Category Archives: 2008 Financial Collapse

The Stock Market Produces Nothing

On June 2, 2020, Jan Dehn of Ashmore Investment Management Limited remarked:

If central banks were to allow asset prices to reflect the actual underlying fundamentals – record levels of debt, record low productivity growth, record unemployment, record populism – the resulting crashes in financial markets would be so large that most Western economies would be plunged into deep and lasting depressions.1

Putting aside the fact that many countries and regions are already in a deep and lasting economic depression that started long ago, the stock market is once again rising thanks to massive non-stop infusions of digital dollars from the private institutions of the rich like the Federal Reserve. Central banks in other parts of the world are also printing colossal sums of money around the clock. However, no jobs or social programs are being printed.

Like the banks, the stock market produces nothing. Neither creates value. Both are driven by anti-consciousness and both are a drain on the socialized economy.

While the stock market reflects the contradictions inherent to the capitalist economic system and is not an entity unto itself completely detached from the production of goods and services, stocks themselves are not the economy. Stocks are largely property titles to claims to anticipated wealth. An increase in the price of stocks, for example, does not necessarily represent an increase in real wealth. In short, there exists a mediated relationship between the stock market and the actual production of real value.

Today, stock values have become very far removed from the value of real assets and material goods and services. The idea of “bubbles” reflects this growing disconnect between the economy and the stock market. In 2008, for example, most could not even explain what “derivatives” were because they were so convoluted and so far removed from reality. It was next to impossible to determine which claims of wealth (real and fictitious) belonged to whom because toxic financial instruments were essentially made-up and resold over and over again.

In reality, much of the stock market relies on fictitious capital—value beyond what can be realized in the form of commodities. It is capital above and beyond actual capital. Fictitious capital is parasitic and can arise from printing money, lending between banks, compound interest, credit, speculation, fractional banking, fake toxic financial instruments, and more. Fictitious capital spontaneously duplicates and triplicates real capital. It is not real value produced by real workers in the sphere of production. Workers do not produce fictitious capital. Speculation, for example, represents a projected legal claim to value that may or may not materialize in the future. It is a gamble. It is akin to trading in promises and risks, without actual existing funds. Not surprisingly, risk-taking and recklessness have reached new heights under the current surreal circumstances.

The “free-market” under conditions of imperialism causes many individuals and organizations to become blind to reality and the laws of motion of economic development. Many get lost in a radically-detached subjective reality where anything goes (so-called “animal spirits” take over). The market appears as a land of infinite unicorns and rainbows. Material reality dissolves. After all, the private Federal Reserve has repeatedly signaled to the mega-rich that they have nothing to worry about: the super-rich will be taken care of under all circumstances. Since they are “too big to fail and too big to jail,” digital dollars will keep flowing to them perpetually. This eliminates risk for a tiny few.

Keeping in mind the important principle that what is not produced cannot be distributed, the stock market mainly re-divides and re-distributes already-produced value. It represents the parasitism and decay within the economy. It is an arena in which the richest and most powerful capture the wealth seized not only by weaker and smaller owners of capital, but also the pensions and other funds that belong to workers and the public. “Might makes right” prevails throughout the obsolete “dog-eat-dog” capitalist economic system.

The notion that “money begets money” (“capitalization”) is a capital-centered prejudice that fosters the illusion that production does not matter and workers are irrelevant; workers supposedly have nothing to do with the production of social wealth. Money just arises magically. But the fairy tale that “money begets money” is a main reason why the stock market always becomes “over-valued” and eventually crashes. Asset valuations and speculation may extend well beyond the stratosphere, but ultimately they are governed by the laws of motion of economic development and must return to Earth. The chickens always come home to roost, as the saying goes. The “good times” never last. Anxiety and insecurity are always around the corner. Unplanned and anarchic economic activity cannot escape frequent catastrophic reckonings.

Such crashes and the havoc they wreak are inevitable in an economic system based on the private ownership of competing parts of the economy. The generalized anarchy of production in society negates conscious human control and planning of the economy and inevitably leads to disharmony between production and consumption, resulting in regular upheavals and chaos. Sustained prosperity, peace, and stability for all are impossible under such outmoded conditions and further reveal the need for new relations of production. A new direction and motivation for the economy are sorely needed.

The economy, properly speaking, is the relations people enter into with each other in the course of producing value. Every society has to produce and reproduce their means of existence. Any society that fails to do so, even for a few months, will experience serious problems.

Capital is the dominant unequal social relation in modern society. Workers and owners of capital enter into a relation with each other that legally permits owners of capital to seize the added-value stemming from the labor-time of workers. The claims of workers and owners of capital over this added-value clash frequently, and today this unequal social relation is in deep crisis and needs to give way to a new relation in which the working class controls what it alone produces.

To be clear, value comes only from the labor-time of workers producing goods and services in material space-time. Only the work-time of the working class can impart value to commodities. Without workers, there would be no social wealth. In this sense, owners of capital are historically superfluous, a drain on society and the economy. They are not needed. They play no positive role. They are not interested in nation-building and have not solved any problems. Owners of capital are blocking social progress by preventing the rise of new relations of production that are in harmony with the socialized nature of production.

All the chicanery, parasitism, and schemes of the imperialist oligarchs, including the stock market, will only intensify economic and social problems. Inequality, unemployment, and poverty will continue to worsen as private central banks print more money and stock markets climb.

The law of the falling rate of profit is coercive and inescapable. Under capitalism, the amount of capital invested in production eventually necessarily exceeds the profit returned. And eventually a point is reached where there is no incentive to invest, thereby establishing the conditions for crisis. Efforts to counter this law are temporary and ineffective in the long run; such efforts cannot avert crises altogether. Attempts to avert this law lead only to more tragedies for the people. The law of the falling rate of profit is a main reason why, over the past few decades, owners of capital have reduced investments in real production and shifted towards financial parasitism. According to some, the rate of profit in the U.S. has been steadily declining for 70 years.

In the coming months, the domino effects of the current world-wide economic fiasco will become even more painful and visible. The consequences of the global economic collapse will be unfolding for some time. More social unrest is bound to arise at home and abroad. And to be sure, finding a vaccine for Covid-19 will not end the depression or its torturous consequences. The obsolete capitalist economic system has been in decline for decades.

Nonetheless, while multiple overwhelming crises are unfolding simultaneously, this is not the time to drown in pessimism and hopelessness. That won’t help.

Taking up the hard and drawn-out work of developing independent thinking and politics is critical at this juncture. There are openings to do this. The social unrest unfolding worldwide provides an opening to advance ideas, thinking, perspectives, and measures that advance the general interests of society and its members. For instance, people everywhere are raising demands for accountability for state violence in its many forms. They are also rejecting past symbols of oppression. A new form of consciousness is unfolding and its direction and content are up for grabs. When far more people start to say things like “nothing surprises me anymore,” it is clear there are significant contradictions in motion.

Growing social unrest is intensifying the need to reject the ideas, views, agendas, arrangements, and fear-mongering of the rich and the democrats and republicans who govern on their behalf. Conditions are compelling more people to take nothing for granted and to investigate things and phenomena for themselves. There is a heightened sense of skepticism about information from mainstream sources. In the current rapidly-changing context, one must persistently engage in a conscious act of finding out and not automatically believe the rich and their political and media representatives. The mainstream media and the cartel political parties work tirelessly to impose ideas, agendas, and arrangements on people that deprive them of their own outlook, motivation, drive, and path forward.

Women, students, youth, workers, and senor citizens must take up serious investigation and analysis of what is unfolding and connect the dots. Action with no analysis won’t work. Nor will blindly repeating what the mainstream media or social media says. That just increases confusion and incoherence. Resorting to knee-jerk reactions, one-liners, or clever idioms will not do either. The need for analysis and coherence is more critical than ever.

Old ideas and old ways of thinking are not going to be useful moving forward. People must establish their own reference points and their own perspective on how to move society forward. A new direction, aim, motivation, and organization of society and the economy are needed and possible.

People everywhere want real decision-making power over their lives, society, and economy. This power is key to unleashing the human factor essential to building the new and guaranteeing the rights of all.

  1. Jan Dehn. June 2, 2020. “When market valuations become too high to fall“, June 2, 2020.

The Shallow Deep-State Goes Deeper as It Moves Toward Martial Law

I am not trying to be cute and play with words.  That title is meant to convey what it says, so let me explain.

The people who own the United States and their allies around the world have a plan.  It is so simple that it is extremely devious.  Their plan has been in operation for many years.  It has most people bamboozled because it is Janus-faced by design, overt one day, covert the next, but both faces operate under one controlling head.  Some call this head the Deep-State. Even the Deep-State calls itself the Deep-State in a double fake. It is meant to make people schizoid, which it has.

The so called Deep-State has been given many names over the years.  I will not bore you with them, except to say that it was once called the power elite.  They are the upper classes, the super wealthy who control the financial institutions, Wall Street, the intelligence agencies, the corporate media, the internet, the military, and the politicians. They are multinational.

They are the wealthy nihilists who care not one jot for the rest of the world. They operate in secret, yet also run above-ground organizations such as the World Bank (WB), the World Health Organization (WHO), the U.S. Agency for International Development (USAID), etc. Their bloodstream runs on war, the preparations for war, and economic exploitation of the world.  All wealthy people are not party to their machinations, but they are almost always complicit in profiting from their crimes, unless they are very stupid.  Or play stupid.  Since I am talking about a great confidence game, that is quite common.

