simply approves or rejects whatever trade agreement is put before it, without revisions or amendments.
Controversy has erupted, and justifiably so. Based on the leaks — and the history of arrangements in past trade pacts — it is easy to infer the shape of the whole TPP, and it doesn’t look good. There is a real risk that it will benefit the wealthiest sliver of the American and global elite at the expense of everyone else. The fact that such a plan is under consideration at all is testament to how deeply inequality reverberates through our economic policies.
Worse, agreements like the TPP are only one aspect of a larger problem: our gross mismanagement of globalization.
Let’s tackle the history first. In general, trade deals today are markedly different from those made in the decades following World War II, when negotiations focused on lowering tariffs. As tariffs came down on all sides, trade expanded, and each country could develop the sectors in which it had strengths and as a result, standards of living would rise. Some jobs would be lost, but new jobs would be created.
Today, the purpose of trade agreements is different. Tariffs around the world are already low. The focus has shifted to “nontariff barriers,” and the most important of these — for the corporate interests pushing agreements — are regulations. Huge multinational corporations complain that inconsistent regulations make business costly. But most of the regulations, even if they are imperfect, are there for a reason: to protect workers, consumers, the economy and the environment.
What’s more, those regulations were often put in place by governments responding to the democratic demands of their citizens. Trade agreements’ new boosters euphemistically claim that they are simply after regulatory harmonization, a clean-sounding phrase that implies an innocent plan to promote efficiency. One could, of course, get regulatory harmonization by strengthening regulations to the highest standards everywhere. But when corporations call for harmonization, what they really mean is a race to the bottom.
When agreements like the TPP govern international trade — when every country has agreed to similarly minimal regulations — multinational corporations can return to the practices that were common before the Clean Air and Clean Water Acts became law (in 1970 and 1972, respectively) and before the latest financial crisis hit. Corporations everywhere may well agree that getting rid of regulations would be good for corporate profits. Trade negotiators might be persuaded that these trade agreements would be good for trade and corporate profits. But there would be some big losers — namely, the rest of us.
These high stakes are why it is especially risky to let trade negotiations proceed in secret. All over the world, trade ministries are captured by corporate and financial interests. And when negotiations are secret, there is no way that the democratic process can exert the checks and balances required to put limits on the negative effects of these agreements.
The secrecy might be enough to cause significant controversy for the TPP. What we know of its particulars only makes it more unpalatable. One of the worst is that it allows corporations to seek restitution in an international tribunal, not only for unjust expropriation, but also for alleged diminution of their potential profits as a result of regulation. This is not a theoretical problem. Philip Morris has already tried this tactic against Uruguay, claiming that its antismoking regulations, which have won accolades from the World Health Organization, unfairly hurt profits, violating a bilateral trade treaty between Switzerland and Uruguay. In this sense, recent trade agreements are reminiscent of the Opium Wars, in which Western powers successfully demanded that China keep itself open to opium because they saw it as vital in correcting what otherwise would be a large trade imbalance.
Provisions already incorporated in other trade agreements are being used elsewhere to undermine environmental and other regulations. Developing countries pay a high price for signing on to these provisions, but the evidence that they get more investment in return is scant and controversial. And though these countries are the most obvious victims, the same issue could become a problem for the United States, as well. American corporations could conceivably create a subsidiary in some Pacific Rim country, invest in the United States through that subsidiary, and then take action against the United States government — getting rights as a “foreign” company that they would not have had as an American company. Again, this is not just a theoretical possibility: There is already some evidence that companies are choosing how to funnel their money into different countries on the basis of where their legal position in relation to the government is strongest.
There are other noxious provisions. America has been fighting to lower the cost of health care. But the TPP would make the introduction of generic drugs more difficult, and thus raise the price of medicines. In the poorest countries, this is not just about moving money into corporate coffers: thousands would die unnecessarily. Of course, those who do research have to be compensated. That’s why we have a patent system. But the patent system is supposed to carefully balance the benefits of intellectual protection with another worthy goal: making access to knowledge more available. I’ve written before about how the system has been abused by those seeking patents for the genes that predispose women to breast cancer. The Supreme Court ended up rejecting those patents, but not before many women suffered unnecessarily. Trade agreements provide even more opportunities for patent abuse.
The worries mount. One way of reading the leaked negotiation documents suggests that the TPP would make it easier for American banks to sell risky derivatives around the world, perhaps setting us up for the same kind of crisis that led to the Great Recession.
In spite of all this, there are those who passionately support the TPP and agreements like it, including many economists. What makes this support possible is bogus, debunked economic theory, which has remained in circulation mostly because it serves the interests of the wealthiest.
Free trade was a central tenet of economics in the discipline’s early years. Yes, there are winners and losers, the theory went, but the winners can always compensate the losers, so that free trade (or even freer trade) is a win-win. This conclusion, unfortunately, is based on numerous assumptions, many of which are simply wrong.
The older theories, for instance, simply ignored risk, and assumed that workers could move seamlessly between jobs. It was assumed that the economy was at full employment, so that workers displaced by globalization would quickly move from low-productivity sectors (which had thrived simply because foreign competition was kept at bay through tariffs and other trade restrictions) to high-productivity sectors. But when there is a high level of unemployment, and especially when a large percentage of the unemployed have been out of work long-term (as is the case now), there can’t be such complacency.
