#end stock buybacks

[rejectingrepublicans]

[mostlysignssomeportents]

Too big to care

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me in BOSTON with Randall "XKCD" Munroe (Apr 11), then PROVIDENCE (Apr 12), and beyond!

Remember the first time you used Google search? It was like magic. After years of progressively worsening search quality from Altavista and Yahoo, Google was literally stunning, a gateway to the very best things on the internet.

Today, Google has a 90% search market-share. They got it the hard way: they cheated. Google spends tens of billions of dollars on payola in order to ensure that they are the default search engine behind every search box you encounter on every device, every service and every website:

https://pluralistic.net/2023/10/03/not-feeling-lucky/#fundamental-laws-of-economics

Not coincidentally, Google's search is getting progressively, monotonically worse. It is a cesspool of botshit, spam, scams, and nonsense. Important resources that I never bothered to bookmark because I could find them with a quick Google search no longer show up in the first ten screens of results:

https://pluralistic.net/2024/02/21/im-feeling-unlucky/#not-up-to-the-task

Even after all that payola, Google is still absurdly profitable. They have so much money, they were able to do a $80 billion stock buyback. Just a few months later, Google fired 12,000 skilled technical workers. Essentially, Google is saying that they don't need to spend money on quality, because we're all locked into using Google search. It's cheaper to buy the default search box everywhere in the world than it is to make a product that is so good that even if we tried another search engine, we'd still prefer Google.

This is enshittification. Google is shifting value away from end users (searchers) and business customers (advertisers, publishers and merchants) to itself:

https://pluralistic.net/2024/03/05/the-map-is-not-the-territory/#apor-locksmith

And here's the thing: there are search engines out there that are so good that if you just try them, you'll get that same feeling you got the first time you tried Google.

When I was in Tucson last month on my book-tour for my new novel The Bezzle, I crashed with my pals Patrick and Teresa Nielsen Hayden. I've know them since I was a teenager (Patrick is my editor).

We were sitting in his living room on our laptops – just like old times! – and Patrick asked me if I'd tried Kagi, a new search-engine.

Teresa chimed in, extolling the advanced search features, the "lenses" that surfaced specific kinds of resources on the web.

I hadn't even heard of Kagi, but the Nielsen Haydens are among the most effective researchers I know – both in their professional editorial lives and in their many obsessive hobbies. If it was good enough for them…

I tried it. It was magic.

No, seriously. All those things Google couldn't find anymore? Top of the search pile. Queries that generated pages of spam in Google results? Fucking pristine on Kagi – the right answers, over and over again.

That was before I started playing with Kagi's lenses and other bells and whistles, which elevated the search experience from "magic" to sorcerous.

The catch is that Kagi costs money – after 100 queries, they want you to cough up $10/month ($14 for a couple or $20 for a family with up to six accounts, and some kid-specific features):

https://kagi.com/settings?p=billing_plan&plan=family

I immediately bought a family plan. I've been using it for a month. I've basically stopped using Google search altogether.

Kagi just let me get a lot more done, and I assumed that they were some kind of wildly capitalized startup that was running their own crawl and and their own data-centers. But this morning, I read Jason Koebler's 404 Media report on his own experiences using it:

https://www.404media.co/friendship-ended-with-google-now-kagi-is-my-best-friend/

Koebler's piece contained a key detail that I'd somehow missed:

When you search on Kagi, the service makes a series of “anonymized API calls to traditional search indexes like Google, Yandex, Mojeek, and Brave,” as well as a handful of other specialized search engines, Wikimedia Commons, Flickr, etc. Kagi then combines this with its own web index and news index (for news searches) to build the results pages that you see. So, essentially, you are getting some mix of Google search results combined with results from other indexes.

In other words: Kagi is a heavily customized, anonymized front-end to Google.

The implications of this are stunning. It means that Google's enshittified search-results are a choice. Those ad-strewn, sub-Altavista, spam-drowned search pages are a feature, not a bug. Google prefers those results to Kagi, because Google makes more money out of shit than they would out of delivering a good product:

https://www.theverge.com/2024/4/2/24117976/best-printer-2024-home-use-office-use-labels-school-homework

No wonder Google spends a whole-ass Twitter every year to make sure you never try a rival search engine. Bottom line: they ran the numbers and figured out their most profitable course of action is to enshittify their flagship product and bribe their "competitors" like Apple and Samsung so that you never try another search engine and have another one of those magic moments that sent all those Jeeves-askin' Yahooers to Google a quarter-century ago.

One of my favorite TV comedy bits is Lily Tomlin as Ernestine the AT&T operator; Tomlin would do these pitches for the Bell System and end every ad with "We don't care. We don't have to. We're the phone company":

https://snltranscripts.jt.org/76/76aphonecompany.phtml

Speaking of TV comedy: this week saw FTC chair Lina Khan appear on The Daily Show with Jon Stewart. It was amazing:

https://www.youtube.com/watch?v=oaDTiWaYfcM

The coverage of Khan's appearance has focused on Stewart's revelation that when he was doing a show on Apple TV, the company prohibited him from interviewing her (presumably because of her hostility to tech monopolies):

https://www.thebignewsletter.com/p/apple-got-caught-censoring-its-own

But for me, the big moment came when Khan described tech monopolists as "too big to care."

What a phrase!

Since the subprime crisis, we're all familiar with businesses being "too big to fail" and "too big to jail." But "too big to care?" Oof, that got me right in the feels.

Because that's what it feels like to use enshittified Google. That's what it feels like to discover that Kagi – the good search engine – is mostly Google with the weights adjusted to serve users, not shareholders.

Google used to care. They cared because they were worried about competitors and regulators. They cared because their workers made them care:

https://www.vox.com/future-perfect/2019/4/4/18295933/google-cancels-ai-ethics-board

Google doesn't care anymore. They don't have to. They're the search company.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/04/04/teach-me-how-to-shruggie/#kagi

[capitalism-and-analytics]

Some highlights from the proposed bill for those interested:

Highest Personal Income Tax Rate Since 1986 (combined Federal Tax rate of 45%)

Highest Capital Gains Tax Since 1978. A rate over twice as high as China’s capital gains tax rate.(nearly doubles rate from 20% to 39%)

Corporate Tax Rate Higher than Communist China. (A 31% increase, from 21% to 28%)

Unconstitutional Wealth Tax on Unrealized Gains

Quadrupled Tax on Stock Buybacks. This tax will hit every American with a 401K or IRA or union pension.