Other people, all other classes, the poor, middle-classes, even a portion of the upper middle classes mean nothing to the power elite unless they can serve their interests.  They are always waging class warfare to maintain their domination and control. Their recent version of this class war is underway in the United States and in many other countries. As of today, they are using race fears to create chaos and outrage to disguise their class warfare that is leading to the imposition of martial law.  Soon they will shift back to the coronavirus fraud. Back and forth, in and out, now you see it, now you don’t.

By shutting down the world’s economy, they have destroyed the livelihoods of hundreds of millions of people and are creating poverty on a vast scale. Much famine and death will follow.  In the United States alone, 40-45 million people have applied for unemployment insurance and job loss is the greatest since the Great Depression. The reason:  a massive propaganda campaign created around Covid-19 fear porn.

This class war is not new, but it is conducted today at warp speed since these people control the technology that has allowed them vastly increased power. In the U.S.A., it is conducted as usual under the guise of Republicans versus Democrats, the two representative political factions that are the faces of the controlled “opposition,” who are actually allies in the larger confidence game.  Keeping “hope” alive is central to their strategy.  Mind control is what they do.  Speed is their greatest ally.  Race is central to their game plan.  They always say they are protecting us.

It is all a lie.  A show.  Nothing but a spectacle for the gullible.  A shadow play.

The current president, Donald Trump, is the choice of one faction of these psychopaths.  This year, Joseph Biden, is the shaky presumptive choice of the other. Both are deranged puppets.  Regular people fight over who is better or worse because they are living inside what Jim Garrison, the former District Attorney of New Orleans and the only person to ever bring a trial in the assassination of President Kennedy, long ago called “the doll’s house.”

It is a place where illusions and delusions replace reality.  It is 24/7 propaganda. It keeps people engaged. It gives them something to argue about, one team to root for.  It’s a sport. It is similar to Plato’s Cave.  Fire has been replaced with electronic lighting and screens, but little has changed.

The sick system of exploitation is oiled and greased with the tantalizing bait of hope dangled for the masses.  Shit slogans like “We are all in this together.”

But there is no hope for this system.

But when the propaganda is so slick that it creates a double-bind, people grasp at any neurotic “solution” out of frustration.  As I write, huge angry crowds are out in the streets protesting the sick murder of a black man, George Floyd, by a white cop. Police infiltrators have started violent looting.  Chaos reigns, as planned. Such killings are routine, but someone turned a switch for this one when just yesterday operation corona lockdown with its fear and fake statistics had everyone cowering behind masks at home as the economic lives of vast numbers were destroyed in a flash.  For today, the masquerade is in the streets. Many good people are caught up in it.  In a few days the scene will shift and we can expect another “bombshell.”  These surprises will keep happening one after another for the foreseeable future.  Shock and Awe for the home crowd.  The war come home.  The controllers know you can’t wage war against the rest of the world unless you do so at home as well.

When one group within the deep-state won the internecine battle in 2016 and “shocked” the country with the election of the comical Trump, the other deep-state group called the Democrats, immediately set in motion a plan to try to oust him or to make it seem as if they were trying to do so. The naïve thought this may happen, and their deluded yearning has been stretched until the 2020 presidential election, although some probably think Trump might go before then.  He won’t.

So many people have destroyed their minds and relationships because they can’t see through the fraud.

Early in 2017, as the outgoing front man for the CIA/warfare/Wall St. state, Barack Obama, left his time bombs for the future. The pink pussy hats were sent out marching to open the show.  Russia-gate was launched; eventually impeachment was tried. The Democrats. with their media allies, went on a non-stop attack. It was all so obvious, so shallow in its intent, as it was meant to be. But millions who were in the doll house were outraged, obsessed, frantic with rage.  They bought the con-game. Both those who hate Trump and those that love him have spent almost four years foaming at the mouth, breathless.

Trump was cast as the personification of evil.  A relentless attack on Trump began and has continued all this time. It is pure theater. Trump remains at the helm, as planned, holding the Bible aloft in a style reminiscent of a Bible thumping Klansman from The Birth of a Nation. Only the ignorant thought it might have been different.  He knows how to perform his role. He is a fine actor.  He outrages, spews idiocies, as he is supposed to do. That Mussolini style stance, that absurd hair, the pout.  Just perfect for an arch-villain. It’s so obvious that it isn’t. Herein lies the trick.

And who profits from his policies?  The super-rich, of course, the power-elite.  Who just stole 6-10 trillion dollars of public money under the hilariously named Cares Act?  The super-rich, of course, the deep-state.  It was a bi-partisan bank robbery from the public treasury carried out under the shadow of Covid-19, whose phony hyped up numbers were used to frighten the populace into lockdown mode as the Republican and Democratic bank robbers smiled in unison and announced forcefully, “We care!”  We are here to protect you.

Remember how Barack Obama “saved” us by bailing out Wall St. and the big banks to the tune of trillions in early 2009.  Then waged unending wars. Left black Americans bereft.  He cared, too, didn’t he?  Our leaders always care.

Obama was the black guy in the white hat. Trump is the white guy in the black hat. Hollywood on the Potomac, as Gary Wills called it when Ronald Reagan was the acting-president.  Now Obama’s war-loving side-kick, the pale-faced, twisted talking Biden is seriously offered as an alternative to the Elvis impersonator in the White House.  This is the false left/right dichotomy that has the residents of the doll’s house in its grip.

If you can’t see what’s coming, you might want to break out of the house, take off your mask, go for a walk, and take some deep breaths.  The walls are closing in.

Knees will be on everyone’s necks in the months ahead.

Another Bank Bailout Under Cover of a Virus

Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.  

When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the Act actually said was that the next time the banks failed, they would be subject to “bail ins” – the funds of their creditors, including their large depositors, would be tapped to cover their bad loans.

Then bail-ins were tried in Europe. The results were disastrous.

Many economists in the US and Europe argued that the next time the banks failed, they should be nationalized – taken over by the government as public utilities. But that opportunity was lost when, in September 2019 and again in March 2020, Wall Street banks were quietly bailed out from a liquidity crisis in the repo market that could otherwise have bankrupted them. There was no bail-in of private funds, no heated congressional debate, and no public vote. It was all done unilaterally by unelected bureaucrats at the Federal Reserve.

“The justification of private profit,” said President Franklin Roosevelt in a 1938 address, “is private risk.” Banking has now been made virtually risk-free, backed by the full faith and credit of the United States and its people. The American people are therefore entitled to share in the benefits and the profits. Banking needs to be made a public utility.

The Risky Business of Borrowing Short to Lend Long

Individual banks can go bankrupt from too many bad loans, but the crises that can trigger system-wide collapse are “liquidity crises.” Banks “borrow short to lend long.” They borrow from their depositors to make long-term loans or investments while promising the depositors that they can come for their money “on demand.” To pull off this sleight of hand, when the depositors and the borrowers want the money at the same time, the banks have to borrow from somewhere else. If they can’t find lenders on short notice, or if the price of borrowing suddenly becomes prohibitive, the result is a “liquidity crisis.”

Before 1933, when the government stepped in with FDIC deposit insurance, bank panics and bank runs were common. When people suspected a bank was in trouble, they would all rush to withdraw their funds at once, exposing the fact that the banks did not have the money they purported to have. During the Great Depression, more than one-third of all private US banks were closed due to bank runs.

But President Franklin D. Roosevelt, who took office in 1933, was skeptical about insuring bank deposits. He warned, “We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future.” The government had a viable public alternative, a US postal banking system established in 1911. Postal banks became especially popular during the Depression, because they were backed by the US government. But Roosevelt was pressured into signing the 1933 Banking Act, creating the Federal Deposit Insurance Corporation that insured private banks with public funds.

Congress, however, was unwilling to insure more than $5,000 per depositor (about $100,000 today), a sum raised temporarily in 2008 and permanently in 2010 to $250,000. That meant large institutional investors (pension funds, mutual funds, hedge funds, sovereign wealth funds) had nowhere to park the millions of dollars they held between investments. They wanted a place to put their funds that was secure, provided them with some interest, and was liquid like a traditional deposit account, allowing quick withdrawal. They wanted the same “ironclad moneyback guarantee” provided by FDIC deposit insurance, with the ability to get their money back on demand.

It was largely in response to that need that the private repo market evolved. Repo trades, although technically “sales and repurchases” of collateral, are in effect secured short-term loans, usually repayable the next day or in two weeks. Repo replaces the security of deposit insurance with the security of highly liquid collateral, typically Treasury debt or mortgage-backed securities. Although the repo market evolved chiefly to satisfy the needs of the large institutional investors that were its chief lenders, it also served the interests of the banks, since it allowed them to get around the capital requirements imposed by regulators on the conventional banking system. Borrowing from the repo market became so popular that by 2008, it provided half the credit in the country. By 2020, this massive market had a turnover of $1 trillion a day.