Today, there are 20 million Americans who would like a full-time job but can’t get one. Millions have stopped looking. So there is a real risk that individuals moved from low productivity-employment in a protected sector will end up zero-productivity members of the vast ranks of the unemployed. This hurts even those who keep their jobs, as higher unemployment puts downward pressure on wages.
We can argue over why our economy isn’t performing the way it’s supposed to — whether it’s because of a lack of aggregate demand, or because our banks, more interested in speculation and market manipulation than lending, are not providing adequate funds to small and medium-size enterprises. But whatever the reasons, the reality is that these trade agreements do risk increasing unemployment.
One of the reasons that we are in such bad shape is that we have mismanaged globalization. Our economic policies encourage the outsourcing of jobs: Goods produced abroad with cheap labor can be cheaply brought back into the United States. So American workers understand that they have to compete with those abroad, and their bargaining power is weakened. This is one of the reasons that the real median income of full-time male workers is lower than it was 40 years ago.
American politics today compounds these problems. Even in the best of circumstances, the old free trade theory said only that the winners could compensate the losers, not that they would. And they haven’t — quite the opposite. Advocates of trade agreements often say that for America to be competitive, not only will wages have to be cut, but so will taxes and expenditures, especially on programs that are of benefit to ordinary citizens. We should accept the short-term pain, they say, because in the long run, all will benefit. But as John Maynard Keynes famously said in another context, “in the long run we are all dead.” In this case, there is little evidence that the trade agreements will lead to faster or more profound growth.
Critics of the TPP are so numerous because both the process and the theory that undergird it are bankrupt. Opposition has blossomed not just in the United States, but also in Asia, where the talks have stalled.
By leading a full-on rejection of fast-track authority for the TPP, the Senate majority leader, Harry Reid, seems to have given us all a little respite. Those who see trade agreements as enriching corporations at the expense of the 99 percent seem to have won this skirmish. But there is a broader war to ensure that trade policy — and globalization more generally — is designed so as to increase the standards of living of most Americans. The outcome of that war remains uncertain.
In this series, I have repeatedly made two points: The first is that the high level of inequality in the United States today, and its enormous increase during the past 30 years, is the cumulative result of an array of policies, programs and laws. Given that the president himself has emphasized that inequality should be the country’s top priority, every new policy, program or law should be examined from the perspective of its impact on inequality. Agreements like the TPP have contributed in important ways to this inequality. Corporations may profit, and it is even possible, though far from assured, that gross domestic product as conventionally measured will increase. But the well-being of ordinary citizens is likely to take a hit.
And this brings me to the second point that I have repeatedly emphasized: Trickle-down economics is a myth. Enriching corporations — as the TPP would — will not necessarily help those in the middle, let alone those at the bottom.
Krugman and DeLong on Avoiding Secular Stagnation
Tuesday, 25 March 2014 08:20
Brad DeLong and Paul Krugman are having some back and forth on the problem of secular stagnation and what it would have taken to avoid a prolonged period of high unemployment. I thought I would weigh in quickly since I have a better track record on this stuff than either of them.
The basic story going into the crash was that we had an economy that was being driven by the housing bubble. This was both directly through residential construction and indirectly through the consumption that followed from $8 trillion of bubble generated housing equity. Residential construction expanded to a record high of more than 6 percent of GDP at a time when demographics would have implied its share would be shrinking. This led to enormous overbuilding, which is why construction hit record lows following the crash. (There was a smaller bubble in non-residential real estate that also burst in the crash.)
Consumption also predictably plummeted. This is known as the housing wealth effect. (I learned about this in grad school, didn't anyone else?) Anyhow, when people saw their homes soar in value many spent in part based on this wealth. This might have meant doing cash out refinancing, a story that obsessed Alan Greenspan during the bubble years. It might mean a home equity loan, or it might just mean not putting money into a retirement account because your house is saving for you.
In any case, when the $8 trillion in bubble generated equity disappeared so did the consumption that it was driving. You can't borrow against equity that isn't there. This cost the economy between $400 billion and $600 billion (@ 3-4 percent of GDP) in annual consumption expenditures. Between the lost construction and lost consumption, it was necessary to replace close to 8 percent of GDP. The effect of lost tax revenue in forcing cutbacks at the state and local level raised the demand loss by another percentage point or so.
Some of this gap would be filled as excess inventory of housing gradually faded and the vacancy rates came back to more normal levels. We're getting there, but still have some way to go. Some would be filled by a drop in the trade deficit, which now sits at around 3 percent of GDP, compared to a level of almost 6 percent of GDP before the crisis.
The government could fill the remaining gap with additional spending, but our cult of low-deficit politicians is insisting that they would rather keep people from getting jobs, so this ain't going to happen. Low interest rates are of course a good route to spark demand, and if we could lower real rates further with a higher inflation rate, that would be good news. But that one also doesn't seem very promising.
The other part of the demand story would be to make more progress on the trade deficit. This one is not rocket science, a lower dollar means a lower trade deficit (more econ 101). The issue of lowering the dollar is often posed as a matter of getting tough with the Chinese and force them to stop "manipulating" their currency.
We actually don't have to hide in the dark and wait to catch China in the act and then bring them to justice. China very openly maintains its currency at a level that is well below the market rate. They set a target for their exchange rate and they maintain it by buying up massive amount of foreign assets, such as U.S. government bonds. We don't have to catch them in the act, all of this is completely open and involves trillions of dollars of asset purchases.
