Top of the Pops
A bit on Russia:
The Duma is now considering a law to provide legal immunity for past presidents, a move that ostensibly would give Putin more room to maneuver and leave the post formally after 2024 if he so chooses. Clearly someone realized they needed to preserve all possible options to manage that process. It also looks like Duma speaker Vyacheslav Volodin isn’t going anywhere after rumors he would be vacating that post after next year’s elections. Add in the more recent policy change aiming to limit members of the security services from holding property abroad and it’s clear that there’s a broader push behind the scenes right now to setup instruments to hold others’ feet to the fire — Putin could retire but maintain immense informal control from other council posts and would be immune from corruption investigations, Volodin is always agitating for more influence but probably realizes that the Duma may be a more attractive post only if Putin is no longer president, and the internal fights between security services will only intensify as 2024 draws nearer. The fact that they might make Medvedev a senator is not just about continuity. It’s placing the ultimate fall guy in a visible formal post.
- Lukoil is going to shift 4 of its refineries into tolling operations — its subsidiaries supplying the crude will own the refined products but pay tolling fees for the processing — in order to optimize costs, namely by lowering tax obligations.
- Rosatom is being given operation control of Vladivostok’s commercial port. The move is punishment for FESCO and the Magomedov brothers as they continue to lose bits and pieces of their logistical empire.
- With Biden pulling into winning position, analysts expect it’s net bullish for Russian equities and markets writ large.
COVID Status Report
COVID daily new cases have nearly hit 20,000 in Russia. Dmitry Peskov has hinted at real problems in “certain regions” but the Kremlin is making on concrete comment on which ones and what exactly they see happening. It might get a bit harder to find decent coverage of the infection in the coming weeks as editors try to bury the worst headlines and talk around others.
Red = cases across Russia Blue = cases across Russia without Moscow Black = Moscow
There’s no slowdown outside of Moscow in sight. Things will be the worst where there’s the least state capacity and resources in hand.
Things look better now in the sober light of dawn, with Nevada now enough to clinch it, the votes in Pennsylvania providing hope that Biden surpasses Trump, Arizona tightening but still looking solid, and a shot in Georgia too. If that all comes to pass, then Biden will have won a race that looks far more decisive in electoral terms than in practice. Last go round, it was Republicans singing a song given how big the electoral break their way was. Democrats are about to do the same and pretend to have leverage they don’t have until we know what happens in the two Georgia senate races and likely runoffs come January. There’s the trouble with USPS in Florida and a host of legal challenges across the map to come. A lot can still frustrate us.
Now comes the hard part: the “legitimacy” crisis that a lot of Democrats, often coastal democrats with an education, higher-paying jobs, and limited if any exposure to the pre-COVID negative effects of a Trump presidency in material terms is going to become the story because of the party’s (thus far) failure to win the senate. All attention will be put on the executive branch because it’s easier to blame the electoral college for the party’s failings than to actually win the statehouses needed to change a system that clearly does not well reflect contemporary realities of American life. And rather than help those disenfranchised in material terms by the economic geography of the United States, it’s easier to blame many of them for a system they inherited. Put another way, unless the party attempts to get buy-in from a broader geographic and social coalition of voters, arguments about the electoral college are really about rejecting the principles enshrined in the existence of the senate and throwing a hissy fit that people are too stupid to know how to vote properly. It’s explicitly about cities taking precedence over everyone else (for understandable economic reasons) while effectively ceding the structural advantages of the current system to the other party and appearing to not care about the lives of people who don’t fit the party mold.
Any legitimacy crisis for the American political system today is much more a result of its failings of inequality than strictly minoritarian rule because the fact of that rule is intimately tied to the political decision among Democrats the last 40 years to forego vying for a large swathe of the electorate. Truth is that the urban Democratic base so disappointed by many of the election results (I include myself) lives in a different reality than the one they’re generally concerned about when it comes to the strength of the Republican Party among rural and suburban voters. This is older data, but useful for context on jobs in the US since the Financial Crisis:
Jobs of any kind never recovered post-2008 and they weren’t great before. Pulling older data, self-employment and entrepreneurship are other elements crucial to understand:
Small business ownership is the lifeblood of low-density, relatively unpopulated stretches of the country where no one has anywhere to go when it comes to employment. These trends inevitably play out when you look at labor force mobility at the national level since much of that entrepreneurship is forced by circumstance. The senate took a look at the problem last year and mapped the states seeing the highest levels of graduates moving elsewhere. The following is net brain drain based on relative measures of the top third of the education distribution within a state’s population:
The West coast, Minnesota, Utah, Texas, Illinois, Colorado, New York, Maryland and Virginia (pushed by the insane waste on contractors around D.C. and D.C.’s over-inflated incomes), New Jersey, Massachusetts and the wealthier parts of New England with larger urban centers all benefit. Florida’s notably losing — presumably that will make it harder for Democrats to flip it. Stagnation in PA, OH, and MI doesn’t reflect success, but rather that some graduates are moving back because of costs of living. The economies themselves for many Rust Belt urban centers aren’t nearly as dynamic as their coastal peers or else Chicago. Look familiar as to where Democrats have had the best shot at winning, changes of fortune, and places they struggled? When Americans complain about Washington not caring about their plight, it’s worth considering that the median household income in D.C. is $24,000 higher than the national median, $27,000+ higher than the median in New York City, and worse across the South. It’s not just urban inflation. There’s an accumulation of rents that’s a massive issue, and the Democrats have nothing to say for it except to promise a national minimum wage hike that will disproportionately burden the small businesses in rural areas and small towns so vital to employment and savings.
