Category Archives: 2008 Financial Collapse

Is the Run on the Dollar Due to Panic or Greed?

What’s going on in the repo market? Rates on repurchase agreements (“repo”) should be around 2%, in line with the fed funds rate. But they shot up to over 5% on September 16 and got as high as 10% on September 17. Yet banks were refusing to lend to each other, evidently passing up big profits to hold onto their cash – just as they did in the housing market crash and Great Recession of 2008-09.

Since banks weren’t lending, the Federal Reserve Bank of New York jumped in, increasing its overnight repo operations to $75 billion; and on October 23 it upped the ante to $120 billion in overnight operations and $45 billion in longer-term operations.

Why are banks no longer lending to each other? Are they afraid that collapse is imminent somewhere in the system, as with the Lehman collapse in 2008?

Perhaps, and if so the likely suspect is Deutsche Bank. But it looks to be just another case of Wall Street fattening itself at the public trough, using the funds of mom and pop depositors to maximize bank profits and line the pockets of bank executives while depriving small businesses of affordable loans.

Why the Repo Market Is a Big Deal

The repo market allows banks and other financial institutions to borrow and lend to each another, usually overnight. More than $1 trillion in overnight repo transactions collateralized with U.S. government debt occur every day. Banks lacking available deposits frequently go to these markets to fund their loans and finance their trades.

Legally, repos are sales and repurchases; but they function like secured overnight or short-term loans. They work like a pawn shop: the lender takes an asset (usually a federal security) in exchange for cash, with an agreement to return the asset for the cash plus interest the next day unless the loan is rolled over.  The New York Fed currently engages in two types of repo operations: overnight repurchase agreements that unwind the next business day, and 14 day repurchase agreements that unwind after 14 days.

The Fed re-started its large-scale repo operations in September, when borrowing rates shot up due to an unexpectedly high demand for dollars. The Fed said the unusual demand was due largely to quarterly tax payments and Treasury debt settlements. Other factors proposed as contributing to the cash strains include regulatory change and a decline in bank reserves due to “quantitative tightening” (in which the Fed shrunk its balance sheet by selling some of its QE acquisitions back into the market), as well as unusually high government debt issuance over the last four years and a flight into U.S. currency and securities to avoid the negative interest rate policies of central banks abroad.

Panic or Calculated Self-interest?

The Fed’s stated objective in boosting the liquidity available to financial markets was simply to maintain its “target rate” for the interest charged by banks to each other in the fed funds market. But critics were not convinced. Why were private capital markets once again in need of public support if there was no financial crisis in sight? Was the Fed engaged in a stealth “QE4,” restarting its quantitative easing program?

The Fed insisted that it wasn’t, and financial analyst Wolf Richter agreed. Writing on Wolfstreet.com on October 10, he said the banks and particularly the primary dealers were hoarding their long-term securities in anticipation of higher profits. The primary dealers are the 24 U.S. and foreign broker-dealers and banks authorized to deal directly with the U.S. Treasury and the New York Fed. They were funding their horde of long-term securities in the repo market, putting pressure on that market, as the Fed said in the minutes for its July meeting even before repo rates blew out in mid-September. Richter contended:

They’d expected a massive bout of QE, and perhaps some of the players had gleefully contributed to, or even instigated the turmoil in the repo market to make sure they would get that massive bout of QE as the Fed would be forced to calm the waters with QE, the theory went. This QE would include big purchases of long-term securities to push down long-term yields, and drive up the prices of those bonds ….

Prices were high and yields were low, a sign that there was heavy demand. But the dealers were holding out for even higher prices and even lower yields. … Massive QE, where the Fed buys these types of Treasury securities, would accomplish that.

But that’s exactly what the Fed said it wouldn’t do.

What the Fed was doing instead, it said, was to revive its “standing repo facility” – the facility it had used before September 2008, when it abandoned that device in favor of QE and zero interest rate policy. But it insisted that this was not QE, expanding the money supply. Overnight repos are just an advance of credit, which must be repaid the next day. While $165 billion per month sounds like a lot, repo loans don’t accumulate; the Fed is just making short-term advances, available as needed up to a limit of $165 billion.

In Wall Street on Parade on October 28, Pam and Russ Martens pointed to another greed-driven trigger to the recent run on repo. The perpetrator was JPMorgan Chase, the largest bank in the U.S., with $1.6 trillion in deposits. Quoting David Henry on Reuters:

Publicly-filed data shows JPMorgan reduced the cash it has on deposit at the Federal Reserve, from which it might have lent, by $158 billion in the year through June, a 57% decline. … [T]he data shows its switch accounted for about a third of the drop in all banking reserves at the Fed during the period.

This $158 billion drawdown in JPMorgan’s reserve account is evidently what necessitated the Fed’s $165 billion in new repo offerings. But why the large drawdown?

Henry attributed it to regulatory changes that increased the bank’s required reserves, but according to the Martens, something more was involved. “The shocking news,” they write, is that “according to its SEC filings, JPMorgan Chase is partly using Federally insured deposits made by moms and pops across the country in its more than 5,000 branches to prop up its share price with buybacks.” Small businesses are being deprived of affordable loans because the liquidity necessary to back the loans is being used to prop up bank stock prices. Bank shares constitute a substantial portion of the pay of bank executives.

According to Thomas Hoenig, then Vice Chair of the Federal Deposit Insurance Corporation (FDIC), in a July 2017 letter to the U.S. Senate Banking Committee:

[If] the 10 largest U.S. Bank Holding Companies [BHCs] were to retain a greater share of their earnings earmarked for dividends and share buybacks in 2017 they would be able to increase loans by more than $1 trillion, which is greater than 5 percent of annual U.S. GDP.

Four of the 10 BHCs will distribute more than 100 percent of their current year’s earnings, which alone could support approximately $537 billion in new loans to Main Street.

If share buybacks of $83 billion, representing 72 percent of total payouts for these 10 BHCs in 2017, were instead retained, they could, under current capital rules, increase small business loans by three quarters of a trillion dollars or mortgage loans by almost one and a half trillion dollars.

Hoenig was referring to the banks’ own capital rather than to their deposits, but the damage to local credit markets is even worse if deposits are also being diverted to fund share buybacks. Banks are not serving the real economy. They are using public credit backed by public funds to feed their own private bottom lines.

The whole repo rigmarole underscores the sleight of hand on which our money and banking systems are built, and why it is time to change them. Banks do not really have the money they lend. To back their loans, they rely on their ability to borrow from the reserves of other banks, generated from their customers’ deposits; and if those banks withhold their deposits in the insatiable pursuit of higher profits, the borrowing banks must turn to the public purse for liquidity. The banks could not function without public support. They should be turned into public utilities, mandated to serve the interests of the people and the productive economy on which the public depends.

This article was first posted on Truthdig.com

Sick of being a Guinea Pig

Some corporations and governments have used the US public as guinea pigs in uncontrolled experiments conducted without the public’s approval. They were often gambling with our well being when they introduced new products or conducted risky tests. In contrast, there were usually few risks for the CEOs or government officials in charge of these unacknowledged experiments.

If serious harm occurred, it was often very difficult to link the harm to the product or action due to: 1) the long lag time for the development of many diseases; and 2) other possible causes. Moreover, any damages awarded to the injured parties were usually small compared to the product’s profits. The damage awards were viewed simply as a cost of doing business. However, for the victim or his family, money was poor compensation for death or for a disease or disability.

For example, executives of cigarette companies misled the public about how addictive cigarettes were and the horrific damage they caused. Corporations paid fines, but not the executives. Note cigarettes are still on the market.

In the years before the financial crisis of 2008/2009, Wall Street introduced complex investment products that were marketed as being very safe. Unfortunately, rating agencies and regulators abrogated their responsibilities. As a result, these really risky products led to the crisis in which millions of people in this country alone lost their homes and jobs. None of the corporate leaders on Wall Street went to jail for these crimes, and many even received large bonuses.

Exxon began research on climate change about 40 years ago and an internal report concluded that results could be catastrophic and that burning of fossil fuels was a key contributor. Later Exxon shifted its strategy to opposing action on climate change. Due partly to Exxon, the necessary transition from fossil fuels has still not occurred. We are already seeing the impact of a changing climate and it’s likely to become much worse.

More recently, all Boeing 737 Max planes were grounded after two of them crashed killing everyone on board. The Federal Aviation Administration, despite concerns about the process, had allowed Boeing to perform some of the safety inspections. Apparently major problems with the flight control system and its instructions were missed. Will the Boeing CEO and other officials face trial or pay any fines?

There are numerous other products for which corporations misled the public about their safety. Truth and public responsibility have frequently taken a back seat to excess greed. Making matters worse, political appointees chosen to head regulatory agencies often gave priority, despite strong objections from the dedicated staff, to corporate interests over the public interest.

Given this past record, isn’t it finally time for the US to act proactively when a new product is developed, that is, to follow the precautionary principle? If there are legitimate concerns raised about a product, more testing must be performed before the product can be marketed. After all, it is far better to prevent the marketing of a product than being forced to deal with its possibly irreversible impact when it’s shown to be harmful.

Currently, there is a huge push for 5G (fifth generation) technology by the telecommunications industry. According to the industry, 5G offers greater bandwidth than 4G by using the largely untapped much higher portion of the millimeter wave spectrum. Due to its increased speed, 5G is touted as facilitating the ‘Internet of Things’ (IoT), that is, it will allow smart appliances, self-driving cars, etc. to connect to the internet and to talk to one another. 5G will likely complement 4G for some time. Perhaps more importantly, 5G will also be a major new revenue source for industry.

Because the higher millimeter wave frequencies don’t travel very far, tons more microwave antennas will be required. These antennas will be much smaller than those for 4G and will be ubiquitous, for example, on street signs, traffic signals and utility poles. However, privacy and surveillance issues may become even more of a concern with 5G given that these antennas are so close together.

The Federal Communications Commission under its Chairman Ajit Pai, a former Verizon attorney, has adopted rules essentially removing most of the control by local governments to approve or deny placement of cell towers or to consider health or environmental effects for placement. However, on August 9th, a three-judge panel for the US Court of Appeals for Washington, DC Circuit ruled against the part of the FCC deregulation that exempted telecoms from considering the environmental and historic preservation reviews for the placement of 5G antennas.

5G also raises new concerns about health as there are few independent studies documenting its safety. Moreover, some independent studies recently have suggested that the health risks are of concern.

During a February 6, 2019 Senate Committee hearing on 5G, telecommunications industry representatives replied to a question from Senator Richard Blumenthal about industry support for independent health and safety studies. The response was: There are no industry backed studies to my knowledge right now.” Blumenthal replied, “So, we are flying blind here on health and safety”.

Isn’t it time to say no to being a guinea pig? Demand that the FCC and Congress stop the rollout of 5G until independent studies demonstrate its safety.

In addition, given the huge societal changes that are rapidly occurring as a result of the steady stream of technological developments, shouldn’t we say whoa and discuss the implications before going ahead? People, not corporations and their new technology, should determine our future.