$31 Billion Tax on American Energy

32% Increase to Medicare Taxes

Carried Interest Tax on Capital Gains

$23 Billion Retirement Tax

$24 Billion Cryptocurrency Tax

Real Estate Tax Hike (wants to end 1031 Like-Kind Exchanges)

Doubles the Global Minimum Tax (Global Intangible Low-Tax Income (GILTI) from on U.S. multinational corporations from 10.5 to 21 percent, which after the disallowance of foreign tax credits would provide a top rate of 26.25 percent)

[shu-of-the-wind]

Notable quotes from this article include:

"The strike – which marks the first time all three of the Detroit Three carmakers have been targeted by strikes at the same time – is being coordinated by UAW president Shawn Fain. He said he intended to launch a series of limited and targeted “standup” strikes to shut individual auto plants around the US." "They involve a combined 12,700 workers at the plants, which are critical to the production of some of the Detroit Three’s most profitable vehicles including the Ford Bronco, Jeep Wrangler and Chevrolet Colorado pickup truck."

"The UAW has a $825m strike fund that is set to compensate workers $500 a week while out on strike and could support all of its members for about three months. Staggering the strikes rather than having all 150,000 members walk out at once will allow the union to stretch those resources.

A limited strike could also reduce the potential economic damage economists and politicians fear would result from a widespread, lengthy shutdown of Detroit Three operations."

AND, THE BIG ONE: "Among the union’s demands are a 40% pay increase, an end to tiers, where some workers are paid at lower wage scales than others, and the restoration of concessions from previous contracts such as medical benefits for retirees, more paid time off and rights for workers affected by plant closures.

Workers have cited past concessions and the big three’s immense profits in arguing in favor of their demands. The automakers’ profits jumped 92% from 2013 to 2022, totaling $250bn. During this same time period, chief executive pay increased 40%, and nearly $66bn was paid out in stock dividends or stock buybacks to shareholders.

The industry is also set to receive record taxpayer incentives for transitioning to electric vehicles.

Despite these financial performances, hourly wages for workers have fallen 19.3%, with inflation taken into account, since 2008."

[anarchywoofwoof]

here's the thing: you've heard "there's no ethical consumption under capitalism" but i'd like to propose another sentiment that i feel: ethical employers under capitalism are as prevalent as ethical consumption.

i have worked for three companies. each of them have been extremely unique from the last. i initially worked in retail. then i worked for a call center. now i work in technology.

when i worked in retail, i saw how money and commerce and consumerism affects society. i saw the physical effects of capitalism on your body; managers who were in their 40s looking like they're in their 60s.. yeah, 20 years of retail will do that to you. i saw waste, i saw egregious labor violations, i saw regular people just flat out not get paid for work they did. work i watched them do. all because someone didn't put their punches in a timesheet. i worked in hr during this time, so i saw the truth about how hr is not on the side of the worker and is, in fact, an arm of the shareholders.

then i worked in a call center environment. and i saw the effect that capitalism has on the mind. the psychological warfare of an employer with over 100% attrition, the churn and burn of call center work. the dehumanizing feeling of being absolutely trashed by a drunk person or called slurs and knowing if you hang up, you lose your job. the constant surveillance state that monitors every website, every phone call, every movement you make.

now in technology, i see the The Emperor Has No Clothes. a facade of better wages, better benefits - but only if you're willing to sacrifice your every free minute, every second to the machine. and if you don't, you're cast as an outsider; someone who doesn't want to succeed and move up the ladder and grow. and i've seen that technology in the wrong hands is more harmful than the benefits of technology to a society by a magnitude. and i've seen the absolute terror that private investment eventually has on good, equitable and decent corporations. corporations with leadership that ultimately, in the end, settle on the billions of dollars in payouts over their worker's lives.

private investment companies are just one way that capitalism is eroding the fabric of the american workplace. offshoring, cutting costs to the bare bones and then flipping the company from private to public and making an absolute killing. constant stock buybacks, investing only in the future of their own capital. it's a smash and grab. the victims are the american taxpayer and the american worker.

the truth is that if you find an equitable, fair employer, they will eventually outgrow themselves. corporations are small scale capitalist experiments. success breeds massive growth, out of control, until the system topples or is razed for it's resources.

i'm not saying there's no ethical employment under capitalism but as the days pass, the truth is that unless you are working for a bonafide and vetted non-profit organization, that reality is that boasting you have an "ethical" employer is often going to be a short term claim. capitalism will seep in and poison your employer the moment that the profit motive appears too delicious to deny.

[liberalsarecool]

Tax corporate profits, end stock buybacks.

These corporate advantages are destroying the planet. Spend the tax revenues on services to help workers.

[meandmybigmouth]

Trump blasts Biden on key issue impacting voters after damaging report: ‘Totally lost control’ | Fox News

GREEDFLATION! VIA FOXNEWS!

RAISE THESE MOFO'S TAXES AS THEIR PRICES RISE!. KEEP REMINDING THEM THAT THEY ARE SIGNALING THE END OF TAXPAYER FINANCED BAILOUTS! AND INSTEAD OF STOCK BUYBACKS THEY BETTER START SAVING FOR THE NEXT FINANCIAL CATASTROPHE!. END THEIR OFFSHORE TAX HIDEAWAYS! .

[thosearentcrimes]

Not sure how you solve the whole "shareholder value maximization" thing. It seems fairly obvious that CEOs being very highly paid for overloading perfectly functional and profitable businesses with debt they can't really service long-term to pay for stock buybacks and pointless acquisitions is a bad thing on balance, but a good thing for everyone who gets to decide if it happens or not. You start with a functional productive enterprise and end with a yard sale, with the now shambling frankencompany being re-carved up and bought piecemeal by other companies still in the "fanatical acquisitions" stage of the process. At best you end up with consolidation/monopolization and displacement of profits onto the finance industry. But how do you stop it? Will it wither away as increased interest rates compel more judicious application of capital?

I do wish it were practical for workers at companies being liquidated due to inability to service debt to buy the company free of debt at a steep discount and run it as a cooperative. Realistically, this sort of resolution has only been remotely plausible in situations with sufficient political agitation (LIP type) or established union power and wealth. But in the case of unions, often the funds they have available are pension funds and such, and it's generally not great if they burn people's retirement trying to make a company doomed by macroeconomics beyond their control work, and presumably that would be the case at least some of the time.

[theculturedmarxist]

Welcome to BIG, a newsletter on the politics of monopoly power. If you’re already signed up, great! If you’d like to sign up and receive issues over email, you can do so here.

Today, as the U.S. is drawn into wars in Israel and Ukraine, as well as the defense of now-peaceful Taiwan, I’m writing about war. Not the policy choices, or whether U.S. military power is a net force for good or ill, but the actual practical machinery behind the American defense base that produces the weaponry necessary to sustain the military.

As stockpiles dwindle, there is now widespread agreement among policymakers that America must rebuild its capacity to arm itself and its allies. But according to a new scorching government report released this week, that’s mostly just talk. The Pentagon doesn’t bother tracking the guts of defense contracting, which is who owns the mighty firms that build weaponry.

