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The New York Times is running an amazing series of articles about how corporate America has played city and state governments like a fiddle to extract generous subsidies for locating plants in their areas.

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

Game theory names this a collective action problem. Read more…

The phony Republican outrage after Tim Geithner’s visit to Congress yesterday shows what a pickle they are in. Geithner carried to the Hill the same proposal Obama made to Boehner and Co. last Friday, but this time the Speaker went public with his outrage as if he had never heard the proposal before. According to insiders, that’s because Boehner didn’t think Obama was serious last week and only now realizes the President is serious as a heart attack.

Time is on Obama’s side. If the Republican leadership won’t yield before December 31, the Bush Tax Cuts go away and Republican’s get blamed for raising taxes on the middle class. You can bet a bill changing that gets passed within days and so all this talk of fiscal Armageddon is pure nonsense. The bigger question for progressives is how to hold on to the big cuts in the Military budget that were part of the sequester. As Christopher Drew has pointed out, there is so much waste and incompetence in Pentagon weapons budgets, that cutting the billions from their budget is desperately needed to force them to get their house in order. This is where the Liberal-Libertarian coalition against the Military Industrial Complex has got to step up to the plate.

Last summer I went to the Aspen Institute, home of establishment wisdom, and found myself both bemused and bored by the narrow “managing chaos” focus of the pundits. What I long for is a conversation that questions some of the basic assumptions of the conventional wisdom. I find that in the writing of Jeremy Grantham, an extremely successful investor who is willing to question some of the basic assumptions of contemporary capitalism. Grantham’s new quarterly letter is titled “On the Road to Zero Growth” and it starts with a shocker to the conventional wisdom and then takes you on an amazing ride.

The U.S. GDP growth rate that we have become accustomed to for over a hundred years – in excess of 3% a year – is not just hiding behind temporary setbacks. It is gone forever. Yet most business people (and the Fed) assume that economic growth will recover to its old rates.

Grantham puts up this chart that shows that 3% growth is a strange outlier that occurred for about 50 years in the last 1000 years, and may never return.

For the US, the limits to growth are part demographics and part “other stuff”, including productivity, inequality, reduced capital spending, resource restraints and ecological crisis. Read more…

David Sanger has been writing the conventional wisdom for as long as I can remember, but this morning he has really become John McCain’s talking puppet. In trying to justify why we should be sending troops to Syria and Libya, he quotes Romney Neo Con Eliot Cohen.

To Mr. Obama’s critics, the root of the seeming absence of American leverage in the Middle East today is a light footprint that was simply too light.

“I think the way to understand Obama’s approach — I wouldn’t call it a strategy — is that he has a uniform preference to keep most problems at a distance,” said Eliot A. Cohen, a professor at the Johns Hopkins School of Advanced International Studies who worked for Mitt Romney’s presidential campaign and helped develop Mr. Romney’s critique of Mr. Obama’s approach. “That is what the light footprint has been all about. And it’s run out of gas.”

I have no patience for Sanger or any of the Beltway buffoons who managed to convince us for 60 years that the United States needs to be the unpaid policeman of the world. How much blood and treasure in useless wars that will never solve Sunni-Shia conflict, is enough for these chicken hawks? Obama’s did exactly the right thing in Libya,and he is right to stay out of the Syrian Civil War. I will say what no one seems to acknowledge. Ambassador Chris Stevens had no business being in Benghazi with a two person security detail. It was only his own self inflated sense of invulnerability that brought him there and there is no reason to change Obama’s new “light touch” foreign policy, just because Stevens made a mistake.

T-Bone Burnett and I ventured into the academic lion’s den at MIT on Saturday and had a remarkably civil conversation about piracy, IP, fair use and other touchy subjects. Much of the thanks have to go to my colleague Henry Jenkins the founder of the Futures of Entertainment Conference, who both guided the conversation and provided a constant reminder that in a participatory culture notions of fair use are critical to enhancing creativity. Bone and I made the argument that the main problem that can be solved without legislation is for brands and advertising networks to stop sending millions of dollars of advertising to pirate sites run by organized criminals like Kim Dotcom. This of course put both the Google folks in the audience at FOE 6 as well as some of the branding agencies, in a defensive crouch, accusing us of whining. Questions were posed as to why Google would be interested in helping the music or movie industry at the sacrifice of profits to their own bottom line.

Henry Jenkins’ notion is that there is no reason for technology, content and academia to be in conflict over these issues. We were able to talk both passionately about the right of artists to get paid for their work and the right of the participatory culture to take sections of an artistic work and remix it for non-commercial use. This is real progress and my hope is that the bombast surrounding this issue is slowly surrendering to a more civil conversation that can resolve this important issue. I also want to thank our correspondent Len Bullard for his contribution to the conversation. He played the role of our trainer before the debate brilliantly.