Before 2008, banks also borrowed from each other in the fed funds market, allowing the Fed to manipulate interest rates by controlling the fed funds rate. But after 2008, banks were afraid to lend to each other for fear the borrowing banks might be insolvent and might not pay the loans back. Instead the lenders turned to the repo market, where loans were supposedly secured with collateral. The problem was that the collateral could be “rehypothecated,” or used for several loans at once; and by September 2019, the borrower side of the repo market had been taken over by hedge funds, which were notorious for risky rehypothecation. Many large institutional lenders therefore pulled out, driving the cost of borrowing at one point from 2% to 10%.

Rather than letting the banks fail and forcing a bail-in of private creditors’ funds, the Fed quietly stepped in and saved the banks by becoming the “repo lender of last resort.” But the liquidity crunch did not abate, and by March the Fed was making $1 trillion per day available in overnight loans. The central bank was backstopping the whole repo market, including the hedge funds, an untenable situation.

In March 2020, under cover of a national crisis, the Fed therefore flung the doors open to its discount window, where only banks could borrow. Previously, banks were reluctant to apply there because the interest was at a penalty rate and carried a stigma, signaling that the bank must be in distress. But that concern was eliminated when the Fed announced in a March 15 press release that the interest rate had been dropped to 0.25% (virtually zero). The reserve requirement was also eliminated, the capital requirement was relaxed, and all banks in good standing were offered loans of up to 90 days, “renewable on a daily basis.” The loans could be continually rolled over. And while the alleged intent was “to help meet demands for credit from households and businesses at this time,” no strings were attached to this interest-free money. There was no obligation to lend to small businesses, reduce credit card rates, or write down underwater mortgages.

The Fed’s scheme worked, and demand for repo loans plummeted. Even J.P. Morgan Chase, the largest bank in the country, has acknowledged borrowing at the Fed’s discount window for super cheap loans. But the windfall to Wall Street has not been shared with the public. In Canada, some of the biggest banks slashed their credit card interest rates in half, from 21 percent to 11 percent, to help relieve borrowers during the COVID-19 crisis. But US banks have felt no such compunction. US credit card rates dropped in April only by half a percentage point, to 20.15%. The giant Wall Street banks continue to favor their largest clients, doling out CARES Act benefits to them first, emptying the trough before many smaller businesses could drink there.

In 1969, Prime Minister Indira Gandhi nationalized 14 of India’s largest banks, not because they were bankrupt (the usual justification today) but to ensure that credit would be allocated according to planned priorities, including getting banks into rural areas and making cheap financing available to Indian farmers.  Congress could do the same today, but the odds are it won’t. As Sen. Dick Durbin said in 2009, “the banks … are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

Time for the States to Step In

State and local governments could make cheap credit available to their communities, but today they too are second class citizens when it comes to borrowing. Unlike the banks, which can borrow virtually interest-free with no strings attached, states can sell their bonds to the Fed only at market rates of 3% or 4% or more plus a penalty. Why are elected local governments, which are required to serve the public, penalized for shortfalls in their budgets caused by a mandatory shutdown, when private banks that serve private stockholders are not?

States can borrow from the federal unemployment trust fund, as California just did for $348 million, but these loans too must be paid back with interest, and they must be used to cover soaring claims for state unemployment benefits. States remain desperately short of funds to repair holes in their budgets from lost revenues and increased costs due to the shutdown.

States are excellent credit risks – far better than banks would be without the life-support of the federal government. States have a tax base, they aren’t going anywhere, they are legally required to pay their bills, and they are forbidden to file for bankruptcy. Banks are considered better credit risks than states only because their deposits are insured by the federal government and they are gifted with routine bailouts from the Fed, without which they would have collapsed decades ago.

State and local governments with a mandate to serve the public interest deserve to be treated as well as private Wall Street banks that have repeatedly been found guilty of frauds on the public. How can states get parity with the banks? If Congress won’t address that need, states can borrow interest-free at the Fed’s discount window by forming their own publicly-owned banks. For more on that possibility, see my earlier article here.

As Buckminster Fuller said, “You never change things by fighting the existing reality. To change something, create a new model that makes the old model obsolete.” Post-COVID-19, the world will need to explore new models; and publicly-owned banks should be high on the list.

Turbo-charging The Great Depression and Great Repression

Great Depression

Since the 2008 economic collapse engineered by Wall Street, most of the world’s economies have been running on gas fumes and more bankrupt schemes and failed policies. Few, if any, economies have been able to return to weak pre-2008 economic growth levels. Even the Chinese and Indian economic “miracles” are not that miraculous.

To be sure, major capitalist economies have been declining since the late 1970s, and for the past few years imperialist organizations like the IMF and World Bank have routinely revised downward multiple economic growth estimates that are low to begin with.

Financialization, stock market manipulation, the refusal to strengthen the productive sector that actually produces what people need (the real economy), large declines in consumer spending, enormous sums of debt in all forms and at all levels,1 more personal and corporate bankruptcies, endless money printing by central banks around the world, extremely low interest rates, and the non-stop invention of toxic financial instruments, “utilities,” “vehicles,” “facilities,” and arrangements to rescue the rich now dominate the retrogressive direction of humanity. These and other antisocial developments point to a historically exhausted ruling class that is unfit to rule. The financial oligarchy has no solutions for any of the serious problems confronting humanity, just more tragedies.

The last few months have unmasked the most massive economic collapse the U.S. has ever experienced. Officially, 30 million people in the U.S. lost their jobs in about 6 weeks. The St. Louis Federal Reserve noted recently that around 50 million Americans may be unemployed in the coming months, resulting in an “official” unemployment rate exceeding 32 percent.2 The jobless rate at the height of the 1930s Great Depression was 25%.

Millions have also seen their pensions and savings drop substantially and rapidly. Not surprisingly, the mental, emotional, and physical health of millions has also further deteriorated, causing more harm than the coronavirus itself. Insecurity and uncertainty have never been higher.

Globally, a bigger disaster is unfolding. An April 29, 2020 press release from the International Labor Organization states that, “The continued sharp decline in working hours globally due to the COVID-19 outbreak  means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed.”3

The coming months and years will be horrendous for millions worldwide. More intense social, economic, and political turmoil is bound to arise. Few will be unaffected by coming developments.

Fortunately, the fear, hysteria, and disinformation built into the ready-made “COVID Pandemic” narrative promoted by the rich and their allies has not caused everyone to become anticonscious or paralyzed. Many have not abandoned conscious acts of finding out the truth.

The “COVID Pandemic” did not trigger, induce, or cause the current economic meltdown, it simply diverted attention from it temporarily and provided convenient cover for what was inevitable.4 For years, many have been accurately predicting a major stock market crash and a deepening of the economic depression that started 12 years ago. It was not a matter of if the house of cards would collapse, but when it would break down. Many actually came very close to predicting the exact timeline of the economic collapse as well. There really were no mysteries or secrets.

Capitalism has always lurched from crisis to crisis, ensuring instability and insecurity for millions. Chaos, anarchy, and violence are inherent core features of the so-called “free market.” Economic upheavals, slumps, recessions, booms, and busts are fellow-travelers of this anachronistic economic system that further destroys the social and natural environment with each passing day. This will continue so long as conscious human control of the economy is blocked by existing political-economic arrangements.

While comparing the current economic catastrophe to the deep economic crises of 2008 or the 1930s has some value, this value is limited because the breadth, depth, and nature of the current economic collapse is far greater and qualitatively different given the all-around level of development and interconnectedness of contemporary societies and economies around the world. Wealth and power are also more concentrated in fewer hands today than just 12 years ago. Geo-political and geo-economic configurations have evolved and changed as well, presenting humanity with new realities. And never before has most of the world been put on a top-down extended lockdown (a prison term) for months at the same time.

In this dark context, while various benefits, stimulus checks, waivers and extensions for bills, and other social insurance programs are being considered and implemented in order to provide people with some relief, these are all temporary and inadequate—they are largely “stop-gap measures.” Student loans, for example, will have to start being repaid eventually, as will rent, credit cards, mortgages, car payments, service fees, and utility bills.

Here it is worth recalling that the U.S. Federal Reserve recently printed $4 trillion to prop up the big banks and big business. This is in addition to the $2.2 trillion CARES Act passed a few weeks ago,5 which also benefits mainly the rich. Most of the money that was printed in three seconds will not go to the majority. It will not substantively help the millions who have been harmed by the severe economic collapse that could have been prevented if decisions were made by the people and not the financial oligarchy. This is even more alarming when considering that the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, recently stated that the Federal Reserve has an “infinite amount of cash” to bail out the super-rich.

But if an “infinite amount of cash” can arbitrarily and instantly be printed on a whim, why should anything go unfunded? Why not fully fund excellent healthcare for all right now? Why not fully fund America’s public schools? Why not eliminate $1.7 trillion of humiliating student debt immediately? Why should anyone even pay taxes? What meaning does money have if it bears no relationship to the real world and the sphere of production that humanity depends on? Replacing real value with fictitious value is not a recipe for social progress; it lays the groundwork for deeper problems down the road.

Great Repression

The current crisis will lead to the further concentration of wealth in even fewer hands. Everything will be even more monopolized by the super-rich.

Monopoly in economics means monopoly in politics, and monopoly in politics means less democracy and more authoritarianism, repression, surveillance, and war. Things cannot be otherwise in the final and highest stage of capitalism. Economic parasitism and decay will only intensify until a new direction, motivation, and outlook for society and the economy are established by the people themselves.