Inside the Submissive Void: Propaganda, Censorship, Power, and Control

Nothing appears more surprising to those who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers.

— David Hume, “Of the First Principles of Government”, 1768.

Brief: The use of propaganda and censorship is more frequently associated with totalitarian, corrupt and/or despotic regimes, not modern democracies in the West. Yet the history of how western governments and their ever vigilant overlords in the media, financial and business spheres have controlled the political narrative of the time via these means is a long, storied and ruinous one, going back well before 1914. Along with serving the contemporaneous political objectives of its perpetrators as contrived, such activities often continue to inform our understanding, and cement our interpretation, of history. If as the saying goes, “history repeats itself”, we need look no further as to the main reason why. In this wide ranging ‘safari’ into the disinformation, myth-making, fake news wilderness—aka The Big Shill—Greg Maybury concludes that “It’s the narrative, stupid!”

Controlling the Proles

The following yarn may be apocryphal, but either way the ‘moral of the fable’ should serve our narrative well. The story goes like this: sometime during the height of the Cold War a group of American journalists were hosting a visit to the U.S. of some of their Soviet counterparts. After allowing their visitors some time to soak up the media zeitgeist stateside, most of the Americans expected their guests to express unbridled envy at the professional liberties they enjoyed in the Land of the Free Press.

One of the Russian scribes was indeed compelled to express his unabashed ‘admiration’ to his hosts…in particular, for the “far superior quality” of American “propaganda“. Now it’s fair to say his hosts were taken aback by what was at best a backhanded compliment. After some collegial ‘piss-taking’ about the stereotypes associated with Western “press freedom” versus those of the controlled media in the Soviet system, one of the Americans called on their Russian colleague to explain what he meant. In fractured English, he replied with the following:

It’s very simple. In Soviet Union, we don’t believe our propaganda. In America, you actually believe yours!

As highly amusing as this anecdote is, it masks a disturbing reality—the Russian journo’s jibe doesn’t simply remain true now; that ‘belief’ has become even more delusional, farcical, and above all, dangerous. One suspects that Russian journos today would think much the same. And in few cases has the “delusional”, “farcical”, and “dangerous” nature of this conviction been more evident than with the West’s continued provocations of Russia, with “Skripalgate” in Old Blighty (see here, and here), and “Russia-Gate” stateside (see here, and here) being prime, though far from the only, exemplars we might point to.

Of course, just recently we were all subjected to the ludicrous dog n’ pony show that was the much touted London “media freedom” conference, organised under the auspices of the so-called Media Freedom Coalition (MFC), a UK/Canadian ‘initiative’. As the name suggested, this was the establishment’s lip-service effort to be seen to be supporting or ‘defending’ media freedom, and initiating strategies and frameworks for the ‘protection’ of journalists. For my part I can’t recall another recent event that so perfectly embraced the Orwellian playbook, absent any hint of irony or embarrassment from the parties involved.

To illustrate, after noting that ‘the world is becoming a more hostile place’ for journalists, the MFC website then righteously intones:….’[they face dangers beyond warzones and extremism, including increasing intolerance to independent reporting, populism, rampant corruption, crime, and the breakdown of law and order….’. The cynic might be tempted to add: ‘And that’s just in our Western democracies!’

And who can forget the fatuous “integrity initiative” that preceded it, whose lofty ambitions aimed to ‘defend democracy against disinformation’? This is elite code for limiting free speech, already happening at a rate of knots, with the powers that be ‘setting up new perimeters’ online and offline. The prevailing efforts by a range of people to make it a crime to criticise Israel or boycott the country is arguably the most insidious, egregious example. As well, the attempts by the MSM to designate genuine, independent analysis by alternative media as “fake news” is another one.

Such is the sophistication and ubiquity of the narrative control techniques used today—afforded increasingly by ‘computational propaganda’ via automated scripts, hacking, botnets, troll farms, and algorithms and the like, along with the barely veiled censorship and information gatekeeping practised by Google and Facebook and other tech behemoths—it’s become one of the most troubling aspects of the technological/social media revolution. (See also here, here, here, and here.)

Notably, the MFC conference came and went after organisers saw fit to exclude legitimate Russian news outlets RT and Sputnik, an ideological ‘fashion statement’ thoroughly at odds with the purported premise upon which it was instigated. Moreover, there was little mention of the ‘elephant in the room’ Julian Assange—the person who embodies foremost the disconnect between the practice and the preaching of Western media freedom, to say little of underscoring the irony, self-serving opportunism, and double standards that frequently attend any mainstream debate about what it actually means.

Put bluntly, “media freedom” in the West is increasingly ‘more honoured in the breach than in the observance’, with the London confab all about keeping up appearances to the contrary, an event we might say was conceived of by soulless, demented, establishment shills, ‘…full of sound and fury, signifying nothing’. The surreal spectacle, though, must have induced cognitive dissonance even amongst the pundits, and many head-shaking moments for Assange supporters and genuine truth-seekers alike.

As for Wikileaks and Assange himself, it’s worth noting the attitude of the national security state toward him. After accusing Assange of being a “narcissist”, “fraud”, and “a coward”, and labelling WikiLeaks a “hostile intelligence service”, Secretary of State Mike Pompeo declared he [Assange] was eager to do the bidding of Russia and other American adversaries.Either way, his comments can be taken as more or less representative of Beltway and broader Western opinion, including in my own country Australia. Along with noting that official Washington’s hatred of Assange ‘borders on rabid’, Ted Carpenter offered the following:

[Assange] symbolizes a crucial fight over freedom of the press and the ability of journalists to expose government misconduct without fear of prosecution. Unfortunately, a disturbing number of “establishment” journalists in the United States seem willing—indeed, eager—to throw him to the government wolves.

Lapdogs for the Government

Here was, of course, another surreal spectacle, this time courtesy of one of the Deep State’s most dangerous, reviled, and divisive figures, a notable protagonist in the Russia-Gate conspiracy, and America’s most senior diplomat no less. Not only is it difficult to accept that the former CIA Director actually believes what he is saying, well might we ask, “Who can believe Mike Pompeo?”

And here’s also someone whose manifest cynicism, hypocrisy, and chutzpah would embarrass the much derided scribes and Pharisees of Biblical days. We have Pompeo on record recently in a rare moment of honesty admitting—whilst laughing his ample ass off it should be noted, as if he was recalling some “Boy’s Own Adventure” from his misspent youth with a bunch of his mates down at the local pub—that under his watch as CIA Director, ‘…We lied, cheated, we stole…we had entire training courses.’ It may have been one of the few times in his wretched existence that Pompeo didn’t speak with a forked tongue.

At all events, his candour aside, we can assume safely that this reactionary, monomaniacal, Christian Zionist ‘end-timer’ passed all the Company’s “training courses” with flying colours. According to Matthew Rosenberg of the New York Times, all this did not stop Pompeo, however, from name-checking Wikileaks when it served his own interests. Back in 2016 at the height of the election campaign, he had ‘no compunction…about pointing people toward emails stolen by Russian hackers from the Democratic National Committee and then posted by WikiLeaks.

And this is, of course, The Company we’re talking about, whose past and present relationship with the media might be summed up in two words: Operation Mockingbird (OpMock). Anyone vaguely familiar with the well-documented Grand Deception that was OpMock, arguably the CIA’s most enduring, insidious, and successful psy-ops gambit, will know what we’re talking about. (See here, here, here, and here.) At its most basic, this operation was all about propaganda and censorship, usually operating in tandem to ensure all the bases are covered.

After opining that the MSM is ‘totally infiltrated’ by the CIA and various other agencies, for his part former NSA whistleblower William Binney recently added, ‘When it comes to national security, the media only talk about what the administration wants you to hear, and basically suppress any other statements about what’s going on that the administration does not want get public. The media is basically the lapdogs for the government.’ Even the redoubtable William Casey, Ronald Reagan’s CIA Director back in the day was reported to have said something along the following lines: We know our disinformation program is complete when almost everything the American public believes is false.’

In order to provide a broader and deeper perspective, we should now consider the views of a few others on the subjects at hand, along with some history. In a 2013 piece musing on the modern significance of the practice, my compatriot John Pilger recalled a time when he met Leni Riefenstahl back in 70s and asked her about her films that ‘glorified the Nazis’. Using groundbreaking camera and lighting techniques, Riefenstahl produced a documentary that mesmerized Germans; as Pilger noted, her Triumph of the Will ‘cast Adolf Hitler’s spell’. She told the veteran Aussie journalist the “messages” of her films were dependent not on “orders from above”, but on the “submissive void” of the German public.

All in all, Riefenstahl produced arguably for the rest of the world the most compelling historical footage of mass hysteria, blind obedience, nationalistic fervour, and existential menace, all key ingredients in anyone’s totalitarian nightmare. That it also impressed a lot of very powerful, high profile people in the West on both sides of the pond is also axiomatic: These included bankers, financiers, industrialists, and sundry business elites without whose support Hitler might’ve at best ended up a footnote in the historical record after the ill-fated beer-hall putsch. (See here, and here.)

Triumph” apparently still resonates today. To the surprise of few one imagines, such was the impact of the filmas casually revealed in the excellent 2018 Alexis Bloom documentary Divide and Conquer: The Story of Roger Ailesit elicited no small amount of admiration from arguably the single most influential propagandist of recent times. (Ed. Note: Readers might wish to check out Russell Crowe’s recent portrayal of Ailes in Stan’s mini-series The Loudest Voice, in my view one the best performances of the man’s career.)

In a recent piece unambiguously titled “Propaganda Is The Root Of All Our Problems”, my other compatriot Caitlin Johnstone also had a few things to say about the subject, echoing Orwell when she observed it was all about “controlling the narrative”. Though I’d suggest the greater “root” problem is our easy propensity to ignore this reality, pretend it doesn’t or won’t affect us, or reject it as conspiratorial nonsense, in this, of course, she’s correct. As she cogently observes:

I write about this stuff for a living, and even I don’t have the time or energy to write…about every single narrative control tool that the US-centralized empire has been implementing into its arsenal. There are too damn many of them emerging too damn fast, because they’re just that damn crucial for maintaining existing power structures.

The Discreet Use of Censorship and Uniformed Men

It is hardly surprising that those who hold power should seek to control the words and language people use’ said Canadian author John Ralston Saul in his 1993 book Voltaire’s Bastards–the Dictatorship of Reason in the West. Fittingly, in a discussion encompassing amongst other things history, language, power, and dissent, he opined, ‘Determining how individuals communicate is’…an objective which represents for the power elites ‘the best chance’ [they] have to control what people think. This translates as: The more control ‘we’ have over what the proles think, the more ‘we’ can reduce the inherent risk for elites in democracy.

Clumsy men’, Saul went on to say, ‘try to do this through power and fear. Heavy-handed men running heavy-handed systems attempt the same thing through police-enforced censorship. The more sophisticated the elites, the more they concentrate on creating intellectual systems which control expression through the communications structures. These systems require only the discreet use of censorship and uniformed men.’ In other words, along with assuming it is their right to take it in the first place, ‘those who take power will always try to change the established language’, presumably to better facilitate their hold on it and/or legitimise their claim to it.