But first, I have a personal announcement. I am going on leave this week, and I’ve hired a colleague named Lee Hepner to take over for BIG while I am out. You are in for a treat. Hepner works with me at the American Economic Liberties Project. He’s a lawyer with over a decade's worth of policy and political experience at the state and local level, and when I have a question on the law or procedure, Hepner’s one of my go-to people. He’s drafted important legislation, and has recently been focusing on the airline industry, labor issues, and a lot of the major antitrust litigation I've written about here, including the trials of the Meta-Within merger, the Microsoft-Activision acquisition and the Google monopolization case. You're in good hands.

And now, let’s talk the defense base. Here’s an exceptionally boring chart that involves all the money in the world. Welcome to the Pentagon.

One of the more important side stories to the recent wars in Ukraine and Israel, and competition with China over Taiwan, is that the U.S. defense industrial base, composed of 200k plus corporations, is being forced to actually build weapons again. Defense is big business, and since the end of the Cold War, the government has allowed Wall Street to determine who owns, builds, and profits from defense spending.

The consequences, as with much of our economic machinery, are predictable. Higher prices, worse quality, lower output. Wall Street and private equity firms prioritize cash out first, and that means a once functioning and nimble industrial base now produces more grift than anything else. As Lucas Kunce and I wrote for the American Conservative in 2019, the U.S. simply can’t build or get the equipment it needs. There are at this point a bevy of interesting reports coming out of the Pentagon. The last one I wrote up earlier this year showed that unlike the mid-20th century defense-industrial base, today government cash goes increasingly to stock buybacks rather than actual armaments. And now, with a dramatic upsurge in need for everything from missiles to artillery shells to bullets, we’re starting to see cracks in the vaunted U.S. military.

The signs are unmistakable. In Ukraine, fighters are rationing shells. Taiwan can’t get weapons it ordered years ago. The Pentagon has put together a secret team to scour stockpiles to find high-precision armaments in demand on every battlefield and potential battlefield. But the problem goes beyond national defense. In Lake City, Missouri, the largest small arms ammunition plant in the world has decided all ammo production is going to the military, meaning that there is going to be a domestic shortage for hunters, sportsmen, and maybe even police. This shortage may look like a story of a sudden surge in demand, but it’s actually, as Elle Ekman wrote in the Prospect in 2021, a story of consolidation and de-industrialization.

Surges due to wars aren’t new, and there’s always some time lag between the build-up and the delivery. But today, the lengths of time are weirdly long. For instance, the Army is awarding contracts to RTX and Lockheed Martin to build new Stinger missiles, which makes sense. But the process will take.. five years. Why? What is new is Wall Street’s role in weaponry. We used to have slack, and productive capacity, but then came private equity and mergers. And now we don’t. The government can’t actually solicit bids from multiple players for most major weapons systems, because there’s just one or two possible bidders. So that means there’s little incentive for firms to expand output, even if there’s more spending. Why not just raise price?

But don’t take my word for it, take that of the Pentagon. In 2022, the DOD reported that “that consolidation of the industrial base reduces competition for DOD contracts and leads DOD to rely on a more limited number of suppliers. This lack of competition may in turn increase the risk of supply chain gaps, price increases, reduced innovation, and other adverse effects.” And that’s why, more than a year into the Ukraine conflict, the ramp-up is still not where it needs to be.

This week, the Government Accountability Office (GAO), which is a Congressional office charged with investigating problems in government and business, explained why. The GAO came out with a report on how the Pentagon is doing essentially zero oversight of Wall Street’s acquisitions of defense contractors. The title is as boring as you’d expect, designed to have few people pay attention, but offering a red-alert to procurement officials.

The report is simply jaw-dropping. Despite all the chatter about consolidation at high levels within the Pentagon, and in Congress, the bureaucracy has made essentially no progress whatsoever. For instance, we have a trillion dollar defense budget, but there are just two people in the Department of Defense who look at mergers in the defense base. You couldn’t staff the morning shift of a small coffee shop with that, and yet two people are supposed to look at the estimated four hundred mergers plus going on every year among defense contractors and subcontractors.

Four hundred mergers every year is a lot, but of course, that’s just an estimate. Why don’t we know how many acquisitions happen in the defense base? As it turns out, it’s an estimate because the Pentagon isn’t tracking defense mergers anymore. To put it in boring GAO-speak, Pentagon“officials could not say with certainty how many defense-related M&A now occur annually because they no longer track or maintain data on all M&A in the defense industrial base.” So the DOD is almost totally blind to the corporate owners of contractors and subcontractors, which might be one reason that, say, Chinese alloys are being discovered in sensitive weapons systems like the state of the art F-35.

It gets worse. There’s no policy or guidance on mergers, and DOD doesn’t even require contractors or subcontractors to tell them that there is new ownership when an acquisition occurs. In fact, the Pentagon relies on public news to learn of mergers. They often do not know that the mergers are going on, or that the Federal Trade Commission is reviewing them. When big mergers happen, even if the Pentagon is concerned, no one tracks what happens after it closes. They do no analysis of industry sectors, as their “M&A office is not collecting robust data or conducting recurring trend analyses that could help them identify M&A in risky areas of consolidation among defense suppliers.”

The Pentagon’s head-in-the-sand approach is why Lockheed now has a chokehold on nuclear missile modernization, since it bought the key supplier of rocket engines and denies those engines to rivals bidding for the contract to upgrade what is known as the nuclear triad.

So how does the U.S. government manage defense base mergers? Well, the Pentagon defers to the antitrust agencies to look solely at competition. “While DOD policy directs Industrial Base Policy and DOD stakeholders to assess other types of risks, such as national security and innovation risks,” wrote the GAO, “they have not routinely done so.” Basically, dealing with their own defense base is someone else’s job.

What I found most useful about the GAO report is the Pentagon’s response, a classic bureaucratic hand wave. The DOD agreed with all the conclusions of the GAO. It should track mergers and what happens afterwards, it should have more personnel doing so, it should consider national security aspects of corporate combinations, and it should have clear policy on mergers. But it doesn’t. The DOD says it will have a better strategy to deal with mergers… by 2024. Basically, you’re right, but it’s not our problem.

Every day, it seems like political leaders and consultants are saying it’s time to really get that arsenal of democracy going, and to re-industrialize for real. It’s quite possible to get a lot done. The FTC and DOJ now have significant amounts of national security-related information on mergers due to a Congressional change in pre-merger notification laws in 2022, so the DOD could easily do a better job of tracking what’s happening in the defense base.

More to the point, the Pentagon is very powerful. The Deputy Secretary of Defense, Kathleen Hicks could simply start smashing heads on competition and begin telling contractors that if they don’t shape up, she will start an internal war against them. Or the head of the Armed Services Committees could threaten the cushy cash flow that leads to record stock buybacks among contractors, if the ramp-up doesn’t start. Or they could grant antitrust authority for the DOD straight-up, which would rely on a national security standard that allows widespread corporate restructuring without the long slog of a court case. There are many paths.