It is also not a matter of bringing China to justice over the issue. China has found maintaining an under-valued currency to be a useful development strategy, but they also find other policies to be useful to their development strategy, like not enforcing foreign patent and copyrights or not opening their financial markets to companies like Goldman Sachs.
This suggests an obvious path for getting China to allow the dollar to fall against its currency. We simply tell them that we don't care if they enforce Pfizer and Merck's patents or Microsoft's copyrights. We also tell them they don't have to open up their financial markets to Goldman Sachs, J.P. Morgan and the other Wall Street behemoths, we just want them to raise the value of their currency.
Again, this path may not be politically viable either because of the relative power of the drug companies and banks as opposed to tens of millions of unemployed and under-employed workers, but let's at least get the cards on the table. As fans of national income accounting everywhere know, we will not be able to get to potential GDP without large budget deficits as long as we have large trade deficits (assuming no more bubbles).
There is one other item that must be on the full employment agenda especially as we approach the big March 31 deadline for Obamacare. If we reduce the supply of labor we can also get to full employment. Obamacare will be a useful step in this direction since it will give millions of workers the option not to work or to work fewer hours since they will not have to get health insurance through their jobs. This means that parents of young children will be able to spend more time with their kids, people suffering from illnesses or disabilities will be able to rest more and work less, and many older workers will be able to retire early.
There are other ways we can go to accommodate people's needs and thereby reduce the labor supply. For example more paid sick days would be good news, as would be paid family and medical leave. Many state and local governments are leading the way in these areas. Also, some paid vacation would be nice. Four weeks has been the norm in Europe for decades with some countries guaranteeing as much as six weeks of paid vacation. (Yep, it's all in the good book.)
Anyhow, there are always things that can be done. The key point is to first understand where we are. And the most important take away is that millions are suffering now not because we are too poor, but we are too rich. We don't need all the workers we have. This provides enormous opportunities for making people's lives better, if we just had the political will.
Arrest Climate-Change Deniers
Man-made climate change happens. Man-made climate change kills a lot of people. It's going to kill a lot more. We have laws on the books to punish anyone whose lies contribute to people's deaths. It's time to punish the climate-change liars.
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This is an argument that's just being discussed seriously in some circles. It was laid out earlier this month, with all the appropriate caveats, by Lawrence Torcello, a philosophy professor at the Rochester Institute of Technology.
There is a clear precedent, Torcello says, in L'Aquila, Italy, where six seismologists were convicted of manslaughter in connection with a 2009 earthquake that killed 309 people. The scientists weren't convicted because they failed to predict an earthquake; no one can make such a prediction with reliable precision. But they were convened to study a series of tremors the week before the quake, and tacitly signed off on a government official's public message that "the situation looks favorable" and residents should chill out with some wine.
Their "inexact, incomplete and contradictory information," the court found, contributed to the residents' fatal lack of preparations for bigger tremors.
This is one reason why in the coastal South, where I'm from, you rarely hear TV weathermen and laboratory meteorologists dismiss a tropical storm as no big deal, especially after Katrina. Hurricane season is a big deal, and residents are encouraged to take safety precautions, to prevent a weather pattern from becoming a life-altering nightmare. Constant vigilance is a very American response to external threats.
Except, that is, where climate change is concerned. It is one of the rare threats to safety and stability where a large swath of U.S. commercial culture has marshaled tons of resources to tell Americans: It's not happening. Don't sweat it. It's no big deal.
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Those people are criminally negligent. As Torcello puts it:
Imagine if in L'Aquila, scientists themselves had made every effort to communicate the risks of living in an earthquake zone. Imagine that they even advocated for a scientifically informed but costly earthquake readiness plan.
If those with a financial or political interest in inaction had funded an organised campaign to discredit the consensus findings of seismology, and for that reason no preparations were made, then many of us would agree that the financiers of the denialist campaign were criminally responsible for the consequences of that campaign. I submit that this is just what is happening with the current, well documented funding of global warming denialism.
Attempts to deceive the public on climate change, and to consequently block any public policy to tackle it, contribute to roughly 150,000 deaths a year already—Torcello again:
More deaths can already be attributed to climate change than the L'Aquila earthquake and we can be certain that deaths from climate change will continue to rise with global warming. Nonetheless, climate denial remains a serious deterrent against meaningful political action in the very countries most responsible for the crisis.
Those denialists should face jail. They should face fines. They should face lawsuits from the classes of people whose lives and livelihoods are most threatened by denialist tactics.
Let's make a clear distinction here: I'm not talking about the man on the street who thinks Rush Limbaugh is right, and climate change is a socialist United Nations conspiracy foisted by a Muslim U.S. president on an unwitting public to erode its civil liberties.
You all know that man. That man is an idiot. He is too stupid to do anything other than choke the earth's atmosphere a little more with his Mr. Pibb burps and his F-150's gassy exhaust. Few of us believers in climate change can do much more—or less—than he can.
Nor am I talking about simple skeptics, particularly the scientists who must constantly hypo-test our existing assumptions about the world in order to check their accuracy. That is part and parcel of the important public policy discussion about what we do next.