This image of Sheldon Adelson wheeling his way out of a busted Romney Victory Celebration seems so telling to me. This sad old man, with his badly dyed hair, who thought he could buy the election, unable to even walk away with dignity. In the end, he did not really understand our country. His own personal piqué at having to pay more taxes is a kind of Madame LaFarge gesture, but the Sans Culottes are right outside the walls of his Venetian Palace and some of them are even inside, cleaning the drunk gamblers barf off the bathroom floor. If there is any justice, he will be in jail at this time next year for bribery under the Foreign Corrupt Practices Act.

Can you imagine what Karl Rove’s life has been like for the last 36 hours? All those billionaires ringing him up asking, “what the fuck happened?”, knowing full well that they had bet the house on a loser, not because of any great principle, but simply to keep their tax cuts and get rid of the EPA and Dodd Frank. In the last minutes of his expiring bet on Tuesday Night, when Rove tried to get Fox News to reverse their call that Obama had won, it revealed the smallness of the man and the deep failure of the whole exercise the Rove and Murdoch tried to foist on the American public.

And then there are the true bastards of this game, the Koch Brothers. Almost singlehandedly responsible for the climate change denial industry, they threatened their employees who didn’t vote for Romney. They spent their millions trying to keep from having to clean up all the dirty plants they run that poison our air and water.Good luck with that, boys.

The question must be asked. Do we have to go through this again in two years? Have these assholes learned their lesson? I doubt it. Hopefully some investigative reporter will really uncover the dark corruption of the Super Pac system. How much did Karl Rove make off Crossroads? Who were the secret donors who tried to stop California’s Prop 30 at the last moment? How is the Koch’s Super PAC a Social Welfare organization under the IRS code?

Donald Trump tweeted we need a revolution after his losing bet on Romney failed. If he and his billionaire buddies try to steal an election one more time, there will be a revolution, but it won’t be one the Donald is happy about, because the pitchfork brigades will be outside Trump Tower looking for his comb over scalp.

I said my piece before the vote as to what the election would mean for the Republicans (thank God Nate Silver was right), but a few quick thoughts on what it could mean for President Obama and the Democrats.

• The Fiscal Cliff-My advice would be to do nothing during the lame duck session. Let the Bush Tax cuts expire and let the sequester kick in, effecting the first major cut in defense spending in 60 years. Then in January with a slightly stronger Democratic Senate, push for a middle class tax cut combined with some tax reform that eliminates corporate tax breaks and try to revive the Jobs Act to spur some of the lost government fiscal stimulus. The economy is recovering and so private demand will take up some of the slack.
• Filibuster Reform-The Senate has once again got to be a functioning legislative body. Anyone who wants to filibuster a bill is going to have to play Jimmy Stewart in Mr Smith Goes to Washington. They are going to have to come to the floor of the Senate and talk until they are hoarse. They are going to have to have the people that oppose cloture on the floor for continuous votes. My guess is we will not have another session of 350 filibusters if that was enacted.
• America 3.0-When asked how a huge bureaucratic company like IBM became so flexible, the CEO Sam Palmisano said, “We had to lower the center of gravity” at IBM, by which he meant push power out to the edges of the company. Obama has to use the miracle of the Federal system to get money to the states and cities to experiment with solutions for education, transportation, energy and housing.
• The Smart Grid-As Hurricane Sandy proved, we are operating with a 19th Century energy grid in a 21st Century world. As the folks in Chattanooga Tennessee have proved, a smart grid can recover quickly after a catastrophic weather event and that makes all the difference.
• Climate Change-Maybe Sandy will also get the climate change deniers to STFU. Energy independence and green power are of a piece. If Germany could run 50% of its electrical power off of solar for a couple of days last summer, surely the US could do better with vast stretches of desert just waiting for large solar and wind arrays.

If Nate Silver is right, it could be a surprisingly good night for President Obama. My favorite political oddsmaker has Obama’s chances of victory at 91%, with potentially 314 electoral votes. If this turns out to be the result, the Republican Party is going to have to do some major soul searching, because if they could not defeat a Democratic incumbent with unemployment at 7.9%, then must reconcile themselves to permanent minority status. In California Republicans represent just 28% of the population and as the diversity of our state becomes the national norm, the party of Old White Men will decline into irrelevance.

This decline explains some of the more egregious tactics of Republicans in the last six months. A party spends its efforts at disenfranchising the opposition party only when it cannot win elections on the strength of its platform. When you are no longer willing to speak for the young, the gays, the people of color, your only way to victory is the Jim Crow way. I’m old enough to have been involved in the Civil Rights movement in 1962 and 1963. The forces in the White Citizens Councils who would make sure that Blacks could not vote surely must have known that their days in power were numbered, but they didn’t care. They were going to fight for their “way of life” until the very end. Rick Scott, Governor of Florida, is no different than George Wallace in 1963 yelling “Segregation Forever”. The Tampa Bay Times editorial says it all.

Gov. Rick Scott, the Republican-led Legislature and the Republican Party of Florida have done everything they can to discourage you from voting and participating in democracy. Don’t let them get away with it.