For Oliver Boyd-Barrett, ‘democratic theory presupposes a public communications infrastructure that facilitates the free and open exchange of ideas.’  Yet for the author of the recently published RussiaGate and Propaganda: Disinformation in the Age of Social Media, ‘No such infrastructure exists.’ The mainstream media he says, is ‘owned and controlled by a small number of large, multi-media and multi-industrial conglomerates’ that lie at the very heart of US oligopoly capitalism and much of whose advertising revenue and content is furnished from other conglomerates:

The inability of mainstream media to sustain an information environment that can encompass histories, perspectives and vocabularies that are free of the shackles of US plutocratic self-regard is also well documented.

Of course, the word “inability” suggests the MSM view themselves as having some responsibility for maintaining such an egalitarian news and information environment. They don’t, of course, and in truth, probably never really have! A better word would be “unwilling”, or even “refusal”. The MSM all but epitomise the “plutocratic self-regard” that is characteristic of “oligopoly capitalism”. Indeed, the MSM collectively functions as advertising, public relations/lobbying entities for Big Corp, in addition to acting as its Praetorian bodyguard, protecting their secrets, crimes, and lies from exposure. Like all other companies they are beholden to their shareholders (profits before truth), most of whom it can safely be assumed are no strangers to “self-regard”, and could care less about “histories, perspectives and vocabularies” that run counter to their own interests.

It was Aussie social scientist Alex Carey who pioneered the study of nationalism, corporatism, and more so for our purposes herein, the management (read: manipulation) of public opinion, though all three have important links. For Carey, the following conclusion was inescapable: ‘It is arguable that the success of business propaganda in persuading us, for so long, that we are free from propaganda is one of the most significant propaganda achievements of the twentieth century.’ This former farmer from Western Australia became one of the world’s acknowledged experts on propaganda and the manipulation of the truth.

Prior to embarking on his academic career, Carey was a successful sheep grazier. By most accounts, he was a first-class judge of the animal from which he made his early living, leaving one to ponder if this expertise gave him a unique insight into his main area of research! In any event, Carey in time sold the farm and travelled to the U.K. to study psychology, apparently a long-time ambition. From the late fifties until his death in 1988, he was a senior lecturer in psychology and industrial relations at the Sydney-based University of New South Wales, with his research being lauded by such luminaries as Noam Chomsky and John Pilger, both of whom have had a thing or three to say over the years about The Big Shill. In fact, such was his admiration, Pilger described him as “a second Orwell”, which in anyone’s lingo is a big call.

Carey unfortunately died in 1988, interestingly the year that his more famous contemporaries Edward Herman and Chomsky’s book Manufacturing Consent: The Political Economy of the Mass Media was published, the authors notably dedicating their book to him. Though much of his work remained unpublished at the time of his death, a book of Carey’s essaysTaking the Risk Out of Democracy: Corporate Propaganda Versus Freedom and Liberty—was published posthumously in 1997. It remains a seminal work. In fact, for anyone with an interest in how public opinion is moulded and our perceptions are managed and manipulated, in whose interests they are done so and to what end, it is as essential reading as any of the work of other more famous names. This tome came complete with a foreword by Chomsky, so enamoured was the latter of Carey’s work.

For Carey, the three “most significant developments” in the political economy of the twentieth century were:

 a) the growth of democracy;

  1. b) the growth of corporate power; and
  2. c) the growth of propaganda as a means of protecting corporate power against democracy.

Carey’s main focus was on the following:

  1. a) advertising and publicity devoted to the creation of artificial wants;
  2. b) the public relations and propaganda industry whose principal goal is the diversion to meaningless pursuits and control of the public mind; and
  3. c) the degree to which academia and the professions are under assault from private power determined to narrow the spectrum of thinkable (sic) thought.

For Carey, it is an axiom of conventional wisdom that the use of propaganda as a means of social and ideological control is ‘distinctive’ of totalitarian regimes. Yet as he stresses: the most minimal exercise of common sense would suggest a different view: that propaganda is likely to play at least as important a part in democratic societies (where the existing distribution of power and privilege is vulnerable to quite limited changes in popular opinion) as in authoritarian societies (where it is not).’ In this context, ‘conventional wisdom” becomes conventional ignorance; as for “common sense”, maybe not so much.

The purpose of this propaganda barrage, as Sharon Bader has noted, has been to convince as many people as possible that it is in their interests to relinquish their own power as workers, consumers, and citizens, and forego their democratic right to restrain and regulate business activity. As a result the political agenda is now…confined to policies aimed at furthering business interests.’

An extreme example of this view playing itself right under our noses and over decades was the cruel fiction of the “trickle down effect” (TDE)—aka the ‘rising tide that would lift all yachts’—of Reaganomics. One of several mantras that defined Reagan’s overarching political shtick, the TDE was by any measure, decidedly more a torrent than a trickle, and said “torrent” was going up not down.

This reality as we now know was not in Reagan’s glossy economic brochure to be sure, and it may have been because the Gipper confused his prepositions and verbs. Yet as the GFC of 2008 amply demonstrated, it culminated in a free-for all, dog eat dog, anything goes, every man for himself form of cannibal (or anarcho) capitalism—an updated, much improved version of the no-holds-barred mercenary mercantilism much reminiscent of the era of the Gilded Age and the Robber Barons who ‘infested’ it, only one that doesn’t just eat its young, it eats itself!

Making the World Safe for Plutocracy

In the increasingly dysfunctional political economy we inhabit then, whether it’s widgets or wars or anything in between, few people realise the degree to which our opinions, perceptions, emotions, and views are shaped and manipulated by propaganda (and its similarly ‘evil twin’ censorship,) its most adept practitioners, and those elite, institutional, political, and corporate entities that seek out their expertise.

It is now just over a hundred years since the practice of propaganda took a giant leap forward, then in the service of persuading palpably reluctant Americans that the war raging in Europe at the time was their war as well. This was at a time when Americans had just voted their then president Woodrow Wilson back into office for a second term, a victory largely achieved on the back of the promise he’d “keep us out of the War.” Americans were very much in what was one of their most isolationist phases, and so Wilson’s promise resonated with them.

But over time they were convinced of the need to become involved by a distinctly different appeal to their political sensibilities. This “appeal” also dampened the isolationist mood, one which it has to be said was not embraced by most of the political, banking, and business elites of the time, most of whom stood to lose big-time if the Germans won, and/or who were already profiting or benefitting from the business of war.

For a president who “kept us out of the war”, this wasn’t going to be an easy ‘pitch’. In order to sell the war the president established the Committee on Public Information (aka the Creel Committee) for the purposes of publicising the rationale for the war and from there, garnering support for it from the general public. Enter Edward Bernays, the nephew of Sigmund Freud, who’s generally considered to be the father of modern public relations. In his film Rule from the Shadows: The Psychology of Power, Aaron Hawkins says Bernays was influenced by people such as Gustave le Bon, Walter Lippman, and Wilfred Trotter, as much, if not more so, than his famous uncle. Either way, Bernays ‘combined their perspectives and synthesised them into an applied science’, which he then ‘branded’ “public relations”.

For its part the Creel committee struggled with its brief from the off; but Bernays worked with them to persuade Americans their involvement in the war was justified—indeed necessary—and to that end he devised the brilliantly inane slogan, “making the world safe for democracy“. Thus was born arguably the first great propaganda catch-phrases of the modern era, and certainly one of the most portentous. The following sums up Bernays’s unabashed mindset:

The conscious, intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.

The rest is history (sort of), with Americans becoming more willing to not just support the war effort but encouraged to view the Germans and their allies as evil brutes threatening democracy and freedom and the ‘American way of life’, however that might’ve been viewed then. From a geopolitical and historical perspective, it was an asinine premise, of course, but nonetheless an extraordinary example of how a few well chosen words tapped into the collective psyche of a country that was decidedly opposed to any U.S involvement in the war and turned that mindset completely on its head. ‘[S]aving the world for democracy’ (or some ‘cover version’ thereof) has since become America’s positioning statement, ‘patriotic’ rallying cry, and the “Get out of Jail Free” card for both its war and its white collar criminal clique.

At all events it was, by any measure, a stroke of genius on Bernays’s part; by appealing to people’s basic fears and desires, he could engineer consent on a mass scale. It goes without saying it changed the course of history in more ways than one. That the U.S. is to this day still using a not dissimilar meme to justify its “foreign entanglements” is testament to both its utility and durability. The reality as we now know was markedly different, of course. They have almost always been about power, empire, control, hegemony, resources, wealth, opportunity, profit, dispossession, keeping existing capitalist structures intact and well-defended, and crushing dissent and opposition.

The Bewildered Herd

It is instructive to note that the template for ‘manufacturing consent’ for war had already been forged by the British. And the Europeans did not ‘sleepwalk‘ like some ‘bewildered herd’ into this conflagration. For twenty years prior to the outbreak of the war in 1914, the then stewards of the British Empire had been diligently preparing the ground for what they viewed as a preordained clash with their rivals for empire, the Germans.

To begin with, contrary to the opinion of the general populace over one hundred years later, it was not the much touted German aggression and militarism, nor their undoubted imperial ambitions, which precipitated its outbreak. The stewards of the British Empire were not about to let the Teutonic upstarts chow down on their imperial lunch as it were, and set about unilaterally and preemptively crushing Germany and with it any ambitions it had for creating its own imperial domain in competition with the Empire upon which Ol’ Sol never set.

The “Great War” is worth noting here for other reasons. As documented so by Jim Macgregor and Gerry Docherty in their two books covering the period from 1890-1920, we learn much about propaganda, which attest to its extraordinary power, in particular its power to distort reality en masse in enduring and subversive ways. In reality, the only thing “great” about World War One was the degree to which the masses fighting for Britain were conned via propaganda and censorship into believing this war was necessary, and the way the official narrative of the war was sustained for posterity via the very same means.

“Great” maybe, but not in a good way!

In these seminal tomes—World War One Hidden History: The Secret Origins of the First World War and its follow-up Prolonging the Agony: How the Anglo-American Establishment Deliberately Extended WWI by Three-And-A-Half YearsMacgregor and Docherty provide a masterclass for us all of the power of propaganda in the service of firstly inciting, then deliberately sustaining a major war. The horrendous carnage and destruction that resulted from it was, of course, unprecedented, the global effects of which linger on now well over one hundred years later.

