All posts by Dan Lieberman

The Case for Israel as a Criminal Enterprise

After UAE-Israel deal, missing is that the Emirates bewildering moment and the shattered Palestinian moment are due to a misrepresentation of what is called the Middle East conflict. The misrepresentation has led to a fallacious approach for rectification, and an impasse for obtaining peace with justice.

Even the terminology seems incorrect. Is this a conflict between Palestinians and Zionists or has it always been a crisis that the Zionists imposed on the Palestinians? Providing a correction is more than semantics, it places the dispute in proper context, a starting point for organizing a response.

In a conflict, two parties have clashing interests for the same objective; both have reasonable narratives that allow pursuing the objective, and almost equal “skin in the game.”

The Zionist’s aimed at establishing an overwhelming presence in a land to which they had no title. The Palestinian objective has always been to remain in lands in which they have title. Compare the objectives; they are not the same. Correctly and honestly pursued, attaining both objectives was not contradictory, could have been achieved, maybe, with difficulty, but eventually. Khalil Sakakini, Palestinian nationalist, essayist and poet, and other Palestinian notables concurred.

I see no reason why the Jews and the Arabs cannot work together in this great country. There is room for all, and up to the present time there have been no serious quarrels. At the be­ginning, what little dissension arose has smoothed out, and I believe it is the desire at least of the younger and vigorous and open mi­nded group of Arabs to do everything they can to work amicably with the Jews. We must say that the Jews have brought considerable progress, and as they are mainly spend­ing their own money in developing the country, it would be wrong not to give them credit for efforts in trying to make a future and better Palestine.

On November 3, 1918, a day after the one-year anniversary of the Balfour Declaration, a delegation of the Muslim-Christian Association handed a petition signed by more than 100 notables to Ronald Storrs, the Occupied Enemy Territory Administration military governor.

We noticed yesterday a large crowd of Jews carrying banners and overrunning the streets shouting words, which hurt the feelings and wound the soul. They pretend with open voice that Palestine, which is the Holy Land of our Fathers and the graveyard of our ancestors, which has been inhabited by the Arabs for long ages who loved it and died in defending it, is now a national home for them. These are words which displease the heavens.  How do the Jews expect Palestine to be a national home when the Muslims and the Christians never asked that it should be a national home for those of them who are not inhabitants of Palestine?  We Arabs, Muslim and Christian, have always sympathized profoundly with the persecuted Jews and their misfortunes in other countries as much as we sympathized with the persecuted Armenians and other weaker nations. We hoped for their deliverance and prosperity. But there is a wide difference between this sympathy and the acceptance of such a nation in our country, to be made by them a national home,  ruling over us and disposing of our affairs. We Muslims and Christians desire to live with our brothers, the Jews of Palestine, in peace and happiness and with equal rights. Our privileges are theirs, and their duties are ours.

An internal conflict between the Zionists – the real conflict – prevented the occurrence; extremist Zionists sought their objective and tried to prevent the Palestinians from maintaining their objective. The cultural, political, revisionist, labor, reform, revolutionary, and religious Zionists fought a conflict among themselves, and a combination of revisionist, revolutionary, and religious Zionists won – chase them out and take their land – the Zionist objective was achieved and the Palestinian objective was defeated.

The Zionists had no reasonable narrative that allowed them to pursue their objective; just unproven and fantastic propositions that scattered Jewish communities throughout the world, who spoke different languages, had different histories, ate different foods, and practiced different customs, constituted a nation, and this nation, despite the fact that few Jews had lived, visited, or had any interest in the area for 2000 years, had a national home in Palestine. The latter concept succeeded from other preposterous suppositions that 19th century Jews, although separated by 100 generations, were direct descendants of Hebrew tribes that had wandered the area, and their wanderings, which left no significant footprint on the soil, were mesmerizing forces beckoning Jews to return. Compare the hypothetical and artificial Zionist narrative to the Palestinian narrative: Palestinians spoke a common language, practiced similar customs, ate the same foods, and walked, worked and prayed in the area for centuries, tracing themselves to the biblical populations that inhabited the area,

The “skin in the game” for the Zionists was zero. They had no original investment in the area, no physical attachment to the area, no care for its surroundings. The Palestinians had 100 percent “skin in the game”; they cherished every olive tree their ancestors planted centuries ago, every orange tree that gave aroma to their surroundings, and all the baba ganoush they could eat.

A crisis is an event that leads to an unstable and dangerous situation, which affects an individual, group, community, or whole society. Since 1948, the Palestinians have been in an unstable and dangerous situation. Since 1948, the Palestinians have had a crisis.

Due to clever propaganda and an unknowing and caring world, the crisis has been purposefully portrayed as two ethnicities struggling for national acclamation and contested land. The Zionists, who did not have the most basic requirements for national identity – speaking a common language and living together in the same place – have assumed a national identity. The Palestinians, who have all the requirements for national identity – a common language and living together in the same place for centuries – are perceived as seeking identity.

The Zionists had little ownership of property and nil existence in Mandatory Palestine. Palestinians had legal title to vast areas and centuries of living, tilling, nurturing the soil, and populating the lands in large numbers. Yet, the crisis is portrayed as two parties fighting for contested lands.

The true nature of the crisis is best described by posing questions: How did the Israel government manage to acquire 90 percent of the land in Israel?  How did Jewish immigrants obtain housing on that land? How did West Bank settlers obtain land, water and other resources on land they did not own?

Palestinian experiences, two of hundreds of thousands, supply the answers.

From Remembering Jerusalem by Hala Sakakini,

In 1953, five years after the year of the disaster, we settled close to Ramallah, so near to our Katamon neighborhood in Jerusalem, yet so far. A rigid Jordanian-Israeli border divided us from the family home that came to life over and over in our memories, as if we had left only yesterday.

In 1967, a month after the Six Day War, when people were allowed to go from one part of Jerusalem to the other, my sister and I made our way on foot into Katamon, yearning. Now, in the heart of the Jewish neighborhood called Gonen, on Yordei HaSira Street, Number 8, we found what had been, in our youth, our house, our mother’s and father’s and son’s and we two daughters’, and the house of relatives and friends and guests from near and from far. A building that housed a committee of wise men who considered all aspects of Palestinian life ceased in an instant to exist under the blows of the weapons of war and became, over time, with the help of contributions from American Jews, a WIZO nursery and kindergarten.

From Remembering the Palestinian Nakba by Nasser Barghouti,

Twenty years since I (Rasmiya Barghouti had seen Northern Galilee, I was finally given a permit by the Israeli military authorities to visit. I decided to take two of my daughters with me.
It took less than three hours to reach Safed, renamed Tsvat by Israel after 1948. The van stopped in front of the white stone home that held childhood memories. I proceeded to the familiar metal door, where I knocked. A large eastern European woman opened the door. We argued. I returned to the van, my hardened face wet with tears. “She wouldn’t let me in! She still has the same curtains I made with my mother.”

We proceeded in silence, as I wept discretely, to lunch at a hotel on Lake Tiberias, where my youngest child grew hyper. Instead of imposing my usual military-style discipline on the child, I encouraged her to  “splatter water,”  “make more noise” – a shock to the rest of the family. The Israeli waiter hurriedly came to the table demanding, in Hebrew, they stop the raucous behavior. It was then that my defiance exploded into cursing the waiter in Arabic. “We can do whatever we please! This is my father’s hotel!” Until that moment, my children had been sheltered from knowing anything about my dear loss.

One word summarizes the taking of another person’s property, livelihood, and dignity – theft!  In this case, a specific type of theft, known as Raubwirtschaft, German for “plunder economy.”

In Raubwirtschaft, the state economy is partially based on robbery, looting and plundering conquered territories. States that engage in Raubwirtschaft are in continuous warfare with their neighbors and usurp the resources of their conquered subjects, while claiming security objectives and defensive actions against defenseless people.

Israel has gone further than Raubwirtschaft, using it as a springboard for transnational corruption — having its citizens extend the illicit activities to global networks of money laundering, human trafficking, drug smuggling, and general crime.

A Broad Brush of Israeli Involvement in Transnational Corruption

Money Laundering

Blacklisted 16 years ago, Israel has gained entry to the Financial Action Task Force, yet new immigrants can bring in unreported income for 10 years and vast scams go unprosecuted. Not to mention complaints from law enforcement in places like France and the United States that Israel is not cooperating sufficiently on international financial crimes.

Ariel Marom, a Belorussian-born former banker and social justice activist who lives in Israel and frequently travels throughout Russia and Eastern Europe for work, told The Times of Israel he believes that hundreds of millions of dollars of dirty money from the former Soviet Union is being smuggled into Israel, including by new immigrants, a phenomenon he fears may have been lost on the FATF. There are certain branches of large Israeli banks, he said, that have developed a reputation among newcomers for looking the other way.

Much of it is black money, smuggled out of Russia or the Ukraine, Moldova or the Baltic countries that has been stolen from the government budget or constitutes the proceeds of prostitution, drug sales, weapons sales or oil sales in contravention of international law. “Israel is one of the financial havens for this black money,” he claimed, based on his conversations with businessmen and politicians in the former Soviet Union and Eastern Europe. “A small percentage of this money is used to corrupt Israeli politicians,” he charged. “Russians – and this is no secret – fund the campaigns of a number of politicians, not just one party.”

Murdered Israelis involved in ‘money laundering,’ says Mexico government

Two Israelis shot dead in Mexico City were involved in money laundering and had links to local mafias, Mexico’s government said on Friday.

Human Trafficking

Fourteen Israelis are suspected by Colombian authorities of running a child sex trafficking ring which marketed tour packages from Israel to the Latin American country aimed at businessmen and recently discharged soldiers, according to reports on Monday.

In the recent past, Israel was faced with a severe phenomenon of human trafficking for prostitution. Since the mid-1990’s until around 2005, women were “imported” to Israel from poverty-stricken countries and forced into prostitution by criminal groups. According to police estimates, 3,000 women were trafficked for prostitution in the year 2003 alone, and there were 300-400 operating brothels and escort services. Other sources believe that these numbers were even greater.

Drug Trade

In its annual report for 2012, the International Narcotics Control Board lists Brazil and Israel among the “countries that are major manufacturers, exporters, importers and users of narcotic drugs.”

Hug Drug

Oded Tuito was alleged to be a global pill-pusher, whose Israeli mafia group was the biggest operator in a booming international trade in the lucrative “hug drug.”

“The profits were ploughed into Israeli real estate, being sent there from the US or Barcelona,” a police spokesman said. Police forces in various parts of the world said Mr Tuito’s arrest confirmed the alleged growing global influence of Israel’s loose-knit, but expanding, crime organisations

International Crime Center

Israel is at the center of international trade in the drug ecstasy, according to a document published last week by the U.S. State Department.

A seriously embarrassing record for a nation that was created to be “a light among all nations,” and claims to represent world Jewry.

Along with the kleptomania and civil violations, Zionists are guilty of massive killings. An Irgun soldier told me that when the Irgun entered a village, they were ordered to take seven Palestinians hostage, shoot them, and frighten the other villagers to leave. Kidnappings (called arrests), wanton destruction of property and resources, control of movement, and other crimes are committed by Israel, continually, day after day, year after year, with impunity and without care. Here is a recent one of thousands of examples, in which few are ever charged with the crime, and, if charged, are not penalized.

Palestinian Farmers Lose Hundreds of Olive, Fig Trees to West Bank VandalsHaaretz

The Shai (West Bank) Police have opened an investigation following the uprooting of over 300 olive trees and 20 fig trees and vines in the plot of a Palestinian farmer in the area of al-Tawamin in the South Hebron Hills. The farmer, Abu Mahmoud Barakat from the town of Yatta, told Haaretz that he estimates the damage caused to him – which includes the destruction of the irrigation system at the site – to be about 200,000 shekels ($59,000).

Present day Israel behaves as an assortment of criminal elements that has evolved into and a criminal enterprise. It may not have started that way, but it became that way.

The Zionist experience closely resembles a previous criminal enterprise, the Massachusetts Bay Colony, which financed the Puritans, enabled them to steal the land, and decimate the indigenous population. Similar to the Massachusetts Bay Colony financing the Puritans, International Banker Edmund Rothschild’s financing enabled the Zionists to form enterprises in the Kibbutzim. Rothschild provided funds for manufacturing and infrastructure, including wineries, agricultural firms, and power plants.

Possessing the economy was important to the Zionists, and Histadrut, General Organization of Workers in Israel, at its inception a Trade Union only for Jewish workers, sought and became the most powerful institution in Mandatory Palestine and Israel. After becoming a Trade Union, it evolved into the proprietor of businesses and factories and was, for a time, the largest employer in the country. Together with the government, Histadrut eventually controlled most of the economy, pauperizing Palestinian peasants and crippling Palestinian enterprises.

Puritans and Zionists – A Close Resemblance

A small congregation of Puritans differentiated themselves from their co-religionists by being unwilling to reconcile their independent organization with the established Church of England. Desiring to preserve their identity and feeling constantly persecuted, they sought new places to live their unique social and communal life. Concluding they would never be accepted in Europe, they sought opportunity in a foreign and open land. Because they made a voyage to what they termed ‘their Promised land’ (not a land promised to them), they became known as the Pilgrims.

