Teeming Shores
Inequality
It has been said that America is a country full of temporarily embarrassed millionaires - or capitalists, depending on which quote you prefer. Americans - especially American politicians - insist that we are the best, richest, freest nation on the planet. By one measurement - richest - they are correct, but they’re off on the details.
The US - and, these days, the UK - can best be characterized as poor countries with some very rich people in them. The Financial Times explains:
The rich in the US are exceptionally rich — the top 10 per cent have the highest top-decile disposable incomes in the world, 50 per cent above their British counterparts. But the bottom decile struggle by with a standard of living that is worse than the poorest in 14 European countries including Slovenia.
The bottom ten percent of Americans have worse lives than the poorest Slovenians. What’s crazy is, the five years of growth pre-pandemic - and the accompanying government stimulus, though that was unevenly distributed - actually made Americans better off financially, though still far behind Europe:
The growth spurt boosted incomes of the bottom decile of US households by roughly an extra 10 per cent. But transpose Norway’s inequality gradient on to the US, and the poorest decile of Americans would be a further 40 per cent better off while the top decile would remain richer than the top of almost every other country on the planet.
If America’s wealth distribution was similar to Norway, our poorest would have significantly more resources - and better quality of life - while our rich would still be obscenely rich. The policy choices of America’s wealthy elites keep our poor much worse off than they need to be, given the vast wealth our country has. Again, it is a choice, a choice only one other country in the West has embraced.
In the UK, even the middle class is significantly worse off than its European peers:
While the top earners rank fifth, the average household ranks 12th and the poorest 5 per cent rank 15th. Far from simply losing touch with their western European peers, last year the lowest-earning bracket of British households had a standard of living that was 20 per cent weaker than their counterparts in Slovenia.
In 2007, the average UK household was 8 per cent worse off than its peers in north-western Europe, but the deficit has since ballooned to a record 20 per cent. On present trends, the average Slovenian household will be better off than its British counterpart by 2024, and the average Polish family will move ahead before the end of the decade. A country in desperate need of migrant labour may soon have to ask new arrivals to take a pay cut.
This is especially topical now - as the UK braces for a brutal winter due to increased energy prices and, thanks to its shiny new Tory government, a loss of confidence in its economy:
The British pound plunged to a historic low against the U.S. dollar on Monday, as plans announced late last week for a 45 billion pound (about $48.4 billion) tax cut and massive new borrowing to pay for it sent shockwaves through markets and caused a crisis of faith in the ability of the new British government to pull the country’s stalling economy back from the brink of recession.
By Wednesday, the crisis had grown so acute that the Bank of England said it would reverse its previous plan to sell off bonds and would instead start buying bonds to backstop a collapsing market, warning that continued volatility posed a “material risk to U.K. financial stability.” Having stabilized somewhat on Tuesday, the pound again dipped following the news to $1.05.
From an American point of view it is a little puzzling - when we cut taxes on the rich, the markets love it. However, the tax cuts were wildly unpopular with both Britons and the IMF:
The International Monetary Fund (IMF) offered a sharp critique of the planned tax cuts, which have been widely panned by economists, urging the government to “reevaluate” the measures, warning that they could drive up inflation and inequality.
All the worst predictions about Brexit seem to have come to pass - the country is in a deep financial crisis, its citizens are worse off, and its become increasingly isolated due to the immigration policies a slim majority of its populace voted for. The UK doesn’t have the economic strength of the US, which - despite its growing wealth gap and declining standard of living - has the infrastructure and GDP to shower its citizens with money and not be immediately punished by global markets. Why do both these countries insist on allowing a very small number of people to hoard massive riches while they suffer? The elite in both countries have leaned on one grievance that has worked remarkably well: identity politics.
Immigration
The Brexit campaign used immigration as its central plank. The average (white) Brit was persuaded that life would be better if there weren’t so many Poles or Slovenians entering the country to take the good jobs, or whatever. Ironically, those same immigrants are now better off staying at home, financially at least.
Here in America, immigration has been the organizing issue for the right, and it’s depressingly effective:
Nearly 9 in 10 Republicans said they approve of the efforts by some GOP governors to send migrants who have crossed the U.S.-Mexico border to Democratic-led cities elsewhere, according to CBS News’s Battleground Tracker released Monday.