Such was the enduring power of the propaganda that today most people would have great difficulty in accepting the following; this is a short summary of historical realities revealed by Macgregor and Docherty that are at complete odds with the official narrative, the political discourse, and the school textbooks:

  1. It was Great Britain (supported by France and Russia) and not Germany who was the principal aggressor in the events and actions that led to the outbreak of war;
  2. The British had for twenty years prior to 1914 viewed Germany as its most dangerous economic and imperial rival, and fully anticipated that a war was inevitable;
  3. In the U.K. and the U.S., various factions worked feverishly to ensure the war went on for as long as possible, and scuttled peacemaking efforts from the off;
  4. key truths about this most consequential of geopolitical conflicts have been concealed for well over one hundred years, with no sign the official record will change;
  5. very powerful forces (incl. a future US president) amongst U.S. political, media, and economic elites conspired to eventually convince an otherwise unwilling populace in America that U.S. entry onto the war was necessary;
  6. those same forces and many similar groups in the U.K. and Europe engaged in everything from war profiteering, destruction/forging of war records, false-flag ops, treason, conspiracy to wage aggressive war, and direct efforts to prolong the war by any means necessary, many of which will rock folks to their very core.

But peace was not on the agenda. When, by 1916, the military failures were so embarrassing and costly, some key players in the British government were willing to talk about peace. This could not be tolerated. The potential peacemakers had to be thrown under the bus. The unelected European leaders had one common bond: They would fight Germany until she was crushed.

Prolonging the Agony details how this secret cabal organised to this end the change of government without a single vote being cast. David Lloyd George was promoted to prime minister in Britain and Georges Clemenceau made prime minister in France. A new government, an inner-elite war cabinet thrust the Secret Elite leader, Alfred Milner into power at the very inner-core of the decision-makers in British politics. Democracy? They had no truck with democracy. The voting public had no say. The men entrusted with the task would keep going till the end and their place-men were backed by the media and the money-power, in Britain, France and America.

Propaganda Always Wins

But just as the pioneering adherents back in the day might never have dreamt how sophisticated and all encompassing the practice of propaganda would become, nor would the citizenry at large have anticipated the extent to which the industry has facilitated an entrenched, rapacious plutocracy at the expense of our economic opportunity, our financial security, our physical environment, and increasingly, our basic democratic rights and freedoms.

We now live in the Age of the Big Shill—cocooned in a submissive void no less—an era where nothing can be taken on face value yet where time and attention constraints (to name just a few) force us to do so; [where] few people in public life can be taken at their word; where unchallenged perceptions become accepted reality; where ‘open-book’ history is now incontrovertible not-negotiable, upon pain of imprisonment fact; where education is about uniformity, function, form and conformity, all in the service of imposed neo-liberal ideologies embracing then prioritising individual—albeit dubious—freedoms.

More broadly, it’s the “Roger Ailes” of this world—acting on behalf of the power elites who after all are their paymasters—who create the intellectual systems which control expression through the communications structures, whilst ensuring…these systems require only ‘the discreet use of censorship and uniformed men.’ They are the shapers and moulders of the discourse that passes for the accepted lingua franca of the increasingly globalised, interconnected, corporatised political economy of the planet. Throughout this process they ‘will always try to change the established language.’

And we can no longer rely on our elected representatives to honestly represent us and our interests. Whether this decision making is taking place inside or outside the legislative process, these processes are well and truly in the grip of the banks and financial institutions and transnational organisations. In whose interests are they going to be more concerned with? We saw all this just after the Global Financial Crisis (GFC) when the very people who brought the system to the brink, made billions off the dodge for their banks and millions for themselves, bankrupted hundreds of thousands of American families, were called upon by the U.S. government to fix up the mess, and to all intents given a blank cheque to so do.

That the U.S. is at even greater risk now of economic implosion is something few serious pundits would dispute, and a testament to the effectiveness of the snow-job perpetrated upon Americans regarding the causes, the impact, and the implications of the 2008 meltdown going forward.

In most cases, one accepts almost by definition such disconnects (read: hidden agendas) are the rule rather than the exception, hence the multi-billion foundation—and global reach and impact—of the propaganda business. This in itself is a key indicator as to why organisations place so much importance on this aspect of managing their affairs. At the very least, once corporations saw how the psychology of persuasion could be leveraged to manipulate consumers and politicians saw the same with the citizenry and even its own workers, the growth of the industry was assured.

As Riefenstahl noted during her chinwag with Pilger after he asked if those embracing the “submissive void” included the liberal, educated bourgeoisie? “Everyone,” she said.

By way of underscoring her point, she added enigmatically: ‘Propaganda always wins…if you allow it’.

Wealth Concentration Drives a New Global Imperialism

Regime changes in Iraq and Libya, Syria’s war, Venezuela’s crisis, sanctions on Cuba, Iran, Russia, and North Korea are reflections of a new global imperialism imposed by a core of capitalist nations in support of trillions of dollars of concentrated investment wealth. This new world order of mass capital has become a totalitarian empire of inequality and repression.

The global 1%, comprised of over 36-million millionaires and 2,400 billionaires, employ their excess capital with investment management firms like BlackRock and J.P Morgan Chase. The top seventeen of these trillion-dollar investment management firms controlled $41.1 trillion dollars in 2017. These firms are all directly invested in each other and managed by only 199 people who decide how and where global capital will be invested. Their biggest problem is they have more capital than there are safe investment opportunities, which leads to risky speculative investments, increased war spending, privatization of the public domain, and pressures to open new capital investment opportunities through political regime changes.

Power elites in support of capital investment are collectively embedded in a system of mandatory growth. Failure for capital to achieve continuing expansion leads to economic stagnation, which can result in depression, bank failures, currency collapses, and mass unemployment.  Capitalism is an economic system that inevitably adjusts itself via contractions, recessions, and depressions. Power elites are entrapped in a web of enforced growth that requires ongoing global management and the formation of new and ever expanding capital investment opportunities. This forced expansion becomes a worldwide manifest destiny that seeks total capital domination in all regions of the earth and beyond.

Sixty percent of the core 199 global power elite managers are from the US, with people from twenty capitalist nations rounding out the balance. These power elite managers and associated one percenters take active part in global policy groups and governments. They serve as advisors to the IMF, World Trade Organization, World Bank, International Bank of Settlements, Federal Reserve Board, G-7 and the G-20. Most attend the World Economic Forum. Global power elites engage actively on private international policy councils such as the Council of Thirty, Trilateral Commission, and the Atlantic Council. Many of the US global elites are members of the Council on Foreign Relations and the Business Roundtable in the US. The most important issue for these power elites is protecting capital investment, insuring debt collection, and building opportunities for further returns.

The global power elite are aware of their existence as a numerical minority in the vast sea of impoverished humanity. Roughly 80% of the world’s population lives on less than ten dollars a day and half live on less than three dollars a day. Concentrated global capital becomes the binding institutional alignment that brings transnational capitalists into a centralized global imperialism facilitated by world economic/trade institutions and protected by the US/NATO military empire. This concentration of wealth leads to a crisis of humanity, whereby poverty, war, starvation, mass alienation, media propaganda, and environmental devastation have reached levels that threaten humanity’s future.

The idea of independent self-ruling nation-states has long been held sacrosanct in traditional liberal capitalist economies. However, globalization has placed a new set of demands on capitalism that requires transnational mechanisms to support continued capital growth that is increasingly beyond the boundaries of individual states. The financial crisis of 2008 was an acknowledgement of the global system of capital under threat. These threats encourage the abandonment of nation-state rights altogether and the formation of a global imperialism that reflects new world order requirements for protecting transnational capital.

Institutions within capitalist countries including government ministries, defense forces, intelligence agencies, judiciary, universities and representative bodies, recognize to varying degrees that the overriding demands of transnational capital spill beyond the boundaries of nation-states.  The resulting worldwide reach motivates a new form of global imperialism that is evident by coalitions of core capitalist nations engaged in past and present regime change efforts via sanctions, covert actions, co-options, and war with non-cooperating nations—Iran, Iraq, Syria, Libya, Venezuela, Cuba, North Korea and Russia.

The attempted coup in Venezuela shows the alignment of transnational capital-supporting states in recognizing the elite forces that oppose Maduro’s socialist presidency. A new global imperialism is at work here, whereby Venezuela’s sovereignty is openly undermined by a capital imperial world order that seeks not just control of Venezuela’s oil, but a full opportunity for widespread investments through a new regime.

The widespread corporate media negation of the democratically elected president of Venezuela demonstrates that these media are owned and controlled by ideologists for the global power elite. Corporate media today is highly concentrated and fully international. Their primary goal is the promotion of product sales and pro-capitalist propaganda through the psychological control of human desires, emotions, beliefs, fears, and values. Corporate media does this by manipulating feelings and cognitions of human beings worldwide, and by promoting entertainment as a distraction to global inequality.

Recognizing global imperialism as a manifestation of concentrated wealth, managed by a few hundred people, is of utmost importance for democratic humanitarian activists.  We must stand on the Universal Declaration of Human Rights and challenge global imperialism and its fascist governments, media propaganda, and empire armies.

QE Forever: The Fed’s Dramatic About-face

“Quantitative easing” was supposed to be an emergency measure. The Federal Reserve “eased” shrinkage in the money supply due to the 2008-09 credit crisis by pumping out trillions of dollars in new bank reserves. After the crisis, the presumption was that the Fed would “normalize” conditions by sopping up the excess reserves through “quantitative tightening” (QT) – raising interest rates and selling the securities it had bought with new reserves back into the market.

The Fed relentlessly pushed on with quantitative tightening through 2018, despite a severe market correction in the fall. In December, Fed Chairman Jerome Powell said that QT would be on “autopilot,” meaning the Fed would continue to raise interest rates and to sell $50 billion monthly in securities until it hit its target. But the market protested loudly to this move, with the Nasdaq Composite Index dropping 22% from its late-summer high.

Worse, defaults on consumer loans were rising. December 2018 was the first time in two years that all loan types and all major metropolitan statistical areas showed a higher default rate month-over-month. Consumer debt – including auto, student and credit card debt – is typically bundled and sold as asset-backed securities similar to the risky mortgage-backed securities that brought down the market in 2008 after the Fed had progressively raised interest rates.

Chairman Powell evidently got the memo. In January, he abruptly changed course and announced that QT would be halted if needed. On February 4th, Mary Daly, president of the Federal Reserve Bank of San Francisco, said they were considering going much further. “You could imagine executing policy with your interest rate as your primary tool and the balance sheet as a secondary tool, one that you would use more readily,” she said. QE and QT would no longer be emergency measures but would be routine tools for managing the money supply. In a February 13th article on Seeking Alpha titled “Quantitative Easing on Demand,” Mark Grant wrote:

If the Fed does decide to pursue this strategy it will be a wholesale change in the way the financial system in the United States operates and I think that very few institutions or people appreciate what is taking place or what it will mean to the markets, all of the markets.

The Problem of Debt Deflation

The Fed is realizing that it cannot bring its balance sheet back to “normal.” It must keep pumping new money into the banking system to avoid a recession. This naturally alarms Fed watchers worried about hyperinflation. But QE need not create unwanted inflation if directed properly. The money spigots just need to be aimed at the debtors rather than the creditor banks. In fact, regular injections of new money directly into the economy may be just what the economy needs to escape the boom and bust cycle that has characterized it for two centuries. Mark Grant concluded his article by quoting Abraham Lincoln:

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.

