Isaac Laquedem

Is William Baxter (1929-1998) the culprit behind today's shortage of baby formula? History and economics say "yes"

On May 12 Heather Cox Richardson published this incisive essay, one of her "Letters from an American" series.  She starts her essay with a short discussion of the involvement of members of the Trump administration in the planning of the January 6 attack on the Capitol, and then moves into a report from the House Select Committee on the Coronavirus Crisis.  The committee's name doesn't describe its full ambit, which is to look into anything related to the federal government's response to the pandemic, including waste and fraud.  Professor Richardson then describes Tyson Foods pushing Secretary of Agriculture Sonny Perdue, and through him Vice President Pence and President Trump, to keep meatpacking workers on the job.  As she reports, "Industry leaders wrote a proposed executive order for Trump to issue, declaring a meat shortage and invoking the Defense Production Act to ensure that the plants continued to operate.  Less than a week later, Trump issued a similar executive order." 

Professor Richardson then ties the consolidation of meat production into the hands of a few gigantic businesses to the shortage of infant formula in the United States that resulted when one producer, Abbott, recalled its production from one factory after test samples were found to be contaminated, and describes the situation as the "larger problem of the consolidation of food production."

The "larger problem of the consolidation of food production" that Professor Richardson describes is significant, but it's only one facet of the very large problem of the consolidation of American and transnational industries in general, which started in the early years of the Reagan Administration.  Having successfully broken up American Telephone & Telegraph on antitrust grounds, the Reagan Administration and its chief antitrust enforcer, William Baxter, declared victory and went home, leaving the rest of American industry to merge and consolidate as it wished on the modest condition of paying a small toll to the government pursuant to the Hart-Scott-Rodino Act of 1976, but unfettered by Section 2 of the Sherman Act of 1890.  Benign neglect remained the policy of the enforcers (the "enablers"?) until 1998 when the Clinton Administration sought to fracture Microsoft - a case that the government won at trial and then ignominiously settled in the second year of the Bush (43) administration.

Since then antitrust enforcement in the context of corporate mergers has ceased to play an important part in corporate America.  By 2017 business professors Gustavo Grullon, Yelena Larkin, and Roni Michaely could write that market concentration as measured by the Herfindahl-Hirschman index (the one the Justice Department uses, when it's on the job) "has systematically increased in over 75% of U.S. industries, and the average increase in concentration levels has reached 90%" measured since about 2000. They also found that in real-dollar terms the average and median size of public corporations ("the largest players in the economy," they wrote) had tripled.  As they demurely put it, "Profit margins and shareholders' wealth gains have increased in proportion to the increase in industry concentration... Increased profit margins are mainly driven by wider operating margins rather than higher operational efficiency."

Translation: as the big got bigger, they used their concentrated market power not to be more efficient, nor to innovate, but to charge higher prices and make more money.  Food production is just one of the industries where the increase in concentration has brought new opportunities for the poor to subsidize the rich.

Rep. Marjorie Taylor Greene stamped out

Twitter shut down the personal account of Rep. Marjorie Taylor Greene, stating or implying that its system of artificial intelligence had detected a "fifth strike" in her tweets that in the AI's (and hence Twitter's) view are misleading enough about Covid to cause harm.  MSN's article on her partial expulsion from the Twitterverse (she can still use her official House account) demurely contrasts one of her tweets with an observed fact about Covid deaths: 

Shortly before her weeklong suspension from Twitter, she claimed in a tweet that the virus was “not dangerous for non-obese people and those under 65”. According to the Centers for Disease Control and Prevention (CDC), people under 65 account for nearly 250,000 of US deaths involving Covid-19.

It's pleasing to see Twitter acknowledge that it's more than just a passive publisher of misinformation, similarly to its action in January last when it expelled Donald Trump.  Am I perhaps too cynical in noting that it didn't expel Mr. Trump until after January 6 when it became clear that the coup attempt had failed?  Twitter's management, like the Supreme Court, may align with Finley Peter Dunne's famous line, "No matther whether th' Constitution follows th' flag or not, th' Supreme Coort follows th' election returns."

A timeline of Texas's stand against Covid as managed by Governor Abbott and Costello

Sometimes the facts imply their own editorial commentary:

March 19, 2020:    Governor Abbott limits gatherings of large groups to help prevent the spread of Covid-19.

June 30, 2020:    Texas reports 6,975 new Covid-19 cases, a single-day high for the state.

December 17, 2020:     Texas reports 16,864 new Covid-19 cases, the highest daily number of new cases since the start of the pandemic.

March 2, 2021:    Governor Abbott lifts Texas's mask mandate and allows all businesses to reopen at full capacity.

April 5, 2021:    Governor Abbott prohibits Texas governments from requiring visitors to show proof of vaccination.