The Pilgrims did not intend to uproot native communities they anticipated they would encounter. Due to a series of contagious diseases resulting from contacts with European fishermen on the Maine coast, the land was sparsely populated. However, the Pokanoket Tribe and Federation, led by Chief Massasoit, controlled the entire area. After being wary of the newcomers to his territory, Massasoit concluded that his people could benefit from a cordial relationship with the Pilgrims.

When word reached England that the Pilgrim adventure, which had several times been near failure, had finally succeeded, due principally to Pokanoket assistance, other English — Puritans, entrepreneurs, adventurers, merchants, farmers — booked passage to the New England. They and Pilgrim descendants acquired an insatiable thirst for land and detoured from the original mission.

The Pilgrims bought their land from the Natives, but the Natives expected to continue to use the land’s resources.  The colonists built fences where no fences had ever been before, closing off their property to make the land their own. Tensions had long existed due to the two cultures different ways of life.  Colonists’ livestock trampling Native cornfields was a continuing problem.  Competition for resources created friction. Regional economic changes forced many Natives to sell their land. – Nathan Philbrick, Mayflower.

Living behind fences, similar to the Palestinians who live behind a wall, the Pokanoket Indians became fearful of losing all their land, agriculture, and fishing rights. Their fear and insecurity generated fear and insecurity in the Puritans. After 40 years of a peaceful and helpful relationship, both sides contemplated a future without the other. Massasoit’s son, who gave himself the name of King Philip, felt betrayed by the Puritans and started a 14-month war to drive out the English, a war for survival, which he almost won.

Fourteen months of attacks and counter attacks devastated New England. The Puritans survived, but many of the area’s tribes lost their homes, their culture, and their way of life. Within a century, the Cape Cod Indians had been reduced to several hundred people, most of them living on reservations in the towns of Mashpee on the Cape and in Aquinnah on Martha’s Vineyard. The Sakonnets dwindled from about four hundred survivors to six men and nineteen women by 1774.

Specifying an ideology and a nation as criminal enterprises is a severe charge, controversial, and not easily accepted. Facts and logic lead to the charge, but, because they contradict the accepted norm, they can be conveniently discarded for made for consumption stories and carefully planned agendas, whose huge army of faithful followers spread the deception and numb the mind. It is difficult to replace the ingrained and more pleasant story – the Hollywood story of a nation built by the intrepid Kibbutz settler who diligently worked the soil during the day and guarded the settlement from evil forces at night. The label, criminal enterprise, needs and has support from an examination of other Zionist behaviors.

Case For The Charge of Criminal Enterprise

Israel has sufficient agriculture to feed its people and water to hydrate its population and irrigate its crops. Intended annexation of the Jordan Valley has several motives — gain valuable fertile land to produce crops for export, control the entire Jordan River for industrial purposes and deny the benefits of the Jordan Valley to the destitute Palestinians. Taking land from others for commercial purposes and calling it annexation is definitely the work of a criminal enterprise. How else can it be characterized?

Israel has not defined its borders, which allows for criminal extension of the borders by conquest and confiscation. In negotiations, Israel proposed trading land in Israel for incorporation of West Bank settlements into Israel. If Israel has available land for trade, why did it not populate the settlers in those lands? Answer: The West Bank lands have more importance to the Zionist enterprise.

Israel does not have a national identity that equates with citizenship. This arrangement develops competing ethnic identities and enables a majority ethnicity to gain more benefits from the national largesse.

Israel does not having a written constitution, which allows some laws to be applied arbitrarily, and be bent to favor the major ethnicity.

The greatest of all the crimes is the denial of ontological security for the Palestinians, a stable mental state derived from a sense of continuity in regard to the events in one’s life. Caused by the severe Israeli repression, which features terrorizing communities, isolating communities, destroying crops, diverting water, subjecting passage to checkpoints, disabling bread winners, and reducing fatherly figures by humiliating the men, by breaking of bones ordered by the Rabin administration, and by brutal and senseless beatings. Add purposeful denial of agriculture, water rights, fishing rights, livelihood, and employment, and the absence of ontological security accelerates to total deterioration of the Palestinian community. Without law to protect them, the Palestinians are continuous victims of a criminal enterprise.

Why do the Zionists embrace their dubious connection with wandering tribes and errant kings and reject the well-established and historical memories of their most precious epochs and proud moments of history – their centuries of sojourn in Mesopotamia and Persia. In The Chosen Few: How Education Shaped Jewish History, 70-1492, winner of the 2012 National Jewish Book Award in Scholarship, by Maristella Botticini, Zvi Eckstein, Princeton University press, 2012, the authors claim that “Judaism reached its Golden Age in 800 -1200 A.D. During that time, Mesopotamia and Persia contained 75% of world Jewry with the rest in North Africa and Western Europe.” Readily absorbing the new wisdom they encountered after their exodus to ancient Iraq and Persia, the Jews compiled the Talmud, and moved rapidly into achieving almost total male literacy, obtaining economic advancement, and becoming leaders for progress and modernity. The answer to the first line question: This history, truth, and reality do not fit into their Raubwirtschaft agenda.

Proper Interpretation of the Crisis Leads to Improved Understanding of Events

Characterize Israel as a criminal enterprise and

(1) The Emirates “normalization” of ties with Israel is better framed as, “You do not disturb my turf, and I will not disturb your turf.”
(2) Boycott, Disinvestment, and Sanctions (BDS) is more correctly described as a valid attempt to punish illegal activities and criminal actions.
(3) Realize that misinterpretation of the nature of the crisis led to a faulty approach to resolve it. Palestinians have always been in a no-win position, never having the power to counter overwhelming power, and could only hope for a suitable compromise, which was impossible – the Zionists want the entire enchilada. Those who honestly sought a reasonable compromise and solution of the crisis by negotiations did not factor into their arguments the true nature of the Zionist mission; there was nothing the Palestine Authority could do to change the situation. While deliberating negotiations, Israel did what it wanted, when it wanted, and where it wanted. That is how West Bank settlers obtained land, water and other resources on land they did not own.
(4) The failure of other nations and international institutions to intervene and modify the situation makes them guilty of aiding and abetting. An opportunity existed in 1956 when U.S. President Dwight Eisenhower prevented Israel from seizing the Sinai Peninsula and, indirectly, moving its boundaries to the Litany River in Lebanon (A behind the scenes deal proposed by David ben Gurion). France assisted Israel in developing nuclear weapons, the U.S. and Great Britain enabled Israel to continue its criminal activities, and Germany donated funds for Israel to build infrastructure and submarines for nuclear-armed Israel to threaten all enemies.

Solution

The Palestinians have found themselves thrust in an unenviable role with specific challenges — expose the contrived narrative of the Israelis and impress the world with their narrative of continuous transitory life as Canaanites and Hebrews, to Christians, to Muslims, to Arabs, to citizens of the Ottoman Empire and finally to suffering the Al-Nakba, which started their route to being oppressed. Despite decades of mental, physical, and emotional fatigue, they owe this task to themselves, to their communities in Diasporas, to Jews who do not want to be involved in the injustices, to a Middle East that suffers from the expansion of the crisis, and to a world that might soon face a related catastrophe. Although, under present conditions, the outlook is not favorable, they must keep trying in the best manner they perceive. Only a change in Israel from a criminal enterprise to a democratic nation can resolve the situation. Not being imposed within, demands it be imposed from without. Without a just solution, the Palestinians and world Jewry will suffer.

Palestinians want what all peoples need for survival – self- identity that derives from being part of a state that protects its citizens. Loss of safety results in loss of trust and loss of self-identity. Nationality and religion enhance identity and are an answer to ontological security. The latter two words are more than an esoteric expression. They define what the Palestinians lack and most need. Without ontological security, the Palestinians will face deterioration leading to genocide. Be aware, it is not genocide until it is all over.

The biblical “Exodus” story did not free the Jews. Just the opposite, it has been used to keep Jews in perpetual bondage to a spurious history and to promote an attitude of constant victim hood, while distracting them from realizing the role they play in the injustices done to others. Hopefully, Jews who absorb actual history will awaken other Jews to the destructive impulses generating from Israel, which prevents them from recognizing the roots of modern Judaism and instead reverts them to become atavistic and reactionary relics of an ancient Hebrew and fictitious world.

The post The Case for Israel as a Criminal Enterprise first appeared on Dissident Voice.

Trump’s Lesser Economy

How many times a day, and in how many different presentations, has President Donald Trump suddenly departed from script to exclaim, “This was the greatest economy we ever had, the greatest in the world, the greatest ever, and it all went down because of a pandemic?” A large part of the United States electorate has accepted this political statement, which Trump uses to boost his election chance. Time to burst the bubble he has created around himself and let him know his ego- building statement is entirely false.

Trump does not describe the criteria by which he created the illusion that his economy is the greatest ever. He mentions the words GDP, stock market, and employment. Research the U.S. economy and learn that since 1871, the United States (US) has always had, except for some recessions, the best economy on the world. During the roaring twenties, the US had half of world production, and has only 1/8 of the same during the Trump administration. The best economy ever, for its time, may be more appropriately assigned to the 15th century Chinese Ming Dynasty, when Chinese production was, by far, the largest in the world, capitalism showed a beginning, technology advanced, and wage labor replaced peasant labor.

Almost every U.S. president has seen a substantial rise in the stock market during his or her administration. The Trump administration has only added to the existing trends, which almost all other presidents and administrations have done — nothing unusual or extraordinary.

That is not the real story. The real story approaches the economy from another perspective – examination of economic factors, such as those shown in the following table.

  United States China
Gross Domestic Product
2019 (1)
$21.4 trillion

 

$14.1 trillion
Gross Domestic Product at Purchasing Parity 2019 (1) $21.4 trillion $27.3 trillion

 

GDP Growth

Average 2017-2020 (2)

2.53% 6.6%

 

Service Sector
Percent of GDP 2017 est. (3)
80.0% 51.6%
Goods Sector
Percent of GDP 2017 est (3)
19.1% 40.5%
Agriculture Sector
Percent of GDP 2017 est (3)
0.9% 7.9%
Industrial Output  2018 (4) $3.436 trillion

 

$5.652 trillion

 

Unemployment 2019 (5) 3.87 percent 3.8 percent(urban)
Defense Spending 2019  (6) $684.5 billion $181.1 billion
Automobile production
2018 (7)
11 million vehicles, about 13% world market 25 million vehicles, about 28% of world market
High Speed Rail 2018 (8) 0 miles  15,500 miles
Highway million miles 2018 2.93 US source (9) 2.91 China source (10)

Not all factors that drive an economy can be examined; the relative importance of each factor cannot be accurately assigned; and each nation has specific reasons for emphasizing a factor. As one example, the United States considers automobile and aviation transportation more important than high-speed rail for passenger traffic. Unless, a nation has conclusive economic superiority, which the United States had for several decades, it is difficult to assign a title of “world’s greatest” economy to any nation. The table shows that the United States economic progress has been limited, and China deserves consideration in being awarded the title of the world’s greatest economy. Start with the Gross Domestic Product (GDP), a favorite statistic for those who boast of America’s prominence.

The GDP is an important factor but it is not the important factor. Due to its skewing by prices for goods and wages to laborers, it is not entirely reliable. A Buick automobile, produced in the USA and sold for $30,000 may be identical to an automobile produced in China and sold for $20,000, but they add differently to the GDP. More accurate is the GDP/PPP, where purchasing power is introduced to correct the limitations of the GDP in evaluating economic progress. By use of this factor, China demonstrates a much larger economy than that of the US.

Another consideration is the value given to components of the GDP. Because goods and agriculture supply the most needed wants to a community, and their purchases generate additional money in the economy, they play a more significant role in the economy. Buyers of hard goods are able to receive credit for purchase of these goods much more easily than those who purchase services. Credit creates money, and money buys the added goods and pays the added wages.

The service economy exaggerates the GDP. One dollar of purchase in the goods economy requires time for feedback before manufacture of other goods and their purchases augment the GDP. Purchases in the service economy only pass the same money quickly from one service to another – go to a doctor who the next day goes to a lawyer, who the next day hires a plumber, who the next day goes to a restaurant. The next day the waiter buys a pair of shoes. The GDP has greatly increased due to the rapid transactions of several services and has delayed the use of the dollar for additional production.

The US service industry has become the more prominent aspect of the economy, and this prominence indicates that labor has fulfilled wants for many material goods. A great economy is a productive economy and not a service, or consumptive economy. Industrial output, whether for domestic or foreign use, demonstrates the robustness of an economy. China greatly leads the United States in industrial output and ability to marshal resources. By rapidly allocating industrial resources to construct two hospitals in two weeks and provide sufficient beds and medical equipment for the fast growing number of COVID-19 patients, China demonstrated its industrial robustness.

Manufacture of wasted goods is another way of increasing GDP. No country is better at this operation than the United States. Its defense appropriations and armament sales exceed those of almost all other nations combined. Want to increase GDP – tax the wage earners, and hire workers to manufacture tanks. Purchases of goods and services are transferred from the taxpayers to the new worker, which maintains the GDP. Government purchase of the tanks adds to the GDP, and the GDP is automatically increased without increasing the money supply.