But there is scientific skepticism... and there is a malicious, profiteering quietist agenda posturing as skepticism. There is uncertainty about whether man-made climate change can be stopped or reversed... and there is the body of purulent pundits, paid sponsors, and corporate grifters who exploit the smallest uncertainty at the edges of a settled science.
I'm talking about Rush and his multi-million-dollar ilk in the disinformation business. I'm talking about Americans for Prosperity and the businesses and billionaires who back its obfuscatory propaganda. I'm talking about public persons and organizations and corporations for whom denying a fundamental scientific fact is profitable, who encourage the acceleration of an anti-environment course of unregulated consumption and production that, frankly, will screw my son and your children and whatever progeny they manage to have.
Those malcontents must be punished and stopped.
Deniers will, of course, fuss and stomp and beat their breasts and claim this is persecution, this is a violation of free speech. Of course, they already say that now, when judges force them into doing penance for comparing climate scientists to child-rapist and denial poster-boy Jerry Sandusky.
Related
Roughly .02 Percent of Published Researchers Reject Global Warming
In 2013, there were 10,885 published, peer-reviewed articles that researched anthropogenic, or man-made, climate change. Only two argued that the… Read…
But First Amendment rights have never been absolute. You still can't yell "fire" in a crowded theater. You shouldn't be able to yell "balderdash" at 10,883 scientific journal articles a year, all saying the same thing: This is a problem, and we should take some preparations for when it becomes a bigger problem.
Willful, profiteering public deniers of climate change can compare themselves to Galileo all they want, pretending that they're voices of sanity in a cruel wilderness. But Galileo had science on his side. He had a telescope aimed at the cosmos. Climate deniers have their heads jammed in the sand... or in a barrel of money.
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There is a lot we can do societally, now, not just in terms of reducing our contributions to the global climate's maladies but in terms of preparing for its effects: rising seas and temperatures. Changes in crops and food supplies. Increased population density and disease. There is a chance to make society safer and smarter.
If you have all of this information at your command and that reform project still scares you, if you think it necessarily entails a sacrifice of your personal freedom that you cannot brook, fine. That's a debate we can have. But if you are actively trying to deny people the tools they need to inform themselves, to protect themselves against a scientifically proven threat to life and limb, you shouldn't be part of the debate. You should be punished for your self-serving malice.
I'm sure there are plenty of videos from Live Leak that would be relevant.
The Comcast Merger Isn’t About Lines On A Map; It’s About Controlling The Delivery Of Information
By Kate Cox April 12, 2014
(knight725)
Comcast and proposed merger partner Time Warner Cable claim they don’t compete because their service areas don’t overlap, and that a combined company would happily divest itself of a few million customers to keeps its pay-TV market share below 30%, allowing other companies that don’t currently compete with Comcast to keep not competing with Comcast. This narrow, shortsighted view fails to take into account the full breadth of what’s involved in this merger — broadcast TV, cable TV, network technology, in-home technology, access to the Internet, and much more. In addition to asking whether or not regulators should permit Comcast to add 10-12 million customers, there is a more important question at the core of this deal: Should Comcast be allowed to control both what content you consume and how you get to consume it?
QUESTIONABLE COMPETITION
This week, Comcast and Time Warner Cable executives testified before the Senate Judiciary Committee about why they think their merger is such a great idea.
In their joint testimony [PDF], the execs made a point of giving hearty shout-outs to anyone they perceive as a competitor, in order to claim that the merged company won’t be a monopoly. That list of competitors repeatedly named AT&T, Verizon, DirecTV, Dish, Amazon, Apple, Sony, Google, Netflix, and Facebook as chief concerns.
Some of those are easy to understand: the satellite companies directly compete with Comcast to get TV networks into peoples’ homes, for example, and the fiber companies do that plus broadband, too. But Apple and Sony? Amazon and Netflix? Facebook?
If Comcast is the company that plugs the broadband wire into your home, then why are they so concerned about whose devices and services you might use once you’ve got that connection?
Comcast is so concerned about all those other products explicitly because they aren’t just the company that plugs the broadband wire into your home. Comcast is already not only your carrier but also your content — and if they get their way they’ll become your gatekeeper to everyone else’s content, too.
WHAT COMCAST DOES
The post-2011, post-NBCU-merger Comcast is an absolute behemoth of a company. They’ve got reach into an enormous number of media, internet, film, and television-related businesses.
So Comcast is:
And that’s without getting into their landline phone service, their web properties, their physical properties, their sports ties, or the several large cities where they own major local TV stations.
- A “last mile” cable company, managing the physical infrastructure for television delivery
- A “last mile” broadband company, managing the physical infrastructure for Internet delivery
- A content delivery company, managing the software for broadcast/cable television (set-top boxes, the X1 platform and “TV anywhere”)
- An ISP, managing software for Internet access (Comcast.net etc)
- A broadcast TV network (NBC)
- A cable content company (Bravo, SyFy, USA, etc.)
- A movie studio (Universal, Focus Features)
- A streaming content delivery company (Streampix, Hulu, Xfinity On Demand)
Distilled, the core businesses from which Comcast makes its big money are as a cable TV distributor, as a broadband Internet access distributor, and as a content company. And the combination of those three elements gives it enormous power.