The quote is apparently apocryphal, but the principle still holds: new money needs to be regularly added to the money supply to avoid an overwhelming debt burden and allow the economy to reach its true productive potential. Regular injections of new money are necessary to avoid something economists fear even more than inflation – the sort of “debt deflation” that took down the economy in the 1930s.

Most money today is created by banks when they make loans. When overextended borrowers pay down old loans without taking out new ones, the money supply “deflates” or shrinks. Demand shrinks with it, and businesses lacking customers close their doors, in the sort of self-feeding death spiral seen in the Great Depression.

As Australian economist Steve Keen observes, today the level of private debt is way too high, and that is why so little lending is occurring. But mainstream economists consider the rate of growth of debt to be irrelevant to macroeconomic policy, because lending is thought to simply redistribute spending power from savers to investors. Conventional economic theory says that banks are merely intermediaries, recirculating existing money rather than creating spending power in their own right. But this is not true, says Prof. Keen. Banks actually create new money when they make loans. He cites the Bank of England, which said in its 2014 quarterly report:

[B]anks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. . . .

In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

Loans create deposits, and deposits make up the bulk of the money supply. Money today is created by banks as a debt on their balance sheets, and more is always owed back than was created, since the interest claimed by the banks is not created in the original loan. Debt thus grows faster than the money supply. When overextended borrowers quit taking out the new loans needed to repay old loans, the gap widens even further. The result is debt deflation – a debt-induced reduction in the new money needed to stimulate economic activity and growth. Thus the need for injections of new money to fill the gap between debt and the money available to repay it.

However, the money created through QE to date has not gone to the consuming public, where it must go to fill this gap. Rather, it has gone to the banks, which have funneled it into the speculative financialized markets. Nomi Prins calls this “dark money” – the trillions of dollars flowing yearly in and around global stock, bond and derivatives markets generated by central banks when they electronically fabricate money by buying bonds and stocks. She writes, “These dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups.” She shows graphically that the rise in dark money is directly correlated with the rise in financial markets.

QE has worked to reverse the debts of the banks and to prop up the stock market, but it has not relieved the debts of consumers, businesses or governments; and it is these debts that will trigger the sort of debt deflation that can take the economy down. Keen concludes that “no amount of exhorting banks to ‘Intermediate’ will end the drought in credit growth that is the real cause of The Great Malaise.” The only way to reduce the private debt burden without causing a depression, he says, is a Modern Debt Jubilee or People’s Quantitative Easing.

QE-funded Debt Relief

In antiquity, as Prof. Michael Hudson observes, debts were routinely forgiven when a new ruler took the throne. The rulers and their advisors knew that debt at interest grew faster than the money supply and that debt relief was necessary to avoid economic collapse from an overwhelming debt overhang. Economic growth is arithmetic and can’t keep up with the exponential growth of debt growing at compound interest.

Consumers need that sort of debt relief today, but simply voiding out their debts as was done in antiquity will not work because the debts are not owed to the government. They are owed to banks and private investors who would have to bear the loss. The alternative suggested by Keen and others is to fill the debt gap with a form of QE dropped not into bank reserve accounts but digitally into the bank accounts of the general public. Debtors could then use the money to pay down their debts. In fact, Keen says it should go first to pay down debts. Non-debtors would receive a cash injection.

Properly managed, these injections need not create inflation. (See my earlier article here.) Money is created as loans and extinguished when they are paid off, so the money used to pay down debt would be extinguished along with the debt. And the cash injections not used to pay down debt would just help fill the gap between real and potential productivity, allowing demand and supply to rise together, keeping prices stable.

A regular injection of money into personal bank accounts has been called a “universal basic income,” but better would be to call it a “national dividend” – something all citizens are entitled to equally, without regard to economic status or ability to work. It would serve as a safety net for people living paycheck to paycheck, but the larger purpose would be as economic policy to stimulate demand and productivity, keeping the wheels of industry turning.

Money might then indeed become a servant of humanity, transformed from a tool of oppression into a means of securing common prosperity. But first the central bank needs to become a public servant. It needs to be made a public utility, responsive to the needs of the people and the economy.

• This article was first published on Truthdig.com.

The Venezuela Myth Keeping Us From Transforming Our Economy

Modern Monetary Theory (MMT) is getting significant media attention these days, after Alexandria Ocasio-Cortez said in an interview that it should “be a larger part of our conversation” when it comes to funding the Green New Deal. According to MMT, the government can spend what it needs without worrying about deficits. MMT expert and Bernie Sanders advisor Prof. Stephanie Kelton says the government actually creates money when it spends. The real limit on spending is not an artificially imposed debt ceiling but a lack of labor and materials to do the work, leading to generalized price inflation. Only when that real ceiling is hit does the money need to be taxed back, and then not to fund government spending but to shrink the money supply in an economy that has run out of resources to put the extra money to work.

Predictably, critics have been quick to rebut, calling the trend to endorse MMT “disturbing” and “a joke that’s not funny.” In a February 1st post on The Daily Reckoning, Brian Maher darkly envisioned Bernie Sanders getting elected in 2020 and implementing “Quantitative Easing for the People” based on MMT theories. To debunk the notion that governments can just “print the money” to solve their economic problems, he raise the specter of Venezuela, where “money” is everywhere but bare essentials are out of reach for many, the storefronts are empty, unemployment is at 33%, and inflation is predicted to hit 1,000,000% by the end of the year.

Blogger Arnold Kling also pointed to the Venezuelan hyperinflation. He described MMT as “the doctrine that because the government prints money, it can spend whatever it wants . . . until it can’t.” He said:

To me, the hyperinflation in Venezuela exemplifies what happens when a country reaches the “it can’t” point. The country is not at full employment. But the government can’t seem to spend its way out of difficulty. Somebody should ask these MMT rock stars about the Venezuela example.

I’m not an MMT rock star and won’t try to expound on its subtleties. (I would submit that under existing regulations, the government cannot actually create money when it spends, but that it should be able to. In fact, MMTers have acknowledged that problem; but it’s a subject for another article.) What I want to address here is the hyperinflation issue, and why Venezuelan hyperinflation and “QE for the People” are completely different animals.

What Is Different About Venezuela

Venezuela’s problems are not the result of the government issuing money and using it to hire people to build infrastructure, provide essential services and expand economic development. If it were, unemployment would not be at 33 percent and climbing. Venezuela has a problem that the US does not have and will never have: it owes massive debts in a currency it cannot print itself, namely US dollars. When oil (its principal resource) was booming, Venezuela was able to meet its repayment schedule. But when oil plummeted, the government was reduced to printing Venezuelan Bolivars and selling them for US dollars on international currency exchanges. As speculators drove up the price of dollars, more and more printing was required by the government, massively deflating the national currency.

It was the same problem suffered by Weimar Germany and Zimbabwe, the two classic examples of hyperinflation typically raised to silence proponents of government expansion of the money supply before Venezuela suffered the same fate. Prof. Michael Hudson, an economic rock star who supports MMT principles, has studied the hyperinflation question extensively. He confirms that those disasters were not due to governments issuing money to stimulate the economy. Rather, he writes, “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”

Venezuela and other countries that are carrying massive debts in currencies that are not their own are not sovereign. Governments that are sovereign can and have engaged in issuing their own currencies for infrastructure and development quite successfully. A number of contemporary and historical examples were discussed in my earlier articles, including in Japan, China, Australia, and Canada.

Although Venezuela is not technically at war, it is suffering from foreign currency strains triggered by aggressive attacks by a foreign power. US economic sanctions have been going on for years, causing at least $20 billion in losses to the country. About $7 billion of its assets are now being held hostage by the US, which has waged an undeclared war against Venezuela ever since George W. Bush’s failed military coup against President Hugo Chavez in 2002. Chavez boldly announced the “Bolivarian Revolution,” a series of economic and social reforms that dramatically reduced poverty and illiteracy and improved health and living conditions for millions of Venezuelans. The reforms, which included nationalizing key components of the nation’s economy, made Chavez a hero to millions of people and the enemy of Venezuela’s oligarchs.

Nicolas Maduro was elected president following Chavez’s death in 2013 and vowed to continue the Bolivarian Revolution. Like Saddam Hussein and Omar Gaddafi before him, he defiantly announced that Venezuela would not be trading oil in US dollars, following sanctions imposed by President Trump.

The notorious Elliott Abrams has now been appointed as special envoy to Venezuela. Considered a criminal by many for covering up massacres committed by US-backed death squads in Central America, Abrams was among the prominent neocons closely linked to Bush’s failed Venezuelan coup in 2002. National Security Advisor John Bolton is another key neocon architect advocating regime change in Venezuela. At a January 28 press conference, he held a yellow legal pad prominently displaying the words “5,000 troops to Colombia,” a country that shares a border with Venezuela. Apparently the neocon contingent feels they have unfinished business there.

Bolton does not even pretend that it’s all about restoring “democracy.” He said on Fox News, “It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela.” As President Nixon said of US tactics against Allende’s government in Chile, the point of sanctions and military threats is to squeeze the country economically.

Killing the Public Banking Revolution in Venezuela

It may be about more than oil, which recently hit record lows in the market. The US hardly needs to invade a country to replenish its supplies. As with Libya and Iraq, another motive may be to suppress the banking revolution initiated by Venezuela’s upstart leaders.

The banking crisis of 2009-10 exposed the corruption and systemic weakness of Venezuelan banks. Some banks were engaged in questionable business practices.  Others were seriously undercapitalized.  Others were apparently lending top executives large sums of money.  At least one financier could not prove where he got the money to buy the banks he owned.

Rather than bailing out the culprits, as was done in the US, in 2009 the government nationalized seven Venezuelan banks, accounting for around 12% of the nation’s bank deposits.  In 2010, more were taken over.  The government arrested at least 16 bankers and issued more than 40 corruption-related arrest warrants for others who had fled the country. By the end of March 2011, only 37 banks were left, down from 59 at the end of November 2009.  State-owned institutions took a larger role, holding 35% of assets as of March 2011, while foreign institutions held just 13.2% of assets.

Over the howls of the media, in 2010 Chavez took the bold step of passing legislation defining the banking industry as one of “public service.”  The legislation specified that 5% of the banks’ net profits must go towards funding community council projects, designed and implemented by communities for the benefit of communities. The Venezuelan government directed the allocation of bank credit to preferred sectors of the economy, and it increasingly became involved in the operations of private financial institutions.  By law, nearly half the lending portfolios of Venezuelan banks had to be directed to particular mandated sectors of the economy, including small business and agriculture.

In an April 2012 article called “Venezuela Increases Banks’ Obligatory Social Contributions, U.S. and Europe Do Not,” Rachael Boothroyd said that the Venezuelan government was requiring the banks to give back. Housing was declared a constitutional right, and Venezuelan banks were obliged to contribute 15% of their yearly earnings to securing it. The government’s Great Housing Mission aimed to build 2.7 million free houses for low-income families before 2019. The goal was to create a social banking system that contributed to the development of society rather than simply siphoning off its wealth.  Boothroyd wrote:

. . . Venezuelans are in the fortunate position of having a national government which prioritizes their life quality, wellbeing and development over the health of bankers’ and lobbyists’ pay checks.  If the 2009 financial crisis demonstrated anything, it was that capitalism is quite simply incapable of regulating itself, and that is precisely where progressive governments and progressive government legislation needs to step in.