On May 2, 2020, the Washington Post wrote:

In a matter of months, tens of millions of people in dozens of countries have been placed under surveillance. Governments, private companies and researchers observe the health, habits and movements of citizens, often without their consent…. At least 27 countries are using data from cellphone companies to track the movements of citizens, according to Edin Omanovic, the advocacy director for Privacy International, which is keeping a record of surveillance programs.6

It is no accident that we are seeing a broad range of enhanced police-state arrangements being put into place during the “COVID Pandemic.” Police-state arrangements are multiplying, often out of sight and with zero scrutiny.

New police-state arrangements include stepping up the number of police departments in dozens of U.S. cities using more drones to “protect public health”—usually without telling anyone. A dystopian atmosphere has even emerged in some places.

We are also seeing big tech companies like Apple launching “tracing apps” so as to “find infected people” and  “improve public health.” Such apps will gather, store, and misuse gigantic quantities of private information, creating much anguish and many headaches for people in a variety of ways.

State “digital checkpoints” have also conveniently emerged during the “COVID Pandemic.” Some states are now setting up arrangements that require those driving into their state to stop at some place close to the state border and complete some sort of digital personal inventory and questionnaire before being permitted to enter the state. Putting aside the many embarrassing logistical and technical problems that have emerged with these poorly-conceived antisocial arrangements, this is nonetheless an effective way to gather extensive private and personal information—and it is probably unconstitutional; certainly not something Americans are used to or should get used to.

Perhaps worse, several mayors of major cities have publicly, casually, and openly called on people to snitch on each other in the name of “improving public heath.” Snitching all of a sudden has been cynically turned into a virtue, even a heroic act. But is such an approach a progressive, responsible, and ethical way to build a modern society that honors the dignity and personality of people? How is sowing distrust, animosity, and fear between neighbors helpful and acceptable? Is this how unity and mutual support are built?

A massive top-down effort to shift many different services and work online is also exposing millions more to frequent invasions of their privacy and hacking, not to mention a range of technology-related health problems (e.g., headaches, eye strain, neck pain, hand problems, shoulder tension, and sedentary behavior). Technology is great in many ways, but it is also excellent at delivering many problems.

For a more extensive and detailed breakdown of the many other aggressive and criminalizing surveillance tactics being used by authorities at home and abroad, see John W. Whitehead’s March 3, 2020 article, “Coronavirus vs. the Mass Surveillance State: Which Poses the Greater Threat?”

Fight for the Alternative

It is critical to consciously reject and condemn police state arrangements and government abdicating its responsibility to the people. As grim and sometimes apocalyptic as the dark situation we are collectively suffering through feels like at times, all is not lost. All is not doom and gloom.

Contradictions, cracks, and openings abound.

While various things have (inadvertently) improved during the “COVID Pandemic,” such as less pollution around the world, clearer skies, cleaner lakes, fewer car accidents, and lower gas prices, to name just a few, we are experiencing a deep crisis, and a crisis presents various opportunities.

What happens next is significant.

It is critical to deprive the rich and their allies of any initiative to further wreck everything. Their ideas and policies are bankrupt and do not serve the public interest. The rich and their retinue, including the cartel political parties, must not be allowed to set the agenda for anything. They have no real solutions.

People are tired of being told what to do by unaccountable “leaders” and politicians, and they reject the ready-made diversionary answers “leaders” are tirelessly promoting. People do not want any more top-down “solutions” that leave them out of the equation. They want to be the decision-makers themselves, which means giving more than occasional “input” that is routinely disregarded or used against them anyway. Decision-making and “input” are not the same. The entire polity must be part of all decision-making. Sovereignty lies with the polity, not “leaders,” different factions of the rich, and politicians.

People can and must boldly speak out in their own name and be accountable only to  themselves and their peers. The polity is very creative and has many intelligent solutions for everything, as well as a strong desire to enact such solutions.

It is harmful to rely on the rich and their political representatives. It is best to avoid them altogether and find new ways to come together and think about, analyze, and discuss new directions, motivations, agendas, and programs for society and the economy. There is an alternative to the highly untenable status quo.

  1. Credit card debt is about one trillion dollars in America and has grown significantly since the 2008 economic collapse. See Bureau of Consumer Financial Protection. August 2019. The consumer credit card market.
  2. Miguel Faria-e-Castro.  “Back-of-the-envelope estimates of next quarter’s unemployment rate“. Federal Reserve Bank of St. Louis, March 24, 2020.
  3. International Labor Organization.  “ILO: As job losses escalate, nearly half of global workforce at risk of losing livelihoods“, April 29, 2020.
  4. It is worth noting that, intended or not, social and physical distancing rules have played a big role in blocking rallies, protests, and demonstrations against assaults on people’s rights and livelihoods.
  5. Note that millions of people have still not received their meager stimulus check.
  6. Kareem Fahim, Min Joo Kim and Steve Hendrix.  “Cellphone monitoring is spreading with the coronavirus.  So is an uneasy tolerance of surveillance“. Washington Post, May 2, 2020.

Pandemic Fallout Includes Handout to Rich Retirees

The coronavirus pandemic is worlds apart from the financial meltdown of 2008-09. Even so the government’s response was identical in one telltale way. Congress once again gave a special dose of tender loving care to taxpayers who need it the least.

The 2008 bailout suspended annual required minimum distribution (RMDs) from retirement accounts. Surprise, surprise, the same tax break showed up in the $2.2 trillion stimulus signed by President Trump.

Waiving RMDs is welcome news for the well-heeled. They have plenty of income outside their IRAs and 401(k)s. They’re fine with passing up a distribution, and seriously happy to avoid the taxes that come with it.

(A quick history: The first retirement accounts didn’t need any waiver to avoid taxes. In addition to untaxed contributions and tax-free capital gains, there were no mandatory distributions either. The party ended when lawmakers finally laid down a time limit. A 1986  tax reform mandated minimum distributions starting at age 70 1/2. It’s been reset at 72 effective this year.)

The new waiver lets retirees off the hook for 2020. The hook is still in, though, for the millions who actually rely on their accounts and can’t get along without withdrawals.

They’ll be forced to do what the affluent have been spared from doing. They’ll have to liquidate holdings at prices battered by the fastest stock market crash in U.S. history (including three record drops in the Dow over just eight days). Wall Street has rallied since its late-March low but remains well in the red for the year.

The stimulus bill did slightly better for younger workers. Account withdrawals prior to age 59 ½ normally incur a 10 percent penalty; taxpayers financially harmed by the pandemic won’t have to pay that penalty. Income taxes can be spread out over three years, but the full amounts remain due. There’s also an option to repay the distribution back into a retirement plan.
Withdrawing savings ahead of time, however, carries a penalty all its own. David Certner, the legislative counsel and policy director for the AARP, put it this way:

It’s never a good idea. It’s particularly not a good idea when the market is down. But for people who are in really bad shape, this may be their one emergency alternative.

Now for a look at the waiver from a fiscal perspective: the government will be losing billions at the worst possible time.

The stock market racked up giant gains last year. RMDs are based on account balances as of December 31, so the taxes on distributions were certain to hit new highs. Revenues have steadily trended up as millions of boomers reach minimum distribution age. Coupled with the market’s 2019 performance, bumper RMD taxes should be flowing into the Treasury.

Now most of those dollars will likely be staying in the pockets of taxpayers whose pockets are already full. At the same time, Congress will be shoveling money out the door in the biggest national bailout ever.

Waiving RMDs is tax policy tilted toward the upper incomes. The timing makes it financially foolhardy as well. The waiver might last only a year, just as the first one did. Even so, a government already starving for revenue may never make up what it’s now passing up.

Some have argued that now isn’t the time to worry about who gets what, or for what reasons, or anything else. All that can come later; the only thing government should concern itself with at the moment is doing everything possible to help as many people as possible.

Point taken. We’re all in this together. It’s an extraordinary time demanding extraordinary measures. Nothing else matters.

All the same, suspending RMDs has little to do with going all out for America. It has everything to do with going all in for those at the top.

Same old, same old. Here’s to a post-pandemic with fewer tax favors for the haves.

Surgeon General Links COVID-19 to 9/11

“This will be our Pearl Harbor moment, our 9/11 moment.”  That was U.S. Surgeon General Jerome Adams on April 5, touring the Sunday morning shows to warn of the worst week yet for pandemic death in the United States.