May 18, 2021:  Governor Abbott bans almost all Texas governments from requiring visitors to wear masks. "Texans, not government, should decide their best health practices," he said.

July 21, 2021:    New Covid cases in Texas begin to jump, moving from 1,000/day in the prior week to 10,000/day on July 27.

July 29, 2021:  Governor Abbott allows all state agencies and local governments "to proceed without COVID-19-related limitations imposed by local governmental entities or officials."  Any local official or  government that violates the order may be fined $1,000.  The governor reiterates his April 5, 2021 order that prohibits all governments from requiring visitors to provide proof of vaccination.  "Texans have mastered the safe practices that help to prevent and avoid the spread of COVID-19," he wrote.

August 17, 2021:    Governor Abbott tests positive for Covid-19.

October 11, 2021:    Governor Abbott prohibits all vaccine mandates in Texas, writing that "in yet another instance of federal overreach, the Biden Administration is now bullying many private entities into imposing COVID-19 vaccine mandates, causing workforce disruptions that threaten Texas's continued recovery from the COVID-19 disaster."

December 28, 2021:    Texas reports 57,000 new Covid-19 cases over the Christmas weekend.

December 31, 2021:    Governor Abbott begs President Biden for federal help for Texas to fight Covid.

No Peloton for Christmas? Those two contentious jobs at the Port of Portland cast a long shadow

Readers with long memories will recall that in 2014 the ILWU and the electricians' union fought over two jobs at Terminal 6, the Port of Portland's container facility on the Columbia River (pictured).  The question was whether the task of plugging power cords into refrigerated containers was properly allocated to the ILWU (because the containers were sitting on docks) or to the electricians (because the task involved wiring).  The fight between the unions turned into a general slowdown that drove container shipping away from Portland in 2017.  One freight line tenuously returned (one ship a week) in early 2020, just before the pandemic struck. 

The idled union workers might ask their leadership to read this story about the Port of Los Angeles, the busiest port on the west coast.  Shipping times from China to Los Angeles have ballooned from 2 weeks to 7 or 8 weeks.  The ships still chug across the Pacific Ocean at the same speed -- until they get to Los Angeles, where they sit and wait offshore for weeks with their cargoes of Pelotons and other Christmas gifts (now Twelfth Night gifts?) before they can dock and unload.  Everyone involved justly blames the Covid-19 pandemic.  The delays in unloading in Los Angeles are so great that many importers paid extra - a lot extra - to have their goods flown to the United States instead of taking their chances on being marooned offshore.

Consider the Port of Portland's nearly idle Terminal 6, its facility for handling shipping containers.  Certainly the warring unions couldn't have predicted in 2014 that a worldwide pandemic would strike in 2020.  But they might have considered that anything that caused a slowdown at a larger west coast port might encourage freight companies to divert their ships to Terminal 6, and keep their members employed.

Harvard Professor Raj Chetty explains COVID-19's impact in a nonpartisan way based on actual data and economics. We should listen.

Here is a link to actual data on the effect of the pandemic on the American economy.  It's a website, "Track The Recovery," maintained by a group of economists led by Harvard professor Raj Chetty.  Bloomberg News has a good description of Professor Chetty's work, and the data on which it's based, here.

Among the most pointed findings is that "the recession has nearly ended for high-wage workers, but job losses persist for low-wage workers."  The money quote from the Bloomberg article:

On video calls with dozens of Democrats and Republicans in Congress, as well as Treasury officials and state and local policymakers, his message has been consistent: Get the virus under control at all costs—a task the U.S. has so far failed at pitifully. No matter how many businesses are allowed to reopen, normal economic life will not resume until their customers feel they’re no longer at risk of contagion. In the meantime, he tells them, target assistance to the people, businesses, and places that need it. There’s no use sending stimulus checks to people making $150,000 a year or cutting their payroll taxes. They have plenty of money; what they lack is places to safely spend it.

 

Why does the Republican Party support the death penalty and oppose abortion? The reason is economics, not ethics

The recent experience with the novel coronavirus and the economic effects of the shutdown gives us all an opportunity to calculate how much the pro-life party values life. Approximately 30 million Americans lost their jobs because of the coronavirus pandemic. The shutdown if continued through the phased reopening without being rushed will save perhaps 1 million American lives. It follows that to the (mostly Republican) politicians who wished to end the shutdown in the early summer, one life to them is worth not more than about 30 jobs. It also explains the Republican fascination with the death penalty. If the average death penalty case costs about $100,000 to try, which we can evaluate as equal to roughly 2 jobs for a year, but if only one out of every 40 people convicted of a death penalty crime is actually executed, then each execution produces roughly 80 jobs, a very decent return on investment from this coldly capitalist point of view.

