Michael Hudson: Did the team give up their bargaining power?

Michael Hudson: Did the team give up their bargaining power?


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Author: Michael Hudson, Professor of Economics at the University of Missouri, Kansas City, and Researcher at the Levy Institute of Economics at Bard College.His latest book is “And forgive their debts”: From Bronze Age Finance to Jubilee Borrowing, Foreclosure and Redemption

One of the main reasons Naked Capitalism is my favorite website is the discussion among members on Links, Watercooler, and articles selected by Yves, Lambert, and Jeri-Lynn. Most other sites with reviews are full of unhelpful personalized responses, personal attacks, or personal free associations. But Naked Capitalism discussants often add useful observations, expositions, and references, making the site a knowledge salon. So please contribute!

The most important thing is the good judgment of the NC critics, realizing that Republicans are a disaster withThe Democratic Party is. Lambert recently posed an obvious question: Why didn’t the Democrats simply ask the Senate to remove Manchin and the cinema from their committee positions — or directly put forward a motion that said they would take money from lobbyists to develop The policy (contribution to campaigning) that leads to bribery is a corrupt conflict of interest. It will not succeed, but it will draw attention to the level of corruption in the campaign funding process in determining which candidates will vote and which issues they will support.

Of course, the problem is that all senators and most members of Congress are selling their votes. Who will propose a law to overturn the Supreme Court’s joint civil ruling made by the recipient of this special interest fund and enact a new law?

Biden promised to let Blue Dog/New Democrat Thatcher faction “centrist” members of the House of Representatives (US companies and 1% of hired lobbyists) to join. But what about the Senate? What is in the negotiation agreement that will prevent Manchin and the film company from canceling the bill there?

In any case, the new BBB bill has been twisted into something completely different from what was described last week. The biggest factor grafted into it is a $450 billion tax cut for wealthy homeowners and an increase in the SALT property tax deduction in the Democratic states of the East Coast from $10,000 to $72,500. This giveaway is driven by the same “centrists” that prevented the approval of the BBB because it would “increase the budget deficit.”

It gets worse. Last weekend, we learned that the early promise of financial savings for medical insurance drug purchases has been greatly weakened. Rather than having health insurance negotiate directly with pharmaceutical companies to make prices consistent with prices paid by other countries, the new “negotiation” “is the biggest change that occurred last week: it will apply to fewer drugs, require smaller discounts, and , And most importantly, exempt new drugs from negotiation.… The original House of Representatives regulation of drug prices will allow the government to reduce the prices of up to 250 expensive drugs, no matter how novel or innovative they are.… The current bill will allow Medicare The prices of no more than 20 drugs are negotiated each year, and they are limited to those drugs that have been around for a while. This is a relatively small subset of the drug field. Last year alone, the US Food and Drug Administration approved it 53 new drugs.”[1]

The article pointed out that “on average, Americans pay about 250% of the price of medicines in other developed countries.” These countries “are often actively negotiating to lower the price of medicines, usually focusing on purchasing medicines for the entire country.” Blue Dog Team There are so many crocodile tears about the federal budget deficit! Complaining about increased deficits is “telling” that they will continue to oppose pro-labor and pro-consumer policies. When it comes to the one percent military appropriation or tax cuts, they have never raised such concerns.

In fact, after making fun of the Progressive Caucus for a few months, letting them think that BBB is indeed “Bernie’s Act”, they made a change and regarded it as a starting point that could be scaled down. This gave the Biden administration a new meaning to the term “transformative.” It seeks to transform the economy to support one percent of donors.

The six House Democrats who voted against the bill are Missouri Rep. Corey Bush, New York Rep. Jamal Bowman, Massachusetts Rep. Aiana Presley, and Michigan Rep. Rashida Tlaib, New York State Rep. Alexander Ocasio-Cortez, is perhaps the most outspoken member, Minnesota Rep. Ilhan Omar. New York TimesThe post-mortem report reported news after the surrender at midnight on Friday describing how the leaders of the black caucus negotiated a compromise to “trust them.” “The progressives have slowly succumbed.” The veto vote was reduced from 20 votes to 10 votes, and finally 6 votes. Ms. Pelosi can only lose four Democrats, but aides said she is confident that she can pressure at least two of the six to vote before the gavel falls. “[2]

Did the team give up their bargaining power?

By surrendering, the Progressive Caucus lost its only effective bargaining point: it has the ability to do what Manchin and the movie theaters have been doing — using President Biden’s despair to gain SomeLaw passed, do somethingAfter losses in Virginia and other parts of the country on Tuesday.

I am glad to see that some of the discussants of my NC post on Friday mentioned Rome. It does provide a precedent for the strategy that caused only 6 Squad members to retreat from their only available strong negotiation point: in the original BBB bill, the shift from social welfare support to childcare, medical care, parental leave, and government negotiations to reduce drug prices became an issue. A mockery of the original version. Is all this a scam?