Given the approximate equality in factors that influence the appearance of US and China economies, other factors tilt the scale — manufacture of the most desired goods, application of new technology to transportation, and size of infrastructure — automobile production, and implementation of high speed rail and construction of highway mileage to improve infrastructure. As the table shows, the Trump administration has accomplished little in construction of high-speed rail, achieving elevated levels of automobile production, and renovating infrastructure. China leads the world in all of these agents of advanced economy, and with technological marvels — high speed trains that operate at 16,000 miles of altitude, construction of several of the longest bridge-tunnel complexes, and most electric vehicles on the road. Yes, China has the largest market, which skews the data. Nevertheless, the greatest economy is an absolute and not calculated on a per capita basis.

What has Trump done to believe he is responsible for the low unemployment numbers and average growth of GDP? He has personally endorsed tax cuts on personal income and corporate profits, deregulation, and trade pact renegotiations. What are the results?

Tax cuts on personal income only transfer purchasing power from the government to the public; they do not increase purchasing power or the money supply. Their effect on GDP is dubious, and they have increased the national debt.

A report indicates that tax cuts on corporate profits did not generate a major increase in capital spending, and the spending that did occur, happened for a short period. Trump showed his ignorance of elementary economic news and his devious manner of using his failures to accentuate his self-approving wisdom when he stated, “If I knew corporations would use the tax cuts for stock buybacks, I would never have approved the tax cuts.” As for the personal income tax cut, lowering the corporate tax rate has increased the national debt.

Deregulation trades attention to environmental, unfair competition and ecological problems for some business benefits. Are the tradeoffs worthwhile or meaningful? Where is the data to quantify the results? Does Trump have any information?

Active operations from renegotiations of the trade pacts did not occur until late 2019. Because the data on the worth of the renegotiated agreement will not be available until mid-2020, Trump cannot use the renegotiations in descriptions of his economy. As a sideline to his thinking, Trump has made the outrageous assertion that the tariffs on Chinese imports, which are paid by the U.S. importers and usually raises the price of the goods, were paid by the Chinese government and the Chinese lowered U.S. deficit by adding to U.S. revenues. What!

Do U.S. presidents play much of a role in directing the economy, or is that more a function of the Federal Reserve and congressional budgets? The real GDP increased by $2.7 trillion during Trump’s first three years in office. During the time, the Federal Reserve reversed its decline in balance sheet to reach close to pre-Trump levels and the government deficit increased by $3.2 trillion. Free money buys a lot of GDP.

Trump’s claim of achieving “the best economy that the world has ever had” is a meaningless and self-aggrandizing play on words. When a multitude of factors, rather than a few handpicked factors, is considered, during his term in office, U.S. economic progress has been meager, and China’s economic power might have eclipsed that of the United States.

Is This a Trump Epidemic in the United States?

Although President Trump, in his daily press conferences, attempts to show that his administration is succeeding in containing the epidemic, the April 22, 2020 report from worldometers.info demonstrated the opposite — the United States had 1/3 of the Corona Virus cases and 1/4 of the corona virus deaths worldwide. Could the response be more catastrophic?

  TOTAL CASES TOTAL DEATHS
World 2,592,234 181,062
USA   820,600  45,967

On April 22, compared to April 19, the already significant number of daily cases increased by 4000.

On April 21, compared to April 19, the already shocking number of daily deaths increased by 1100.

On April 23, the United States, whose population represents roughly five percent of the world population, had almost 50 percent of the active cases, or almost as many active cases (750,000) as the rest of the world combined. This figure suggests that the number of deaths, resulting from COVID-19 in the United States, will rise more rapidly than in other nations.

Trump and his sycophants term these statistics as improvement and progress.

Is Trump responsible for the United States’ catastrophic response to the COVID-19?

Definitely; the statistics, his statements, and actions prove it. Unfortunately, a delinquent White House press corps has failed to convince the public at the press briefings. Where are the Walter Cronkites, Peter Jennings, Ted Koppels, and Diane Sawyers of yester year?

Trump Administration was Late in Responding

December 31: A Chinese government official telephones The Centers for Disease Control and Prevention (CDC) in Atlanta and informs that office of a new pneumonia like disease in Wuhan. The Chinese government, on the same day, also informs the World Health Organization (WHO), of which the United States is a member.

Trump has said the Chinese were two months late in informing the United States of the epidemic. Yet, after U.S. administration organizations were informed, the U.S. administration took no action for one month.

January 20: The same day China declares that human-to-human transmission has been proven, the disease is noted in a patient in the state of Washington. Coincidentally, the Republic of Korea reports its first case of novel coronavirus.

January 26: A patient in Pennsylvania contracts the virus.

January 31: Travel restrictions prohibit non-U.S. citizens, other than the immediate family of U.S. citizens and permanent residents who had traveled to China within the previous two weeks, from entering the United States. Americans returning from China are allowed into the country, but they face screening at select ports of entry and are required to undertake 14 days of self-screening. Those returning from Hubei province, the center of the outbreak, are subject to up to 14 days of mandatory quarantine.

Note: This was not a total travel ban between the U.S. and China.

The New York Times, April 4, 2020, “430,000 People Have Traveled From China to U.S. Since Coronavirus Surfaced” reported:

There were 1,300 direct flights to 17 cities before President Trump’s travel restrictions. Since then, nearly 40,000 Americans and other authorized travelers have made the trip, some this past week and many with spotty screening.

… In interviews, multiple travelers who arrived after the screening was expanded said they received only passing scrutiny, with minimal follow-up.

“I was surprised at how lax the whole process was,” said Andrew Wu, 31, who landed at Los Angeles International Airport on a flight from Beijing on March 10. “The guy I spoke to read down a list of questions, and he didn’t seem interested in checking out anything.”

… Mr. Wu, who has had no symptoms and has not become ill, said he was told to stay inside for 14 days when he landed in Los Angeles. He said he received two reminder messages the next day by email and text, but no further follow-up.

Another traveler, Chandler Jurinka, said his experience on Feb. 29 had an even more haphazard feel. He flew from Beijing to Seattle, with stops in Tokyo and Vancouver.

At the Seattle-Tacoma airport, he said, an immigration officer went through his documents and asked questions unrelated to the virus about his job and life in China. At no point did anyone take his temperature, he said.

“He hands me my passport and forms and says, ‘Oh, by the way, you haven’t been to Wuhan, have you?’” Mr. Jurinka said. “And then he says, ‘You don’t have a fever, right?’”

Like others, he left the airport with a card that recommended two weeks of self-quarantine and a promise that someone would call to check up on him. He said he never got a call.

March 13: After labeled a global pandemic by the World Health Organization, Trump declares the virus a national emergency. Social distancing guidelines for the country are outlined. On the same day, more than a little late, travel restrictions from 26 European countries are applied.

ABC News, April 9, 2020, “New York coronavirus outbreak originated in Europe, new study finds” reported:

COVID-19 cases in New York City were found as early as February.

A new study has found evidence that the first COVID-19 cases in New York City originated in Europe and occurred as early as February.

… Researchers found that COVID-19 in New York City “predominately arose through untracked transmission between the United States and Europe, with limited evidence supporting direct introductions from China,  where the virus originated, or other locations in Asia.”

April 21: Two thousand eight hundred and four (2804) deaths are recorded in one day in the United States, more than the total number of deaths in Turkey, and 50 percent of the total number of deaths in Germany to that date.

Testing

Press briefings pedal the line that the U.S. has the most testing in the world. Left out of the claims is that, except for China and India, the U.S. has magnitudes more population than other nations. Statistics from worldometers.info indicate almost a dozen major nations have more testing/1 million population, including Spain and Italy.

South Korea and the United States had their first confirmed COVID-19 case on the same day in January. South Korea took the threat seriously, and, by the start of March, had tested 100,000 people for the virus. The United States, under Trump, did not take it seriously and had tested just 1,000 people by the start of March.

“Anybody that wants a test can get a test. That’s what the bottom line is,” Trump told reporters on March 6, during a visit to the Centers for Disease Control and Prevention in Atlanta. PolitiFact fact-checked Trump and ascertained he had equivocated. “At that time, current supply of the test was limited, and clinicians were the ones who decided whether a patient met criteria to warrant testing. Testing was not as easy as just calling your doctor or pharmacy, saying you want to be tested for COVID-19 and getting it done.”

“…on its website, the CDC said, ‘Clinicians should use their judgment to determine if a patient has signs and symptoms compatible with COVID-19 and whether the patient should be tested.’”

Ventilators

Trump boasted of U.S. mass production of ventilators, as if he was directing the assembly lines. He did not relate that the accelerated production did not start until April 1, and, after the need had been mostly filled by other sources.

Johns Hopkins Center for Health Security reported on Ventilator Stockpiling and Availability in the US. Updated April 1, 2020:

Manufacturers of ventilators are currently ramping up production to meet demand during the COVID-19 outbreak, and companies such as GM, Ford, Dyson, Rolls-Royce, and Tesla are all beginning to look into how they can shift their manufacturing facilities to create ventilators.

A Courthouse News investigation “found that awards to the top-five ventilator contractors in response to the novel coronavirus pandemic topped $2.3 billion, more than $1.9 billion of which went to four companies with a foreign parent or owner. All of those contracts had delivery dates scheduled well after the apex of Covid-19 infections in New York, the U.S. epicenter of the pandemic. The data contradicts Trump’s bluster about U.S. dominance over the life-saving machines.”

Falsifications

Trump claimed the federal stockpile of emergency medicine and supplies which he inherited, was an “empty shelf.”

As of 2016, there were at least six warehouses holding “approximately $7 billion in products across more than 900 separate line items,” according to a report from the National Academies of Sciences, Engineering, and Medicine.

Trump said nobody knew how to contain this epidemic.

Taiwan, Korea, and China have contained the epidemic.

Trump said we did not know about COVID-19; that it is a new epidemic.

Yes, before it started in China, and after that time it was known to everyone.

Trump has repeatedly said that we are winning. Is 50,000 deaths, and more predicted, a winner?

Trump said that predictions had hundreds of thousands of deaths in the United States, and his “strategy” saved lives. What strategy? Undoubtedly, with no tactics, the virus would have caused hundreds of thousands of lives. A well-planned and well-coordinated strategy, such as was done in Taiwan (428 cases and six deaths), would have decreased the number of deaths in the United States to the thousands and not to the tens of thousands.

Trump said he inherited a broken system. If so, and that statement is dubious, he had three years to fix the problems. Why did he remain complacent?

FACTCHECK POSTS

In an updated post on March 19, 2020 on “Trump’s Statements About the Coronavirus“:

Jan. 22: “We have it totally under control. It’s one person coming in from China. We have it under control. It’s going to be just fine.” — Trump in a CNBC interview.

Jan. 30: “We think we have it very well under control. We have very little problem in this country at this moment — five — and those people are all recuperating successfully. But we’re working very closely with China and other countries, and we think it’s going to have a very good ending for us … that I can assure you.” — Trump in a speech in Michigan.

Feb. 10: “Now, the virus that we’re talking about having to do — you know, a lot of people think that goes away in April with the heat — as the heat comes in. Typically, that will go away in April. We’re in great shape though. We have 12 cases — 11 cases, and many of them are in good shape now.” — Trump at the White House.

Feb. 14: “There’s a theory that, in April, when it gets warm — historically, that has been able to kill the virus.  So we don’t know yet; we’re not sure yet. But that’s around the corner.” — Trump in speaking to National Border Patrol Council members.

Feb. 23: “We have it very much under control in this country.” — Trump in speaking to reporters.

Feb. 24: “The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!” — Trump in a tweet.

Feb. 26: “So we’re at the low level. As they get better, we take them off the list, so that we’re going to be pretty soon at only five people. And we could be at just one or two people over the next short period of time. So we’ve had very good luck.” — Trump at a White House briefing.

Feb. 26: “And again, when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done.” — Trump at a press conference.

Feb. 26: “I think every aspect of our society should be prepared. I don’t think it’s going to come to that, especially with the fact that we’re going down, not up. We’re going very substantially down, not up.” — Trump at a press conference, when asked if “U.S. schools should be preparing for a coronavirus spreading.”

Feb. 27: “It’s going to disappear. One day — it’s like a miracle — it will disappear.” — Trump at a White House meeting with African American leaders.

Feb. 29: “And I’ve gotten to know these professionals. They’re incredible. And everything is under control. I mean, they’re very, very cool. They’ve done it, and they’ve done it well. Everything is really under control.” — Trump in a speech at the CPAC conference outside Washington, D.C.

March 4: “[W]e have a very small number of people in this country [infected]. We have a big country. The biggest impact we had was when we took the 40-plus people [from a cruise ship]. … We brought them back. We immediately quarantined them. But you add that to the numbers. But if you don’t add that to the numbers, we’re talking about very small numbers in the United States.” — Trump at a White House meeting with airline CEOs.

March 4: “Well, I think the 3.4% is really a false number.” — Trump in an interview on Fox News, referring to the percentage of diagnosed COVID-19 patients worldwide who had died, as reported by the World Health Organization. (See our item “Trump and the Coronavirus Death Rate.”)