The same analysis explains also the Republican position on abortion and right to life. If a healthcare team of four people can perform two abortions a day for 250 business days a year, equaling 500 per year altogether, then each abortion produces only 1/125 of a job for a year, far below the job production from capital punishment. What we have taken for years as Republican hypocrisy about human life may merely be economics. Further research is needed to determine the normative Republican value for job-life equivalence. I think it will turn out to be about 20 jobs per life.

Are you better off than you were four years ago (III)?

https://www.statista.com/chart/21269/daily-deaths-covid-19-selected-countries/ 

The Centers for Disease Control and Prevention orders a stop to evictions. Why doesn't it order everyone to wear a mask in public?

This week the Centers for Disease Control and Prevention, acting under authority given to the Surgeon General and the Department of Health and Human Services, issued an order entitled "Temporary Halt in Residential Evictions to Prevent the  Further Spread of COVID-19," which you can read in the Federal Register here.  The order prohibits landlords from evicting residential tenants for nonpayment of rent if:

• The tenant has tried to obtain all available government housing assistance;
• The tenant expects to earn $99,000 or less in 2020 ($198,000 or less for a couple), or was not required to report any income in 2019, or received a CARES Act Economic Impact Payment;
• The tenant can't pay the full rent due to substantial loss of household income, work, or wages, or a layoff, or extraordinary medical expenses;
• The tenant is trying to make timely partial payments of as much of the rent as possible; and
• Eviction would likely make the tenant homeless or force the tenant into group living.

How does CDC get the authority to freeze evictions of residential tenants?  It comes from 42 USC §264, a provision of federal law that authorizes the Surgeon General to "make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession.”

The  Knower of All Things observes that an order prohibiting residential evictions in the United States won't do anything to prevent communicable diseases from entering the United States, and it won't do anything to prevent communicable diseases such as COVID-19 from spreading from state to state unless the assumption is that evicted tenants will change states.  He adds that if CDC has the power to issue an order to prohibit residential evictions, then CDC also has the power to order everyone to wear a mask in public, which CDC recommends but is strangely reluctant to direct.

It's time for CDC to face up to facts and act on its own advice.

 

The Laquedem Coronavirus Relief Plan for cruise lines: out of site, out of mind

That's not a typo.  One of the good points of the CARES Act, which provides relief for small businesses across the country, is that to qualify, a business must be "created or organized in the United States or under the laws of the United States," and it must have "significant operations in and a majority of its employees based in the United States."  The CARES Act intentionally omits the major cruise lines from its benefits.  Congress should hold firm against the pleas of the cruise industry for a bailout.  Here's why.

Consider Carnival Cruise Lines, the most American of the major lines.  It consists of two entities, both publicly traded.  The United States entity, Carnival Corporation, has its corporate offices and operational headquarters in Florida.  It is, however, a Panama corporation, though its Seabourn and Holland America brands operate  through American subsidiaries from a Seattle office, and its Princess Cruises brand operates from California.

As for its ships: the Seabourn fleet sails under the flags of Norway and Bahamas.  Holland America's ships fly the flags of Malta, the Netherlands, Great Britain, and Bahamas.  The Princess Cruises ships are registered in Bermuda and Great Britain.  Carnival's own ships are flagged in Panama and Bahamas.

Carnival's management has chosen to register its ships in foreign countries and not site them in the United States for two main reasons: to avoid American income taxes and to avoid American wage and safety regulations.  I would be disappointed if Congress gave in to the industry's pleas for help.  I'd applaud any member of Congress who will tell the cruise line owners to look for relief for their foreign ships from Panama, Malta, and Bahamas, the nations they chose to support.

UW Medicine tells the courts to go away until COVID-19 is under control

Lawyers occasionally send the courts and one another notices of unavailability, in which a lawyer says that he or she will be on vacation, or in another trial, or recovering from surgery for a certain period.  By rule or professional courtesy, the courts and opposing counsel won't schedule hearings or depositions during the periods when the lawyer is not available.

The federal and state courts in Washington must have been surprised to receive a notice of unavailability this week, not from lawyers in a case but from UW Medicine, the hospital system affiliated with the University of Washington.  The notice states that because of the COVID-19 pandemic, until at least April 27 all medical professionals employed by UW Medicine will be unavailable to participate in any regularly-scheduled legal proceeding.  In a polite way, UW Medicine has told the legal system that it's going to put treating patients and keeping its staff healthy above going through old files, sitting in depositions, and showing up for hearings.

Most of the judges and lawyers of our sister state will agree that UW Medicine is in line with our national priorities.  I predict, however, that at least one tone-deaf attorney will file a motion to compel someone from UW Medicine to attend some legal proceeding, and I hope the court that hears the blithe lawyer's motion orders him or her into quarantine.

You can read the full text of UW Medicine's letter to the courts below the break.  UW was thorough and also sent its notice to the state and local bar associations, the attorney general, the King County prosecuting attorney, and the public defender.