1. Today I wrote about the recent blackouts in New York City, the greatest city in America. Monopolization and financialization have put NYC on the brink of disaster. And it's not just electricity. mattstoller.substack.com/welcome
2. Blackouts are scary things. On July 13th, people got stuck in elevators, the subway stopped, theaters shut down, and Jennifer Lopez was interrupted in the middle of a song at Madison Square Garden. nytimes.com/2019/07/15/nyr…
3. Another blackout happened a week later. Just before the blackout, NYC electric utility Con Ed president Tim Cawley embarrassingly said, “By any measure, we are the most reliable electric delivery system in the United States." Oops. mattstoller.substack.com/welcome
4. Blackouts in New York City reflect the politics of the time. In 1965, and then again in 1969, Con Edison had massive outages that inspired frustration with what Americans perceived as an overall breakdown of the New Deal order. Another one in 1977 enabled widespread looting.
5. The Carter and then Reagan eras of deregulation and concentrated capital were in many ways framed against the old, over-regulated, and antiquated systems represented by Con Edison, and in a bigger sense, New York City of the 1970s. mattstoller.substack.com/welcome
6. Deregulation finally hit New York's utilities fully in 1997. But it didn't work. Con Ed still raises dividends every year, its CEO makes $10M a year, and its operations are terrible. Consider what happened after Hurricane Sandy.
7. Half the city went without power, and not because of the storm. Because of the poor electrical grid. The Utility Workers of America released a report on it. Con Ed was so badly run it didn't bother to stock up on ladders before the storm. Ladders! assets.documentcloud.org/documents/4402…
8. But the weak electrical grid is only the first problem in NYC. The second is the Hudson tunnel, the busiest rail link in America. It was built in 1910, and is so old and rundown it could collapse at any moment. mattstoller.substack.com/welcome
9. Chris Christie, to fight Obama, refused to use stimulus money to rebuild the Hudson tunnel. But even if he hadn't been a jerk, we increasingly can't build things in America without spending far more than it should cost. Why? These guys.
10. Increasingly, government contractor is a wretched stew of corruption, due to 'reinventing government' by Bill Clinton and Al Gore, super-sized by Dick Cheney. One consultant, for instance, from BCG, now costs the gov't $33k a week.
11. The resulting system of private governance is both inefficient and expensive. Instead of hiring a gov't employee at $120k/year gov'ts now hire a Booz Allen consultant at $500k/year. If socialists want to socialize something, they should start with, oh, government.
12. The third problem, after electricity and transport, is food. New York City nearly ran out of food after Sandy, because of corporate concentration. Here's @sidhubaba from 2013. citylab.com/equity/2013/10…
@sidhubaba 13. New York state used to grow a lot of the food NYC ate. Even Brooklyn and Queens counties were large vegetable producers! But that system is gone, as large companies like Sysco now run a much leaner and distanced system. NYC's food supply is just farther away.
@sidhubaba 14. We have pooled risk in hidden ways. At Boeing it means the company was generating gobs of cash, but planes started crashing. In NYC that means residents are vulnerable to losing electricity and food, and to transit collapses. mattstoller.substack.com/welcome
@sidhubaba 15. Governor Andrew Cuomo is part of the problem. His defining experience, in my view, was his alleged attempt in 1988 to take over a south Florida savings and loan bank and drain the bank of its assets. He's a finance guy first and foremost. sun-sentinel.com/news/fl-xpm-19…
@sidhubaba 16. Cuomo can't see the problems of corruption and financialization because his political success relies on them. He believes in corrupt contracting and corporate concentration. The regulators he appoints often see the world that way too. mattstoller.substack.com/welcome
@sidhubaba 17. There’s a political rebellion going on all over American society because it’s obvious our leaders can’t handle the job we’ve given to them. I just hope the rebellion succeeds before a crisis really shows us why that rebellion needs to succeed. mattstoller.substack.com/welcome
@sidhubaba 18. Anyway, that's my NYC disaster movie. Right now it's just spreadsheets and the theme to Jaws. All fixable, of course, if we choose to fix it.
P.S. Subscribe to my newsletter if you like stories like this on the politics of monopoly and finance. mattstoller.substack.com/welcome
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1. You learn a lot about politicians when the spotlight is not on them. So I want to offer an observation about something Kamala just did - a quiet and almost wholly unnoticed favor to big business and Mitch McConnell - suggesting she would have been a problematic President.🧵
2. In late November, after the election, the Biden White House nominated two people for something called the International Trade Commission. The ITC is the body designed to address cheating by foreign companies who dump products to destroy US producers.
3. The ITC is one of those places where free traders have run the roost for decades, crushing industry after industry by refusing to uphold anti-dumping law. It's also a place that few in D.C. care about. Domestic producers? Pffeh, who cares about steel and mattress imports?
1. This is a useful response in terms of how to understand the Abundance theory of politics. Yglesias is making a *policy* argument about private equity. It's not bad! It depends! We have to be nuanced! Ok, that's true. So what's the problem?
2. People increasingly hear 'private equity' and associate it with pillaging. It's not always true; KKR has done a great job with Simon & Schuster. But it's often true. So demonizing private equity is like demonizing Wall Street - it's a symbol of a society with haves/have nots.
3. That's the *political* story that populists like Bernie Sanders and Donald Trump tell. It's a true political story, private equity billionaires are doing horrific things and corrupting politics. We all know that's true. But anti-populists don't like that political story.
1. There's a fascinating dynamic among Trumpy venture capitalists trying to manipulate the right-wing for their own purposes. For example, here's vc Marc Andreesen saying the Consumer Financial Protection Bureau forces conservatives to lose their bank accounts.
2. Andreesen says the CFPB 'terrorizes' financial institutions and denies them access to the banking system, and says it is going after conservatives. But is that true? Well, as @dorajfacundo points out, the CFPB is doing the opposite.
Trump is a lot like Obama. He is about to destroy the Republican Party as badly as Obama destroyed the Democrats, and for the same reason. He's promised a realignment for the people, he's going to deliver a realignment for Wall Street.
Trump is also a godsend for Democrats the way Obama was for the Rs. In 2024, the Democrats are a spent force, dominated by horrible Obama retreads. By 2028 MSNBC will be gone and a wave of populists will have redefined the Dems as a renewed faction.
Obama and Trump jointly and fully buried the post-Cold War era of domestic politics. Obama took the moral currency of the civil rights movement and openly spent it on Wall Street, Trump proved that voters don't buy into the moral myths of the 20th century anymore.
1. Identity politics is bad because it's fundamentally a con, a way of ensuring plutocrats control our society. It's the inversion of 'rights' to support authoritarian corporate power. Here are some examples.
2. Regulating trillion dollar social media and search monopolists to protect children from addiction is actually an attack on gay people. wsj.com/politics/polic…
3. Another... Getting paid $1500/hour to help steal from chicken farmers is about women's empowerment.
1. Since the new line on why antitrust is bad is the Spirit Airlines bankruptcy, let's talk about what is really happening. Here's a hint. The CEO of Spirit was paid a $3.8 million bonus the week before the bankruptcy. But you don't hear about that. wlrn.org/business/2024-…
2. What's really going on isn't a bad enforcement regime, it's a bunch of greedy incompetent airline executives blaming the government for not letting them violate the law for money. Let's start at the beginning. npr.org/2024/11/18/nx-…
3. In 2022, there was a bidding war between Frontier and JetBlue over Spirit Airlines. Spirit's board hired a consultant to evaluate, who told execs/shareholders that the JetBlue deal was *illegal." They accepted it anyway since it was more money. financierworldwide.com/jetblues-38bn-…