The poll found that 87 percent of likely Republican voters approved of the move, compared to just 20 percent of Democrats and 48 percent of independents. Meanwhile, 80 percent of Democrats disapprove of the tactic, compared to 13 percent of Republicans.
Twenty percent of Democrats think it’s good for governors of border states to send migrants - often against their will - to ‘liberal’ cities. Not to mention nearly half of independents. Gross.
Ron DeSantis’s stunt - paying a GOP donor’s company exorbitant fees to fly asylum seekers to Martha’s Vineyard for a planned photo op - is only the latest and most cynical in his party’s campaign to demonize immigrants, legal or otherwise. Never mind that Florida’s hospitality and agriculture industries are desperately in need of migrant labor.
The reality is that our immigration system is a mess - largely by design, after years of policy and bureaucratic interference - and is a stationary target for the party of identity politics. Republicans don’t have to offer any solutions because the argument for dismantling the system entirely resonates with a public who rates immigration an ‘important’ topic, despite it having little to no impact on their lives. Despite low unemployment and over ten million jobs sitting unfilled, the threat of immigrants coming to take the jobs no one wants is enough to sway them at the polls, apparently.
The question we need to ask ourselves as a country is: do we have an obligation to take in people seeking safety and sanctuary?
What’s at stake, though no one is willing to articulate it, is the idea of asylum itself: Does America still embrace its obligation under international law to provide sanctuary to at least some unauthorized immigrants?
[…]
The idea of “sending a message” has become a permanent feature of immigration policy, as politicians have fretted that any favorable treatment of migrants already here will encourage more to come.
The Refugee Act of 1980 says people can come into the US and ask for asylum, and receive a hearing. It’s based on the UN Refugee Convention put in place after the Holocaust. There are real logistical hurdles to processing so many asylum claims - courts are hopelessly underfunded and backlogged - and we do shit like this:
Meanwhile, the Biden administration is trying to tighten the asylum system in exactly the ways hawks had been asking for. Hundreds of thousands of migrants are being monitored with GPS-enabled ankle bracelets or cellphones to prevent them from absconding. A new regulation aimed at expediting the asylum process by sending those with weaker claims home within weeks was piloted this summer; nearly half of asylum claimants were rejected at the screening-interview stage, up from 15 percent under the old screening process.
Even a well-meaning administration - increasingly unlikely in a country so deeply polarized around immigration, and facing intransigence from the agencies tasked with managing migrants - would be hard pressed to create systems to humanely deal with the flood of people seeking a better life in America, fleeing crushing poverty or violence. So, rather than having an honest debate over what sort of country we are, whether we want to embrace diversity or turn our backs on the people our government helped to oppress for decades, politicians use immigrants as political pawns, fearmongering an unstoppable brown wave sweeping across our borders. The facts don’t matter, and the polls show people think literally trafficking migrants is okay if it ‘brings attention’ to the issue, which neither party has a plan or the political will to try to fix.
Hurricanes
As Florida deals with the aftermath of Hurricane Ian, and anti-aid zealots like its governor line up for the billions in federal aid, it’s worth looking at another storm that hit a couple weeks ago in Puerto Rico. Fiona was a mere Category 1 hurricane, but it wreaked havoc on the island’s electrical grid. It’s been five years since Maria killed thousands on the island, and billions in federal aid had been earmarked for recovery and rebuilding. What happened?
The privatization of Puerto Rico’s electricity was pitched as a panacea for the island’s troubled grid. But it hasn’t delivered on that promise so far. Instead, like any number of other privatization schemes supercharged after Maria, electrical grid privatization has been an invitation for companies to come make a profit off the provision of basic services.
That Fiona hit Puerto Rico so hard is a failure on multiple levels. Just $40 million of the $9 billion in federal funds meant to rebuild Puerto Rico’s grid since Maria has been spent.
It was confirmed last year that the Trump administration blocked $20 billion in aid to the island for whatever mixture of racist tropes was rattling around in his skull at the time. In all, four times that much has been allocated, but most of it hasn’t arrived:
The federal government has allocated nearly $69 billion to help the island recover from Maria as well as other disasters that have hit the island over the past few years. But most of the money, specifically funds for housing and infrastructure relief, hasn't made its way to communities on the island. Puerto Rico has received $19 billion, according to the Office of Recovery, Reconstruction and Resiliency.