During these interviews, the Surgeon General also managed to show off his mask-making skills, an unwitting allusion to the fact that — contrary to the spectacular events of 1941 and 2001 (not to mention his own previous “guidance” against the efficacy of face masks) — we are far more likely on the brink of a 1918 moment.  Not that the Surgeon General’s mission was to raise awareness of pandemics past.  Instead, Adams’ appearances were wholly in keeping with the Trump regime’s pivot to an ominous war footing media strategy following the March 11 “National Emergency” declaration — after, of course, previously downplaying the COVID’s threat to the country’s health.  Mixed messaging is trending pretty hard these days…

The comparison to the 1918 influenza catastrophe is both more topically relevant, given the kind of emergency, as well as more historically significant.   According to consensus estimates, 675,000 Americans died during the 1918-19 pandemic.  Despite a recent scaremongering model predicting as many as 1.2 to 2 million deaths from the current coronaviral outbreak, it appears that the sheer number of fatalities will be far less this time.  It should also be noted that the U.S. population has tripled during the last hundred years.  In other words, despite the botched initial response to this novel coronavirus, the United States is considerably ahead of the “Curve” in relation to the 1918 flu. Even the briefly touted worst case scenario for the current coronaviral flu falls far short of U.S. Army Surgeon General Victor Vaughn’s 1918 concern that “If the epidemic continues its mathematical rate of acceleration, civilization could easily disappear from the face of the earth.”  This time around, not even the most morbid of forecasts have suggested anything like an extinction event.  The Apocalypse will have to hold its horses — at least for now…

So, there’s some good news in this historical comparison of the two pandemics; we’re all still going to die, but more than likely not because of this novel pathogen, the COVID-19.  Nevertheless, there’s another factor to consider in this virological context.  One hundred years ago, the United States was manifestly on the rise, whereas today, America is evidently in decline.  To use a boxing metaphor:  the 1918 influenza “haymaker,” staggering though it was, did little to impede the relentless onslaught of the “American Century,” while a flurry of jabs — initially dismissed as mere feints — from the COVID-19 has the American Leviathan on the ropes, and the canvas is calling.  How is this possible?

To rephrase and re-focus Surgeon General Adams’ unwittingly uncanny linkage a click:  America never left “our 9/11 moment.”

Back in 2001, if not for the 9/11 event and its anthrax annex, the collapse of Enron would have been the Story of the Year.  Enron had been the poster child of a financially driven “Boom!” economy.  By the time the NYC Trade Towers and the Pentagon were struck, out of a clear blue sky, the almighty Stock Market had already been quietly slumping, and the sham of Enron was about to be unmasked for the fraud that it was (See:  Alex Gibney’s “Enron: the Smartest Guys in the Room,” 2005).  Enron’s free fall showed that fakery and swindling were really the order of the day on Wall St — not to mention Pennsylvania Avenue, and the rest of Washington, DC.  While the “New American Century” had gotten off to an obviously disastrous start, the dubiously elected Bush 2 regime, which was practically inert on the day of those fateful attacks, proceeded to make things much worse in the wake of 9/11.

Slapped into reaction, America invaded Afghanistan and Iraq in quick succession.  These pointless and unwinnable wars soon morphed into defense industry gravy trains costing trillions of dollars.  Among other delusionalisms at the time, Americans were told that Iraqi oil would pay for that invasion; it never did.  In fact, the price per gallon of gasoline actually doubled between 9/11 and the peak of Iraq-Attack-Two in 2006, amounting to an undeclared war-time gas tax on the average American.  Many a clever economist has failed to note this radical, and ironic, price spike in a commodity so basic to the fossil fuel-driven United States.  Was it, perchance, merely an unintended consequence of the war?

In other domestic news, 0% financing became the rage, encouraging a shook-up consumer-citizenry to splurge in a post-9/11 climate of “shock and awe.” For its part, Wall St was allowed to indulge in toxic financial instruments like “derivatives” and “credit default swaps” tied to an ever more precarious “subprime mortgage market.”  All of this crazy credit and debt-based speculative activity finally melted down into the famous financial crash of 2008, the second coming of which we are experiencing now.

Against this grim backdrop, the previously obscure Barack Obama was voted into office.  Obama had promised “Change,” but only managed to deliver more “paper,” as the Federal Reserve turned to the money printing presses to bail out the big failing banks.  Wall St was saved! — but with no “change” for the little guys and gals. Ever the smooth functionary in his caretaker role, Obama signaled to Wall St that their “free for few” could continue, unfettered…

Today, the bailout business is booming again, but this time with a small twist: Main St is being thrown back a few crumbs by the fake, financialized economy, even as the big stakeholders take most of the cake, just like in 2008. Presumably, this helicoptering of crumbs will forestall some form of a citizens revolt, which may be inevitable, given that 22 million Americans — a truly staggering number — have lost their jobs in the first 4 weeks since Trump’s national emergency declaration, with millions more to soon follow.  Under the cover of this novel coronavirus, the Debt-cult of post-9/11 America, led by the Fed, is reaping the whirlwind it has sown, with most Americans left holding an increasingly empty bag.

Wither the way out of this dire Scylla and Charybdis strait, caught between a pandemic and possible national bankruptcy?  If history, and especially recent history, is any guide, things can get a whole lot worse…

In a way to begin again:  Historically, War and Pestilence go hand-in-hand, or, horse-to-horse, to pursue an equestrian to apocalyptical metaphor. “Chariot!  Taxi! Uber!”  So it’s right there, at the beginning of the western literary tradition, in Homer’s Iliad, the opening lines, declaring the Wrath of Achilleus.  Well, the well-benched Achaeans investing the citadel of “oriental” Troy (a.k.a. Ilium), had been there 9 circling years, with no positive return (Nostos?) on their investment to show for it; and, furthermore, were confounded by a plague wasting their idle ranks, which were hostilely ringed around Troy.  Who knew “Whatever for?” this mad adventurous war was still for?

Today, the masked-mad-Max-man of the World, the Lone Ranger United States, is somewhat in the role of Achilleus, and sidelined by the COVID-19, however much this disease-aster was brought upon itself by its own self or selves, truths be told!  Not that Donald J Trump’s anyone’s Agamemnon — except that Agamemnon’s far from the strongest leader in the western literary tradition; indeed, he’s a distinctly bipolar, moody figure, a fact which lightly re-invites the Trump analogy…

So, who is the “Achilleus” figure in the COVID-19 registrar?  Probably the Death Star, also known as the Pentagon.  Remember:  the American Leviathan’s been thrust upon the ropes of ever thinning Finance, and Betsy Ross has been laid off, which means that the Flag’s a no masking position, so to speak, based on Betsy’s whereabouts, which are currently unknown, even to the Gates-Bezos-Jimmy Buffet-to-Zuckerberg crowd, even though their surrogates will social-media about it all day, including the likely hideouts of Betsy Ross during this global-national health crisis, and everything else besides…

In 1918, a plague of disproportionate lethality followed quickly upon a war that was never expected to yield the same — and yet it did, beyond everyone’s expectations, which were only considered to be “realistic” until the realistic actually happened.  Historians rarely connect the influenza to the Great War that epigraphed it.  Whatever else the current crop of Historians think, pandemic flu is a “Thing”;  not necessarily John Carpenter’s, which is another “Thing,” whatever anyone thinks about that movie, or cinematic photo-play, as pre-COVID films may now in the future be known by.  The “Thing” has changed, and it’s a Trickster virus.  No one’s safe, but everyone’s OK.  That’s the deal.  People die every day, but no one really knows why.  Every death is a question mark:  or, is it just a death? Did the United States of America just invade Saudi Arabia, or is that simply another fake news story?  After all, there was an “imminent threat,” some sources from Iran reported…

War is the Disease!  This is the headline that we all must understand, sooner rather than later…

Bloated

The Bloated Defense Department

The so-called Defense Department does not live up to its name; instead, the acronym and word Bloated describe this behemoth and its budget. We the people need defense, but the trillion tax dollars we spend a year do not provide it. Instead they pay for:

Some 800 US overseas military bases

Endless wars

The Nuclear Arsenal

Billions for Bombers and Battleships

These do nothing to make us secure.  They have benefited few people in the US or the world, apart from bloated arms manufacturers and merchants, bloated military contractors, bloated generals, bloated politicians, and those in the high echelons of bloated corporate power.

The Defense We Need

We need a strong, universal free-of-charge public health system to help defend us against COVID-19 and other health problems; the bloated Department steals resources that could provide the true security for a healthy population.

We need defense against climate disruption and heating of the planet. The bloated Department aggravates these problems by emitting more greenhouse gases than any other institution in the world and more than many entire nations.

We needed defense against Wall Street predators when they stole home ownership from millions of people – especially people of color and other working class people – during the 2008 economic meltdown. The bloated Department offered no defense.

Women especially need defense against sexual harassment, assault and domestic violence. The bloated Department exacerbates these problems: military culture promotes sexism, Military Sexual Trauma is rampant; the military protects sexual perpetrators of women and men within its ranks .

Veterans who have survived the endless and earlier wars need to heal from physical, emotional and moral injury.  The resources offered are inadequate and often inappropriate.  The bloated Department’s promotion of war and hyper-masculinity tends to aggravate veterans’ trauma.

The bloated Department did not even defend against a military attack on its own headquarters on September 11, 2001.  Nobody in the Pentagon lost their job over that “failure”.

Truth in Language

Toward the goal of ending war and militarism, let us have truth in language.  Bloated is an accurate word and acronym for the Department that oversees the enormously wasteful and destructive military. As the COVID pandemic makes painfully clear, funds now squandered on the military are urgently needed to meet the real security needs of US people – for healthcare, housing, infrastructure, and food security.

Let us also stop using the term defense expenditures when referring to costs that do not defend human beings from real problems that we face.  Military or war expenditures are accurate terms.

Changes in language in our writings, speeches, conversations and on social media can help change thinking and help lead to right action.

Welcome to the Era of the Great Disillusionment

This is a column I have been mulling over for a while but, for reasons that will be instantly obvious, I have been hesitant to write. It is about 5G, vaccines, 9/11, aliens and lizard overlords. Or more accurately, it isn’t.