March 7: “No, I’m not concerned at all. No, we’ve done a great job with it.” — Trump, when asked by reporters if he was concerned about the arrival of the coronavirus in the Washington, D.C., area.

March 9: “So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!” — Trump in a tweet.

March 10: “And we’re prepared, and we’re doing a great job with it. And it will go away. Just stay calm. It will go away.” — Trump, after meeting with Republican senators.

A day later, on March 11, the WHO declared the global outbreak a pandemic.

Conclusion

Trump’s prevarications, misinformation, misdirection, and careless attention in preventing the spread of COVID-19 in the United States demand extensive disclosure. Together with the unreasonable and catastrophic epidemic totals, they compound the charge that the Trump administration has not contained the contagion and has turned it into a cataclysmic epidemic. These actions, which could have been prevented, are criminal in appearance, and complicity in this behavior includes all those who share the daily mendacious briefings.

If a plurality of Americans are unaware of the damage done by their president, and may vote him for another term, it is imperative to expose the punishing actions to the American people by President Trump.

If it were not masks and gloves that its frontline soldiers needed, but guns, smart bombs, bunker busters, submarines, fighter jets and nuclear bombs, would there be a shortage?
Arundhati Roy

The measure of a nation’s civilization is not how high its buildings, how fast its cars, how strong its military, how advanced its technology, or how many tourists it can send out to consume the whole world’s goods are, “There is only one test for you: how you treat the weak and vulnerable.”
LA Times on Fang Fang, Wuhan Diary

America is Now Democratic Socialist

Take careful notice – as of March 2020, the United States is operating as a more than strict Democratic Socialist system. The government is regulating aspects of American life — economic, social, and medical. The Federal Reserve is printing money and making it available to financial and commercial industries and the public. Americans are being told what to do, what to produce and where they can go.

The Covid-19 epidemic has proven the final test for the capitalist system, which had a temporary rescue by neoliberal free enterprise. After the Reagan administration changed the economic landscape so that budget deficits drove the economy and Capitalism ran on debt, the neoliberal system chugged through several recessions and one major recession, reached its peak, and now has met its fate by a microscopic bug. The capitalist system could not respond to the crisis and fell apart in all its formations — economy dropped precipitously, shortages of medical equipment appeared, health institutions did not know where to obtain supplies, workers were stranded, industry did not know how to proceed, and the Republican government reacted too slow and too uncoordinated.

Briefly reviewing the real history of the development of the crisis, which is much different than presented by President Donald Trump, we learn the extent of the failure of the present system in its duty to the American people.

Data gathered from World Health Organization, archived Peoples Daily Online, British Broadcasting Report, United States newspaper reports.

On December 30, 2019, Chinese doctor Li Wenliang noticed seven cases of a virus that resembled SARS. He informed some of his associates that an unusual number of pneumonia cases were occurring in Wuhan.

The next day, December 31, the Chinese government informed the World Health Organization (WHO) in Beijing of the appearance of a possible new virus.

On January 1, the local government closed the food market in Wuhan, the epicenter of the coronavirus outbreak, and performed environmental sanitation and disinfection. WHO requested further information from China.

Because the virus had leaped from animal to human, it was unknown if the virus could be transmitted by human contact.

To prevent panic, and stall people from leaving Wuhan and possibly spread the disease, the Wuhan Public Security Force (not the central government) accused the doctor of disturbing the public order and prevented him from speaking further on the matter.

On January 7, Chinese scientists announced the identification of a new virus that, like SARS and the common cold, belonged to the coronavirus family

On January 11, China reported the first known death from the coronavirus, a 61-year-old man who bought food at the Wuhan market. WHO received “detailed information” from Chinese authorities that there is “no clear evidence of human-to-human transmission” linked to these coronavirus cases.

On January 15, Wuhan’s health commission, in a reply to WHO, released a statement: “The possibility of limited human-to-human transmission cannot be ruled out.”

On January 20, Chinese officials confirmed cases of human-to-human transmission, with two patients in Guangdong catching the virus from infected family members and medical staff also testing positive for the virus.

On January 24, a week before travel restrictions, the Center for disease control (CDC) confirmed two cases of the novel coronavirus in the U.S. from people who had returned from Wuhan, China.

On January 31, the Secretary of Health and Human Services declared the novel coronavirus to be a public health emergency. Due to a quirk in federal law, anyone wanting to test for the coronavirus first needed to seek approval from the Food and Drug Administration (FDA).

On January 31, travel restrictions prohibited non-U.S. citizens, other than the immediate family of U.S. citizens and permanent residents who had traveled to China within the previous two weeks, from entering the United States. Americans returning from China were allowed into the country, but faced screening at select ports of entry and were required to undertake 14 days of self-screening to ensure they did not pose a health risk. Those returning from Hubei province, the center of the outbreak, were subject to up to 14 days of mandatory quarantine. Note that this was not a total travel ban between the U.S. and China.

On February 29, the FDA allowed other labs that met certain prior regulatory requirements to use their own tests before they had received explicit approval from the FDA.

On March 23, President Trump, announced, “May soon loosen federal guidelines for social distancing and encourage shuttered businesses to reopen,” which differs from worldwide approach to the epidemic and contradicts China’s successful methods in containing the virus. Rather than let the economy fail, Americans must sacrifice themselves.

In a Democratic Socialist system, the economic emergency only means a delay in production. No matter how long a crisis lasts, in a Democratic Socialist society the community’s basic needs are provided and citizens are secure in knowing full employment is eventually guaranteed.

For neoliberal free enterprise, in which production and GDP are dependent on debt, the economic emergency means a drastic decline in revenue that prevents many from meeting credit payments, a prelude to bankruptcies of industries, financial sectors, small businesses, and individuals. Recovery will be punishing, and, for many, unemployment will be high and insecurity prevalent. The dollar will fall, inflation will increase as import prices increase, and much of U.S. export market will be lost to those — China, Japan, Korea — whose industries revive quicker from the catastrophe.

The Federal Reserve rushes to provide free money and prevent the calamity, but cannot entirely accomplish the task. Trump administration economist Larry Kudlow has said a stimulus package “would include $4 trillion in lending power for the Federal Reserve as well as a $2 trillion of aid.” Similar, to the General Motors bailout, the government offers a Democratic Socialist method ─ taking a stake in falling corporations ─ an offer that Boeing chief executive Dave Calhoun said he is not willing to accept.

A misshaped socioeconomic system, compounded by a misshaped U.S. president, failed to contain the ultra-damaging health and economic effects of Covid-19. Another failure is that of inaction by the Democratic Socialists.

Disappointing and mystifying that the Democratic Socialist organizations, socialized community leaders, and the entire progressive community failed to capitalize on this significant historical moment, which has shown a desperate need for Democratic Socialism. Nowhere, in speeches, articles, discussions, agendas, and meetings are there loud expressions to arouse the public into understanding the urgency and importance to the American community of a socialized economy that could have met this challenge and would meet future challenges — climate change that modifies coastlines and arable lands; greenhouse gas emissions that heat the atmosphere and petition a handover from fossil fuels to renewable energy sources; robotics and artificial intelligence that change the factory floor, its administration, and the composition of the workforce; possibility of nuclear war in an atmosphere of intense international hostility and growing arms races; pandemics from new disease microbes that replicate quickly, defy conventional medicine, and spread beyond borders; security enhancements due to internal conflicts and external hostilities; political, economic and social polarizations that have stimulated populist movements; and population migrations that cause cultural conflicts and reassignment of resources.

National leaders with the reputation of past social figures — Eugene Debs, Norman Thomas, Franklin Roosevelt, Henry Wallace — are not here to energize the crowds and move the electorate, and a slowly fading Bernie Sanders is not taking advantage of the opportunity now available to him.

The only way that Sanders could win was to answer critics who viewed his plans as being misaligned with American public leanings and history. In this endeavor, his campaign and progressive backers have not effectively characterized the Democratic Social programs and neglected to show that, because the present administration could not respond to the pandemic by conventional means, it is using Democratic Socialist policies to resolve the crisis.

A lost opportunity is lost forever.

The revolution is not in the streets. The revolution is in the locked homes.

Democratic Socialism Can Prevent the Catastrophe

Capitalism gathered together resources, labor, and capital to start an industrial revolution that brought prosperity and elevated standards of living to much of the earth’s inhabitants. Once in motion it generated additional capital that gathered more labor and more resources in a perpetual cycle of increased production that constantly benefitted populations. The achievements did not occur smoothly, they sputtered from periodic recessions that solicited government policies to recharge the system.

Soviet style socialism did not wait for a capitalism to provide capital formation, industrial development, allocation of resources and prosperity, including housing and luxuries for much of the population. The Soviets struggled to house, clothe, and feed, in a short time, a deprived population that had barely survived World War II, which led to mismanagement, shoddy construction, and misallocation of resources. By not following Karl Marx’s observations, which praised capitalist development and urged its necessity before socialist constructions, the Soviet system doomed itself to failure.

Capitalism has neared a peak, mostly using capital to generate capital, unable to comprehend the challenges faced by its actions, going as far as it can go without intensifying major problems it has created. Slowly and inexorably, the socio-economic system refutes a counter-productive capitalism, that is taking more than it gives, that is destroying more than it creates, and that has become more irresponsible than responsible. In the coming decades, cooperation will be preferred to competition, sharing preferred to taking, responsibility to all preferred to irresponsibility to one, socialization preferred to capitalization.

The change does not arrive from ideological, economic, social, or political considerations; it arrives from the realization that the earth is on fire and only a strong willed and collective community can dampen the conflagration. The change comes from realization that private and civic initiatives cannot and will not resolve the forecasted problems, each will protect what they have and deny the challenges — climate change that modifies coastlines and arable lands; greenhouse gas emissions that heat the atmosphere and petition a handover from fossil fuels to renewable energy sources; robotics and artificial intelligence that change the factory floor, its administration, and the composition of the workforce; possibility of nuclear war in an atmosphere of intense international hostility and growing arms races; pandemics from new disease microbes that replicate quickly, defy conventional medicine, and spread beyond borders; security enhancements due to internal conflicts and external hostilities; political, economic and social polarizations that have stimulated populist movements; and population migrations that cause cultural conflicts and reassignment of resources. Allied to these challenges are the subsidiary challenges each of them creates – reallocation of food sources and possible shortages in food supply; economic upheavals due to bankruptcies of resource and transportation industries and nations dependent upon fossil fuels; re-orientation of the work force to prevent severe unemployment; forced arms controls to prevent global wars; sharing of resources to lessen predicted large scale migrations; international controls and research to prevent spread of disease; more equal distribution of income to assure all have basics for survival in a quickly changing economic landscape, and regulations that assure adequate privacy, security, and disease mitigation. Despite public awareness and concern for all the challenges, inertia is apparent. Escaping human extinction will require government intervention in all aspects of the socio-economic system.

Climate Change

The earth and its inhabitants have proved adaptable, surviving catastrophes and climate changes in previous epochs. The predicted rapidity of this climate change and the scientific analysis that attributes it to carbon emissions make it unlikely that, without more centralized planning and regimentation, the earth will have sufficient time to correct for the climate shifts.

Greenhouse Gas Emissions
Containing carbon emissions demands regulation of all its sources and severe changes in the air, sea, and ground transportations that use the energy sources. The latter change can be fulfilled by a shift to electric vehicles, which, due to elevated costs, will require subsidies. Present air and sea transportation engines are not easily substituted and they may face restrictions, which means severe reductions in international transport and other industries that need fossil fuels for powering the efforts.

Allied to addressing the effects of greenhouse gas emissions is addressing severe economic problems due to population, agriculture and labor shifts, and answering a possible economic decline due to lower and changing demand in companies engaged in fossil fuel extraction, petroleum refining, fossil energy transport, pipeline and associated equipment manufacture. Fisheries, tourism, airlines, shipping, animal husbandry, recreation, investment, and plastics industries will also be affected. By directing investments so they factor climate change into their capital distribution, investment powerhouse, Black Rock, has already considered a general makeover of the economic system.

Food Supply
Shifts in arable lands, increases in desert lands, a dwindling fish supply, and possible limits to meat production, due to less grasslands and restrictions on methane gas release from herds, will re-orient the food supply. Warmer water temperatures will cause changes in habitat ranges of many fish and shellfish species. Unless food production and distribution are carefully monitored and controlled, famines will occur. Sustainable farming will become a rule.

Water Resource
The United Nations World Water Development Report 2018 states that “The global demand for water has been increasing at a rate of about 1% per year over the past decades as a function of population growth, economic development and changing consumption patterns, among other factors, and it will continue to grow significantly over the foreseeable future….At the same time, the global water cycle is intensifying due to climate change, with wetter regions generally becoming wetter and drier regions becoming even drier. Other global changes (e.g., urbanisation, de-forestation, intensification of agriculture) add to these challenges. At present, an estimated 3.6 billion people (nearly half the global population) live in areas that are potentially water-scarce at least one month per year, and this population could increase to some 4.8–5.7 billion by 2050.”

Will private industry be able to regulate and equitably distribute available water resources? Only governments, acting in concert with one another and with international agencies will determine who gets what, when, and where.

Artificial Intelligence (AI) plus Robotics

Robotics clears the factory floor of workers and AI, by replacing much administration — solving problems, clarifying work schedules, preparing and managing budgets — clears the offices of managers.