Imagine the uproar on the mainland if allocated funds for disaster relief were held up or never delivered - not that you have to imagine too hard. Anyhow, Puerto Rico has had five years to repair and modernize its grid and it, well, hasn’t:
This time, damage to transmission lines seems to be minimal, with the heaviest losses concentrated in the south and in the mountains. Still, outages have been longer since LUMA took over power lines from the public Puerto Rico Electric Power Authority, or PREPA, last June, and precious little progress has been made toward fixing structural issues.
Puerto Rico’s current political and governance debacle arises from US colonialism and decades of mistreatment. Once a tax haven for manufacturing and agricultural business, the US allowed the generous allowances to expire in 2006, and since then the island has suffered massive budget shortfalls, racking up more than $70 billion in debt. Via Congress, the US created the Fiscal Oversight and Management Board, run by a law professor who believes that when a city or colony runs into financial troubles, the people it owes money to - often distressed debt investors, who swoop in to buy it for pennies on the dollar - should have a say in how the government is run:
“There are democracy issues,” [David] Skeel told me, “but the case for [using a control board to institute government reforms]…is that when a public entity is in deep financial distress there is almost always some government dysfunction connected with it.”
The intervention of an oversight board, he continued, “can sometimes catalyze reform that makes the entity more democratic and responsive…but you go through a process that is not democratic, there’s no question about that.”
[Clayton] Gillette wrote another essay in 2014 titled “Dictatorships for Democracy: Takeovers of Financially Failed Cities,” which advocates dictatura rei gerundae causa, or “the dictatorship for getting things done.” He argues that takeover boards should be allowed “to exceed the limits of the Roman dictator, who was [allowed to take control during crises but] prohibited from making changes to the constitutional structure of the republic.”
Uhhh, right. Democracy ‘issues’ when an unelected ‘dictator’ is put in charge to do critical things, like making sure hedge funds get paid. Puerto Rico has finally emerged from a protracted bankruptcy, which erased nearly half of the debt it owned in 2015. The pain to islanders isn’t as bad as it could have been, with the judge ruling against cutting pension benefits and establishing a trust to make future payments. Still, many of the islands creditors will come out ahead, while it is paying over a billion dollars a year towards its debts.
Meanwhile, David Skeel and his cronies are in charge of Puerto Rico’s ‘restructuring’ and economic recovery, which is obviously going great:
Earlier this summer, the board sued the Puerto Rican government to stop it from implementing a law expanding private-sector employees’ vacation and sick time, overtime pay, and meal breaks, arguing it would slow economic growth.
So the island’s inhabitants are stuck with a privatized energy company they didn’t vote for, and a string of politically connected profiteers who show up every time there’s a natural disaster, while the island receives only a fraction of the money Congress tries to send it.
Even if Puerto Rico were to cut ties with LUMA and put its relief funds to work doing actual rebuilding and modernizing its grid to get off expensive, climate destroying fossil fuels - imagine a Caribbean island with solar power! - the vultures will still get paid:
In Fiona’s wake, calls have proliferated for Governor Pedro Pierluisi to cancel the company’s contract before November 30, after which the island could be saddled with a $1.5 billion penalty for severing ties.
When you’re stuck in permanent debt peonage to an unelected board of libertarian law professors and bankers who are working to systematically sell your island off for parts, what’s a billion and a half dollars here or there? At least the lights might stay on when the next hurricane hits.
Lead Pipes
When we’re not ignoring deadly crises in our colonies, we’re ignoring them in our major cities:
One in 20 tap water tests performed for thousands of Chicago residents found lead, a neurotoxic metal, at or above US government limits, according to a Guardian analysis of a City of Chicago data trove.
The Guardian worked with the water engineer who helped expose the Flint water crisis to review data collected by the city of Chicago - which authorities either failed to analyze - bad! - or didn’t want to share with the public - worse! - because it was grim. Also, you’ll never guess which communities are disproportionately effected by lead:
While homes with high lead test results were widely distributed around residential areas of the city, the areas with the biggest percentages of high lead tests also tended to be working-class neighborhoods with large Black or Latino populations.
For instance, in four zip codes on Chicago’s South Side, eight to 10% of lead tests showed results above the EPA action level.