Let me preface my argument by making clear I do not intend to express any view about the truth or falsity of any of these debates – not even the one about reptile rulers. My refusal to publicly take a view should not be interpreted as my implicit endorsement of any of these viewpoints because, after all, only a crazy tinfoil hat-wearing conspiracy theorist sympathiser would refuse to make their views known on such matters.

Equally, my lumping together of all these disparate issues does not necessarily mean I see them as alike. Rather, they are presented in mainstream thinking as similarly proof of an unhinged, delusional, conspiracy-oriented mindset. I am working within a category that has been selected for me.

Truth and falsehood are not what this column is about. To consider these topics solely on the basis of whether they are true or false would distract from the critical thinking I wish to engage in here – especially since critical thinking is so widely discouraged in our societies. I want this column to deny a safe space to anyone emotionally invested in either side of these debates. (Doubtless, that will not deter those who would prefer to make mischief and misrepresent my argument. That is a hazard that comes with the territory.)

I am focusing on this set of issues now because some of them have been playing out increasingly loudly on social media as we cope with the isolation of lockdowns. People trapped at home have more time to explore the internet, and that means more opportunities to find often obscure information that may or may not be true. These kinds of debates are shaping our discursive landscape, and have profound political implications. It is these matters, not questions of truth, I want to examine in this column.

Social media and 5G

Let’s take 5G as an example. I am not a scientist, and I have done no research on 5G. Which is a very good reason why no one should be interested in what I have to say about the science or the safety of 5G. But like many people active on social media, I have been made aware – often with little choice on my part – of online debates about 5G and science.

Like TV presenter Eamonn Holmes, I have inevitably gained an impression of that debate. To a casual viewer, the debate looks (and we are discussing here appearances only) something like this:

a) State scientific advisers, as well as scientists whose jobs or research are financed by the mobile phone industry, are very certain that there are no dangers associated with 5G.

b) A few scientists (real ones, not evangelical pastors pretending to be former Vodafone executives) have warned that there has not been independent research on the health effects of 5G, that the technology has been rushed through for commercial reasons, and that the possible dangers posed long term to our health from constant exposure have not been properly assessed.

c) Other scientists in this specialist field, possibly the majority, are keeping their peace.

Business our new god

That impression might not be true. It may be that that is just the way social media has made the debate look. It is possible that on the contrary:

  • the research has been vigorously carried out, even if it does not appear to have been widely reported in the mainstream media,
  • mobile phone and other communication industries have not financed what research there is in an attempt to obtain results helpful to their commercial interests,
  • the aggressively competitive mobile phone industry has been prepared to sit back and wait several years for all safety issues to be resolved, unconcerned about the effects on their profits of such delays,
  • the industry has avoided using its money and lobbyists to buy influence in the corridors of power and advance a political agenda based on its commercial interests rather than on the science,
  • and individual governments, keen not to be left behind on a global battlefield in which they compete for economic, military and intelligence advantage, have collectively waited to see whether 5G is safe rather than try to undercut each other and gain an edge over allies and enemies alike.

All of that is possible. But anyone who has been observing our societies for the past few decades – where business has become our new god, and where corporate money seems to dominate our political systems more than the politicians we elect – would have at least reasonable grounds to worry that corners may have been cut, that political pressure may have been exerted, and that some scientists (who are presumably human like the rest of us) may have been prepared to prioritise their careers and incomes over the most rigorous science.

Looney-tunes conspiracism

Again, I am not a scientist. Even if the research has not been carried out properly and the phone industry has lobbied sympathetic politicians to advance its commercial interests, it is still possible that, despite all that, 5G is entirely safe. But as I said at the start, I am not here to express a view about the science of 5G.

I am discussing instead why it is not unreasonable or entirely irrational for a debate about the safety of 5G to have gone viral on social media while being ignored by corporate media; why a very mainstream TV presenter like Eamonn Holmes might suggest – to huge criticism – a need to address growing public concerns about 5G; why such concerns might quickly morph into fears of a connection between 5G and the current global pandemic; and why frightened people might decide to take things into their own hands by burning down 5G masts.

Explaining this chain of events is not the same as justifying any of the links in that chain. But equally, dismissing all of it as simply looney-tunes conspiracism is not entirely reasonable or rational either.

The issue here is not really about 5G, it’s about whether our major institutions still hold public trust. Those who dismiss all concerns about 5G have a very high level of trust in the state and its institutions. Those who worry about 5G – a growing section of western populations , it seems – have very little trust in our institutions and increasingly in our scientists too. And the people responsible for that erosion of trust are our governments – and, if we are brutally honest, the scientists as well.

Information overload

Debates like the 5G one have not emerged in a vacuum. They come at a moment of unprecedented information dissemination that derives from a decade of rapid growth in social media. We are the first societies to have access to data and information that was once the preserve of monarchs, state officials and advisers, and in more recent times a few select journalists.

Now rogue academics, rogue journalists, rogue former officials – anyone, in fact – can go online and discover a myriad of things that until recently no one outside a small establishment circle was ever supposed to understand. If you know where to look, you can even find some of this stuff on Wikipedia (see, for example, Operation Timber Sycamore).

The effect of this information overload has been to disorientate the great majority of us who lack the time, the knowledge and the analytical skills to sift through it all and make sense of the world around us. It is hard to discriminate when there is so much information – good and bad alike – to digest.

Nonetheless, we have got a sense from these online debates,  reinforced by events in the non-virtual world, that our politicians do not always tell the truth, that money – rather than the public interest – sometimes wins out in decision-making processes, and that our elites may be little better equipped than us – aside from their expensive educations – to run our societies.

Two decades of lies

There has been a handful of staging posts over the past two decades to our current era of the Great Disillusionment. They include:

  • the lack of transparency in the US government’s investigation into the events surrounding 9/11 (obscured by a parallel online controversy about what took place that day);
  • the documented lies told about the reasons for launching a disastrous and illegal war of aggression against Iraq in 2003 that unleashed regional chaos, waves of destabilising migration into Europe and new, exceptionally brutal forms of political Islam;
  • the astronomical bailouts after the 2008 crash of bankers whose criminal activities nearly bankrupted the global economy (but who were never held to account) and instituted more than a decade of austerity measures that had to be paid for by the public;
  • the refusal by western governments and global institutions to take any leadership on tackling climate change, as not only the science but the weather itself has made the urgency of that emergency clear, because it would mean taking on their corporate sponsors;
  • and now the criminal failures of our governments to prepare for, and respond properly to, the Covid-19 pandemic, despite many years of warnings.

Anyone who still takes what our governments say at face value … well, I have several bridges to sell you.

Experts failed us

But it is not just governments to blame. The failings of experts, administrators and the professional class have been all too visible to the public as well. Those officials who have enjoyed easy access to prominent platforms in the state-corporate media have obediently repeated what state and corporate interests wanted us to hear, often only for that information to be exposed later as incomplete, misleading or downright fabricated.

In the run-up to the 2003 attack on Iraq, too many political scientists, journalists and weapons experts kept their heads down, keen to preserve their careers and status, rather than speak up in support of those rare experts like Scott Ritter and the late David Kelly who dared to sound the alarm that we were not being told the whole truth.

In 2008, only a handful of economists was prepared to break with corporate orthodoxy and question whether throwing money at bankers exposed as financial criminals was wise, or to demand that these bankers be prosecuted. The economists did not argue the case that there must be a price for the banks to pay, such as a public stake in the banks that were bailed out, in return for forcing taxpayers to massively invest in these discredited businesses. And the economists did not propose overhauling our financial systems to make sure there was no repetition of the economic crash. Instead, they kept their heads down as well, in the hope that their large salaries continued and that they would not lose their esteemed positions in think-tanks and universities.

We know that climate scientists were quietly warning back in the 1950s of the dangers of runaway global warming, and that in the 1980s scientists working for the fossil-fuel companies predicted very precisely how and when the catastrophe would unfold – right about now. It is wonderful that today the vast majority of these scientists are publicly agreed on the dangers, even if they are still trapped in a dangerous caution by the conservatism of scientific procedure. But they forfeited public trust by leaving it so very, very late to speak up.

And recently we have learnt, for example, that a series of Conservative governments in the UK recklessly ran down the supplies of hospital protective gear, even though they had more than a decade of warnings of a coming pandemic. The question is why did no scientific advisers or health officials blow the whistle earlier. Now it is too late to save the lives of many thousands, including dozens of medical staff, who have fallen victim so far to the virus in the UK.

Lesser of two evils

Worse still, in the Anglosphere of the US and the UK, we have ended up with political systems that offer a choice between one party that supports a brutal, unrestrained version of neoliberalism and another party that supports a marginally less brutal, slightly mitigated version of neoliberalism. (And we have recently discovered in the UK that, after the grassroots membership of one of those twinned parties managed to choose a leader in Jeremy Corbyn who rejected this orthodoxy, his own party machine conspired to throw the election rather than let him near power.) As we are warned at each election, in case we decide that elections are in fact futile, we enjoy a choice – between the lesser of two evils.

Those who ignore or instinctively defend these glaring failings of the modern corporate system are really in no position to sit smugly in judgment on those who wish to question the safety of 5G, or vaccines, or the truth of 9/11, or the reality of a climate catastrophe, or even of the presence of lizard overlords.