But if you actually look at the guts of the bureaucracy, nothing is happening, because doing something about our industrial base means thwarting Wall Street, and that’s generally not something that’s considered on the table among normie policymakers. Giant bureaucracies are hard to change, but they are not immovable. One of the ways that you know a previously non-functional bureaucracy is on the right track is, ironically, if there is bitter infighting and anger among staff, who are being tasked to do things differently. But as the GAO showed this week, that’s just not happening in the Pentagon, or at least, not happening nearly fast enough.

And that’s why America is increasingly out of ammunition.

[mostlysignssomeportents]

Conspiratorialism and the epistemological crisis

I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me next weekend (Mar 30/31) in ANAHEIM at WONDERCON, then in Boston with Randall "XKCD" Munroe! (Apr 11), then Providence (Apr 12), and beyond!

Last year, Ed Pierson was supposed to fly from Seattle to New Jersey on Alaska Airlines. He boarded his flight, but then he had an urgent discussion with the flight attendant, explaining that as a former senior Boeing engineer, he'd specifically requested that flight because the aircraft wasn't a 737 Max:

https://www.cnn.com/travel/boeing-737-max-passenger-boycott/index.html

But for operational reasons, Alaska had switched out the equipment on the flight and there he was on a 737 Max, about to travel cross-continent, and he didn't feel safe doing so. He demanded to be let off the flight. His bags were offloaded and he walked back up the jetbridge after telling the spooked flight attendant, "I can’t go into detail right now, but I wasn’t planning on flying the Max, and I want to get off the plane."

Boeing, of course, is a flying disaster that was years in the making. Its planes have been falling out of the sky since 2019. Floods of whistleblowers have come forward to say its aircraft are unsafe. Pierson's not the only Boeing employee to state – both on and off the record – that he wouldn't fly on a specific model of Boeing aircraft, or, in some cases any recent Boeing aircraft:

https://pluralistic.net/2024/01/22/anything-that-cant-go-on-forever/#will-eventually-stop

And yet, for years, Boeing's regulators have allowed the company to keep turning out planes that keep turning out lemons. This is a pretty frightening situation, to say the least. I'm not an aerospace engineer, I'm not an aircraft safety inspector, but every time I book a flight, I have to make a decision about whether to trust Boeing's assurances that I can safely board one of its planes without dying.

In an ideal world, I wouldn't even have to think about this. I'd be able to trust that publicly accountable regulators were on the job, making sure that airplanes were airworthy. "Caveat emptor" is no way to run a civilian aviation system.

But even though I don't have the specialized expertise needed to assess the airworthiness of Boeing planes, I do have the much more general expertise needed to assess the trustworthiness of Boeing's regulator. The FAA has spent years deferring to Boeing, allowing it to self-certify that its aircraft were safe. Even when these assurances led to the death of hundreds of people, the FAA continued to allow Boeing to mark its own homework:

https://www.youtube.com/watch?v=Q8oCilY4szc

What's more, the FAA boss who presided over those hundreds of deaths was an ex-Boeing lobbyist, whom Trump subsequently appointed to run Boeing's oversight. He's not the only ex-insider who ended up a regulator, and there's plenty of ex-regulators now on Boeing's payroll:

https://therevolvingdoorproject.org/boeing-debacle-shows-need-to-investigate-trump-era-corruption/

You don't have to be an aviation expert to understand that companies have conflicts of interest when it comes to certifying their own products. "Market forces" aren't going to keep Boeing from shipping defective products, because the company's top brass are more worried about cashing out with this quarter's massive stock buybacks than they are about their successors' ability to manage the PR storm or Congressional hearings after their greed kills hundreds and hundreds of people.

You also don't have to be an aviation expert to understand that these conflicts persist even when a Boeing insider leaves the company to work for its regulators, or vice-versa. A regulator who anticipates a giant signing bonus from Boeing after their term in office, or a an ex-Boeing exec who holds millions in Boeing stock has an irreconcilable conflict of interest that will make it very hard – perhaps impossible – for them to hold the company to account when it trades safety for profit.

It's not just Boeing customers who feel justifiably anxious about trusting a system with such obvious conflicts of interest: Boeing's own executives, lobbyists and lawyers also refuse to participate in similarly flawed systems of oversight and conflict resolution. If Boeing was sued by its shareholders and the judge was also a pissed off Boeing shareholder, they would demand a recusal. If Boeing was looking for outside counsel to represent it in a liability suit brought by the family of one of its murder victims, they wouldn't hire the firm that was suing them – not even if that firm promised to be fair. If a Boeing executive's spouse sued for divorce, that exec wouldn't use the same lawyer as their soon-to-be-ex.

Sure, it takes specialized knowledge and training to be a lawyer, a judge, or an aircraft safety inspector. But anyone can look at the system those experts work in and spot its glaring defects. In other words, while acquiring expertise is hard, it's much easier to spot weaknesses in the process by which that expertise affects the world around us.

And therein lies the problem: aviation isn't the only technically complex, potentially lethal, and utterly, obviously untrustworthy system we all have to navigate. How about the building safety codes that governed the structure you're in right now? Plenty of people have blithely assumed that structural engineers carefully designed those standards, and that these standards were diligently upheld, only to discover in tragic, ghastly ways that this was wrong:

https://www.bbc.com/news/64568826

There are dozens – hundreds! – of life-or-death, highly technical questions you have to resolve every day just to survive. Should you trust the antilock braking firmware in your car? How about the food hygiene rules in the factories that produced the food in your shopping cart? Or the kitchen that made the pizza that was just delivered? Is your kid's school teaching them well, or will they grow up to be ignoramuses and thus economic roadkill?

Hell, even if I never get into another Boeing aircraft, I live in the approach path for Burbank airport, where Southwest lands 50+ Boeing flights every day. How can I be sure that the next Boeing 737 Max that falls out of the sky won't land on my roof?

This is the epistemological crisis we're living through today. Epistemology is the process by which we know things. The whole point of a transparent, democratically accountable process for expert technical deliberation is to resolve the epistemological challenge of making good choices about all of these life-or-death questions. Even the smartest person among us can't learn to evaluate all those questions, but we can all look at the process by which these questions are answered and draw conclusions about its soundness.

Is the process public? Are the people in charge of it forthright? Do they have conflicts of interest, and, if so, do they sit out any decision that gives even the appearance of impropriety? If new evidence comes to light – like, say, a horrific disaster – is there a way to re-open the process and change the rules?

The actual technical details might be a black box for us, opaque and indecipherable. But the box itself can be easily observed: is it made of sturdy material? Does it have sharp corners and clean lines? Or is it flimsy, irregular and torn? We don't have to know anything about the box's contents to conclude that we don't trust the box.