Owning so many elements all the way up and down the whole process chain is known as vertical integration. (Horizontal integration is spreading a business wider, as the Comcast/TWC merger would do.) So for example, Comcast could take a 30-minute sitcom from production, to broadcast, to syndicated cable rerun, to on-demand, to streaming service that goes right to your home on Comcast’s data network without a third party being any link in the chain.
When vertical integration is used to prevent competitors from doing their business, it can be an anti-trust concern. That most famously happened when the Supreme Court broke up the Hollywood studio system in 1948. In 2011 when Comcast wanted to buy NBCUniversal, the FCC and the Justice Department updated the metrics [PDF] they use to analyze vertical integration and imposed some restrictions on Comcast to prevent certain foreseeable abuses from happening.
THE COMCAST ECOSYSTEM
Pay TV — cable, fiber, and satellite — all work through a series of contract agreements with companies that own the networks. The company that owns the content gets a fee from the distributor, and these are generally arranged on a per-network, per-subscriber basis.
ESPN famously commands the highest fee of any cable network. So parent company Disney gets a little bit of money — in the ballpark of $5 — for every cable, satellite, and fiber subscriber in the country that has ESPN in their package (pretty much all of them).
Smaller networks command much lower fees, because content companies are trying to get their little channels in front of more eyeballs to increase ad revenue. Bigger networks get much higher fees, because realistically if a cable company blacks out ESPN they’re going to lose an enormous number of subscribers. The money depends on who needs whom.
But of course, this is 2014, the age of the cord-cutter. With somewhere between 95 and 100 million subscribers, pay TV is still a big deal… for now. The under-40 crowd is starting to opt out of pay TV at a rate that the industry didn’t see coming even a few years ago. But just because someone doesn’t pay for cable anymore doesn’t mean they don’t want to see the programming.
DOUBLE-DIPPING AND THE MODERN MARKET
Happily for Comcast, those cord-cutting households aren’t unplugging; they’re just replacing their pay-TV service with streaming-only options. And successfully doing that means maintaining a reliable home broadband connection… which Comcast, conveniently, also provides.
Broadband competition is effectively nil in many areas, despite Comcast’s claims about 4G LTE mobile broadband. So buying TWC extends Comcast’s reach into that market, which they no doubt want to do.
But there’s more to it than just selling access to the Internet pipelines. What comes down those pipelines matters, too.
Under the recently-vacated net neutrality rule, an ISP like Comcast would be forbidden from working out a pay-for-carriage agreement with an Internet content company the same way they can with a cable network. But that rule was overturned early this year, and nothing yet has replaced it.
Comcast is obligated, under the terms of its NBCU purchase, to keep adhering to the now-absent rule until 2018. But that rule has plenty of loopholes that can still result in services needing to pay for decent access to Comcast’s network.
Of course, Comcast isn’t just sitting around finding ways to charge companies like Netflix for carriage; they’re out there competing directly in the same space. The trade and lobbying group for the big cable companies, the NCTA, has a chart on their website under “competition” where they list the biggest video subscription services. From largest to smallest, the list includes Netflix, Comcast, DirecTV, Dish, TWC, Hulu, FiOS, U-Verse, Cox, and Charter.
Eight of those are companies that provide pay TV service, and can easily be considered competitors with each other. The other two though, Hulu and Netflix, are internet-only content-only companies that don’t care who you get your broadband connection from, as long as you’re in front of a screen that can access their apps or websites — and Comcast already owns about a third of Hulu.
HOW COMCAST KEEPS YOU IN ITS SANDBOX
The joy of being a vertically integrated company is being able to exercise something called vertical leverage. Basically, the bigger Comcast gets, the more extraordinary financial power they wield. The terms they can negotiate upstream and downstream are more likely to be favorable to them, and not to anyone else.
A report [PDF] from the Consumer Federation of America calls these “bottleneck points.” And the bigger Comcast gets, the more of them they have — as in their recent peering dispute with Netflix.
Comcast also has ways of keeping paying consumers, not just other businesses, playing on their turf. In 2012, for example, Comcast declared that while time spent streaming video through YouTube or Netflix counted against a customer’s monthly data cap, data streamed from Comcast’s On-Demand service would not.
And what about that X1 platform that Comcast keeps touting in all if their testimony, filings, and self-congratulatory website posts? It’s the company’s next iteration on a cable box: a cloud-based, remotely accessible platform that integrates DVR, currently-airing TV listings, and Comcast’s on-demand video. It is convenient for Comcast subscribers… and it’s also a way to keep them from ever wanting to turn on another device and log in to Netflix instead.
Comcast even manages to find a way to use its extensive gatekeeping to prevent paying subscribers from accessing material they paid for. HBO subscribers who get their premium channel from Comcast can’t use the HBO Go app on certain platforms (Roku and PlayStation 3) even though HBO supports it — because Comcast’s authentication process doesn’t.
IS THIS REALLY SOMETHING TO WORRY ABOUT?
Right now, Comcast is limited by legal agreements not to behave in too shady a manner. They had to relinquish management control of Hulu, for example, and those net neutrality requirements remain in place. Getting the merger with Time Warner Cable through the approval process would likely require some sort of nod to broadband competition as a concession.
But Comcast has a really bad track record of actually obeying those orders. Once it gets the green light to go ahead with a business move, they generally just do what they want.
Consumer advocacy groups aren’t the only ones worried about Comcast’s continued expansion plans: lawmakers from both parties have their doubts. Those concerns aren’t just about who runs wires where, and what company a consumer pays to get service. They’re about what customers are allowed to consume.