Because through their reflexive dismissal of doubt, of all critical thinking on anything that has not been pre-approved by our governments and by the state-corporate media, they have helped to disfigure the only yardsticks we have for measuring truth or falsehood. They have forced on us a terrible choice: to blindly follow those who have repeatedly demonstrated they are not worthy of being followed, or to trust nothing at all, to doubt everything. Neither position is one a healthy, balanced individual would want to adopt. But that is where we are today.

Big Brother regimes

It is therefore hardly surprising that those who have been so discredited by the current explosion of information – the politicians, the corporations and the professional class – are wondering how to fix things in the way most likely to maintain their power and authority.

They face two, possibly complementary options.

One is to allow the information overload to continue, or even escalate. There is an argument to be made that the more possible truths we are presented with, the more powerless we feel and the more willing we are to defer to those most vocal in claiming authority. Confused and hopeless, we will look to father figures, to the strongmen of old, to those who have cultivated an aura of decisiveness and fearlessness, to those who look like down-to-earth mavericks and rebels.

This approach will throw up more Donald Trumps, Boris Johnsons and Jair Bolsonaros. And these men, while charming us with their supposed lack of orthodoxy, will still, of course, be exceptionally accommodating to the most powerful corporate interests – the military-industrial complex – that really run the show.

The other option, which has already been road-tested under the rubric of “fake news”, will be to treat us the public like irresponsible children, who need a firm, guiding hand. The technocrats and professionals will try to re-establish their authority as though the last two decades never occurred, as though we never saw through their hypocrisy and lies.

They will cite “conspiracy theories” – even the true ones – as proof that it is time to impose new curbs on internet freedoms, on the right to speak and to think. They will argue that the social media experiment has run its course and proved itself a menace – because we, the public, are a menace. They are already flying trial balloons for this new Big Brother world, under cover of tackling the health threats posed by the Covid-19 epidemic.

We should not be surprised that the “thought-leaders” for shutting down the cacophony of the internet are those whose failures have been most exposed by our new freedoms to explore the dark recesses of the recent historical record. They have included Tony Blair, the British prime minister who lied western publics into the disastrous and illegal war on Iraq in 2003, and Jack Goldsmith, rewarded as a Harvard law professor for his role – since whitewashed – in helping the Bush administration legalise torture and step up warrantless surveillance programmes.

Need for a new media

The only alternative to a future in which we are ruled by Big Brother technocrats like Tony Blair, or by chummy authoritarians who brook no dissent, or a mix of the two, will require a complete overhaul of our societies’ approach to information. We will need fewer curbs on free speech, not more.

The real test of our societies – and the only hope of surviving the coming emergencies, economic and environmental – will be finding a way to hold our leaders truly to account. Not based on whether they are secretly lizards, but on what they are doing to save our planet from our all-too-human, self-destructive instinct for acquisition and our craving for guarantees of security in an uncertain world.

That, in turn, will require a transformation of our relationship to information and debate. We will need a new model of independent, pluralistic, responsive, questioning media that is accountable to the public, not to billionaires and corporations. Precisely the kind of media we do not have now. We will need media we can trust to represent the full range of credible, intelligent, informed debate, not the narrow Overton window through which we get a highly partisan, distorted view of the world that serves the 1 percent – an elite so richly rewarded by the current system that they are prepared to ignore the fact that they and we are hurtling towards the abyss.

With that kind of media in place – one that truly holds politicians to account and celebrates scientists for their contributions to collective knowledge, not their usefulness to corporate enrichment – we would not need to worry about the safety of our communications systems or medicines, we would not need to doubt the truth of events in the news or wonder whether we have lizards for rulers, because in that kind of world no one would rule over us. They would serve the public for the common good.

Sounds like a fantastical, improbable system of government? It has a name: democracy. Maybe it is time for us finally to give it a go.

Deja vu: Another Bail-Out for Banks and Other Giant Corporations

The name of the latest enormous transfer of wealth to the one percent, the CARES (Coronavirus Aid, Relief, and Economic Security) Act, represents a public relations coup. Unsurprisingly, this great sounding title misrepresents the bill’s contents.

Pattern of transferring wealth upward

Unfortunately, this bill is essentially a repeat of the bailout of Wall Street during the Great Recession that further enriched the obscenely wealthy at the public’s expense. This current legislation again showers Wall Street and gigantic corporations with oodles of money while providing aid for Main Street that is far too little and far too late. This legislation will also increase our already shamefully large wealth chasm.

This creatively misnamed Act is the fourth time in the past twenty years that our government of, by and for the corporations has bestowed massive gifts on the wealthy. The gifts were in the form of huge tax breaks under the George W. Bush and Donald Trump administrations and gigantic bailouts under the Barack Obama and Trump administrations.

Disaster Capitalism

Naomi Klein’s 2007 book, The Shock Doctrine: The Rise of Disaster Capitalism details how politicians use crises to transfer great amounts of wealth upward at the public’s expense. We saw an immediate example of this doctrine triggered by the 2008-09 Wall Street caused financial crisis that led to the Great Recession. The White House, Congress and the Federal Reserve quickly provided trillions of dollars to bail out Wall Street, but did little for Main Street. In addition, Wall Street executives were not held responsible for their crimes.

It wasn’t always this way. For example, during the Great Depression, the Franklin Delano Roosevelt administration passed many pieces of progressive legislation that greatly benefited the public and the common good.

Today, in response to an ongoing banking and corporate financial crisis, our corporate influenced government quickly took advantage of the horrific novel coronavirus outbreak to massively reward their major campaign contributors with a huge bailout.

Two sections of the CARES Act

Most of the corporate media reported that the CARES Act would inject $2.2 trillion dollars into the economy. In reality, about $450 billion of the $500 billion set aside for loans to large corporation and banks can be used to insure lending to these corporations from the Federal Reserve. The Federal Reserve can leverage this money into an additional $4 trillion or so for the recipients. The media usually ignore or downplay this $4 trillion.

Instead the corporate media highlights the money set aside for so-called small businesses and workers. For example, there is to be a one-time income-dependent transfer of at most $1200 to most  Americans adults and $500 for dependent children under 17. This one-time payment to the public is a drop in the bucket compared to the needs. In addition, many of the public are still waiting for this relatively small amount.

Another more substantial assistance is the expansion of eligibility for unemployment insurance. Crucially, unemployment recipients will also get $600 per week for four months on top of the state’s unemployment benefits. However, compare this to some European nations that are underwriting 70% to 90% of workers’ pay if their companies keep them employed during the crisis.

Aftermath

Politicians must do much more to aid the suffering public. For example, one of many examples of the failure of the profit driven system is health care. We clearly need an expanded Medicare for All since tying health care to employment has failed miserably. We must also strengthen our public health system that has been weakened by severe under-funding. This pandemic and the Trump administration’s terrible response also show our security clearly isn’t tied to excessive military spending that is at the expense of domestic programs.

Unless politicians pass legislation to directly address public needs, the future will be extremely bleak. The US economy has already experienced an unprecedented job loss with over 26 million people filing for unemployment insurance in the last five weeks. This situation is likely to worsen as more small businesses fold during this pandemic despite the latest bill. When the pandemic is over, the number of unemployed and of homeless will likely be enormous. After all the bailouts of the obscenely wealthy, it’s past time for the government to provide for the public’s needs. Otherwise, how will a desperate public react?

The Decade Of Transformation Is Here: Remaking The Economy For The People

The pandemic, economic collapse and the government’s response to them are going to not only determine the 2020 election but define the future for this decade and beyond. People are seeing the failure of the US healthcare nonsystem and the economy. The government was able to provide trillions for big business and Wall Street without asking the usual, “Where will we get the money?” However, the rescue bill recently passed by Congress provides a fraction of what most people need to get through this period. Once again, a pandemic will reshape the course of history.

Last week, we wrote about the failings of the healthcare system and the need for a universal, publicly-funded system. This week, we focus on the need to change the US economic system. The economic crisis in the United States is breaking all records. The class war that has existed for decades is being magnified and sharpened. The failings of financialized, neoliberal capitalism is being brought into focus at a time when people in the United States have greater support for socializing the economy than in recent times.

This Thursday, there was a record 3.3 million applications for unemployment, an increase of three million from the previous week, but on the same day, there was a record rise in the stock market. This contradiction shows the divide between the economic insecurity of the people and investors profiting from the crisis. The 11.4 percent increase in the stock market on Thursday was the largest increase since 1933 while the record rise in unemployment was 40 percent higher than ever recorded. Projections are for 30 percent unemployment this quarter, which is five percent higher than the worst of the Great Depression.

The response to the economic crisis reveals who the government represents. While people’s economic insecurity grew, the government acted to primarily benefit the wealthiest. This realization should spur an uprising like the United States has never seen before. Perhaps the most dangerous to the ruling class is their incompetence has been exposed. As Glen Ford writes, “The capitalist ‘crisis of legitimacy’ may have passed the point of no return, as the Corporate State proves daily that it cannot perform the basic function of protecting the lives of its citizens.”

Disaster Aid: Crumbs For The People, Trillions For The Wealthiest

Congress unanimously passed a $1.6 trillion coronavirus disaster aid bill this week. This is almost equal to the 2009 Recovery Act and the 2008 Wall Street rescue combined. Democrat’s votes were essential to passing the bill so they could have demanded whatever they wanted. This bill shows the bi-partisan priority for big business.