New software and manufacturing industries will emerge, but will the tools of the new industrial age be used to satisfy the wants and needs of the populace or mainly the profits of entrepreneurs? Will the self-operating machines be able to generate income for all those who have left the factories; will there be sufficient income in the system to purchase all goods in the expanded market? Will supply exceed demand and profits become a mirage? Will AI and extensive Robotics be a suitable companion to the workers of a new and less profit oriented system industrial system, where wages can be coupons for more equitably distributed abundance? Arrangement between humans and the new machines reorder the democracy and the social; reorder society into Democratic Socialism.

Population Migrations

Already a major problem that has reached crisis proportions, a 2018 World Bank Group report enhances the problem. The report “estimates that the impacts of climate change in three of the world’s most densely populated developing regions—sub-Saharan Africa, South Asia, and Latin America—could result in the displacement and internal migration of more than 140 million people before 2050.” A mass movement of that scale will need cooperative government actions and international agreements to prevent political and economic strife and enable continued development in the affected regions.

Nuclear war

Nations that rely on fossil fuel exports to maintain their economic system — Middle East, Iran, Russia, Venezuela and others — and nations destabilized by the effects of climate change — water scarcity, agriculture losses, food depletion — that cannot effectively compete and re-orient themselves in the changing world may become aggressive and seek opportunities by engaging in warfare, which could lead to use of weapons of mass destruction. A byproduct of the switch to renewable fuels and climate change – inability to compete in the new economic environment – must be accommodated to prevent military catastrophes. Arms controls and peaceful cooperation will replace arms races and unilateral actions.

Disease and Pestilence

China’s recent actions to contain the spread of Covid-19 virus serve as a model for future actions in controlling pandemics. Local actions can contain the pandemic but cannot prevent its spread. Centralized programs that mobilize all agencies and institutions and the entire public are necessary to coordinate all activities that defeat the pandemic. National health plans, which enable every citizen to have adequate medical coverage, will assure that everyone will be able to seek medical assistance quickly and halt the spreading of diseases. Trends to increased isolation, remaining home, and ordering goods and foods online will change life styles and cripple commercial activities of retail stores, restaurants, entertainment, sports arenas, local transportation, and suburban malls. With more work from home, rather than from offices, rapid changes in urban environment, industry composition and employment will appear, and necessitate government assistance to prevent business collapses and severe unemployment.

Security Enhancements

Terrorist and mass shooting actions from those who are mentally ill, feel estranged from society, and have been coopted by extremists will grow. Tighter law enforcement, increased surveillance, and privacy invasions will follow. Protection of all will replace self-protection.

Political and Social Polarization

Modern democracies have given people freedom and hope, more of the air to breathe. In the process, groups have taken advantage of the freedoms and increased their concentration of wealth and power, which has led to oligarchies. Those who feel they have been unfairly sidetracked from the prosperity have sought refuge by gathering together in nationalist organizations and populist politics. The coming socialization poses a solution by implementing workplace democracy in which workers have a stake in corporate management and are able to institute a more equitable distribution of income and wealth.

Conclusions

All of the posed problems have previously required some form of government intervention. The convergence of them at one time, and the growing perils from climate change and pandemics strike a new chord in domestic and international relations — cooperation before competition, survival of all before survival of the fittest, limited material wealth before unlimited natural catastrophes.

Those who previously exclaimed, “Better Dead than Red” need not transpose to “Better Red than Dead.” “Better Pink than Sink,” is the new slogan for the Democratic and Socialist communities, pushed to leadership in order to prevent Capitalism’s latest offering — human extinction.

It is not the Non-existent Iranian Bomb; it is the Other Existing Bombs

United States (US) demands that Iran promise to halt pursuit of nuclear weapons and ballistic missile developments distract from the real intent of the US actions. Knowing that the Islamic Republic is not pursuing nuclear weapons and will react aggressively to sanctions, the US ploy deters other nations from establishing more friendly relations with Iran and from changing their perspectives on the causes of the Middle East crises.

Adherence by all nations to the The Joint Comprehensive Plan of Action (JCPOA) had potential to stimulate extensive political, economic, and social engagements of the international community with Iran, Investments leading to long lasting attachments, friendships, and alliances would initiate a revitalized, prosperous, and stronger Iran. A new perspective of Iran could yield a revised perspective of a violent, unstable, and disturbed Middle East. Israel and Saudi Arabia would finally receive attention as participants in bringing chaos to the Arab region. Economies committed to Iran’s progress and allied with its interests could bring pressure on Israel and Saudi Arabia to change their destructive behaviors.

Because the demands on Iran can be approached in a less provocative and insinuating manner, the demands are meant to provoke and insinuate. Assuredly, the US wants Iran to eschew nuclear and ballistic weapons, but the provocative approach indicates other purposes — completely alienate Iran, destroy its military capability, and bring Tehran to collapse and submission. Accomplishing the far-reaching goals will not affect the average American, lessen US defense needs, or diminish the continuous battering of the helpless faces of the Middle East. The strategy mostly pleases Israel and Saudi Arabia, who have engineered it, share major responsibillty for the Middle East turmoil, and are using mighty America to subdue the princpal antagonist to their malicious activities. During the 2016 presidential campaign, contender Donald Trump said, Many nations, including allies, ripped off the US.” President Donald Trump has verified that statement.

Noting the history of US promises to leaders of other nations – give up your aggressive attitudes and you will benefit ─ the US promises make the Ayatollah skeptical. The US reneged on the JPOAC, sent Serbian President Slobodan Milosevic to the World Court and eventual death (although his compromises allowed the Dayton Accords that ended the Yugoslavian conflict), directly assisted NATO in the overthrow of subdued Libyan leader, Moammar Gadhafi, pulverized Iraq after sanctions could not drive that nation to total ruin, rejected Iranian pledge of  $560 million worth of assistance to Afghanistan at the Tokyo donors’ conference in January 2002, and, according to the U.S. envoy to Afghanistan, Richard Dobbins, disregarded Iran’s “decisive role in persuading the Northern Alliance delegation to compromise its demands of wanting 60 percent of the portfolios in an interim government.”

Tehran senses it is in a lose-lose situation.  Regardless of its decisions and directions,the centuries old Persian lands will be pulverized.

If the US honestly wants to have Iran promise never to pursue nuclear and ballistic missile weapons, it would approach the issues with a question, “What will it take for you (Iran) never to pursue these weapons?” Assuredly, the response would include provisions that require the US to no longer assist the despotic Saudi Kingdom in its oppression of minorities and opposition, in its export of terrorists, and in its slaughter of the Houthis, and the response would propose that the US eliminate financial, military and cooperative support to Israel’s theft of Palestinian lands, oppressive conditions imposed on Palestinians, and daily killings of Palestinian people, and combat Israel’s expansionist plans.

The correct question soliciting a formative response and leading to decisive US actions resolves two situations and benefits the US — fear of Iran developing weapons of mass destruction is relieved and the Middle East is pointed in a direction that achieves justice, peace, and stability for its peoples.

Despite the August 2018 report from the U.S. Department of State’s Iran Action group, which “chronicle  iran’s destructive activities,” and consists of everything from most minor to most major, from unsubstantiated to retaliatory, from the present time to before the discovery of dirt, (July 22, 1980 – Bethesda, MD, United States: An Iranian operative assassinated a former Iranian diplomat-in-exile, Ali Akbar Tabatabai, a vocal critic of then-Iranian Supreme Leader Ayatollah Ruhollah Khomeini.) Iranians will not rebel in sufficient numbers against their own repressive state until they note the end of hypocritical support by western powers of other repressive states. Halting international terrorism, ameliorating the Middle East violence, and preventing any one nation from establishing hegemony in the Arab world starts with President Trump sending Secretary Pompeo to confront Israel and Saudi Arabia, two nations whose records of injustice, aggression, oppression, and violation of human rights exceed that of the oppressive Iran regime.

Otherwise, it will occur on a Sunday morning; always occurs in the early hours on the day of rest. It will come with a roar greater than the sum of all shrieks and screams ever uttered by humankind, rip across fields and cities and burn through the flesh of a part of the world’s population.

The New Politics of Starvation

President Donald Trump’s use of the most vicious aspects of economic warfare prompt another examination of the politics of starvation.

After George W. Bush’s administration, Presidents Barack Obama and Donald Trump lessened Bush’s aggressive war policies and leaned to economic warfare. Sounds harmless when compared to exploding bombs, but it is not — economic warfare can crush an adversary without firing a shot. Gone to its extreme, economic warfare has the force of a neutron bomb; it disables the nation’s infrastructure and debilitates its population. Isolation from the international financial system, material embargos, and other sanctions reduce living standards and bring populations close to starvation The most serious aspects of economic warfare are major crimes and a form of terrorism.

Iran, Cuba, North Korea, and Iraq endured the most punishing sanctions from the United States. Results of sanctions against these countries, models for the effects of sanctions, show that sanctions have rarely accomplished their stated purposes and their intentions may be for other reasons — stalling economic progress, weakening challenges to antagonistic actions, advancing dominance, and promoting regime change.

Iran

Disturbed with the rule of Ayatollah Ruhollah Khomeini, and infuriated by the hostage taking of 52 of U.S. embassy personnel by extreme Islamic students and militants, President Jimmy Carter froze several billions of dollars in Iranian bank deposits, gold and other properties, and followed with a 1980 embargo on trade with and travel to Iran. These punitive actions accomplished nothing for the United States, strengthened the Ayatollah’s Authority and hardened the student demands for releasing the captured embassy officials.

President Reagan, who partially owed his climb into the executive office to the hostage crisis, showed contempt for Iran’s resolution of the problem. Driven by the unproven assertion that Iran was involved in the 1983 bombing of a marine barracks in Beirut, and favoring Saddam Hussein’s Iraq in the Iraq-Iran war, the U.S. president imposed additional sanctions on the Islamic Republic. and, in 1987, banned all imports from Iran.

Duriing the Clinton administration, the Iran-Libya Sanctions Act (ILSA) penalized all foreign companies that provided investments over $20 million for the development of petroleum resources.

Iran’s entrance into the atomic age provoked a series of new sanctions. Economic warfare soon reached full scale by subduing Iran’s earnings from its most precious resource and export – oil. The U.S. Congress passed unilateral sanctions that targeted Iran’s energy and banking sectors. Sanctions did not halt Iran’s nuclear activities, or prevent it from signing contracts with foreign firms to develop its energy resources. Exports slowly grew to an estimated $82 billion in 2012, with liberated Iraq and independent China filling the gap as trading partners.

Nevertheless, economic warfare affected Iran’s industries and welfare. In October 2012, Iran’s currency, the rial, fell to a record low against the US dollar, losing about 80 per cent of its value in one year. Lack of spare parts and inability to replace planes affected aviation safety. Real growth rate in GDP, at a steady six per cent a year during the first decade of the twenty first century, fell to two per cent in 2011-2012. One report, citing officials from the U.S. Departments of State and Energy, concluded that gasoline imports in the Shah’s former kingdom declined from 130,000 barrels a day in 2009 to 50,000 barrels a day in 2011. Machinery wears, and the  costs and time for repairs rapidly increased. A nation of educated professionals, who depended upon access to foreign technology and scientific cooperation, had their access to knowledge severely curtailed.

In a October 5, 2012 report to the UN General Assembly, UN Secretary General Ban Ki-moon summarized effects of sanctions on Iran’s population.

The sanctions imposed on the Islamic Republic of Iran have had significant effects on the general population, including an escalation in inflation, a rise in commodities and energy costs, an increase in the rate of unemployment and a shortage of necessary items, including medicine,

The embargoes have also hampered humanitarian operations, as the imposed restrictions on Iran’s banking system have halted the imports of medicines needed for treating diseases like cancer and heart and respiratory conditions.

The Obama administration eventually eased restrictions on the sale of medicines to Iran, and, after the Joint Comprehensive Plan of Action, in which Iran halted and downsized its uranium enrichment, the UN lifted sanctions. In a following year, Iran GDP increased 15 percent.

On May 8, 2018, U.S. President Donald Trump announced that the United States would withdraw from the Iran nuclear deal. and U.S. sanctions came into effect again in November 2018. President Trump articulated his plan for renewed sanctions as, “to bring Iran’s oil exports to ‘zero’ and remove a main source of revenue for the regime.” Trump imposed the ultimate harm afforded by economic warfare — starve the people and have them revolt against the regime.

That has not happened nor is predicted to occur. World Bank statistics indicate a severe slowing of the economy and steady rise of inflation.

As shown in the charts, oil production, and GDP growth dropped monotonically and severely. Currency value suffered an initial shock and had some recovery. Inflation was up 40%, especially in food (up 60%) — a suffering economy, a suffering people, and no political gain for the U.S.

Cuba

Immediately after the 1960 Cuban revolution, the United States imposed an embargo against Cuba. Fifty plus years of sanctions have not succeeded in accomplishing the purposes for which the United States proposed the sanctions — compensation to U.S. firms nationalized by Cuba and the overthrow of the Castro regime. The only result of the embargo has been deprivation of the Cuban people.