The other aspect of the Dying Republican Party is the constant dog whistle of thinly cloaked racism that pervaded the Romney campaign. It’s all of a piece: from the early lies of Obama eliminating welfare requirements to the 47% remarks about people who would never take responsiblity for them selves, to John Sununu’s wish that Obama would learn how to be an American, to Donald Trumps incessant birtherism, right up to Paul Ryan’s closing statement that an Obama victory threatens “Judeo-Christian” values.

It’s a dangerous path, it’s a path that grows government, restricts freedom and liberty, and compromises those values, those Judeo-Christian, Western-civilization values that made us such a great and exceptional nation in the first place.

A Romney loss will cause the hard right to double down and say he wasn’t conservative enough. But the truth is that Paul Ryan’s pinched view of the American future is a minority view. And that minority will be even smaller in four years as many of the fiercest partisans die of old age.

Chris Christie is a smart politician. His full scale embrace of President Obama in the last three days was not done without consideration for the political value going forward. My guess is that Christie has seen enough internal Republican polling to understand that Obama will probably win on next Tuesday. He doesn’t want to be too closely associated with a loser like Mitt Romney. But more importantly he is thinking about 2016. Romney was losing badly until he did his frantic pivot to the center in the first debate. It must be clear to Republicans that a “severe conservative” cannot win a Presidential campaign. Given that Paul Ryan has made it clear that he would like to run for President, that leaves Christie as the centrist candidate in the party. Embracing a Democratic President in bi-partisan ardor, cements that position for 2016.

I think Christie is probably right about Romney losing. The ever dependable Nate Silver has raised Obama’s chance of victory to 79%, the highest it has been since just before the first debate.

Mr. Obama continues to hold the lead in the vast majority of polls in Iowa, Nevada, Ohio and Wisconsin, the states that represent his path of least resistance toward winning the Electoral College. This was particularly apparent on Wednesday, a day when there were a remarkable number of polls, 27, released in the battleground states.

Christie’s apostasy has of course unleashed a fury on the far right. My sense is that if Romney loses the Republican circular firing squad will be out in force. El Rushbo will say Romney lost because he softened his conservative message in the closing weeks, ignoring the clear polling that the moderation was the only thing that got him close.

The closing days are going to be interesting, but I am beginning to feel pretty confident of an Obama victory.

The New York Times ran an article this morning entitled “Movies Try to Escape Cultural Irrelevance”. I had to smile because I have been thinking for a while about what is going on culturally in our entertainment universe and trying to ponder how the economics of various distribution platforms determine the daringness of what gets produced. It is clear that the cultural conversation today is around TV and not the movies. The movie business has long since surrendered to producing cartoon fantasies (Spider Man, X Men, etc) for teenagers while the TV business seems to thrive on serious dramas that plumb the depths of character in dramatically satisfying ways (Mad Men, The Good Wife, Breaking Bad, etc). The Movie industry thinks they have a PR problem, when they really have a content problem.

Several industry groups, including the Academy of Motion Picture Arts and Sciences, which awards the Oscars, and the nonprofit American Film Institute, which supports cinema, are privately brainstorming about starting public campaigns to convince people that movies still matter.

You wouldn’t have to convince people that movies mattered in 1975, because every week there was a movie that mattered. So what is it about the platform that determines this differential? To begin with, TV still has a business model that works, unlike either the film business or the Broadband Internet distribution business. TV works because it has a limited supply of commercial spots per hour. With increasing demand from advertisers, the price for each spot rises and so production costs can be covered and a profit can be made. Contrast this to the Internet advertising platform. Here you have an infinite number of ad units so that prices never rise even if demand rises.

Google is in essence trying to repeal the laws of supply and demand, which is why their recent financial results disappointed analysts.

Analysts focused on the amount that advertisers pay for clicks on Google ads, a metric called cost-per-click, which dropped 8 percent over both last quarter and last year. Susan Wojcicki, Google’s senior vice president of advertising, told analysts that a drop in average cost-per-click often accompanied an increase in the number of paid clicks on ads, which rose 34 percent over last year.

In contrast, even though TV viewership is down, ad rates have stayed high because of supply constraints. Which leads us to the movie business model.  Unlike TV, movies are a total crapshoot. Each film is a one off product, almost impossible to predict demand. The only possible indicator is sales of a very similar product—thus the sequel. It’s hard to imagine, but the sequel is a relatively new phenomena. No one suggested a Gone with the Wind II or a Casablanca II. But once Star Wars II made more money than the first one, the die was cast and now Hollywood is a crackhead chasing sequels. Of course the agents know this, so the price for talent soars as the number after the title rises. Now a rational business would look for metrics such as return on investment to determine whether spending $200 million on Tron Legacy was a good idea. In that world, Bob Zemekis’ new film Flight, made for $30 million, may seem like the best investment of the year. Whether Hollywood will be able to kick it’s sequel habit is a question, but in the mean time the movies will continue to suffer from a kind of cultural irrelevance and TV will continue to thrive.