That is also where the progressive wing of the Democratic Party is stepping in in the US – and why AOC’s proposals evoke howls in the media of the sort seen in Venezuela.

Article I, Section 8, of the Constitution gives Congress the power to create the nation’s money supply. Congress needs to exercise that power. Key to restoring our economic sovereignty is to reclaim the power to issue money from a commercial banking system that acknowledges no public responsibility beyond maximizing profits for its shareholders. Bank-created money is backed by the full faith and credit of the United States, including federal deposit insurance, access to the Fed’s lending window, and government bailouts when things go wrong. If we the people are backing the currency, it should be issued by the people through their representative government. Today, however, our government does not adequately represent the people. We first need to take our government back, and that is what AOC and her congressional allies are attempting to do.

• First published on Truthdig.com.

Universal Basic Income Is Easier Than It Looks

Calls for a Universal Basic Income have been increasing, most recently as part of the Green New Deal introduced by Rep. Alexandria Ocasio-Cortez (D-NY) and supported in the last month by at least 40 members of Congress. A Universal Basic Income (UBI) is a monthly payment to all adults with no strings attached, similar to Social Security. Critics say the Green New Deal asks too much of the rich and upper-middle-class taxpayers who will have to pay for it, but taxing the rich is not what the resolution proposes. It says funding would primarily come from the federal government, “using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks,” and other vehicles.

The Federal Reserve alone could do the job. It could buy “Green” federal bonds with money created on its balance sheet, just as the Fed funded the purchase of $3.7 trillion in bonds in its “quantitative easing” program to save the banks. The Treasury could also do it. The Treasury has the constitutional power to issue coins in any denomination, even trillion dollar coins. What prevents legislators from pursuing those options is the fear of hyperinflation from excess “demand” (spendable income) driving prices up. But, in fact, the consumer economy is chronically short of spendable income, due to the way money enters the consumer economy. We actually need regular injections of money to avoid a “balance sheet recession” and allow for growth, and a UBI is one way to do it.

The pros and cons of a UBI are hotly debated and have been discussed elsewhere. The point here is to show that it could actually be funded year after year without driving up taxes or prices. New money is continually being added to the money supply, but it is added as debt created privately by banks. (How banks rather than the government create most of the money supply today is explained on the Bank of England website here.) A UBI would replace money-created-as-debt with debt-free money – a “debt jubilee” for consumers – while leaving the money supply for the most part unchanged; and to the extent that new money was added, it could help create the demand needed to fill the gap between actual and potential productivity.

The Debt Overhang Crippling Economies

The “bank money” composing most of the money in circulation is created only when someone borrows, and today businesses and consumers are burdened with debts that are higher than ever before. In 2018, credit card debt alone exceeded $1 trillion, student debt exceeded $1.5 trillion, auto loan debt exceeded $1.1 trillion, and non-financial corporate debt hit $5.7 trillion. When businesses and individuals pay down old loans rather than taking out new loans, the money supply shrinks, causing a “balance sheet recession.” In that situation, the central bank, rather than removing money from the economy (as the Fed is doing now), needs to add money to fill the gap between debt and the spendable income available to repay it.

Debt always grows faster than the money available to repay it. One problem is the interest, which is not created along with the principal, so more money is always owed back than was created in the original loan. Beyond that, some of the money created as debt is held off the consumer market by “savers” and investors who place it elsewhere, making it unavailable to companies selling their wares and the wage-earners they employ. The result is a debt bubble that continues to grow until it is not sustainable and the system collapses, in the familiar death spiral euphemistically called the “business cycle.” As economist Michael Hudson shows in his 2018 book And Forgive Them Their Debts, this inevitable debt overhang was corrected historically with periodic “debt jubilees” – debt forgiveness – something he argues we need to do again today.

For governments, a debt jubilee could be effected by allowing the central bank to buy government securities and hold them on its books. For individuals, one way to do it fairly across the board would be with a UBI.

Why a UBI Need Not Be Inflationary

In a 2018 book called The Road to Debt Bondage: How Banks Create Unpayable Debt, political economist Derryl Hermanutz proposes a central-bank-issued UBI of one thousand dollars per month, credited directly to people’s bank accounts. Assuming this payment went to all US residents over 18, or about 241 million people, the outlay would be close to $3 trillion annually. For people with overdue debt, Hermanutz proposes that it automatically go to pay down those debts. Since money is created as loans and extinguished when they are repaid, that portion of a UBI disbursement would be extinguished along with the debt.

People who were current on their debts could choose whether or not to pay them down, but many would also no doubt go for that option. Hermanutz estimates that roughly half of a UBI payout could be extinguished in this way through mandatory and voluntary loan repayments. That money would not increase the money supply or demand. It would just allow debtors to spend on necessities with debt-free money rather than hocking their futures with unrepayable debt.

He estimates that another third of a UBI disbursement would go to “savers” who did not need the money for expenditures. This money, too, would not be likely to drive up consumer prices, since it would go into investment and savings vehicles rather than circulating in the consumer economy. That leaves only about one-sixth of payouts, or $500 billion, that would actually be competing for goods and services; and that sum could easily be absorbed by the “output gap” between actual and forecasted productivity.

According to a July 2017 paper from the Roosevelt Institute called “What Recovery? The Case for Continued Expansionary Policy at the Fed”:

GDP remains well below both the long-run trend and the level predicted by forecasters a decade ago. In 2016, real per capita GDP was 10% below the Congressional Budget Office’s (CBO) 2006 forecast, and shows no signs of returning to the predicted level.

The report showed that the most likely explanation for this lackluster growth was inadequate demand. Wages have remained stagnant; and before producers will produce, they need customers knocking on their doors.

In 2017, the US Gross Domestic Product was $19.4 trillion. If the economy is running at 10% below full capacity, $2 trillion could be injected into the economy every year without creating price inflation. It would just generate the demand needed to stimulate an additional $2 trillion in GDP. In fact, a UBI might pay for itself, just as the G.I. Bill produced a sevenfold return from increased productivity after World War II.

The Evidence of China

That new money can be injected year after year without triggering price inflation is evident from a look at China. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) remains a modest 2.2%.

Why has all that excess money not driven prices up? The answer is that China’s Gross Domestic Product has grown at the same fast clip as its money supply. When supply (GDP) and demand (money) increase together, prices remain stable.

Whether or not the Chinese government would approve of a UBI, it does recognize that to stimulate productivity, the money must get out there first; and since the government owns 80% of China’s banks, it is in a position to borrow money into existence as needed. For “self-funding” loans – those that generate income (fees for rail travel and electricity, rents for real estate) – repayment extinguishes the debt along with the money it created, leaving the net money supply unchanged. When loans are not repaid, the money they created is not extinguished; but if it goes to consumers and businesses that then buy goods and services with it, demand will still stimulate the production of supply, so that supply and demand rise together and prices remain stable.

Without demand, producers will not produce and workers will not get hired, leaving them without the funds to generate supply, in a vicious cycle that leads to recession and depression. And that cycle is what our own central bank is triggering now.

The Fed Tightens the Screws

Rather than stimulating the economy with new demand, the Fed has been engaging in “quantitative tightening.” On December 19, 2018, it raised the fed funds rate for the ninth time in 3 years, despite a “brutal” stock market in which the Dow Jones Industrial Average had already lost 3,000 points in 2-½ months. The Fed is still struggling to reach even its modest 2% inflation target, and GDP growth is trending down, with estimates at only 2-2.7% for 2019. So why did it again raise rates, over the protests of commentators including the president himself?

For its barometer, the Fed looks at whether the economy has hit “full employment,” which it considers to be 4.7% unemployment, taking into account the “natural rate of unemployment” of people between jobs or voluntarily out of work. At full employment, workers are expected to demand more wages, causing prices to rise. But unemployment is now officially at 3.7% – beyond technical full employment – and neither wages nor consumer prices have shot up. There is obviously something wrong with the theory, as is evident from a look at Japan, where prices have long refused to rise despite a serious lack of workers.

The official unemployment figures are actually misleading. Including short-term discouraged workers, the rate of US unemployed or underemployed workers as of May 2018 was 7.6%, double the widely reported rate. When long-term discouraged workers are included, the real unemployment figure was 21.5%. Beyond that large untapped pool of workers, there is the seemingly endless supply of cheap labor from abroad and the expanding labor potential of robots, computers and machines. In fact, the economy’s ability to generate supply in response to demand is far from reaching full capacity today.

Our central bank is driving us into another recession based on bad economic theory. Adding money to the economy for productive, non-speculative purposes will not drive up prices so long as materials and workers (human or mechanical) are available to create the supply necessary to meet demand; and they are available now. There will always be price increases in particular markets when there are shortages, bottlenecks, monopolies or patents limiting competition, but these increases are not due to an economy awash with money. Housing, healthcare, education and gas have all gone up, but it is not because people have too much money to spend. In fact, it is those necessary expenses that are driving people into unrepayable debt, and it is this massive debt overhang that is preventing economic growth.

Without some form of debt jubilee, the debt bubble will continue to grow until it can again no longer be sustained. A UBI can help correct that problem without fear of “overheating” the economy, so long as the new money is limited to filling the gap between real and potential productivity and goes into generating jobs, building infrastructure and providing for the needs of the people, rather than being diverted into the speculative, parasitic economy that feeds off them.

This article was first published on Truthdig.com

Homelessness, Corporate Welfare and Priorities

The homelessness issue has been a source of controversy at the local, state and national levels for some time now. There has been some limited progress, but this problem has certainly not been resolved humanely. Sometimes lost in the debate about this issue is that the homeless are fellow human beings, including families with children, and most of them really don’t want to be without homes.

Many of these people were and are hard working people who suffered some event, whether it was due to the predatory financial crisis ten years ago, a health crisis, a loss of a good-paying job, an accident, a severe weather-related event, the opioid crisis or other drug addiction, etc. A disproportionately large number are military veterans who suffer from PTSD or other injuries that prevent them from maintaining employment. Many of us could also become homeless if we were faced with something that disrupted our income source.

Despite the valiant efforts of lots of smart and compassionate people, the conditions faced by the homeless in the U.S. are, in general, a disgrace. I had the good fortune to have lived in Western Europe for two years in the 1980s and saw very few homeless people there. Most of these nations had good safety net programs that were a right. Unlike the U.S., self-described as the world’s greatest nation, these Western European nations valued and provided human rights including, for example, the rights to health care, housing and food, rights that don’t exist here.

Much of the lack of progress regarding homelessness in the U.S. is due to a shortage of public funds to deal adequately with the issue. Unfortunately, we accept this shortage instead of questioning why it exists.

