Doc Huston

@doch_one

News — At The Edge — 3/17

Articles this week demonstrate how our past — legal corporate dominance — is undermining and stifling our future and potential.

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Citizens United was only one in a long sequence of corporate legal victories —

“[2010] Citizens United ruling…[said] corporations have a First Amendment right to spend their money to influence elections [and]…seemed to extinguish any hope of serious campaign-finance reform….

[While] rights of corporations were not debated in the state conventions that ratified the constitution, nor were companies mentioned in the Federalist Papers…corporations have repeatedly been able to exploit laws meant to benefit others…

[For example] the 14th Amendment — designed to give equal citizenship to freed slaves — persuaded the Supreme Court that it had also meant to protect companies….[So] between 1868…and 1912, the justices decided 28 cases asserting the rights of African-Americans, almost all [lost]…[while] 312 cases on the rights of companies…succeeded in striking down minimum-wage and child-labor laws.

‘For most of American history…the Supreme Court failed to protect the dispossessed and the marginalized, with the justices claiming to be powerless in the face of hostile public sentiment.’ By contrast ‘the court has insisted that broad public sentiment favoring business regulation must bend to the demands of the constitution’….

A focus on the rights of the listener, not the speaker, was at the heart of the Citizens United case…followed, in 2014, by the Hobby Lobby case, which gave the company an exemption from a federal rule requiring large employers to include birth control in their employees’ health plans…[as] religious freedom….

[But] in aggregate, court rulings on corporate rights do not make sense.

Companies are obliged to prioritize the profits they make for shareholders, rather than seeking to benefit employees or the wider community; that sits oddly with the notion that businesses also have political and religious freedom.” https://www.economist.com/news/books-and-arts/21738343-citizens-united-was-only-one-long-sequence-corporate-legal-victories-triumph

YouTube, the Great Radicalizer —

“[During] 2016 presidential election campaign…[Trump] YouTube started to recommend and ‘autoplay’ videos for me that featured white supremacist rants, Holocaust denials and other disturbing content….

I created another YouTube account and started watching videos of Hillary Clinton and Bernie Sanders…[then] directed to videos of a leftish conspiratorial cast [like]…secret government agencies and…[U.S.]government was behind the attacks of Sept. 11.

As with the Trump videos, YouTube was recommending content that was more and more extreme than the mainstream political fare I had started with….I experimented with nonpolitical topics…[and] same basic pattern emerged…[that] promotes, recommends and disseminates videos…to constantly up the stakes….

[So] YouTube may be one of the most powerful radicalizing instruments…[with] nexus of artificial intelligence and Google’s business model…[where] longer people stay…the more money Google makes…. Its algorithm seems to have concluded that people are drawn to content that is more extreme than what they started with — or to incendiary content in general….

[A] Wall Street Journal [study]…found that YouTube often ‘fed far-right or far-left videos to users who watched relatively mainstream news sources’….

What we are witnessing is the computational exploitation of a natural human desire…carried along by the exciting sensation of uncovering more secrets [leading] viewers down a rabbit hole of extremism, while Google racks up the ad sales…[saying] they are merely serving us what we want….

This situation is especially dangerous given how many people — especially young people — turn to YouTube for information….There is no reason to let a company make so much money while potentially helping to radicalize billions of people…while asking society to bear so many of the costs.” https://www.nytimes.com/2018/03/10/opinion/sunday/youtube-politics-radical.html?rref=collection%2Fsectioncollection%2Fopinion&action=click&contentCollection=opinion&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront

Tim Berners-Lee: We need a ‘legal or regulatory framework’ to save the Web from dominant tech platforms —

“[H]e thinks we need to do to save the Web from the concentration of power of a ‘few dominant platforms’ that has ‘made it possible to weaponize the Web at scale’…[by] serving as easy vehicles for third parties, including foreign governments, to manipulate public opinion….

What was once a rich selection of blogs and websites has been compressed under the powerful weight of a few dominant platforms…[as] a new set of gatekeepers…controlling which ideas and opinions are seen and shared’…[creating] barriers to competition by acquiring emerging startups and new innovations and hiring the top technology talent. ‘Add to this the competitive advantage…user data gives them, and we can expect the next 20 years to be far less innovative than the last’….

[These] companies have been charged with fixing these problems when their ultimate goal has more to do with appeasing shareholders than ensuring the greater good of society… which is why some level of regulation may be required.” https://venturebeat.com/2018/03/12/tim-berners-lee-we-need-a-legal-or-regulatory-framework-to-save-the-web-from-dominant-tech-platforms/

Three Cheers for Financial Repression —

“[It’s] bondholders…losing money because…[of] government manipulation…forcing them into buying ‘bonds at unfavorable rates, i.e., below the prevailing level of inflation…[so] ‘savers’ subsidize ‘investors’…[Now] it’s market forces more than government policy….

[Still] policymakers have concentrated on ensuring the profitability of the bond market more than just about anything else…[and] the financial sector has quadrupled in size relative to the rest of the economy….

What is good for the bankers has not been good for the economy….[So] sympathy for bondholders seems misplaced, considering median male real wages are lower [than]…were in 1973, that median real income is lower than…when Jimmy Carter was President, and household income is lower than it was during the last millennium….

[Still] financial repression has historically proven benefits. By limiting the advantages of existing wealth, it lessens inequality and increases social mobility [and]…subsidizes investment, which inevitably stimulates growth….

[Clearly] cheap capital, much more than cheap labor, has been China’s primary comparative advantage in the global economy….

[U.S.] 1945 to 1980, inflation generally exceeded the interest rate on treasuries. Bondholders lost money, but corporate profits boomed, and real wages more than doubled…[so] repayment of war debt essentially painless. Between 1947 and 1980, government ‘debt…fell from 120% to 35% of GDP.

Since 1982, bondholders [with]…a 30-year treasury [and]…15% coupon, has been one of the great money makers of all time…[and] shifted vast wealth from workers to the already rich. The economy as a whole has not done so well. Growth in the developed world since 1982 has been miniscule…. Wages have been stagnant, increasing inequality rampant….

Financiers, who lend money, want high interest rates, low inflation [because]…greatest fear is to be repaid in depreciated currency. Everybody else, however, including entrepreneurs, prefers low interest rates, moderate inflation, easy money…so they can repay those debts more easily….

Persistently low interest rates demonstrate capital is no longer a scarce resource. Let’s stop pretending it is, allowing weathholders to demand high returns. If interest rates are a dialogue between the past and the future, savings come from the past and investment leads to the future.

Financial repression is the secret sauce that makes economies grow and makes us all richer….Probably the easiest way to stimulate financial repression is to raise the inflation target.evonomics.com/three-cheers-for-financial-repression/

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Doc Huston

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