For example: we may not be experts in chemical engineering or water safety, but we can tell when a regulator is on the ball on these issues. Back in 2019, the West Virginia Department of Environmental Protection sought comment on its water safety regs. Dow Chemical – the largest corporation in the state's largest industry – filed comments arguing that WV should have lower standards for chemical contamination in its drinking water.

Now, I'm perfectly prepared to believe that there are safe levels of chemical runoff in the water supply. There's a lot of water in the water supply, after all, and "the dose makes the poison." What's more, I use the products whose manufacture results in that chemical waste. I want them to be made safely, but I do want them to be made – for one thing, the next time I have surgery, I want the anesthesiologist to start an IV with fresh, sterile plastic tubing.

And I'm not a chemist, let alone a water chemist. Neither am I a toxicologist. There are aspects of this debate I am totally unqualified to assess. Nevertheless, I think the WV process was a bad one, and here's why:

https://www.wvma.com/press/wvma-news/4244-wvma-statement-on-human-health-criteria-development

That's Dow's comment to the regulator (as proffered by its mouthpiece, the WV Manufacturers' Association, which it dominates). In that comment, Dow argues that West Virginians safely can absorb more poison than other Americans, because the people of West Virginia are fatter than other Americans, and so they have more tissue and thus a better ratio of poison to person than the typical American. But they don't stop there! They also say that West Virginians don't drink as much water as their out-of-state cousins, preferring to drink beer instead, so even if their water is more toxic, they'll be drinking less of it:

https://washingtonmonthly.com/2019/03/14/the-real-elitists-looking-down-on-trump-voters/

Even without any expertise in toxicology or water chemistry, I can tell that these are bullshit answers. The fact that the WV regulator accepted these comments tells me that they're not a good regulator. I was in WV last year to give a talk, and I didn't drink the tap water.

It's totally reasonable for non-experts to reject the conclusions of experts when the process by which those experts resolve their disagreements is obviously corrupt and irredeemably flawed. But some refusals carry higher costs – both for the refuseniks and the people around them – than my switching to bottled water when I was in Charleston.

Take vaccine denial (or "hesitancy"). Many people greeted the advent of an extremely rapid, high-tech covid vaccine with dread and mistrust. They argued that the pharma industry was dominated by corrupt, greedy corporations that routinely put their profits ahead of the public's safety, and that regulators, in Big Pharma's pocket, let them get away with mass murder.

The thing is, all that is true. Look, I've had five covid vaccinations, but not because I trust the pharma industry. I've had direct experience of how pharma sacrifices safety on greed's altar, and narrowly avoided harm myself. I have had chronic pain problems my whole life, and they've gotten worse every year. When my daughter was on the way, I decided this was going to get in the way of my ability to parent – I wanted to be able to carry her for long stretches! – and so I started aggressively pursuing the pain treatments I'd given up on many years before.

My journey led me to many specialists – physios, dieticians, rehab specialists, neurologists, surgeons – and I tried many, many therapies. Luckily, my wife had private insurance – we were in the UK then – and I could go to just about any doctor that seemed promising. That's how I found myself in the offices of a Harley Street quack, a prominent pain specialist, who had great news for me: it turned out that opioids were way safer than had previously been thought, and I could just take opioids every day and night for the rest of my life without any serious risk of addiction. It would be fine.

This sounded wrong to me. I'd lost several friends to overdoses, and watched others spiral into miserable lives as they struggled with addiction. So I "did my own research." Despite not having a background in chemistry, biology, neurology or pharmacology, I struggled through papers and read commentary and came to the conclusion that opioids weren't safe at all. Rather, corrupt billionaire pharma owners like the Sackler family had colluded with their regulators to risk the lives of millions by pushing falsified research that was finding publication in some of the most respected, peer-reviewed journals in the world.

I became an opioid denier, in other words.

I decided, based on my own research, that the experts were wrong, and that they were wrong for corrupt reasons, and that I couldn't trust their advice.

When anti-vaxxers decried the covid vaccines, they said things that were – in form at least – indistinguishable from the things I'd been saying 15 years earlier, when I decided to ignore my doctor's advice and throw away my medication on the grounds that it would probably harm me.

For me, faith in vaccines didn't come from a broad, newfound trust in the pharmaceutical system: rather, I judged that there was so much scrutiny on these new medications that it would overwhelm even pharma's ability to corruptly continue to sell a medication that they secretly knew to be harmful, as they'd done so many times before:

https://www.npr.org/2007/11/10/5470430/timeline-the-rise-and-fall-of-vioxx

But many of my peers had a different take on anti-vaxxers: for these friends and colleagues, anti-vaxxers were being foolish. Surprisingly, these people I'd long felt myself in broad agreement with began to defend the pharmaceutical system and its regulators. Once they saw that anti-vaxx was a wedge issue championed by right-wing culture war shitheads, they became not just pro-vaccine, but pro-pharma.

There's a name for this phenomenon: "schismogenesis." That's when you decide how you feel about an issue based on who supports it. Think of self-described "progressives" who became cheerleaders for the America's cruel, ruthless and lawless "intelligence community" when it seemed that US spooks were bent on Trump's ouster:

https://pluralistic.net/2021/12/18/schizmogenesis/

The fact that the FBI didn't like Trump didn't make them allies of progressive causes. This was and is the same entity that (among other things) tried to blackmail Martin Luther King, Jr into killing himself:

https://en.wikipedia.org/wiki/FBI%E2%80%93King_suicide_letter

But schismogenesis isn't merely a reactionary way of flip-flopping on issues based on reflexive enmity. It's actually a reasonable epistemological tactic: in a world where there are more issues you need to be clear on than you can possibly inform yourself about, you need some shortcuts. One shortcut – a shortcut that's failing – is to say, "Well, I'll provisionally believe whatever the expert system tells me is true." Another shortcut is, "I will provisionally disbelieve in whatever the people I know to act in bad faith are saying is true." That is, "schismogenesis."

Schismogenesis isn't a great tactic. It would be far better if we had a set of institutions we could all largely trust – if the black boxes where expert debate took place were sturdy, rectilinear and sharp-cornered.

But they're not. They're just not. Our regulatory process sucks. Corporate concentration makes it trivial for cartels to capture their regulators and steer them to conclusions that benefit corporate shareholders even if that means visiting enormous harm – even mass death – on the public:

https://pluralistic.net/2022/06/05/regulatory-capture/

No one hates Big Tech more than I do, but many of my co-belligerents in the war on Big Tech believe that the rise of conspiratorialism can be laid at tech platforms' feet. They say that Big Tech boasts of how good they are at algorithmically manipulating our beliefs, and attribute Qanons, flat earthers, and other outlandish conspiratorial cults to the misuse off those algorithms.