An examination of the US budget reveals that over 60% of the discretionary spending goes to funding the military, including expensive weapons that help fuel an arms race. Other nations without an empire spend far less on their militaries. For example, our military budget is greater than the combined total of the seven nations with the next largest military budgets. Note that much of this money does not go for our national security but, instead, is corporate welfare. The military, including our naval fleets and air force as well as the over 800 military bases around the world, is used, among other things, to protect overseas investments of banks and other transnational corporations. More corporate welfare goes to the weapons manufacturers for weapons that often don’t work, are grossly over budget, and/or are unnecessary.

Our political leaders have also greatly increased homelessness in Gaza, Afghanistan, Iraq, Libya, Syria and Yemen, areas or countries we have attacked or where we supported our allies’ attacks.  Shamefully, we almost never consider these people.

One might ask how we have arrived at this situation where our nation doesn’t value human rights of our people or of the others. Instead U.S. leaders sacrifice our rights to the protection of a banking and corporate empire that enriches the already wealthy at the expense of the rest of us and the environment.

A partial answer to the above question is that we have a political system influenced/controlled by money. Our lightly-regulated capitalist system allows the accumulation of vast amounts of money that translate into political power. Laws are then created to further rig the system to benefit the wealthy. Our economic system allows no room for compassion for the other, a system in which looking out for number one and excessive greed rule the day. This neo-liberal economic system stands in stark contrast to the professed teachings of most religions including Christianity.

Unless we change our political and economic systems, we won’t have a government of, by and for the people. Instead we will continue to have a budget that protects and expands the wealth of those in power instead of protecting our true human rights (including the right to shelter) and the right to a clean, safe and sustainable environment. Therefore we require a fundamental change in the U.S. political/economic system. Otherwise, continuing on our current path is likely to result in either a nuclear conflict or worsening climate chaos, both of which threaten human survival.

The Banality of Evil Creeps into those Who Believe They Are Good

I was at a city hall meeting in Beaverton, Oregon, the other day when a few questions I had for the presenters dropped jaws. We’ll get to that later, the jaw-dropping effect I and those of my ilk have when we end up in the controlled boardrooms and chambers of the controllers – bureaucrats, public-private clubs like Chamber of Commerce, Rotary, and both political operatives and those who liken themselves as the great planners of the world moving communities and housing and public commons around a giant chessboard to make things better for and more efficient in spite of us.

Look, I am now a social worker who once was a print journalist who once was a part-time college instructor (freeway flyer adjunct teaching double the load of a tenured faculty) facilitating literature, writing, rhetoric classes, and others. The power of those “planners” and “institutional leadership wonks” and those Deanlets and Admin Class and HR pros and VPs and Provosts to swat down a radical but effective teacher/faculty/instructor/lecturer isn’t (or wasn’t then) so surprising. I was one of hundreds of thousands of faculty, adjunct,  hit with 11th Hour appointments, Just-in-Time gigs and called one-week-into-the-semester with offers to teach temporarily. Then, the next logical step of precarity was when a dean or department head or someone higher got wind of a disgruntled student, or helicopter (now drone) parent who didn’t like me teaching Sapphire or Chalmers Johnson or Earth Liberation Front or Ward Churchill in critical thinking classes, it was common to get only one or many times no classes the following semester. De facto fired. They fought and fought against unemployment benefits.

Here’s one paragraph that got me sanctioned while teaching in Spokane, at both Gonzaga and the community college:

As for those in the World Trade Center… Well, really, let’s get a grip here, shall we? True enough, they were civilians of a sort. But innocent? Gimme a break. They formed a technocratic corps at the very heart of America’s global financial empire—the “mighty engine of profit” to which the military dimension of U.S. policy has always been enslaved—and they did so both willingly and knowingly. Recourse to “ignorance”—a derivative, after all, of the word “ignore”—counts as less than an excuse among this relatively well-educated elite. To the extent that any of them were unaware of the costs and consequences to others of what they were involved in—and in many cases excelling at—it was because of their absolute refusal to see. More likely, it was because they were too busy braying, incessantly and self-importantly, into their cell phones, arranging power lunches and stock transactions, each of which translated, conveniently out of sight, mind and smelling distance, into the starved and rotting flesh of infants. If there was a better, more effective, or in fact any other way of visiting some penalty befitting their participation upon the little Eichmanns inhabiting the sterile sanctuary of the twin towers, I’d really be interested in hearing about it.

We are talking 17 years ago, Ward Churchill. The Little Eichmann reference goes back to the 1960s, and the root of it goes to Hannah Ardent looking at the trial of Adolf Eichmann, more or a less a middle man who helped get Jews into trains and eventually onto concentration camps and then marched into gas chambers. The banality of evil was her term from a 1963 book. So this Eichmann relied on propaganda against Jews and radicals and other undesirables rather than thinking for himself. Careerism at its ugliest, doing the bureaucratic work to advance a career and then at the Trial, displayed this “Common” personality that did not belie a psychopathic tendency. Of course, Ardent got raked over the coals for this observation and for her book, Eichmann in Jerusalem.

When I use the term, Little Eichmann, I broadly hinge it to the persons that live that more or less sacred American Mad Men lifestyle, with 401k’s, trips to Hawaii, cabins at the lake, who sometimes are the poverty pimps in the social services, but who indeed make daily decisions that negatively and drastically affect the lives of millions of people. In the case of tanned Vail skiers who work for Raytheon developing guidance systems and sophisticated satellite tethers and surveillance systems, who vote democrat and do triathlons, that Little Eichmann archetype also comes to mind. Evil, well, that is a tougher analysis  – mal, well, that succinctly means bad. I see evil or bad or maladaptive and malicious on a spectrum, like autism spectrum disorders.

Back to Beaverton City Hall: As I said, last week I was at this meeting about a “safe parking” policy, a pilot program for this city hooked to the Portland Metro area, where Intel is sited, and in one of the fastest growing counties in Oregon. Safe parking is all a jumbo in its implications: but for the city of Beaverton the program’s intent is to get three spaces, parking slots from each entity participating, for homeless people to set up their vehicles from which to live and dine and recreate. Old Taurus sedans, beat-up Dodge vans, maybe a 20-foot 1985 RV covered in black mold or Pacific Northwest moss. The City will put in $30,000 for a non-profit to manage these 15 or 20 spaces, and the city will put in a porta-potty and a small storage pod (in the fourth space) for belongings on each property.

This is how Portland’s tri-city locale plans to “solve” the homeless problem: live in your vehicles, with all manner of physical ailments (number one for Americans, bad backs) and all manner of mental health issues and all manner of work schedules. Cars, the new normal for housing in the world’s number one super power.

This is the band-aid on the sucking chest wound. This is a bizarre thing in a state with Nike as its brand, that Phil Knight throwing millions into a Republican gubernatorial candidate for governor’s coffers. Of course, the necessity of getting churches and large non-profits with a few empty parking spaces for houseless persons is based on more of the Little Eichmann syndrome – the city fathers and mothers, the business community, the cops, and all those elites and NIMBYs (not in my backyard) voted to make it illegal to sleep in your vehicle along the public right away, or, along streets and alleys. That’s the rub, the law was passed, and now it’s $300 fine, more upon second offense, and then, 30 days in jail for repeat offense: for sleeping off a 12-hour shift at Amazon warehouse or 14-hour shift as forklift operator for Safeway distribution center.

So these overpaid uniformed bureaucrats with SWAT armament and armored vehicles and $50 an hour overtime gigs and retirement accounts will be knocking on the fogged-over windows of our sisters/ brothers, aunties/uncles, cousins, moms/dads, grandparents, daughters/sons living the Life of Riley in their two-door Honda Accords.

Hmm, more than 12 million empty homes in the richest country in the world. Millions of other buildings empty. Plots of land by the gazillion. And, we have several million homeless, and tens of millions one layoff, one heart-attack, one arrest away from homelessness.

The first question was why we aren’t working on shutting down the illegal and inhumane law that even allows the police to harass people living in their cars? The next question was why parking spaces for cars? Certainly, all that overstock inventory in all those Pacific Northwest travel trailer and camper lots would be a source of a better living space moved to those vaunted few (20) parking spaces: or what about all those used trailers up for sale on Craig’s List? You think Nike Boy could help get his brethren to pony up a few million for trailers? What worse way to treat diabetic houseless people with cramped quarters? What fine way to treat a PTSD survivor with six windows in a Chevy with eight by four living space for two humans, a dog, and all their belongings and food.

The people at this meeting, well, I know most are empathetic, but even those have minds colonized by the cotton-ball-on-the-head wound solution thinking. All this energy, all the Power Points, all the meeting after meeting, all the solicitation and begging for 20 parking spaces and they hope for a shower source, too, as well as an internet link (for job hunting, etc.)  and maybe a place to cook a meal.

While housing vacancy has long been a problem in America, especially in economically distressed places, vacancies surged in the wake of the economic crisis of 2008. The number of unoccupied homes jumped by 26 percent—from 9.5 to 12 million between 2005 and 2010. Many people (and many urbanists) see vacancy and abandoned housing as problems of distressed cities, but small towns and rural communities have vacancy rates that are roughly double that of metropolitan areas, according to the study.

This is the insanity of these Little Eichmanns: The number of cities that have made homelessness a crime! Then, getting a few churches to open up parking slots for a few people to “try and get resources and wrap around services to end their homelessness.” Here are the facts — the National Law Center on Homelessness and Poverty states there are over 200 cities that have created these Little Eichmann (my terminology) municipal bans on camping or sleeping outside, increasing by more than 50 percent since 2011. Theses bans include various human survival and daily activities of living processes, from camping and sitting in particular outdoor places, to loitering and begging in public to sleeping in vehicles.

I am living hand to mouth, so to speak. I make $17 an hour with two master’s degrees and a shit load of experience and depth of both character and solutions-driven energy. This is the way of the world, brother, age 61, and living the dream in Hops-Blazers-Nike City, in the state of no return Nike/Oregon Ducks. Man oh man, those gridlock days commuting to and from work. Man, all those people outside my apartment building living in their vehicles (I live in Vancouver) and all those people who have to rotate where they live, while calling Ford minivan home, moving their stuff every week, so the Clark County Sheriff Department doesn’t ticket, bust and worse, impound.

I have gotten a few teeth – dentures — for some of these people. Finding funding to have a pretty rancid and nasty old guy in Portland measure, model and mold for a fitting. That’s, of course, if the people have their teeth already pulled out.

Abscesses and limps and back braces and walkers and nephritic livers and dying flesh and scabies and, hell, just plain old BO. Yet, these folk are working the FedEx conveyor belts, packaging those Harry and David apples, folding and stacking all those Black Friday flyers.

Living the high life. And, yet, these Little Eichmanns would attempt to say, or ask, “Why do they all have smart phones . . . they smoke and vape and some of them drink? Wasteful, no wonder they are homeless.”

So that line of thinking comes and goes, from the deplorables of the Trump species to the so-self vaunted elite. They drink after a hard day’s work, these houseless people. Yet, all those put-together Portlanders with two-income heads of household, double Prius driveways, all that REI gear ready for ski season, well, I bicycle those ‘hoods and see the recycle bins on trash day, filled to the brim with IPA bottles, affordable local wine bottles, and bottles from those enticing brews in the spirit world.