Of course. Replacing lead pipes is prohibitively expensive for working class families, and the city has been slow to fix the problem:
In May 2021, Chicago’s mayor, Lori Lightfoot, condemned previous mayors for “kicking the can down the road” and failing to deal with the urgent need for pipe replacements. Yet, as of this month, only 180 of the city’s almost half-million lead lines have been replaced.
Lightfoot knows all about getting necessary city services in a time of crisis. And while the Chicago data is alarming, the reality is every major city and millions of homes around the country still have lead pipes, which can poison water and cause all sorts of terrible health problems:
Although the Flint crisis rang alarm bells across the country, estimates say there are some 10m lead pipes still serving US homes – meaning these homes could potentially have unsafe tap water.
EPA, the agency in charge of regulating lead in drinking water, calculates contamination in ways that may miss dangerous levels in poor areas:
But the EPA has an “action level” of 15ppb – meaning that cities are only required to notify the public when at least 10% of a small sample of homes tested are above that amount.
By this measure, Chicago is in compliance.
But this method may miss widescale issues. Flint was also technically in compliance until more detailed testing revealed the extent of its problems.
The American Academy of Pediatrics recommends children drink water with no more than 1ppb of lead, so we’re not only nowhere near safe levels, a patchwork of regulatory failure and political inaction guarantees we’re expose some of the country’s most vulnerable children to high levels of toxic chemicals during critical developmental years.
It would cost $60 billion dollars to replace all the lead pipes in the country, according to one estimate. So, of course, Congress has allocated a quarter of that:
Biden initially sought $45 billion from Congress to complete the task. In the end, Biden got only $15 billion for lead pipes as part of the bipartisan infrastructure bill he signed into law last month.
And the plan relies on states - some of whom were happy to refuse money to keep their poor residents healthy - to spend pandemic relief funds to remove lead pipes. Even if the project were fully funded, it would rely on a nearly unimaginable national mobilization of, uh, plumbers? and municipal water crews to get the job done. It’s easier for cities like Chicago to send out test kits, publish the data, and hope no one notices.
DWAC
Last time we checked in on DWAC, the SPAC trying to take Trump Media public, it was hoping to secure an extension from its shareholders to close the deal, which it blamed the SEC for delaying. Even if it got the extension, there was the risk that major investors - including a billion dollars’ worth of secondary financing commitments - might walk away. How’s that going?
Digital World Acquisition Corp., the blank-check company looking to take Trump Media and Technology Group public, has changed its listed address to a UPS Store in Miami.
The change from a Miami office building to a UPS address came with DWAC’s regulatory filing on Friday disclosing that some investors pulled out tens of millions of dollars.
The company said it had lost $138.5 million of the $1 billion in financing from private investors in public equity, also known as PIPE, to fund Trump Media after the merger. The contractual obligation for those investors to contribute to former President Donald Trump’s media company after the deal had expired last Tuesday, allowing them to pull their funding.
Maybe it was destined to end this way - the once multi-billion dollar publicly traded Trump media empire is now being run out of a UPS store, and more than half the investors have pulled their cash. The ‘media’ part of Trump Media also appears to be on life support:
Trump had more than 80 million followers on Twitter. On Truth Social, which he founded after he was banned from Twitter following the Jan. 6, 2021, Capitol insurrection, he has 4.1 million. The app is also currently barred from the Google Play store.
A truly shocking development when noted business genius Devin Nunes is at the helm. What a pity.
Short Cons
NYT - “LinkedIn ran experiments on more than 20 million users over five years that, while intended to improve how the platform worked for members, could have affected some people’s livelihoods, according to a new study.”
Protocol - “One of the largest prison technology providers in the country seized $121 million from users’ prepaid accounts, after deeming those accounts inactive.”
MarketWatch - ““For the safety of our community, Airbnb runs background checks in the U.S. and may take action to remove people with certain convictions, or who have multiple prior convictions,” Ben Breit, a spokesperson for the company, said in a statement to MarketWatch.”
The Intercept - “Bank of America has refused to forgive some of the loans it made to small business owners through the Paycheck Protection Program. An early Covid-era program that gave business owners money to cover payroll and other costs to help keep them afloat during the pandemic, the loans were supposed to be forgiven if used correctly.”
Tips, thoughts, or open borders to scammerdarkly@gmail.com