Although the United Nations General Assembly on November 2, 1995, voted 117 to 3 to recommend an end to the U.S. embargo against Cuba, President Clinton, on March 12, 1996, signed into law the misnamed Cuban Liberty and Democratic Solidarity Act. This Act imposed penalties on foreign companies doing business in Cuba, permitted U.S. citizens to sue foreign investors who make use of American-owned property seized by the Cuban government, and denied foreign investors in Cuba’s industry to enter the U.S.

The World Health Organization (WHO) complimented pre-90’s Cuba for its public health system, which had been credited with eliminating hunger and malnutrition and wiping out infectious diseases. A tightened embargo reinforced Cuba’s suffering after Russia withdrew subsidies. and, soon, Cuba of the mid-90’s portrayed another image. The American Association for World Health and the American Public Health Association ascertained that the embargo caused significant deterioration in Cuba’s food production and health care:

  • Cuba was banned from purchasing nearly 1/2 of new drugs on the market.
  • Physicians had access to only 890 medications, down from 1,300 in 1989.
  • Deterioration of water supply increased water borne diseases.
  • Daily caloric intake dropped by 33% between 1989 and 1993.

In 2000, the Clinton administration finally allowed Cuba to have some relief from an aggressive economic warfare. The administration allowed the sale of agriculture and medicine to Cuba for humanitarian purposes. According to the USDA’s Foreign Agricultural Service, U.S. agricultural exports to Cuba reached $380 million in 2004. However, after hitting a peak of $710 million in 2008, U.S. food sales to Cuba declined over 50 percent by the year 2011. Reasons for the decline were largely economic – lack of foreign currency and better financial terms being offered by other countries.

Representatives of a dozen leading U.S. business organizations, including the U.S. Chamber of Commerce, signed a letter in December urging Barack Obama to scrap the embargo. The letter pegs the cost to the U.S. economy at $1.2 billion per year. The CPF’s estimates are much higher: up to $4.84 billion annually in lost sales and exports. The Cuban government estimates the loss to Cuba at about $685 million annually. Thus the blockade costs the United States up to $4.155 billion more a year than it costs Cuba.1

After a period of harsh policy toward Cuba under President George W. Bush, President Obama announced in late 2014 that Washington and Havana would begin normalizing relations. To that end, the Obama administration achieved three pillars of normalization: 1) the removal of Cuba’s designation as a state sponsor of terrorism, which allowed Cuba to access international finance; 2) the reestablishment of diplomatic relations; and 3) relaxed restrictions on travel and trade through executive action. The embargo remained in place.

In 2017, the Trump administration reversed some of the changes made under President Obama, but the vast majority remained U.S. policy. Despite some tighter trade sanctions and limitations on authorized travel, there are still legal pathways for Americans to export and travel to Cuba. On the list of  new sanctions is allowing Americans to sue foreign companies in Cuba that are profiting from or using properties that were seized during the Cuban revolution.

Havana — The Cuban government announced Friday it is launching widespread rationing of chicken, eggs, rice, beans, soap and other basic products in the face of a grave economic crisis. Commerce Minister Betsy Díaz Velazquez told the state-run Cuban News Agency that various forms of rationing would be employed in order to deal with shortages of staple foods.

Díaz blamed the hardening of the U.S. trade embargo by the Trump administration. Economists give equal or greater blame to a plunge in aid from Venezuela, where the collapse of the state-run oil company has led to a nearly two-thirds cut in shipments of subsidized fuel that Cuba used for power and to earn hard currency on the open market.2

Another suffering economy, suffering people, and no political gain for the U.S.

North Korea

The proud and impoverished nation of North Korea has been continually subjected to sanctions, threats of economic sanctions, and hastily withdrawn sanctions. The media is peppered with the words: “U.S. Lifts sanctions,” “U.S. recommends sanctions,” “South Korea wary of sanctions.” It’s difficult to know if North Korea is being sanctioned or being forced into being sanctioned. After its 2006 claim of conducting a nuclear test, the DPRK (Democratic People’s Republic Korea) leaders responded to intended sanctions by labeling them as “a declaration of war.”

The DPRK has,suffered from economic warfare, which includes restrictions on trade and financial transactions. Export of sensitive dual-use items (items that have both military and non-military uses) have, at times, been prohibited.  During March 2012, the politics of starvation entered the situation; angered by an intended North Korea missile test, the U.S. suspended food aid to the “hermit kingdom.”

WASHINGTON (Reuters) – The United States has suspended planned food aid to North Korea as Pyongyang vows to push ahead with a plan to launch a long-range missile in defiance of international warnings, U.S. military officials said on Wednesday.

Under President Obama, sanctions increased as a policy of “strategic patience;” the US waited for North Korea to change its bad behavior before engaging with the state. As a result, trade between North Korea and China increased and sanctions did not encourage Kim Jong-An to discuss de-nuclearization.

On September 21, 2017, President Donald Trump, as part of his administration’s “maximum pressure” campaign, allowed severing from its financial system and/or freezing assets of companies, businesses, organizations, and individuals who traded in goods, services, or technology with North Korea.

U.S. negotiations with North Korea have a built-in error; they request de-nuclearization in exchange for improved relations and reduction in sanctions. Not considered is that North Korea’s development of a nuclear arsenal was a response to its regard of U.S. actions in the Korean peninsula as a direct threat to its regime and the developments had no relation to sanctions. Therefore, the DPRK will not trade de-nuclearization for relief of sanctions, and that approach is a non-starter.

Sanctions, intended to collapse the North Korea regime, have not halted its development of nuclear weapons and guided missile delivery systems. They have collapsed the economy and harmed the North Korean people; starvation during droughts have occurred. Although some international assistance has been provided to North Korea, the intensive economic warfare waged against the “hermit kingdom” has exacerbated its problems, without any apparent benefit to its principal antagonist, the United States.

Iraq

If Iraq were Pompeii, then the US would be Mt. Vesuvius.

The sanctions against Iraq began August 6, 1990, four days after Hussein invaded Kuwait, and featured a near-total financial and trade embargo. Resultant suffering has been outlined in a UN Report on the Current Humanitarian Situation in Iraq, submitted to the Security Council, March 1999.  Due to the length of the report, only significant features are mentioned.

Before the Iraq War

  • before 1991 Iraq’s social and economic indicators were generally above the regional and developing country averages.
  • Up to 1990, the Food and Agricultural Organization (FAO) cited Iraq as having one of the highest per capita food availability indicators in the region.
  • According to the World Health Organization (WHO), prior to 1991, health care reached approximately 97% of the urban population and 78% of rural residents. A major reduction of young child mortality took place from 1960 to 1990; with the infant mortality rate at 65 per 1,000 live births in 1989 (1991 Human Development Report average for developing countries was 76 per 1,000 live births). UNICEF indicates that a national welfare system assisted orphans and children with disabilities and supported the poorest families.
  • Before 1991, southern and central Iraq had well developed water and sanitation systems, composed with two hundred water treatment plants (“wtp’s”) for urban areas and 1200 compact wtp’s to serve rural areas, as well as an extensive distribution network. WHO estimates that 90% of the population had access to an abundant quantity of safe drinking water.

From Sanctions After the Gulf War

  • Economist Intelligence Unit estimates that Iraqi GDP may have fallen by nearly 67% in 1991, and the nation had “experienced a shift from relative affluence to massive poverty” and had infant mortality rates that were “among the highest in the world.”
  • The United Nations Population Fund (UNFPA) estimated the maternal mortality rate increased from 50/100,000 live births in 1989 to 117/100,000 in 1997. The under-five child mortality rate increased from 30.2/1000 live births to 97.2/1000 during the same period. The United Nations Department of Economic and Social Affairs (DESA) calculates that the infant mortality rate rose from 64/1000 births in 1990 to 129/1000 in 1995 (the Human Development Report set the average infant mortality rate for Least Developed Countries at 109/1000). Low birth weight babies (less than 2.5 kg) rose from 4% in 1990 to around a quarter of registered births in 1997, due mainly to maternal malnutrition.
  • Calorie intake fell from a pre-war 3120 to 1093 calories per capita/per day in 1994-95. The prevalence of malnutrition in Iraqi children under five almost doubled from 1991 to 1996 (from 12% to 23%). Acute malnutrition in Center/South rose from 3% to 11% for the same age bracket.
  • The World Food Program (WFP) estimated that access to potable water decreased to 50% of the 1990 level in urban areas and 33% in rural areas.
  • School enrollment for all ages (6-23) declined to 53%. According to a field survey conducted in 1993, as quoted by UNESCO, in Central and Southern governorates, 83% of school buildings needed rehabilitation, with 8613 out of 10,334 schools having suffered serious damages. The same source indicated that some schools with a planned capacity of 700 pupils actually have 4500 enrolled in them. Substantive progress in reducing adult and female illiteracy ceased and regressed to mid-1980 levels. More families are forced to rely on children to secure household incomes. Figures provided by UNESCO indicate that drop-outs in elementary schools increased from 95,692 in 1990 to 131,658 in 1999.

Sanctions, and its toll on the Iraqi people, continued until the U.S. invasion of Iraq in 2003.

Excerpts from Invisible War: The United States and the Iraq Sanctions, Joy Gordon. Harvard University Press, 2010, describe the extent of irrational economic warfare conducted by the United states against a defenseless Iraq.

While the United States consistently justified its policies in terms of preventing Iraq from developing weapons or threatening its neighbors, the U.S. policy went well beyond any rational concern with security. There was an elaborate architecture of policies that found a dozen other ways to simply do gratuitous harm that had not the least relation to the threat Iraq might have posed to its neighbors or to anyone else.

For thirteen years the United States unilaterally prevented Iraq from importing nearly everything related to electricity, telecommunications, and transportation, blocked much of what was needed for agriculture and housing construction, and even prohibited some equipment and materials necessary for health care and food preparation.

As the criticism grew, there is no sign that anyone in the U.S. administration, and only a tiny handful within Congress, actually took it to heart– actually questioned the sanity and legality of reducing an entire civilization to a preindustrial state, of bankrupting an entire nation for the purpose of containing one tyrannical man.

On May 12, 1996, Madeleine Albright, then U.S. Ambassador to the United Nations, appeared on the CBS program 60 Minutes. Commentator Lesley Stahl asked, “We have heard that half a million children have died. I mean, that’s more children than died in Hiroshima. Is the price worth it?” Madeleine Albright replied, “we think the price is worth it.”  Is that an expected response from a normal human being?

The U.S. 2003 invasion of Iraq accomplished what sanctions failed to accomplish —  push Iraq to total ruin. A question, “Why war, if had sanctions, or why sanctions if need to go to war?”

Conclusion

As shown, sanctions never accomplished their stated purposes and gravely harmed populations. The economic warfare had equivalents to military war. The country that took the offensive became the aggressor, as in any war, and the destruction to the defending state was equally brutal. In the one-sided engagement, the civilian population of the defending nation suffered greatly and the aggressor country suffered few losses. The economic wars never achieved the results that the offended party desired, and no peace treaties were signed. The struggles remained an open issue.

A limited form of economic warfare may, at times, have a legitimate purpose. A complete economic war, that invades all aspects of a country’s life and continues until it debilitates the population, cannot be accepted. In a military campaign, atrocities and human rights violations are often committed. Although no shots are fired and battlefields are not identifiable, economic warfare cannot camouflage its atrocities and disguise its human rights violations.

  1. Dollars and Sense, 2009, The Costs of the Embargo, by Margot Pepper
  2. From CBS News, May 11, 2019.

Does Capitalism Mean War?

During the Cold war, the major antagonists, United States and Soviet Union, faced one another at European borders. No military confrontations occurred between them. Their cooperation, in a war to end all wars, had a brief interlude, and succeeding years detected huge losses of lives in endless conflicts.

The Cold War atmosphere became a testing ground for two systems. The capitalist system gained economic and political victories, but at what cost? A fundamental question emerged from the rhetoric and saber rattling — which system, capitalist or socialist, was more likely to contain peace, or stated another way, more likely to wage war? Examination of the conflicts occurring during the Cold War provides a clue and answers another lingering question. “Does Capitalism mean war?”

A chart of the history of major wars during the 1946-1991 era tells a story. Years succeeding the collapse of the Soviet Union and its communist system add to the story. A review of economic warfare completes the picture.

The chart describes major and local wars from 1946 to 2019 with the following criteria:

  • Major wars (shown in red) consider engagements by one or more huge armies, a result of significant importance, and/or extensive casualties.
  • Local wars are confined to civil wars/uprisings outside of the nation (shown in green) and military interventions by one nation in another nation (shown in brown).
  • Only offensive wars, in which a NATO nation fought or which a Soviet bloc (Warsaw Pact or China) fought, are considered.
  • )The Middle East wars between Israel and its neighbors, the Iraq war against ISIS, the Syrian War, and the Falkland Island war, where great Britain defended itself against an Argentinian invasion, are not included.
  • Documenting wars fought by the major capitalist nations after the decline of the Soviet Union in 1991 adds information to their roles in hostile actions.
  • China is included in the Socialist Bloc, but, because it operated independently from the Warsaw pact, its wars are independently summarized.

Peruse the chart, absorb the immense scale of conflicts, and then read the summary.