All this has happened before.The Roma team has some relevant history of appropriate tactics CanWhen Pelosi and Biden implored them to accept all the planned changes in pro-business, pro-Wall Street, and pro-oligarchy politics, they followed suit. By 370 BC, Roman nobles kept their promises time and time again. Even if they pass laws that support debtors, the senators and the courts they control refuse to enforce them. So I am very happy to see Rome mentioned in the discussion on Friday.

The Roman aristocracy’s strategy was to obstruct reforms and delay reforms as the debt crisis intensified. In 376, G. Licinius Stolo and L. Sextius Laturanus were elected as civil servants and submitted three bills to Parliament to provide debt relief through debt reduction and deduction of interest already paid from the principal still owed— -And the balance is paid in three equal annual installments.Li Wei’s Roman history(6.36:12) described how Sextius and Licinius spoke to the nobles:

Do you feel happy that civilians who are overwhelmed by debt put their own people under shackles and punishment earlier than paying off the principal to pay off their debts? So, should they be crowded into the forum as the property of their creditors? The house of the nobleman should be full of prisoners, and the place where the nobleman lives should have a private dungeon?

They warned that the alternative to the plan was that “until the civilians elect a consul from their own ranks as guardians, nobles will seize land or lethal usurers murder civilians without restriction. Their freedom.”[3]

Livy wrote that the Senate considers that only nobles are suitable for office, and “refused to allow the reading of bills or any other procedures commonly used by civilians when voting. For several weeks, the parliament has held regular meetings without any transactions, and the bill is deemed to have been Die.” This prompted Sextius to reply:

very good. Now that you are happy that the veto has such great power, we will use the same weapons to protect civilians. So come on, nobles, inform a meeting of the consular forum. I will notice that our colleagues are now unanimously saying words that make you very happy. The word “I forbid” will not bring you much fun (Li Wei, 6.35).

Livy described this struggle as lasting a full ten years, but this struggle may have only lasted a year. To be sure, Licinius and Sextius made all-or-nothing requirements for their three-part plan. Without the consent of the civilian protection officer, military taxation cannot be established, and even the military protection officer is prevented from being elected.

Civilian opponents accused Licinius and Sextus of “seeking kingship” for themselves-today known as “leftists” or “socialists.” But they won a historic rewrite of the Roman debt law.

Of course, the class struggle continues. The civilians threatened a new division in 366 and escalated the deadlock by electing Sextius as the first civilian consul. “The nobles refused to confirm his appointment, and things are approaching the division of civilians” (Livy 6.42.11). However, the hard line taken by the civilians won again.

This did not happen in the United States on Friday night. Just as many Roman civilians were unwilling to face the incurable Senate, the Progressive Caucus gave in to President Biden so that he could “save face” from the embarrassing loss of Tuesday in Virginia and other candidates who rejected the Democratic National Committee’s support. . The Democratic leadership believes that the use of identity politics to distract voters from the economic issues at hand, and that voters are the common denominator of working class, will win. But the result was to antagonize the hyphenated American identities, exacerbating the white/black disparity.

The big picture in the room is like DNC. Its Blue Dog leadership pushes conservative candidates against “leftists” in every primary election, which means pro-labor, pro-consumer, and pro-environmental candidates oppose those who support the policies most voters want. .

Progressives might say: “For us, the Democratic National Committee has prepared a knife for us, which is obvious to us. The cost of our support for voting for the bipartisan $1 trillion infrastructure bill is You let us dominate the DNC. We will no longer be deceived, supporting politicians who represent special corporate interests and opposing one percent of the policies we support.”

From now on, what the Progressive Caucus should do is: When any defense bill is proposed, they should follow the “conservative” strategy and insist on reviewing the budget to ensure that it does not increase the national debt. I know that the whereabouts of the Pentagon is unknown, such as $6 trillion (is this really the number). Persist in seeing it and prolong the investigation until the bill is strangled.

Unlike Democrats, Republicans are now MMT parties: they can cut taxes, increase military spending and do whatever they want without worrying about budget deficits, because they know: “We can simply print money. We don’t need to borrow. If you don’t believe us , Ask Stephanie Kelton.”

I can’t think of a better website to track development than Naked Capitalism. So I am happy to urge everyone to join this week’s fundraising event. Please go to the tip jar!


[1]Margot Sanger-Katz, “The Democratic Party chooses the less risky path of lowering drug prices”, New York Times, November 6, 2021.

[2]Jonathan Weisman and Carl Hulse, “The Congressional Black Caucus is the key to infrastructure voting,” New York Times, November 6, 2021.

[3]Levy 6.37:3. He explained (6.37.4): “As long as the executive power is in the hands of the other party, there can be no fair or just management, and they only have the veto power to protest.”

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