"We built a Big Data mind-control ray" is one of those extraordinary claims that requires extraordinary evidence. But the evidence for Big Tech's persuasion machines is very poor: mostly, it consists of tech platforms' own boasts to potential investors and customers for their advertising products. "We can change peoples' minds" has long been the boast of advertising companies, and it's clear that they can change the minds of customers for advertising.

Think of department store mogul John Wanamaker, who famously said "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Today – thanks to commercial surveillance – we know that the true proportion of wasted advertising spending is more like 99.9%. Advertising agencies may be really good at convincing John Wanamaker and his successors, through prolonged, personal, intense selling – but that doesn't mean they're able to sell so efficiently to the rest of us with mass banner ads or spambots:

http://pluralistic.net/HowToDestroySurveillanceCapitalism

In other words, the fact that Facebook claims it is really good at persuasion doesn't mean that it's true. Just like the AI companies who claim their chatbots can do your job: they are much better at convincing your boss (who is insatiably horny for firing workers) than they are at actually producing an algorithm that can replace you. What's more, their profitability relies far more on convincing a rich, credulous business executive that their product works than it does on actually delivering a working product.

Now, I do think that Facebook and other tech giants play an important role in the rise of conspiratorial beliefs. However, that role isn't using algorithms to persuade people to mistrust our institutions. Rather Big Tech – like other corporate cartels – has so corrupted our regulatory system that they make trusting our institutions irrational.

Think of federal privacy law. The last time the US got a new federal consumer privacy law was in 1988, when Congress passed the Video Privacy Protection Act, a law that prohibits video store clerks from leaking your VHS rental history:

https://www.eff.org/deeplinks/2008/07/why-vppa-protects-youtube-and-viacom-employees

It's been a minute. There are very obvious privacy concerns haunting Americans, related to those tech giants, and yet the closest Congress can come to doing something about it is to attempt the forced sale of the sole Chinese tech giant with a US footprint to a US company, to ensure that its rampant privacy violations are conducted by our fellow Americans, and to force Chinese spies to buy their surveillance data on millions of Americans in the lawless, reckless swamp of US data-brokerages:

https://www.npr.org/2024/03/14/1238435508/tiktok-ban-bill-congress-china

For millions of Americans – especially younger Americans – the failure to pass (or even introduce!) a federal privacy law proves that our institutions can't be trusted. They're right:

https://www.tiktok.com/@pearlmania500/video/7345961470548512043

Occam's Razor cautions us to seek the simplest explanation for the phenomena we see in the world around us. There's a much simpler explanation for why people believe conspiracy theories they encounter online than the idea that the one time Facebook is telling the truth is when they're boasting about how well their products work – especially given the undeniable fact that everyone else who ever claimed to have perfected mind-control was a fantasist or a liar, from Rasputin to MK-ULTRA to pick-up artists.

Maybe people believe in conspiracy theories because they have hundreds of life-or-death decisions to make every day, and the institutions that are supposed to make that possible keep proving that they can't be trusted. Nevertheless, those decisions have to be made, and so something needs to fill the epistemological void left by the manifest unsoundness of the black box where the decisions get made.

For many people – millions – the thing that fills the black box is conspiracy fantasies. It's true that tech makes finding these conspiracy fantasies easier than ever, and it's true that tech makes forming communities of conspiratorial belief easier, too. But the vulnerability to conspiratorialism that algorithms identify and target people based on isn't a function of Big Data. It's a function of corruption – of life in a world in which real conspiracies (to steal your wages, or let rich people escape the consequences of their crimes, or sacrifice your safety to protect large firms' profits) are everywhere.

Progressives – which is to say, the coalition of liberals and leftists, in which liberals are the senior partners and spokespeople who control the Overton Window – used to identify and decry these conspiracies. But as right wing "populists" declared their opposition to these conspiracies – when Trump damned free trade and the mainstream media as tools of the ruling class – progressives leaned into schismogenesis and declared their vocal support for these old enemies of progress.

This is the crux of Naomi Klein's brilliant 2023 book Doppelganger: that as the progressive coalition started supporting these unworthy and broken institutions, the right spun up "mirror world" versions of their critique, distorted versions that focus on scapegoating vulnerable groups rather than fighting unworthy institutions:

https://pluralistic.net/2023/09/05/not-that-naomi/#if-the-naomi-be-klein-youre-doing-just-fine

This is a long tradition in politics: hundreds of years ago, some leftists branded antisemitism "the socialism of fools." Rather than condemning the system's embrace of the finance sector and its wealthy beneficiaries, anti-semites blame a disfavored group of people – people who are just as likely as anyone to suffer under the system:

https://en.wikipedia.org/wiki/Antisemitism_is_the_socialism_of_fools

It's an ugly, shallow, cartoon version of socialism's measured and comprehensive analysis of how the class system actually works and why it's so harmful to everyone except a tiny elite. Literally cartoonish: the shadow-world version of socialism co-opts and simplifies the iconography of class struggle. And schismogenesis – "if the right likes this, I don't" – sends "progressive" scolds after anyone who dares to criticize finance as the crux of our world's problems as popularizing "antisemetic dog-whistles."

This is the problem with "horseshoe theory" – the idea that the far right and the far left bend all the way around to meet each other:

https://pluralistic.net/2024/02/26/horsehoe-crab/#substantive-disagreement

When the right criticizes pharma companies, they tell us to "do our own research" (e.g. ignore the systemic problems of people being forced to work under dangerous conditions during a pandemic while individually assessing conflicting claims about vaccine safety, ideally landing on buying "supplements" from a grifter). When the left criticizes pharma, it's to argue for universal access to medicine and vigorous public oversight of pharma companies. These aren't the same thing:

https://pluralistic.net/2021/05/25/the-other-shoe-drops/#quid-pro-quo

Long before opportunistic right wing politicians realized they could get mileage out of pointing at the terrifying epistemological crisis of trying to make good choices in an age of institutions that can't be trusted, the left was sounding the alarm. Conspiratorialism – the fracturing of our shared reality – is a serious problem, weakening our ability to respond effectively to endless disasters of the polycrisis.

But by blaming the problem of conspiratorialism on the credulity of believers (rather than the deserved disrepute of the institutions they have lost faith in) we adopt the logic of the right: "conspiratorialism is a problem of individuals believing wrong things," rather than "a system that makes wrong explanations credible – and a schismogenic insistence that these institutions are sound and trustworthy."

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/03/25/black-boxes/#when-you-know-you-know

Image: Nuclear Regulatory Commission (modified) https://www.flickr.com/photos/nrcgov/15993154185/

meanwell-packaging.co.uk https://www.flickr.com/photos/195311218@N08/52159853896

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/

[reddancer1]

Bernie takes on Big Pharma

There is a lot of discussion about how "divided" our nation is and, on many issues, that is absolutely true.