Summary

Communist Bloc

(1) The Soviet Union fought wars with Afghanistan and China. In the Afghanistan war, the Soviets intended to maintain a communist and friendly government. The China conflict resolved a long-lingering border dispute.
(2) In major wars, where both the United States and Soviet Union intervened — Korea and Vietnam — the Soviets mainly supplied weapons and aircraft. By not committing ground troops, the Soviet Union tempered its aggressive nature in the conflicts and had few casualties.
(3) Warsaw Pact allies interfered in the uprisings of two countries — Hungry, and Czechoslovakia — both of which were in the Warsaw Pact and the Socialist orbit.
(4) The Soviet Union and Cuba interfered in one civil strife outside of the recognized Warsaw Pact sphere of influence — Angola — and supported one faction in that Civil War

China

(1) China fought several major wars — Tibet, Sino/Vietnam, Sino/Indian, and Sino/Soviet. In the Sino/Vietnam war, China invaded Vietnam in retaliation to Vietnam’s aggression against Cambodia. The two latter conflicts were long-simmering border wars with neighboring nations. In the Tibet invasion and annexation, China claimed a historical attachment of Tibet to China. More likely. China took advantage of a weak Tibet and incorporated it to prevent Tibet from allying with a nation that was antagonistic to China — India or the United States. The wars and annexation did not involve the Soviet bloc.
(2) The Chinese military entered the Korean War after U.S. troops moved close to the Yalu River, which is a natural border with China. China dedicated a massive number of ground troops to the campaign.
(3) China assisted North Vietnam with war materials and construction manpower in the early years of the war, which stopped entirely after the Soviet Union made similar commitments to the North Vietnamese.

Capitalist Bloc

(1) In major hostilities, the United States allies (France and Great Britain) initiated the Suez war against Egypt after Nasser nationalized the Suez Canal (U.S. President Eisenhower resolved the conflict in favor of Egypt), the United States and allies initiated and fought with military might in the 1st Gulf war with Iraq after Saddam Hussein invaded Kuwait, and the U.S. air force engaged in extensive bombings of the Libyan capital in response to suspected Libyan attacks on U.S. civilians and off-duty troops.
(2) The United States and its allies intervened, with all military might, in the Korean and Vietnam civil wars. In both wars, which had massive casualties, U.S. miliktary dominated the fighting by the coalition forces.
(3) In another major war — between Iraq and Iran — U.S. participation was mainly logistic and patrol of the adjacent seas. Although the U.S. sold arms to Iran, in an arms for hostages deal, assistance to Iraq and hostile actions, such as the downing of an Iranian passenger plane, caused damage and loss of life to the Iranians.
(4) U.S., and/or its western allies interfered in civil strifes and uprisings in Indo-China (France), Kenya (Great Britain), Angola (U.S.), Algeria (France), Nicaragua (U.S.), Salvador (U.S.), Congo (U.S. and Belgium). and Chad (France),
(5) U.S. intervened to replace governments in Cuba, Guatemala, Chile, Grenada, Dominican Republic, Panama, and Brazil.
(6) U.S. covertly assisted the Afghan Mujahideen through Pakistan intelligence. Result of Afghan-Russian war — rise of Osama bin Laden and al-Qaeda and installation of Taliban regime.

After the Breakup of the Soviet Union

(1) Citing humanitarian reasons, U.S. and NATO intervened in the Libyan, Bosnian and Kosovo conflicts, providing aerial bombardments that determined the outcomes of these conflicts. At no time was either Yugoslavia or Libya a threat to the U.S. or any NATO nation.
(2) Based on purposefully misdirected intelligence, the U.S. invaded Iraq and replaced the Saddam Hussein regime.
(3) After the September 11, 2001 terrorist attacks, the United States, with NATO assistance, invaded Afghanistan, replaced the Taliban regime and started a protracted civil war.
(4) A U.S. humanitarian mission turned into battles with militias in Somalia.
(5) U.S. military sales to Saudi Arabia and logistic assistance have enabled the Saudi Kingdom to pulverize the Yemenite Houthi population.

Economic warfare

Economic warfare must be considered equal to military war. Warfare is visualized in terms of dead soldiers, battlefield blood, eerie noises, and bombed-out structures. Warfare can be silent and still be deadly. The country that takes the offense becomes the aggressor, and the destruction to the defending state is equally brutal. In most cases, the economic war is a one sided battle; the civilian population of the defending nation suffers greatly and the aggressor country suffers few losses.

The communist Soviet Bloc did not engage in any economic warfare.

Since World War II, the United States embargoed and sanctioned more than 35 countries in economic warfares. Start with Iran; then wander around the map to Libya, Nicaragua, Burma, Sudan, Iraq, Cuba, Liberia, North Korea, Rwanda, Sierra Leone, Somalia, Yugoslavia and other countries. Economic warfare, of which sanctions are one part, intentionally reduces living standards and promotes starvation. By starving and debilitating a population in order to gain economic or political advantage, economic warfare is a major crime and a form of terrorism.

The most punishing sanctions by the United States, until the 2012 sanctions against Iran, had been against Cuba, North Korea, and Iraq. Iran has replaced Saddam Hussein’s Iraq as the most sanctioned nation on the globe.

Conclusions

The results of the analysis indicate that Socialist nations are not immune to engaging in war. However, the engagements were minimal and not intended to increase their hegemony. In one virulent war, the Soviet Union tried to maintain another nation — Afghanistan — in its orbit, and caused severe consequences to itself. The Soviet Bloc militarily assisted other communist nations in distress — North Korea, North Vietnam, Cuba, and Angola — but did not participate with its soldiers in the ground wars. Interferences in uprisings of other nations were localized to nations of the Warsaw Pact — Hungary and Czechoslovakia. The Socialist Bloc never intervened beyond its borders to convince newly struggling nations to become socialist or tried to overthrow existing governments.

China acted as an aggressor in several wars, but not as part of adventure by the Socialist Bloc. Operating independently, China seized opportunities to satisfy historical grievances, or, in the case of the Korean War, defend itself against incursion upon its territory. Although reports have China’s leader, Mao Zedong, determined to have a “people’s war” within the pan-Asian Communist movement, no such conflicts ever occurred. China assisted the Vietnamese in the Indo-china war and supplied armaments and manpower for logistical support during the early years of the Vietnam War.

Claiming protection of interest, which were mainly economic and political, the Capitalist western nations went beyond their borders and homeland security interests and, often with apparent ease that eschewed compromise and diplomacy, initiated several violent and catastrophic wars — 1st Gulf, Vietnam, and Suez wars. In the Korean War, the United States and its allies invoked the UN charter. However, the intensity of the war, which went beyond containment, and its inconclusive resolution have clouded U.S. original intentions in fighting the war. Less violent, but more characteristic of capitalist western intentions were the many suppressions of uprisings and interferences in civil wars — Indo-China, Algeria, Kenya, Nicaragua, Angola, Salvador and Chad. Allied to the interferences were several interventions that either intended or succeeded overthrowing existing and legitimate governments and replacing them with leaders favorable to American political and economic interests — Cuba, Guatemala, Chile, Grenada, Dominican Republic, Panama, and Brazil.

After the dissolution of the Soviet Union, the Capitalist western nations displayed a militant and aggressive attitude that showed the Cold War was often used as an excuse for unrelated hostilities. As summarized previously. (1) U.S. battles with Somali militia, (2) U.S./NATO intervention that provided substantial air force attacks and determined the outcomes of the Libyan, Bosnian and Kosovo conflicts, (3) intention of subduing Osama bin laden and al-Qaeda after the 9/11 attack on American soil turning into a violent civil war that has lasted almost 20 years, (4) U.S. unnecessary invasion and occupation of Iraq, which caused a huge amount of casualties and destruction, and (5) U.S. support for Saudi Arabia, which has enabled the Saudi Kingdom to pulverize the Yemenite Houthi population, all point to a capitalism that will not exist without waging war. Add to the mix, the economic warfare that has decimated populations and the question “Does Capitalism Mean War?” leans to a positive response.

Not being definite arises from being unsure if it is the capitalist world waging war or only a temporary world power, United States. Well, France has continually interfered in African nations to protect its interests and NATO has subdued nations that contested western hegemony, and brought its forces to the border of an antagonist Russia. We may question if war is endemic to humanity and what would have occurred if the Socialist Bloc had been victorious in the Cold War and subdued the capitalist nations? Would the head honchos of the Socialist system behave aggressively to maintain their version of world order? The analysis, based on interpretation of events, provides a possible answer to the question, “Does capitalism mean war?” Logic reinforces a positive reply and answers the other questions.

The Socialist nations run on scarcity, which prevents them from engaging in damaging economic warfare. Because their production capability is limited by material and human resources, armaments, defense budgets, and foreign wars exhaust their resources and are not compatible with their operation. Honest Socialism, which is the only Socialism – perhaps ideal — is based on respect for sovereignty and fair trade.

Capitalist nations run on surplus, on capital eager to feed machines. If they can obtain the material resources, they can grow their economies and augment the markets to export the surplus. Military defense expenditures create jobs that relieve unemployment, heighten a profitable industry, and supply the muscle that captures resources and markets, and silences those who contest hegemony and protest against a dictated world order. .

Capitalism has benefits of more properly allocating resources and motivating workers, elements that enable it to recover from sputtering recessions, develop more rapidly and to greater limits. Socialism has elements of a more peaceful system that trudges slowly in a progressive direction, hampered by a bureaucratic led work force that is less able to organize itself at optimum efficiency. However, do the advantaged citizens in the Capitalist systems realize that their benefits may result from derogatory effects to others, from physical and economic wars that caused havoc throughout the world?

Should the expression, “Better Dead than Red” be replaced by “Better to Exist than be Capitalist?” or “Don’t Get Your Fill by Having to Kill

Whom Did Tax Reform Benefit?

Characterizations of the Tax Cuts and Jobs Act have followed agendas – its opponents maintaining it is a bill for the wealthy, and its supporters arguing that the bill fairly satisfies all economic levels.

A previous article, Failure of Trump Tax Cuts, analyzed the effects of the Tax cuts on the economy and showed that tax cuts do not pay for themselves; they do not generate additional revenue that compensate for the loss of government receipts. This article analyzes tax cut effects on individual wage earners. Four scenarios, representative of the tax paying public in years 2017 and 2018, are presented.

  • Single tax payer using standard deduction;
  • Single tax payer using itemized deduction of $16,000;
  • Married taxpayer, two children, filing separately and using standard deduction; and,
  • Married taxpayer, two children, filing separately, and using itemized deduction of $16,000.

Effects on wage earners are not the sole means for evaluating the worth of tax bills; other factors will be considered.

The results for single taxpayers, using the standard deduction, are shown on the left in the following table.

In 2017, this type of taxpayer added a deduction from a $4050 exemption to the standard deduction of $6000. In 2018, the standard deduction was raised to $12,000, but no exemptions were allowed.

The single taxpayer in 2018, using the standard deduction, had a $1950 advantage in taxable income compared to the single 2017 taxpayer. Because the tax rates were also lowered in 2018, a single taxpayer of equivalent gross income gained another advantage and paid less tax than in 2017.

Which earning group did the reduced taxes most benefit?

By absolute figures, the higher the earnings, the greater is the benefit. However, a more accepted manner for examining the figures is by proportion. By these criteria, the lower waged earners received the greatest benefit — 21% for low wage earner, 18% for high wage earner, and 9.3% for ultra-high wage earners.

The results for single taxpayers, using itemized deduction of $16,000 deduction, are shown on the right of the table.

In this case, the 2017 wage earner had an advantage. In addition to the $16,000 itemized deduction, the 2017 wage earner received a single exemption of $4050 applied to the deductions. The lower tax rates in 2018 offset this advantage, but insufficiently; none of the single taxpayers received much benefit, and the lowest wage earners actually paid slightly more taxes.

The results for the married taxpayer, using standard deduction, are shown on the left in the next table.

In 2017, this type of taxpayer was able, from four $4050 exemptions, to add a deduction of $16,200 to the standard deduction of $6000. In 2018, no exemptions were allowed, even for married families. Offsetting this disadvantage were the child and spouse credits. In 2017, each dependent child, created a $1000 tax credit, directly off the bottom line of the tax statement. In 2018, each dependent child created a $2000 tax credit and a $500 tax credit was allowed for the spouse. In 2018, the child tax credits are refundable (not the spouse credit), which means a negative tax, up to $1400, is refundable.

The higher tax credits in 2018 enabled all of these types of married taxpayers ($4500 tax credits) to reduce their taxes in 2018. Note that the difference in taxes between the 2018 single taxpayer using the standard deduction and the married taxpayer using the standard deduction is exactly $45000. In this scenario, the absolute tax gain was almost equal between all wage earners, except the ultra-high wage earners. Proportionately, the lower wage earners received the most benefits.

The results for married taxpayers, using an itemized deduction of $16,000, are shown on the right of the table. In this case, by itemizing deductions, just as for the single taxpayers, the 2018 married taxpayers lost the $6000 advantage they had compared to the 2017 taxpayers. The combination of loss of this advantage, together with the difference in tax credits and tax tables for the two tax years, made erratic differences between taxpayers from the two years. Generally, the absolute advantage for the 2018 taxpayer was small, even going negative for middle-income wage earners.