The bill is too little too late for people who have lost their jobs and for small businesses that have been forced to close. The law includes a one-time $1,200 payment to most people. This payment will arrive after rent and other debt payments are due for a US population with record debt. Congress does not understand the economic realities of people in the United States. Nobel Prize-winning economist Joseph Stiglitz explained what was needed saying, “The answer is we need no evictions, no foreclosures on all properties, and the government should guarantee pay.” In addition, credit card companies should also put “a stay on interest on all debt.”

When COVID-19 first began, we pointed out that the US healthcare system was not prepared to respond and showed the problems of putting profits before health. The COVID-19 rescue bill did not pay for coronavirus testing or treatment. Millions of people who lose their jobs will lose their health insurance, demonstrating why healthcare should not be tied to employment. Adding to health problems, the law did not increase the SNAP food program for the poor.

Roughly one-third of the funding goes to direct payments to people, unemployment insurance for four months, hospitals, veterans’ care, and public transit. Two-thirds go to government and corporations. Adam Levitin describes the law as “robbing taxpayers to bail out the rich.”

Congress allotted at least $454 billion to support big business in addition to $46 billion for specific industries, especially airlines. Some of these funds will also bail out the fossil fuel industry. According to the way the Federal Reserve operates, they will be allowed to spend ten times the amount Congress allocated to support big business, $4.5 trillion. Jack Rasmus writes that the Federal Reserve had already “allocated no less than $6.2 Trillion so far to bail out the banks and investors.” He summarizes the disparity: “Meanwhile Congress provides one-fourth that, and only one-third of that one fourth, for the Main St., workers, and middle-class families.”

Trump shows the disdain government has for the people and its favoritism for big business and investors as he objected to paying for 80,000 life-saving ventilators because they cost $1 billion while the government provides trillions to big business and investors. Governors and hospitals are issuing dire warnings of what is to come, but the federal government is not listening.

Economic Collapse Shows The Need For Transformational Change

The economic collapse is still unfolding. The US is already in a deep recession that is likely to be worse than the 2008 financial crisis and could develop into a greater depression if the COVID-19 economic shutdown lasts a long time.

Already, the crises, the government’s support for Wall Street and its failure to protect the 99% are creating louder demands for system change. We need to put forward a bold agenda and agitate around it to demand economic security for all. As Margaret Kimberly writes, we are entering a period of revolutionary change because we know returning to normal is “the opposite of what we need.” Or as Vijay Prashad says, “Normal was the problem.”

While the urgent health and economic crises dominate, the climate crisis also continues. The climate crisis already required replacing the fossil fuel era with a clean and sustainable energy economy and remaking multiple sectors of the economy such as construction, transportation, agriculture, and infrastructure. Now, out of these crises, a new sustainable economic democracy can be born where people control finance, inequality is minimized and workers are empowered, along with creating public programs that meet the necessities of the people and protect the planet.

The US Constitution gives the government the power to create money; Article I, Section 8 says: “The Congress shall have power … to coin money, regulate the value thereof, and of foreign coin.” Congress needs to take back that power so the government can create debt-free money. Currently, the Federal Reserve, which was created by Congress in 1913, is the privately-owned US central bank that produces money and sets interest rates. It puts the interests of the big banks first. The Fed can be altered, nationalized or even dismantled by Congress. Its functions could be put into the Department of the Treasury.

Monetary actions need to be transparent and designed to serve the necessities of the people and the planet. Money should be spent by the government into the economy to meet those needs while preventing inflation and deflation. In this way, the government would have the funds needed to transform to a green energy economy, rebuild infrastructure, provide education from pre-school through college without tuition, create the healthcare infrastructure we need for universal healthcare and more.  In addition, through a network of state and local public banks, people would be able to get cost-only mortgages and loans to meet their needs.

Moving money creation into the federal government would place it within the constitutional system of checks and balances where the people have a voice to ensure it works for the whole society, not only for the bankers and the privileged. This could end the parasitic private banking system and replace it with a democratic public system designed for the people’s needs as Mexico is doing.

Globalization must be reconsidered. Corporate globalization with trade agreements that favor corporate power is a root cause of this global pandemic. We need trade that puts people and the planet first and encourages local production of goods. This includes remaking agriculture to support smaller farms and urban farming using organic and regenerative techniques that increase the nutritional value of foods and sequester carbon.

What we need instead is popular globalization – developing solidarity and reciprocity between people around the world. We can learn from each other, collaborate and provide mutual aid in times of crisis as Cuba and other countries are doing now.

As businesses are bailed out by the government, they could be required to protect and empower workers. Workers’ rights have been shrinking since the 1950s as unions have become smaller and more allied with business interests. The right to collective bargaining needs to be included as a requirement for receiving government funds. For large public corporations, workers should be given a board seat, indeed the government should be given a board seat and an equity share in any corporation that is bailed out. For smaller businesses, as they reopen, it is an opportunity to restructure so worker ownership and workers sharing in the profits become the norm.

The US needs to build the economy from the bottom up. The era of trickle-down economics that has existed since the early 80s has failed most people in the United States. The government needs to create a full-employment economy with the government as the employer of last resort. The American Society of Civil Engineers gives US infrastructure a grade of D+ requiring a $2 trillion dollar investment that would create millions of jobs. The Green New Deal would create 30 million jobs over ten years according to the detailed plan put forward by the Green Party’s Howie Hawkins.

The coronavirus disaster aid includes a payment to every person in the US earning under $70,000. While the one-time $1,200 check is grossly insufficient, it demonstrates the possibility of a universal basic income. This would lift people out of poverty and protect them from the coming age of robots and artificial intelligence that will impact millions of existing jobs. The evidence is growing that a basic income works. A World Bank analysis of 19 studies found that cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty

The United States economy is in a debt crisis that demands quantitative easing for the people. Personal, corporate and government debt is at a record high. While the economic collapse is being blamed on the coronavirus, the reality is that the pandemic was a trigger that led to a recession that was already coming. The US needs to correct those fundamentals — massive debt, a wealth divide, inadequate income, poverty — as part of restarting the economy. Just as the Fed has bought debts to relieve businesses of debt burden, it can do the same for the personal debts of people. We should start by ending the crisis of student debt, which is preventing two generations from participating in the economy. While we make post-high school vocational and college education tuition-free, we should not leave behind the generations suffering from high-priced education.

Rise-Up and Demand Change

To create change, people must demand it. Even before the coronavirus collapse, people were demanding an end to inequality, worker rights, climate justice, and improved Medicare for all, among other issues. In the last two years, the United States has seen record numbers of striking workers. The climate movement is blocking pipelines and infrastructure and shutting down cities. Protests against inequality and debt resistance have existed since the occupy movement.

Now, with the economic collapse, protests are increasing. It’s Going Down reports: “with millions of people now wondering how they are going to make ends meet and pay rent, let alone survive the current epidemic, a new wave of struggles is breaking out across the social terrain. Prisoners and detention center detainees are launching hunger strikes as those on the outside demand that they be released, tenants are currently pushing for a rent strike starting on April 1st, the houseless are taking over vacant homes in Los Angeles, and workers have launched a series of wildcat strikers, sick-outs, and job actions in response to being forced onto the front lines of the pandemic like lambs to the slaughter.”

Workers at the Fiat Chrysler Windsor Assembly Plant walked off the job over concerns about the spread of coronavirus. Pittsburgh garbage collectors refused to pick up trash because their health was not being protected. Chipotle employees walked off the job and publicly protested the company for allegedly penalizing workers who call in sick. Perdue employees in Georgia walked off their jobs on a production line over a wage dispute and management asked workers to put in extra hours without a pay increase during the pandemic. Some Whole Foods workers announced a collective action in the form of a “sick out,” with workers using their sick days in order to strike. In Italy, wildcat strikes erupted to demand that plants be closed for the duration of the virus. Postal workers in London took strike actions due to the risks of the virus.

The pandemic requires creativity in protest. Technology allows us to educate and organize online, as well as to protest, petition, email, and call. There have also been car marches, public transport drivers have refused to monitor tickets, collective messages have been sent from balconies and windows. People are showing they can be innovative to get our message across to decision-makers. We can also build community and strengthen bonds with mutual aid.

If the ownership class continues its call to re-open the economy despite the health risks, the potential of a general strike can become a reality. When Trump called for returning to work the hashtags #GeneralStrike and #GeneralStrike2020— calling on workers everywhere to walk off the job — began trending on Twitter. Rather than a strike against one corporation, people would strike across multiple businesses and could also include a rent and mortgage strike as well as a debt strike. The coronavirus has shown that essential workers are among the lowest-paid workers and that they make the economy function. We also understand that if people refuse to pay their debts or rent, the financial system will collapse. Understanding those realities gives a new understanding of the power of the people.

A general strike, as Rosa Luxembourg described it in 1906, is not ‘one isolated action” but a rallying call for a campaign of “class struggle lasting for years, perhaps for decades.” A general strike could take many forms, including a global day of action. Before the current crises, we saw the decade of the 2020s as a decade of potential transformational change because on multiple fronts movements were growing and demanding responses to an array of crises. Now, the triggers for the economic collapse could also be the trigger for transformational revolt.

We are all in this together. We are all connected and share a common humanity. If we act in solidarity during this time of crisis and in this decade of transformation, we can create the future we want to see for ourselves and future generations.