Whether the reasons for locking a content provider out of distribution access are politically motivated or simply financial, the end result is the same: consumers have narrower access.
THE FUTURE OF NOT-AWESOME
And that’s the future that’s coming to pass. Comcast already controls the production, distribution, and exhibition pipeline for content — both in the traditional TV space and also in the streaming space. But Comcast’s reach, despite the dearth of true competition in most markets, isn’t yet universal. A few other companies are big enough that they can still provide tiny obstacles to Comcast’s vertical leverage.
In the end, making Comcast bigger only gives it more leverage — a company that would control the lion’s share of to-the-home information for this country. Until such a time when (and if) wireless and fiber providers begin offering a service that competes with cable Internet on speed, availability and cost, consumers are only going to see the walls around Comcast’s sandbox grow taller, while bottlenecked Internet businesses face higher and higher tolls for access to a huge portion of American homes and offices.
In this game, the only one who wins is Comcast.
Leave ‘Organic’ Out of It
MAY 6, 2014
Mark Bittman
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The ever-increasing number of people working to improve the growing, processing, transporting, marketing, distributing and eating of food must think through our messages more thoroughly and get them across more clearly. I don’t pretend to have all the answers, but I can say that a couple of buzzwords represent issues that are far more nuanced than we often make them appear. These are “organic” and “G.M.O.'s” (genetically modified organisms).
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I think we — forward-thinking media, progressives in general, activist farmers, think-tank types, nonprofiteers, everyone who’s battling to create a better food system — often send the wrong message on both of these. If we understand and explain them better it’ll be more difficult for us to be discredited (or, worse, dismissed out of hand), and we’ll have more success moving intelligent comments on these important issues into the mainstream.
Let’s start with “organic.” The struggle to raise more food in more sustainable ways is as important as any, including the fight to slow climate change. (They’re related, of course.) But more sustainable does not mean “pure,” and organic often generates unreasonable expectations. Many experts are now using the term “agro-ecological,” which has the disadvantage of being unusable in casual conversation — why not just say, “We want to make crop production better?” Because we can improve industrial agriculture more quickly and easily than we can convert the whole system to “organic,” which is never going to happen. Unless, of course, we run out of cheap fossil fuel and have to stop moving chemicals and food around the globe willy-nilly.
Furthermore, there’s a very real difference between eating better and growing better. I can eat better starting right now, and it has nothing — zero — to do with shopping at Whole Foods or eating organically. It has to do with eating less junk, hyperprocessed food and industrially raised animal products. The word “organic” need not cross my lips.
Often I’m engaged in a discussion where I say precisely that: Eat more plants, try to wipe out junk food from your diet, cut back on industrially produced animal products, and so on. Inevitably, someone asks, “What if I can’t afford to buy organic?” Or, “What if I can’t afford to shop at Whole Foods?”
Let’s encourage people to eat real food, which for most people will mean eating better. This is affordable for nearly everyone in the United States. (I tackled this issue a couple of years ago, in detail.) For most people, eating better is mostly about will and skill. Those are not small items, but they’re much more easily dealt with than changing industrial agriculture. Yes, there are people who are too poor to afford real food; but that’s an issue of justice, the right to food and fair wages — not of whether the food is organic.
Eating organic food is unquestionably a better option than eating nonorganic food; at this point, however, it’s a privilege. But that doesn’t make it a deal-breaking matter. Reducing the overload of synthetic chemicals and drugs in agriculture and the environment is a huge issue, as is eating better, but neither necessitates “going organic.”
Then there are G.M.O.'s: OMG (the palindrome is irresistible). Someone recently said to me, “The important issues are food policy, sustainability and G.M.O.'s.” That’s like saying, “The important issues are poverty, war and dynamite.” G.M.O.'s are cogs in industrial agriculture, the way dynamite is in war; take either away, and you have solved virtually nothing.
By themselves and in their current primitive form, G.M.O.s are probably harmless; the technology itself is not even a little bit nervous making. (Neither we nor plants would be possible without “foreign DNA” in our cells.) But to date G.M.O.'s have been used by companies like Monsanto to maximize profits and further removing the accumulated expertise of generations of farmers from agriculture; in those goals, they’ve succeeded brilliantly. They have not been successful in moving sustainable agriculture forward (which is relevant because that was their claim), nor has their deployment been harmless: It’s helped accelerate industrial agriculture and its problems and strengthened the positions of unprincipled companies.
But the technology itself has not been found to be harmful, and we should recognize the possibility that the underlying science could well be useful (as dynamite can be useful for good), particularly with greater public investment and oversight.
Let’s be clear: Biotech in agriculture has been overrated both in its benefits and in its dangers. And by overrating its dangers, the otherwise generally rational “food movement” allows itself to be framed as “anti-science.”
If anti-G.M.O. activists were successful in banning G.M.O.'s, we’d still have industrial agriculture, along with its wholesale environmental degradation and pollution, labor abuse and overproduction of ingredients for the junk food diet.
What about labeling? I’m in favor of transparency — I want to know what’s in my food — and labeling G.M.O.'s may well be the thin end of the wedge. But that G.M.O.'s are in the forefront of the battle for transparency is perhaps unfortunate, since they play on irrational fears and are far less worrisome than the intensive and virtually unregulated use of antibiotics and agricultural chemicals.
