Pluralistic: 20 Oct 2020

Today's links

Feds gouge states, subsidize corporations (permalink)

The scariest zombies this Hallowe'en aren't trick-or-treating, they're the zombie corporations that are borrowing cheap money from the Fed, declaring special dividends and stock buybacks, shambling on despite their inevitable demise.

Wage stagnation, crushing consumer debt and mass layoffs means that no matter how much money we give these zombie companies, they're not going to create jobs or invest in new capital – the only people with money are their shareholders, who don't need their products.

Meanwhile, the same Fed that is offering a public subsidy to the richest people in America in the form of preferential interest rates in corporate loans is gouging state and local governments whose tax-bases have collapsed.

As Matthew Cunningham-Cook writes for the Daily Poster, "budget-strapped states and cities are being forced to choose between high-interest loans or mass layoffs of teachers, firefighters, emergency workers and other public-sector employees."

A coalition of grassroots groups and state/local politicians have called upon the Fed to offer states and cities the same interest rates that blue-chip zombies are getting.

This wouldn't just help avoid mass layoffs and fund desperately needed services to residents whose lives were shattered by covid, it would also let cities roll over their Wall Street debt, which currently accounts for $160b/year in interest payments alone (!).

What could our state and local governments do this year if they didn't have to shell out $160b in interest to Wall Street?

  • help 13m families avoid eviction by covering their annual rent

  • provide all 31.5m unemployed workers $600/week for 8 weeks

The Fed has provided unlimited liquidity for corporate junk bonds, but its $500b Municipal Liquidity Facility is dormant, having been used just twice since the start of the crisis for a total of $1.6b. That fund lends at 0.5%, but cities and states can't get at it.

Corporations get a great deal, states not so much.

Chevron was able to borrow for 0.9% over 4.5 years; the State of Wisconsin, which has the same credit rating as Chevron, is borrowing at 1.28% over 3 years.

Phillip Morris sold its bonds to the Fed at 0.9%. The State of Kentucky, which has the same credit rating as Morris, is paying 2% over 3 years.

The Fed offered NYC 1.9% over 24 months – a worse deal than they'd get from Citibank.

That slumbering Municipal Liquidity Fund is overseen by Kent Hiteshew, the Obama-era bankster enabler who bailed out the predatory bondholders who had buried Puerto Rico under an avalanche of debt. He's a finance crime lifer: ex-Bear Sterns, ex-Drexel Burnham Lambert.

By starving cities and states of credit, Hiteshew is able to pile up lucrative business for Wall Street, which is able to borrow Fed money for almost nothing, then turn around and loan it to state and local governments at massive markups.

"The Fed has two bazookas. One of them is a municipal bazooka and the other is a corporate credit bazooka. They have the municipal bazooka setting on low and the corporate bazooka setting on high." -Nathan Tankus

(Image: Gan Khoon Lay, CC BY, modified; C Hanchey, CC BY-NC, modified)

Cadillac perfects the murdermobile (permalink)

I am not a car person. Until we moved back to LA in 2015, the only time I'd ever been a car owner was 12 months in 2006-7, when I moved to LA for a Fulbright chair at USC and bought a used Hyundai Elantra to get to the university in.

When we moved back here in '15, we bought a used Prius. Both cars were fine – they got us around, took us to the beach, and were good for grocery runs.

But two years ago, I did a consulting gig that came with a one-year lease on a luxury SUV. I admit, I was curious about what life would be like behind the wheel of a land-yacht.

It was terrible.

The car handled like a tank, had multiple, massive bind-spots, and while it boasted a massive touchscreen with seven millions features, they were impossible to access, switched themselves off and on at random, and were a huge distracted-driving risk.

It looks like my lux SUV experience was par for the course. Andrew J Hawkins reviewed the new Cadillac Escalade for The Verge and the thing sounds like a lumbering murdermobile.

It's the largest SUV Cadillac ever made, 18' long, 6.5' high, with a grille "like a sheer cliffside, obstructing my view several feet out in front of the wheels."

Last year's (smaller) Escalade has a blindspot so huge that "It took 13 children seated in a line in front of the Escalade before the driver could see the tops of their heads."

Here's Hawkins's 3-y-o standing in front of the new Escalade's grille:

The Escalade is a true road-hazard: at 6.75' wide, it barely fits in a highway lane (or a driveway).

As bad as it is to be in a car that gets hit by one of these things, pedestrians fare even worse: peds murdered by SUVs have soared 81% in ten years.

Not surprising: these things are so tall that they strike the head or torso, and they have so much clearance that they trap their victims beneath them.

The Escalade tries to make up for this with a cluster of cameras and haptic feedback mechanisms (my SUV had this too).

I found those mechanisms helpful, but agree with Hawkins: "When you need a suite of high-definition cameras and other expensive sensors to safely drive to the grocery store, there might be something inherently wrong with your design."

GM (who make the Cadillac) is phasing out all car models except SUVs for the US market.

SUVs are the second largest cause of the global rise in carbon dioxide emissions over the past decade.

We barely drove our free SUV – a couple trips to the beach, some grocery runs. When the lease expired last month, we bought an all-electric Kia that we run off our rooftop solar.

The Kia is frankly great. It has fantastic handling, and dashboard controls based on buttons and knobs that you can find without taking your eyes off the road. We still barely drive it, but when we do, it's 1,000 times nicer than the SUV.

My only complaint is that Kia's leasing department insisted on using my home address for correspondence (I only give out a nearby mailbox as a precaution against doxing, SWATing, etc), and now I'm getting TONS of junk mail from people they've sold or given my name to.

(Image: Andrew J Hawkins, modified)

Solar's "miracle material" (permalink)

Back in 2017, University of Utah researchers caused a stir when they published findings on a material called "perovskite" that was called a "miracle" for its potential to increase the efficiency of photovoltaics from 3% to 20%.

At the time, the consensus was that implementing this research would take at least a decade, while a means of stabilizing the material in direct sunlight was developed.

But now a joint Monash University and the University of Sydney team have announced a major breakthrough that they say will allow for rapid development of practical devices.

The researchers say that focused, high-intensity light does not degrade the material the way diffuse sunlight does, and that adding a focusing lens will yield PV cells that perform with perovskite's efficiency but without its rapid breakdown.

The researchers also speculate that this discovery will allow them to make much higher-density digital storage devices.

(Image: Jeff Fitlow, Rice University)

This day in history (permalink)

#15yrsago Finnish copyright minister carries fake Prada bag on official business

#15yrsago Chinese activist to Jerry Yang: You are helping to maintain an evil system

#10yrsago Scary Godmother: delightful, spooky graphic storybook for kids

#5yrsago The Welcome to Night Vale novel dances a tightrope between weird humor and real pathos

#5yrsago Reality check: we know nothing whatsoever about simulating human brains

#5yrsago How the market for zero-day vulnerabilities works

#5yrsago How a lobbyist/doctor couple are destroying Worker’s Comp across America

#1yrago Yahoo Groups archivists despair as Verizon blocks their preservation efforts ahead of shutdown

Colophon (permalink)

Today's top sources: Super Punch (, Naked Capitalism (, Slashdot (

Currently writing: My next novel, "The Lost Cause," a post-GND novel about truth and reconciliation. Yesterday's progress: 573 words (74504 total).

Currently reading: Harrow the Ninth, Tamsyn Muir

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When life gives you SARS, you make sarsaparilla -Joey "Accordion Guy" DeVilla