So self-medicating with $250K dual incomes, fancy home, hipster lifestyles, but they’d begrudge houseless amputees who have to work the cash register at a Plaid Pantry on 12 hour shifts?

I have been recriminated for not having tenure, for not being an editor, for not retired with a pension, for not having that Oprah Pick in bookstores, for not having a steady career, for working long-ass hours as a social worker. The recrimination is magnificent and goes around all corners of this flagging empire. Pre-Trump, Pre-Obama, Pre-Clinton, Pre-Bush. Oh, man, that Ray-gun:

He had a villain, who was not a real welfare cheat or emblamtic of people needing welfare assistance to live back then in a troubling world of Gilded Age haves and haves not. That was January 1976, when Reagan announced that this Welfare Queen was using ”80 names, 30 addresses, 15 telephone numbers to collect food stamps, Social Security, veterans benefits for four nonexistent, deceased veteran husbands, as well as welfare. Her tax-free cash income alone has been running $150,000 a year.”

Four decades later, we have the same dude in office, the aberration of neoliberalism and collective amnesia and incessant ignorance in what I deem now as Homo Consumopithecus and Homo Retailapithecus. Reagan had that crowd eating out of his hands as he used his B-Grade Thespian licks to stress the numbers – “one hundred and fifty thousand dollars.”

Poverty rose to the top of the public agenda in the 1960s, in part spurred by the publication of Michael Harrington’s The Other America: Poverty in the United States. Harrington’s 1962 book made a claim that shocked the nation at a time when it was experiencing a period of unprecedented affluence: based on the best available evidence, between 40 million and 50 million Americans—20 to 25 percent of the nation’s population—still lived in poverty, suffering from “inadequate housing, medicine, food, and opportunity.”

Shedding light on the lives of the poor from New York to Appalachia to the Deep South, Harrington’s book asked how it was possible that so much poverty existed in a land of such prosperity. It challenged the country to ask what it was prepared to do about it.

So, somehow, all those people reminding me that my job history has been all based on my passions, my avocations, my dreams, that I should be proud being able to work at poverty level incomes as a small town newspaper reporter, or that I was able to teach so many people in gang reduction programs, at universities and colleges, in alternative schools, in prisons and elsewhere, at poverty wages; or that I was able to get poems published here and stories published there and that I have a short story collection coming out in 2019 at zero profit, or that I am doing God’s work as a homeless veterans counselor, again, at those Trump-loving, Bezos-embracing poverty wages.

Oh, man, oh man, all those countries I visited and worked in, all those people whose lives I changed, and here I am, one motorcycle accident away from the poor house, except there is no poor house.

Daily, I see the results of military sexual trauma, of incessant physical abuse as active duty military, infinite anxiety and cognitive disorders, a truck load of amputated feet and legs, and unending COPD, congestive heart failure, and overall bodies of a 70-year-old hampering 30-year-old men and women veterans.

They get this old radical environmentalist, vegan, in-your-face teacher, and a huge case of heart and passion, and I challenge them to think hard about how they have been duped, but for the most part, none of the ex-soldiers have even heard of the (two-star) Major General who wrote the small tome, War is a Racket:

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the World War I a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy?

How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious.

They just take it. This newly acquired territory promptly is exploited by the few — the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.

And what is this bill?

This bill renders a horrible accounting. Newly placed gravestones. Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Depression and all its attendant miseries. Back-breaking taxation for generations and generations.

For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it. Now that I see the international war clouds gathering, as they are today, I must face it and speak out.

More fitting now than ever, General Butler’s words. Structural violence is also the war of the billionaires and millionaires against the rest of us, marks and suckers born every nanosecond in their eyes. Disaster Capitalism is violence. Parasitic investing is war. Hostile takeovers are was. Hedge funds poisoning retirement funds and billions wasted/stolen to manage (sic) this dirty money are war. Forced arbitration is war. PayDay loans are war. Wells Fargo stealing homes is war. Lead in New Jersey cities’ pipes is war. Hog  excrement/toxins/blood/aborted fetuses pound scum sprayed onto land near poor communities is war. Fence lining polluting industries against poor and minority populations is war.

So is making it illegal to sit on a curb, hold a sign asking for a handout;  so is the fact there are millions of empty buildings collecting black mold and tax deferments. War is offshore accounts, and war is a society plugged into forced, perceived and planned obsolescence.

Some of us are battle weary, and others trudge on, soldiers against the machine, against the fascism of the market place, the fascism of the tools of the propagandists.

Some of us ask the tricky questions at meetings and conferences and confabs: When are you big wigs, honchos, going to give up a few hours a week pay for others to get in on the pay? When are you going to open up that old truck depot for homeless to build tiny homes?

When are you going to have the balls to get the heads of Boeing, Nike, Adidas, Intel, the lot of them, to come to our fogged-up station wagon windows in your safe parking zones to show them how some of their mainline workers and tangential workers who support their billions in profits really live?

How many millionaires are chain migrating from California or Texas, coming into the Portland arena who might have the heart to help fund 15 or 30 acres out there in Beavercreek (Clackamas, Oregon) to set up intentional communities for both veterans and non veterans, inter-generational population, with permaculture, therapy dog training, you name it, around a prayer circle, a sweat lodge, and community garden and commercial kitchen to sell those herbs and veggies to those two-income wonders who scoff at my bottle of cheap Vodka while they fly around and bike around on their wine tours and whiskey bar rounds? Micro homes and tiny homes.

My old man was in the Air Force for 12 years, which got the family to the Azores, Albuquerque, Maryland, and then he got an officer commission in the Army, for 20 years, which got the family to Germany, UK, Paris, Spain and other locales, and I know hands down he’d be spinning and turning in his grave if he was alive and here to witness not only the mistreatment of schmucks out of the military with horrendous ailments, but also the mistreatment of college students with $80K loans to be nurses or social workers. He’d be his own energy source spinning in his grave at Fort Huachuca if he was around, after being shot in Korea and twice in Vietnam, to witness social security on the chopping block, real wages at 1970 levels, old people begging on the streets, library hours waning, public education being privatized and dumb downed, and millions of acres of public sold to the “I don’t need no stinkin’ badge” big energy thugs.

I might be embarrassed if he was around, me at age 61, wasted three college degrees, living the dream of apartment life, no 401k or state retirement balloon payment on the horizon, no real estate or stocks and bonds stashed away, nothing, after all of this toil to actually have given to society, in all my communist, atheistic glory.

But there is no shame in that, in my bones, working my ass off until the last breath, and on my t-shirt, I’d have a stick figure, with a stack of free bus tickets, journalism awards, and housing vouchers all piled around me with the (thanks National Rifle Association) meme stenciled on my back:

You can have my social worker and teaching credentials and press passes when you pry them from my cold dead hands!

Larry Summers Trips Out

In a recent Financial Times article, Harvard economics professor and former U.S. Treasury Secretary Lawrence Summers describes his excellent adventure driving from Chicago to Portland. As Summers writes, it “was a trip different to any I had ever taken,” full of revelations for someone who usually only travels long distances by plane.

Summers and his wife took two weeks to drive on two-lane roads across prairies and mountains, from Dubuque to Cody to Bozeman and beyond, “marveling at how much of this vast country is uninhabited.” They were sometimes far from any gas stations and even farther from phone chargers. Occasionally they had no mobile phone service at all!

Okay, so not exactly a Jack Kerouac odyssey, but well outside the Summers Comfort Zones of Cambridge, the Vineyard, Georgetown, Manhattan, et al.

Braving flyover country, separated from his usual tribe of “business leaders and cosmopolitan elites who are more worried about the concerns of their conference mates in Davos than those of their fellow citizens,” Summers marveled that local people in bars and restaurants where he stopped did not seem concerned with the ongoing saga of Brett Kavanaugh’s Supreme Court confirmation process.

And Summers noted with some puzzlement that “People in most of the places we visited have tended to vote Republican in recent decades.”

By far the most surprising revelation of the Summers travelogue was how surprised he seemed to be by what he was seeing.

Because, Larry, Larry, Larry, you’re the reason! Those were your economic policies during the Clinton years that shaped the country many of us have long known, but where you’re just now arriving. You were a senior Treasury official during that entire era and top dog, Secretary of the Treasury, from 1999 to 2001.

You advocated repealing key provisions of the 1933 Glass-Steagall Act that regulated banks for more than sixty years. And you helped frustrate efforts to regulate the derivatives that many analysts blame for the 2008 financial crisis. Foreshadowing Trumpian environmentalism, you argued that the U.S. should not honor the Kyoto Protocol or take the lead in greenhouse gas reductions.

You signed off on NAFTA! Even Ross Perot knew that was a bad idea, sending millions of jobs overseas and creating many of those “romantic ghost towns” and “abandoned cafes, gas stations and hotels” across the nation you are now so astonished to behold. From such ruins an opioid epidemic has arisen, with its suicidal rituals of despair. Did you happen to catch any whiff of that?

How complicit were you? Did you also advise Bill to end “welfare as we know it,” destroying the safety net for millions of our poorest citizens? Did you sign off on Bill’s “three-strikes” crime laws that mandated life sentences for repeat offenders, even non-violent offenders, creating the mass incarceration for which the USA is justly infamous?

You and Clinton were nominal Democrats, but you bent over backwards to placate Newt Gingrich so Bill could get re-elected (only to be impeached). What’s the point of voting for Democrats like you? Of course, we didn’t vote for you.

You returned to government in the Obama years to direct the National Economic Council response to the 2008 economic meltdown that you had helped to create. You bailed out the big banks but not their client victims. That may have pleased your friends in Davos and the Hamptons, Larry, but it didn’t help many people in Dubuque or Bozeman. You’re probably lucky that no one on your journey knew who the hell you were or they might have spoiled your lunch.

Do you really wonder why so many denizens of devastated communities voted Republican in recent decades?

Of course, political choice for the 99 percent consists of Tweedledumb or Tweedledumber. Why would anyone outside the Bos-Wash corridor bother with Brett Kavanaugh’s confirmation process? The fix was in for his Supreme Court appointment from the git go, regardless of what evidence anyone, especially any offended female, might produce to undermine his fitness for the job.

Government of the people, by the people, for the people is a catchy, empty phrase for most of those who live between the coasts or on them, outside the privileged enclaves you frequent, Larry. The incessant media chatter is so much white (and token black) noise. Blah blah. Nothing to do with day-to-day reality.

And those Depression-era public works you admired – the libraries and courthouses, the bridges and national parks – are stately reminders that federal government largesse in communities big and small has vanished in recent decades. “Infrastructure” is just another content-free political buzzword. Like “public schools.” Our permanent war economy leaves less and less for the common good. We are really waging war on ourselves.

So, well, anyway, Larry, despite some of your dubious conclusions about your amazing journey into America’s dark heartland, it’s probably good that you finally caught a glimpse of reality on the ground, where many of your actions have had devastating consequences and most of your fellow citizens actually live.

But Larry, Larry, Larry, what took you so long?