For this scenario, only the ultra-high wage earners managed to maintain a distinct advantage in the 2018 tax year. The low wage earners had a decent advantage, but the $1400 limitation in the tax credits limited the advantage.

Other Considerations

The analysis uncovers the inutility of the standard tax deduction, which only moves the income down the tax schedule. As an example, a single wage earner of $40,000 in 2018 who uses the $12,000 standard deduction pays the same tax as a wage earner of $38,000 in the same tax schedule that has no standard deduction. For those who itemize deductions, subtracting $12,000 from their deduction steers taxpayers to itemize deductions only when they have more than $12,000 in deductions. Similar reasoning applies to the exemption; it also only shifts the tax table by the exemption, which every single taxpayer has, by the exemption amount. Having a standard deduction and an exemption make it seem that the Internal Revenue Department is being considerate of taxpayers, but all these considerations do is raise the level at which it is beneficial to itemize deductions. Is it not simpler and preferable to have neither a standard deduction nor exemptions and modify the tax table to more equitably distribute taxes?

Married taxpayers with children, who also have no exemptions in 2018, have a $500 tax credit for the spouse and a $2000 tax credit for each child. Regardless of the taxable income, all taxpayers receive the same credit. Is this fair or logical? Should the lower income groups, in which the care of a dependent child is a greater percentage of available income and, therefore, a greater financial burden, receive more benefit? Tax credits are a correct approach, but shouldn’t they be inversely proportional to the income? As an example, a wage earner with dependent children, could receive a tax credit by the formula

N X K/I = TC

where N= number of dependents, K = Tax Credit for one dependent, I = income, and TC = Total tax credits.

As an example, if N=2, K= 80 (expressed in 000), and I = 40 (expressed in 000), then
TC = 4 or $4000.
If I = $100,000, then TC = $1600.

Although the Tax Cuts and Jobs Act managed to save all 2018 wage earners something in their taxes, the savings beg another question, “Were the benefits sufficient to warrant the Tax act?” Entering into the discussion is that the reduced taxes increased the federal deficit. Regarding the entire situation from a total perspective, we have the increased deficit essentially financing the tax cuts. Wage earners received a temporary loan from the government, which should be repaid one day by increased taxes. Should be, but not definitely – the deficit monotonically increases with no regard of ever reducing it.

The tax cuts could have been used to re-distribute the wealth – heavy tax cuts for low wage earners and no tax cuts for ultra-high wage earners. Why give those earning $200,000 another $5000 and low wage earners only another $1500? Shouldn’t it be the other way? Better yet, why not make tax cuts, budget neutral, and have low wage earners receive sizeable tax cuts and ultra-high wage earners pay more taxes to compensate for the revenue lost to the government planners..

Going further, why has the administration bothered to spend huge dollars for preparing, legislating, and managing new income tax policies that gave $6000 to people who already had after tax income of $160,000, and served to increase the federal deficit and support their largesse? Why did it not keep the same tax legislation and use the costs incurred for the new tax legislation together with the monetary benefits that occurred with the new legislation and use the total revenue to assist the least advantaged citizens of the American economy?

Conclusions

(1) The Tax Cuts and Jobs Act mainly favored those using the standard deduction.

(2) From a proportional saving perspective, lower wage earners gained mostly from the Act

(3) The fact that the Act was not budget neutral, and increased the deficit, its effectiveness is definitely judgmental.

(4) A more meaningful and fair Tax Cuts and Jobs Act gives more decisive benefits to all low wage earners and serves to redistribute the wealth.

(5) Reappraisal of the income tax should have included a reappraisal of the worth of the standard deduction.

(6) The tax credits gave equal weight to all income levels, which does not seem fair or logical.

(7) The most debatable feature of the Tax Cuts and Jobs Act is that it assumes that the function of income taxes is to regulate consumer purchasing power rather than provide adequate revenue for government programs.

Americans for Tax Reform and Grover Norquist take note: There is no evidence that income tax cuts pay for themselves or stimulate the economy. Until poverty is eliminated, tax cuts are meaningless if they only give more funds to those who already have adequate means to live.

Failure of Trump Tax Cuts

For President Donald J. Trump, there is only one goal in life – making money. Lowering taxes gives corporations and individuals more money; therefore, lower taxes must be beneficial. The constant self-serving references to his management of the economy are meaningless – examining President Trump’s essential thrusts for invigorating an already invigorated economy reveals contradictions in his Taxation Policies.

Reducing Income Taxes

President Trump signed the “Tax Cuts and Jobs Act” into law on December 22, 2017. His belief that reducing income tax rates automatically advances the economy is a shibboleth; a simple analysis exposes the fallacy.

Some economists find subjective reasons for why lower income tax rates benefit the economy. Objectively, income tax rates only determine the transfer of money between government and taxpayers. Neither direction, up or down, adds or subtracts money to the economic system nor allows more or less available spending to the economy; purchasing power stays the same, which means the total purchases of goods and services remain the same. One exception – unlike the consumer who cannot accumulate vast funds for sizable investments, the government can temporarily postpone consumer spending, aggregate billions of dollars, and channel these funds into huge projects that add to the Gross Domestic Product (GDP).

As one example, the government uses an accumulation of taxes to initiate construction projects. The suppliers to the projects hire workers, and the total wages paid the workers almost matches the taxes raised for the effort. Spending by the new wage earners ripples through the economy, and, in its final appearance, almost matches the reduced consumer spending of the taxed individuals. Consumer spending stays about the same, but money circulates through other channels. Employment, production (new constructions), and GDP increase — give one advantage to tax increases.

Individual workers and taxpayers benefit from tax cuts; however, stimulating the entire economy by income tax breaks is a psychological phenomenon. The exaggerations, promises, and optimism generated by tax breaks fashion a more optimistic public that incorrectly assumes they stimulate additional spending to already combined consumer and government spending. Creeping into the debate are other false assumptions — those who have excess funds will purchase domestic goods, invest, and stimulate growth. Not considered is that individuals might purchase imports, invest in speculative ventures that only churn money, and decrease available purchasing power in the domestic economy. The latter seems to have been one result from the tax cuts.

New York Times, March 6, 2018, “In Blow to Trump, America’s Trade Deficit in Goods Hits Record $891 Billion”.

Money from the tax cuts helped Americans buy more imported goods than ever in 2018. In addition, to finance the tax cuts, the government needed to borrow more dollars, some of which came from foreign investors.

If those who protest vociferously against the ever increasing government debt and its burden to future generations want to ameliorate their children’s problems, why don’t they pay their fair share of taxes now, which will lower the government debt and prevent higher taxes for their descendants in the future?

Overhauling Corporate Taxes

Granted that overhauling an antiquated corporate tax structure could be advantageous to the economy. However, is it necessary for an economy that, despite supposed elevated corporate taxes, achieved great success, which included low unemployment and high corporate profits? Why fix something that was not broken and had no indication of being disrupted? If lowering corporation tax rates promoted more exports and investment, then its value is apparent. Has that happened? Analysis, statistics, and several charts answer the question.

Corporations already paid less than 21% in taxes.

In 2012, among large corporations that met that $10 million in assets threshold, 42.3% paid no federal income taxes after tax credits. Among profitable large companies, 19.5% paid no federal income taxes. The average effective tax rate among the profitable large corporations was 16.1%, under federal tax treatment. Compared to the pretax net income these corporations showed in their annual reports the rate was 14%.

One prominent feature of the “Tax Cuts and Jobs Act,” which should be factored into the assessment of the overhaul of the corporate tax structure, is the change from a global to a territorial tax system. Instead of corporations paying the difference between the U.S. tax rate and taxes already paid to the country where income was earned, each subsidiary now pays only taxes to the country in which it earns the income. Under new tax code Section 965, U.S. multinationals are required to pay a one-time “transition tax” on income accumulated overseas since 1986. The law treats the income as repatriated and imposes a 15.5 percent tax on cash or cash equivalents, and an 8 percent tax on illiquid assets, such as factories and equipment.

The amount of offshore cash corporations are bringing back to the U.S. dropped sharply for a second straight quarter, falling short of the trillions of dollars President Donald Trump had promised would result from his tax overhaul.

Companies repatriated $92.7 billion in the July-September period, the lowest amount this year and down almost 50 percent from the previous quarter, according to data released Wednesday by the Commerce Department. U.S. corporations repatriated $294.9 billion in the first three months of 2018 and $183.7 billion in the second quarter.

This provision of the “Tax Act” may be the only tax reform that stimulated the economy.

Assessing benefits of the “Tax Cuts and Jobs Act” examines its effects on:

Corporate Profits

Observe corporation after tax profits (lower figure) during the last several years — companies had high profits, and sufficient funds for investment must have been available.

Compare after tax to before tax profits (upper figure with slightly different scale) and note the low tax rate on the profit. As examples,

Profits in 2014 reached $2320 billion and after tax profits were $1920 billion.

Tax Rate = $400b/$2320b = 17.2 percent.

Profits in 2015 were $2000 billion and after tax profits were $1640 billion.

Tax Rate = $360b/$2000b = 18.0 percent.

Profits at end of 2018 (after Tax Act) were $2220 billion and after tax profits were $1980 billion.

Tax Rate = $250b/$2230b = 10.8 percent.

Calculations verify that Tax Rates for most corporations were much below the previous 35% rate and, presently, are only about 6-7 percent below that of the previous average rate.

Another supposition is that, with increased after tax profits, corporations can improve competition from foreign sources by trading the profits for lower prices. How much can prices be lowered? Calculations, shown in the following table, demonstrate what products will cost for two different profit margins with reduction of the corporate tax from 35 percent to 20 percent, and if the corporation forfeited all of the profit increase by reducing its prices.

Price That Maintains After Tax Profit

Is the cutting of prices by 2.0% – 4.0% sufficient to make products more competitive? Unlikely! Advantage from the more realistic 6 percent tax cut makes it more unlikely.

How additional profits were used


Stock buybacks, increased dividends, and net domestic investment provide the answers.

Stock buybacks increased by $330 billion; dividends increased slightly.

Net Domestic Investment increased by $200 billion.

As shown before, the repatriated profits, less the 15.5% tax rate, amounted to about $424 billion in year 2108. The sum of additional usage of profits amounted to $530 billion in year 2018. Obviously, the repatriated profits played the major role in additional usage of profits, and tax cuts had little effect on profit usage.

Using repatriated profits to enrich stockholders might have merits – stockholders deserve benefits from their corporations and this benefit has an added significance. Unlike normal stock market trades, where money is exchanged and no new money enters the system, these stock buybacks took external funds and injected them into the domestic system, which increased the available money supply and purchasing power.

Trade Balance

It is difficult to assign a relation between tax cuts and Trade in Goods and Services. President Trump’s tariff policies add confusion to determining the causes for the trade deficit and how it was affected by tax cuts. Clearly, despite President Trump’s stress on improving it, the tax cuts did not reverse the trend, and the trade deficit increased by a large margin ($69b) in year 2018.

Foreign Competition

Exports, which had already been increasing, additionally increased, and imports, especially of goods, increased much more. Bottom line is that the corporate tax cuts cannot be shown to have improved competition with foreign sources.

Gross Domestic Product (GDP)

The GDP grew at a more rapid rate during year 2018, up about $1160b compared to growth of $852b in year 2017, or an additional $300b in the rate of growth. The kicker is that Federal Government Spending (shown above), which added $110B to the GDP, coupled with the $200b increase in net domestic investment (cited previously) accounted for that added growth. The additional trade deficit of $69b (cited previously) subtracted from the GDP growth, but can be accounted for by a partial spending stimulus from the $330b stock buybacks due to the profit repatriation (cited previously). Sufficient evidence exists that other mechanisms than the tax cuts were responsible for the added growth to the GDP.

Government Deficit

According to Department of the Treasury reports, corporate tax receipts fell by 28 percent – from $223 billion in 2017 to $162 billion during the first nine months of fiscal year 2018. For that reason, as the following chart shows, the Federal Government deficit, which has increased in all of years of Trump’s presidency, increased by $114 billion. If $75b taxes had not been collected on the $500b of repatriated profits, the deficit would have increased by $189b. Because the defict increased, it can be argued that the deficit increase, caused by the tax cuts, stimulated the economy.

Conclusions

Evidently, corporations flush with repatriated profits, used these retained earnings for about $330 billion in stock buybacks and about $200 billion for additional investment. The repatriated profits also increased the money supply and GDP.

This indicates the tax cut are responsible for (1) increased after tax profits for already highly profitable corporations, (2) increased trade deficit, (3) about $80 billion loss (annualized) in government revenue, and (4) increased federal deficit to $114b. One more result – lowering of competition — corporations with large profits can use the funds to buy out and provide stiffer competition to corporations that have miniscule profits or losses.

President Trump’s corporate and income tax cuts enriched corporations, satisfied those already employed and flush with money, and did little to stimulate the national economy.

Note: Deciphering a multitude of economic statistics and using them to evaluate the effectiveness of tax cuts is a complicated task. It is believed that the statistics have been correctly applied and the results are credible. If not, rebuttals to lapses in argument and incorrect formulations, as well as advice to obtaining more precise numbers, are welcome