But if you ask most Americans — Democrats, Republicans, independents, progressives, conservatives — they will agree: We are getting ripped off, big time, by the pharmaceutical industry.

The good news — and there is good news — is that scientists have made some amazing and important discoveries that have saved millions of lives during the global COVID pandemic, and others that have the capacity to save and extend the quality of life for people in this country and around the world.

The bad news — and there is plenty of it — is that those advances in science and technology mean nothing if people cannot afford them.

In this country, we pay over 3 times as much as other major countries for brand name prescription drugs, and, in some cases we pay 10 or 20 times more than the people of other countries for the same exact product.

The result of the high cost of prescription drug costs is obvious: One out of four Americans cannot afford to purchase the prescriptions their doctors write and some die as a result.

And if you think the high cost of prescription drugs is just an individual patient or family problem that may not impact you, I am here to tell you that you are mistaken.

This is also a taxpayer issue. The high cost of these medicines drives up the cost of Medicaid, Medicare, and other public health programs as well as private insurance. When people can't afford the medicine they need and get sicker than they should, they end up in emergency rooms or hospitals at great expense to our already bloated and wasteful healthcare system.

So no matter who you are, no matter how healthy or wealthy you are, this is an issue that impacts ALL OF US.

Yet while millions of Americans struggle to pay for the lifesaving medicine they need and all of us pay the price, the drug companies and their executives have never had it so well.

In 2022, Johnson & Johnson made nearly $18 billion in profits, paid its CEO over $27 million in compensation, and spent over $17 billion on stock buybacks and dividends.

That same year, Merck made $14.5 billion in profit, handed out over $7 billion in dividends to their wealthy stockholders, and paid its CEO over $52 million in compensation.

And Bristol Myers Squibb made $6.3 billion in profits last year, while recently spending over $12 billion on stock buybacks and dividends and giving its CEO over $41 million in compensation.

So where do we go from here?

First, let us acknowledge that we have made SOME progress on the issue of lowering the cost of prescription drugs.

As a result of the Inflation Reduction Act, seniors with diabetes are paying no more than $35 a month for the insulin they need; beginning next year, seniors will be paying no more than $2,000 out-of-pocket a year for prescription drugs; and for the first time in American history Medicare is negotiating with the pharmaceutical industry to lower some of the most expensive prescription drug prices in America.

I am also proud of the accomplishments the Senate Committee on Health, Education, Labor, and Pensions (HELP), which I chair, has made to bring down the cost of prescription drugs.

Months ago, the HELP Committee launched an investigation into the outrageously high price of inhalers that 25 million Americans with asthma and 16 million Americans with chronic obstructive pulmonary disease (COPD) need to breathe.

After talking to the CEOs of the 4 major inhaler manufacturers, three of them have made a commitment to cap the cost of all of their brand name inhalers — Boehringer Ingelheim, AstraZeneca, and GlaxoSmithKline — to $35 at the counter, a substantial reduction in price. Up to this point Tevla has refused to join its competitors and lower its prices.

Last year, the CEO of Moderna committed during a HELP Committee hearing that his company would set up a patient assistance program so that no one in America would have to pay for their vaccine out of pocket.

In a separate HELP Committee hearing last May, the CEO of Eli Lilly committed that his company would not raise prices on existing insulin products after announcing very substantial price cuts for these products.

These efforts will improve life for millions of Americans. They will prevent unnecessary deaths, ease suffering, and save substantial sums of money for working class families.

But, despite all that we’ve accomplished, it is not enough. Not even close. Much more has to be done.

First, it is not just seniors who should be paying no more than $2,000 a year for prescription drugs — that must be made universal and extend to ALL Americans. Period. No matter what their health condition or how many prescription drugs they use, no one should pay more than $2,000 a year out-of-pocket.

There are also individual drugs like Ozempic, made by Novo Nordisk, that have the potential to be game changers in the diabetes and obesity epidemics. Yet, Americans are being charged outrageous and unsustainable prices for these products. We pay about $1,000 a month for this drug while the same exact product can be purchased for just $155 a month in Canada and just $59 in Germany. That may make sense to somebody, but not to me.

If we do not substantially reduce the price of this drug, millions who need it will be unable to afford it. Further, this extremely high price has the potential to bankrupt Medicare, the American people, and our entire healthcare system.

Further, we can no longer tolerate Astellas and Pfizer charging Americans with prostate cancer over $165,000 for Xtandi when that exact same product can be purchased for just $20,000 in Japan.

But it is not just these drugs — it is often the case that Americans are paying far more than people in other countries for the same exact medicines.

All over this country, the American people are asking why it is that they pay, by far, the highest prices in the world for prescription drugs?

The answer is simple. It is because drug companies in America are allowed to charge whatever they want. And that’s what they do. Their business model is not about how they can save and improve the lives of as many people as possible — it is about maximizing profit. And that is something that should offend everyone.

I have introduced legislation to cut the price of prescription drugs by at least 50% by preventing the pharmaceutical industry from charging more for medicine in the U.S. than they do in Canada, Britain, Germany, France, and Japan — a concept that is not only supported by progressives, but former President Donald Trump.

I have also introduced legislation to allow patients, pharmacists, and wholesalers to purchase affordable prescription drugs from Canada, the United Kingdom, and other major countries with strong safety standards.

I will soon be introducing legislation that would greatly expand Medicare’s ability to negotiate the price of prescription drugs.

Working together, we can take on the greed of the pharmaceutical industry and substantially lower the price of prescription drugs in America.

Yes. There are many issues which divide the American people — but not this one. Whether you are a Democrat, Republican, or Independent, a progressive or conservative, you understand that the extraordinary greed of the pharmaceutical industry must be ended.

When we do that, we will be improving the quality of life for millions of Americans while lowering the cost of healthcare in this country which is at least double that of any other wealthy country.

Let’s do it.

Bernie Sanders

[zvaigzdelasas]

If [unions] accept the deal that was announced at about 5 a.m. (0900 GMT), workers whose pay had been frozen would win double-digit increases and would be allowed to seek certain types of medical care without fear of being punished, union leaders said. The agreement also includes an immediate 14.1% wage rise, the railroads said.

A rail shutdown could have frozen almost 30% of U.S. cargo shipments by weight, stoked inflation, cost the American economy as much as $2 billion per day and unleashed a cascade of transport woes affecting U.S. energy, agriculture, manufacturing, healthcare and retail sectors. [...]

The railroad industry slashed almost 30% of its workforce over the past six years, cutting pay and other costs as companies increased profits, stock buybacks and dividends for investors.

Profits at BNSF, owned by billionaire Warren Buffett's Berkshire Hathaway (BRKa.N), rose 9.8% in the quarter ending June 30 to $1.66 billion. [...]