Maybe all I’m saying here is this: There are two important struggles in food: One is for sustainable agriculture and all that it implies — more respect for the earth and those who live on it (including workers), more care in the use of natural resources in general, more consideration for future generations. The other is for healthier eating: a limit to outright lies in marketing “food” to children, a limit on the sales of foodlike substances, a general encouragement for the eating of real food.
Both sustainability and healthier eating affect us. Very few people can avoid struggling daily with the avalanche of bad food and the culture and propaganda surrounding it. Near-hysteria or simple answers lead to unachievable situations and nonsolutions. More effective would be shifting the food culture, the relevant business models and public policies — a gradual and concerted movement toward making production and consumption simply “better.” That is what the good food movement should be about.
Well, his point was more that genetics in food is not necessarily a bad thing, more that putting in genes to resist certain branded chemicals is the harm.
Brazilians Hate the World Cup. Brazilians Are Role Models.
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Brazilians do not just hate the World Cup theme song; with the world's biggest sporting spectacle just weeks away, it's becoming clear that Brazilians hate the whole fucking World Cup. Why can't we all be like Brazilians?
It's not that Brazilians don't love soccer. Brazilians fucking love soccer. It's that, in an almost unprecedented showing of national good sense-having, regular Brazilians have collectively come the realization that the World Cup amounts to a huge ripoff of, you know, regular Brazilians, all so that some asshole politicians can feel glorious. Brazilians—who love soccer!—have been raising hell about the outrageous expense of hosting the World Cup for years now. This never happens! From Bloomberg:
Brazil's team, which has been cheered by thousands of flag-waving fans on the record five occasions its returned home with the World Cup trophy, received abuse from striking teachers when it departed for its training camp two days ago.
Demonstrators waved banners criticizing the tournament and the team's luxury bus was pasted with stickers calling for more money for schools.
Can you imagine NFL fans pelting their team's bus and demanding their city not spend money on a new stadium, and instead spend money on schools, or hospitals, or the poor? It is like a rational and mildly liberal American's wet dream! Can you imagine a million citizens of an American city taking to the street in riotous protest to demand that their city not host the Super Bowl? Can you imagine University of Alabama alumni waving signs and writing graffiti urging their school to divert funds from the football team into education? I cannot imagine it. And yet Brazil is living it.
Why can't Brazilians get into the dumb, idiotic, exploitative sporting-enthusiast spirit that their politicians demand? Why, can't they see that their leaders are simply making the hard choices to emphasize important priorities first?
In Fortaleza, another poor northeastern city hosting six games, builders finished the Castelão stadium for $230 million. But fans arriving at Fortaleza's airport will find a giant tent rather than a new planned terminal.
That airport terminal had to die so that this useless boondoggle of a stadium could live! Don't you see? Hey, is that gasoline? Put that away this instant.
Brazilians are pissed, and I am impressed. May we all inherit their love of sports, and disgust with the way that sports are used to rip off the general public.
The Gun-Law Improvements That No One Is Taking Seriously
- by Adam Weinstein
- May 28, 2014
- 3 min read
- original
S
America's gun conversation, to the extent that there is one, is facile, extreme and led by monied interests on both ends. The NRA is awful and the vocal anti-gun left is little better—focused on superficial answers to a culture-wide problem. Here are some reform ideas that ought to be taken seriously.
But before the list, a finer statement of the problem. Gun people—and I have always considered myself one, regardless of how much the steadily degenerating paranoid right wing of the right wing disagrees—are right about one thing: Guns are greatly misunderstood. Hence the trouble with the so-called "gun control" lobby: It fixates on measures that are paradoxically toothless and easily spun as tyrannical by the industry-led NRA. One example is an assault-weapons ban, which is the least you can do: Assault weapons, gun people correctly point out, are as lethal as most other guns. The difference is aesthetic and cultural.
Those differences are worth addressing, but not necessarily with fast-enacted laws against cosmetic changes to a gun's stock. And they don't address the fact that some of America's darkest massacres—not just last week's USCB shooting, but Virginia Tech, still the deadliest mass-shooting on American soil—were perpetrated with semiautomatic pistols, which are common and useful both for recreational shooting and legitimate, limited self-defense.
It's worth pointing out that there are hundreds of millions of legal guns in America, while the NRA claims 4 million members... and there's no telling how legit that number is, since they push membership when you register for shooting classes locally, and they claimed my dead grandfather as a member for more than a decade after his passing. A vast majority of gun owners in America aren't represented by the NRA or its far-right alternatives. Nor are they effectively courted or consulted by the Bloomberg-funded gun-law groups.
Beyond the clichés, the cherished identities as freedom-loving gun-people or urbane intellects with little respect for the salt of the earth, there is nothing. There is on one hand a Second Amendment absolutism that sees any responsibility to a larger community than the self or the family as a dilution of a fundamental right. There is on the other hand an assumption that gun ownership is illegitimate because the ill-educated, boorish, bullying paranoid gun nuts who feel most passionately about the issue block our view of any moderate elements. There is no space being carved out for a more responsible, humane, trained (and yes, smaller) armed citizenry.
The events of last week demand that we do better. We could consider whether any of the following measures might have frustrated Elliot Rodger's ambitions to kill people with firearms, and whether they could dampen those ambitions in others down the line:
What chance do these measures have of passing? I don't know. But I bet they start a more productive national conversation than an assault-weapon ban.