Similarly, you can see agricultural states where graduates stick closer to home and states where cities are struggling. Spatial inequality makes it all the easier for Republicans to stake out extreme positions. Well-to-do suburbanites and anyone who loses from tax hikes or likes their healthcare plan has a home and those struggling in rural communities know the city dwellers don’t give a damn about them. Since the urban-suburban base of the Democratic Party generally demands loyalty tests on social issues in a manner that goes beyond a concrete policy agenda or anything you can persuade with, Republicans have an easier time retreating from debates. The trend de jour led by the Resistance and Biden is onanistic platitudes about democracy, decency, and America’s place in the world. Democrats are in a hole when it comes to the Senate structurally. It’s not fair. It’s not ideal. It’s not helpful. But that can only be overcome by engaging in what amounts to a deradicalization campaign targeted at some of the voters Republicans rely on, and staking out an agenda to maintain and expand Biden’s coalition. Elizabeth Warren was particularly good in the primaries at least trying to message the backbone of what would be a rural development policy. That needs to become more visible heading into 2022 if you want to keep the Republicans playing defense and gain ground in statehouses needed to actually overhaul the electoral college.
The Pale King
Biden may well have clinched it soon enough, but the world he’ll face come January won’t be kind to his political capital or his prelapsarian attachment to America’s lost innocence. Money alone isn’t going to save the Democrats should they get two runoffs in Georgia (looking pretty likely). It’s actually distressing that with the White House in sight, I don’t actually know what they’re going to try to do. But that’s the campaign they wanted, a tabula rasa pretending to be a Norman Rockwell painting. At least the US is going to rejoin the Paris Agreement immediately since the cost to American businesses could be immense.
Without a senate majority, they’ll have to flip one or two republican votes to then use Harris’ vote as a tiebreaker. In practical terms, this means that if you’re assessing stimulus, any infrastructure bill, basically anything that doesn’t have a clear bipartisan consensus — sanctioning Russia and escalating tensions with China clearly do — you’re best served looking to see which Republicans are up for re-election or want a new policy brief and which ones are polling worst at home. You’re also best set to look at Biden’s team for the Federal Reserve to see if they feel comfortable expanding support for municipalities, which could then turbocharge some spending efforts through the backdoor on greening policies and more. There is little chance they give Warren the Treasury after Biden begged rich donors to line up and crush Trump. A possibility, but I’d expect business as usual for Treasury Secretary. In fact, I’d expect business as usual from Biden. The biggest losers — and winners — from this election were progressives and center-left Democrats who recognize that the structural realities of contemporary capitalism have dimmed or ruined the prospects of two generations and now threaten to ruin those of a third.
The theory of change that animated my own support for Biden was built on winning the senate. Only by undoing the filibuster could Democrats conceivably ram through the massive spending bills needed to address the current crisis, and crucially, try to reach new voters in the process. Without the senate, another variable becomes a massive concern. Trump isn’t going anywhere when he leaves office (assuming he’s not arrested in trying to avoid a transition of power or something like that). He’s going to start his own TV network or media empire of sorts, he’s going to have the loyalty of his base, and he’s probably going to want to run again for payback in 2024. He’ll be throwing stones and trying to rile up his base against the Democrats as a private citizen, throwing sand in the gears of whatever gets proposed since Democrats won’t have a majority to push it through. In other words, he’ll be trying to demand loyalty from beyond the grave as it were, and might just get it often enough. If Biden is willing to pull the trigger on a DoJ investigation, that would inflame his supporters all the more.
This now cuts to the core of the problem facing a would-be Biden presidency. It can only fail to meet expectations, providing more fuel to the left flank of the party — far too driven by id to lead and win a policy knife fight in Washington — and simultaneously more fuel to the centrists now calling for Speaker Pelosi’s ouster. Biden painted himself as a mediator, but he cobbled together a campaign with no discernible identity that frequently contradicted itself upon closer examination. The vote totals and turnout correspond to COVID-19. Full stop. The race was effectively tied in head to head polling before COVID struck, and that was when Biden was flailing in the primaries before the party’s elder statesmen realized that a drawn out nomination fight would kill the party against Trump and moved after South Carolina to avoid that. Now faced with an unhappy caucus, he’ll have to push himself out of his comfort zone, something he’s frankly not good at doing.
The presidency makes every president a liar. There is almost no way to match rhetoric or vision with action and when that does happen, it is almost always the political benefit of terrible circumstances that explains it. Biden’s campaign lacked both rhetoric and vision beyond erasing the last four years and allowing us to go home after work without thinking about what that malicious idiot at 1600 Pennsylvania was going to Tweet or do. I’ll dive more into Georgia tomorrow and wrap up this week before getting back to the usual beats come Monday. I simply could not make mental room for other things, I apologize. Now I’m just bracing myself to find out just how the promise of Biden 2020 ends up lying to us since I can’t make out what it was they wanted to say in the first place and the yawning vacuum that is political strategy from every corner of the party is undermining getting anything done.
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