Thursday's deal follows some earlier recommendations of the president's emergency mediators. It includes a 24% percent wage increase over a five-year period from 2020 through 2024 as well$1,000 lump sum payments in each of the next five years.

Some 22,000 union workers at 29 West Coast ports that handle almost 40% of U.S. imports are also [still] in high-stakes labor contract negotiations.

15 Sep 22

[realcleverissues]

Expiration Date Capitalism

I think capitalist endeavors should have an expiration date, or other means of phasing it out for each individual situation.

Like, we let patents expire even though the person who invented a thing literally *invented* a new thing, and spent who knows how much time, money, and knowledge to create it.

Why can’t capitalist stakes in businesses do the same? E.g. After 20 years, there’s no more investor return. The business then runs for itself and its workers. (So if the guy who made the company is still running, he’ll still earn a good *wage* but not a *profit*.)

Or perhaps letting things expire after they’ve provided a certain return on investment. E.g. After a company’s stocks have returned 10x their original value (adjusting for inflation), the stocks die and the company just runs for itself, focusing on efficiency and wages, not whatever crazy shortcuts or buybacks investors want to do to make some more cash out of it, in perpetuity (esp when a lot of the “innovations” are just new ways to screw employees and customers).

The company can decide to issue *new* stocks for investors to invest in, but the old stocks or ownership rights won’t last forever. Just because you built a popular coffee shop or grocery store, doesn’t mean you get to monopolize its success till the end of time. Get rewarded for your investment; get rewarded for your work, but then let the money go where it should: the business, to quality products and services, and to the laborers who provide it.

[virtualcurrencyspace]

Bitcoin Is Now Above $29K

Bitcoin has pushed above $29,000 following the U.S. Federal Reserve’s 25 basis point interest rate hike on Thursday, with some analysts speculating on a strong break to the upside after over a month of trade in a narrow wedge. The move over $29,000 came a few hours after the Fed hike as a report indicated another U.S. bank failure could soon be at hand. Crypto services provider Matrixport has said that if Thursday’s rate rise proves to be the last of this cycle, bitcoin could rally 20% to $36,000. Despite trading volumes declining slightly, the “path higher sees only limited resistance,” Matrixport said in a research note on Thursday. The end of the recent earning season will see stock buybacks restart, which will “continue to be a tailwind for stocks and risk assets,” the note added.

https://www.coindesk.com/markets/2023/05/04/first-mover-americas-bitcoin-ending-week-on-positive-note/?outputType=amp

[azspot]

Today, we live in the enshittification end-times, red of tooth and claw, where media companies' revenues are dwindling and advertisers' costs are soaring, and the tech giants are raking in hundreds of billions, firing hundreds of thousands of workers, and pissing away tens of billions on stock buybacks…

Cory Doctorow

[mariacallous]

After BP’s big results announcement today, it’s clear that major questions remain about Rishi Sunak’s windfall tax. The oil giant registered profits of $8.2bn (£7.1bn) over the past three months, almost triple the profit it made for the same period last year. While BP reports it expects to pay about £700m in windfall tax on its North Sea operations this year, it also plans to spend more than three times that much on a $2.5bn (£2.17bn) share buyback programme, handing surplus cash back to its shareholders instead of using it for renewable investment or lowering prices.

Sunak introduced the tax when he was chancellor, promising to redistribute the extraordinary profits of oil and gas companies to households and businesses in the form of cost of living support. Thanks to extremely generous loopholes – which provide tax breaks in return for investments, such as drilling oil in the North Sea – the energy profits levy looks set to miss out on vital revenues. Shell has made more than $30bn (£26bn) in net income since the start of the year, and still hasn’t paid a single penny in additional tax from the levy in the UK.

As prime minister, Sunak is once again looking at ways to raise tax revenues for the government. Rather than return to the public service cuts of the austerity era, he may turn his focus back to the behaviour of the companies he first targeted in May.

Companies producing oil and gas have been making eye-watering profits this year while average energy bills have doubled since last October, even with the government’s energy price cap holding down costs. This is no coincidence: their windfall profits are the result of sharp increases in the wholesale price of energy and represent direct cash transfers from the pockets of households and businesses.

But instead of channelling all of their profits into productive investments, energy companies have transferred most of their extra cash straight to shareholders in the form of dividends and “buybacks”. Dividends are the primary means of paying shareholders when the company makes a profit, while buybacks reward shareholders by inflating the value of a company’s stock. Share buybacks were illegal in the UK until 1981 because they were considered by many to be a form of market manipulation.

Despite aiming to invest billions in the UK’s “energy system” by 2030, Shell and BPhave transferred more than $28.6bn to shareholders through buybacks this year. The prediction by BP’s chief executive last year that rising oil prices would turn the company into a “cash machine” for its investors was proven right again this morning when it announced the latest round of buybacks. As IPPR and Common Wealth recently showed, in the first half of this year BP spent 10 times as much on transferring cash to shareholders through buybacks as it invested into renewable energy. Shell spent seven times as much on buying back its own shares as it invested into renewables in the same period.

Oil and gas giants are among the most extreme examples of this practice, but they aren’t anomalies. Cash transfers to shareholders have increased across the UK economy since the pandemic ended. Shareholder payouts, which slumped to record lows during Covid, are now 30% higher than they were pre-pandemic. Buybacks have rebounded 20-fold since their lowest point during the pandemic and are now twice as high as their previous peak in 2018.

Astonishingly, shareholders pay less tax on the wealth they earn from owning stocks than working people do on their wages and salaries. Dividends and buybacks are taxed at consistently lower rates than income tax, allowing asset owners to accumulate wealth while paying less tax than workers.

These payouts overwhelmingly benefit the wealthiest members of society. Recent analysis by Common Wealth shows that the top 1% of households overwhelmingly dominate the direct ownership of UK shares. This means that while households struggle with the cost of living crisis, profits are being channelled into the hands of wealthy asset-owners. This situation is unjustifiable. Taxes on shareholder payouts should be raised to ensure that companies are not channelling profits to their investors at a time of national economic crisis.

The Biden administration recently introduced a small tax on share buybacks to fund renewable energy projects and reduce the US government’s deficit. Analysis by IPPR and Common Wealth shows that if the UK government followed suit, it could raise £225m a year. Alternatively, a “windfall” tax on share buybacks could raise up to £11bn in a year, more than half coming from the buybacks of Shell and BP alone. A higher tax would also encourage companies to reinvest their profits into the economy and in the process boost growth, innovation and job creation.

At the same time, the government could close the loopholes that allow shareholders to pay less tax than workers. Bringing taxes on dividends in line with income tax levels would raise £6bn a year.

Targeting the imbalance between growing shareholder payouts and falling household income would allow the government to continue supporting households and businesses without returning to austerity. It’s vital that we prioritise these progressive revenue-raisers over the failed spending cuts of the past.