- Limits on the number of modern firearms or magazines that may be possessed or purchased in a set time period up to several years. You can still own guns. Any guns you like. Just not all of them, all at one time, without undertaking a negotiation with the society that has to live with you and your guns.
- High purchase taxes, insurance requirements, co-signing agreements, or mandatory training and evaluation for men 25 and under seeking to own firearms, the way rental cars work. We know that men of that age are especially likely to use guns on themselves and others, just as auto insurers have long known they're likelier to get in crashes. Plus, there's a precedent to this approach: In 1934, seeking to curb the proliferation of machine guns on the streets, the U.S. passed the National Firearms Act, which levied a $200 tax on every purchase of a full-auto weapon or other controlled gun. The guns were still available, and other firearms were more affordable, so no right to ownership was infringed, but this constitutional federal regulation of commerce effectively ended the broad trade in machine guns.
- Mandatory disclosure of all prescriptions taken and all mental health services consulted since birth. If Rodger had attempted to enlist in the armed forces, all this information would have been recorded at the time of his recruitment. And given his medication and consultation history, he would have either been disqualified from service or required to obtain a waiver to the rules. There are no such requirements for gun purchases.
- Allowing rental housing units to bar firearms or require firearms possession to be declared on a leasing application, and secured with an additional move-in deposit... as is currently done with cats and dogs. Cats and dogs.
- Require breathalyzer testing at the point of sale for all firearms purchases, and again on delivery of the firearms, if there's a waiting period.
- More cops. Not armed private citizens, cops. The first thing that stops a bad guy with a gun is not giving a bad guy a gun. The second thing is not a random guy who thinks he's good, a supreme gentleman. The second thing is a guy whom we as a society have decided is good. Don't trust cops? Then work to create better-trained, savvier cops. Don't complain about the evils of policing like it means something.
- Require all modern firearms sold to men to be plated permanently in high-gloss pink. No, really. Shiny hot pink guns are harder to conceal illicitly and easier for the unarmed to spot and avoid. This would be a win-win for America: Either macho gun culture would spurn pink guns and there'd be fewer pistol-packing men with something to prove, or they'd bite the bullet and acculturate to pink guns... and then, maybe, our culture might finally get over its dumb coding of pink as "girly."
S
Dumb ass bitch.
doghouse
and
OfficePants
will get behind this one.
US Corruption vs. World Corruption | Ian Welsh
US Corruption vs. World Corruption
2015 July 31
tags: Corruption
by Ian Welsh
One of the most hilarious things to me is Americans whacking other countries for being corrupt. Russia is a favorite target, but virtually every non-Western country is abused for corruption.
I’ve pointed out before that this is absurd. There is no more corrupt country in the world than the US. The bank bailouts were pure corruption, performed even though a supermajority of the population was against them; even though the banks had broken the law systematically; even though the banks were bankrupt due to decisions they knew were corrupt, illegal and (yes), stupid.
The US election system is flagrantly corrupt, with billions of dollars of direct and indirect donations from the rich. You buy supper with a candidate for thousands of dollars a plate. You buy White House access with much larger donations. Third party PACs spend hundreds of millions.
The bribery in the US is legal. Legal. That does not mean it is not bribery. That does not mean it is not corruption. It is used to make sure that politicians owe the monied class and do not harm them, aye that they continue to pass laws and take actions which help them.
The regulatory class is completely owned: there is a revolving door between Wall Street and the Treasury and Federal Reserve, for example, and Wall Street pays far better. When senior officials leave, they get jobs from those they regulated, or give speeches for six figures a pop. Politicians are treated the same, receiving lobbying jobs worth six to seven figures, board positions and so on.
This is all legal, but it is corruption.
Jimmy Carter recently said this, with respect to Citizen’s United:
an oligarchy, with unlimited political bribery
But don’t be deceived, Citizen’s United was just the final capstone: the US was already a completely corrupt, bought and owned regulatory state before Citizen’s United. Citizen’s United just made it much easier.
I repeat, in absolute terms, there is no more corrupt country in the world than the US. In relative terms? Who knows, but the US being corrupt matters more than corruption in any other country. (Though China is coming on strong.) US financial law is essentially extra-territorial: the US is capable of crippling other countries economies almost alone with Treasury orders. The US has the world’s largest military and regularly intervenes in other countries with air strikes, assassinations and general terror.
What is unique about America is not its corruption, many countries are corrupt, it is the sheer hypocrisy of pretending that America is not corrupt, because Americans have made their corruption legal.
Corruption is the inevitable consequence of concentrated wealth. It always occurs when you have great inequality, it cannot be avoided.
You want corruption back to reasonable levels? You want it illegal again? You take the oligarchs wealth away from them and you break the great monopolistic and oligopolistic companies or bridle them with uncorrupted regulators crawling up their backside while taxing the hell out of them.
Nothing else works (and the second solution works for a while). Nothing else has ever worked. Anyone who tells you otherwise is lying to you.
You want you country back, and your children and yourselves to have a future?
It’s you or them. So far Americans keep choosing them.
I think both
OfficePants
is Ian Welsh.
I just figured it out.
Well, they saw no way to extract money from anyone by "helping" him, obviously.
